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ICTSI Oregon, Inc. v. International Longshore and Warehouse Union

United States District Court, D. Oregon

April 5, 2019

ICTSI OREGON, INC., Plaintiff,



         ICTSI Oregon, Inc. (“ICTSI”) brings the sole remaining claim in this case against International Longshore and Warehouse Union (“ILWU”) and International Longshore and Warehouse Union Local 8 (“Local 8”) (collectively, “ILWU Entities”).[1] ICTSI alleges that the ILWU Entities engaged in illegal secondary boycott activities, violating § 303 of the Labor-Management Relations Act, 29 U.S.C. § 187. Specifically, ICTSI alleges that the ILWU Entities engaged in work stoppages, slowdowns, safety gimmicks, and other coercive actions with an object of forcing and compelling ICTSI to pressure the Port of Portland (the “Port”) to relinquish control over or reassign jobs at Terminal 6 of the Port that involve the plugging, unplugging, and monitoring of refrigerated containers. This Opinion and Order addresses ICTSI's motion for sanctions based on the ILWU Entities' alleged improper conduct during discovery. For the following reasons, ICTSI's motion is granted in part.

         A. Standards

         The Court has inherent authority to impose sanctions and Rule 37 of the Federal Rules of Civil Procedure authorizes the imposition of sanctions. See Leon v. IDX Sys. Corp., 464 F.3d 951, 958 (9th Cir. 2006) (“There are two sources of authority under which a district court can sanction a party who has despoiled evidence: the inherent power of federal courts to levy sanctions in response to abusive litigation practices, and the availability of sanctions under Rule 37 . . . .”). Rule 37(c)(1) permits sanctions for failure to provide information requested under Rule 26(a) or (e). Rule 37(d)(1) authorizes sanctions for the failure to appear of a witness designated under Rule 30(b)(6).

         To obtain sanctions for spoliation, a party must show:

(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed “with a culpable state of mind”; and (3) that the evidence was “relevant” to the party's claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.

Apple Inc. v. Samsung Elecs. Co., 888 F.Supp.2d 976, 989-90 (N.D. Cal. 2012) (quoting Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002)). “[T]he presence of bad faith automatically establishes relevance; however, when the destruction is negligent, relevance must be proven by the party seeking sanctions.” S.E.C. v. Mercury Interactive LLC, 2012 WL 3277165, at *10 (N.D. Cal. Aug. 9, 2012) (quotation marks omitted). In evaluating relevance, however, “because ‘the relevance of . . . [destroyed] documents cannot be clearly ascertained because the documents no longer exist,' a party ‘can hardly assert any presumption of irrelevance as to the destroyed documents.'” Leon, 464 F.3d at 959 (alterations in original) (quoting Alexander v. Nat'l Farmers Org., 687 F.2d 1173, 1205 (8th Cir. 1982)).

         B. Discussion

         ICTSI moves for sanctions against the ILWU Entities on three grounds: (1) Leal Sundet destroyed relevant notebooks; (2) Robert McEllrath destroyed relevant calendars; and (3) the ILWU Entities' engaged in improper conduct during depositions taken under Rule 30(b)(6) of the Federal Rules of Civil Procedure. ICTSI requests a sanction precluding the ILWU Entities from introducing evidence or argument on the issues relating to the alleged misconduct.

         1. Mr. Sundet's Notebooks

         ICTSI asserts that Mr. Sundet writes notes in notebooks while attending meetings, ICTSI requested those notebooks in discovery, and the ILWU Entities have given inconstant responses regarding the responsive notebooks, including stating that they were destroyed. ICTSI requests that the Court preclude evidence relating to the notebooks and give the jury an adverse inference instruction regarding the content of the notebooks.

         During his deposition, Mr. Sundet testified that he does not take notes in notebooks while at meetings. ICTSI then moved to compel production of any journals or notebooks contain relevant notes written by Mr. Sundet. In response to the motion to compel, the ILWU Entities represented to the Court that Mr. Sundet testified that he did not maintain any relevant journals or notebooks but that nonetheless the ILWU Entities requested that Mr. Sundet search for any such items, and no such materials exist. Counsel for ICTSI then provided counsel for the ILWU Entities a photograph of Mr. Sundet at a meeting showing three different colored notebooks in front of him (one blue, one red, one black). In later correspondence between counsel, an attorney for the ILWU Entities stated that she had discussed the photograph with Mr. Sundet, it did not depict Mr. Sundet taking any notes, it appeared one notebook was Mr. Sundet's calendar, and it also appeared the others were notebooks he used to “to take stray notes and to doodle.” ECF 315-1 at 39. The attorney also explained in the letter that such stray notes and doodles would be immediately destroyed by Mr. Sundet and then the notebooks would be destroyed when fully used. Id. ICTSI promptly requested sanctions, and the Court stated in its Opinion and Order on the parties' discovery motions (“Discovery Opinion”) that ICTSI would need to file a formal sanctions motion, if it believed the requirements for sanctions were met under the circumstances of the alleged destruction of evidence. ICTSI then filed the pending sanctions motion.

         In response to ICTSI's motion for sanctions, the ILWU Entities repeat the assertion that Mr. Sundet does not take relevant notes in journals or notebooks. They note that the photograph does not refute this assertion because it does not show Mr. Sundet taking any notes. They also submit Mr. Sundet's declaration, which reiterates his deposition testimony that he generally does not take notes at union meetings, does not use notebooks to take notes at union meetings, and does not recall taking notes at union meetings. He also states that he believes, regarding the incident photographed, that he merely took the three notebooks out of his bag to get at information needed from within his bag but was not using the notebooks during the meeting. He explains that the black notebook appears to be his calendar (which was produced), the red notebook appears to be his notebook containing his user names and passwords, and the blue notebook was blank and never used. He offers to have the Court review the red and blue notebooks in camera because he does not want his user names and passwords produced.

         ICTSI responds that the ILWU Entities should be judicially estopped from changing their representation that the journals were destroyed because they made that representation to counsel and the Court. The decision to impose judicial estoppel is left to the discretion of the district court. New Hampshire v. Maine, 532 U.S. 742, 750 (2001). In considering whether to apply the doctrine of judicial estoppel, district courts may consider several questions, including:

(1) Is the party's later position “clearly inconsistent with its earlier position?” (2) Did the party succeed in persuading a court to accept its earlier position, creating a perception that the first or second court was misled? and (3) Will the party seeking to assert an inconsistent position “derive ...

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