United States District Court, W.D. Washington, Seattle
Honorable Richard A. Jones United States District Judge.
matter comes before the Court on Defendant Dun &
Bradstreet, Inc.'s (“D&B”) Motion for
Relief for Spoliation. Dkt. # 103. Having considered the
briefing of the parties, relevant portions of the record, and
the oral arguments of counsel, the Court DENIES D&B's
motion. As specified in further detail below, however, the
Court finds that less severe sanctions may be warranted.
Accordingly, the Court STRIKES the parties' pending
motions for summary judgment, Dkt. ## 60, 66, and ORDERS the
parties to take additional steps toward resolving this
WhoToo, Inc. (“WhoToo”) filed this action against
D&B for breach of contract, tortious interference with
business expectancy, and injunctive relief. Dkt. # 1. The
parties have since engaged in discovery and filed motions for
December 13, 2016, after submitting its motion for summary
judgment, D&B learned that WhoToo is named as a defendant
in a state proceeding pending in King County Superior Court,
Shannon v. WhoToo, Inc., et al., No. 15-2-24758-1.
Dkt. # 104 at 1. WhoToo is represented by the same lead
counsel in that case as it is in this case. Compare
Dkt. # 104-1 at 22 with Dkt. # 60 at 26.
December 19, D&B retrieved documents filed in the
Shannon v. WhoToo matter from King County Superior
Court's filing docket. Id. at 2. Some of these
documents are highly relevant to D&B's defense in the
instant matter, yet were not produced by WhoToo during
discovery. For instance, one of the central facts at issue in
this case is whether WhoToo developed a functional
application programming interface (“API”) for a
third party, 6Sense Insights, Inc. (“6Sense”),
with which D&B had a business arrangement. Dkt. # 12 at
10-11. Throughout the course of this litigation, WhoToo has
maintained that it delivered a functional API to 6Sense.
See, e.g., Dkt. # 95 at 4 (“The record
confirms that WhoToo delivered a working API.”). This
issue also arose in the Rule 30(b)(6) deposition of
WhoToo's CEO, Matt Rowlen. When asked what problems he
was aware of during the development of the API, Rowlen
testified that he “wasn't involved with the-with
the details of that, other than I have seen some discovery as
it related to it since” and that any such problems were
limited to “timing and time.” Dkt. # 67-2 at 48.
documents obtained by D&B from the state proceeding
undermine these representations concerning the functionality
of the API. For example, in a sworn declaration, Rowlen
represented that the API was “radically
different” than anticipated internally and “also
radically different from what I had communicated to
D&B.” Dkt. # 104-2 at 6. In an underlying email,
Rowlen expressed that the API developed by WhoToo may have
“killed the deal” with 6Sense. Dkt. # 104-3 at
16. Further communications confirm Rowlen's discontent
with the API. See, e.g., id. at 12
filed a motion for relief from spoliation on the basis that
WhoToo intentionally withheld documents and acted in bad
faith. As a remedy, D&B requests that WhoToo's action
be dismissed with prejudice or, in the alternative, that the
Court instruct the jury to draw an adverse inference from
WhoToo's failure to produce evidence. On January 4, 2017,
the Court held a telephonic hearing on D&B's motion.
Dkt. # 103. Since then, WhoToo has filed an opposition to
D&B's motion and produced further responsive
documents. Dkt. # 111.
Court has broad discretion to control discovery. Avila v.
Willits Envtl. Remediation Trust, 633 F.3d 828, 833 (9th
Cir. 2011). “There are two sources of authority under
which a district court can sanction a party who has despoiled
evidence: the inherent power of federal courts to levy
sanctions in response to abusive litigation practices, and
the availability of sanctions under Rule 37 against a party
who ‘fails to obey an order to provide or permit
discovery.'” Leon v. IDX Sys. Corp., 464
F.3d 951, 958 (9th Cir. 2006) (quoting Fjelstad v. Am.
Honda Motor Co., 762 F.2d 1334, 1337-38 (9th Cir. 1985).
Certain sanctions, such as dismissal, require a showing bad
faith. Id. Other sanctions, such as an adverse jury
instruction, do not require a showing of bad faith.
Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir.
on the record at this juncture, there is insufficient
evidence to justify dismissing WhoToo's case or
instructing the jury to draw an adverse inference from
WhoToo's nondisclosure. The documents discovered by
D&B were publically filed in a state court
proceeding-making these documents publically available is
inconsistent with an intent to suppress or hide them from
discovery. As discussed below, sanctions may be warranted,
but not in the form of dismissal or an adverse jury
instruction. The Court is confident that this case can be
resolved without resorting to unduly harsh remedies that
detract from the merits.
Court, however, is troubled by two aspects of WhoToo's
conduct. First, WhoToo's counsel-who has twice conceded
that this is not his “finest moment”- should have
been aware of the need to produce the documents at issue.
Dkt. ## 110 at 11, 14. He is counsel in both the state matter
and the instant matter, yet he filed documents advancing
inconsistent positions: (1) in the state matter, the
documents indicate that the API developed by WhoToo was
deficient, Dkt. # 104-2 at 6; (2) in the instant mater, the
documents assert that the API was functional, Dkt. # 95 at 4.
Second, WhoToo's CEO testified in the instant matter that
only minimal problems arose during the ...