Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 1 of 44 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA AGILITY PUBLIC WAREHOUSING COMPANY, K.S.C., et al., Plaintiffs, Civil Action No. 14-1064 (JDB) v. ORAL ARGUMENT REQUESTED U.S. DEPARTMENT OF DEFENSE, et al., Defendants. PLAINTIFFS’ MOTION FOR REMEDIAL SANCTIONS Plaintiffs, by and through their undersigned counsel, respectfully move this Court for an order imposing appropriate remedial sanctions to mitigate Defendants’ failure to preserve and produce to Plaintiffs relevant materials in their possession, custody, or control. The grounds for Plaintiffs’ motion are set forth in the accompanying memorandum of points and authorities. Pursuant to Local Rule 7(m), undersigned counsel discussed this motion with Defendants’ counsel in a good-faith effort to determine whether there is any opposition to the relief sought and to narrow any areas of disagreement. Undersigned counsel understands that Defendants oppose the relief requested in this motion. Plaintiffs respectfully request that the Court schedule oral argument on this motion. Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 2 of 44 Dated: May 6, 2016 Respectfully submitted, /s/ Margaret E. Krawiec MARGARET E. KRAWIEC (Bar No. 490066) DAVID B. LELAND (Bar No. 484096) THOMAS A. PARNHAM (Bar No. 1005976) Skadden, Arps, Slate, Meagher & Flom LLP 1440 New York Avenue, NW Washington, DC 20005 (202) 371-7000 (202) 661-8257 (fax) RICHARD MARMARO (pro hac vice) Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue, Suite 3400 Los Angeles, CA 90071 (213) 687-5000 (213) 687-5600 (fax) KRISTIN N. TAHLER (pro hac vice) Quinn Emanuel Urquhart & Sullivan LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017 (213) 443-3000 (213) 443-3100 (fax) Counsel for Plaintiffs Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 3 of 44 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA AGILITY PUBLIC WAREHOUSING COMPANY, K.S.C., et al., Plaintiffs, v. Civil Action No. 14-1064 (JDB) ORAL ARGUMENT REQUESTED U.S. DEPARTMENT OF DEFENSE, et al., Defendants. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR REMEDIAL SANCTIONS Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 4 of 44 TABLE OF CONTENTS INTRODUCTION ...........................................................................................................................1 BACKGROUND .............................................................................................................................4 STANDARD OF REVIEW ...........................................................................................................14 ARGUMENT .................................................................................................................................16 I. II. REMEDIAL SANCTIONS ARE WARRANTED BECAUSE DEFENDANTS FAILED TO PRESERVE HIGHLY RELEVANT EVIDENCE.......................................16 A. Defendants Had an Obligation to Preserve Lussier’s Emails When the Emails Were Lost. ..................................................................................................16 B. Defendants Had a Culpable State of Mind. ...........................................................23 C. The Lost Evidence Is Relevant and Helpful to Agility. .........................................27 ADDITIONAL DISCOVERY IS THE APPROPRIATE REMEDIAL SANCTION FOR DEFENDANTS’ FAILURE TO PRESERVE RELEVANT EVIDENCE........................................................................................................................32 CONCLUSION ..............................................................................................................................38 i Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 5 of 44 TABLE OF AUTHORITIES CASES Asher Associates, LLC v. Baker Hughes Oilfield Operations, Inc., No. 07-cv-01379-WYD-CBS, 2009 WL 1328483 (D. Colo. May 12, 2009) ........................................................................................32, 34, 36 Bolger v. District of Columbia, 608 F. Supp. 2d 10 (D.D.C. 2009) .....................................................................................15 CAT3, LLC v. Black Lineage, Inc., 14 Civ. 5511 (AT) (JCF), 2016 WL 154116 (S.D.N.Y. Jan. 12, 2016) ......................................................................15 Chen v. District of Columbia, 839 F. Supp. 2d 7 (D.D.C. 2011) ............................................................................... passim Citizens for Responsibility & Ethics in Wash. v. U.S. Department of Veterans Affairs, 828 F. Supp. 2d 325 (D.D.C. 2011) ......................................................................36 Clarke v. Wash. Metropolitan Area Transit Authority, 904 F. Supp. 2d 11 (D.D.C. 2012) ............................................................................. passim D’Onofrio v. SFX Sports Group, Inc., 254 F.R.D. 129 (D.D.C. 2008).........................................................................18, 21, 33, 35 Landmark Legal Foundation v. EPA, 272 F. Supp. 2d 59 (D.D.C. 2003) ...................................................................23, 33, 35, 36 Landmark Legal Foundation v. EPA, 959 F. Supp. 2d 175 (D.D.C. 2013) ...................................................................................36 Landmark Legal Foundation v. EPA, 82 F. Supp. 3d 211 (D.D.C. 2015) .....................................................................................14 Living Color Enterprises, Inc. v. New Era Aquaculture, Ltd., Case No. 14-cv-62216, 2016 WL 1105297 (S.D. Fla. Mar. 22, 2016) ..............................15 Mazloum v. District of Columbia Metropolitan Police Department, 522 F. Supp. 2d 24 (D.D.C. 2007) .....................................................................................17 Nacco Materials Handling Group, Inc. v. Lilly Co., 278 F.R.D. 395 (W.D. Tenn. 2011) .................................................................24, 25, 32, 35 Nelson v. Amica Mutual Insurance Co., No. 6:15-cv-160-Orl-41TBS, 2015 WL 4507609 (M.D. Fla. July 14, 2015) ..............17, 21 ii Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 6 of 44 Nunnally v. District of Columbia, Civil Action No. 08-1464 PLF/DAR, 2013 WL 6869665 (D.D.C. Dec. 19, 2013) .............................................................................................. passim Peskoff v. Faber, 251 F.R.D. 59 (D.D.C. 2008)..................................................................................... passim Pilchesky v. Gatelli, 12 A.3d 430 (Pa. Super. Ct. 2011) .......................................................................................6 Richard Green (Fine Paintings) v. McClendon, 262 F.R.D. 284 (S.D.N.Y. 2009) ............................................................................... passim Treppel v. Biosail Corp., 249 F.R.D. 111 (S.D.N.Y. 2008) .................................................................................33, 35 United States ex rel. Miller v. Holzmann, Civil Action No. 95-1231 (RCL), 2007 WL 781941 (D.D.C. Mar. 12, 2007) .............................................................................................. passim United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951) .............................................................................................................6 RULES Federal Rule of Civil Procedure 37(e) .....................................................................................15, 33 iii Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 7 of 44 INTRODUCTION Preservation of potentially relevant evidence is a fundamental obligation of parties who reasonably can foresee that they might become involved in litigation. Hornbook legal principles command that parties in such circumstances take steps to ensure that evidence that is or might become relevant to the litigation is neither lost nor destroyed. And when a party violates its bedrock duty to preserve relevant evidence, remedial sanctions are justified. Such is the case here. Defendants have refused time and again to adopt any kind of safeguards to prevent the loss or destruction of evidence highly relevant to the efforts of Plaintiffs (hereinafter, “Agility”) to defend against defamation claims brought against them by Kuwait & Gulf Link Transport Company (“KGL”) in Pennsylvania state court (“Pennsylvania Litigation”).1 Defendants were under an obligation to preserve materials relating to the Pennsylvania Litigation once that action was filed on March 21, 2012. The claims against Agility in the meritless Pennsylvania Litigation are largely premised on KGL’s theory that it suffered harm from the response of Defense Logistics Agency (“DLA”) officials to a whistleblower’s letters alleging ties between KGL and sanctioned Iranian companies received in March 2011. And it was, in no small measure, the actions of DLA officials that spurred KGL to file suit in the first instance. Those officials (including senior DLA attorney Normand Lussier) immediately leaked the allegedly defamatory letters to counsel for KGL and thereafter actively facilitated KGL’s pre-litigation efforts in the year leading up to its filing the Pennsylvania Litigation. DLA kept an open channel of communication with KGL and aided KGL in its litigation by, among other things, providing information related to the IP address from which the 1 Kuwait & Gulf Link Transp. Co., et al. v. John Doe, et al., No. 2012-1820, Court of Common Pleas, Cumberland County, Pennsylvania. 1 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 8 of 44 letters were sent; marshalling jurisdictional facts to assist KGL in filing in its preferred forum; and leaking privileged and confidential internal DLA communications and analysis, highly confidential business information from Agility, and even sealed court documents.2 Despite these links between DLA and the Pennsylvania Litigation for the past four years, Agility has recently learned through an admission by the Department of Justice (“DOJ”) that DLA failed to issue—and, stunningly, still has not issued—a litigation hold. Nor has it taken any steps to preserve potentially relevant evidence, including evidence that was subject to Agility’s March 2014 subpoenas (construed by DLA as Touhy requests) at issue in this action. DOJ was forced to admit this failure to preserve evidence after KGL made an eleventh-hour production on February 27, 2016—following what should have been the conclusion of Lussier’s deposition—of highly relevant communications between Lussier and KGL’s counsel, including communications that occurred after the issuance of the March 2014 subpoenas. Not only had many of these highly relevant documents not previously been produced by DLA to Agility, but 2 Even assuming that Defendants’ preservation duties were not triggered when KGL filed the Pennsylvania Litigation (on March 21, 2012), it was eminently foreseeable on January 28, 2013 or June 26, 2013, when Defendants Kowalski and Lussier executed declarations in support of KGL in the Pennsylvania Litigation, that Defendants would be involved in that litigation. Indeed, they already were. According to DLA Associate General Counsel Daniel Poling, DLA began collaborating with KGL to identify the pseudonymous author of the allegedly defamatory letters at the heart of the Pennsylvania Litigation shortly after they were received in March 2011. DLA attorneys—including Poling, Lussier, and Noel Woodward— began corresponding with KGL’s counsel in a coordinated effort to identify that person and entity in order to subject him or her to criminal penalties. See generally Exs. 1 (Decl. of D. Poling (Aug. 19, 2014)) & 2 (Decl. of D. Hammond (Aug. 20, 2014)). (Such criminal penalties would, of course, be completely unwarranted because the Wilson Letters were substantially true—KGL admits in its complaint in the Pennsylvania Litigation that it did have ties to sanctioned Iranian entities at the time the Wilson Letters were sent.) Alternatively, Defendants indisputably were on notice no later than March 6, 2014 or March 7, 2014 that they possessed emails and other documents critical to the Pennsylvania Litigation. On those dates, Agility served subpoenas for documents and deposition testimony on Defendants Normand Lussier, Medard Kowalski, and DLA. 2 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 9 of 44 DOJ recently admitted that DLA no longer even possesses some of the documents on its servers (apart from the KGL production). This substantial document loss and destruction is a direct result of DLA’s failure to preserve documents material to the Pennsylvania Litigation. Indeed, DLA has conceded that dozens of emails to or from Lussier that were responsive to the records search to which the parties agreed in an earlier effort to resolve the action in this Court were simply deleted from the system. And there almost certainly are dozens—if not hundreds or thousands—more emails that have been lost as a result of DLA’s negligence and never will be recovered.3 DLA’s failure to preserve evidence potentially relevant to the Pennsylvania Litigation justifies the imposition of remedial sanctions. Authorizing Agility to conduct additional discovery is the appropriate remedy for DLA’s violation of its preservation obligations. Specifically, the Court should grant Agility two forms of additional discovery. First, the Court should order DLA to produce all documents that include any of the previously agreed-on search terms from the electronic mailboxes of DLA officials who worked in close coordination with Lussier regarding the issues at stake in the Pennsylvania Litigation, namely Daniel Poling, Noel Woodward, and Fred Pribble. As Lussier confirmed at his deposition, Poling, Woodward, and Pribble all were significantly involved with DLA’s response to the allegedly defamatory letters and, generally, “all things KGL and Agility.” As a result, they 3 Unfortunately, this is not the first time that the failure by DOJ and DLA to issue a litigation hold has led to the spoliation of documents critical to Agility’s defense. In connection with an unrelated criminal action pending in the United States District Court for the Northern District of Georgia, the government failed to issue a written litigation hold to preserve relevant documents from a DLA component until 2010—despite launching its investigation of Agility in 2005. In the intervening five years, DLA lost or destroyed critical exculpatory evidence. See Motion for Sanctions, United States v. The Public Warehousing Company, K.S.C., a/k/a Agility, No. 1:09-CR-490-TWT-AJB (N.D. Ga. June 18, 2015). 3 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 10 of 44 likely are (or were) in possession of responsive emails.4 This should be done forthwith so that additional, relevant documents are not lost. Second, the Court should order DLA to make Poling, Woodward, and Pribble available for deposition by Agility. Because DLA, by its own admission, has failed to implement any preservation procedures, it is likely that responsive emails to or from Lussier that were in the possession of Poling, Woodward, or Pribble have been lost or destroyed. As a result, allowing Agility to examine the three officials about their involvement in matters underpinning the Pennsylvania Litigation is the best—and, indeed, only—way to remedy DLA’s breach of its fundamental litigation duties. BACKGROUND In March 2011, a whistleblower using the pseudonym “Scott Wilson” emailed two letters (“Wilson Letters”) to U.S. government officials identifying alleged ties between KGL, a defense contractor headquartered in Kuwait, and Iranian shipping companies sanctioned for their support of Iran’s nuclear proliferation program.5 One of the recipients of the Wilson Letters was defendant Medard Kowalski, a contracting officer at DLA. Kowalski forwarded the letters to Lussier, a DLA attorney, who promptly leaked them to an attorney representing a KGL 4 Pursuant to the Touhy request, DLA has stated that it searched the complete electronic mailboxes of Kowalski, Lussier, FOIA Officer Deborah Teer, as well as a single email folder within Poling’s electronic mailbox. See Dkt. No. 41-3, Decl. of D. Poling (May 22, 2015) at ¶ 14. The electronic mailboxes of Woodward and Pribble, and the full electronic mailbox of Poling, have not been searched, despite Agility’s subpoena request for all responsive documents in DLA’s possession, custody, or control. 5 Additional background on the Wilson Letters and the Pennsylvania Litigation may be found in Agility’s prior filings with this Court, including the Complaint (Dkt. No. 1), Agility’s Motion for Summary Judgment (Dkt. No. 28), and Agility’s Motion to Compel the Production of Documents (Dkt. No. 40). 4 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 11 of 44 subcontractor with the intent that the letters be shared with KGL. As expected, that attorney subsequently provided the Wilson Letters to an attorney representing KGL. After leaking the Wilson Letters to KGL, DLA began almost immediately to assist KGL in its attempt to identify the pseudonymous “Scott Wilson.” DLA attorneys worked with KGL to trace the letters to an IP address registered to Agility. DLA also assisted KGL’s counsel in gathering evidence and jurisdictional facts for use in the state court complaint against Agility. According to Poling, by no later than May 30, 2011—and possibly as early as April 1, 2011— DLA had concluded that it had a “common interest” with KGL in identifying the source of the Wilson Letters. DLA and KGL hoped, through the coordinated use of a potential civil case and the government’s “significant tools and leverage in a [potential] criminal investigation,” to identify and punish “Scott Wilson.” KGL’s counsel and DLA attorneys Poling, Lussier, and Woodward purportedly exchanged multiple emails in furtherance of those efforts.6 See Exs. 1 (Decl. of D. Poling (Aug. 19, 2014)) & 2 (Decl. of D. Hammond (Aug. 20, 2014)). In March 2012, following months of coordination with DLA, KGL initiated the Pennsylvania Litigation: a defamation lawsuit against “Scott Wilson,” Agility, and three of Agility’s U.S. affiliates in Pennsylvania state court. In support of its efforts to establish the prima facie showing of defamation necessary to unmask the anonymous whistleblower behind the Wilson Letters, KGL submitted declarations from Kowalski and Lussier that were sworn 6 The Pennsylvania court rejected DLA and KGL’s attempts to cloak these communications under the guise of a formal “common interest privilege,” concluding that the assertion of such a privilege “border[ed] on the frivolous.” Ex. 3 (Opinion and Order In Re: U.S. and Kuwaiti Defendants’ Motions to Compel Documents, Withheld on the Basis of a Common Legal Interest Privilege) at 4. In any event, it is highly inappropriate for a government agency to act as a “shadow party” in private civil litigation. Among other things, DLA put KGL’s counsel in contact with the criminal prosecutor handling an unrelated criminal matter against Agility—apparently hoping to drum up interest in additional charges relating to the Wilson Letters. 5 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 12 of 44 under penalty of perjury.7 Among other things, Kowalski and Lussier averred that they read the Wilson Letters, were concerned by the allegations in the letters, were not aware of similar allegations from other sources, and undertook a serious review of the alleged conduct in light of DLA’s concerns about KGL’s propriety as a government contractor. Agility sought to test the veracity of these declarations. On March 6, 2014 and March 7, 2014, it served document and deposition subpoenas on DLA, Kowalski, and Lussier, seeking information critical to a successful defense of the defamation claim. DLA refused to comply with the subpoenas, citing regulations issued pursuant to United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). As a result, on June 24, 2014, Agility brought this action pursuant to the Administrative Procedure Act (“APA”), asserting that DLA improperly collaborated with KGL in connection with the Pennsylvania Litigation while stonewalling Agility’s requests for information necessary to its defense.8 7 As noted in previous filings in this action, Pennsylvania law requires a plaintiff seeking to unmask a John Doe defendant in a defamation action to “present sufficient evidence to establish a prima facie case for all elements of a defamation claim . . . such as would survive a motion for summary judgment.” Pilchesky v. Gatelli, 12 A.3d 430, 442–43 (Pa. Super. Ct. 2011). The strength of that prima facie case is then weighed against the John Doe defendant’s First Amendment rights to “ensure[] that a plaintiff does not present a frivolous claim or one intended merely to harass or silence a vocal critic.” Id. at 443. The Pennsylvania court ultimately concluded that KGL’s prima facie case was “not . . . a strong one” and that there was “little evidence of harm.” Ex. 4 (Opinion and Order In Re: Plaintiffs’ Motion to Apply Pilchesky and Compel Disclosure of John Does’ Identities, In Re: Defendants’ Joint Motion for Summary Judgment) at 9. However, the court also denied Agility’s motion for summary judgment, indicating that the matter may need to go to trial to be resolved due to the fact-specific nature of defamation actions under state law—including determining whether the Wilson Letters are substantially true (as Agility contends) and whether they harmed KGL’s reputation. Id. at 11. Accordingly, evidence regarding Defendants’ reaction to the Wilson Letters remains relevant to the Pennsylvania Litigation. 8 On March 7, 2016, Agility filed a second lawsuit against DLA and related officials concerning their denial of additional Touhy requests submitted by Agility for deposition testimony. See Civil Action No. 16-00448 (JDB). The defendants in that action have not yet filed their answer to Agility’s complaint. 6 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 13 of 44 Following Agility’s motion for summary judgment in this action, DLA agreed to revise its response to Agility’s Touhy requests and to make Kowalski and Lussier available for depositions. DLA also agreed to produce materials responsive to Agility’s document requests. Between January 26, 2015 and June 5, 2015, DLA produced on a rolling basis documents identified through the use of agreed-on search terms run across the email accounts of relevant custodians, including Lussier. Agility filed a motion to compel the production of additional documents, which this Court granted in part and denied in part in a memorandum opinion and order entered June 23, 2015. On June 29, 2015, Agility began its deposition of Lussier.9 During the deposition, Lussier testified that KGL’s counsel prepared the initial draft of his declaration, see Ex. 5, Lussier Dep. 298:5-299:2, June 29, 2015; that he was not involved in DLA’s investigation of KGL following receipt of the Wilson Letters, see id. at 304:14–305:17; that he did not read the Wilson Letters or the emails attached thereto at the time that they were sent, see id. at 249:16– 250:15; and that there were suspicions immediately within DLA that Agility was responsible for the Wilson Letters and that its role in the letters would not have been “material” to any investigation, see id. at 306:5–309:9. Acknowledging that this testimony contradicted his sworn declaration, Lussier testified at various points that the language in that declaration was “an overstatement,” “a mistake,” and did not reflect what “actually happened.” Id. at 304:14-305:8, 306:5-307:4, 309:10-19.10 9 As discussed in the motion to reopen filed contemporaneously herewith, the parties subsequently filed a joint stipulation of dismissal without prejudice in this action. 10 Before Lussier executed his declaration, he sent it to Poling for review. Agility is not aware of any objection to the declaration by Poling or anyone else at DLA prior to its filing in the Pennsylvania Litigation. 7 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 14 of 44 Because Lussier’s testimony contradicted his prior sworn statements in the declaration, Agility’s counsel advised Lussier of his right under the Fifth Amendment not to incriminate himself. Id. at 312:3–313:6, 314:2–315:8. Counsel for DOJ concurred with this approach, and further stated that the “best course [was] to suspend the deposition.” Id. at 316:4-21. KGL’s counsel, whose conduct was placed directly at issue by Lussier’s testimony, likewise agreed to suspend the deposition. Id. at 315:9-316:3. On July 9, 2015, less than two weeks after Lussier’s deposition was suspended, DLA Deputy General Counsel James M. Coyne wrote to KGL regarding the declarations previously executed by Kowalski and Lussier. According to that letter, DLA concluded that “both of [the] declarations contain materials errors,” including at least one “material statement of fact that is incorrect.” Based on this determination, DLA stated that it did “not authorize continued use of the two declarations,” asserted that “the declarations should not be used or considered for any purpose,” and requested that KGL “seek to have the declarations withdrawn” from the Pennsylvania Litigation. A copy of DLA’s letter was submitted to this Court as an attachment to the status report filed by the parties on July 15, 2015. See Dkt. No. 47. On November 3, 2015, more than four months after the deposition was suspended, DOJ counsel informed KGL and Agility that Lussier’s request for individual representation by DOJ had been denied and that Lussier did not intend to retain personal counsel at his own expense going forward. DOJ counsel further advised that Lussier had officially retired from government service on October 31, 2015. Lussier’s deposition resumed on December 15, 2015. During his continued deposition, Lussier testified that he was biased against Agility, see Ex. 6, Lussier Dep. 105:18-22, Dec. 15, 2015; that he provided a great deal of internal DLA information to KGL’s counsel outside of the 8 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 15 of 44 Touhy or Freedom of Information Act (“FOIA”) process, id. at 152:13-153:2; and that his colleagues Daniel Poling, the Associate General Counsel (Litigation) and Chief Trial Attorney for DLA; Noel Woodward, the then-Associate General Counsel (Business Integrity) of DLA; and Fred Pribble, the General Counsel of DLA, also were significantly involved in DLA’s response to the Wilson Letters as well as “all things Agility and KGL,” see, e.g., id. at 78:1681:4, 125:11-16; Ex. 7, Lussier Dep. 52:22-53:5, Feb. 5, 2016. The transcript also reveals that Lussier repeatedly gave inconsistent testimony, stating on more than one occasion that he was “changing” his previous testimony. See, e.g., id., Lussier Dep. 88:22-92:9, Feb. 5, 2016. Following the completion of Agility’s initial questioning of Lussier, KGL’s examination of Lussier was scheduled to begin on March 2, 2016. However, just after midnight on February 27, 2016, KGL produced nearly 3,000 pages of highly relevant communications between DLA and KGL—many of which were previously undisclosed—including communications between Lussier and KGL’s counsel. These documents were highly relevant to Lussier’s deposition. Moreover, the overwhelming majority of these documents included the search terms that the government agreed to run in connection with this litigation—and, consequently, should have been produced by the government pursuant to the parties’ agreement that resolved this action.11 In the wake of this eleventh-hour production by KGL, Lussier failed to appear for his March 2, 2016 deposition. Ex. 8, Lussier Dep. 5:22-10:7, Mar. 2, 2016. Shortly thereafter, on 11 Specifically, Agility’s analysis indicates that of the 436 documents produced by KGL in its eleventh-hour production, 252 hit upon the search terms agreed to by DLA (excluding family members). Despite this, the majority of such documents were not produced by DLA. Further, included in this set of documents were communications between Lussier and KGL’s counsel dated after the March 7, 2014 subpoenas issued to DLA, providing indisputable evidence that DLA’s failure to implement preservation procedures upon receipt of the subpoenas led to the loss of responsive records. 9 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 16 of 44 March 4, 2016, Agility sent correspondence to DOJ regarding the serious issues raised by KGL’s production and Lussier’s failure to appear at his deposition. Ex. 9 (M. Krawiec Letter to J. Schwartz and E. Kade (Mar. 4, 2016)). Agility stated that DLA’s failure to produce responsive communications with KGL called into question the adequacy of its production efforts and raised the possibility of spoliation of evidence. Agility also noted that some of the communications showed that documents over which the government had claimed a privilege had in fact been provided unredacted to KGL’s counsel, thus waiving any such privilege.12 Finally, Agility explained that it had been substantially prejudiced by DLA’s conduct and Lussier’s failure to appear at the deposition, and asked DLA and DOJ to take steps to investigate and respond to the issues raised by Agility. On March 11, 2016, in response to this letter, the government informed Agility that it was “committed to determining why certain documents produced by KGL to Agility . . . were not included in the government’s various productions of documents in response to your Touhy request[s].” Ex. 10 (J. Schwartz Letter to M. Krawiec (Mar. 11, 2016)). The government also explained that DLA had instructed Lussier that his March 2, 2016 deposition was postponed to allow the government time to analyze KGL’s production. Id. On March 15, 2016, Agility informed the government that DLA’s decision to postpone Lussier’s deposition due to a problem of its own creation was inappropriate, particularly given that Agility—the only party prejudiced 12 It appears that some of these documents are implicated by the previous motion to compel filed in this case. The Court generally sustained Defendants’ privilege assertions, without the benefit of knowing that Lussier forwarded a number of these materials to third parties. See Dkt. No. 46. 10 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 17 of 44 by the untimely production of documents—was prepared to go forward.13 Ex. 11 (M. Krawiec Letter to J. Schwartz (Mar. 15, 2016)). On March 22, 2016, the parties resumed Lussier’s deposition once again. Due to KGL’s production of documents that had been withheld from Agility previously, the parties agreed to permit Agility to examine the witness regarding these new documents before KGL began its questioning. These documents included 23 emails Lussier sent to KGL’s counsel on the very day that KGL filed its complaint against Agility in the Pennsylvania Litigation, including internal DLA communications, as well as confidential settlement communications between Agility and the government in connection with criminal litigation pending in Georgia, United States v. The Public Warehousing Company, K.S.C., a/k/a Agility, No. 1:09-CR-490-TWT-AJB (N.D. Ga.), and sealed documents from previous litigation between Agility and DLA pending before this Court, Agility Defense & Government Services, Inc., et al. v. Defense Logistics Agency, et al., Civil Action No. 09-2348 (D.D.C.). Agility questioned Lussier at length regarding his conduct in forwarding these protected materials to an attorney for a private party involved in litigation against Agility. Lussier could not offer any reasonable justification for his conduct. Agility also questioned Lussier about the circumstances surrounding the government’s failure to produce such key documents to Agility in connection with this litigation. Lussier 13 In its March 11, 2016 letter, the government also asserted that it was considering clawing back certain documents within KGL’s recent production as to which DLA asserted a privilege. Ex. 10 (J. Schwartz Letter to M. Krawiec (Mar. 11, 2016)). Agility objected to this anticipated clawback, explaining that Lussier had waived any purported privilege by providing the documents to KGL’s counsel. Ex. 11 (M. Krawiec Letter to J. Schwartz (Mar. 15, 2016)). Nevertheless, on March 18, 2016, the government issued a clawback notice with respect to 28 documents in KGL’s production. Ex. 12 (J. Schwartz Letter to M. Krawiec (Mar. 18, 2016)). To date, Agility has honored that clawback request but reserves the right to challenge it in the future. 11 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 18 of 44 averred that he was not involved in the government’s document collection efforts. Importantly, Lussier also testified that he was never provided a litigation hold in connection with the Pennsylvania Litigation or this APA action. Thus, throughout the period relevant to Agility’s defense—from Lussier’s leak of the Wilson Letters to his provision of a materially false declaration to his ever-shifting deposition testimony—it appears that DLA took absolutely no steps to preserve potentially relevant evidence; instead, DLA’s routine document destruction protocols have been in place. Because of this, highly relevant documents and communications almost certainly were destroyed.14 On March 24, 2016, in light of Lussier’s testimony, Agility wrote to DOJ requesting that it take steps to mitigate the ongoing prejudice to Agility caused by the government’s conduct. Agility asked that the government immediately issue a litigation hold, withdraw its requests to claw back certain documents produced by KGL that involved DLA communications forwarded to third parties, and expeditiously investigate the adequacy of its prior document collection and production efforts. Ex. 13 (M. Krawiec Letter to J. Schwartz (Mar. 24, 2016)). DOJ responded on April 13, 2016, asserting that its investigation into DLA’s failure to produce responsive documents was “now complete.” Among other things, DOJ conceded that there were documents that were responsive to the search terms used by DLA that were not in Lussier’s mailbox when pulled. DOJ asserted that only “a fraction of these documents were not previously produced to Agility[.]” However, even if portions of some of these documents were previously produced by DLA to Agility, the previously produced versions did not include key emails showing the underlying DLA documents and communications being forwarded to KGL’s 14 Lussier’s deposition continued over two more days (April 7, 2016 and April 26, 2016) and involved Agility completing its questioning regarding the new documents, KGL conducting its own examination, and Agility conducting a limited re-cross examination. 12 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 19 of 44 counsel by Lussier. DOJ also conceded that Lussier did not routinely save emails from his “sent” folder and might have deleted some of the relevant materials in response to DLA directives to reduce mailbox size. Ex. 14 (J. Schwartz Letter to M. Krawiec (Apr. 13, 2016)). In its April 13 letter, DOJ also confirmed that no litigation hold was issued in connection with this litigation. DOJ asserted that it believed that this matter would be decided on the administrative record, purportedly obviating the need for any such hold.15 Moreover, DOJ doubted the utility of issuing a litigation hold, arguing that any such hold would have been effective only from June 2014 (when this action was filed) through December 2014 (when Lussier’s mailbox was collected) and that the majority of the “missing documents” were dated from mid-2011 through mid-2013. Id. DOJ’s letter failed, however, to acknowledge that Lussier’s involvement in the Pennsylvania Litigation began much earlier than June 2014—he provided extensive relevant information to KGL’s counsel before the lawsuit, including on the day the complaint was filed in March 2012, and he executed his declaration in June 2013. On April 26, 2016, DOJ informed Agility that it had identified yet another failure to comply with the terms of the parties’ resolution of the dispute in this action. According to DOJ, the contractor tasked with performing the requisite searches of DLA mailboxes pulled in response to Agility’s Touhy requests neglected to use two agreed-on search terms (including, glaringly, the term “KGL”). 15 Because of this, approximately 200 documents responsive to DOJ’s suggestion that compilation of the “administrative record” was sufficient to meet its preservation obligation is nonsensical. The “administrative record” compiled by Defendants consisted primarily of correspondence regarding Agility’s Touhy requests. But those Touhy requests sought documents and deposition testimony from DLA, including emails held by Lussier and others within the agency. Defendants were aware that Agility filed this litigation in order to obtain those underlying documents, and they cannot seriously argue that they were under no obligation to preserve such materials. In any event, the government’s supposition as to the likely conclusion of this matter is not a justification for failing to put in place a litigation hold. 13 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 20 of 44 Agility’s Touhy request were never reviewed for production to Agility. The DOJ has represented that these documents generally do not involve communications between DLA and KGL’s counsel, and do not appear to cure DLA’s failure to preserve documents (including the lost documents that were part of KGL’s eleventh-hour production). STANDARD OF REVIEW “Federal courts maintain inherent powers ‘to protect their integrity and prevent abuses of the judicial process.’” Landmark Legal Found. v. EPA, 82 F. Supp. 3d 211, 218 (D.D.C. 2015). This inherent authority “encompasses the power to sanction attorney or party misconduct.” Id. Exercising this inherent power, courts can sanction parties that breach their duty to preserve evidence. E.g., Clarke v. Wash. Metro. Area Transit Auth., 904 F. Supp. 2d 11, 20 (D.D.C. 2012) (noting that a party that breaches its duty to preserve evidence “‘runs the risk of being justly accused of spoliation’ . . . and finding itself the subject of sanctions” and explaining that “[t]he authority to issue sanctions in this context . . . flows . . . from the court’s inherent authority to manage its affairs so as to achieve the orderly and expeditious disposition of cases”); see also Nunnally v. District of Columbia, Civil Action No. 08-1464 PLF/DAR, 2013 WL 6869665, at *6 (D.D.C. Dec. 19, 2013) (“A court, in an exercise of inherent discretion, can impose a range of sanctions for spoliation of evidence.”). “Although the court has a wide array of options at its disposal, sanctions may be divided into two rough categories”: (1) punitive sanctions, and (2) remedial (or issue-related) sanctions. Clarke, 904 F. Supp. 2d at 20. Punitive sanctions “include dismissals, default judgments, contempt orders, and the imposition of fines.” Id. Remedial sanctions, on the other hand, are “targeted to remedy the precise evidentiary issue[.]” Id. A party is entitled to relief in the form of a remedial sanction for the failure to preserve evidence when it establishes three elements: “(1) the party having control over the evidence had 14 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 21 of 44 an obligation to preserve it when it was destroyed or altered; (2) the destruction or loss was accompanied by a culpable state of mind; and (3) the evidence that was destroyed or altered was relevant to the claims or defenses of the party that sought the discovery of the spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defense of the party that sought it.” Id. at 21; see also Bolger v. District of Columbia, 608 F. Supp. 2d 10, 30 (D.D.C. 2009) (Bates, J.) (same). As to the culpability prong, moreover, “even the negligent destruction of relevant evidence may warrant [remedial] sanctions.” Clarke, 904 F. Supp. 2d at 21. A party seeking a remedial sanction need only prove these elements by a preponderance of the evidence. Nunnally, 2013 WL 6869665, at *16; see also Clarke, 904 F. Supp. 2d at 20 (“[A] party seeking [a remedial sanction] need only put forth a preponderance of the evidence, but a party seeking a [punitive] sanction must put forth clear and convincing evidence before sanctions are warranted.”).16 16 Recent amendments to Federal Rule of Civil Procedure 37(e) took effect on December 1, 2015. Amended Rule 37(e) authorizes a court to impose sanctions on a party, under certain circumstances, for failure to preserve electronically stored information. According to the Advisory Committee Notes, amended Rule 37(e) “forecloses reliance on inherent authority . . . to determine when certain measures should be used” as a sanction for loss of evidence. Fed. R. Civ. P. 37(e), Advisory Committee Notes. But Rule 37(e)—including its limitations on a court’s use of its inherent authority—does not apply here, where the evidence that Defendants failed to preserve can be “restored or replaced through additional discovery.” See Fed. R. Civ. P. 37(e); see also id., Advisory Committee Notes (noting that the Rule “applies only if . . . the information could not be restored or replaced by additional discovery”); Living Color Enters., Inc. v. New Era Aquaculture, Ltd., Case No. 14-cv-62216, 2016 WL 1105297, at *5 (S.D. Fla. Mar. 22, 2016) (observing that Rule 37(e) does not apply where electronically stored information “can be restored or replaced through additional discovery”); CAT3, LLC v. Black Lineage, Inc., 14 Civ. 5511 (AT) (JCF), 2016 WL 154116, at *6 (S.D.N.Y. Jan. 12, 2016) (explaining that Rule 37(e) does not apply “where, for example, emails are lost when one custodian deletes them from his mailbox but remain available in the records of another custodian” and noting that courts maintain inherent authority to “remedy spoliation” in the event that Rule 37(e) does not apply to the facts at issue). 15 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 22 of 44 ARGUMENT I. REMEDIAL SANCTIONS ARE WARRANTED BECAUSE DEFENDANTS FAILED TO PRESERVE HIGHLY RELEVANT EVIDENCE. Each of the three requirements justifying the imposition of remedial sanctions plainly are met here. First, Defendants had an obligation to preserve Lussier’s emails at the time that they were lost. Second, Defendants’ failure to issue a litigation hold or to take any steps to preserve relevant documents at any time during the course of the Pennsylvania Litigation or this action— which would have prevented the loss of Lussier’s emails—constitutes at least negligence. Third, the lost Lussier emails are relevant and favorable to Agility, as demonstrated most clearly by the content of lost emails that already have been recovered through other means. This Court, therefore, should grant Agility’s request for remedial sanctions. A. Defendants Had an Obligation to Preserve Lussier’s Emails When the Emails Were Lost. A party seeking the imposition of remedial sanctions for failure to preserve evidence first must show that the “party having control over the evidence had an obligation to preserve it when it was destroyed or altered.” Clarke, 904 F. Supp. 2d at 21. As a general matter, a party’s preservation obligations are triggered once that party “anticipates that it will be subject to litigation[.]” Id. at 19–20. More specifically, as soon as future litigation becomes “reasonably foreseeable,” a party is “under a duty to preserve what it knows, or reasonably should know, is relevant 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 request.” Nunnally, 2013 WL 6869665, at *6. A party that fails to heed this duty “runs the risk of being justly accused of spoliation[.]” Clarke, 904 F. Supp. 2d at 20. Nonparties also have a duty to preserve evidence under certain circumstances. Although “there is no general duty in the common law” requiring nonparties to preserve evidence, a nonparty’s preservation obligations 16 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 23 of 44 can be triggered by “agreement, contract, statute, or other special circumstance.” Mazloum v. District of Columbia Metro. Police Dep’t, 522 F. Supp. 2d 24, 56 (D.D.C. 2007) (Bates, J.) (emphasis added). A nonparty also is required to preserve evidence upon receipt of a “properly served discovery request.” Nelson v. Amica Mut. Ins. Co., No. 6:15-cv-160-Orl-41TBS, 2015 WL 4507609, at *2 (M.D. Fla. July 14, 2015). Applying these principles, courts vigilantly have enforced the duty to preserve relevant evidence at the moment future litigation becomes reasonably foreseeable. In Chen v. District of Columbia, 839 F. Supp. 2d 7 (D.D.C. 2011), for instance, the plaintiff claimed that one of the defendants, Red Roof Inn (“Red Roof”), had a duty to preserve images from security cameras that captured the events that formed the basis for the litigation and, absent modification of routine system retention processes, would be deleted after two weeks. Id. at 10–11. The Court held that there was “no doubt” that Red Roof was “put on notice almost immediately following” the incident at issue that “litigation against the company by [plaintiff] was a strong possibility.” Id. at 13. The Court explained that plaintiff’s counsel had informed representatives at Red Roof that the plaintiff intended to file suit, had sent letters to Red Roof’s counsel concerning the plaintiff’s claims, and had “even warned” that the company should refrain from destroying evidence. Id. And because Red Roof was aware that the dispute involved an altercation between the plaintiff and a security guard that took place in the hotel lobby, “[i]t should have been . . . readily apparent . . . that the recordings made by the lobby security cameras . . . were potentially highly relevant to [plaintiff’s] claims.” Id. In sum, the Court concluded that “Red Roof, put on notice of the likelihood of litigation and aware of the potential relevance of the security footage, had a clear obligation to preserve that evidence.” Id. 17 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 24 of 44 Likewise, the Court in Peskoff v. Faber, 251 F.R.D. 59 (D.D.C. 2008), imposed sanctions after concluding that the defendant breached its duty to preserve relevant evidence. Id. at 62. The Court concluded that, as of the day that the plaintiff threatened suit, the defendant “had an obligation to make a conscientious effort to preserve electronically stored information that would be relevant to this dispute.” Id. Despite that duty, the defendant “failed to deactivate network maintenance tools that automatically deleted electronically stored information that would be relevant to this dispute,” “did not have [plaintiff’s] e-mails archived” until two months after the plaintiff threatened suit, and “at no point” had “relevant back-up tapes preserved.” Id. Time and again, courts have echoed the analysis of Chen and Peskoff in enforcing a party’s duty to preserve potentially relevant evidence. See, e.g., Nunnally, 2013 WL 6869665, at *17–18 (concluding that future litigation was “reasonably foreseeable” to the District based on plaintiff’s filing of internal complaints and complaints with a federal agency and a District agency, and deeming deponents’ testimony that they “did not recall being instructed to preserve documents associated with this litigation,” even though they were involved in the conduct at issue, “relevant to the court’s inquiry”); D’Onofrio v. SFX Sports Grp., Inc., 254 F.R.D. 129, 131 (D.D.C. 2008) (concluding that, “at a minimum, [defendants] failed to appropriately implement a litigation hold” after plaintiff expressed her intention to file suit and noting that defendants’ employee had testified that he was not asked to make a copy of the plaintiff’s file on the server until two years after the suit was filed); United States ex rel. Miller v. Holzmann, Civil Action No. 95-1231 (RCL), 2007 WL 781941, at *2 n.2 (D.D.C. Mar. 12, 2007) (determining that the government was “unreasonable in failing to prevent the destruction of [the documents at issue] by issuing a litigation hold on the documents”). 18 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 25 of 44 Applying this Court’s precedent to the facts here, the Court should conclude that Defendants—as the party having control over Lussier’s emails—“had an obligation to preserve” the emails when the emails were “destroyed or altered,” Clarke, 904 F. Supp. 2d at 21. Future litigation between Agility and Defendants was “reasonably foreseeable” by March 21, 2012, when KGL initiated the Pennsylvania Litigation, triggering Defendants’ obligation to preserve any evidence that it “reasonably should know[] is relevant” to the Pennsylvania Litigation. See Nunnally, 2013 WL 6869665, at *6. On that date, Defendants knew that KGL premised its claims against Agility almost exclusively on the alleged harm caused to KGL in its dealings with DLA as a result of the Wilson Letters. Defendants also knew (or should have known) that it was DLA and its employees (including, most prominently, Lussier) who brought the Wilson Letters to the attention of KGL in the first instance and who were in virtually constant communication with KGL immediately before and on the day that the Pennsylvania Litigation was filed. When KGL filed the Pennsylvania Litigation, DLA was no disinterested nonparty; rather, it had—using the weight of the federal government—collaborated with and assisted KGL throughout the process that culminated in KGL’s filing suit. See, e.g., Exs. 1 (Decl. of D. Poling (Aug. 19, 2014)) & 2 (Decl. of D. Hammond (Aug. 20, 2014)). As in Chen, then, “[i]t should have been . . . readily apparent” to DLA on March 21, 2012 that Lussier emails discussions of the Wilson Letters and interactions with KGL’s counsel “were potentially highly relevant” to the Pennsylvania Litigation and reasonably could be the subject of discovery requests by Agility in that litigation. See 839 F. Supp. 2d at 13. On that date, Defendants thus had an “obligation to make a conscientious effort to preserve electronically stored information that would be relevant” to the Pennsylvania Litigation, including Lussier’s emails. See Peskoff, 251 F.R.D. at 62; Nunnally, 2013 WL 6869665, at *6 (explaining that duty to preserve extends to what a party 19 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 26 of 44 “knows, or reasonably should know, is relevant 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 request”). Even assuming arguendo that future litigation between Agility and Defendants was not foreseeable upon the filing of the Pennsylvania Litigation, Defendants’ duty to preserve relevant evidence commenced, in any event, no later than January 28, 2013, when Kowalski (a federal employee) executed a declaration in support of KGL’s claims in the Pennsylvania Litigation, or June 26, 2013, when Lussier (another federal employee) executed a similar declaration. Through execution and submission of these two declarations, DLA injected itself into the Pennsylvania Litigation—completing an extraordinary intervention by a federal agency on behalf of a private party in a state-court defamation action brought against another private party. DLA should have been aware by this time that (1) these declarations had put DLA’s receipt, discussion, and investigation of the Wilson Letters at issue in the Pennsylvania Litigation, and (2) KGL was using the declarations as the focus of its showing of harm, a key element of its defamation claim. It thus “should have been . . . readily apparent” to DLA by January 28, 2013 that correspondence among DLA officials (including Lussier) about the Wilson Letters was “potentially highly relevant” to the Pennsylvania Litigation and that Agility was reasonably likely to seek discovery of that correspondence in response to the filing of Kowalski’s declaration. See Chen, 839 F. Supp. 2d at 13. And DLA, as a result, had a duty to preserve that evidence. See Peskoff, 251 F.R.D. at 62; Nunnally, 2013 WL 6869665, at *6. And, once more, even assuming arguendo that nothing in the Pennsylvania Litigation triggered Defendants’ duty to preserve relevant evidence, Defendants’ preservation obligations commenced no later than March 6, 2014 or March 7, 2014, when Agility submitted document 20 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 27 of 44 and deposition subpoenas to Lussier, Kowalski, and DLA. Defendants, at that point, knew that DLA testimony and documents were highly relevant to the Pennsylvania Litigation and, more specifically, knew that Agility sought access to DLA emails. Surely Agility’s subpoenas—and the implicit threat of litigation that accompanied them should Defendants refuse to comply—put Defendants “on notice . . . that litigation against [them] by [Agility] was a strong possibility.” See Chen, 893 F. Supp. 2d at 13. As a result, by March 7, 2014, Defendants had an “obligation to make a conscientious effort to preserve electronically stored information that would be relevant” to the Pennsylvania Litigation, including—as specifically identified in the subpoenas— Lussier’s emails. See Peskoff, 251 F.R.D. at 62.17 Even though Defendants thus had an obligation to preserve all relevant documents by March 21, 2012 (or, at the latest, March 7, 2014), it is undisputed that they failed to make any kind of preservation efforts until December 28, 2014, when “DLA pulled the entirety of Mr. Lussier’s mailbox . . . as it existed [on that date].” Ex. 14 (J. Schwartz Letter to M. Krawiec 17 Although Defendants’ preservation obligations were triggered, at the latest, upon the issuance of subpoenas to Lussier, Kowalski, and DLA, it is indisputable that the initiation of this action on June 24, 2014 required Defendants, “at a minimum,” to “implement a litigation hold.” See D’Onofrio, 254 F.R.D. at 131. Even looking to Defendants exclusively as a putative nonparty to the Pennsylvania Litigation, Defendants’ preservation duty was triggered by receipt of the subpoena, which was a “properly served discovery request.” See Nelson, 2015 WL 4507609, at *3. Agility has concrete evidence and an admission by DOJ that documents dated after the initiation of this action no longer existed in Lussier’s mailbox when Defendants pulled it. And there are still more events that arguably triggered Defendants’ duty to preserve relevant evidence. For instance, in December 2011, KGL submitted a Touhy request for the Wilson Letters. Ex. 15 (KGL002809). Moreover, on June 14, 2013, KGL submitted a FOIA request for documents related to the Pennsylvania Litigation. Ex. 16 (KGL002990). Each of these several events imposed an obligation on Defendants to preserve evidence relevant to the Pennsylvania Litigation—including documents responsive to Agility’s subpoenas. Each time, however, Defendants failed to heed their duty. Irrespective of the date from which the Court measures the government’s document preservation obligations, there can be no dispute that spoliation occurred here. 21 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 28 of 44 (Apr. 13, 2016)) at 1.18 It also is undisputed that relevant emails were lost during the time that Defendants had a duty of preservation and failed to heed it. Indeed, Defendants have conceded that there are “documents which are responsive to the search terms used in DLA’s revised Touhy response” that “were not in Mr. Lussier’s mailbox when it was pulled.” Id. According to Defendants, the loss of relevant emails in Lussier’s inbox occurred because Lussier “did not routinely save emails from his ‘Sent’ folder into his personal folder file” and because “DLA email users received automatic warnings when their mailboxes reached 100,000 KB” that “suggested that the user delete any items they were no longer using.” Id. at 2–3. And Defendants did not seek to safeguard against the deletion of relevant emails by issuing a litigation hold, creating a back-up of Lussier’s mailbox, or otherwise modifying the default email settings, as they were required to do once future litigation was reasonably foreseeable. See, e.g., Peskoff, 251 F.R.D. at 62 (imposing sanctions where defendant “failed to deactivate network maintenance tools that automatically deleted electronically stored information”). Defendants thus violated their duty to “make a conscientious effort to preserve electronically stored information that would be relevant to this dispute.” See id. Even while conceding that they did not—and still have not—put in place any protections against the loss or destruction of relevant evidence and that relevant evidence was lost, Defendants claim that they fulfilled their preservation obligations by “preserv[ing] and compil[ing] the administrative record for DLA’s response to Agility’s Touhy requests.” Ex. 14 (J. Schwartz Letter to M. Krawiec (Apr. 13, 2016)) at 3. That is not so. First, as outlined above, 18 As already noted, Defendants also pulled the mailboxes officer, as well as one folder in the mailbox of Poling. otherwise preserve the entire mailboxes of Pribble, Poling, that these individuals were involved in DLA’s response to KGL and Agility. 22 of Kowalski and a DLA FOIA They apparently did not pull or and Woodward, despite knowing the Wilson Letters and all things Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 29 of 44 Defendants’ preservation obligations arise out of and were triggered by events stemming from the Pennsylvania Litigation: the initiation of that action, the execution and submission of two declarations by DLA employees in support of KGL’s prima facie case, or Agility’s submission of subpoenas to DLA and two of its employees. Thus, their purported “preserv[ation]” of the administrative record did not preserve key documents relevant to the underlying Pennsylvania Litigation and is, at best, woefully incomplete for that reason. Second, even putting the Pennsylvania Litigation to one side, Defendants ignore that Agility initiated this action to obtain DLA emails—the very same emails that Defendants claim they had no obligation to preserve. Of course, common sense and precedent dictate that Defendants were obligated to preserve the documents that were requested, lest Agility be deprived of any remedy should it prevail in this suit. See, e.g., Holzmann, 2007 WL 781941, at *2 n.2 (imposing duty to preserve records that were the subject of a FOIA request, not just the administrative record regarding handling of that request); Landmark Legal Found. v. EPA, 272 F. Supp. 2d 59, 67 (D.D.C. 2003) (same). At bottom, Defendants, “put on notice of the likelihood of litigation and aware of the potential relevance” of DLA’s emails as of March 21, 2012, “had a clear obligation to preserve that evidence.” See Chen, 839 F. Supp. 2d at 13. The first requirement for imposing remedial sanctions thus is satisfied here. See id.; Clarke, 904 F. Supp. 2d at 21. B. Defendants Had a Culpable State of Mind. To obtain remedial sanctions for failure to preserve evidence, a party next must establish that the “destruction or loss was accompanied by a culpable state of mind.” Clarke, 904 F. Supp. 2d at 21. Sufficient culpability is proven in the context of remedial sanctions through a showing of mere negligence. Id. Demonstrating negligence does not require meeting a steep burden. Indeed, “[a]fter determining that a litigant ‘had possession’ of evidence and ‘easily could have preserved it,’ . . . ‘[i]n the absence of any other explanation, the Court must conclude that . . . 23 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 30 of 44 only negligence could have’ eliminated the evidence.” Nunnally, 2013 WL 6869665, at *18. In Chen, for instance, the Court “easily conclude[d] that Red Roof was at least negligent in failing to preserve the security footage,” given that Red Roof had possession of the footage and “easily could have preserved it” by altering its normal two-week footage retention period or by “burning a viable copy of the footage onto a DVD.” 839 F. Supp. 2d at 13–14. Similarly, the court in Nacco Materials Handling Group, Inc. v. Lilly Co., 278 F.R.D. 395 (W.D. Tenn. 2011), found the defendant negligent where it “failed to timely issue an effective written litigation hold, to take appropriate steps to preserve any existing electronic records, to suspend or alter automatic delete features and routine overwriting features, and to timely and effectively collect [electronically stored information].” Id. at 404. In that case, the defendant had “left collection efforts to its employees to search their own computers with no supervision or oversight from management,” “did not follow up with its employees to determine what efforts were taken to preserve and collect relevant evidence,” and “failed to document any of its search and collection efforts.” Id. Courts also categorically have held that a party’s failure to issue a timely litigation hold constitutes at least negligence when documents are lost as a result. See, e.g., Richard Green (Fine Paintings) v. McClendon, 262 F.R.D. 284, 290 (S.D.N.Y. 2009) (“[T]he failure to implement a litigation hold is, by itself, considered grossly negligent behavior.”); Holzmann, 2007 WL 781941, at *2 n.2 (concluding that government was negligent “in failing to prevent the destruction of [the documents at issue] by issuing a litigation hold on the documents”). Application of these principles compels finding Defendants at least negligent in their failure to preserve Lussier’s emails. As a threshold matter, Defendants concede that they failed to issue a litigation hold at any time in response either to the Pennsylvania Litigation or this 24 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 31 of 44 action. DOJ Letter at 3. Shockingly, Defendants still have not issued a litigation hold or taken any steps to preserve relevant evidence. This, without more, constitutes “grossly negligent behavior.” See Richard Green, 262 F.R.D. at 290; see also Holzmann, 2007 WL 781941, at *2 n.2. Even putting the categorical rule regarding failure to issue litigation holds to one side, Defendants’ conduct easily satisfies the culpability requirement. Defendants admit that they took absolutely no action to prevent the loss of Lussier’s emails and related documents until pulling the contents of his mailbox on December 28, 2014—over two-and-a-half years after KGL initiated the Pennsylvania Litigation and five months after Agility initiated this action. Ex. 14 (J. Schwartz Letter to M. Krawiec (Apr. 13, 2016)) at 2. Defendants also concede that Lussier often failed to save emails from his “sent” folder to his personal folder and that DLA’s email system recommended that users delete emails after reaching a certain storage threshold. Id. at 2–3. Yet, even after being put on notice that Lussier’s emails were highly relevant both to the Pennsylvania Litigation and this action, Defendants still failed to comply with their preservation mandate. As was the case in Nacco Materials, Defendants left employees to their own devices and did not offer any direction regarding the need to retain relevant records. See 278 F.R.D. at 404. Because Defendants had possession of Lussier’s lost emails and “easily could have preserved” them simply by saving the emails from permanent deletion or by modifying the email system’s retention or storage processes, and Defendants offer no compelling reason for their failure to do so, “the Court must conclude that . . . only negligence could have” led to the loss of the emails. See Chen, 839 F. Supp. 2d at 14. For example, as noted, Lussier forwarded to KGL’s counsel a large tranche of at least 23 emails on March 21, 2012, the date the Pennsylvania Litigation was filed. The government has 25 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 32 of 44 admitted that it never even reviewed many of these documents in responding to the Touhy request, although such documents were responsive to the agreed-on search terms. While parts of email chains containing internal DLA communication forwarded to KGL’s counsel had previously been produced by DLA, the key fact that Lussier was aiding a private litigant in such a blatant and unusual way on the very day the litigation was filed was hidden from Agility until KGL’s eleventh hour production on February 27, 2016. This tranche of documents included Lussier’s forwarding to KGL’s counsel internal DLA communication related to DLA’s efforts on KGL’s behalf to seek “three or four white binders” of KGL documents evidencing KGL’s ties to Iran from law enforcement under the pretext of determining KGL’s present responsibility. See Ex. 17 (KGL026172). This shows not only that DLA was working on the inside to support KGL and KGL’s counsel but also keeping KGL’s counsel apprised of such efforts. Numerous other emails in this tranche are as shocking, with DLA effectively granting private counsel special access to internal information to support its private state court litigation against Agility. The forwarding of such emails reinforces the inappropriate relationship Lussier had with KGL’s counsel, and the degree to which DLA has essentially acted as a shadow party in the Pennsylvania Litigation. Indeed, this suggests that KGL filed the lawsuit with DLA’s full support and interest in uncovering Wilson’s identity. Moreover, DLA gave KGL’s counsel access to at least 5 separate DLA employees—4 of which were outside the Touhy process— while forcing Agility to pursue costly litigation in order to question these individuals. On June 5, 2013, Lussier provided another large tranche of documents to KGL’s counsel. The government has admitted that it does not currently have and never even reviewed many of these documents in responding to the Touhy request, although such documents were responsive to the agreed on search terms. In one email forwarded on that date, Lussier shares with KGL’s 26 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 33 of 44 counsel internal government communication regarding DLA’s response to KGL counsel’s request to be put in touch with investigators regarding the emails attached to the Scott Wilson letters. Ex. 18 (KGL026114). Lussier’s email even revealed to KGL’s counsel the name of the DCIS investigator, which was redacted from the shorter email chain DLA produced to Agility in response to Agility’s subpoena (and was clawed back by Defendants after KGL produced the email unredacted). DLA’s failure to produce such a document to Agility, thereby hiding that Lussier coordinated so closely with KGL’s counsel, is highly problematic and has prejudiced Agility in its efforts to defend itself in the Pennsylvania Litigation, particularly when KGL’s entire case hinges on showing that the Wilson Letters harmed its relationship with DLA. Indeed, Defendants’ conduct crosses the threshold from negligence to gross negligence, given their “cavalier attitude toward [their] discovery obligations.” Chen, 839 F. Supp. 2d at 14. As in Chen, “[t]here is no evidence . . . that [DLA] ever took any steps to discuss [its] obligations to preserve evidence” with any employees. Id. Rather, just like in Chen, DLA still has not communicated any preservation obligations to its employees even after KGL’s eleventh hour production revealed to Agility what KGL and DLA already knew – the extent of the deep involvement of DLA with KGL’s counsel in the Pennsylvania Litigation. Id. Defendants’ “level of carelessness,” therefore, should “lead[] the Court to the inescapable finding that [Defendants’] spoliation was grossly negligent.” Id. In any event, whether merely negligent or grossly negligent, Defendants are sufficiently culpable in the loss of Lussier’s emails that remedial sanctions are justified. See Clarke, 904 F. Supp. 2d at 21. C. The Lost Evidence Is Relevant and Helpful to Agility. Finally, to establish that remedial sanctions are warranted, a party must show that the lost evidence “was relevant to the claims or defenses of the party that sought the discovery of the 27 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 34 of 44 spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defense of the party that sought it.” Clarke, 904 F. Supp. 2d at 21; see also Chen, 839 F. Supp. 2d at 14 (“The third and last requirement for an adverse inference instruction is a showing that the destroyed evidence was relevant to the moving party’s claims or defenses. In this context, ‘the concept of relevance encompasses not only the ordinary meaning of the term, but also that the destroyed evidence would have been favorable to the movant.’”). Courts have noted that “[d]etermining relevance” for purposes of remedial sanctions “is an ‘unavoidably imperfect’ inquiry where the court ‘can only venture guesses with varying degrees of confidence as to what that missing evidence may have revealed.’” Nunnally, 2013 WL 6869665, at *18. Courts have found the relevance requirement met in two circumstances. First, courts have found relevance established where the party seeking sanctions is able to produce a subset of the lost evidence and demonstrate that that portion of the evidence was responsive to discovery requests and helpful to its claims. Thus, in Nunnally, the court “infer[red]” that lost documents were “likely relevant” to the plaintiff’s claims because the plaintiff had “retained copies of some of the documents in question” and was “able to provide evidence that there are documents, which are responsive to her requests, but which were not produced by Defendant.” 2013 WL 6869665, at *16. Second, courts have found that relevance is presumed where the party that lost the documents was grossly negligent or acted in bad faith. Chen, 839 F. Supp. 2d at 15 (referencing the “theory that a culpable spoliator may have something to hide” and holding that, “‘[w]here the moving party adduces evidence that its opponent destroyed potential evidence (or otherwise rendered it unavailable) in bad faith or through gross negligence . . . , that same evidence of the 28 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 35 of 44 opponent’s state of mind will frequently also be sufficient to permit a jury to conclude that the missing evidence is favorable to the party’”). Here, Agility has shown that Lussier’s lost emails are relevant on each of these two independent bases. First, as Defendants have conceded, Agility is in possession of lost emails from Lussier that are relevant to the Pennsylvania Litigation and this action—i.e., they are “responsive to the search terms used in DLA’s revised Touhy response.” Ex. 14 (J. Schwartz Letter to M. Krawiec (Apr. 13, 2016)) at 1 (admitting that these relevant lost emails “were not reviewed or produced by DLA . . . because they were not in Mr. Lussier’s mailbox when it was pulled”). Indeed, the sharing of internal government information related to Agility has continued throughout the duration of the Pennsylvania Litigation. For example, on March 26, 2012, Lussier sent to KGL’s counsel internal DLA communication related to Agility and instructed KGL’s counsel to “please hold close[.]” Ex. 19 (KGL026461). That document was produced to Agility in unredacted form by KGL on February 27, 2016, and DLA subsequently clawed back and redacted the document (although KGL continues to possess the unredacted version). This document again underscores that while Agility has been forced at every turn to fight for information to defend itself against meritless litigation, KGL’s counsel was spoon-fed not only the information it needed to bring and sustain such litigation, but also a ready supply of information about the target of such litigation. Again, such documents directly rebut any claim by KGL that its relationship with DLA was harmed as a result of the Wilson Letters. Because Agility has been “able to provide evidence that there are documents, which are responsive to [its] requests, but which were not produced by Defendant[s],” this Court should “infer that the documents at issue are ‘likely relevant’ to [Agility’s] claims.” See Nunnally, 2013 WL 6869665, at *16. 29 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 36 of 44 Second, Agility has satisfied the relevance requirement for the independent reason that Defendants were grossly negligent in failing to preserve Lussier’s emails. “Based on that conclusion, a reasonable jury could also find” that the lost evidence was “adverse to [Defendants],” and “[t]he ‘relevance’ requirement therefore is satisfied.” Chen, 839 F. Supp. 2d at 15. Obliquely challenging the relevance of any lost emails, Defendants suggest that, “as this litigation was not filed until June 24, 2014, and Mr. Lussier’s mailbox was pulled on December 28, 2014, it is not clear that a litigation hold would have preserved the missing documents, most of which are dated mid-2011 through mid-2013.” Ex. 14 (J. Schwartz Letter to M. Krawiec (Apr. 13, 2016)) at 3. This speculative assertion fails for three fundamental reasons. First, Defendants’ argument is predicated on the assumption that Defendants’ obligation to preserve Lussier’s emails was triggered on June 24, 2014. As detailed above, however, Defendants actually had a duty to preserve Lussier’s emails on March 21, 2012 (the date when the Pennsylvania Litigation began, by which time DLA should have been on notice about its own involvement in the litigation)—and, in any event, no later than March 6 or March 7, 2014 (when Agility issued subpoenas to DLA, Lussier, and Kowalski). Of course, issuance of a timely litigation hold on March 21, 2012 would have captured all emails to or from Lussier from March 2012 “through mid-2013,” and, most likely, many or all sent from “mid-2011” onward. Even implementation of a litigation hold in March 2014 reasonably could have preserved emails dating through mid-2013. Second, Lussier’s lost emails that KGL produced to Agility belie Defendants’ assertion that a litigation hold issued June 24, 2014 would not have preserved any relevant emails. To the extent that other custodians retained possession of Lussier’s emails as of July 2014, there is no reason—and Defendants offer none—why Lussier’s mailbox would not have included those 30 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 37 of 44 same emails (and others sent during the same time period) if a litigation hold were timely issued. For example, in a July 2, 2014 email, Agility learned from KGL’s eleventh hour production that Lussier forwarded to KGL’s counsel internal DLA communication related to a “[n]ew FOIA request” related to KGL and Agility. See Ex. 20 (KGL026270). In another example, on July 21, 2014, Lussier forwarded to KGL’s counsel internal government correspondence related to the filing of this litigation. Ex. 21 (KGL025273). This correspondence from Lussier to KGL’s counsel was never produced to Agility by DLA. Third, Defendants, as the wrongdoers, may not rely on speculation to diminish the breach of their duty to preserve relevant evidence. Indeed, the Court in Holzmann rejected a similar argument—that the plaintiffs were not prejudiced by any document loss and sanctions were not warranted because “most, if not all, of the documents that the magistrate judge found to be lost and irretrievable were likely given to the defendants over the course of discovery.” 2007 WL 781941, at *1. As the Holzmann Court explained, “[t]he government’s conduct created a situation where we cannot assess exactly what or how much information was lost and what or how much information was important to the defendants’ case,” and “[i]t would defy logic at this point to give the government of the benefit of the doubt[.]” Id. “The documents are lost,” the Court continued, and “[t]he fact is that there is no way of verifying either contention, and this is caused directly by the government’s conduct in handling these documents.” Id. So too here. To the extent that there is any doubt whether Lussier’s improperly lost emails contain relevant evidence that is favorable to Agility—and there is no such doubt, as shown above—Defendants are not to be given the benefit of that doubt. Instead, the proper course is to find the relevance requirement satisfied and impose sanctions. 31 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 38 of 44 II. ADDITIONAL DISCOVERY IS THE APPROPRIATE REMEDIAL SANCTION FOR DEFENDANTS’ FAILURE TO PRESERVE RELEVANT EVIDENCE. Once a party has demonstrated that remedial sanctions are warranted, the final step is to determine the proper sanction to impose. Courts enjoy the prerogative to “impose a range of sanctions for spoliation of evidence.” Nunnally, 2013 6869665, at *6. When remedial sanctions are at issue, the only limitation is that the sanctions imposed be “targeted to remedy the precise evidentiary issue[.]” Clarke, 904 F. Supp. 2d at 20. Here, the loss of an untold number of emails sent to or received by Lussier is “the precise evidentiary issue.” Id. Granting Agility additional discovery is the appropriate means for rectifying Defendants’ breach of their duty to preserve relevant evidence. Specifically, the Court should require Defendants to (1) produce all documents from the electronic mailboxes of Daniel Poling, the Associate General Counsel (Litigation) and Chief Trial Attorney of DLA; Noel Woodward, the former Associate General Counsel (Business Integrity) of DLA; and Fred Pribble, the General Counsel of DLA, that include any of the previously agreed-on search terms; and (2) make Poling, Woodward, and Pribble available for deposition by Agility, given the likelihood that Defendants’ across-theboard failure to implement any procedures to preserve relevant evidence resulted in the loss of relevant emails from the mailboxes of those three individuals, and thus deposing them is the only way to recover the negligently lost information to the greatest extent possible. Courts commonly have given the aggrieved party additional discovery—whether in the form of broadened document discovery or depositions of additional individuals—as a remedial sanction for the loss of evidence. See, e.g., Nacco Materials, 278 F.R.D. at 406 (concluding that, “[a]t a minimum, additional discovery in the form of searches for relevant evidence is needed” to remedy potential loss of evidence); Asher Associates, LLC v. Baker Hughes Oilfield Operations, Inc., No. 07-cv-01379-WYD-CBS, 2009 WL 1328483, at *11 (D. Colo. May 12, 2009) (re32 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 39 of 44 opening discovery to allow plaintiffs to depose additional employees of defendant as remedy for loss of evidence); Richard Green, 262 F.R.D. at 291–92 (authorizing further discovery of subject of lost evidence, including depositions); D’Onofrio, 254 F.R.D. at 132 (authorizing plaintiff to “search any depository of electronically stored information” maintained by defendants “that may contain” enumerated types of electronically stored information); Treppel v. Biosail Corp., 249 F.R.D. 111, 124 (S.D.N.Y. 2008) (allowing plaintiff to conduct additional discovery, including search of backups of relevant servers and forensic examination of laptop); Landmark, 272 F. Supp. 2d at 67 (noting with approval that agency had remedied plaintiff’s injury suffered from the improper destruction of documents “to the best of its abilities by providing access to top [agency] officials . . . for deposition” and by “recovering information from the reformatted hard drives to the extent possible”).19 In Richard Green, for example, the plaintiff sought sanctions in connection with the defendant’s failure to preserve and produce certain electronically stored documents. 262 F.R.D. at 287. Specifically, the defendant had failed to preserve the electronic record of a spreadsheet with details of relevant pieces of art and, moreover, had reinstalled her entire computer operating system, potentially deleting information in the process. Id. at 288. Finding remedial sanctions warranted, the court authorized “further discovery concerning the spreadsheet and other electronically-stored documents” to “allow the plaintiff the chance to determine whether it is in fact missing relevant evidence.” Id. at 292. The court also authorized the plaintiff to “take 19 Amended Rule 37(e), too, recognizes that additional discovery is an appropriate remedy for evidentiary loss. See Fed. R. Civ. P. 37(e), Advisory Committee Notes (“When a party fails to take reasonable steps to preserve electronically stored information that should have been preserved in the anticipation or conduct of litigation, and the information is lost as a result, Rule 37(e) directs that the initial focus should be on whether the lost information can be restored or replaced through additional discovery.”). 33 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 40 of 44 discovery” of “any person who created or modified the spreadsheet.” Id. The court reached a similar result in Asher Associates. In that case, the plaintiff moved for sanctions based on the defendant’s failure to preserve and its improper destruction of two electrical pump systems, the quality of which was the subject of the parties’ dispute. 2009 WL 1328483, at *11. The court granted remedial sanctions. Id. Because the physical evidence was irretrievably lost and there was no other physical or electronic evidence that might cure the loss, the court allowed the plaintiffs to depose employees of the defendant “who were directly involved in the evaluation and disposition of the component parts” of one of the pump systems. Id. Like those cases, allowing Agility additional discovery is warranted as an appropriate remedial sanction here. First, the Court should require Defendants to produce all documents from the electronic mailboxes of Poling, Woodward, and Pribble that include any of the previously agreed-on search terms. As noted, Lussier testified at his deposition that Poling, Woodard, and Pribble all were significantly involved in DLA’s response to the Wilson Letters and, hence, the core matters underlying the Pennsylvania Litigation. See, e.g., Ex. 6, Lussier Dep. 78:16-81:4, 125:11-16, Dec. 15, 2015; Ex. 7, Lussier Dep. 52:22-53:5, Feb. 5, 2016. Poling, for instance, voluntarily provided KGL’s counsel with a declaration describing the joint interests of KGL and DLA in unmasking the identity of Scott Wilson. Ex. 1 (Decl. of D. Poling (Aug. 19, 2014)). He also appears to have played a role in the drafting and submission of Lussier’s declaration in the Pennsylvania Litigation. Ex. 22 (DLA-00004363). Woodward, for her part, was Lussier’s “person for all things KGL” and was one of the DLA officials “most interested” in tracking developments regarding KGL and allegations of ties with Iran. Ex. 7, Lussier Dep. 46:5-16, 52:22-53:5, Feb. 5, 2016. And Pribble, as the supervisor of Lussier, Poling, and Woodward, was aware of the Wilson Letters, knew of prior allegations and 34 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 41 of 44 investigations regarding KGL’s ties with Iran, knew that DLA attorneys had put KGL’s counsel in touch with law enforcement officials, and was at least aware of other efforts by DLA and its employees to cooperate with and assist KGL. See, e.g., Ex. 6, Lussier Dep. 109:20-110:16, Dec. 15, 2015; Ex. 7, Lussier Dep. 27:21-34:5, 56:1-57:18, Feb. 5, 2016. Not only that, emails to or from Lussier that already have been produced to Agility show that Poling, Woodward, and Pribble frequently sent or were copied on Lussier’s emails responsive to the agreed-on search terms.20 Given the centrality of Poling, Woodward, and Pribble to the Pennsylvania Litigation— and, more specifically, to the subject of discovery requests regarding Lussier—and that Poling, Woodward, and Pribble sent or received responsive emails that already have been produced, the Court should order Defendants to search the mailboxes of those three custodians and produce all documents that include the agreed-on search terms. Granting this additional discovery is consistent with the principle that “[r]econstruction of the destroyed documents to the extent possible” is an appropriate remedy for document loss. See Landmark, 272 F. Supp. 2d at 67. It also comports with the relief ordered by courts in similar contexts. See, e.g., Nacco Materials, 278 F.R.D. at 406; Richard Green, 262 F.R.D. at 292; D’Onofrio, 254 F.R.D. at 133; Treppel, 249 F.R.D. at 124. Second, the Court should allow Agility to depose Poling, Woodward, and Pribble. In light of the woefully inadequate—indeed, nonexistent—preservation practices employed by Defendants, there is a strong possibility that responsive records previously in the possession of Poling, Woodward, and Pribble have been lost. 20 When faced with the specter of such an Of the 960 document families produced by DLA, Lussier was on 644, Poling was on 530, Pribble was on 198, and Woodward was on 349. 35 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 42 of 44 evidentiary loss, courts have ordered depositions as a substitute for the physical or electronic evidence and thus as a cure for a party’s breach of its preservation duties. In Asher Associates, for instance, the court allowed the plaintiff to depose employees of the defendant who might possess relevant information regarding the quality of a pump system that had been destroyed but was central to the litigation. 2009 WL 1328483, at *11. Likewise, the court in Richard Green authorized depositions of any persons who might have had a role in creating or modifying a spreadsheet after the electronic record of that spreadsheet was lost. 262 F.R.D. at 292; see also Landmark, 272 F. Supp. 2d at 67 (noting with approval that agency had made “top [agency] officials” available for deposition as a means for remedying the destruction of documents that were the subject of a FOIA request). The same result is appropriate here. In light of Defendants’ negligent loss of evidence, the only way that Agility might be able to obtain the full range of information to which it is lawfully entitled and regarding which Defendants breached their preservation obligations is through depositions of the three DLA officials, other than Lussier, who were centrally involved in the matters underpinning the Pennsylvania Litigation: Poling, Woodward, and Pribble. Affording Agility the opportunity to depose Poling, Woodward, and Pribble thus is a sanction appropriately “targeted to remedy the precise evidentiary issue[.]” Clarke, 904 F. Supp. 2d at 20.21 21 Agility submits that the current evidentiary record amply establishes that remedial sanctions are warranted here, and that the requested relief is appropriate. To the extent that the Court is not able to assess fully the issues presented, Agility requests discovery into Defendants’ record preservation and collection practices. See, e.g., Landmark Legal Found. v. EPA, 959 F. Supp. 2d 175, 184 (D.D.C. 2013) (authorizing additional discovery in FOIA case to obtain further information regarding the scope of agency’s search); Citizens for Responsibility & Ethics in Wash. v. U.S. Dep’t of Veterans Affairs, 828 F. Supp. 2d 325, 334 (D.D.C. 2011) (granting additional discovery in FOIA action “for the purpose of determining whether the explanation for the current state of affairs is document destruction, incompetence, or something in between”). 36 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 43 of 44 At bottom, production of responsive documents in the mailboxes of Poling, Woodward, and Pribble along with depositions of those three officials “presents the only hope for the discovery of electronically stored information that should already have been produced to [Agility],” Peskoff, 251 F.R.D. at 63. It is, therefore, the appropriate remedy for Defendants’ wholesale breach of their preservation obligations. 37 Case 1:14-cv-01064-JDB Document 51 Filed 05/06/16 Page 44 of 44 CONCLUSION For the foregoing reasons, Agility respectfully requests that the Court enter an order imposing remedial sanctions on Defendants that directs Defendants to (1) produce all documents from the electronic mailboxes of Daniel Poling, Noel Woodward, and Fred Pribble that include any of the previously agreed-on search terms; and (2) make Poling, Woodward, and Pribble available for deposition examination by Agility. Dated: May 6, 2016 Respectfully submitted, /s/ Margaret E. Krawiec MARGARET E. KRAWIEC (Bar No. 490066) DAVID B. LELAND (Bar No. 484096) THOMAS A. PARNHAM (Bar No. 1005976) Skadden, Arps, Slate, Meagher & Flom LLP 1440 New York Avenue, NW Washington, DC 20005 (202) 371-7000 (202) 661-8257 (fax) RICHARD MARMARO (pro hac vice) Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue, Suite 3400 Los Angeles, CA 90071 (213) 687-5000 (213) 687-5600 (fax) KRISTIN N. TAHLER (pro hac vice) Quinn Emanuel Urquhart & Sullivan LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017 (213) 443-3000 (213) 443-3100 (fax) Counsel for Plaintiffs 38