Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Cramton v. Grabbagreen Franchising LLC

United States District Court, D. Arizona

December 23, 2019

Kim Cramton, Plaintiff,
v.
Grabbagreen Franchising LLC, et al., Defendants.

          ORDER

          DOMINIC W. LANZA UNITED STATES DISTRICT JUDGE

         The parties have filed a series of interrelated motions in this hotly contested employment action. (Docs. 142, 143, 200, 206, 220, and 229.) The motions recently became fully briefed, and the Court hereby rules as follows.

         BACKGROUND

         I. The Parties, Claims, And Essential Facts[1]

         From September 2014 through September 2017, Plaintiff Kim Cramton (“Cramton”) was affiliated in various capacities with a trio of related entities, Grabbagreen Franchising, LLC (“GFL”), Eat Clean Operations, LLC (“ECO”), and Eat Clean Holdings, LLC (“ECH”) (collectively, the “Corporate Defendants”). The business purpose of the Corporate Defendants, which were owned and/or operated by Keely Newman (“Keely”) and her spouse, attorney Kelli Newman (“Kelli”), was to oversee the “Grabbagreen” restaurant franchise, which features healthy fast food and juice. For ease of reference, the Corporate Defendants, Keely, and Kelli will be referred to collectively as “Defendants.”

         On September 25, 2017, Cramton stopped working for Defendants. At the time of her departure, Cramton held an 18.6% ownership interest in ECH. However, in October 2017, Keely purported to exercise a contractual provision that permitted her to repurchase Cramton's ownership interest for $1 if Cramton voluntarily resigned. Later, in November 2017, Cramton began working for Kahala Brands Ltd. (“Kahala”), where her role was to promote the franchising of the “Blimpie” line of sandwich shops.

         Cramton filed this lawsuit in December 2017. The operative 10-count complaint (Doc. 88) raises claims that can be grouped into the following four categories:

         • ADA Claims (Counts 1-3): Cramton contends she became disabled in April 2017, after being diagnosed with a brain aneurysm, yet the Corporate Defendants refused her request for an accommodation, retaliated against her, and subjected her to emotional abuse. Cramton thus contends her seeming resignation on September 25, 2017 was actually a constructive discharge.

         • Minimum Wage Claim (Count 4): Cramton contends she didn't receive any wages for her work for Defendants throughout 2017, in violation of Arizona's minimum wage statute. Nevertheless, in late 2017, Cramton received a W-2 statement stating GFL had paid her $25, 000 in wages in 2017. Cramton contends the $25, 000 didn't constitute wages (instead, it represented the partial repayment of a loan) and that Defendants improperly issued the W-2 in an attempt to evade liability on her wage claim.

         • Contract Claim (Count 5): Cramton contends she loaned over $66, 000 to ECO in October 2016, to help fund the acquisition of a Grabbagreen franchise location, but has only received partial repayment on the note.

         • Tort And Contract Claims (Count 6-10): These claims all arise, in one form or another, from a phone call on September 18, 2017 during which Keely allegedly told Cramton that a planned sale of Grabbagreen to Kahala had fallen through and that Kahala would not be making any future offers. Cramton departed soon after receiving this information. In fact, Kahala ended up acquiring Grabbagreen in March 2018 for $2.675 million, and Cramton contends that Keely's statement during the phone call was false because Keely knew at the time that Kahala remained interested in an acquisition. Cramton thus seeks, under a variety of tort and contract theories, the portion of the Kahala acquisition proceeds she would have received if she hadn't left the company in September 2017.

         Defendants deny these allegations and assert an array of counterclaims against Cramton. (Doc. 95.) In a nutshell, Defendants contend that Cramton violated a confidentiality and non-compete agreement, and engaged in unfair competition, by joining Kahala, an alleged competitor in the restaurant franchise industry; violated a contractual release of claims by bringing this lawsuit; and wrongfully interfered with their efforts to sell Grabbagreen to Kahala, causing the ultimate sale price to be at least $1 million lower than it should have been. Defendants' overarching theory is that Cramton impulsively resigned in September 2017, didn't realize she was forfeiting her 18.6% ownership interest by doing so, and concocted this lawsuit in an effort to recoup the $500, 000 or so she would have earned from the Kahala acquisition if she'd stuck around instead of resigning. (See, e.g., Doc. 143 at 5; Doc. 172 at 1.)

         One of the key issues in this case is what, exactly, Cramton knew about Kahala's acquisition plans when she resigned. In addition to disputing Cramton's characterization of what Keely said during the fateful phone call on September 18, 2017-according to Defendants, Keely merely told Cramton that Kahala had declined to accept a particular offer and didn't say the overall deal was dead-Defendants contend that Cramton had friends within Grabbagreen and Kahala who were secretly feeding her information about Kahala's plans. (This theory, if true, would undermine Cramton's suggestion that she detrimentally relied on Keely's purported statement.) In Defendants' view, the evidence of these communications should have been found on Cramton's company-issued computer and cell phone. Unfortunately, around the time of her departure, Cramton brought both devices to a third-party data vendor in an attempt to have them “wiped.” Much ink has been spilled over what consequences, if any, should flow from that decision.

         II. Relevant Procedural Background

         On December 13, 2018, Defendants deposed Cramton. (Doc. 107.) Afterward, Defendants filed a motion seeking authorization to conduct three additional hours of examination. (Id.)

         On December 28, 2018, the Court issued an order denying Defendants' request. (Doc. 108.)

         On February 22, 2019, Defendants filed a motion for reconsideration, arguing, inter alia, that Cramton had submitted declarations following her deposition that contradicted her deposition testimony and her MIDP disclosures. (Doc. 136.)

         On March 1, 2019, Cramton filed a motion for partial summary judgment. (Doc. 142.) It seeks summary judgment on Count 4 (the minimum wage claim), on Count 5 (the breach-of-contract claim pertaining to the promissory note), on whether the Corporate Defendants comprise an “integrated enterprise” for purposes of Counts 1-3 (the ADA claims), and on all of Defendants' counterclaims, which Cramton contends were “only asserted for purposes of maliciously imposing additional litigation costs against [her].” (Id. at 2-3.) This motion appeared to become fully briefed on April 16, 2019. (Docs. 158, 171.)

         Separately, on March 1, 2019, Defendants filed their own motion for summary judgment. (Doc. 143.) It seeks summary judgment on all of Cramton's claims except Count 5 (the breach-of-contract claim pertaining to the promissory note). This motion also appeared to become fully briefed on April 16, 2019. (Docs. 159, 172.)

         On April 30, 2019, the Court issued an order granting Defendants' motion for reconsideration and authorizing Defendants to re-depose Cramton for three hours on certain topics. (Doc. 175.)

         On May 21, 2019, the renewed deposition took place. (Doc. 184 at 1.)

         On June 3, 2019, and seemingly in response to the testimony she had provided during the renewed deposition, Cramton filed a motion to withdraw her “request for summary judgment with respect to the amount of damages ($56, 499) claimed in support of her minimum wage claim.” (Doc. 184.) This unopposed request was later granted. (Doc. 203 at 1.)

         On June 20, 2019, Defendants notified the Court of their desire to file a sanctions motion against Cramton based upon her alleged spoliation of evidence. (Doc. 197.) The following day, after holding a hearing, the Court authorized Defendants to file such a motion. (Doc. 195.)

         On July 12, 2019, Defendants filed a motion to supplement their summary judgment motion, as well as their response to Cramton's summary judgment motion, to include certain admissions Cramton had made during her renewed deposition. (Doc. 200.) That motion became fully briefed on July 22, 2019. (Docs. 202, 205.)

         On July 22, 2019, Defendants filed their sanctions motion. (Doc. 206.) Among other things, it seeks dismissal of most of the counts in Cramton's complaint. (Id. at 19.) That motion appeared to become fully briefed on August 30, 2019. (Docs. 216, 221.)

         On July 28, 2019, Cramton submitted an errata sheet concerning the testimony she had provided during her renewed deposition. (Doc. 220-1.)

         On August 30, 2019, Kelli (who, by this point, had begun representing herself pro se, see Doc. 178) filed a motion to strike Cramton's errata sheet under the theory that the proposed changes were not mere errata, but substantive changes intended to bolster her litigation position. (Doc. 220.) That motion became fully briefed on September 19, 2019. (Docs. 225, 228.) And during oral argument, the remaining Defendants joined Kelli's motion.

         On November 1, 2019, Cramton filed a motion for leave to file a surreply to Defendants' sanctions motion. (Doc. 229.) That motion became fully briefed on November 15, 2019. (Docs. 230, 231, 232.)

         On December 10, 2019, the Court issued a tentative ruling addressing the parties' six pending motions. (Doc. 238.)

         On December 16, 2019, the Court heard oral argument on the motions. (Doc. 241.)

         On December 20, 2019, Cramton submitted a supplemental brief concerning one of her ADA claims. (Doc. 243.)

         DISCUSSION

         Before addressing the parties' cross-motions for summary judgment, the Court will resolve the other pending motions. This approach is necessary because the resolution of those motions may narrow, or moot, the summary judgment arguments.

         I. Defendants' Motion To Supplement The Record (Doc. 200)

         As noted, Cramton's initial deposition took place on December 13, 2018, but the Court later authorized Defendants to pursue three additional hours of deposition time. (Doc. 175.) The renewed deposition took place on May 21, 2019, and Defendants then moved to supplement their motion for summary judgment, as well as their response to Cramton's motion for summary judgment, with certain testimony from the May 21 deposition. (Doc. 200.) Cramton opposes the motion on the ground that Defendants are attempting “to supplement the summary judgment record with unrelated information that was within their custody and control at the time the summary judgment briefing was filed.” (Doc. 202.) Cramton also argues “there is no need to supplement the summary judgment record with respect to the number of hours worked claimed because Ms. Cramton already moved to withdraw that portion of her summary judgment record. (Doc. #184). That motion was unopposed by the Grabbagreen defendants.” (Id.)

         Defendants' motion will be granted. Cramton has not demonstrated that the information Defendants seek to add to the record was available to them at the time of the initial summary judgment briefing and the Court can decide for itself whether the newly added information is relevant to its analysis.

         II. Defendants' Motion For Sanctions (Doc. 206)

         Defendants move for sanctions due to Cramton's alleged failure to preserve and produce certain electronically stored information (“ESI”)-specifically, text messages and voicemails-pertaining to four witnesses: (1) John Wuycheck, a current employee of Kahala; (2) Jeff Farnell, a former employee of GFL; (3) Todd Cable, another former employee of GFL; and (4) Adrienne Savone, Cramton's niece. (Doc. 206.)

         A. Underlying Facts

         1. Cramton's anticipation of litigation

         On multiple occasions between April 2017 and September 2017, Cramton consulted with attorneys about matters related to her employment. On April 17, 2017, Cramton spoke with an attorney, Grabbagreen's outside counsel Juliet Peters, about how to request FMLA leave from Defendants. (Doc. 199-1 at 29-30.) In response, Ms. Peters advised Cramton to “[i]nsulate yourself” by obtaining a doctor's note and further advised Cramton to speak with a different attorney, Catherine Pearson. (Doc. 199-1 at 29-30.) That same day, Cramton spoke with Ms. Pearson, who provided advice concerning how to submit a reasonable accommodation request to Defendants. (Doc. 199-1 at 27.) Cramton later thanked Ms. Peters for referring her to Ms. Pearson, stating: “She's awesome. . . . She gave me some great advice and sent me an email indicating what I might want to say to Keely.” (Doc. 199-1 at 30.)

         Next, on June 16, 2017, Cramton told her therapist that, because she was “unsure of whether [her] partner/boss will distribute her %, ” she “is hiring an employment lawyer.” (Doc. 199-1 at 42.) And on June 23, 2017, Cramton consulted with a third attorney, Shelley DiGiacomo, and was told to “make notes” of calls with Keely because such notes “may be useful to a litigator in the future.” (Doc. 199-1 at 36.)

         On September 19, 2017, Cramton corresponded with Ms. DiGiacomo about how to submit a demand to Defendants for repayment of an overdue note and how to obtain one month's worth of severance pay upon resigning. (Doc. 199-1 at 9.) Following this discussion, Cramton texted her spouse that “I spoke with my attorney today and I am going to quit.” (Doc. 199-1 at 10.) Finally, on September 22, 2017, Ms. DiGiacomo drafted Cramton's resignation letter, which Defendants received on September 24, 2017 and which stated that “Ms. Cramton is resigning her position [with GFL] and its related entities effective September 25, 2017.” (Doc. 199-1 at 12.)

         2. The company-issued cell phone and computer

         While she was employed by Defendants, Cramton used a company-issued cell phone and company-issued computer. (Doc. 199-1 at 74.) On September 24, 2017-the same day she submitted her resignation letter-Cramton purchased a new cell phone and went to the Verizon store to set it up. (Doc. 199-1 at 75-81.) Cramton also brought her company-issued cell phone to the store. (Id.) While there, Cramton arranged for a store employee to transfer all of the data, pictures, contacts, text messages, and e-mails from the old phone to the new phone. (Id. at 80-81.)

         On September 25, 2017, the day after receiving Cramton's resignation letter, Defendants sent a response to Ms. DiGiacomo. (Doc. 19-1 at 14-15.) Among other things, this letter included a “demand that [Cramton] immediately return all Grabbagreen property of any nature whatsoever to Grabbagreen, including . . . the computer [and] cell phone . . . . [A]ll data on the cell phone or sent using that company device belongs to Grabbagreen.” (Id. at 14.)

         On September 26, 2017, Cramton contacted Carl Wilson, a representative of a company called P.C. Guru, to explain that “I've left Grabbagreen so I . . . need to reset the Mac[intosh computer] I had before I turn it in.” (Doc. 199-1 at 24.)

         On September 27, 2017, Cramton met with Mr. Wilson. The invoice from that meeting states that Cramton paid $350 for Mr. Wilson to “move data” from her company-issued computer and to “clean up and erase” her company-issued cell phone. (Doc. 199-1 at 101.) In her declaration (and during her deposition), Cramton explained that she only asked Mr. Wilson to save the emails between herself and Keely that were contained on the computer, without requesting a backup of the entire hard drive, but Mr. Wilson ended up making a complete backup copy (which she didn't realize until later). (Doc. 199-1 at 39 ¶¶ 10-11; Doc. 216-1 at 45-46.)

         That same day, Ms. DiGiacomo sent a response letter to Defendants. (Doc. 199-1 at 98.) Among other things, this letter promised that Cramton would return her company-issued cell phone and computer by September 29, 2017. (Id.)

         3. The ESI-related demands and correspondence

         On April 20, 2018, Defendants provided Cramton with their initial disclosure pursuant to the Court's mandatory initial disclosure pilot program (“MIDP”). (Doc. 216-1 at 60-82.) Defendants' disclosure identified 23 witnesses as “likely to have discoverable information relevant to any party's claims and defenses.” (Id. at 61-67.) Among the named individuals were Wuycheck, who was expected to possess information concerning “[h]is conversations with Kim Cramton on September 22, 2017 and at other times related to Kahala's Grabbagreen acquisition” (id. at 62), and Farnell and Cable, former GFL employees who were expected to possess information concerning “Cramton's work schedule and her HR role” (id. at 66). Defendants' MIDP disclosure did not, in contrast, identify Savone as a person who likely possessed discoverable information. In addition, Defendants' MIDP disclosure did not specifically state that the text messages on Cramton's cell phone needed to be preserved.

         On May 2, 2018, Cramton's counsel provided Defendants' counsel with a draft ESI agreement. (Doc. 216-1 at 85-97.) Among other things, this draft agreement provided that Cramton “do[es] not have a significant volume of ESI relevant to this dispute, ” that “[t]he bulk of Ms. Cramton's relevant email correspondence is either in the possession and control of Defendants (her former employer) or non-party Kahala Brands (her current employer), ” that Cramton “has preserved on a hard drive her email correspondence [with Keely], ” and that Cramton “agrees to turn over this hard drive” but “[a]ll remaining production of documents by [Cramton] will proceed through the typical (non-ESI) procedures.” (Id. at 92.) It appears that Defendants never responded to this email, so the draft ESI agreement was never finalized.

         On June 19, 2018, Cramton offered to provide Defendants with all of the emails involving Keely that she had saved from her company-issued computer. (Doc. 216-1 at 99 [“[T]he hard drive is simply a [sic] imaged copy of all of Kim Cramton's emails with Keely . . . . We have repeatedly offered to [produce the hard drive], but you have not accepted that offer.”].)

         On June 20, 2018, Defendants responded by stating that Cramton “has not produced anything related to the hard drive that [she] copied and then returned wiped. We are requesting that [Cramton] have a forensic person take possession of the hard drive copy she made and run a directory of all files on the hard drive. Once we have a copy of the directory files, then we can discuss with you what should be produced.” (Doc. 216-1 at 103.)

         On August 8, 2018, Defendants served Cramton with a request for production (“RFP”) seeking all communications with Wuycheck, Cable, or Farnell “related to Defendants or [Cramton] or the Grabbagreen business . . . from January 2, 2016 to the present.” (Doc. 216-1 at 120.) At some unspecified point after receiving this RFP, Cramton contends she “produced the texts in her phone with these individuals she could locate, regardless of relevance.” (Doc. 216 at 6. See also Doc. 199-1 at 40 ¶ 14 [Cramton's declaration of January 4, 2019, stating “I have produced every text message that I have in my personal phone from the recipients that Defendants requested.”].) The parties' briefs do not identify, with precision, how many such texts were produced or the date on which the production occurred.

         On September 12, 2018, Cramton's counsel informed Defendants' counsel that “there are many more files on the hard drive that we previously thought, due to the fact that backups were performed that Ms. Cramton did not request or anticipate. I personally didn't realize that these backups were on the hard drive before we sent it to our vendor for imaging.” (Doc. 216-1 at 110.) Given the volume of documents contained on the hard drive, Cramton's counsel offered to immediately “turn over the entire hard drive to [Defendants], ” as opposed to reviewing the hard drive and then only producing the subset of documents deemed discoverable by Cramton's counsel. (Id.) The following day, the complete hard drive was produced to Defendants. (Doc. 142-7 at 2 [delivery receipt].)

         On November 7, 2018, Defendants served Cramton with an RFP seeking all communications with Savone “related to Defendants or [Cramton] or the Grabbagreen business . . . from January 2, 2016 to the present.” (Doc. 216-1 at 124-25.) Cramton contends she responded to this request by “produc[ing] every text message . . . in [her] personal phone” with Savone. (Doc. 199-1 at 40 ¶ 14.)

         That same day, Defendants served a Rule 45 subpoena on Savone seeking all of her communications “concerning or relating to Keely Newman, Kell[i] Newman, Kim Cramton, [Cramton's spouse], and/or the Grabbagreen companies . . . from January 1, 2016 to the present.” (Doc. 216-1 at 127-32.) In response, Savone apparently “produced some texts with Cramton and [Cramton's spouse].” (Doc. 216 at 5.)

         Finally, on November 7, 2018, Defendants also served a Rule 45 subpoena on Farnell seeking, inter alia, all “text messages . . . you had with Kim Cramton from April 1, 2017 to the present date.” (Doc. 216-1 at 133-39.) On December 5, 2018, Farnell responded to the subpoena by stating that “I have searched my personal email account and text messages between the dates of December 1, 2016 and today” and “I have no communications with [Cramton] . . . regarding the relationship between [Cramton] and Keely or the lawsuit between [Keely and Cramton].” (Doc. 216-1 at 141-42.)

         4. The depositions

         As noted, Defendants' motion for sanctions focuses on Cramton's alleged failure to preserve ESI pertaining to four witnesses: Wuycheck, Farnell, Cable, and Savone.

         Defendants did not depose three of those witnesses. They never noticed the depositions of Cable and Savone. As for Farnell, although Defendants initially noticed his deposition for December 2018, they informed Cramton a few days beforehand that they wished to “temporarily vacat[e] the deposition[] of . . . Farnell until we can get the document production issues resolved” (Doc. 216-1 at 162) and never rescheduled it.

         Wuycheck testified during his deposition that he received a text message from Cramton on September 22, 2017. (Doc. 199-1 at 85-86.) In Defendants' view, this was a critical text message because of its timing-it was sent four days after the disputed phone call between Keely and Cramton and two days before Cramton submitted her resignation letter. (Doc. 206 at 10-11; see also Doc. 220 at 3-4 [Defendants' argument that “Cramton could not reasonably or justifiably rely on a statement purportedly made by Keely Newman on the September 18, 2017 call given Cramton's demonstrated ability to get information directly from other sources, specifically her direct back channel communications with Kahala's lead contact Wuycheck”].)

         On May 20, 2019, Defendants disclosed the text message logs for Cramton's company-issued cell phone. (Doc. 216-2 at 3.) Cramton contends (Doc. 216 at 9-10)- and Defendants initially didn't dispute[2]-that these logs show that Cramton and Wuycheck engaged in a single, two-minute-long phone call on September 22, 2017 but didn't exchange any text messages on that date.

         On May 21, 2019, Cramton sat for her renewed deposition. During this session, Cramton initially denied ever communicating via text with Wuycheck. (Doc. 199-1 at 84 [“I don't think I even had individual text messages with John Wuycheck.”].) However, after being shown Wuycheck's deposition transcript, Cramton stated that she did recall texting Wuycheck on September 22, 2017, and further stated that the text merely stated that “I wanted to talk to him.” (Doc. 199-1 at 88.)

         On June 11, 2019, Cramton's counsel informed Defendants' counsel via email that Cramton's deposition testimony on this point was inaccurate. (Doc. 216-4 at 2 [“Ms. Cramton believes, after further reflection, that her communication with Mr. Wuycheck on the date in question was by voicemail, not by text message.”].) And in an errata sheet submitted on July 28, 2019-which is the subject of a motion to strike that is addressed in Part IV below-Cramton sought to change her deposition testimony on this point to reflect that “I believe it was a call not a text.” (Doc. 220-1 at 2.)

         B. Analysis

         Defendants seek sanctions against Cramton pursuant to Rules 37(e)(1) and (e)(2) of the Federal Rules of Civil Procedure. (Doc. 206 at 2.)

         Rule 37(e) was “completely rewritten” in 2015 to “provide[] a nationally uniform standard for when courts can give an adverse inference instruction, or impose equally or more severe sanctions, to remedy the loss of ESI.” See generally S. Gensler, 1 Federal Rules of Civil Procedure, Rules and Commentary, Rule 37, at 1070 (2018). The text of Rule 37(e) now provides:

         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 in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.

Id.

         A party seeking sanctions under Rule 37(e) has a threshold duty to show that the ESI at issue was, in fact, lost or destroyed. Id., advisory committee note to 2015 amendment (“The new rule applies only . . . when [ESI] is lost.”). If such a showing has been made, the court then must determine whether “(1) [the opposing party] failed to preserve . . . ESI ‘that should have been preserved' in anticipation or conduct of litigation; (2) the information was lost because [the opposing party] failed to take reasonable steps to preserve it; (3) the ESI cannot be restored or replaced through additional discovery; and (4) the [party seeking sanctions] was prejudiced by the loss.” Fed. Trade Comm'n v. DirecTV, Inc., 2016 WL 7386133, *3 (N.D. Cal. 2016).

         1. Threshold issue: was any ESI lost?

         Although Defendants place heavy emphasis on the fact that Cramton arranged to have her company-issued computer and cell phone “wiped” before returning them, Rule 37(e) doesn't authorize sanctions against litigants who attempt, without success, to delete ESI. See Gensler, supra, at 1071 (“The requirement that information be lost means that Rule 37(e) does not address cases where intentional spoliators fail to achieve their intended purpose.”). Here, Mr. Wilson (the computer technician from P.C. Guru) made a backup of Cramton's hard drive, even though she hadn't requested one, and Cramton produced that hard drive to Defendants after it was discovered midway through this case. Moreover, the evidence shows that Cramton attempted to transfer the complete contents of her company-issued cell phone onto her new cell phone, and Cramton stated in her declaration that she has produced all of the texts with Wuycheck, Farnell, Cable, and Savone that were saved onto her new phone.[3] Thus, unless Defendants can show that some text messages were lost during the hard drive backup process and/or that Cramton's claims about her efforts to retrieve and produce text messages from her phone are inaccurate, Rule 37(e) sanctions are unavailable.

         a. Defendants' evolving theories

         The process of assessing how much (if any) ESI is missing has been complicated by the fact that Defendants' theories and allegations on this issue have changed over time. In their motion, although Defendants complained generally about the loss of “relevant evidence” (Doc. 206 at 6-8), they ultimately focused on Cramton's communications with four witnesses-Wuycheck, Farnell, Cable, and Savone-and purported to identify a specific number of missing ESI communications pertaining to each witness (id. at 10-15). Defendants also explained they were relying primarily on two techniques-“independent forensic analysis[4] and a painstaking review of cell phone records” (id. at i)-to prove these communications were missing.

         As discussed in Part II.B.1.b below, Defendants' initial efforts to prove the existence of missing ESI largely fell flat because Cramton was able, upon receipt of Defendants' motion, to belatedly locate and produce many of the allegedly missing text messages. As a result, Defendants argued for the first time, in a footnote in their reply brief, that they could actually prove the existence of missing text messages in a different way-by proffering a declaration from Kelli (who acknowledged during oral argument that she is not a computer expert) to establish that certain types of text messages sent on an iPhone never show up in the monthly call logs. (Doc. 221 at 10 n.5, citing Doc. 221-1 at 62 ¶¶ 31-32.)[5] Additionally, although Defendants didn't include a request for an evidentiary hearing in their motion, they made such a request in their reply (Doc. 221 at 2) and renewed that request during oral argument.

         The Court will not consider the new arguments raised for the first time in Defendants' reply and will decline to hold an evidentiary hearing. It is hornbook law “that issues cannot be raised for the first time in a reply brief.” Gadda v. State Bar of Cal., 511 F.3d 933, 937 n.2 (9th Cir. 2007). Moreover, in this case, the Court specifically instructed Defendants, during a pre-motion hearing (Doc. 195), that their motion should focus “very specifically” on what ESI was allegedly deleted. After Defendants filed their motion, which appeared to identify with precision the universe of allegedly missing ESI, Cramton expended substantial time and resources responding to those arguments and showing that much of the missing material wasn't, in fact, missing. It would be improper under these circumstances to allow Defendants to belatedly raise new claims and theories in their reply to Cramton's response. As one court put it: “Barring extraordinary circumstances, both the opposing party and the court are entitled to rely on the movant's opening brief as a conclusive statement of its position on the claims targeted by the motion. Both efficiency, and fairness to one's adversary, militate in favor of requiring a movant's opening brief to identify with certainty all the arguments and evidence which the movant believes supports his position.” International-Matex Tank Terminals-Illinois v. Chemical Bank, 2009 WL 2423756, *7 (S.D. Ill. 2009).

         This is, in some respects, an unsatisfying outcome because it remains possible that key ESI may be missing. Additionally, Cramton is not blameless in this affair because her decision to attempt to wipe her company-issued devices was the catalyst for all of the spoliation-related litigation that has ensued. Nevertheless, the Court does not have the time or resources to allow Defendants to keep advancing new claims and theories in successive briefs and hearings until one eventually prevails. It was incumbent upon Defendants (particularly under the procedural circumstances of this case) to raise all of their best arguments in their initial motion and the Court will accordingly limit its consideration to the arguments contained therein.

         b. The allegedly missing ESI

         • Wuycheck. Defendants' motion asserts there is one missing Wuycheck text message, which was sent on September 22, 2017. (Doc. 206 at 10-11.) The sole evidence identified in the motion to prove the existence of this missing message is Wuycheck's and Cramton's deposition testimony. (Id.)

         This argument is unavailing. Although Wuycheck stated during his deposition that he texted with Cramton on September 22, 2017, and although Cramton initially gave similar testimony during her deposition, the phone records state the only communication between Wuycheck and Cramton on that date was a phone call. Accordingly, Cramton has now corrected her deposition testimony to reflect that the September 22, 2017 communication with Wuycheck wasn't a text. The Court thus concludes that Wuycheck and Cramton likely misspoke during their depositions when describing the September 22, 2017 communication as a text, that the communication was likely a phone call, and that Defendants therefore haven't proved that any ESI related to Wuycheck has been lost.

         • Farnell. Defendants' motion contends there are 738 missing Farnell text messages and three missing Farnell voicemail messages. (Doc. 206 at 14-15.) The motion uses two different methods to calculate these figures. First, Defendants rely on extrapolation-they contend that because their forensic expert was able to recover 329 Farnell text messages from Cramton's backup hard drive, which spanned a roughly four-month period in mid-2017, this shows that Cramton and Farnell “averaged 82 texts per month” and that the duo therefore probably exchanged 738 additional text messages during “the remaining 9 months in the relevant period of this lawsuit.” (Id. at 14 n.4.)[6] Second, Defendants also contend the phone records from Cramton's company-issued cell phone show she exchanged eight text messages with Farnell between August 18, 2017 and September 24, 2017, which have never been produced, and that the phone records from the personal cell phone Cramton obtained after leaving the company show that she deleted three voicemails from Farnell between September 25, 2017 and December 14, 2017, which also haven't been produced. (Doc. 206-1 at 28.)[7]

         In her response, Cramton argues that Defendants' extrapolation theory is “completely speculative” and that they have identified, at most, eight text messages that weren't originally produced. (Doc. 216 at 11-12.) She further contends she was able to locate seven of those messages after receiving Defendants' motion, which are enclosed as exhibits to her response (Doc. 216-4 at 14-48), and argues the only reason she had trouble identifying them earlier was because they are group texts with multiple recipients (including, on one occasion, Keely). (Doc. 216 at 11.) As for the three missing voicemails, Cramton acknowledges she hasn't been able to recover them but contends that “voicemails often must be deleted by the user to keep the mailbox from filling up” and that the three voicemails at issue were “received long before [Cramton] was ever on notice that she might have an obligation to preserve such messages.” (Doc. 216 at 12 n.11.)

         The Court agrees with Cramton that Defendants' extrapolation theory is too speculative to prove the existence of any missing text messages. Also, Defendants' summary of the phone records revealed the existence of only eight missing text messages, and seven of those messages have now been located and produced. Accordingly, Defendants have only proved the existence of one lost Farnell text message (dated August 29, 2017) and three lost Farnell voicemail messages.

         • Cable. Defendants' motion contends there are 32 missing Cable text messages. (Doc. 206 at 15.) They derive this figure through subtraction-specifically, they contend that Cramton's phone records show she exchanged 58 texts with Cable from May 3, 2017 through September 24, 2017, but she only produced 26 such messages during discovery, so the remaining 32 must have been improperly deleted. (Id.)

         In her response, Cramton argues that three of the “missing” text messages were group texts involving herself, Farrell, and Cable that have now been located and produced; that Defendants already had six of the “missing” text messages (which are Bates stamped) at the time they filed their motion; that she was able to locate an additional 14 texts involving Cable after Defendants filed their motion; and that “[o]f the remaining nine texts that Cramton could not locate, seven come from a series of texts between 8:46am and 8:58am on June 28, 2017” and the “two remaining texts [were on] 8:44pm and 9:06pm on July 26, 2017.” (Doc. 216 at 14.)

         The Court thus concludes that Defendants have only proved the existence of nine lost Cable text messages, all of which were sent in June or July 2017.

         • Savone: Defendants' motion contends there are 444 missing Savone text messages. (Doc. 206 at 16-18.) To support this figure, Defendants rely on a pair of summary charts attached as Exhibits AA and BB to their motion (Doc. 206-1 at 39-69), which purportedly show that although Cramton produced an unspecified number of her text messages with Savone, “at least 444 text messages with Savone are missing from within the text strings [Cramton] produced.” (Doc. 206 at 16-17, emphasis in original.)

         In her response, Cramton argues the summary charts are “a defendant-prepared document for which no underlying AT&T documents or any other evidentiary support has been produced, ” that the chart appearing at Exhibit AA reflects the existence of only 270 missing text messages, not 444, and that Defendants assured her “that Exhibit BB is merely a breakdown of [Exhibit] AA by month.” (Doc. 216 at 14 & n.4.) Cramton further contends that, of the 270 messages identified in Exhibit AA, only 41 were sent between her phone number and Savone's number. (Id.) Cramton also contends she wasn't required to preserve those 41 messages because they were from February and March 2017 (well before litigation was anticipated) and that she also wasn't required to produce those text messages in response to Defendants' RFP, because it only sought the Cramton/Savone text messages that touched upon certain subject areas and many of the 41 text messages didn't address those subjects. (Id. at 14-15.) Finally, Cramton contends that, notwithstanding all of that, she was able to locate 34 of the 41 purportedly missing messages after receiving Defendants' motion and none of them has any relevance to this litigation. (Id. at 15.)

         In their reply, Defendants begin by noting that Cramton only analyzed the missing text messages identified in their first summary chart, Exhibit AA (see Doc. 206-1 at 39-46), and ignored their second summary chart, Exhibit BB (see Doc. 206-1 at 47-69). (Doc. 221 at 9.) Thus, although Defendants don't dispute Cramton's contention that Exhibit AA only reveals the existence of 41 missing text messages and that 34 of those text messages had now been recovered, they contend these figures are “deliberately misleading” because they are “based on the reading of only one exhibit.” (Id.)[8] In a different brief, Defendants calculate the total number of missing Savone texts (i.e., the seven in Exhibit AA that Cramton still hasn't been able to identify, plus all of the texts identified as “missing” in Exhibit BB) as around 187. (Doc. 228 at 3.) Finally, and more broadly, Defendants argue that Cramton violated the discovery rules by “silently” withholding or redacting some of the Savone text messages on relevance grounds without disclosing that she was doing so. (Doc. 221 at 9.)

         The omissions in both parties' briefs concerning the Savone text messages create an odd record. On the one hand, Cramton has persuasively demonstrated (and Defendants don't seem to seriously dispute) that the number of purportedly missing text messages identified in Exhibit AA is overstated and that this chart reveals, at most, the existence of only seven missing messages. On the other hand, even though Exhibit BB may be marred by some of the same errors of overinclusion that Defendants made when creating Exhibit AA, Cramton didn't address Exhibit BB in her response. Accordingly, the Court will simply accept, for present purposes, that Exhibit BB is accurate.[9] Thus, the Court will assume that Defendants have proved the existence of a total of 187 missing Savone text messages.

         2. Duty to preserve

         To summarize, Defendants have not proved the existence of any lost Wuycheck text messages but have proved the existence of one lost Farnell text message, three lost Farnell voicemails, and nine lost Cable text messages. Additionally, the Court assumes that 187 Savone text messages are missing. Thus, the next step under Rule 37(e) is to determine whether Cramton had a duty to preserve those materials. Id. (sanctions available if the lost ESI “should have been preserved in the anticipation or conduct of litigation”).

         a. The reasonable foreseeability of litigation

         As the Ninth Circuit has explained, parties “engage in spoliation of documents as a matter of law only if they had ‘some notice that the documents were potentially relevant' to the litigation before they were destroyed.” United States v. Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002) (citation omitted). “This is an objective standard, asking not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation.” Waymo LLC v. Uber Techs., Inc., 2018 WL 646701, *14 (N.D. Cal. 2018) (quotation omitted).

         As discussed in Part II.A.1 above, litigation was clearly on Cramton's mind at the time she submitted her resignation letter on September 24, 2017. By that time, she had been consulting with several different attorneys about possible litigation against Defendants and had even been told by one of those attorneys to start documenting her interactions with Keely because her notes might have future value “to a litigator.” Accordingly, Cramton had a duty to take reasonable steps to preserve ESI pertaining to her potential claims against Defendants by mid-September 2017. Thus, she cannot avoid liability for the loss of the three Farnell voicemails (which she received between September 25, 2017 and December 2017) solely on the ground that litigation wasn't reasonably anticipated at the time she received and deleted them.

         The Court reaches the same conclusion regarding the missing Cable text messages, which were sent on June 28, 2017 and July 26, 2017, and the missing Farnell text message, which was sent on August 29, 2017. All of those communications occurred after Cramton had been advised by Ms. DiGiacomo on June 23, 2017 to start documenting her interactions with Keely. Accordingly, Cramton cannot avoid liability for the loss of the Cable and Farnell text messages ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.