Environmental World Watch, Inc., et al., Plaintiffs, v. The Walt Disney Company, et al., Defendants NO. CV 09-4045-DMG (PLAx) United States District Court, C.D. California, Western Division Signed November 03, 2011 Counsel Charity M. Gilbreth, Dina Marie Randazzo, Garrett L. Jansma, Latham & Watkins LLP, Costa Mesa, CA, Gene A. Lucero, Kirk A. Wilkinson, Latham & Watkins LLP, Los Angeles, CA, Anthony G. Graham, Graham and Martin LLP, Santa Ana, CA, for Defendants. Abrams, Paul L., United States Magistrate Judge ORDER RE: DEFENDANTS' MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND FOR SANCTIONS *1 Plaintiffs in this action contend that defendants have discharged spent cooling water containing hexavalent chromium from their facility in Burbank into the Los Angeles River and a nearby park. In their Motion to Compel filed on October 25, 2011, defendants assert that they have been attempting to obtain documents from plaintiff Environmental World Watch, Inc. (“EWW”) for nearly two years, that although EWW's various attorneys have agreed to produce all responsive documents, only a handful of documents have actually been produced, and that the production remains deficient. EWW represents that all responsive documents have been produced, and that nothing remains to be produced. The Court has concluded that oral argument will not be of material assistance in determining defendants' Motion. Accordingly, the hearing scheduled for November 15, 2011, is ordered off calendar (see Local Rule 7-15). Defendants base their belief that EWW has not produced all responsive documents on their representation that no emails and very few third party communications have been provided, and on the absence of documents showing testing and sampling performed by EWW. In particular, defendants claim that EWW's current counsel appeared in this action in December, 2010, and produced approximately 500 pages of documents in addition to what had already been provided during the time when EWW was represented by multiple prior counsel. The production, however, did not include a single email, and only a few documents reflecting communications with third parties. Declaration of Charity M. Gilbreth in support of Motion (“Gilbreth Dec.”), ¶¶ 23-29. Defendants also cite the June, 2011, deposition of the current president and director of EWW, Dennis Becvar, at which he testified that he did not think that anyone had ever asked him to look for documents responsive to defendants' requests; that he failed to preserve responsive documents; and that he had not spoken to any third party about this lawsuit, including regulators, and had not had any email communications with any regulators (a statement that defendants assert is false based on their Freedom of Information Act requests that revealed communications by Mr. Becvar with several government agencies concerning this litigation, including emails he had with various agencies). Gilbreth Dec., ¶¶ 42-44. In defendants' Fourth Set of Requests for Production of Documents, served the month after Mr. Becvar's deposition, defendants sought documents relevant to this action that they believe are still in EWW's possession, custody or control. Although a “handful of documents” was produced,[1] the production still did not include any emails or third party correspondence. Indeed, of the 5,300 pages of documents produced in this action and related state cases, EWW has not produced a single email. Gilbreth Dec., 50. Thus, while defendants “do not know what additional documents may exist that EWW has failed to produce,” they “have strong reason to believe that documents are being concealed.” Joint Stipulation, at 18. They further argue that EWW had a duty to maintain all relevant documents once litigation commenced. *2 Defendants contend that EWW's “gamesmanship” in not producing documents is also evident in the difficulties they encountered in attempting to take the depositions of and obtain documents from former EWW officers William Dunlap and Doris Nichols[2], whom EWW claimed just prior to their originally scheduled depositions –– are no longer affiliated with it.[3] Accordingly, defendants now seek an order that EWW conduct a forensic review of electronic files and deleted electronic files within its custody and control, including EWW email accounts and accounts used by its officers, directors and/or employees; produce all responsive documents; identify the electronic files it has reviewed; certify the steps taken to locate responsive documents; and certify what documents have not been maintained. For its part, EWW represents that it has already provided written verified responses to defendants' requests for documents, has produced all responsive documents and has confirmed in writing that it has done so, has confirmed that every responsive document in its possession has been provided, and has agreed that any document not produced prior to the discovery cutoff will not be used by it at trial. EWW also responds that it does not have and has never had email accounts or electronic data storage devices, including computers; that Mr. Dunlap and Ms. Nichols are no longer part of EWW and EWW has no control over either individual; and that EWW has never refused to produce its officers for a deposition. Becvar Dec., ¶¶ 4-5. In particular, EWW relates that it has already provided defendants with all test results and reports in its possession, both tests it performed (through third parties) and tests performed by regulatory agencies; that all photographs, maps and engineering drawings have been produced; and that every document in the possession of EWW has been provided to defendants. Id., ¶¶ 8. Mr. Becvar declares that he has no EWW documents relating to this action and that he has provided defendants, through EWW's counsel, with all documents given to him by Mr. Dunlap and Ms. Nichols. Mr. Becvar attempts to explain his deposition response that he did not communicate with regulatory agencies by asserting that he did not consider a regulatory agency to be included in the term “third party” as used by counsel. Mr. Becvar further explains that he has no recall of sending the emails referred to by defendants, and he informed counsel that he had no originals of any documents. Becvar Dec., ¶¶ 9-10. Mr. Dunlap testified at his deposition on October 27, 2011, among other things, that he has both a laptop and desktop computer that he used while doing work for EWW; that he examined those computers when discovery in October 2010 was sent to him and responsive documents were turned over at that time; that he had no emails concerning hexavalent chromium; that he has an EWW email address on which he still occasionally receives communications; that he used a laptop as well as a computer that he built himself while performing tasks for EWW, including while communicating concerning the claims against defendants; that he possibly used an EWW email account to send emails to a regulatory agency concerning claims against EWW; and that he had a policy of deleting emails every couple of days. He has used the email accounts eww_law and eww5001 @aol.com for his business for EWW over the years, and used the account dunlap.eww_law@yahoo.com to communicate with the Water Board concerning claims against defendants, as well as eww.law@safe-mail.net. Supplemental Gilbreth Dec., Ex. UU. *3 Ms. Nichols testified at her deposition on October 28, 2011, among other things, that she does not recall using an EWW email address to send or receive information, or if she used her home desktop computer for EWW activities, that she thinks she resigned as chairman of EWW sometime “last year”, i.e., in 2010, and that no one has asked her to preserve documents during the course of this litigation. Supplemental Gilbreth Dec., Ex. VV. EWW, through Mr. Becvar (who declares he is presently the sole officer and director of EWW (see Becvar Dec., ¶ 4)), has unequivocally stated that it has “no EWW documents relating to this matter (or to any other),” that all documents in its possession have been produced to defendants, including relevant test results and reports, photographs, plume maps and engineering drawings, and that “[e]very document in the possession of EWW has been provided to counsel and has already been produced. EWW has no documents in its possession other than documents which have been provided to counsel.” Becvar Dec., ¶¶ 6-8. Nevertheless, the uncontested assertion that not one email has been produced by EWW to defendants –– despite assertions by its current and former officers that they used computers to conduct EWW correspondence and used email addresses containing “EWW” in those addresses –– raises serious concerns about the diligence of the document search that was conducted by EWW in this action, and warrants further exploration of the production. For example, while Mr. Becvar explains that his deposition response did not include regulatory agencies because he did not consider regulators to be included in the term “third party,” defendants also specifically asked him about his contacts with regulators, which he denied. Gilbreth Dec., Ex. MM, at 286. In addition, his response that he did not think he had been asked to search for responsive documents is troubling, especially since defendants' third request for production of documents was served while he was the only officer of EWW and only a few months prior to his deposition. The fact that both Ms. Nichols and Mr. Becvar testified that they were not instructed to preserve documents, and that Mr. Dunlap had a custom of deleting emails, supports defendants' request for further exploration. Equally troubling are Mr. Becvar's statements about deleting an email and discarding documents.[4]Gilbreth Dec., Ex. MM, at 48, 102. The Court is also concerned by EWW's seemingly contradictory statements as to when Ms. Nichols was no longer able to speak on behalf of EWW (October/November 2010 vs. May 2011), i.e., if in October/November 2010, why did EWW delay in informing defendants of this fact upon service of notice of her deposition, and if in May 2011, why does Mr. Becvar declare that her separation occurred months earlier. Further, EWW does not provide a thorough description of the steps it took to locate responsive documents. Even if EWW does not own and has not owned its own email accounts, or its own computers, EWW business apparently was conducted on a computer or multiple computers owned by Mr. Becvar and by one or more of EWW's former officers. Indeed, it appears that Mr. Becvar communicated with regulatory agencies using his current employer's email account –– an email account not “owned” by EWW on a computer apparently not owned by EWW –– in January, 2011. Gilbreth Dec., Ex. NN, at 290, 329.[5] He further testified that in the work he has done for EWW, he has used his own computer at the offices of his current employer. Supplemental Gilbreth Dec., Ex. XX, at 107. Responsive documents stored in that computer and other computers he used for EWW business would appear to be within EWW's possession, custody or control, through Mr. Becvar. Further, any personal email accounts used by Mr. Becvar for EWW business are also subject to search. See, e.g., Playboy Enterprises, Inc. v. Welles, 60 F.Supp.2d 1050, 1053 (S.D. Cal. 1999).[6] *4 Accordingly, defendants' Motion is granted, to the following extent: 1. No later than November 21, 2011, EWW shall conduct a search of all computers and any other electronic devices capable of receiving, storing and sending data in its possession, custody or control (which shall include all computers and other electronic devices in the possession, custody or control of any and all of its current officers and directors), and produce all documents responsive to defendants' document requests that it locates in this search; 2. As to those computers and devices covered by paragraph 1, above, permit defendants, at defendants' expense, to conduct a forensic review of electronic files and deleted electronic files in an effort to locate responsive documents, based on search terms to be agreed upon by the parties[7]; 3. No later than November 21, 2011, EWW shall provide defendants with a declaration, signed under penalty of perjury by a corporate officer or director with the authority to bind EWW, detailing the nature of the search conducted, and identifying all computers and electronic devices searched, and the email accounts and electronic files that have been reviewed; 4. No later than November 21, 2011, EWW shall provide defendants with a declaration, signed under penalty of perjury by a corporate officer or director with the authority to bind EWW, detailing any and all responsive documents (electronic and otherwise) that have not been maintained by EWW, including the nature of any such documents, and the disposition of those documents; and 5. No later than November 21, 2011, EWW shall provide defendants with a declaration, signed under penalty of perjury by a corporate officer or director with the authority to bind EWW, identifying all computers and other electronic devices not in EWW's possession, custody, or control from or on which any officer, director or employee of EWW has sent or received emails or maintained electronic files relating to EWW. Defendants seek sanctions against EWW in the amount of $5,000 pursuant to Fed.R.Civ.P. 37(a)(5)(A), which authorizes the Court to order that the party whose conduct necessitates the motion pay the movant's reasonable expenses incurred in making the motion, including attorney's fees. The Court, in the circumstances presented here, where no specific documents are being ordered for production, declines to assess sanctions against EWW at this time. Defendants' request for sanctions is denied. DATED: November 3, 2011. Footnotes [1] Defendants assert that EWW's responses to the Requests were untimely, and that all objections have thus been waived. EWW does not contest this assertion. [2] Defendants assert that Mr. Dunlap has told government agencies that he has approximately 60,000 pages relevant to the issues in this litigation. Mr. Dunlap and Ms. Nichols were previously ordered by the Court to appear for their depositions and produce documents at the end of October, 2011. It appears from defendants' Supplemental Memorandum that the depositions occurred as ordered. [3] On the one hand, EWW represents that since “October/November of 2010,” neither Mr. Dunlap nor Ms. Nichols has held any position with EWW “and have no authority to speak for, or act on behalf of, EWW.” Joint Stipulation, at 21; Declaration of Dennis Becvar in support of opposition to Motion (“Becvar Dec.”), ¶ 4. On the other hand, although EWW was served with a notice of deposition for Ms. Nichols on May 9, 2011, EWW did not inform defendants that she was no longer affiliated with EWW until May 26, 2011, and represented that Ms. Nichols had resigned “with immediate effect.” Gilbreth Dec., ¶¶ 31-33. In addition, counsel for EWW did not deny Ms. Nichols' authority to speak on behalf of EWW as of April 6, 2011. Gilbreth Dec., Ex. II. [4] Indeed, a litigant “is under a duty to preserve what it knows, or reasonably should know, is elevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery, and/or is the subject of a pending discovery equest.” Wm. T. Thompson Co. v. General Nutrition Corp., Inc., 593 F.Supp. 1443, 1445 (C.D. Cal. 1984) (citation omitted). Once a duty to preserve takes effect, a party is “required to suspend any existing policies related to deleting or destroying files and preserve all relevant documents related to the litigation.” In re Napster, Inc. Copyright Litigation, 462 F.Supp.2d 1060, 1070 (N.D. Cal. 2006) (citation omitted). [5] It also appears that those same communications were copied to an email account with “EWW” in the address. Id. [6] Defendants have presented evidence that Ms. Nichols and Mr. Dunlap also used computers and additional hardware to conduct EWW business, and utilized various email addresses to onduct EWW business. The Court is not persuaded from defendants' filings, however, that EWW as the possession, custody or control over any of this hardware to allow for a Court-ordered search. The Court thus declines defendants' request to order EWW to search and make available or a forensic search any computer or electronic device that is not in its possession, custody or control, or the possession, custody or control of any of its current officers or directors. This ruling, owever, should not be interpreted as implying that the Court does not have concerns over the iming and/or legitimacy of the departures of Ms. Nichols and Mr. Dunlap from EWW, or the lack of direction to maintain documents related to this litigation. It does not appear that defendants are oreclosed from seeking relevant emails from the internet service providers used by the former officers in connection with EWW communications related to this action. [7] The forensic search shall occur as follows: 1. no later than November 8, 2011, defendants shall select a forensic expert to conduct the search, who shall agree to abide by the terms of the Protective Order currently in place in this action; 2. the parties shall agree upon relevant search terms, and EWW shall make all responsive computer equipment available to the expert for inspection, copying and imaging at a time agreeable to the expert, but not later than November 11, 2011, and the expert shall make a mirror image of the computer equipment at that time; 3. the expert shall use the mirror image to search for and recover any responsive information, and shall provide the recovered data to EWW's counsel no later than November 16, 2011; 4. EWW's counsel shall examine the records for privilege and responsiveness and provide defendants' counsel with all responsive items, and a comprehensive privilege log with all items being withheld, no later than November 21, 2011.