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Morrison v. Veale

United States District Court, M.D. Alabama, Eastern Division

January 25, 2017

CHARLES J. VEALE, M.D., P.C., Defendant.



         This action is assigned to the undersigned magistrate judge to conduct all proceedings and order entry of judgment by consent of all the parties pursuant to 28 U.S.C. § 636(c). See Docs. 45, 46.

         Pending before the Court is Defendant's Motion for Sanctions Including Dismissal of the Action With Prejudice (Doc. 73, filed 8/30/16). Plaintiff submitted her response on September 16, 2016 (Doc. 75). The Court held a hearing and oral arguments on the matter on September 22, 2016. After the hearing, the Court permitted post-hearing briefing and replies. See Docs. 79, 80, 81, 82, 83, 84, and 85. An official transcript was prepared and docketed on December 2, 2016. After review of all the relevant pleadings, testimony, and evidence presented, the motion is fully submitted and ripe for review. On January 5, 2017, the Court entered an order which GRANTED in part and DENIED in part the Defendant's motion. See Doc. 87. This memorandum opinion now provides the basis for that ruling.

         I. Background

         Plaintiff Karla Morrison (“Plaintiff” or “Morrison”) filed her Complaint in this case on October 2, 2014 wherein she alleged violations of the Fair Labor Standards Act (“FLSA”). See Doc. 1. Defendant is Charles J. Veale, M.D., P.C. (“Defendant” or “Veale Practice”). Plaintiff states she was employed by Defendant from September 2011 through her termination on August 19, 2014. Plaintiff asserts two counts for violations of FLSA. Count I claims that Defendant failed to pay her the minimum wage from September 2011 until mid-February 2012 though she worked approximately thirty (30) hours per week. Count II claims that Defendant failed to pay overtime compensation from February 2012 to August 19, 2014 (her termination date) though Plaintiff regularly worked in excess of forty (40) hours.

         After several continuances of the discovery deadline and other relevant deadlines, the discovery period finally concluded on August 5, 2016. See Doc. 66. On August 30, 2016, Defendant filed its motion for sanctions for spoliation of evidence. See Doc. 73. Defendant alleges that after Plaintiff's termination, she improperly logged in to the office email account and deleted all the emails contained within the account. Defendant further alleges that she would secretly and repeatedly log-in to the email account to delete emails throughout the course of the litigation. Defendant states Plaintiff added 2-step verification to the log in process in April 2015 (long after she was terminated). The verification process was linked to her cell phone.

         Plaintiff denies the allegations. Plaintiff states that the only time she accessed the account post-termination was either August 19 or 20, 2014 solely to close out items (including her personal email). Plaintiff claims all emails related to the practice had already been copied and placed in their proper files at the Veale Practice. Plaintiff states that she was only closing out matters already completed. Plaintiff acknowledged she added an inactive account manager notification and an auto-reply which automatically sent a responsive email to the sender that they should contact the Veale Practice directly at the appropriate telephone number. Plaintiff denies accessing the account any time afterwards. Plaintiff claims the deleted emails had no bearing on the case and were clearly not important to the Veale Practice as they did not make any efforts to retrieve them during 2015. Plaintiff claims she did not activate the 2-step verification process in April 2015 and posits anyone could have done that and specifically identifies the Defendant as likely having added Plaintiff's cell phone.

         On September 22, 2016, the Court heard oral arguments and evidence as it related to the motion. The Court heard testimony from Plaintiff's prior three attorneys (which included a limited waiver of privilege as it pertained to discovery matters), Plaintiff Karla Morrison, Nancy Veale, Kathryn Peters, and Dana Johnson. The final three witnesses were employees of the Veale Practice.

         Defendant in its motion for sanctions first requests dismissal with prejudice of the lawsuit. Alternatively, it requested dismissal of the FLSA overtime claim. Plaintiff opposes any sanctions, but states, in the alternative, that if granted that appropriate remedy would be a permissive jury instruction. At the conclusion of the hearing the Court provided both parties the opportunity for supplemental briefing including the Court's request to address alternative remedies besides the far ends of the spectrum each side requested. After receiving the briefs, their sur-replies, and the official transcript of the proceeding, the issue was fully ripe for disposition.

         II. Jurisdiction and Legal Authority

         Morrison asserts claims pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) as she brings claims for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. No party contests either subject matter or personal jurisdiction and adequate support exists for both.

         “‘Spoliation' is the ‘intentional destruction, mutilation, alteration, or concealment of evidence.'” Swofford v. Eslinger, 671 F.Supp.2d 1274, 1279 (M.D. Fla. 2009) (citations omitted); see also Evans v. Mobile County Health Dep't, Civ. Act. No. 10-0600-WS-C, 2012 U.S. Dist. LEXIS 8530, 2012 WL 206141 (S.D. Ala. Jan. 24, 2012) (Cassidy, M.J.) (quoting Swofford); cf. Green Leaf Nursery c. E.I. DuPont de Nemours & Co., 341 F.3d 1292, 1308 (11th Cir. 2003) (spoliation defined as the destruction of evidence or the significant and meaningful alteration of a document or instrument, without reference to intentionality); Oil Equip. Co. v. Modern Welding Co., ___ Fed.Appx. ___, 2106 U.S. App. LEXIS 17632, *15, 2016 WL 5417736, *5 (11th Cir. Sept. 29, 2016) (quoting West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) (“Spoliation” refers to “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.” Eleventh Circuit again includes both intentional and negligent mens rea.). A district court has “broad discretion” to impose sanctions as part of its “inherent power to manage its own affairs and to achieve the orderly and expeditious disposition of cases.” Flury v. Daimler Chrysler Corp., 427 F.3d 939, 944 (11th Cir. 2005). Sanctions for spoliation of evidence are intended “to prevent unfair prejudice to litigants and to insure the integrity of the discovery process.” Id.

         Federal law governs the imposition of spoliation sanctions since “spoliation sanctions constitute an evidentiary matter.” Id. (citations omitted). However, while federal law governs, a court may look to state law for guidance to the extent is consistent with federal law. Flury, 427 F.3d at 944 (examining spoliation factors enumerated in Georgia law since the Eleventh Circuit had not set forth specific guidelines and Georgia law on the subject was wholly consistent with federal spoliation principles); Southeastern Mechanical Services, Inc. v. Brody, 657 F.Supp.2d 1293, 1299 (M.D. Fla. 2009) (“[C]ourts may look to state law principles for guidance so long as the principles are consistent with [general] federal spoliation principles [that do exist].”).

         The Alabama Supreme Court has applied the following five factors in analyzing a request for spoliation sanctions: “(1) the importance of the evidence destroyed; (2) the culpability of the offending party; (3) fundamental fairness; (4) alternative sources of the information obtainable from the evidence destroyed; and (5) the possible effectiveness of other sanctions less severe than dismissal.” Story v. RAJ Properties, Inc., 909 So.2d 797, 802-803 (Ala. 2005) (citation omitted); see also Oil Equip Co., 2016 U.S. App. LEXIS 17632 at *15-16, 2016 WL 5417736 at *5 (quoting Story); Ray v. Ford Motor Co., 792 F.Supp.2d 1274, 1279 (M.D. Ala. 2011) (citing Story).

         Finally, Federal Rule of Civil Procedure 37(e) addresses Electronically Stored Information (ESI). The relatively new Fed.R.Civ.P. 37(e) went into effect on December 1, 2015 which is after the filing of this case. As such, it is not binding, but the Court finds the material persuasive. It states as follows:

(e) Failure to Preserve Electronically Stored Information.

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information's use ...

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