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Webster v. Psychiatric Medical Care, LLC

United States District Court, D. Montana, Missoula Division

May 30, 2019

RACHEL E. WEBSTER, a married woman, Plaintiff,
PSYCHIATRIC MEDICAL CARE, LLC, doing business as SENIOR LIFE SOLUTIONS, a Tennessee limited liability company, Defendant.



         Before the Court is Plaintiff Rachel E. Webster's Motion for Sanctions. (Doc. 37.) A hearing was held on the motion on April 26, 2019. The Court now grants the motion in substantial part, but it denies the form of relief requested. Webster is entitled to: (1) an adverse inference instruction; (2) the opportunity to conduct additional discovery; and (3) her costs and fees associated with bringing the motion and with correcting the prejudice she has suffered.


         Webster initiated suit in this matter on August 28, 2017, alleging that she was unlawfully terminated from her employment with Defendant Psychiatric Medical Care, LLC ("PMC"). On January 3, 2019, the Court granted Webster1 s motion to file an amended complaint adding Defendant Cabinet Peaks Medical Center ("Cabinet Peaks"), a medical facility located in Libby, Montana, which contracted with PMC to provide services at Cabinet Peaks. Trial is set for October 15, 2019.

         Webster's claims arise from the termination of her employment with PMC. Webster began working for PMC as a Program Therapist on June 5, 2017, with an annual salary of $65, 000. (Doc. 13 at 2.) Along with two other new hires, Webster traveled to Missouri for training the following week. (Id., ) On June 21, 2017, PMC terminated Webster's employment. (Id. at 3.)

         Webster suffers from multiple sclerosis and trigeminal neuralgia, and she alleges that her firing was related to her disability, in violation of the Americans with Disabilities Act ("ADA"). (See Doc. 40.) PMC theorizes that Webster was terminated due to performance issues. However, key evidence-Webster's personnel file, including her training evaluation-was destroyed within days of Webster's termination. Further, PMC did not timely inform Webster of the destruction of the file.

         Webster requests sanctions because PMC:

(1)destroyed Webster's training records;
(2) withheld an email referencing the destruction of the records until the day before discovery closed; (3) withheld the templates used to assess Webster's performance in training until after the close of discovery; (4)failed to produce other documents regarding Webster's performance, "including an email that disproves one of PMC's claimed reasons for terminating Ms. Webster";
(5) failed to disclose witnesses known to PMC to have discoverable information; and
(6) failed to produce a copy of its insurance policy for ten months and failed, until the hearing on this matter, [1] to produce an unredacted copy including the relevant policy limits.

         (Doc. 38 at 7.)

         Legal Standard

         "There are two sources of authority under which a district court can sanction a party who has despoiled evidence: the inherent power of federal courts to levy sanctions in response to abusive litigation practices, and the availability of sanctions under Rule 37 against a party who 'fails to obey an order to provide or permit discovery.'" Leon v. IDX Sys. Corp., 464 F.3d 951, 958 (9th Cir. 2006) (quoting Fjelstad v. Am. Honda Motor, Co., 762 F.2d 1334, 1339 (9th Cir. 1985)). Regardless of the source of authority relied upon, the district court has broad discretion to fashion appropriate sanctions. Id.

         Whether the court's authority derives from Rule 37 or from its inherent authority, the court should consider five factors "[b]efore imposing the harsh sanction of dismissal":

(1)the public's interest in expeditious resolution of litigation;
(2)the court's need to manage its dockets;
(3)the risk of prejudice to the party seeking sanctions;
(4) the public policy favoring disposition of cases on their merits; and
(5)the availability of less drastic sanctions.

Anheuser-Busch, Inc. v. Nat. Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995) (quoting Henry v. Gill Indus., Inc., 983 F.2d 943, 948 (9th Cir. 1993)). Additionally, "[a] finding of 'willfulness, fault, or bad faith' is required for dismissal to be proper." Leon, 464 F.3d at 958 (quoting Anheuser-Busch, 69 F.3d at 348).


         Webster's claims may be divided between two legal categories. First, she alleges spoliation, which is sanctionable under the Court's inherent authority. See Leon, 464 F.3d at 958 & n.4. Second, she contends that PMC failed to timely producer-or, in some instances, to produce at any time-discoverable and responsive information and evidence, which is sanctionable under Rule 37.

         I. Spoliation

         As the Northern District of California has noted, courts generally look for three elements to determine if sanctionable spoliation has occurred: (1) a duty to preserve the evidence at the time of destruction; (2) culpability for the destruction; and (3) relevance of the destroyed evidence to a claim or defense "such that a reasonable trier of fact could find that it would support that claim or defense." Rockman Co. (USA) v. Nong Shim Co., 229 F.Supp.3d 1109, 1122-23 (NX). Cal. 2017) (quoting Apple Inc. v. Samsung Elecs. Co., 888 F.Supp.2d 976, 989 (N.D. Cal. 2012)). Because Webster alleges not only spoliation but also violations sanctionable under Rule 37, the Court will address the second and third elements in its analysis of PMC's discovery-related conduct as a whole. See infra p. 16-22.

         Webster relies on 29 C.F.R. § 1602.14, promulgated in part under the ADA, to establish the existence of a duty at the time Webster's training documents were shredded. Section 1602.14 provides that "[i]n the case of involuntary termination of an employee, the personnel records of the individual ...

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