ORDER RE: SAMSUNG’S MOTIONS FOR DE NOVO DETERMINATION OF DISPOSITIVE MATTER REFERRED TO MAGISTRATE JUDGE, OR, IN THE ALTERNATIVE, MOTION FOR RELIEF FROM NONDISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE
Samsung moves for relief from portions of Magistrate Judge Grewal’s July 24, 2012 Order Granting-in-Part Apple’s Motion for an Adverse Inference Jury Instruction. See ECF No. 1321,
I. BACKGROUND
A. Samsung’s Preservation Efforts
Although Apple seeks, and Judge Grewal imposed, an adverse inference jury instruction against all three Defendants— Samsung Electronics Co., Ltd. (“SEC”), Samsung Electronics America, Inc. (“SEA”), and Samsung Telecommunications America, LLC (“STA”) — only SEC’s document preservation activities are at issue here. See Adverse Inference Order,
Sometime in July 2010, after Samsung launched its Galaxy line of smartphones, Apple’s CEO Steve Jobs and Apple’s Chief Operating Officer Tim Cook met with Samsung CEO J.Y. Lee., and “ ‘advised Mr. Lee that Samsung needed to cease copying Apple’s iPhone designs and infringing Apple’s patents immediately.’ ” Id. at 1142 n. 59 (quoting Decl. of Richard J. Lutton, Jr. in Supp. of Apple’s Mot. for a Prelim. Inj. (“Lutton Deck”), ECF No. 128, ¶¶2-4). On August 4, 2010, Apple met with a Samsung representative and gave a presentation illustrating Samsung’s alleged infringement of certain Apple patents. Order,
In light of the recent discussions between Samsung Electronics Co., Ltd. (“Samsung”) and Apple Inc. (“Apple”), there is a reasonable likelihood of future patent litigation between Samsung and Apple unless a business resolution can be reached.... The purpose of this email is to request that you preserve any and all such documents that may be relevant to the issues in a potential litigation between Samsung and Apple until it is fully resolved. Please be aware that the above-mentioned exemplary list of documents2 is not exhaustive and the categories of documents may well be even broader. For this reason, if you have any doubt as to whether you should preserve particular documents, you are instructed to retain them.... [I]t is important that you do not destroy or discard any potentially responsive documents AND PRESERVE ANY SUCH RELEVANT DOCUMENTS until the likelihood of litigation relating to these issues has been sufficiently attenuated, or until otherwise notified by Samsung’s Legal or IP teams.
Deck of Esther Kim in Supp. of Apple’s Mot. for Adverse Inference Jury Instruction, ECF No. 895 (“Kim Deck”), at Ex. 9-A (emphases in original). The “exemplary list of documents” identified in the August 23 litigation hold notice specifically includes “correspondence, ... electronic files and e-mails.” Kim Deck Ex. 9-A. In addition, the notice enumerates ten categories of potentially relevant documents subject to the preservation duty, including documents that relate to:
(1) Apple or any of Apple’s patents that could potentially impact Samsung’s relevant business units (e.g., Digital Media & Communications, Device Solutions,etc.); (2) the design, development, testing, manufacturing, reverse engineering, distribution and sale of any Samsung product that Apple would likely accuse of infringing one or more of Apple’s patents;. ... (6) any internal analysis, assessments (including any efforts by Samsung to design around Apple’s patents) and/or reports concerning either Apple’s patents or Samsung’s patents that are currently the subject of the discussions between Apple and Samsung; ... (9) any communications to third parties (e.g., for analysis purposes to third party vendors or law firms) concerning any of the Apple patents; and (10) any communications with anyone relating to any Apple patent and/or Apple patent claim against Samsung.
Kim Decl. Ex. 9-A. Finally, the notice informs recipients that the preservation duty extends to “documents stored in long term record retention, as well as documents in your office computer or any central files,” and instructs recipients to “ensure that any scheduled disposal of such relevant documents (if any) is immediately suspended.” Id. The August 23 litigation hold notice itself was sent to only 27 Samsung custodians, although the notice asks recipients to “distribute this message to anyone else who may have any such relevant documents,” and states that “[t]his obligation to retain relevant documents applies generally to all employees and outside consultants or agents of Samsung./’ Id.; see id. Ex. 9-S (list of custodian recipients). There is no record of any further preservation actions on Samsung’s part for the next seven months. See Adverse Inference Order,
Apple filed this lawsuit against Samsung on April 15, 2011. See ECF No. 1. On April 21, 2011, and continuing over the next few weeks, Samsung sent litigation hold notices to a total of approximately 2,841 Samsung employees. See Kim Decl. Ex. 9 at 1; id. Exs. 9-C, 9-E, 9-G. The April 21 and subsequent hold notices were similar in content to the August 23 notice, but identified more categories of relevant documents. Samsung personnel and outside counsel provided various trainings to relevant employees describing the duty to preserve relevant documents and the litigation hold requirements, and employees were instructed to inform their subordinates about the policy. Adverse Inference Order,
B. Adverse Inference Order
On May 1, 2012, Apple filed a Motion for Adverse Inference Jury Instructions Due to Samsung’s Spoliation of Evidence, which Samsung opposed. See ECF Nos. 895, 987. In its motion, Apple sought a finding that Samsung spoliated evidence, and as a sanction for such conduct, an adverse inference jury instruction “to the effect that: (1) Samsung had a duty to preserve relevant evidence, including emails; Samsung failed to preserve large volumes of relevant emails and other documents; Samsung acted in bad faith in failing to preserve the relevant documents; and the jury may presume that the documents that Samsung failed to preserve would have been favorable to Apple’s case and unfavorable to Samsung; and (2) if the jury finds infringement of any Apple patent, trademark, or trade dress, that jury may infer that the infringement was intentional, willful, and without regard to Apple’s rights.” ECF No. 895 at iv.
In sum, Judge Grewal found that: (1) Samsung’s duty to preserve evidence arose on August 23, 2010; (2) Samsung’s continued use of its biweekly email destruction policy, insufficient distribution of the litigation hold notice before April 2011, and failure to confirm compliance with the litigation hold notices constituted willful violation of this duty; and (3) the destroyed documents were relevant and prejudicial to Apple’s claims, as demonstrated by the “stark difference in production from my-Single and Microsoft Outlook custodians,” and the fact that some of the mySingle custodians whose production of email was remarkably low were “senior Samsung employees whose internal communications would have been especially probative to the claims at issue in this litigation.” Id. at 1150; see id. at 1144-50. In light of these findings, Judge Grewal concluded that an adverse inference instruction was warranted. However, given the absence of any finding of bad faith, Judge Grewal ordered that the jury be instructed as follows:
Samsung has failed to prevent the destruction of relevant evidence for Apple’s use in this litigation. This is known as the “spoliation of evidence.” I instruct you, as a matter of law, that Samsung failed to preserve evidence after its duty to preserve arose. This failure resulted from its failure to perform its discovery obligations.
You may also presume that Apple has met its burden of proving the following two elements by a preponderance of the evidence: first, that relevant evidence was destroyed after the duty to preserve arose. Evidence is relevant if it would have clarified a fact at issue in the trial and otherwise would naturally have been introduced into evidence; and second, the lost evidence was favorable to Apple. Whether this finding is important to you in reaching a verdict in this case is for you to decide. You may choose to find it determinative, somewhat determinative, or not at all determinative in reaching your verdict.
Id. at 1151.
C. Denial Order
The day after Judge Grewal issued the Adverse Inference Order, Samsung filed its own Motion for Spoliation Adverse Inference Instruction Against Apple, requesting that the jury be given the same
On August 16, 2012, Judge Grewal issued an Order Denying Samsung’s Motion for an Adverse Inference Jury Instruction, based solely on “this court’s well-recognized discretion to hold parties to a schedule and insist upon requests that are timely.” ECF No. 1792 at 2. On August 17, 2012, Samsung moved for relief from Judge Grewal’s ruling. ECF No. 1799.
II. STANDARD OF REVIEW
As a threshold matter, the parties dispute what standard of review governs the Court’s review of Judge Grewal’s Adverse Inference Order. To determine what standard of review applies, the Court must determine whether the ruling at issue is dispositive or non-dispositive of a party’s claim or defense. See 28 U.S.C. § 636; Fed.R.Civ.P. 72(a). With respect to dis-positive matters, the Federal Magistrates Act (the “Act”)
By contrast, the district court may designate any non-dispositive pretrial matter to be determined by a magistrate judge, whose ruling on the matter will be modified or set aside only if “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); see Fed.R.Civ.P. 72(a); Grimes v. City & Cnty. of San Francisco,
Samsung argues that the de novo standard applies here for two reasons: (1) magistrate judges lack inherent power to impose sanctions; and (2) Judge Grewal’s finding of spoliation and imposition of an adverse jury instruction in this case constitutes a dispositive sanction under 28 U.S.C. § 636(b)(1)(B).
A. Inherent Power to Sanction
In sanctioning Samsung, Magistrate Judge Grewal relied on his “inherent power[ ] ... to levy appropriate sanctions against a party who prejudices its opponent through the spoliation of evidence that the spoliating party had reason to know was relevant to litigation.” Order,
It is firmly established in the Ninth Circuit that “[a] federal trial court has the inherent discretionary power to make appropriate evidentiary rulings in response to the destruction or spoliation of relevant evidence,” which includes the power “to permit a jury to draw an adverse inference from the destruction or spoliation against the party or witness responsible for that behavior.” Glover v. BIC Corp.,
Notwithstanding this settled principle, Samsung reads Chambers as applying only to Article III courts, and argues that the inherent power to impose spoliation does not extend to “federal magistrates,” which are “creatures of statute, and so is their jurisdiction.” NLRB v. A-Plus Roofing, Inc.,
Samsung’s argument is without merit. Nothing in Chambers indicates that inherent powers are limited to Article III courts. Cf. Chambers,
Nor is there support for Samsung’s contention that inherent powers must be expressly conferred by statute. To the contrary, precedent clearly provides that “courts created by Congress have inherent powers, unless Congress intentionally restricts those powers.” In re Rainbow Magazine,
Here, the Federal Magistrates Act places some restrictions on a magistrate judge’s otherwise vested inherent powers, such as the power to dismiss a case for forum non conveniens or failure to prosecute. See 28 U.S.C. § 636(b)(1)(A) (excepting motions to dismiss from a magistrate judge’s jurisdiction). However, there is no evidence of congressional intent to “abrogate or restrict the inherent power to sanction.” See In re Rainbow Magazine,
In light of this discussion of controlling Ninth Circuit authority, this Court declines to follow Reddick v. White,
Samsung also argues that the finding of spoliation and imposition of an adverse jury instruction constitutes a dispositive sanction and should therefore be subject to de novo review as provided for in § 636(b)(1)(B). This argument, too, must fail.
To determine whether a magistrate judge’s ruling is “dispositive,” the Court “must look to the effect of the motion.” United States v. Rivera-Guerrero,
While the Ninth Circuit has not explicitly addressed a magistrate judge’s imposition of sanctions pursuant to its inherent authority, the Ninth Circuit has upheld a magistrate judge’s authority to order sanctions under both Rule 11 and Rule 37 of the Federal Rules of Civil Procedure, provided that the actual sanctions imposed are non-dispositive. See Maisonville,
III. ADVERSE INFERENCE ORDER
Samsung challenges Judge Grewal’s Adverse Inference Order on three grounds: (1) the finding that Samsung’s duty to preserve arose in August 2010 was clearly erroneous; (2) the finding that Apple was prejudiced was clearly erroneous; and (3) the form of the adverse inference instruction is contrary to law. The Court considers first whether there is any error in Judge Grewal’s finding of spoliation, and second whether the adverse inference instruction imposed is proper and justified on this record.
A. Spoliation
“ ‘Document retention policies,’ which are created in part to keep certain information from getting into the hands of others, ... are common in business,” and are lawful “under ordinary circumstances.” Arthur Andersen LLP v. United States,
The Ninth Circuit has approved the use of adverse inferences as sanctions for spoliation of evidence but has not set forth a precise standard for determining when such sanctions are appropriate. Trial courts have widely adopted the Second Circuit’s three-part test, which provides that “a party seeking an adverse inference instruction based on the destruction of evidence must establish!:] (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
Samsung does not challenge Judge Grewal’s application of this three-part test for spoliation, nor does Samsung challenge Judge Grewal’s findings with respect to willfulness and relevance. Samsung argues only that Judge Grewal erred in finding that Samsung’s duty to preserve arose in August 2010, more than seven months before Apple filed this action. Mot. at 2. In finding that Samsung’s preservation duty arose in August 2010, Judge Grewal relied on Apple’s in-person, August 4, 2010 presentation, in which Apple confronted Samsung with “a comprehensive summary of its specific patent infringement claims against specific Samsung products,” and on Samsung’s own August 23, 2010 litigation hold notice, in which Samsung acknowledged “a reasonable likelihood of future patent litigation between Samsung and Apple unless a business resolution can be reached.” Order,
Having considered the parties’ briefs, the relevant case law, and the record before Judge Grewal, the Court cannot say that Judge Grewal’s finding was clearly erroneous. As a general matter, there is no question that the duty to preserve relevant evidence may arise even before litigation is formally commenced. See World Courier,
Here, it was not clear error to find that litigation was reasonably foreseeable as of August 23, 2010, shortly after the August 4 presentation wherein Apple alerted Samsung to Apple’s patents and infringement positions. Samsung’s first two arguments rely on the parties’ “longstanding business relationship,” but Samsung did not make this argument before Judge Grewal, and thus it is too late to raise it now. See Harbridge v. Yates, No. 1:11-cv-00473 AWI JLT,
Nor is the Court persuaded by Samsung’s third and fourth arguments. As Judge Grewal correctly noted, while Apple’s failure to issue any litigation hold notice of its own until April 2011 may be grounds for Samsung to seek its own adverse inference instruction against Apple for spoliation of evidence, Apple’s conduct does not absolve Samsung of its own preservation duty. Finally, contrary to Samsung’s assertion that Samsung was not on notice of any “specific” claim until the filing of Apple’s complaint, the August 2010 presentation identified specific Apple intellectual property and specific Samsung devices. See generally ECF No. 418. The presentation clearly identifies specific potential infringement claims that would put a reasonable party on notice of a likelihood of litigation. Accordingly, it was neither clearly erroneous nor contrary to law to find that Samsung’s duty to preserve arose in August 2010.
Once Samsung’s duty to preserve took effect in August 2010, Samsung was “required to suspend any existing policies related to deleting or destroying files and preserve all relevant documents related to the litigation.” In re Napster,
B. Sanction
The Court therefore next considers the propriety of the precise sanction imposed. See Dong Ah Tire & Rubber Co.,
In considering what spoliation sanction to impose, if any, courts generally consider three factors: “ ‘(1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party.’ ” Nursing Home Pension Fund v. Oracle Corp.,
“The prejudice inquiry ‘looks to whether the [spoiling party’s] actions impaired [the non-spoiling party’s] ability to go to trial or threatened to interfere with the rightful decision of the case.’ ” Leon,
Nonetheless, while the Court agrees with Judge Grewal’s conclusion that Samsung’s conduct justifies imposition of an adverse inference instruction, the Court does not find that such a strong adverse inference instruction is justified by this record. As noted above, courts must choose “the least onerous sanction corresponding to the willfulness of the destructive act and the prejudice suffered by the victim.” Schmid,
As Judge Grewal correctly observed, “ ‘an adverse inference instruction can take many forms, again ranging in degrees of harshness.’ ” Adverse Inference Order,
Finally, the Court is unable to find justification for imposing an adverse inference instruction against all three Samsung entity defendants, where the record only supports a finding that Samsung Electronics Co., Ltd. (“SEC”) engaged in any spoliation of evidence. See Adverse Inference Order,
Accordingly, the Court modifies the adverse inference instruction as follows:
Samsung Electronics Company has failed to preserve evidence for Apple’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.
IV. DENIAL ORDER
On August 17, 2012, Samsung moved for relief from Judge Grewal’s August 16, 2012 Order Denying Samsung’s Motion for an Adverse Inference Jury Instruction. See ECF No. 1799. This Court issued a tentative adverse inference instruction against Apple on August 19, 2012. On August 20, 2012, Apple filed objections, and the Court held a hearing.
Judge Grewal denied Samsung’s motion as untimely but did not cite to any particular Federal Rule of Civil Procedure or previously imposed Court deadline governing the timing of Samsung’s motion. To this Court’s knowledge, under Federal Rule of Civil Procedure 51(a)(1), a party’s request for a jury instruction is timely if made “[a]t the close of the evidence or at any earlier reasonable time that the court orders.” Thus, Samsung’s motion appears to be timely under the Federal Rules of Civil Procedure. Apple argues that Samsung’s motion is untimely under Civil Local Rule 7-8(c), which requires that a sanctions motion be filed “as soon as practicable” after the movant learns the facts that give rise to its motion. See ECF No. 1856 at 1. The Court finds that Samsung’s motion is also timely under the Civil Local Rules. Samsung has consistently maintained the position that its duty to preserve did not arise until April 15, 2011, when Apple filed its complaint in this action. See ECF No. 987 (Samsung’s opposition to Apple’s adverse inference motion) at 14-15. Thus, Samsung did not learn of the facts giving rise to its adverse inference motion until Judge Grewal’s July 24
In addition, although the Court agrees that Samsung could have moved for an adverse inference instruction at the same time Apple moved for an adverse inference instruction, the Court does not find that Apple was in any way prejudiced by the timing of Samsung’s motion. As already noted, Samsung has consistently maintained the position that its duty to preserve did not arise until April 15, 2011, when Apple filed its complaint in this action. See ECF No. 987 (Samsung’s opposition to Apple’s adverse inference motion) at 14-15. Furthermore, as Apple itself acknowledges in its Motion to Strike Samsung’s Untimely Motion for Adverse Inference Instruction, Samsung argued in its May 29, 2012 opposition to Apple’s motion for an adverse inference that Apple itself had not issued litigation hold notices in August 2010. See ECF No. 1402 (Apple’s motion to strike) at 2; ECF No. 987 (Samsung’s opposition) at 14-15 & n. 16, 17 n. 19. Thus, Apple was on notice as of May 29, 2012, that Apple could be subject to the same document retention and discovery obligations to which Apple sought to hold Samsung. Moreover, Apple argued for an August 2010 preservation duty trigger date knowing full well that Apple itself did not issue any litigation hold notices until after filing suit in April 2011, eight months later. Apple’s current situation is therefore of its own making. Finally, Samsung argued in its May 29, 2012 opposition to Apple’s adverse inference motion that “[i]f spoliation were a simple numbers game, then Apple itself would be guilty.” ECF No. 987 at 17-18 (explaining that, if a disparity between a custodian’s custodial and non-custodial file productions is a measure of spoliation, “Apple has engaged in spoliation on a far wider scale than anything alleged against Samsung,” and providing illustrative examples). In short, since May 29, 2012, when it filed its opposition to Apple’s adverse inference motion, Samsung has consistently maintained the position that it is guilty of spoliation only to the extent Apple is also guilty of spoliation. Indeed, had Samsung filed its own adverse inference request against Apple before Judge Grewal made a finding that the duty to preserve arose in August 2010, Samsung would have been taking inconsistent positions.
In light of the foregoing, and pursuant to FRCP 51, the Court determines that Samsung’s motion is timely. The Court further determines that the timing of Samsung’s motion does not prejudice Apple, who has to a large degree been on notice of the arguments contained in Samsung’s motion since May 29, 2012, and who both filed an opposition to Samsung’s adverse inference motion on August 6, 2012, see ECF No. 1591, and argued the motion before Judge Grewal on August 7, 2012. Moreover, Apple moved for an adverse inference instruction against Samsung based on the August 2010 preservation duty trigger date and knew better than anyone else its own document retention policies. Apple cannot now claim that it is prejudiced by having the same standard applied to itself. Accordingly, the Court must conclude that Judge Grewal’s Denial Order was contrary to law and that Samsung’s underlying Motion for Spoliation Adverse Inference Instruction Against Apple is subject to de novo review. See ECF No. 1388 (Samsung’s Motion); ECF No. 1591 (Apple’s Opposition); ECF No. 1600 (Samsung’s Reply).
A. Spoliation
As previously stated, “a party seeking an adverse inference instruction based on
1. Duty to Preserve
As this Court has already determined, this litigation was reasonably foreseeable as of August 2010, and thus Apple’s duty to preserve, like Samsung’s, arose in August 2010. See Micron Tech.,
Notwithstanding this duty, Apple did not issue any litigation hold notices until after filing its complaint in April 2011. See Binder Deck ¶¶ 22-29 & Exs. 2, 3; Deck of Alex Binder in Supp. of Samsung’s Mot. for Adverse Inference Jury Instruction, ECF No. 1388-1 (“2d Binder Deck”), ¶ 7 (Apple’s first litigation hold notices issued April 29, 2011). Moreover, although Apple does not employ an automatic e-mail destruction policy like SEC’s mySingle, “employees whose email accounts are too large may receive automatic notices requesting that they reduce the size of their email accounts,” and “[e]mployees who are not subject to document retention notices are encouraged to keep the size of their email accounts below certain limits.” Deck of Beth Kellermann in Supp. of Apple’s Opp’n to Samsung’s Mot. for Spoliation Adverse Inference Instruction Against Apple, ECF No. 1593 (“Kellermann Deck”), ¶ 5. In short, Apple did not issue litigation hold notices to any of its employees for the first eight months after its preservation duty arose. Moreover, even after filing its complaint against Samsung, Apple still did not issue litigation hold notices to several key custodians, including designers and inventors on the patents at issue in this litigation, until September 2011, December 2011, January 2012, or later. See Binder Deck ¶¶ 24-29; 2d Binder Deck ¶¶ 7-11. During that time, not only were employees given no affirmative instructions to preserve potentially relevant documents, but some employees may have been encouraged to keep the size of their email accounts below certain limits, and moreover may have received automatic notices requesting that they reduce the size of their email accounts. On these facts, the Court finds that Apple destroyed documents after its duty to preserve had already arisen.
Next, the Court considers whether Apple acted with the requisite mens rea when destroying documents. In the Ninth Circuit, a party may be entitled to an adverse inference instruction based on spoliation even in the absence of a finding of bad faith. See Unigard,
As already discussed, as the plaintiff-patentee in this suit, “[Apple’s] decision whether to litigate or not was the determining factor in whether or not litigation would in fact ensue.” Micron Tech.,
3. Relevance
Finally, the Court considers whether the documents destroyed by Apple were relevant to this litigation. “[Spoliation of evidence raises a presumption that the destroyed evidence goes to the merits of the case, and further, that such evidence was adverse to the party that destroyed it.” Dong Ah Tire & Rubber Co.,
Here, Samsung points to the paltry production of emails and documents from at least 13 key Apple witnesses, including Chris Stringer (a named inventor on the D'677 and D'889 Patents); Shin Nishibori (a named inventor on the D'889, D'087, and D'677 Patents); Jonathan Ive (a named inventor on the D'087, D'677, and D'899 Patents); Scott Forstall (a named inventor on the '163 Patent); and Steve Jobs (former CEO of Apple and a named inventor on the D'087, D'677, and D'889 Patents). See Binder Decl. ¶¶ 20-
In sum, the Court finds that Apple’s failure between August 2010 and April 2011 to issue any litigation hold notices or take other precautionary measures to ensure the preservation of evidence relevant to this litigation violated Apple’s duty to preserve.
B. Sanction
As a sanction for Apple’s spoliation of relevant evidence, Samsung requests that the Court grant adverse inference instructions against Apple “in the same manner and in the same language that it gives any such instruction with respect to Samsung.” ECF No. 1388 (Samsung Motion) at 9. For the same reasons discussed above with respect to Samsung’s appeal of Judge Grewal’s Adverse Inference Order, the Court determines that only a mild adverse inference instruction is warranted in light of the degree of Apple’s fault and the degree of prejudice Samsung suffered. See Nursing Home Pension Fund,
Apple has failed to preserve evidence for Samsung’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.
V. CONCLUSION
For all the foregoing reasons, the Court GRANTS-IN-PART and DENIES-IN-PART Samsung’s motion for relief from Judge Grewal’s July 24, 2012 Order, and
Samsung Electronics Company has failed to preserve evidence for Apple’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.
Apple has failed to preserve evidence for Samsung’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.
However, the parties indicated at the August 20, 2012 hearing that if the Court decided to issue identical adverse inference instructions against both parties, they prefer that neither adverse inference instruction be given. Accordingly, the Court will not give either jury instruction.
IT IS SO ORDERED.
Notes
. The September 3 notice is a Korean translation of the August 23 notice, which is drafted in English. See Kim Decl. Ex. 9 at 1; see Order,
. The exemplary list of documents described in the litigation hold notice includes "tangible items of any kind that contain information, including for example paper documents, correspondence, memoranda, handwritten notes, drawings, presentation slides, business diaries, electronic files and e-mails.” Kim Decl. Ex. 9-A.
. Although this is a patent infringement case and any appeal will go to the Federal Circuit, the Federal Circuit applies the law of the regional circuit in reviewing sanctions orders. Monsanto Co. v. Ralph,
. The Federal Magistrates Act is codified at 28 U.S.C. §§ 604, 631-39 and 18 U.S.C. §§ 3060, 3401-3402, and is implemented by Federal Rules of Civil Procedure 72 through 75.
. Pursuant to 28 U.S.C. § 636(b)(1)(A):
[A] judge may designate a magistrate judge to hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, to dismiss or quash an indictment or information made by the defendant, to suppress evidence in a criminal case, to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action.
. As Judge Grewal noted, the court’s power to impose sanctions under Rule 37 of the Federal Rules of Civil Procedure for "fail[ure] to obey an order to provide or permit discovery” was not applicable here because Samsung did not violate a court order. See Fed.R.Civ.P. 37(b)(2)(A); Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg. Corp.,
. The Fourth Circuit held that “[a] motion for sanctions under the district court’s 'inherent' power is not a pretrial matter under § 636(B)(1)(a),” that "[mjagistrate judges have no inherent Article III powers,” and that "Congress has not created statutory authorization for magistrate judges to exercise inherent Article III powers.” Reddick,
. Samsung asserts, somewhat tautologically, that the Adverse Inference Order disposes of Apple's spoliation claim. Apple, however, has not asserted in this case a claim for the intentional tort of spoliation of evidence. Cf. Unigard,
. As the Ninth Circuit has explained,
The adverse inference is based on two rationales, one evidentiary and one not. The evidentiary rationale is nothing more than the common sense observation that a party who has notice that a document is relevant to litigation and who proceeds to destroy the document is more likely to have been threatened by the document than is a party in the same position who does not destroy the document.... The other rationale for the inference has to do with its prophylactic and punitive effects. Allowing the trier of fact to draw the inference presumably deters parties from destroying relevant evidence before it can be introduced at trial.
Akiona,
. Other factors considered by some courts include whether an adverse inference jury instruction sanction would "‘serve [][the] threefold purpose of (1) deterring parties from destroying evidence; (2) placing the risk of an erroneous evaluation of the content of the destroyed evidence on the party responsible for its destruction; and (3) restoring the party harmed by the loss of evidence helpful to its case to where the party would have been in the absence of spoliation.' ” Chin v. Port Auth. of New York & New Jersey,
. Apple was given the opportunity to respond to Samsung’s motion for relief both in writing, see ECF No. 1856 at 1-4, and orally at the August 20, 2012 hearing. Accordingly, Apple’s objection on procedural grounds pursuant to Civil Local Rule 72-2 is without basis.