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Derrick v. Standard Nutrition Co.

United States District Court, D. New Mexico

April 12, 2019

RONNY DERRICK and ANGIE DERRICK, Plaintiffs,
v.
STANDARD NUTRITION COMPANY, JOHN DOES 1-5, and XYZ CORPORATE OR BUSINESS ENTITIES 1-5, Defendants, and STANDARD NUTRITION COMPANY, Counterclaimant,
v.
RONNY DERRICK and ANGIE DERRICK, Counter-defendants.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS' MOTION FOR SANCTIONS

          STEPHAN M. VIDMAR, UNITED STATES MAGISTRATE JUDGE

         THIS MATTER is before the Court on Plaintiffs' Motion for Sanctions [Doc. 68], filed on November 19, 2018. Defendant Standard Nutrition Company responded on December 3, 2018. [Doc. 72]. Plaintiffs never replied. Plaintiffs filed their First Supplemental Brief regarding the Motion for Sanctions on February 13, 2019. [Doc. 89]. Defendant responded to the First Supplemental Brief on December 21, 2019. [Doc. 90]. Plaintiffs then filed their Second Supplemental Brief, and an Errata regarding their First Supplemental Brief, on March 13, 2019. [Docs. 92, 93]. Defendant responded to the Second Supplemental Brief on March 14, 2019. [Doc. 94]. The Court held oral argument on the Motion on March 18, 2019. [Doc. 95] (Clerk's Minutes). The Court has considered the briefing, oral argument, the relevant portions of the record, and the relevant law. Being otherwise fully advised in the premises, the Court will DENY Plaintiffs' Motion.

         I. BACKGROUND

         Plaintiffs breed horses at their New Mexico ranch. [Doc. 1-1] at 2. They purchased feed for their horses from Defendant Standard Nutrition on or about December 8, 2016. Id. at 5. Plaintiffs allege that some of their horses became ill and died after eating the feed. Id. Plaintiffs claim that the feed contained monensin, a substance toxic to horses. Id. Plaintiffs assert various claims against Defendant, including claims for products liability, breach of contract, cruelty to animals, unfair trade practices, misrepresentation, and fraud. Id. at 7-14. Defendant has filed a counterclaim alleging breach of contract (failure to pay for the feed) and malicious abuse of process. [Doc. 5] at 3-4.

         Plaintiffs served Requests for Production (“RFPs”) seeking, inter alia, notes and records related to Plaintiffs' feed; records of the manufacture, storage, and movement of the feed; and records identifying five other feeds that may have contaminated Plaintiffs' feed. [Doc. 44] at 4- 6. Dissatisfied with Defendant's responses to the RFPs, Plaintiffs filed a Motion to Compel. [Doc. 44]. At the oral argument on the Motion to Compel, counsel stated that Defendant had agreed to supplement some of its discovery responses.[1] [Doc. 52] at 1. The Court therefore granted the Motion “insofar as Defendant has agreed to supplement its production of documents” and denied the remainder of the Motion as moot. [Doc. 52] (Clerk's Minutes); [Doc. 53]. The Court ordered Defendant to supplement its responses by August 24, 2018, and ordered Plaintiffs to file objections, if any, to Defendant's supplemental responses no later than September 7, 2018. [Doc. 53]. Defendant supplemented its responses on August 24, 2018. [Doc. 72-4]. Plaintiffs did not object.

         Two months later, on October 25, 2018, Plaintiffs deposed George Madrazo, Defendant's current Operations Manager and formerly the Co-Operations Manager with Kevin Floyd. [Doc. 68-2] at 1. According to Plaintiffs, Madrazo testified that Defendant has-or should have- various records, test results, feed samples, fines, [2] and other evidence that it had not produced. [Doc. 68] at 4-5. At the deposition, Plaintiffs' counsel orally requested production of Defendant's monensin inventory and test results from Elanco.[3] [Doc. 68-2] at 15, 20. Plaintiffs' counsel emailed defense counsel on October 30, 2018, asking Defendant to “look into” the documents Madrazo testified to. [Doc. 72-3] at 1-2. These documents include: a photo of a conveyor, notes and records from Floyd, test results from Elanco, a fax concerning Defendant's investigation into Plaintiffs' horses' deaths, Defendant's monensin inventory, and other samples and test results of Plaintiffs' feed. Id.

         In the October 30, 2018 email, Plaintiffs' counsel also asked Defendant's counsel to look into the fines that resulted from the manufacture of Plaintiffs' feed. According to Madrazo, those fines should have been retained at the mill until the next production cycle. Id. at 2; see [Doc. 68-2] at 5.

         Plaintiffs filed the instant Motion for Sanctions on November 19, 2018. [Doc. 68]. Defense counsel subsequently replied to Plaintiffs' counsel's email on November 28, 2018, stating that, though he would provide photos of the conveyor, all other discovery requests involved evidence (1) that Defendant had already disclosed, (2) that Defendant had destroyed inadvertently or in the normal course of business, or (3) that did not exist at the time of the incident. [Doc. 72-3] at 1. Defendant responded to the Motion on December 3, 2018. [Doc. 72].

         The Court held a status conference on February 1, 2019. [Doc. 86] (Clerk's Minutes). The Court ordered Plaintiffs to file supplemental briefing addressing the deposition testimony of Floyd and Plaintiffs' expert, Dr. Ronald Box, as well as any other additional discovery completed after Defendant responded to the Motion for Sanctions on December 3, 2018. Id.; Recording of Status Conference at 4:15-6:00 (February 1, 2019) (Liberty-Picacho Courtroom). The Court ordered Plaintiffs to file their supplemental brief no later than February 13, 2019, and Defendant to file its response no later than February 21, 2019. [Doc. 88].

         Plaintiffs filed their First Supplemental Brief on February 13, 2019. [Doc. 89]. Plaintiffs argue that, based on Floyd's testimony, Defendant should have retained 1, 180 pounds of fines for testing, and that its failure to do so constituted spoliation of evidence. Id. at 5-10. Plaintiffs contend that Dr. Hall, Defendant's expert, testified that testing the fines would have produced relevant evidence. Id. Defendant filed its Response to Plaintiffs' First Supplemental Brief on February 21, 2019. [Doc. 90].

         Plaintiffs filed a Second Supplemental Brief on March 13, 2019. [Doc. 92]. They again argue that the deposition testimony of Dr. Hall indicates that testing the fines would have produced relevant evidence.[4] [Doc. 92] at 4-10. They make no new arguments in the Second Supplemental Brief; it largely provides quotations from Dr. Hall to support the same spoliation arguments made in the First Supplemental Brief. See Id. Defendant responded to the Second Supplemental Brief on March 14, 2019. [Doc. 94].

         II. ANALYSIS

         Plaintiffs argue that Madrazo's and Floyd's testimony establishes that Defendant has relevant evidence it has not disclosed. [Doc. 68]; [Doc. 89]. They argue that Defendant should be sanctioned under Federal Rule of Civil Procedure 37 for two reasons. First, they believe that Defendant's failure to disclose this evidence violated the Court's Order Granting in Part Plaintiffs' Motion to Compel [Doc. 53]. [Doc. 68] at 12-13. Second, they claim that Defendant's failure to disclose this evidence amounted to a failure to supplement under Rules 26(a) and 26(e). Id. at 13- 14. The evidence that Defendant allegedly failed to disclose includes:

• Floyd's notes and records regarding Plaintiffs' feed;
• A fax concerning Defendant's formulation of and investigation into ...

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