United States District Court, D. New Mexico
PHILMAR DAIRY, LLC; ARCH DIAMOND, LLC; MOONSTONE DAIRY, LLC; and HENDRIKA DAIRY, LLC; Plaintiffs,
ARMSTRONG FARMS and RANDY ARMSTRONG, Defendants, and RANDY ARMSTRONG, Counterclaimant,
PHILMAR DAIRY, LLC; ARCH DIAMOND, LLC; MOONSTONE DAIRY, LLC; and HENDRIKA DAIRY, LLC; Counter-defendants.
MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS'
MOTION FOR SANCTIONS FOR SPOLIATION OF EVIDENCE AND EXCLUDING
CERTAIN EVIDENCE AT TRIAL UNDER FEDERAL RULE OF EVIDENCE
STEPHAN M. VIDMAR UNITED STATES MAGISTRATE JUDGE.
MATTER is before the Court on Plaintiffs' Motion for
Sanctions for Spoliation of Evidence [Doc. 103], filed on
April 17, 2019. Defendants responded on May 1, 2019. [Doc.
111]. Plaintiffs replied on May 15, 2019. [Doc. 117]. The
Court has considered the briefing, the relevant portions of
the record, the relevant law, and the oral argument. Because
Plaintiffs fail to establish the elements of a successful
spoliation claim, the Court will DENY Plaintiffs' Motion.
Nevertheless, the Court finds that exclusion of testimony or
argument concerning the disputed evidence is warranted under
Federal Rule of Evidence 403.
are dairies located in Portales, New Mexico. [Doc. 1-1] at
13. Defendant Armstrong Farms, owned by Defendant Randy
Armstrong, is a farm near Dell City, Texas. [Doc. 1-1] at 3
(Complaint); [Doc. 55] at 4 (Defendant's Response to
Plaintiffs' Motion for Partial Summary Judgment). It
agreed to sell Plaintiffs approximately 9, 232 tons of hay
for the 2017 growing season. [Doc. 43] at 4 (Plaintiffs'
Motion for Partial Summary Judgment); [Doc. 43-1] at 1-2.
After the hay was harvested, Defendants stored it on open-air
stack lots on their farm until it was needed by Plaintiffs.
[Doc. 55] at 4. From May 2017 through February 2018,
Defendants delivered approximately 6, 585 tons of hay to
Plaintiffs. [Doc. 1-1] at 15. Defendants claim that on August
23 or 24, 2017, a lightning-caused fire destroyed some of the
stored hay. [Doc. 43-1] at 7-8.
claim that, some time after the fire occurred, Alfred Vest,
Armstrong Farms' former farm manager, discovered
“smoldering, smoking embers”-and no remaining
hay-where Defendants had stored 2, 647 tons of hay intended
for delivery to Plaintiffs. [Doc. 103-1] at 2-3; see [Doc.
55] at 3. He did not witness the fire. [Doc. 103] at 1. Vest
testified that he took photos of the smoldering embers on his
cell phone, but he no longer possesses the photos because
“[they were] about five cell phones ago.” [Doc.
55-1] at 4. Vest testified that he does not recall sending
these photos to Armstrong. Id. According to Defendants,
Vest “informed Plaintiffs within one week of the
fire” of the hay's destruction. [Doc. 43-1] at 7.
Defendants neither delivered the 2, 647 tons of missing hay
nor refunded Plaintiffs' payment for it. [Doc. 1-1] at
16; [Doc. 55] at 4. Plaintiffs dispute that the fire
occurred. [Doc. 1-1] at 16.
sued Defendants in New Mexico state court on April 26, 2018.
[Doc. 1-1] at 1. The Complaint contains claims for unjust
enrichment, breach of contract, fraud, and violations of the
New Mexico Unfair Practices Act. Id. at 17-18.
Defendants removed the action to this Court on June 7, 2018.
[Doc. 1]. On April 17, 2019, Plaintiffs filed the instant
Motion for Sanctions based on the loss/destruction of the
photos. Id. at 1.
claim that Defendants spoliated evidence by failing to
preserve the photos taken by Vest. In response, Defendants
argue that (1) they had no duty to preserve the photos, (2)
Plaintiffs suffered no prejudice from the loss of the photos,
and (3) Defendants lacked the necessary intent to justify
imposition of a default judgment or an adverse-inference jury
instruction. [Doc. 111] at 3-10.
Court must first determine which law to apply. Plaintiffs
rely on three sources of law: Federal Rule of Civil Procedure
37(b), the Court's inherent authority, and Rule 37(e).
[Doc. 103] at 6-7. Because Plaintiffs do not explain how
Defendants' alleged spoliation violated a discovery
order, Rule 37(b) does not apply. Because Vest stored the
photos on a cell phone, and the record does not indicate that
they were ever printed, the photos constituted electronically
stored information (“ESI”). Amended Rule 37(e)
forecloses reliance on the Court's inherent authority to
sanction for spoliation of ESI. See Newberry v. Cty. of
San Bernardino, 750 Fed.Appx. 534, 537 (9th Cir. 2018)
(unpublished); Snider v. Danfoss, LLC, No. 15 CV
4748, 2017 WL 2973464, at *3 n.8 (N.D. Ill. July 12, 2017).
The Court will therefore apply Rule 37(e).
Court will not impose spoliation sanctions because (1)
Plaintiffs fail to establish that Defendants knew or should
have known litigation was imminent, and (2) Plaintiffs fail
to establish that Defendants acted with an intent to deprive
Plaintiffs of the photos' use in future litigation.
the Court will bar testimony and argument concerning the
photos under Rule 403 because the probative value of
mentioning photos which Defendants cannot produce at trial is
substantially outweighed by the danger of unfair prejudice to
Plaintiffs' spoliation claim fails because they have not
established that Defendants knew or should have known that