The opinion of the court was delivered by: Hurley, Senior District Judge
Plaintiffs Field Day LLC f/k/a/ New York Music Festival and AEG Live LLC f/k/a/ AEG Concerts LLC (collectively "Plaintiffs" or "Field Day") commenced this action for money damages and injunctive relief against the County of Suffolk and the Suffolk County Department of Health Services (collectively the "County") and numerous County employees*fn1 (the County employees named as defendants are collectively referred to as the " Individual County Defendants" and the Individual County Defendants and the County are collectively referred to as the "County Defendants"), the New York State Health Commissioner, the Town of Riverhead ("Riverhead") and the Riverhead Police Chief. Plaintiffs allege that they were unlawfully denied the right to stage a weekend-long concert festival within the Town of Riverhead when the County refused to issue a mass gathering permit. Presently before the Court is Plaintiffs' motion for sanctions against the County Defendants due to the alleged spoliation of evidence. For the reasons set forth below, the motion is granted in part and denied in part.
I. The Nature of the Action
According to the Second Amended Complaint, in June 2002 Field Day began efforts to promote and produce a two-day music festival featuring leading rap, hip-hop, and rock artists which was to take place June 7-8, 2003 (the "Festival"). After considering other locations, Field Day entered into a "License Agreement for Outdoor Event" with the Town of Riverhead's Community Development Agency. Under the terms of the License Agreement, Field Day paid $150,000 to lease roughly 1,000 acres of the Calverton Enterprise Park from May 5, 2003 to June 22, 2003 for the purposes of holding the Festival. Field Day expected the festival to draw between 35,000 and 40,000 people. Under the License Agreement Field Day was to be responsible for, among other things, securing a "Mass Gathering Permit," which according to the agreement was a "Necessary Approval" and if Field Day was unsuccessful in obtaining the Necessary Approvals, the agreement would terminate and the obligations of the parties would become null and void.
Over the next several months, Field Day worked with Riverhead and Suffolk County in order to obtain the mass gathering permit. On May 27, 2003 the mass gathering permit was denied. On June 3, 2003 the County moved in New York State Supreme Court for an injunction to preclude Field Day from holding the Festival. On August 21, 2003, the County received a notice of claim*fn2 from Field Day. The instant action was commenced on May 26, 2004.
Field Day alleges that Riverhead and Suffolk County, through their employees, unlawfully failed to approve its application in that the failure to issue the permit was driven by "'political' decisions by 'upper level' Suffolk county officials," a "dislike for rock music concerts and their fans," and/or "the active involvement and political influence of Clear Channel Entertainment, Inc., a media conglomerate that is [Field Day's] largest competitor in the concert promotion industry." (Second Amended Complaint ¶ 2.) The Second Amended Complaint alleges violations of First Amendment free speech rights and common law claims including tortious interference with contractual relations, tortious interference with business relations and prima facie tort. With respect to all the Individual County Defendants except for Harper, Plaintiffs' claims are asserted against them at least in their individual capacities.*fn3
II. The Spoliation Allegations
Field Day maintains that the County has "systemic[ally] and flagrant[ly] fail[ed] to preserve substantial amounts of documentary evidence." (Pls' Mem. in Supp. at 2. ) In support of this conclusion, Field Day alleges that: (1)"[t]he County Attorney's Office never implemented a litigation hold to prevent its employees from destroying evidence exclusively within the county's control and custody since the litigation period commenced;" (2) "[t]he County has made no attempt to search for relevant documents that it confirms exist among the over 82,000 boxes of documents archived in the county's records retention facility;" (3) [t]he County has destroyed internal and external e-mail communications, electronic word documents, calendars, and other data relevant to the claims and defenses in this case by systematically erasing this information by "wiping" or "ghosting' in this case the computer hard drives of its former county employees, including the individual County Defendants in 2004, months after the litigation period commenced;" and (4) "[a]s late as October 2006, former County Health Department officials "purged" and destroyed hard document files containing evidence that directly supports Plaintiff's claims . . . ." (Id.)
To remedy the alleged discovery abuses, Plaintiffs seek a finding that the County Defendants committed spoliation of evidence and request the following relief: "(1) striking the answers of Defendants Gaffney, Michaels, Gallagher, Maimone and Cabble; (2) striking the answer of all the County Defendants on the Civil Rights Conspiracy Claim; (3) striking the affirmative defenses of the County Defendants, including qualified immunity; (4) allowing the Court and/or the Jury to draw an adverse inference on all disputed issues of fact that relate to the destroyed evidence; (5) granting Plaintiffs leave to amend their Complaint to add additional individual county defendants involved in or implicated by the document destruction and discovery abuses; and (6) any other relief the Court deems just and reasonable." (Pls.' Mem. in Supp. at 3.)
The County does not dispute that a litigation hold was not implemented in this matter. (See Feb. 27, 2007 Tr. at 45.) Nor does it dispute that with the change in administration in January 2004, the hard drives of departing County personnel were wiped clean. County Defendants maintain that no spoliation has occurred and that there is no evidence that documents or e-mails relevant to Plaintiffs' claims are missing. According to the County Defendants, the County's document retention system is a paper based system which required that electronic documents such as e-mails be printed out and maintained in paper form. In that paper form, all e-mails and other documents relevant to the claim in this case have been produced. They further argue that no basis to add spoliation claims against new parties has been asserted, nor does any such basis exist.
In addressing this matter, the Court will proceed in the following manner. First, it will discuss the law applicable to spoliation motions generally. It will then discuss the evidence put before it in connection with the instant motion and whether that evidence supports the imposition of sanctions and if so, the nature of the sanctions to be imposed.
"Spoliation is defined as 'the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.'" Tri-County Motors, Inc. v. American Suzuki Motor Corp., 494 F. Supp. 2d 161, 176 (E.D.N.Y. 2007), aff'd, 301 Fed. Appx. 11 (2d Cir. Nov. 24, 2008) (quoting West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)). A party seeking sanctions for spoliation of evidence "must establish (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed 'with a culpable state of mind'; and (3) that the destroyed evidence was 'relevant' to the party's claim or defense such that a reasonable trier of fact could find that it would support that claim or defense." Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 107 (2d Cir. 2002) (citing Byrnie v. Town of Cromwell, 243 F.3d 93, 107-12 (2d Cir. 2001)).
The duty to preserve evidence "arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation." Fujitsu Ltd. v. Fed'l Express Corp., 247 F.3d 423, 436 (2d Cir. 2001). It is now established that "'once a party reasonably anticipates litigation, it must suspend its routine document retention policy and put in place a 'litigation hold' to ensure the preservation of relevant documents.'" Treppel v. Biovail, 249 F.R.D. 111, 118 (S.D.N.Y. 2008) (quoting Zubalake v. UBS Warburg LLC ("Zubalake IV") 220 F.R.D. 212, 218 (S.D.N.Y. 2004). A party "must retain all relevant documents (but not multiple identical copies) in existence at the time the duty to preserve attaches." Zubalake IV, 220 F.R.D. at 218. See also Zubalake v. UBS Warburg LLC ("Zubalake V") 229 F.R.D. 422, 435 n. 88 (S.D.N.Y. 2004) ("Had these directives been followed, UBS would have met its preservation obligations by preserving one copy of all relevant documents that existed at, or were created after, the time when the duty to preserve attached.")
If there was a duty to preserve, the question becomes whether evidence was destroyed with a culpable state of mind. See De Espana v. American Bureau of Shipping, 2007 WL 1686327 * 3 (S.D.N.Y. 2007) (citing Fujitsu, 247 F.3d at 436), reconsideration denied, 2007 WL 3229147 (S.D.N.Y. Oct. 31, 2007), objections overruled, 2008 WL 3851957 (S.D.N.Y. Aug. 18, 2008). The degree of culpability bears on the severity of sanctions. Id. The culpability "prong of the spoliation test can be 'satisfied by showing that the evidence was knowingly . . . or negligently destroyed.'" ACORN v. County of Nassau, 2009 WL 605859, * 4 (E.D.N.Y. Mar. 9, 2009) (quoting Residential Funding, 306 F.3d 99, 108 (2d Cir. 2002)).
The last element of a spoliation claim requires the innocent party to establish that the destroyed materials were relevant evidence and would have been favorable to it. Residential Funding, 306 F.3d at 109; ACORN, 2009 WL 605859, *5. "In this context, the term 'relevance' 'means more than sufficiently probative to satisfy Rule 401 of the Federal Rules of Evidence.'" Id. (quoting Residential Funding, 306 F.3d at 108-09). Relevance and prejudice may, but need not be, presumed when the spoliating party acted in bad faith or in a grossly negligently manner. See Residential Funding, 306 F.3d at 109 ("[A] showing of gross negligence in the destruction or untimely production of evidence will in some circumstances suffice, standing alone, to support a finding that the evidence was unfavorable to the grossly negligent party."); ACORN, 2009 WL 605859, *4 ("While a showing of gross negligence may, in some circumstances, support a claim that missing evidence was relevant to the movant's case, the circumstances in this case do not require such a determination.") Treppel, 249 F.R.D. at 121-122 ("While it is true that under certain circumstances a showing of gross negligence in the destruction or untimely production of evidence will support inference, the circumstances here do not warrant such a finding, as the defendants' conduct does not rise to the egregious level seen in cases where relevance is determined as a matter of law) (internal quotations omitted). Relevance may also be demonstrated by the submission of "extrinsic evidence tending to demonstrate that the missing evidence would have been favorable to it." Chan v. Triple 8 Palace, Inc., 2005 WL 1925579, *8 (S.D.N.Y. Aug. 11, 2005).
II. The Propriety of Sanctions in this Case
In addressing the propriety of sanctions in this case, it is important to note that Plaintiffs seek sanctions not only against the County for the alleged acts of spoliation committed by its employees but against certain of the Individual County Defendants, which defendants Plaintiffs seek to hold liable in their individual capacities. Hence, the Court must address the elements of spoliation not only as to the County acting through its employees but as to each Individual County Defendant.
The first issue to be addressed is when the duty to preserve arose. Plaintiffs argue that the duty arose, at the latest, on June 3, 2003 when the County commenced an action in New York State Supreme Court seeking to enjoin Field Day and the Town of Riverhead from holding the festival. Alternatively, they point to August 21, 2003 when Plaintiffs served the County with a notice of claim, as the date said duty arose. (Pls.' Mem. in Supp. at 5-6. ) In its papers, the County takes the following position: (1) as Plaintiffs have not identified any document that was actually despoiled, "an analysis of whether or not the duty had attached as to that documentation at the time it was destroyed is impossible"; (2) even if the County's own document retention policy supplied the duty to preserve records, plaintiffs must still prove the other elements of the spoliation claim; and (3) the events took place during 2003 at a time when the law governing the duty to preserve electronically stored information was a "grey area." (County's Opp. Mem. at 7.)
The County's first two arguments need not detain the Court for long. It is certainly not inappropriate to determine when the duty to preserve arose and then look at whether evidence was despoiled after that date. Moreover, it is a given that all elements of a spoliation claim must be fulfilled. As to the third argument, it is more appropriately addressed in connection with culpable state of mind.
Although the obligation to preserve evidence commonly arises when the suit has already been filed, it can arise earlier "when a party should have known that the evidence may be relevant to future litigation." Kronish v. U.S., 150 F.3d 112, 126 (2d Cir. 1998) (emphasis added). In the present case, the County was put on notice of the potential for future litigation when it received Field Day's notice of claim and its duty to preserve arose on that date if not before.*fn4 The Court is unpersuaded by the County's suggestion, at oral argument, that the date of receipt of the notice of claim is inappropriate because that it receives thousands of claims a year while the percentage of notices that result in actual lawsuits is small. (Tr. at 61.) That the County proceeded to examine, under oath pursuant to N.Y. Gen. Mun. Law § 50-h,*fn5 representatives of Field Day and the Town of Riverhead upon receipt of the notice of claim warrants the conclusion that the County should have known at that time that documents relating to Field Day's application for a mass gathering permit may be relevant to future litigation.
When the duty to preserve arose on behalf of the individual County Defendants is another matter. The notice of claim is required to be served only upon the County not individual employees thereof. See Messins v. Mazzeo, 854 F. Supp. 116, 145 (E.D.N.Y. 1994). The notice of claim is not before the Court; nor do Plaintiffs point to any evidence as to when, or even if, the Individual County Defendants learned of or were served with the notice of claim.*fn6 The only evidence with respect to the Individual County Defendants is Gerdts' testimony that he understood shortly after the denial of the permit that there would be litigation, although it is not clear from the testimony submitted by Plaintiffs whether he is referencing the litigation brought by the County or litigation to be commenced by Plaintiffs. In any event, sanctions against Gerdts are not sought. (See Pls.' Reply at 6 n.3.) Given the dearth of evidence in the record identified by the parties on this point, the Court concludes that the Individual County Defendants' duty to preserve did not arise until the instant action was commenced in May 2004.
Having determined when the duty to preserve arose, the question becomes whether Plaintiffs have demonstrated that documents were destroyed after the duty to preserve arose. The answer requires that Court to summarize the materials submitted by the parties, which the Court, following the lead of the parties, shall proceed to do witness by witness. In order to provide the appropriate backdrop, the Court begins with the testimony of the Director of Management Information, Douglas Miller.
Douglas Miller - According to Plaintiffs, Miller's testimony supports their spoliation claim in that "Miller testified that: (1) no litigation hold has ever been implemented for this case, (2) the County Defendants and other County employees violated Suffolk County's law governing records retention, (3) the County wiped the hard drives of computers belonging to County Defendants and witnesses, and as a result, (4) all e-mails sent or received during the relevant period were either permanently destroyed or removed to inaccessible media." Ex. A to Bednark Decl. at 1.
Miller became Director of Information Management sometime in October 2006. (Miller Dep. at 6.) He testified he was unaware whether a litigation hold has been issued for the case at bar. (Id. at 18.) According to Miller, the County's document retention system is paper based. Specifically, with to respect to e-mails, "[t]he County's policy has been to print out any pertinent e-mails and then file them as paper, so that's how they would be preserved." (Id. at 24.) According to Miller, every County employee has a responsibility to maintain all their e-mails and all their documents relating to any business matter by printing them out and then filing them.
(Id. at 38.) While e-mails are preserved on back-up emergency tapes, the County has no way of searching those tapes without purchasing a system to restore the tapes and buying e-mail archiving software to go through the tapes. (Id.) If e-mails were moved from the inbox to a personal archive file, they are not backed-up on the emergency tapes. Thus, if e-mails were archived and not printed out and the drive the e-mails were on was wiped clean, there is no back-up, i.e. the e-mails would not be on the emergency back-up tapes. (Id. at 27.) Miller also testified that because of size limitations of inbox storage space, " a warning message is sent to [the user] and they have to clean out their inbox either by printing out pertinent e-mails and saving or deleting e-mails from the inbox. Until they do that, they will not be able to send or receive e-mails." (Id. at 86.)
With respect to the then County Executive Gaffney,*fn7 Miller testified that his calendar was electronic and it was a "transitory" document. In other words, the calendar was deleted on a daily basis as a new one was created. (Id. at 66.) The calendaring function on Microsoft Outlook was not used. According to Miller, "they weren't big tech users back then." (Id. at 71.) With respect to hard copies of Gaffney's calendars, Miller testified that they were thrown out "at the end of [each] day." (Id. at 66.)
Miller testified that he did not know if the County had made an effort to look for responsive documents in the County's records retention facility archives. (Id. at 148.) Nor did he know if the County had undertaken any search to find "all documents related and responsive to this particular legal action either in the County Attorney's Office or in the Clerk's Office . . . ."
As to County employees who (1) were involved in the permitting process for the Festival, (2) used computers to generate documents or send or receive e-mails, and (3) whose hard drives were wiped after August 21, 2003, Miller's testimony supports that the County spoliated evidence by wiping their hard drives. Given his lack of knowledge regarding any search for documents, in the County's archives or otherwise, his testimony does not support spoliation by the County in that regard.
Robert Cabble - Cabble, a former Deputy County Attorney, testified that he personally did not undertake any steps to preserve electronic documents regarding the Field Day festival after June 2003. (Cabble Dep. at 12). He further testified that while he personally did not have a practice regarding the preservation of electronic documents, he had a practice of retaining hard copies, to wit, his practice was to make copies of e-mails and place then in the pertinent file. (Id. at 16.) With respect to the Field Day festival, he stated that he had a file that "dealt with mass gathering research" and the documents produced to Plaintiffs at his deposition "is everything I had been given or received with respect to the mass gathering permits at issue . . . ." (Id. at 16-17.) Although Cabble's hard drive was wiped clean when he left the County with the change in administration in January 2004, given his testimony that he maintained hard copies of electronic communications and documents, as well as the absence of evidence that he was aware his hard drive would be wiped upon his departure, the Court finds Plaintiffs have failed to establish that Cabble, who is individually named as a defendant, spoliated evidence. Cf. Zubalake IV, 220 F.R.D. at 218 (A party "must retain all relevant documents (but not multiple identical copies) in existence at the time the duty to preserve attaches."); see also Fed. R. Civ. P. 34 (2006 Advisory Committee Note) ("If the form of production is not specified . . . the responding party must produce electronically stored information either in a form or forms in which it is ordinarily maintained or in a form or forms that is reasonably usable.") Any spoliation resulting from the wiping of his hard drive is attributable solely to the County.
Plaintiffs also maintain that although county attorneys record their time Cabble did not provide a single itemized entry regarding time spent on Field Day, despite testimony of his involvement, and refer the Court to a document which appears to be Cabble's time accounting records for the period April 1 to June 30. This record shows no detailed time accounting for any matters Cabble may have worked on. Indeed, the entries merely reflects that Cabble spent seven hours each working day on what he identified under the heading "case name" as "admin." Absent is any testimony that Cabble actually kept more detailed time entries or even any testimony regarding how county attorneys were required to keep their time and if the requirements differed depending on the type of work performed.*fn8 Given the absence of such evidence, the Court declines to find spoliation by either the County or Cabble individually based on the absence of detailed entries.
Robert Gaffney - Gaffney, the former Suffolk County Executive testified that he did not communicate by e-mail, did not maintain files, and when he met with senior staff there were no written agenda and no notes taken. It was his practice to communicate orally. (Gaffney Dep. at 36, 37, 40, 132, 133, and 135.)*fn9 Plaintiffs point to testimony from Peter Scully, the former Deputy County Executive for Administration, that Gaffney's administrative assistant would circulate weekly a copy of Gaffney's schedule, which Scully testified he discarded at the end of the week. Scully did not know whether the schedules were typed by hand or whether they came off a computer. (Scully Dep. at 10-11.) Plaintiffs have failed to show that Gaffney, who is a named defendant, spoliated any evidence. The Court credits the testimony of Miller that Gaffney's calendar was "transitory" and with a new calendar overwriting the old. Moreover, there is no evidence that Gaffney knew that the hard drive of his assistant would be wiped when she left the County. Any spoliation that occurred from the wiping of his assistant's hard drive is attributable solely to the County.
Dr. Jean Alicandro - In support of the claim that documents were spoliated, Plaintiffs rely upon the deposition testimony of Robert Delagi, former Chief of Prehospital Medical Operations, which they contend supports that in or "about October 2006, upon leaving her position with the County's Department of Health Services Dr. Alicandro 'purged' all of her files, including task entries created by Delagi in his role as permit review official for EMS ingress and egress issues related to Field Day. These documents are destroyed and cannot be recovered." (Ex. A to Bednark Decl. at p. 1.) Delagi's actual testimony was as follows:
Q: . . . Is it possible then that the handwritten notes that related to the time that you submitted to Dr. Alicandro are no longer in ...