C.D. Cal. Grants Motion in Limine to Exclude Evidence of Sanctions for Spoliation

This month, the Central District of California issued a decision, Mfg. Automation & Software Sys. v. Hughes, 2:16-cv-08962-CAS-KSx, 2019 U.S. Dist. LEXIS 9343 (C.D. Cal. Jan. 15, 2019) on the motions in limine filed by the Plaintiff and the Defendants. The Plaintiff's suit concerned copyright infringement, misappropriation of trade secrets, breach of contract, interference with economic advantage, fraud, and alleged violation of the federal Computer Fraud and Abuse Act, and California's Computer Data Access and Fraud Act.

The Plaintiff's motion in limine sought to exclude evidence of the dissimilarity of the parties' source codes and similarity of the non-literal elements of their software. The Plaintiff's claims concerned the alleged copying by the Defendants of its software which was used to track inventory. A magistrate judge previously ruled that the Plaintiff failed to preserve emails when litigation was anticipated and committed spoliation for which monetary sanctions were awarded under Federal Rule of Civil Procedure 37.

The Court found that the record did not allow it to reach a conclusion as to whether or not the Plaintiff would advance the theory that there was a dissimilarity of the parties' source codes, and denied a motion in limine for evidence on this point without prejudice. The Plaintiff filed another motion in limine to exclude testimony regarding the similarity of the non-literal elements of the software because the Defendants' expert's report did not analyze screenshots of the software. The Court denied this motion.

The Plaintiff also moved to exclude evidence and argument regarding the spoliation of evidence and the related sanctions. The Court granted this motion finding that, "would be improper to provide an additional remedy, in addition to the sanction awarded by the Magistrate Judge." Id. at *14-15.

The Court denied the Plaintiff's motion to limine to exclude future expert disclosures not disclosed in discovery, with respect to a declaration, because the Court would be better able to rule on this as they were raised in the context of the trial. The declaration was filed seven months before the trial and so was not likely to cause prejudice. The Defendants' motion in limine to exclude previously undisclosed testimony by the Plaintiff's expert was also denied without prejudice.

The Defendants filed a motion in limine to exclude evidence obtained by a private investigator who posed as a customer for the purpose of obtaining admissions from the Defendants. The Court did not find that there was evidence that an ethical violation occurred and found that even if there was, the request would be overbroad and and improper.

The Court did grant the Defendants' motion in limine to exclude all witness and evidence not disclosed in accordance with the parties' scheduling order.

Gilded Age Electronic Discovery

Attorneys have been using technology to send business communications for far longer than computers and emails have been around. The Martindale Directory of 1900 contains a record of how lawyers of the Gilded Age used the technology of the day to efficiently send messages about business transactions. At the beginning of the directory is a list of cipher codes used in telegrams. Presumably, these codes allowed lawyers and their clients to communicate with a measure of confidentiality and for a cheaper per letter/word cost.

If a client sent a telegram to an attorney using the word, 'GYMNAST' the message would be, 'Have we power to arrest the party named below on the facts as stated to you?' The code HEDONIC was a direction by an attorney meaning, "Send at once full name of each member of your firm, or if you are corporation, give name of State in which you were incorporated. This we need in matter of your claim against . . .". '

M.D. Tenn. Rules on Spoliation Motions

On Friday, Judge Waverly D. Crenshaw, Jr. issued a decision, EPAC Techs. v. Harpercollins Christian Publ., No. 3:12-cv-00463, 2019 U.S. Dist. LEXIS 1816 (M.D. Tenn. Jan. 4, 2019), ruling on several motions in limine for a trial scheduled to begin this coming Wednesday.

Among these were the Defendant's motion in limine to exclude evidence about his alleged spoliation. He argued that the Plaintiff had mischaracterized the Court and the Special Master's rulings on spoliation and was likely to do so again in front of the jury. The Court determined that the Defendant negligently deposed of relevant books after its duty to preserve arose. Judge Crenshaw ordered a curative jury instruction that the Defendant breached its duty to preserve and that the books could support the Plaintiff's claims. A curative jury instruction of this nature was also ordered for warehouse data and emails that were lost due to the Defendant's negligence. The jury was to take into consideration that the lost ESI would have shown whether or not books were returned, whether orders were filled on time and correctly, and where the books were shipped from.

The Court also ruled on Defendant's motion that EPAC committed spoliation. The motions against EPAC allege that it allowed electronic production data to be lost when it was transferred to third party servers; it lost emails which would show that its platform could fulfill orders for the Defendant; and that it failed to produce financial statements. The Defendant said that it did not create financial statements in the ordinary course of business.

The Court denied the first motion because the Defendant did not show that the production data could not be obtained from other sources, and determined that no Rule 37(e) sanction was warranted. Judge Crenshaw did not find that the identification of four relevant emails that had not been produced supported a finding of spoliation. He also noted that the Defendant made no showing of intent necessary for an adverse inference instruction. The final motion for sanctions was also denied. "To the extent Thomas Nelson questions EPAC's financial practices or the provenance of these data, it may explore those topics and challenge EPAC's proof of damages at trial. A Rule 37(e) sanction of excluding all proof of lost profit damages, however, is not warranted on this record." Id. at *58.