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Coyne v. Los Alamos National Security, LLC

United States District Court, D. New Mexico

March 21, 2017

SUZANNE D. COYNE, Plaintiff,
v.
LOS ALAMOS NATIONAL SECURITY, LLC, NICHOLAS DEGIDIO, and GAIL McGUIRE, Defendants.

          PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

         THIS MATTER is before the Court on Defendants' Motion for Dismissal with Prejudice as Sanction for Plaintiff's Willful Destruction of Evidence (Doc. 136), filed January 20, 2017. On January 24, 2017, Defendants' Motion was referred to me to issue a report and recommendation pursuant to 28 U.S.C. §§ 636(b)(1)(B) and (b)(3) by presiding Magistrate Judge Steven C. Yarbrough. Doc. 140. Having reviewed the briefs submitted by the parties, as well as all pertinent authority, the Court recommends that Defendants' Motion be granted.

         I. Background

         Plaintiff worked for Defendant Los Alamos National Security, LLC, (“LANS”), from July, 2003, until April 26, 2013, when she was terminated pursuant to a Reduction in Force policy. Doc. 1-2 at ¶¶ 9, 58. Plaintiff alleges that this reason for her termination was illusory, and that she was actually terminated because she reported an assault by her coworker, Jackie Little, and took leave under the Family Medical Leave Act following this alleged assault. See Id. ¶¶ 10-57. Plaintiff brought this lawsuit on December 11, 2014, asserting the following claims: Breach of Contract (LANS), Breach of Implied Covenant of Good Faith and Fair Dealing (LANS), Willful Interference and Retaliation (LANS, Degidio), Retaliation (LANS, Degidio, McGuire), Negligence (LANS, Degidio, McGuire), Tortious Interference Retaliation (Degidio, McGuire, Little), Wrongful Termination (LANS, Degidio, McGuire), Intentional Infliction of Emotional Distress (All Defendants), and Assault (Little). Id. ¶¶ 60-100.[1]

         Discovery has not been smooth, and this Court has granted Motions to Compel against both Plaintiff and Defendants. See Docs. 64 (Memorandum Opinion and Order (“MOO”) granting in part Plaintiff's Motion to Compel), 70 (MOO granting in part Defendants' Motion to Compel). However, it is only Plaintiff and her husband's conduct that has warranted an award of attorney's fees. See Doc. 70 at 16.

         The Court granted Defendants' First Motion to Compel on March 10, 2016, finding that Plaintiff's husband, Robert Coyne, then a Plaintiff in this lawsuit, wrongfully withheld documents and refused to answer questions during his deposition and that Plaintiffs failed to produce an adequate privilege log. See Id. at 3-14. In addition to ordering Robert Coyne to produce responsive documents and submit to a second deposition at his expense, the Court awarded Defendants their reasonable costs and attorney fees for bringing the motion pursuant to Federal Rule of Civil Procedure 37(a)(5)(C). See Id. at 14-15. Defendants filed a Cost Bill on March 31, 2016, indicating that the amount expended in bringing the Motion totaled $3, 750.00. See Doc. 73. Plaintiff did not object to this amount.

         The sanctions ordered by this Court went unpaid, however, and on July 7, 2016, Defendants filed a second motion for sanctions based on Plaintiffs' failure to obey this Court's March 10, 2016, Order. See Doc. 97. In addition to seeking the unpaid sanctions, Defendants argued that Plaintiffs had committed further discovery violations in that they failed to produce responsive documents in their possession and failed to supplement their initial disclosures and discovery responses in a timely manner. Id. at 3.

         The Court convened a hearing on Defendants' second motion for sanctions on August 12, 2016. See Doc. 112 (Clerk's Minutes). At that hearing, the Court struggled with how to proceed in this case, given that Plaintiffs declared an inability to pay the sanctions imposed, yet were apparently able to post a $10, 000.00 cash only bond in connection to criminal proceedings against Robert Coyne and to purchase a new Harley-Davidson motorcycle. See Doc. 97 at 9, Doc. 112 at 2. Moreover, the Court cautioned Plaintiffs that they faced potential adverse inferences from their failure to produce the responsive documents. Doc. 112 at 3.

         Ultimately, the Court granted Defendants' second motion for sanctions in part and ordered Plaintiffs to produce any remaining responsive documents, to provide sworn affidavits describing their document search efforts, to supplement their initial disclosures, to submit to a third deposition, and to pay Defendants: “(1) The costs of the second deposition of Suzanne Coyne on June 14, 2016, including any videographer costs; (2) the fees incurred in connection with the second deposition of Robert Coyne on May 24, 2016; (3) the costs and fees, including videographer charges, for a third deposition of each of the Plaintiffs, as described; and (4) the payments required by the Court's March 10, 2016, Order.” Doc. 111 at 2. Due in part to Plaintiffs' claimed inability to pay for additional sanctions, the Court held in abeyance Defendants' requests for the fees and costs associated with bringing their second motion. Id.

         Defendants filed a Second Cost Bill on August 22, 2016, establishing that the running total to be paid to them was now $7, 089.28, and that Plaintiffs owed the videographer $629.72. See Doc. 114. Again, Plaintiffs did not object to these figures. In addition to these amounts, Defendants represent that Plaintiffs owe an additional $3, 200.00 for the costs and fees associated with their third depositions. See Doc. 136-9.[2] This brings the total amount owed by Plaintiffs to $11, 002.32.

         The parties proceeded with discovery, and on September 30, 2016, Defendants served Plaintiffs' counsel with a request for a forensic inspection of Suzanne Coyne's iPhone. See Docs. 117 127-1, 136-6. This request stemmed from an earlier request for production wherein Defendants sought all text messages that “relate in any way to any of the allegations contained in” the Complaint. See Doc. 127-2, 136-1 at 2. Specifically, Defendants sought text messages between Plaintiff and her husband, Robert Coyne, and between Plaintiff and her treating psychiatrist, Dr. Deepa Nadiga. Doc. 136-6. Plaintiff, who had failed to preserve the messages, did not object to the request and even cooperated with Defendants' attempts to retrieve them from her cellular carrier, Verizon, and from Apple before agreeing to the inspection. See Docs. 136-7, 136-8. Plaintiff, however, did object to paying for the cost of the forensic inspection. See Doc. 136-8. Therefore, Defendants filed a Second Motion to Compel Discovery in which they requested the Court order Plaintiff to pay for it. See generally Doc. 127.

         A hearing on Defendants' Second Motion to Compel Discovery was held on December 16, 2016. See Doc. 132 (Clerk's Minutes). Through their Counsel, Plaintiffs represented that they lacked the resources to pay for the inspection's anticipated cost of $2, 850.00. Id. at 2. While the Court questioned this assertion in light of the cash-only bond and motorcycle purchase, it ultimately found that the parties should share equally the cost of the forensic inspection. See Doc. 133. In reaching this decision, the Court found some of the sought text messages “obviously relevant” to Plaintiff's claim for emotional distress and Robert Coyne's then-pending claim for loss of consortium. Id. at 4. Moreover, Plaintiff was “on notice of their importance. . . .” Id. at 5. Relying on Plaintiff's assertion that she “failed to preserve them by simply changing the setting on her phone to prevent automatic deletions over time, ” id. at 5, [3] the Court ordered Plaintiffs to reimburse Defendants for half the cost of the forensic inspection of the iPhone. In doing so, the Court specifically noted that there was “no indication that Mrs. Coyne deliberately erased the messages. . . .” Id. at 5, n.4.

         On January 4, 2017, at approximately 3:52 PM Plaintiff's counsel called Defendants' to report that he had possession of Mrs. Coyne's iPhone and was ready to ship it to the forensic examiner, Epiq eDiscovery Solutions (“Epiq”) to see if the deleted text messages could be recovered. Counsel did just that the following day, see Doc. 136-10, and Epiq received Plaintiff's iPhone on January 9, 2017. Doc. 144-1 at ¶ 2. Upon receipt, an Epiq employee placed the iPhone into a faraday box[4] and then placed it into airplane mode to ensure that no transmissions would be sent or received by the phone. Doc. 136-11 at ¶ 6. A forensic copy was then created of the device. Id. Jon Kessler, Senior Director of Forensic Consulting for Epiq, then attempted to analyze the iPhone and extract the relevant text messages. Alas, none was found. Id. ¶ 7.

         In fact, “[u]pon initial inspection, the device contained very little content.” Id. Mr. Kessler soon determined that Mrs. Coyne's iPhone had been “erased and reset” on or about January 4, 2017, at 9:44 AM MST, the day before Plaintiff's counsel shipped it to Epiq. Id.; Doc. 144-1 at ¶ 4. Indeed, the “erase and reset” occurred just six hours before Plaintiff's counsel obtained possession of the iPhone for shipment to perform the forensic inspection.

         In his affidavit testimony, Mr. Kessler explains that erasing and resetting an iPhone cannot happen accidentally or inadvertently. Doc. 144-1 at ¶ 6. Rather,

for a user of an Apple iPhone to erase and reset the phone they must take one of two actions. First, the user can erase and reset the device from the device itself. In order to do this, the user must follow a number of discreet steps, during which the user is specifically informed that if the user follows the prompts “This will delete all media and data, and reset all settings.” And then “Are you sure you want to continue? All media, data, and settings will be erased. This cannot be undone.” The user would also be required to enter a user passcode and/or Apple ID and password if enabled during this process. Second, an Apple iPhone can be remotely erased using the user's iCloud account and/or the Find my iPhone app. When this action is taken, the user is prompted “All your content and settings will be erased. An erased iPhone cannot be located or tracked.” The user is then required to enter their Apple ID again to confirm, enter a message to display on the device and a call back number should the phone be found.

Doc. 136-11 at ¶ 8. According to Mr. Kessler, “data that existed on the device prior to the erase and reset is not able to be recovered from the device.” Doc. 136-11 at ¶ 9. Furthermore, “[t]here is no way to determine what data, including text messages, may have been deleted but would still have been recoverable prior to the erase and reset.” Doc. 144-1 at ¶ 7.

         After discovering that the iPhone had been erased and reset, Defendants' counsel wrote to Plaintiff's counsel on January 11, 2017. Defendants demanded not only an explanation but production of “any other copies, back-ups or sources of information that contain any of the data that existed on Ms. Coyne's iPhone prior to the deletion, including but not limited to data contained in iTunes, iCloud or on other phones, devices or home computers.” Doc. 136-14. In a January 19, 2017, phone conference between counsel, Plaintiff's attorney stated that Mr. and Mrs. Coyne claimed to have no knowledge of what had happened. Doc. 136-12 at ¶ 4. Plaintiff's counsel further indicated that Mrs. Coyne had contacted Verizon and Apple and was informed that although her contacts had been backed up, her text messages were not. Id.

         It is against this backdrop that Defendants now move the Court to dismiss Plaintiff's case in its entirety with prejudice “as a sanction for Plaintiff's intentional and permanent erasure of all the data on her iPhone the day before it was produced” for the forensic evaluation. Doc. 136 at 1. Plaintiff responds simply that she “did not engage in any destruction of evidence, willful or otherwise” and provides no explanation for the loss of the data. Doc. 141 at 1.

         Mrs. Coyne vehemently denies that she, or someone at her direction, erased and reset her iPhone, and offers her sworn affidavit and that of her husband in support of that position. See Docs. 141, 141-1, 141-2. However, Defendants have submitted evidence that calls into question the veracity of these affidavits. Specifically,

• within 2 minutes after it was erased and reset, Mrs. Coyne's iPhone “connected to a wireless network with the SSID (name) ...

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