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Case 2:12-cv-00871-RCJ-PAL Document 35 Filed 07/11/13 Page 1 of 10

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

JENNIFER HIXSON,

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__________________________________________)

vs.
CITY OF LAS VEGAS,

Plaintiff,


Defendant.



Case No. 2:12-cv-00871-RCJ-PAL

(Mot for Sanctions - Dkt. #26)

ORDER

Before the court is Plaintiff’s Motion for Sanctions Pursuant to Fed. R. Civ. P. 37(c) (Dkt. #26).

The court has considered the Motion, Defendant’s Opposition (Dkt. #29), Plaintiff’s Reply (Dkt. #30),
and the arguments of counsel at hearings conducted on May 21, 2013, and June 25, 2013.

BACKGROUND

The complaint in this case was filed in state court and removed (Dkt. #1) May 23, 2012. It

involves a hostile work environment claim. Plaintiff alleges that she was employed by the Defendant in
the Detention and Enforcement Division in Las Vegas, Nevada from February 2002, until she resigned
on July 15, 2010. See Complaint attached as Exhibit “A” to Petition for Removal (Dkt. #1), ¶¶7, 8.
Plaintiff alleges that she was subjected to a hostile work environment from approximately April 2009,
through the date of her resignation. Id., ¶8. She was in a relationship with Sergeant Glen Lewis until
approximately April 2009, when he began making disparaging remarks and comments about her gender
and sexual orientation. Id., ¶9. Lewis instituted internal complaints against Hixson in May 2009,
which were unfounded and retaliatory. Id., ¶10. Plaintiff complained to her direct supervisor,
Lieutenant Smith, on May 14, 2009, that Lewis was creating a hostile work environment and retaliating
against her. Id., ¶14. Lieutenant Smith responded that Sergeant Lewis had the choice to initiate a
formal complaint. Id. In October 2009, Plaintiff complained to Lieutenant Smith that she was unable

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to handle the stress of the hostile work environment Lewis created. Id., ¶18. However, nothing was
done. Id. Plaintiff complained in person to the deputy chief in December 2010, and conveyed that she
was worried Sergeant Lewis was going to cause her physical harm. Id., ¶20. Nothing was done. Id.,
¶21.

In March 2010, Plaintiff complained to Human Resources that she was being subjected to

gender discrimination and hostile work environment. Id., ¶22. Human Resources did not interview the
Plaintiff, but only took a cursory statement. Id., ¶23. Sergeant Lewis filed two hostile work
environment claims against the Plaintiff with Human Resources less than two months later. Id., ¶25.
Plaintiff was interviewed by Human Resources about Sergeant Lewis’ complaint. Id., ¶26. On July 15,
2010, Plaintiff was constructively discharged by being forced to tender her resignation. Id., ¶27. Based
on these allegations, Plaintiff has asserted claims for gender discrimination and violation of Title VII
and NRS 613.310, hostile work environment in violation of Title VII, constructive discharge, and
negligent training/supervision.

In the current motion, Hixson seeks Rule 37(c) sanctions for the City of Las Vegas’ failure to

disclose a relevant email regarding her allegations of workplace harassment. Plaintiff has a copy of the
email, but the City did not produce it in discovery. The City also failed to supplement its discovery
disclosures after receiving a copy of the email. Plaintiff requests an order sanctioning the Defendant
by: 1) an adverse inference instruction pursuant to NRS § 47.250(3); 2) monetary sanctions in an
amount equal to the cost of hiring an outside IT vendor who should be permitted to investigate the
City’s IT System for additional missing items that are potentially relevant to Plaintiff’s claims; and 3)
attorneys fees and costs for having to file this motion.

Plaintiff produced a chain of email correspondence between Michael Weyland, a union

representative assisting her, and City employee Dan Tarwater from April 6, 2010, through April 7,
2010. The email chain is attached as Exhibit “1” to the motion. The City produced a version of the
email chain which is attached as Exhibit “2”. The City’s version of the email chain does not contain the
April 7, 2010, 8:28 a.m. email from Dan Tarwater to Michael Weyland. In the email, Tarwater
comments that perhaps Weyland will have the good sense to have the Plaintiff retract her hostile work
environment claim.

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Plaintiff filed her hostile work environment claim March 10, 2010, in an email to Louisa
Tuilagi, an employee in the Employee Relations Division of the City. Tuilagi sent a copy of the
complaint to Tarwater March 31, 2010. On April 6, 2010, City employee Karen Coyne asked Tarwater
and Michelle Freeman if they had time to discuss the Plaintiff’s claim because of her concern the matter
was nearly a month old and Plaintiff verbally communicated her complaints March 9, 2010. Tarwater
then sent the email that “maybe he will have the good sense to have her retract her claim, if not we are
moving forward.”

Counsel for Plaintiff communicated with counsel for the City pointing out that the City had not
produced a copy of Tarwater’s April 7, 2010, 8:28 a.m. email to Weyland. The letter was addressed to
discuss the City’s failure to properly engage in discovery by failing to produce relevant evidence under
Rule 37 and Rule 26(e) in initial disclosures or supplemental disclosures. The letter requested that the
City supplement its initial disclosures by April 22, 2013, indicating that if supplemental disclosures
were not served, the Plaintiff would “seek appropriate remedies after formal conferral.”

Plaintiff acknowledges that the City produced voluminous documents in this case. However,
the City’s failure to produce the April 7, 2010, email is suspicious and prejudicial to Plaintiff because
Tarwater’s motives are relevant. A reasonable juror could question Tarwater’s credibility and bias
when he investigated the Plaintiff’s hostile work environment claim. Thus, Rule 37(c) sanctions are
appropriate for the failure to disclose this email unless the failure was substantially justified or
harmless. Plaintiff argues it is the City’s burden, as the party facing sanctions for failure to disclose, to
establish that its failure to comply with its discovery obligations was either substantially justified or
harmless. The failure to produce this email creates an inference the City is also withholding other
potentially relevant information, and calls into doubt the City’s efforts to properly preserve and
maintain electronically stored information. It also suggests the City failed to send litigation hold letters
to appropriate personnel to preserve relevant evidence. For these reasons sanctions are appropriate.
The City opposes the motion maintaining that the Plaintiff filed it without an attempt to meet
and confer. The City points out that Plaintiff has had a copy of the document throughout the case and
that she produced it in her initial disclosures on July 25, 2012. The City represents that on April 7,
2010, when the Tarwater email was sent, the City’s email system permanently deleted all messages

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after 45 days unless a sender or a recipient affirmatively saved the document to a folder. Neither
Plaintiff’s union representative, Mr. Weyland, nor Human Resources Director Dan Tarwater saved the
April 7, 2010, email in the City’s system. Therefore, the system automatically deleted it after 45 days.
The City’s opposition is supported by the affidavit of Raymond Waber, a City of Las Vegas System
Administration Specialist, who attests that prior to June 2010, the City’s email system automatically
purged all emails after a 45-day period unless the emails were affirmatively transferred to a personal
PST folder by the end user. Waber Affidavit, Exhibit “A”, ¶3. In June 2010, the City implemented a
system known as Quest Archive Manager. Id., ¶4. All emails stored at this time in PST folders were
loaded into the Quest Archive Manager system in a “read-only” state for central storage in searching,
and have not been purged. Id. New messages created from June 2010, to September 2011, are
automatically purged by the system after 90 days unless a user affirmatively moved messages to
extended retention folders. Id., ¶5. In September 2011, the City changed to a 7-year retention policy
for all email messages. Id., ¶6.

The opposition is also supported by the affidavit of Betsy Comella which is attached as Exhibit

“B”. Ms. Comella is a Legal Assistant II with the Las Vegas City Attorney’s Office in the civil
division. Id., ¶1, In August 2012, she was asked to conduct an email search to respond to discovery
requests served on Plaintiff’s counsel August 6, 2012. Id., ¶2. She conducted a search as requested of
the City’s email archive system, Quest Software Archive Manager, for any emails mentioning Jennifer
Hixson between August 9, 2009, and April 24, 2012. Id. The results of her email search were
produced in the City of Las Vegas’ responses to Plaintiff’s request for production of documents
September 24, 2012. Id., ¶4. Her search for responsive documents did not turn up the email from
Tarwater to Weyland involved in this motion. Id., ¶5.

The City argues that the motion should be denied because the motion does not contain a

statement that Plaintiff’s counsel attempted to meet and confer to resolve this issue without filing a
motion as required by LR 26-7(b). Additionally, the City argues that because Plaintiff has a copy of the
email, any failure to disclose it is harmless, and Plaintiff has not been prejudiced. Finally, the City
maintains that sanctions are inappropriate under Rule 37(e) that prohibits imposition of sanctions on a
/ / /

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party “for failing to provide electronically stored information lost as a result of the routine, good-faith
operation of an electronic information system” absent exceptional circumstances.

The Plaintiff replies that the City’s arguments of “no harm, no foul” were rejected by the court

in the Zubulake decision, 220 F.R.D. 212 (S.D.N.Y. 2003) (“Zubulake IV”). Plaintiff cites email
correspondence produced by the City in this case prior to the time she filed her hostile work
environment claim which suggests that the City’s representation about its automatic purging system
may not be accurate. The City produced hundreds of pages of emails in this case, and Plaintiff believes
the City failed to communicate its e-discovery obligations to its employees which has caused her
serious damage. The City had an obligation to preserve electronically stored information (“ESI”) at the
time the evidence was destroyed, the records were destroyed with a culpable state of mind, and the
destroyed evidence was relevant to Plaintiff’s claims. Plaintiff acknowledges that her request for
sanctions must be proportional to the violation. However, she argues that she should be restored to the
position she would have been in had the City met its discovery obligations, and that the sanctions she
seeks are proportional.

At the May 21, 2013, hearing, the court heard arguments from counsel and continued the

hearing for 30 days to allow Plaintiff’s counsel to review Defendant’s responses to ESI requests, and
allow Plaintiff’s counsel to depose Mr. Waber to question him about the City’s ESI preservation
policies and issues addressed in his affidavit. At the June 25, 2013, hearing, counsel for Plaintiff
indicated that he had deposed Mr. Waber and had no reason to believe that the City had intentionally
destroyed relevant evidence. Rather, counsel for Plaintiff argued that the City failed to preserve
relevant ESI after it was on notice of potential litigation. Mr. Tarwater testified at his deposition that
the City had not sent a litigation hold letter to City employees at or near the time Plaintiff filed her
complaint with the EEO office. For those reasons Plaintiff argues that sanctions are warranted.
Counsel for the City argued that the City Attorney’s Office was not involved in this matter until June
2011, when Plaintiff filed a formal complaint. The email was authored in April 2010, and at that time
the City’s system automatically purged emails after 45 days unless someone saved them to a folder.
Counsel for the City acknowledged that no litigation hold letter was sent to City employees before the
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email was purged. However, the City has now modified its document retention policies and
communicated the need to preserve documents, including ESI, to its employees.

DISCUSSION

Spoliation is 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. United States v.
Kitsap Physicians Svs., 314 F.3d 995, 1001 (9th Cir. 2002) (citing Akiona v. United States, 938 F.2d
158, 161 (9th Cir. 1991)) (a party engages in spoliation “as a matter of law only if they had ‘some
notice that the documents were potentially relevant’ to the litigation before they were destroyed”); 7-
37A Moore’s Federal Practice - Civil § 37A.55. A party must preserve evidence it knows or should
know is relevant to a claim or defense of any party, or that may lead to the discovery of relevant
evidence. Moore’s at § 37A.55; see also United States v. Kitsap Physicians Serv., 314 F.3d 995, 1001
(9th Cir. 2002); In re Napster, 462 F.Supp.2d 1060, 1067 (N.D. Cal. 2006) (citing Nat’l Ass’n of
Radiation Survivors v. Turnage, 115 F.R.D. 543, 556-57 (N.D. Cal. 1987) (noting, “[a]s soon as a
potential claim is identified, a litigant is under a duty to preserve evidence which it knows or reasonably
should know is relevant to the action”). The duty to preserve arises not only during litigation, but also
extends to the period before litigation when a party should reasonably know that evidence may be
relevant to anticipated litigation. In re Napster, 462 F.Supp.2d at 1067 (duty to preserve begins when a
party should have known that the evidence may be relevant to future litigation).

District courts may impose sanctions for spoliation of evidence as part of their inherent power to

“manage their own affairs so as to achieve the orderly and expeditious disposition of cases.” Napster,
462 F.Supp.2d at 1066 (citing Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991)). Courts may
sanction parties responsible for spoliation of evidence in three ways. First, a court can instruct the jury
that it may draw an adverse inference to the party or witness responsible for destroying the evidence.
See Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir. 1993). Second, a court can exclude witness
testimony based upon the destroyed evidence and proffered by the party responsible for destroying the
evidence. Id. at 1329. Third, the court can dismiss the claim of the party responsible for destroying the
evidence. Dismissal, however, is only appropriate where “a party has engaged deliberately in deceptive
practices that undermine the integrity of judicial proceedings.” Leon v. IDX Systems Corp., 464 F.3d

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951, 958 (9th Cir, 2006) (citing Anheuser-Busch, Inc. v. Natural Beverage Distributors, 69 F.3d 337,
348 (9th Cir. 1995). Before imposing the “harsh sanction” of dismissal, a court must consider the
following factors: (a) the public’s interest in expeditious resolution of litigation; (b) the court’s need to
manager its dockets; (c) the risk of prejudice to the party seeking sanctions; (d) the public policy
favoring disposition of cases on their merits; and (e) the availability of less drastic sanctions. See Leon,
464 F.3d at 958 (citing Anheuser-Busch, 69 F.3d at 348).

Lastly, the court may award sanctions in the form of attorney’s fees against a party or counsel
who acts “in bad faith, vexatiously, wantonly, or for oppressive reasons.” Id. at 961. Before awarding
such sanctions, however, a court must make an express finding that the sanctioned party’s behavior
amounted to “bad faith.” Id. A party “demonstrates bad faith by delaying or disrupting the litigation or
hampering enforcement of a court order.” Id. Where the court finds a party has acted in bad faith, any
award of attorney’s fees must be reasonable. Id.

The Ninth Circuit has held that a party does not engage in spoliation when, without notice of the

evidence’s potential relevance, it destroys the evidence according to its policy or in the normal course
of its business. United States v. $40,955.00 in U.S. Currency, 554 F.3d 752, 758 (9th Cir. 2009) (no
indication that evidence destroyed with knowledge that it was relevant to litigation) (citing United
States v. Kitsap Physicians Service, 314 F.3d 995, 1001-02 (9th Cir. 2002) (no spoliation where
evidence destroyed in normal course of business and no indication that relevant to anticipated
litigation); State of Idaho Potato Comm’n v. G&T Terminal Packaging, Inc., 425 F.3d 708, 720 (9th
Cir. 2005) (same).

A party on notice litigation is reasonably forseeable has a duty to preserve evidence. It is often
repeated that we live in a litigious age. It is not reasonably forseeable that every internal employment
complaint may result in litigation if not resolved to the employee’s satisfaction. However, when an
employee claims that she has been subjected to conduct or employment actions that, if true, would
amount to state or federal law violations, the prudent employer should take affirmative steps to see that
documents and information relevant to her claims and the employers defenses are preserved and not lost
in the ordinary course of business. The court need not determine the outer markers of what notice is
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sufficient to put an employer on notice litigation is reasonably forseeable when an employee makes an
internal complaint of an adverse employment action or employment dispute to resolve this motion.

The record in this case is insufficient to support a finding that the City was on notice Ms. Hixson

contemplated litigation sufficient to trigger a duty to preserve electronically stored information by
suspending its then-existing practice of automatically purging emails after 45 days. Plaintiff sent an
email to a City of Las Vegas Personnel Analyst in the Employee Relations Division complaining she
was being subjected to a hostile work environment and discrimination on March 10, 2010. She referred
to this email as a formal complaint. Plaintiff also indicated that she had previously discussed her
concerns through her chain of command, that no one had been helpful to her, and that Deputy Chief
Freeman told the Plaintiff that Freeman did not believe that Plaintiff was being harassed or subjected to a
hostile work environment. Counsel for the City argues that an internal report of this nature is
insufficient to trigger a duty to preserve potentially relevant evidence especially when City employee
relations personnel had not communicated with the City Attorney’s Office. The court categorically
rejects the City’s arguments that unless the City’s lawyers have been notified of the potential for
litigation the duty to preserve has not been triggered. A contrary finding would encourage managers and
human resource personnel to fail to advise counsel of reasonably forseeable litigation to avoid the duty
to preserve potentially relevant evidence.

Here, Plaintiff resigned July 15, 2010, and asserts she was constructively discharged. Nothing in

the record suggests that on or before the date of her resignation, the Plaintiff threatened litigation, or
informed the City that she had retained counsel about her employment disputes. There is no evidence
before the court that at or near the time Plaintiff tendered her resignation, she claimed that she was
resigning because she had been sexually harassed, discriminated against, or subjected to a hostile work
environment. By July 15, 2010, when Plaintiff resigned, the email system the City used as the time
would have already purged Mr. Tarwater’s April 7, 2010, email unless it was saved to a folder. The
complaint alleges that Plaintiff filed her NERC complaint September 7, 2010. Once the City received
notice of the NERC complaint litigation was certainly foreseeable. However, nothing in the record
indicates that the City was notified Plaintiff had retained counsel, made a pre filing demand , or notified
the City she was thinking about filing a lawsuit before the Plaintiff filed her NERC complaint. Under

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these circumstances, the court finds the City was not sufficiently on notice of potential litigation
involving Ms. Hixson’s employment to trigger a duty to suspend its then existing practice of purging
emails after 45 days.

The court gave counsel for Plaintiff an opportunity to take the deposition of Mr. Waber to
question him about the City’s ESI preservation policies, and the issues addressed in his affidavit
supporting the City’s opposition to this motion. At the June 25, 2013, hearing, counsel for Plaintiff
acknowledged that he had no reason to believe that the city had intentionally destroyed relevant evidence.
Plaintiff also acknowledges that the City produced voluminous documents in this case. The affidavit of
Ms. Comella attests that she conducted a broad search of the City’s email archive system for any emails
mentioning Jennifer Hixson between August 9, 2009, and April 24, 2012. The results of this email search
were produced in the City of Las Vegas’ Responses to Plaintiff’s Request for Production of Documents
served September 24, 2012. This search did not turn up the email from Mr. Tarwater to Mr. Weyland
involved in this motion. The court is satisfied that the email was not produced because it was not saved,
and automatically purged 45 days after it was generated before the City was on notice litigation was
reasonably forseeable.

Finally, the court finds that Rule 37(c) sanctions are not appropriate for the City’s failure to
supplement its discovery disclosures after Plaintiff produced the Tarwater email to the City in her
disclosures. Rule 26(e) requires a party who has made a disclosure under Rule 26(a) or responded to a
formal discovery request to supplement or correct its disclosures or responses “in a timely manner if the
party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the
additional or corrective information has not otherwise been made known to the other parties during the
discovery process or in writing.” Fed. R. Civ. P. 26(e)(1)(A). Plaintiff had the email. Therefore the
additional or corrective information was made known to the parties during the discovery process. Rule
26(e) is not intended to require redundant disclosures.

For all of the reasons stated,

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Case 2:12-cv-00871-RCJ-PAL Document 35 Filed 07/11/13 Page 10 of 10

IT IS ORDERED that Plaintiff’s Motion for Sanctions Pursuant to Fed. R. Civ. P. 37(c) (Dkt.

#26) is DENIED.

Dated this 10th day of July, 2013.

______________________________________
Peggy A. Leen
United States Magistrate Judge

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