296 F.R.D. 604 | C.D. Cal. | 2013
ORDER DENYING PLAINTIFF’S REQUEST TO REOPEN DISCOVERY AND FOR DISCOVERY SANCTIONS
[Dkt. Nos. 271, 285, 308 and related documents]
I.
INTRODUCTION
This Order addresses whether Plaintiff Richard Reinsdorf has presented sufficient evidence of discovery misconduct by Defendants Skeehers U.S.A., Inc. and Skechers U.S.A., Inc. II (collectively, “Skeehers”) to warrant the re-opening of discovery or other potential sanctions. As is discussed more fully below, the Court finds that discovery should remain closed and no sanctions should issue because Skechers did not improperly withhold or destroy relevant evidence.
A. History
This case involves allegations that Skech-ers infringed Reinsdorfs copyright in photographs taken for use in Skechers’ shoe marketing campaigns. On August 9, 2011, the Court issued a Scheduling Order setting a discovery cut-off of April 2, 2012 for all purposes, including fact and expert discovery and related motions, (Dkt. No. 37 at 1-2), which the Court later extended to May 15, 2012. (Dkt. No. 69 at 1). The Order also set May 4, 2012 as the deadline to file dispositive motions, (Dkt. No. 37 at 2), which the Court later extended to May 21,2012. (Dkt. No. 80 at 1).
On May 21, 2012, Skechers filed a Motion for Summary Judgment based, in part, on Skechers’ assertion of a joint work defense and its contention that Reinsdorfs claim for indirect profits was too speculative. (Dkt. No. 125 at 14-22 & 26-32). On the same day, Skechers filed Motions in Limine to Exclude the Testimony of two of Reinsdorfs experts: Frank Luntz, who opined that Reinsdorfs photos influenced consumers’ decisions to buy Skechers’ products, (Dkt. No. 127), and Jamie Turner, who offered an opinion on the amount of Skechers’ profits attributable to Skechers’ use of Reinsdorfs photos. (Dkt. Nos. 128 & 139). While Skechers’ motions were pending, on July 2, 2012, Skechers filed a Motion to Strike the Supplemental Report of another of Reinsdorfs experts, David B. Connelly, who opined specifically about Skechers’ indirect profits. (Dkt. No. 185).
On October 9, 2012, the Court issued an Order denying Skechers’ Motion for Summary Judgment on the ground that Skechers had not “demonstrated that the parties intended to be co-authors of the finished marketing images, which are, therefore, not joint works.” (Dkt. No. 196 at 21). In the same Order, however, the Court granted Skechers’ Motions in Limine to exclude the testimony and reports of Luntz and Turner because the methodologies they employed in reaching their opinions were deficient. (Id. at 13-19). Skeehers filed a Motion for Clarification on November 5, 2012, seeking a further ruling on certain additional grounds raised in its MSJ, including Skechers’ indirect profits argument, and on its Motion to Strike Connelly’s Supplemental Report. (Dkt. No. 198 at 5-10).
On December 3, 2012, while Skeehers’ Motion for Clarification was pending, Reinsdorf moved to substitute the firm Steptoe & Johnson LLP in the place of his counsel up to that point, Lavely & Singer. (Dkt. Nos. 207-08). On December 4, 2012, the Court granted Reinsdorfs Applications to Substitute Attorney. (Dkt. Nos. 210-11).
On February 6, 2012, the Court issued an Amended Order on Skeehers’ MSJ and Mo
Slightly less than three weeks later, on February 25, 2013, Reinsdorfs new counsel filed a “Motion for Relief from, and Reconsideration of, the Court’s Amended Order” on Skechers’ MSJ, Motions in Limine, and Objections to Evidence. (Dkt. No. 229). Reinsdorf alleged, among other things, that newly discovered evidence established that Skechers maintained relevant financial information but had failed to produce it and that Skechers tracked the effectiveness of its marketing on sales, despite Skechers’ representations to counsel and the Court to the contrary. (Id. at 4-15). Reinsdorf also alleged that Skechers had spoliated material evidence. (Id. at 16). Following extensive briefing by the Parties, the Court set a hearing on Reinsdorfs Motion for Relief and Reconsideration for March 29, 2013. (Dkt. No. 254). However, on March 26, 2013, the Court issued an Order taking the March 29, 2013 hearing off calendar and referring the matter to the undersigned Magistrate Judge to resolve Plaintiffs allegations regarding Skechers’ discovery responses. (Dkt. No. 255).
B. Proceedings Before The Magistrate Judge
The Magistrate Judge held an initial hearing on March 28, 2013. (Dkt. No. 257). The Court requested that the Parties meet and confer, and set a briefing schedule for supplemental briefing on any discovery issues that might remain. (Id. at 1). Following a telephonic status conference on April 9, 2013, the Court revised the briefing schedule and set a hearing date.
On April 22, 2013, Reinsdorf filed a Supplemental Brief in support of his Motion for Relief and Reconsideration (“Supp. Memo.”), including the declarations of Dylan Ruga (“Ruga Deck”), Samuel S. Rubin (“Rubin Deck”), and Peter A. Salomon (“Salomon Deck”). (Dkt. No. 271).
On June 3, 2013, the Court held a hearing. (Dkt. No. 325). At the conclusion of the hearing, the Court took the matter under submission. (Id.). After careful consideration of the briefs, evidence and argument, the Court finds that Reinsdorf has failed to establish discovery misconduct or spoliation sufficient to justify re-opening discovery.
II.
THE PARTIES’ CONTENTIONS
Reinsdorf contends that Skeehers misled him and the Court about the existence of certain categories of documents, improperly withheld production of relevant information sought by his discovery requests, and then used the absence of that evidence to support its argument on summary judgment that Reinsdorfs indirect damages were too speculative. (Supp. Memo, at 2-4). In addition, Reinsdorf contends that Skeehers spoliated relevant documents from Skeehers’ Media Share Website. (Id. at 4-5). In light of these alleged discovery abuses, Reinsdorf asks the Court to re-open merits discovery “to allow a full and proper briefing of the issue of [Reinsdorfs] damages” and to order a forensic analysis of Skeehers’ servers and an evidentiary hearing “to explore the full extent of [Skeehers’] spoliation of evidence.” (Id. at 5).
Specifically, Reinsdorf argues that Skech-ers was required to produce differentiated sales data not only in response to Reins-dorfs discovery requests, but also pursuant to the initial disclosure obligations of Rule 26. (Id. at 2, 15-17). According to Reins-dorf, Skeehers “purposely withheld product line and product-by-product sales documents” and “misled the Court about the existence of those documents in a declaration filed by its expert” Dominique Hanssens. (Id. at 2; see also id. at 10-17). In support of this claim, Reinsdorf notes that Rick Graham, Skeehers’ Senior Vice President of Domestic Sales, filed a declaration in an unrelated out of state case that reveals that Skeehers keeps very detailed product line sales records. (Id. at 14). Reinsdorf also argues that although Skeehers agreed to
Reinsdorf further contends that Skechers repeatedly represented that Skechers does not have marketing plans or track revenues attributable to particular marketing or advertising campaigns. (Id. at 3, 17-18, 21-22). However, Reinsdorf discovered a PowerPoint presentation on Skechers’ then publicly-available Media Share Website entitled “International Advertising & Marketing Systems & Procedures 2011” (the “2011 Advertising PowerPoint”). (Id. at 19). According to Reinsdorf, the 2011 Advertising PowerPoint, which was not produced, shows that Skech-ers both has marketing plans and tracks the effectiveness of its advertisements on sales. (Id. at 3, 23). Another document found on the Media Share Website indicates that Skechers “insists upon receiving monthly marketing reports” (the “2011 Marketing Expectations Memo”), which Reinsdorf argues is further evidence of the existence of documents that track the sales effectiveness of marketing spend. (Id. at 20, 23). Furthermore, on third party websites, Reinsdorf has found an article quoting a Skechers marketing executive who discusses the return on ad spend for a selected group of internet advertisements, (Ruga Deck, Exh. 10 at 110-11), and a promotional release that he claims shows that Skechers hires marketing companies to help it “maximize return on its advertising spend for its retail website.” (Id. at 24) (quoting Ruga Deck, Exh. 11 at 112).
Finally, Reinsdorf contends that Skechers “destroyed documents and metadata” which it was required to preserve, including “at least 89 folders and hundreds of files from the [Media] Share Website, including marketing documents containing Reinsdorfs images.” (Id. at 4; see also id. at 27-30) (emphasis omitted). In particular, Reinsdorf claims that a deleted folder entitled “2010_MarketingBinder/” (the “2010 Marketing Binder”) is representative of the information deleted by Skechers. Though not produced by Skechers, the 2010 Marketing Binder was “fortuitously found” by Reinsdorf in another folder on the Media Share Website and “unmistakably shows that Resin-dorfs images were used internationally----” (Id. at 29). Although Reinsdorf acknowledges that Skechers has since produced 61 of the 89 deleted folders, Reinsdorf argues that the production is suspect because (1) not all of the recently-produced folders have the same name as the deleted folders, and (2) not all of the folders are identical to the copies of the folders that Reinsdorf downloaded from Skechers’ Media Share Website (even if the folders had matching names) before they were deleted. (Id. at 28; Rubin Deck ¶ 14). Reinsdorf also contends that even if Skech-ers were to produce all 89 folders from other sources, the metadata from the Media Share Website is irretrievably lost. (Supp. Memo, at 28).
Skechers counters that Reinsdorfs inability to prove indirect profits is “the direct result of deliberate, conscious and tactical choices Reinsdorf made during discovery,” not misconduct by Skechers. (Opp. at 1). According to Skechers, all of Reinsdorfs current contentions could have been explored during discovery, and Reinsdorfs regret over the discovery choices he made “does not entitle him to a discovery do-over.” (Id. at 4).
With respect to Reinsdorfs allegations that Skechers misrepresented and improperly withheld financial data, Skechers does not deny that it maintains product line sales information, but argues that none of Reins-dorfs discovery requests required the production of such information. (Id. at 2, 4-14). According to Skechers, Reinsdorf was aware of the scope of Skechers’ production and it was incumbent on him to file a motion to compel during the discovery period if he believed that product line information was called for by his discovery requests. (Id. at 8). Skechers further argues that it was not required to produce product line data pursuant to Rule 26 because the Rule requires production of documents a party intends to use, not any document that might be relevant to a claim or defense. (Id. at 9-10). Skech-
In addition, Skechers states that it accurately represented that it does not have formal marketing plans. (Id. at 3). While Skechers objected to producing general marketing documents, it did produce “those marketing documents that pertain to the use of Reinsdorfs photographs.” (Id. at 19; see also id. at 22). Because neither the 2011 Advertising PowerPoint nor the 2011 Marketing Expectations Memo, which Reinsdorf claims suggest the existence of marketing plans, specifically referred to Reinsdorf, Skechers was under no obligation to produce them. (Id. at 25-27). Skechers farther argues that the “media plans” discussed in the 2011 Advertising PowerPoint are not “marketing plans” because they merely “specify the media tools,” such as a local television station, that will be used to communicate with a targeted audience. (Id. at 25). Skechers further asserts that Reinsdorfs focus on discrete passages in the 2011 Advertising PowerPoint and the 2011 Marketing Expectations Memo to prove that Skechers tracked the effectiveness of its marketing initiatives on sales is misplaced. (Id. at 3). The phrase “track effectiveness” in the 2011 Advertising PowerPoint did not refer to prospective sales resulting from any particular ad, but instead was part of a directive to subsidiaries requiring them to inform Skech-ers of prior sales totals of the products the subsidiaries wished to feature in any modified advertisement. (Id. at 28). Similarly, the use of the word “effective” or “effectiveness” in the 2011 Marketing Expectations Memo concerned general brand awareness, not increased sales of particular products. (Id. at 29).
Skechers specifically contends that there are no documents analyzing the marketing effectiveness of Reinsdorfs photographs. (Id. at 3, 29). Skechers claims that no display or pop-up ads used Reinsdorfs images.
Finally, Skechers contends that it did not spoliate evidence. According to Skechers, it has provided Reinsdorf with either the original versions or descriptions of the likely contents of “nearly all of the 90 Media Share Files” that form the basis of Reinsdorfs spoliation claim.
III.
STANDARDS FOR RECONSIDERATION AND FOR RE-OPENING DISCOVERY
A district court is authorized to reconsider its decisions pursuant to both the Federal Rules of Civil Procedure and its inherent powers. Rule 54(b) provides that unless certified as a final judgment by the district court, “any order or other decision, however designated, that adjudicates fewer than all the claims” of all of the parties “may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.” Fed. R.Civ.P. 54(b). In addition to this specific authorization, a court has the inherent power to reconsider its own orders. See Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir.1996) (“[T]he interlocutory orders and rulings made pre-trial by a district judge are subject to modification by the district judge at any time prior to final judgment.”). Pursuant to Local Rule 7-18, a motion for reconsideration may be made only on the grounds of:
(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. No motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion.
C.D. Cal. L.R. 7-18. Newly-discovered evidence of a party’s discovery misconduct may provide grounds for granting a motion for reconsideration where the abuses prevented the opposing party from properly prosecuting or defending its case. See, e.g., Pumphrey v. KW. Thompson Tool Co., 62 F.3d 1128, 1132, 1134 (9th Cir.1995) (granting new trial based on post-verdict disclosures showing that defendant’s “misleading, inaccurate, and incomplete responses to discovery” harmed the integrity of the judicial process).
However, a party’s dissatisfaction with counsel’s strategic decisions after an adverse result on a motion is not a proper ground for granting a motion for reconsideration, even if counsel was arguably negligent. A client is presumed to have voluntarily chosen counsel as his or her representative and “ordinarily cannot later avoid accountability for negligent acts or omissions of his counsel.” Matrix Motor Co., Inc. v. Toyota Jidosha Kabushiki Kaisha, 218 F.R.D. 667, 676 (C.D.Cal.2003) (citations and quotations omitted); see also Hussain v. Nicholson, 435 F.3d 359, 364 (D.C.Cir.2006) (“[A] party who voluntarily chooses his attorney ‘cannot ... avoid the consequences of the acts or omissions of this freely selected agent.’ ”) (quoting Link v. Wabash R.R. Co., 370 U.S. 626, 633-34, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962)). Nor is the hiring of new counsel sufficient in itself to warrant reopening discovery to correct prior counsel’s purported errors. See, e.g., Marcin Eng’g LLC v. The Founders at Grizzly Ranch, LLC, 219 F.R.D. 516, 521 (D.Colo.2003) (“That new counsel is dissatisfied with the state of the case it inherited is not grounds under this authority for reopening discovery long after the court-ordered deadlines have passed.”); Vineberg v. Bissonnette, 548 F.3d 50, 55 (1st Cir.2008) (“The engagement of a new attorney, without more, does not compel — or even necessarily favor— the reopening of a previously closed period of discovery.”); Carson v. Bethlehem Steel Corp., 82 F.3d 157, 159 (7th Cir.1996) (“There is no principle that each new attorney for a litigant must have an independent opportunity to conduct discovery. Shortcomings in counsel’s work come to rest with the party represented.”).
Furthermore, a showing that a particular document or documents were not produced or were produced late in the discovery period does not, by itself, necessarily require
In addition, “[i]t is improper to infer nefarious intent or bad faith” from “ordinary discovery errors.” PaineWebber Group, Inc. v. Zinsmeyer Trusts Partnership, 187 F.3d 988, 993 (8th Cir.1999). Consequently, when adjudicating allegations of discovery misconduct as the basis for a motion for reconsideration, the court will inquire whether the producing party’s search and response were objectively reasonable under the circumstances, not whether the search and response were error-free. In evaluating the reasonableness of a search, the court should not only weigh the burdensomeness and importance of the discovery requested, but should also seek to further “the just, speedy, and inexpensive determination of every action” as required by Rule 1. As one court explained,
The rules of discovery do not demand perfection, clairvoyance, or miracle workings in the production of documents. Crying foul and casting aspersions whenever there’s a hole in defendants’ document productions or whenever some small number of documents (even crucial documents) are found relatively late in the process does not advance plaintiffs’ cause and is not conducive to the timely, efficient resolution of this litigation.
Fisher v. Ciba Specialty Chemicals Corp., 2007 WL 987457 at *3 (S.D.Ala. Mar. 30, 2007). A party may comply in good faith with its discovery obligations and yet there may be supplemental productions or even additional responsive documents that were inadvertently omitted. Such supplemental productions or responses do not necessarily equate to discovery misconduct.
IV.
SKECHERS’ PRODUCTION OF FINANCIAL INFORMATION ADEQUATELY RESPONDED TO THE DISCOVERY REQUESTS AND DID NOT VIOLATE THE REQUIREMENTS OF RULE 26
Reinsdorf contends that Skechers was obligated to produce differentiated sales data, i.e., product line or product-by-product sales information, both in response to specific discovery requests and, independent of any request, under Rule 26. (Supp. Memo, at 10-17). According to Reinsdorf, instead of producing differentiated sales data, Skechers falsely represented that it did not have any such information, which precluded Reinsdorf
A. Reinsdorfs Discovery Requests Did Not Require Production Of Differentiated Sales Data
Reinsdorf argues that Skechers was obligated to produce differentiated sales data in response to 12 different production requests: RFP Nos. 158, 171, 179-180, and 182-189. (Supp. Memo, at 10-11). The Court disagrees.
RFP No. S158 sought documents “sufficient to evidence [Skechers’] revenues and profits from 2006 until the present.” (Declaration of William J. Briggs filed in Opposition to Skechers’ MSJ (“Briggs Decl.”), Exh. 38 at 617, Dkt. No. 159.2). Skechers objected, but later agreed to produce Skechers’ annual reports. (Welsh Deck, Exh. N at 616; id., Exh. L at 469). It is axiomatic that a request for documents “sufficient to show” does not require the production of all conceivably relevant information. Skechers’ production of its annual reports adequately responded to RFP 158.
RFP No. 171 sought documents that evidence Skechers’ “deductible expenses and/or elements of profit from 2006 until the present that [Skechers] eontend[s] are attributable to factors other than [Skechers’] alleged infringements of photographs taken by Reinsdorf.”
The Court finds that RFP No. 171 did not require Skechers to produce product line data. In the first instance, this all-encompassing request did not put Skechers on fair notice that Reinsdorf sought product line data. Rule 34(b) requires the requesting party to describe the items to be produced with “reasonable particularity.” Fed.R.Civ.P. 34(b)(l — 2). “The test for reasonable particularity is whether the request places a party upon ‘reasonable notice of what is called for and what is not.’ ” Bruggeman ex rel. Bruggeman v. Blagojevich, 219 F.R.D. 430, 436 (N.D.Ill.2004) (quoting Parsons v. Jefferson-Pilot Corp., 141 F.R.D. 408, 412 (M.D.N.C.1992)); see also Regan-Touhy v. Walgreen Co., 526 F.3d 641, 649-50 (10th Cir.2008) (“[A] discovery request should be sufficiently definite and limited in scope that it can be said ‘to apprise a person of ordinary intelligence what documents are required and [to enable] the court ... to ascertain whether the requested documents have been produced.’ ”) (quoting Wright & Miller, 8A Federal Practice and Procedure § 2211, at 415). “‘All-encompassing demands’ that do not allow a reasonable person to ascertain which documents are required do not meet the particularity standard of Rule 34(b)(1)(A).” In re Asbestos Products Liability Litigation (No. VI), 256 F.R.D. 151, 157 (E.D.Pa.2009). As one court explained,
Requests should be reasonably specific, allowing the respondent to readily identify what is wanted. Requests which are worded too broadly or are too all inclusive of a general topic function like a giant broom, sweeping everything in their path, useful or not. They require the respondent either to guess or move through men*617 tal gymnastics which are unreasonably time-consuming and burdensome to determine which of many pieces of paper may conceivably contain some detail, either obvious or hidden, within the scope of the request.
Dauska v. Green Bay Packaging, Inc., 291 F.R.D. 251, 261, 2013 WL 2088216 at *10 (E.D.Wis. May 14, 2013) (quoting Audiotext Communications v. U.S. Telecom, Inc., 1995 WL 18759 at *1 (D.Kan. Jan. 17, 1995)). RFP No. 171 failed to provide sufficient guidance to Skechers regarding the particular documents or data Reinsdorf demanded. Under the Federal Rules, Skechers was not required to guess.
More importantly, whatever categories of documents and data the request may have encompassed, RFP No. 171 appears to explicitly exclude information that would be supportive of Reinsdorfs indirect profits claim, i.e., the request sought information pertaining to profits not attributable to Reinsdorfs photographs. Therefore, any documents produced in response to the request would not necessarily change the outcome of Skechers’ Motion for Summary Judgment. According to the Ninth Circuit, Reinsdorf has the initial burden of proving a causal nexus between the alleged infringement and the alleged infringer’s gross profits. Polar Bear Productions, Inc. v. Timex Carp., 384 F.3d 700, 711 (9th Cir.2004). Only after the plaintiff has established the requisite causal nexus does the burden shift to the defendant to apportion the profits that were not the result of the infringement. Id. Consequently, the information sought by RFP No. 171 about expenses and profits that were not attributable to the infringement would not address Reinsdorfs need to show a causal nexus and thus would not necessarily have assisted Reinsdorf in his effort to oppose Skechers’ motion.
RFP Nos. 179 and 180 seek, respectively, documents reflecting sales of products “attributable to [Skechers’] marketing efforts that used [Reinsdorfs] images” and, somewhat redundantly, that show “the impact” that Skechers’ marketing efforts using Reinsdorfs images had on sales.
Skechers’ marketing expert, Dominique Hanssens, represented under oath that Skechers does not compile “revenue stream variability data.” (Declaration of Dominique Hanssens in support of Skechers’ Motion in Limine to Exclude Expert Testimony from Jamie Turner, Dkt. No. 128.2, at 5-6). Reinsdorf contends that Skechers’ assertion is false, i.e., that it was a fraudulent representation to state that Skechers does not maintain product line sales data. Reinsdorf further contends this false statement misled his attorneys and caused them to refrain from filing a motion to compel. (Supp. Memo, at 13-14). However, a fair reading of Hanssens’ declaration does not support Reinsdorfs interpretation. Hanssens explains that “variability data” is not the same thing as product-line data and that by noting that Skechers does not compile variability data, he did not mean that Skechers does not maintain “overall company product-line data.” (Hanssens Deck ¶ 12). According to Hanssens, “variability data” would track “dif
More fundamentally, RFP Nos. 179-80 and 182-89 appear to seek documents reflecting the discrete “impact” that Reinsdorfs photographs had on Skechers’ sales, independent of any other sales drivers, as opposed to overall raw sales data of particular product lines. Reinsdorf argues that the “simplest and most obvious way to measure the ‘impact’ of an advertisement on ‘sales’ is to measure the sales of the product being advertised before the advertisement runs versus the sales after the advertisement ran.” (Supp. Memo, at 15). However, that interpretation of the requests, while conceivably possible, is not obvious or inevitable. As Hanssens explained, overall sales data does not isolate the “impact” that Reinsdorfs images alone had on sales because such data does not control for other concurrent reasons for sales. Moreover, the fact that Reinsdorf was aware of the scope of Skechers’ productions but did not seek to compel production of product line sales data suggests that Reinsdorf did not believe such information was required to meet his burden under Polar Bear. Reinsdorf insisted in his Opposition to Skechers’ underlying Motion for Summary Judgment that he “repeatedly requested from Skechers data and information to determine profits earned by Skechers attributable to its use of his photographs,” including “sales information on specific Skechers products.” (“MSJ Opp.,” Dkt. No. 149, at 26). However, none of the requests clearly asked for overall product line sales data, and it appears that counsel who drafted Reinsdorfs Opposition believed such data was not necessary to prove Reinsdorfs case. Reinsdorf argues in his MSJ Opposition that when the defendant in a copyright action fails or refuses to produce evidence of net sales or profits from specific product lines, “the court may rely on indirect or circumstantial evidence and the plaintiff need only establish a basis for a reasoned conclusion.” (Id.). Reinsdorf cited to public statements by Skechers’ CEO and COO linking Skechers’ profits to its marketing success, and argued that because Reinsdorf provided images for “approximately 58% to 60% of Skechers’ product lines, which account for approximately 77% of the company’s revenues during the applicable period,” it was reasonable to conclude that Reinsdorfs images “contributed to the net profits of Skechers between 50% to 75% of net profits.” (Id. at 32). Reinsdorf evidently believed that his burden could be met by indirect sources of proof. That the Court disagreed is not the result of any alleged discovery misconduct by Skechers.
In sum, Skechers produced responsive financial information in response to Reinsdorfs discovery requests and Reinsdorfs very experienced counsel was aware of the scope of those productions. If Reinsdorf needed more specific information, it was incumbent on him to either move to compel or to draft more specific production requests. In addition, if Reinsdorf suddenly realized at the summary judgment stage that he needed more information, he could have brought a motion to take additional discovery under Rule 56(d)(2), but he did not do so. Reinsdorf had sophisticated counsel and is bound by counsel’s strategic decisions. See Matrix Motor Co., Inc., 218 F.R.D. at 676; Hussain, 435 F.3d at 364. Reinsdorf has not shown that Skechers’ responses to his discovery requests were improper.
B. Rule 26 And The Assertion Of Skech-ers’ Fifteenth Affirmative Defense Did Not Require Production Of Differentiated Sales Data
Reinsdorf argues that independent of the requests for production discussed above, Skechers had an affirmative duty under Rule 26 to produce product line sales data. (Supp. Memo, at 15). Skechers’ Rule 26(a) Initial Disclosures identified as a cate
Rule 26 (a)(l)(A)(ii) requires each party to produce or disclose “without awaiting a discovery request” all documents or electronically stored information that the party “may use to support its claims or defenses, unless the use would be solely for impeachment.” In addition, Rule 26(e) imposes on the parties a duty to supplement their disclosures. The automatic disclosure obligation prevents a party from “obstructing] production of the very documents that it would use to support its ease and then unveil[ing] those documents at trial or in response to a dispositive motion.” Milliken & Co. v. Bank of China, 758 F.Supp.2d 238, 245 (S.D.N.Y.2010); see also Robert Kubicek Architects & Assocs. Inc. v. Bosley, 2013 WL 998222 at *1 (D.Ariz. Mar. 13, 2013) (the purpose of Rule 26(a)(l)(A)(ii) “is not merely to apprise the opposing party of the existence of documents; it is to tell the opposing party which documents may be used at trial”).
As explained in the Advisory Committee Notes to Rule 26, “[the] disclosure obligation attaches both to witnesses and documents a party intends to use and also to witnesses and to documents the party intends to use if — in the language of Rule 26(a)(3) — ‘the need arises.’” Fed.R.Civ.P. 26(a)(1), Advisory Comm. Notes, 2000 Amendment (emphasis added). However, as the Advisory Committee further explained, pursuant to the 2000 amendments, “[a] party is no longer obligated to disclose witnesses or documents, whether favorable or unfavorable, that it does not intend to use.” Id. (emphasis added); see also Yaccarino v. Motor Coach Indus., Inc., 2006 WL 5230033 at *6 (E.D.N.Y. Sept. 29, 2006) (“That [certain documents] might be useful to plaintiffs in proving their claims does not trigger [defendant’s] obligation of automatic disclosure under Rule 26.”) (emphasis in original); Ruddell v. Weakley County Sheriffs Dep’t, 2009 WL 7355081 at *1 (W.D.Tenn. May 22, 2009) (“The plain language of the Rule makes clear that the disclosing party must only disclose materials if that party intends to use the materials to support its claims or defenses.”)
Accordingly, Skeehers’ inclusion in its Initial Disclosures of documents related to “defenses referenced in the operative pleadings” did not require the production of product line sales data unless Skeehers intended to use that data in this litigation, which clearly it did not. Therefore, Rule 26 did not impose a duty on Skeehers to disclose the existence of such data or to produce it independent of a discovery request.
Additionally, even construing RFP No. 16 as calling for all documents “related” to Skeehers’ assertion that Reinsdorfs damages claim was too speculative, whether or not Skeehers intended to use such documents at trial, the request cannot be fairly construed to require the production of product line sales data. Skeehers’ Fifteenth Affirmative Defense is an assertion that evidence does not exist to support Reinsdorfs damages claims. Interpreting RFP No. 16 to require Skeehers to produce documents to support that assertion is asking Skeehers to prove a negative. That is an unfair burden as it would require Skeehers to review seemingly every financial document in the company to consider whether the document or data might be helpful to Reinsdorf in some fashion, including uses that might never have been imagined by Reinsdorf. Skeehers was not obligated to do Reinsdorfs work for him. If Reinsdorf determined that he required specific kinds of data to support his damages claims, he needed to request that data in a clear, straightforward manner.
C. Skeehers’ Production Of The Aggregate Data In Skeehers’ General Ledger Sufficiently Responded To Reinsdorfs Request
The other financial information at issue in Reinsdorfs Motion for Relief and Reconsideration is Skeehers’ production of its General Ledger. (Supp. Memo, at 25-27). As noted above, Skeehers produced its General Ledger in response to RFP No. 171, which sought “[a]ll documents that evidence, support, relate or refer to [Skeehers’] deductible expenses and/or elements of profit from 2006 until the present that [Skeehers] contend[s] are attributable to factors other than [Skech-ers’] alleged infringements of photographs taken by Reinsdorf.” (Briggs Deck, Dkt. No. 159.4, Exh. 40 at 650). Because Skech-ers contended that all of its profits were attributable to factors other than its alleged infringing uses of Reinsdorfs photographs, Skeehers objected to the request as over-broad and unduly burdensome, but ultimately agreed to produce its General Ledger. (Welsh Deck, Exh. D at 200). Reinsdorf acknowledges that Skeehers produced the aggregate, “rolled up” numbers, but argues that Skeehers’ production was deficient because it did not include the subledgers containing detailed underlying information, including product line sales data. (Supp. Memo, at 25-27).
The Parties dispute whether a “General Ledger,” as a term of art, necessarily includes subledgers. {See Supp. Memo, at 26; Opp. at 17). According to Reinsdorfs accounting expert, Peter A. Salomon, subledg-ers are “a necessary part of the general ledger.” (Salomon Deck ¶ 17). Salomon states that without subledgers reflecting Skeehers’ revenues and costs, “the full scope and details of Skeehers’ transactions cannot be analyzed.” {Id.). In contrast, Skeehers’ accounting expert, Neill W. Freeman, states that “subsidiary ledgers are considered to be separate ledgers that are supportive of the balances in the general ledger” but are not viewed in the industry as “part of the general ledger.” (Freeman Deck ¶ 12) (emphasis in original). In addition, Skeehers emphasizes that its general ledger and subledgers use different software programs that do not com
It is not necessary for the Court to resolve this battle of the experts to determine the primary issue before it, i.e., whether the aggregate data in Skechers’ general ledger sufficiently responded to Reinsdorfs discovery request for costs and expenses that Skechers contended were attributable to factors other than the alleged infringement. The Court finds that it did. RFP No. 171 did not request product line sales information. In fact, no request specifically sought differentiated sales information. Skechers represents that it produced its general ledger “out of an abundance of caution in the event Skechers’ summary judgment motion was denied and Skechers found itself having to prove up its deductible expenses and costs at trial.” (Opp. at 16). Applying the rules of reasonableness and proportionality, the Court finds that Skechers’ production of its general ledger of aggregate data was objectively reasonable. According to the declarations of both Reinsdorfs and Skechers’ accounting experts, Skechers’ general ledger contained 4,944,684 rows of data for the years 2007 through 2010 and up to thirteen fields of data. (Solomon Deel. ¶ 6; Freeman Deel. ¶ 9). It is likely that Skechers’ combined subledgers would be at least as massive as the general ledger, if not larger.
In sum, the Court finds that Skechers did not misrepresent the financial data it maintained nor did Skechers improperly withhold information that it was required to produce in response to Reinsdorfs discovery requests or pursuant to its disclosure obligations under Rule 26. Accordingly, Reinsdorf has failed to establish grounds to re-open discovery on these contentions.
V.
SKECHERS DID NOT MISREPRESENT THE EXISTENCE OF MARKETING DOCUMENTS
Reinsdorf argues that Skechers fraudulently represented that it does not have marketing plans, which Reinsdorf claims would be relevant to both liability (to show infringing uses), and damages (to show a causal nexus between infringements and sales). (Supp. Memo, at 17). Reinsdorf argues that
Á. Reinsdorf Has Not Shown That Skech-ers Failed To Produce Any Relevant Marketing Plans
The Court finds that Reinsdorf has failed to establish that Skeehers had any overall Marketing Plans or that it failed to produce any material marketing plans that involved his photographs. In the first instance, Skeehers did not represent that it had no marketing documents. Instead, Skeehers simply stated that it did not have a formal “Marketing Plan,” as Reinsdorfs RFP No. 145 specifically requested. (Opp. at 19). RFP No. 145 asked for all documents constituting or relating to Skeehers’ “Marketing Plan for 2006, 2007, 2008, 2009 and 2010.” (Welsh Decl., Exh. M at 596). In its response to RFP No. 145, Skeehers objected on several grounds but also stated that it would “meet and confer with plaintiff to address how this Request may ... be limited and/or clarified to seek documents that are relevant to the claims or defenses in this litigation.” (Id.). Skeehers did not state that it did not have any marketing documents or marketing plans. In addition, at a hearing on January 26, 2012, counsel for Skeehers stated:
There is a difference between having a marketing plan and having a document that is called a “marketing plan.” Skech-ers very clearly has marketing plans, and those marketing plans are evidence in the documents we are proposing to produce to the plaintiff____ [¶] [W]e have likewise represented multiple times to the plaintiff that documents relating to Skeehers’ marketing efforts that pertain to any of the images that we understand are at issue in this lawsuit are being produced.
(Welsh Deck, Exh. A at 21-22).
Skeehers has credibly explained why the company does not have an overall Marketing Plan. David Weinberg, Skeehers’ CFO and COO, explained that Skeehers’ marketing strategy is to promote footwear products that consumers have already indicated that they want as opposed to create initial consumer interest. (Weinberg Deck ¶ 5). Skeehers therefore “continually adjusts its advertising throughout the year based on its assessment of the footwear products and styles that consumers have found attractive----” (Id.). Furthermore, while the 2011 Advertising PowerPoint does refer to “media plans,” (Ruga Deck, Exh. 7 at 55-69), and “International Marketing Materials Procedures,” (id. at 84-97), the document merely describes procedures for getting media plans (which specify the medium to be used to reach a target audience) and marketing images approved. (Opp. at 24). The 2011 Advertising PowerPoint does not appear to present a substantive “marketing plan” discussing specific products, prices, and distribution, which one would expect from a marketing plan. (See Hanssens Deck ¶¶ 17-18). Additionally, the 2011 Advertising PowerPoint does not involve or refer to Reinsdorfs photographs, and therefore is not within the scope of mar
Furthermore, the 2011 Marketing Expectations Memo, which refers to “monthly marketing reports,” is not itself a “marketing plan” and does not reflect the existence of any prospective “marketing plan.” (Opp. at 26). Rather, as John David Moody, Skech-ers’ International Marketing Manager, explained, the 2011 Marketing Expectations Memo was intended to standardize the format, style and content of monthly marketing reports from Skechers’ third party international distributors, subsidiaries and joint venture partners. (Moody Decl. ¶ 11). Like the 2011 Advertising PowerPoint, the 2011 Marketing Expectations Memo does not mention Reinsdorf or his photographs, and thus is not within the scope of documents Skechers agreed to produce. (Opp. at 27). In addition, the monthly marketing reports, which in contrast did involve Reinsdorfs photographs, were retrospective as they discussed marketing initiatives these affiliates conducted during the prior month and thus are not “marketing plans.” (Id. ¶ 12). Reinsdorf in fact questioned Moody about the contents of monthly marketing reports during his deposition. (See Welsh Decl., Exh. I at 442-46). Furthermore, Skechers produced the monthly reports during discovery. (Moody Decl. ¶ 12 & id., Exh. C).
In sum, Reinsdorf has failed to show that Skechers had a formal “Marketing Plan” that a reasonable party would have believed was responsive to Request No. 145 or that Skech-ers failed to produce any relevant, material “marketing plans” that involved Reinsdorfs images. Therefore, Reinsdorfs contentions regarding Skechers’ alleged failure to produce its “marketing plans” do not warrant the re-opening of discovery.
B. Reinsdorf Has Not Shown That Skech-ers Failed To Produce Relevant Documents Tracking The Effectiveness Of Marketing On Sales
The Court further finds that Reinsdorfs claim that Skechers misrepresented the existence of documents showing the effectiveness of Skechers’ advertisements on sales overstates the evidence. Reinsdorfs evidence consists of the 2011 Advertising PowerPoint and the 2011 Marketing Expectations Memo’s isolated references to the word “effective” or “effectiveness,” and references to Skechers’ return on marketing spend from third party websites discussing Skechers’ internet advertising. However, Skechers convincingly showed that Reinsdorfs evidence is taken out of context or is based on a misunderstanding of the facts. Reinsdorf has not shown that relevant documents exist that track the direct impact of a particular marketing campaign on Skechers’ sales, much less that show how Reinsdorfs photographs were the cause of an increase or decrease in any of Skechers’ sales.
The 2011 Advertising PowerPoint describes, in part, the procedures to be followed by Skechers’ affiliates regarding “advertorials,” which are features in fashion magazines that highlight certain products. (Clay Decl. ¶ 13). The procedures include directives on what the magazine page showcasing Skechers’ products must include: the word “SKECHERS” with shoe names, “copy relating to a trend,” and “contact information to track effectiveness.” (Ruga Deck, Exh. 7 at 82). However, Jennifer Clay, Skechers’ Vice President of Corporate Communications, explained that “[t]he contact information that we ask subsidiaries to place on any advertorials is clearly not intended to allow the subsidiaries or Skechers to make any quantitative assessment as to whether particular advertorials resulted in any increases in footwear sales. Instead, we ask that subsidiaries include this contact information on the advertorial to ensure that consumers have the information they need to find the footwear featured in the advertorial.” (Clay Deck ¶ 14).
Similarly, the 2011 Marketing Expectations Memo directs Skechers’ international
Finally, Reinsdorf has not shown how Skechers’ internet marketing is relevant to his suit. Reinsdorf cites to an article in which a Skechers executive discusses the return on ad spend for a selected group of internet advertisements. (Ruga Decl., Exh. 10). Reinsdorf further cites to a promotional release disseminated by AudienceSeience, Inc. which indicates that Skechers hired AudienceSeience to help it to “maximize return on its advertising spend for its retail website.” (Ruga Decl., Exh. 11 at 112). AudienceScience states that it helped Skechers achieve an 827% return on Skechers’ ad spend for a particular advertising campaign. (Id.). Reinsdorf contends that his photographs were “used by Skechers in pop-up advertising” and therefore were subject to effectiveness tracking. (Supp. Memo, at 25). However, according to Timothy Lakin, Skechers’ E commerce Merchandising Manager, the images Reinsdorf submits in support of this contention were not used in pop-up ads because “Skechers has never used pop-up advertising.” (Lakin Deck ¶ 4). La-kin further states that while Skechers does use display ads, “Skechers has never used marketing images containing any of Reinsdorf s photographs in display ads.” (Id. ¶ 6). Lakin confirms that the images submitted by Reinsdorf were used by Skechers as “filler” or for informational or promotional giveaway purposes on Skechers’ own website, Skechers.com. (Id. ¶ 7). However, because Skechers does not maintain “click-through” data to monitor whether a consumer clicked on a particular image prior to making a purchase on Skechers.com, it does not have data tracking the impact of Reinsdorfs photographs on sales.
Finally, Lakin states that Skechers does not hire third party marketing companies to maximize return on advertising spend for Skechers.com. (Lakin Deck ¶ 10). Rather, Skechers uses third party companies that manage advertising networks to “place Skechers’ display ads” on other websites that are visited by persons who came to Skech-ers.com but did not make a purchase (so-called “lost conversions”). (Id.). However, the return on ad spend cited in the promotional release, and the article attached as Exhibit 10 to the Ruga Declaration, in which Laura Christine, Skechers’ Vice President of Direct Marketing and E-commerce, is quoted, suggest that with respect to internet marketing, Skechers tracked its return on ad spend at least on some level. (Ruga Deck, Exh. 10 at 110) (quoting Christine for the proposition that Skechers “achieved a 283% return on ad spend” for a “select group of campaigns” on the web).
Therefore, to the extent that Skechers represented in absolute terms that it “has never sought to assess the impact, if any, that its various types of marketing or advertising have had on Skechers’ sales generally or on sale of specific lines of footwear,” the repre
Finally, Reinsdorf cannot plausibly claim that he was unaware of Skechers’ use of third party ad network vendors during discovery because he served a document subpoena on AudienceSeience on February 6, 2012, prior to the close of discovery. (Welsh Deck ¶ 23). Consequently, even though AudienceScience evidently did not produce any documents in response to Reinsdorfs subpoena, (id.), if Reinsdorf truly believed that evidence regarding Skechers’ internet marketing was important to his indirect profits case, he could have filed a timely motion to compel against AudienceSeience. In addition, the article in which Christine discusses the percentage return of ad spend on certain internet sales is dated June 19, 2009 and is not “new evidence.” (Ruga Decl., Exh. 10 at 110). Reinsdorf pointedly identified Christine by name as someone who was “responsible to execute an aggressive, strategic marketing plan for Skechers” during a meet and confer with Skechers on January 31, 2012. (Welsh Decl., Exh. B at 71). Reinsdorf also could have sought to depose Christine if internet marketing were crucial to his ease. However, Reinsdorfs counsel neither followed up on the AudienceSeience discovery nor deposed Christine. (Opp. at 31 n. 29). Again, Reinsdorf is bound by the strategic choices his prior counsel made regarding discovery. See Matrix Motor Co., Inc., 218 F.R.D. at 676; Hussain, 435 F.3d at 364.
In sum, Reinsdorf has failed to show that Skechers possessed but did not produce any relevant, material information tracking the effectiveness of Reinsdorfs images on Skech-ers’ sales. Nor has Reinsdorf shown that Skechers withheld documents that were responsive to a reasonable construction of Request for Production No. 145. Therefore, this ground does not warrant re-opening discovery.
VI.
REINSDORF FAILS TO SHOW SPOLIATION
Reinsdorf maintains that between April 2012 and March 2013, Skechers “willfully spoliated evidence from a website under its exclusive control that Skechers used to distribute, among other things, Reinsdorfs photographs around the world.” (Supp. Memo, at 27; Rubin Decl. ¶¶ 7-11). Specifically, Reinsdorf states that Skechers deleted 89 folders and one stand alone file from its Media Share Website, which resulted in the loss of both documents and metadata, including evidence “crucial” to his case. (Supp. Memo, at 27).
A. Standard
Spoliation is “the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence^] in pending or reasonably foreseeable litigation.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y.2003) (“Zubulake IV”) (quoting West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999)); see also Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir.2001) (same). The authority to impose sanctions for spoliation arises from a court’s inherent power to control the judicial process. Medi
“A trial court’s discretion regarding the form of a spoliation sanction is broad, and can range from minor sanctions, such as the awarding of attorneys’ fees, to more serious sanctions, such as dismissal of claims or instructing the jury that it may draw an adverse inference.” Apple, Inc. v. Samsung Electronics, Co., Ltd., 881 F.Supp.2d 1132, 1135 (N.D.Cal.2012) (“Apple I”); see also Pension Comm., 685 F.Supp.2d at 469 (“The choices include — from least harsh to most harsh — further discovery, cost-shifting, fines, special jury instructions, preclusion, and the entry of default judgment or dismissal (terminating sanctions.)”). “The sanction should be designed to: (1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party.” West, 167 F.3d at 779 (internal citations and quotation marks omitted). To decide .which specific spoliation sanction to impose, 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.” Apple, Inc. v. Samsung Electronics Co., Ltd., 888 F.Supp.2d 976, 992 (N.D.Cal.2012) (“Apple II”) (internal quotation marks omitted).
The bare fact that evidence has been altered or destroyed “does not necessarily mean that the party has engaged in sanction-worthy spoliation.” Ashton v. Knight Transp., Inc., 772 F.Supp.2d 772, 799-800 (N.D.Tex.2011). To determine whether to impose sanctions for spoliation, the majority of courts, including many courts in this Circuit, apply “the three-part test set forth by Judge Scheindlin in Zubulake TV for determining whether to grant an adverse inference spoliation instruction.” Apple I, 881 F.Supp.2d at 1138. According to Zubulake IV,
A party seeking an adverse inference instruction (or other sanctions) based on the spoliation of evidence must establish the following three elements: (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.
Zubulake TV, 220 F.R.D. at 220 (citing Residential Funding Corp. v. DeGeorge Fin'l Corp., 306 F.3d 99, 108 (2d Cir.2002)); see also Apple II, 888 F.Supp.2d at 989-90; Surowiec v. Capital Title Agency, Inc., 790 F.Supp.2d 997, 1005 (D.Ariz.2011); Lewis v. Ryan, 261 F.R.D. 513, 521 (S.D.Cal.2009); Rev 973 LLC v. Mouren-Laurens, 2009 WL 273205 at *3 (C.D.Cal. Feb. 2, 2009); cf. Victor Stanley v. Creative Pipe, Inc., 269 F.R.D. 497, 520-21 & App’x (D.Md.2010) (analyzing standards for spoliation sanctions by circuit). “After considering these factors, a court must then consider all available sanctions and determine the appropriate one.” Apple I, 881 F.Supp.2d at 1138. The party seeking spoliation sanctions has the burden of establishing the elements of a spoliation claim. Centrifugal Force, Inc. v. Softnet Communication, Inc., 783 F.Supp.2d 736, 740 (S.D.N.Y.2011).
The first factor a court will consider, the obligation to preserve evidence, “arises when the party has notice that the evidence
However, to show relevance, “[i]t is not enough for the innocent party to show that the destroyed evidence would have been responsive to a document request.” Pension Comm., 685 F.Supp.2d at 467. Courts generally agree that “relevance” for spoliation purposes “is a two-pronged finding of relevance and prejudice” because “for the court to issue sanctions, the absence of the evidence must be prejudicial to the party alleging spoliation of evidence.” Victor Stanley, 269 F.R.D. at 531; Rimkus Consulting Group, Inc. v. Cammarata, 688 F.Supp.2d 598, 616 (S.D.Tex.2010) (“Courts recognize that a showing that the lost information is relevant and prejudicial is an important check on spoliation allegations and sanctions motions.”) (citing cases). The prejudice inquiry “looks to whether the [spoliating party’s] actions impaired [the non-spoliating party’s] ability to go to trial or threatened to interfere with the rightful decision of the case.” Leon v. IDX Systems Corp., 464 F.3d 951, 959 (9th Cir.2006) (internal quotations and citations omitted); see also Pension Comm., 685 F.Supp.2d at 467 (“The innocent party must also show that the evidence would have been helpful in proving its claims or defenses — i.e., that the innocent party is prejudiced without that evidence.”).
“Courts have not been uniform in defining the level of culpability — be it negligence, gross negligence, willfulness, or bad faith— that is required before sanctions are appropriate for evidence destruction.” Ashton, 772 F.Supp.2d at 800 (citing Victor Stanley, 269 F.R.D. at 529-31). In the Ninth Circuit, “a party’s destruction of evidence need not be in ‘bad faith’ to warrant a court’s imposition of sanctions.” In re Napster, Inc. Copyright Litigation, 462 F.Supp.2d 1060, 1066 (N.D.Cal.2006) (citing Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir.1993)). The Ninth Circuit has instructed that district courts may impose sanctions even against a spoliating party that merely had “simple notice of ‘potential relevance to the litigation.’ ” Glover, 6 F.3d at 1329 (quoting Akiona v. United States, 938 F.2d 158, 161 (9th Cir.1991)). Nevertheless, “a party’s motive or degree of fault in destroying evidence is relevant to what sanction, if any, is imposed.” In re Napster, Inc. Copyright Litigation, 462 F.Supp.2d at 1066-67.
For example, the Ninth Circuit has held that “[o]nly “willfulness, bad faith, and fault’ justify terminating sanctions.” Connecticut General Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th Cir.2007) (quoting Jorgensen v. Cassiday, 320 F.3d 906, 912 (9th Cir.2003)). The Ninth Circuit has not clearly articulated the degree of culpability necessary to warrant an adverse inference instruction. S.E.C. v. Mercury Interactive LLC, 2012 WL 3277165 at *10 (N.D.Cal. Aug. 9, 2012). However, courts in this Circuit have found that an adverse inference instruction may be warranted where the destruction was either willful or grossly negligent. In re Napster, Inc. Copyright Litigation, 462 F.Supp.2d at 1078; see also Lewis, 261 F.R.D. at 521; Karnazes v. County of San Mateo, 2010 WL 2672003 at *2 (N.D.Cal. July 2, 2010) (“An adverse inference instruction may be appropriate where a party’s bad faith or gross negligence has resulted in either the spoliation of evidence or failure to turn over relevant evidence.”).
In addition, many courts in this Circuit, following Zubulake IV, have instructed that even the negligent destruction of evidence may, in the proper circumstances, warrant some form of sanction. The Zubulake IV court, citing the Second Circuit’s decision in Residential Funding Corp., found that “a ‘culpable state of mind’ for purposes of a spoliation inference includes ‘ordinary negligence.’ ” Zubulake IV, 220 F.R.D. at 220;
“It makes little difference to the party victimized by the destruction of evidence whether that act was done willfully or negligently. The adverse inference provides the necessary mechanism for restoring the evidentiary balance. The inference is adverse to the destroyer not because of any finding of moral culpability, but because the risk that the evidence would have been detrimental rather than favorable should fall on the party responsible for its loss.”
Id. (quoting Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 75 (S.D.N.Y. 1991)).
Accordingly, many courts in this Circuit have adopted the reasoning of the Zubulake TV and Residential Funding Corp. courts and have similarly instructed that “[t]he ‘culpable state of mind’ includes negligence.” Lewis, 261 F.R.D. at 521; see also FTC v. Lights of America Inc., 2012 WL 695008 at *2 (C.D.Cal. Jan. 20, 2012); Housing Rights Center v. Sterling, 2005 WL 3320739 at *8 (C.D.Cal. Mar. 2, 2005); Cottle-Banks v. Cox Communications, Inc., 2013 WL 2244333 at *14 (S.D.Cal. May 21, 2013); Aguirre v. Home Depot U.S.A., Inc., 2012 WL 3639074 at *3 (E.D.Cal. Aug. 23, 2012); Uribe v. McKesson, 2010 WL 4235863 at *3 (E.D.Cal. Oct. 21, 2010); Infor Global Solutions (Michigan), Inc. v. St. Paul Fire and Marine Ins. Co., 2009 WL 5909255 at *3 (N.D.Cal. Oct. 21, 2009). However, as noted above, “when the spoliating party was merely negligent, the innocent party must prove both relevance and prejudice in order to justify the imposition of a severe sanction.” Pension Comm., 685 F.Supp.2d at 467-68; see also Zubulake IV, 220 F.R.D. at 220; Cottle-Banks, 2013 WL 2244333 at *15-16 (negligent destruction of documents did not warrant adverse inference instruction or evidence preclusion where non-spoliating party failed to show relevance and thus was not prejudiced); Apple II, 888 F.Supp.2d at 993 (even where three-part spoliation test is satisfied, a court may deny request for adverse inference where degree of fault and level of prejudice were insufficient to justify the imposition of the sanction) (citing Chin, 685 F.3d at 161-62).
B. Background Facts And The Parties’ Contentions
Reinsdorf took a screenshot of Skechers’ Media Share Website on April 30, 2012. (Rubin Decl. ¶ 7). Later, on December 27, 2012 Reinsdorf made a copy of the contents of the Media Share Website. (Id. ¶8). A comparison of the April 30, 2012 screenshot and the December 27, 2012 download revealed that 68 folders and one file no longer resided on the website. (Id. ¶ 9). Reinsdorf returned to the site on March 8, 2013 and discovered that an additional 21 files that were still on the Media Share Website as of December 27, 2012 had been deleted. (Id. ¶ 10). However, because these 21 folders had been copied during the December 27, 2012 preservation, Reinsdorf was able to examine and quantify their contents. According to Reinsdorf, the 21 folders deleted between December 27, 2012 and March 8, 2013 contained approximately 128 files and totaled over 2,000 megabytes in size. (Id. ¶ 11).
On April 16, 2013, Skechers produced to Reinsdorf a hard drive containing what Skechers represented were the original copies of 61 of the missing documents. (Id. ¶ 12). Reinsdorf argues that this production is inadequate for several reasons. First, the titles of only 49 of the 61 documents produced on April 16, 2013 match the names of the previously deleted Media Share Website documents. (Id.). Furthermore, Reinsdorf contends that it is unlikely that the contents of even documents with matching names is identical. According to Reinsdorf, twelve of the documents with matching names were part of the December 27, 2012 preservation and thus permit a comparison. (Id. ¶ 13). Reinsdorf discovered that the 12 preserved folders contained 55 files. However, a com
In addition to the 61 documents produced by Skechers on April 16, 2013, Skechers also provided Reinsdorf with descriptions of all but five of the deleted documents that it has yet to locate. (Opp. at 33). According to Skechers, the fact that it has been unable to locate a handful of documents does not mean that they were not produced because when copies of documents are posted to the Media Share Website, they are often given different names. (Id. at 32). Skechers further argues that it is doubtful that the documents that it has been unable to find are relevant because none of the documents it produced on April 16, 2013 or for which it provided descriptions are relevant to this lawsuit. (Id.). Skechers notes that even though Reinsdorf has “always” had 21 of the deleted documents, even Reinsdorf does not contend that any of them are relevant to his claims. (Id. at 32). In sum, Skechers contends that the Media Share Website documents are not relevant to Reinsdorfs claims but, even if they were, the majority of the Media Share Website documents have been produced to Reinsdorf.
According to Skechers, Reinsdorfs spoliation claim thus turns on a single document, the 2010 Marketing Binder, which was part of the December 27, 2012 preservation. (Id. at 34). The 2010 Marketing Binder contains, among other things, “photographs of bus wraps and point-of-purchase materials featuring photographs taken by Reinsdorf.” (Welsh Decl. ¶ 36). The Binder was posted to the Media Share Website for use by Skechers’ domestic and foreign sales representatives to “provide examples or illustrations of the type of marketing initiatives [Skechers] employed in the past and to create excitement for the sales representatives.” (Moody Deck ¶ 16). According to Skechers, the 2010 Marketing Binder was “not the equivalent of a mail order catalog” and the inclusion of a photograph from a prior marketing initiative in the Binder did not necessarily mean that sales representatives could order copies of those specific materials for use in 2010. (Id.). Skechers admits that if it had identified the 2010 Marketing Binder as a separate responsive document, it would have produced it. Skechers did produce another document with the exact same name but different content. (Welsh Deck ¶ 36). Skechers also notes that it produced other documents containing the same information as the 2010 Marketing Binder downloaded by Reinsdorf. (Opp. at 34) (citing Welsh Deck, Exhs. V, W, X & Y). Therefore, Skechers argues that its failure to produce the 2010 Marketing Binder did not prejudice Reins-dorf. (Opp. at 35-36). Finally, Skechers argues that because the Media Share Website contains only copies of documents, Skechers was not obligated to preserve documents posted there and their deletion cannot “constitute spoliation as a matter of law.” (Id. at 32).
C. Reinsdorf Fails To Show The Relevance Of The Deleted Documents And Was Not Prejudiced By Their Deletion
It is undisputed that the documents at issue in Reinsdorfs spoliation claim were deleted from Skechers’ Media Share Website after Skechers was under a duty to preserve. However, a party is only required to retain “all relevant documents (but not multiple identical copies) in existence at the time the duty to preserve attaches, and any relevant documents created thereafter.” Zubulake IV, 220 F.R.D. at 218 (emphasis added). As is discussed in more detail below, the Court finds that nearly all of the deleted documents appear to have had no relevance to the claims and defenses in this action. Therefore, Skechers had no duty to preserve them. Furthermore, the Court finds that the deletion of any arguably relevant documents, including the 2010 Marketing Binder, was at most negligent. Because the Court is satisfied that Reinsdorf was not prejudiced by their deletion, Reinsdorfs requests for a forensic examination of Skechers’ servers and
Skechers’ Media Share Website is a “transmittal device used for the transitory hosting and staging of large electronic files.” (Irving Deel. ¶ 3). Copies of documents created and stored elsewhere in the company are loaded by the user to a new folder on the Media Share Website, for the purpose of sharing the information or images. (Id. ¶ 4). Because the Media Share Website does not contain original content, Skechers does not image or make back-up copies of the data stored on the site. (Id. ¶ 5). Moody states that he “routinely remove[s] copies of outdated marketing images from Media Share as part of [his] responsibilities to make sure that Skechers’ international distributors were only provided the current approved marketing images.” (Moody Deck ¶ 17).
Skechers’ production of 61 documents that were the originals of documents deleted from the Media Share Website revealed that none of those documents were relevant to this lawsuit because they did not use or have any connection to Reinsdorfs photographs. That production consists of: twelve documents relating to Skechers’ celebrity marketing initiatives; nine documents relating to Skechers’ lines of children’s shoes; three documents relating to BOBS, Skechers’ charitable contribution program; six documents relating to Skechers’ GOrun shoes and marketing campaigns; seventeen fitness-related videos or documents relating to the videos; six press releases and conference presentations; and eight miscellaneous documents that did not reference or include photographs taken by Reinsdorf. (Breuder Deck at 2-7). Furthermore, the documents for which Skechers provided a description include three blank folders; thirteen documents with dates that postdate Reinsdorfs last photo shoot for Skech-ers by many months or years; two documents relating to celebrity marketing; and one document each relating to Skechers’ Tone-up shoes and GOrun campaign, which did not involve Reinsdorfs photographs. (Id. at 7-8). In addition, Skechers confirmed that the document entitled “2010_Marketing-Binder/” refers to the 2010 Marketing Binder at issue in Reinsdorfs Motion. (Id. at 7). Finally, Reinsdorf admits that he has two of the other deleted documents not accounted for in Skechers’ April 16, 2013 production or descriptions, which, according to Skechers, means that 85 of the 90 deleted folders and files have been accounted for. (Id. at 8) (citing Dkt. No. 271.24, Declaration of Samuel S. Rubin ¶¶ 8-10).
Although Reinsdorf maintains that he “will never know what was contained in many of the hundreds of files that Skechers deleted after April 2012,” it is readily apparent that the vast majority of the deleted documents had nothing to do with Reinsdorfs photographs. (Supp. Memo, at 29). For example, Reinsdorf highlights the titles of five marketing-related folders that were deleted from the Media Share Website to suggest that “critical evidence” was lost. (Id. at 27-28). However, Reinsdorf admits that he has copies of two of these folders, MKTGPresentation and MTKG_BINDER_JAN2012/, from the December 2012 preservation. (Rubin Deck ¶ 10). Nonetheless, Reinsdorf does not even attempt to argue that anything in the contents of these two folders is relevant to his claims. Indeed, Reinsdorf does not cite to the contents of any of the 128 files from the 21 later-deleted folders he copied in the December 2012 preservation. In addition, Skechers produced a copy of a third folder on Reinsdorfs list, INTL_MRKTGIMAG-ES_WSTARBURST_ROYAL_36xl8Folder/, the contents of which Reinsdorf similarly passes over in silence. (Supp. Memo, at 27; Breuder Deck at 7). The only document on Reinsdorfs list of five that Reinsdorf actually discusses is the 2010 Marketing Binder, which Reinsdorf downloaded prior to the December 2012 preservation. (Supp. Memo, at 29; Ruga Deck ¶ 16; Rubin Deck ¶ 9).
The 2010 Marketing Binder contained copies of Reinsdorfs photographs and Skechers admits that it should have been produced. (Welsh Deck ¶ 36). However, Skechers produced another document with the same name, and there is no logical reason to infer that the failure to produce the 2010 Marketing Binder that Reinsdorf downloaded was anything but inadvertent. Reinsdorf does not point to any smoking gun in the 2010
The Court further finds that Reinsdorf was not prejudiced by Skeehers’ failure to produce the 2010 Marketing Binder. In the first instance, Reinsdorf actually has a copy of the document. More importantly, however, Skechers produced other, and in some instances, identical or better evidence of Skeehers’ alleged infringement. In light of Skechers’ production of similar and more probative evidence, Reinsdorfs contention that the 2010 Marketing Binder was “critical” evidence is simply not persuasive. (See Welsh Deck, Exhs. S, T, U, V, W, X & Y). In addition, Reinsdorf already possessed evidence of the same alleged infringing behavior, which he produced to Skechers in discovery. (Id., Exhs. Z, AA & BB). Therefore, the photographs in the 2010 Marketing Binder were merely cumulative evidence not essential to Reinsdorfs case because he has ample evidence of the alleged use of his photographs beyond the license. Furthermore, the loss of metadata associated with the 2010 Marketing Binder is not material to Reinsdorfs case. As Skeehers explained at the hearing, the metadata would show who looked at the 2010 Marketing Binder, but would not reflect how any images in the Binder were ever used. (Dkt. No. 328 at 60-61). The best evidence of what was used were the marketing reports, which Skechers produced. (Id. at 60). Skeehers’ deletion of the 2010 Marketing Binder and its accompanying metadata did not impair Reinsdorfs “ability to go to trial or threaten[ ] to interfere with the rightful decision of the case.” Leon, 464 F.3d at 959 (internal quotation marks omitted).
The Court finds it significant that at the hearing, Reinsdorf was unable to explain how his case would have been different if he had received copies of the Media Share Website materials, including the 2010 Marketing Binder that he already possessed. (Dkt. No. 328 at 10-11). Reinsdorf was unable to identify any documents that he would have attached to his Opposition to the Motion for Summary Judgment that would have altered the Court’s decision. (Id.). Indeed, Reins-dorfs reliance on the 2010 Marketing Binder for instances of infringement is not even relevant to his claim for indirect profits. Accordingly, even if Skechers had timely produced these documents to Reinsdorf, the outcome of Skechers’ Motion for Summary Judgment would have been the same.
The deletion of irrelevant evidence does not support a spoliation claim. See Centrifugal Force, 783 F.Supp.2d at 750 (“[A] discovery sanction cannot be based on a failure to preserve irrelevant evidence”). Mere speculation that other deleted documents may exist that might be helpful to a party’s case is also an insufficient basis for a finding of spoliation. Tri-County Motors, Inc. v. American Suzuki Motor Corp., 494 F.Supp.2d 161, 177 (E.D.N.Y.2007) (“[Speculative assertions as to the existence of documents do not suffice to sustain a motion for spoliation of evidence.”); see also Zubulake IV, 220 F.R.D. at 221 (there is “no reason to believe” that additional evidence would support plaintiffs claim where substantive sampling did not contain relevant information). Reinsdorf has failed to satisfy his burden of demonstrating that he was deprived of any material evidence by Skechers’ alleged destruction of documents. Accordingly, Reinsdorfs spoliation claim fails.
VII.
CONCLUSION
Reinsdorf has, at best, shown one or two instances of imperfect conduct. However, the Federal Rules of Civil Procedure do not require perfection or a guarantee that every possible responsive document has been found or produced. When a party responds to discovery requests, the Rules require only that the search for responsive materials be objectively reasonable.
Furthermore, Reinsdorf is bound by the strategic choices of his prior counsel. Reins-dorf has not shown misconduct by Skechers such that he should not bound by prior coun
. The Court acknowledges and expresses its appreciation for the excellent representation, briefing and oral argument provided by all counsel in connection with these difficult discovery issues.
. The day after the telephonic hearing, on April 10, 2013, Reinsdorf received directly from one of Skechers’ employees a copy of a recall notice issued by Skechers, which Reinsdorf immediately forwarded to counsel. The recall notice required Skechers’ stores to pull any shoeboxes with Reinsdorfs photographs. Prior to Reinsdorfs receipt of the document through informal means, the Parties had been disputing whether the recall notice was privileged or discoverable. Reins-dorf s counsel sequestered the document, notified Skechers, and attempted to resolve informally Reinsdorfs entitlement to retain and use the document. On April 24, 2013, Skechers filed an Ex Parte Application seeking the return of the document, further discovery about how Reins-dorf obtained it, and sanctions. (Dkt. No. 274). Reinsdorf filed an Opposition on April 26, 2013. (Dkt. No. 280). Skechers filed a Reply on April 29, 2013. The District Judge referred the matter to the Magistrate Judge on May 2, 2013. (Dkt. No. 282). The Court held a telephonic hearing on May 9, 2013. (Dkt. No. 300).
Following the hearing, the Court ordered Reinsdorf to submit a declaration responding to specific questions the Court had about the circumstances under which he obtained the document. (Dkt. No. 303). Reinsdorf submitted the Declaration on May 17, 2013. (Dkt. No. 318). On May 20, 2013, Skechers filed a Response to the Declaration. (Dkt. No. 320). The Court concluded that Reinsdorf was a passive recipient of the recall notice and had not solicited its production, and therefore denied Skechers’ requests for further discovery and sanctions on May 31, 2013. (Dkt. No. 324 at 8). However, because Skechers continued to assert that the document was privileged, the Court ordered Reinsdorf to turn over his copies of the recall notice to Skechers pending further proceedings to determine whether the privilege properly applied. (Id. at 11). On June 14, 2013, Skechers filed a Motion for Reconsideration of the Court’s May 31, 2013 Order. (Dkt. No. 330).
. Reinsdorf filed Exhibit 15 to the Ruga Declaration separately at Docket No. 273. In addition, Exhibits 2 and 3 to the Ruga Declaration, and the Salomon Declaration and all of its accompanying exhibits were filed separately under seal at Docket No. 278.
. Reinsdorf filed Exhibit G to the Salomon Supplemental Declaration separately under seal at Docket No. 319.
. Each party raises numerous objections to the opposing party's declarations, often on the grounds that the declarant’s statements are irrelevant, vague, unhelpful, conclusoiy or speculative. (See D. Obj., D. Supp. Obj., P. Obj.). Indeed, the majority of the objections appear directed to the weight that should be accorded the evidence rather them to its admissibility. All evidentiary objections raised by either Reinsdorf or Skeehers that are not specifically addressed in this Report are denied without prejudice as moot, with leave to reassert the objections at a later stage in the proceedings. See PacifiCorp v. Northwest Pipeline GP, 879 F.Supp.2d 1171, 1194 n. 7 & 1214 (D.Or.2012) (declining to address evidentiary objections where the court would reach the same conclusions whether or not it considered the challenged materials). To the extent that the Court does rely in the Report on any evidence objected to, the objections are overruled.
. Counsel explained at the hearing that pop-up ads appear over the content of the web page the reader is viewing, while display ads appear off to the side and do not obscure the page. (Trans., Dkt. No. 328, at 86, 1.4-6). Skechers states that while it has used "display” ads, it has never used "pop-up” ads. (Lakin Decl. ¶¶ 4-5).
. The deleted documents at issue consist of 89 folders, each of which may contain several files, and one stand alone file. (Rubin Decl. ¶ 3). In their briefs, Reinsdorf focuses on the "deleted 89 folders containing hundreds of files," (Supp. Memo, at 27), while Skechers generally refers to the combined folders and file as the "90 Media Share Files.” (Opp. at 31). The Court will refer to the deleted folders and stand alone files as "documents.”
. Pursuant to Rule 26(g)(1)(B), by signing a discovery request or response, the attorney or party "certifies that to the best of the person's knowledge, information, and belief, formed after a reasonable inquiry," the request or response is consistent with existing law and is not interposed for an improper purpose. Fed.R.Civ.P. 26(g)(1)(A-B) (emphasis added). However, Rule 26(g)(1)(B) "does not call for certification that the discovery response is 'complete,' " as does the parallel provision for mandatory disclosures under Rule 26(a), "but rather incorporates the Rule 26(b)(2)(C) proportionality principle." Moore, 287 F.R.D. at 188.
. Similarly, topic 14 of Reinsdorfs Notice of 30(b)(6) Deposition of Skechers U.S.A., Inc. sought information about "Skechers’ deductible expenses and elements of profit from 2006 through the present attributable to factors other than photographs authored by Reinsdorf.” (Declaration of Drew E. Breuder in support of Skech-ers' Motion to Compel further Responses and for Protective Order, Dkt. No. 89.1, Exh. 8 at 56).
. Similarly, topic 13 of Reinsdorfs Notice of 30(b)(6) Deposition of Skechers U.S.A., Inc. sought information about Skechers’ revenues and profits “attributable to Skechers' marketing campaigns.” (Declaration of Drew E. Breuder in support of Skechers’ Motion to Compel further Responses and for Protective Order, Exh. 8 at 55, Dkt. No. 89.1)
. In fact, as Skechers admitted at the hearing, Skechers' Fifteenth Affirmative Defense is not an "affirmative defense” at all. An affirmative defense "plead[s] matters extraneous to the plaintiff’s prima facie case, which deny plaintiff's right to recover, even if the allegations are true.” Federal Deposit Ins. Corp. v. Main Hurdman, 655 F.Supp. 259, 262 (E.D.Cal.1987); see also In re Rawson Food Service, Inc., 846 F.2d 1343, 1349 (11th Cir.1988) ("An affirmative defense raises matters extraneous to the plaintiff's prima facie case; as such, they are derived from the common law plea of ‘confession and avoidance.’ ”) (internal quotation marks omitted). However, "[a] defense which demonstrates that plaintiff has not met its burden of proof is not an affirmative defense.” Zivkovic v. Southern California Edison Co., 302 F.3d 1080, 1088 (9th Cir.2002); see also Rawson Food Service, 846 F.2d at 1349 (defenses which merely "negate an element of the plaintiff's prima facie case ... are excluded from the definition of affirmative defense in Fed.R.Civ.P. 8(c)”) (internal quotation marks omitted).
The defendant “bears the burden of proof as to each element of an affirmative defense.” Tovar v. U.S. Postal Service, 3 F.3d 1271, 1284 (9th Cir.1993). However, the Ninth Circuit has clearly held that "it is the duty of the copyright plaintiff to establish a causal connection between the infringement and the gross revenue reasonably associated with the infringement.” Polar Bear Productions, Inc., 384 F.3d at 715. Skech-ers’ Fifteenth Affirmative Defense merely asserts that Reinsdorf cannot meet his burden to establish the requisite causal connection but does not provide a reason, based on matters extraneous to the elements of Reinsdorf's claim, why Reinsdorf would still not be entitled to the damages he seeks even if he could meet his burden under Polar Bear. Because Skechers' Fifteenth Affirmative Defense is not actually an affirmative defense, Skechers was not required to plead it.
. Skechers’ general ledger includes product-line information for non-branded footwear for which Skechers is required to pay royalties. (Freeman Deck ¶ 9). Although Skechers states that there are "very few footwear products not branded as Skechers,” (Primeaux Decl. ¶ 5), only 1,375,275 rows of the 4,944,684 total rows of data in the general ledger concern non-branded footwear products. (Freeman Deck ¶ 9). As such, it is reasonable to conclude that the subledgers kept in a separate database that reflect product-line sales of Skechers-branded footwear would in fact be much more voluminous than the general ledger.
. The Court further notes that Reinsdorfs apparent purpose in serving RFP No. 171 was not to seek evidence to establish a causal nexus, but to prevent surprise at trial by Skechers’ evidence of its deductible costs and expenses. At the January 26, 2012 hearing, Reinsdorf stated in reference to RFP No. 171 and Deposition Topics 13 and 14 that “if the defendant does not want to put on any proof at trial of what it purports its deductible expenses to be, that’s fine with the plaintiff. We just don’t want to be surprised at trial.” (Welsh Decl., Exh. D at 177). This open court admission further supports the reasonableness of Skechers’ production as Reinsdorf did not state that he desired detailed product-line data, but indicated that he simply wanted the evidence that Skechers would rely on to prove its costs and expenses at trial.
. Lakin notes that the total revenues from all sales on Skechers.com, whether or not from “lost conversions," is no more than one percent of Skechers' total sales. (Lakin Deck ¶ 11).
. It is undisputed that "the duty to preserve arises when a party knows or should know that certain evidence is relevant to pending or future litigation.” Surowiec, 790 F.Supp.2d at 1005 (internal citations and quotations omitted).