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Khaldei v. Kaspiev

United States District Court, Second Circuit

November 3, 2013

ANNA EFIMOVNA KHALDEI, Plaintiff,
v.
KALMAN KASPIEV, Defendant.

OPINION & ORDER

JOHN F. KEENAN, District Judge.

In an opinion filed August 8, 2013, Magistrate Judge Gorenstein denied Plaintiff Anna Efimovna Khaldei's motion for spoliation sanctions against Defendant Kalman Kaspiev. See Khaldei v. Kaspiev, ___ F.Supp.2d ___, 2013 WL 4016497 (S.D.N.Y. Aug. 7, 2013). Plaintiff has filed an objection to Judge Gorenstein's decision, and renews her request for sanctions before this Court. The Court heard oral argument on the objection on October 22, 2013. For the reasons that follow, the objection is overruled and Judge Gorenstein's opinion is affirmed in its entirety. This ruling does not address the parties' pending cross-motions for summary judgment.

I. Background

A. The Underlying Facts

The Court assumes familiarity with the facts of this case. Briefly stated, Plaintiff is the daughter and heir of the late photographer Evgeny Khaldei ("Evgeny"). Plaintiff alleges that in March 1997, shortly before his death, Evgeny entered into an agency agreement with Defendant whereby Defendant would act as Evgeny's worldwide agent for twenty years for the "promotion and sale of photographs produced for sale from the negatives." The next day, Evgeny entered into a licensing agreement with Corbis, a digital archive that licenses images to third parties. Among other provisions, the Corbis agreement called for Evgeny, Defendant, and Corbis to select images for licensing, and for Evgeny to transport the original negatives they selected to Corbis, which would return them to Evgeny after scanning them. However, Defendant later instructed Corbis to return the negatives directly to him. Defendant asserts that he did this because Evgeny had wanted to give or sell the images to the U.S. Library of Congress. The negatives returned to Defendant by Corbis, as well as a disputed number of photographs given by Plaintiff to Defendant after Evgeny's death in December 1997 (collectively, the "Materials"), are at the heart of this lawsuit.

The discovery process has been difficult since the beginning of this action, as Judge Gorenstein thoroughly set forth in his opinion. See Khaldei, 2013 WL 4016497, at *1-3. As relevant to the instant application, Plaintiff argues that Defendant consistently concealed records and evidence regarding the location of the Materials. Plaintiff repeatedly sought to inspect the Materials, but Defendant refused to disclose their location, which was his residence. Defendant had stored the Materials in various locations over the years, but moved them on March 8, 2011 from his apartment to a storage locker at Manhattan Mini Storage, LLC. Because the parties could not agree on a preservation order, this Court entered an order directing the impoundment of the Materials on March 29, 2011. Since then, Defendant has come forward three times with additional photographs to deposit with the Court.

B. The Motion for Sanctions and Judge Gorenstein's Opinion

The parties fully briefed cross-motions for summary judgment before this Court in April. Notwithstanding these motions, on May 15, 2013, Plaintiff's counsel sought leave from Judge Gorenstein to file a separate motion for spoliation sanctions. In his letter to Judge Gorenstein, counsel asserted that the Materials' "situation in their place of storage at the commencement of the litigation was evidence" that Defendant destroyed when he moved the Materials from his apartment to Manhattan Mini Storage. Judge Gorenstein allowed the motion but stated in his memo endorsement, "It is not clear why Rule 37 - let alone the legal doctrine of spoliation - applies to the situation described." (ECF No. 94.)

Plaintiff filed her motion on June 6, 2013. In it, she argued that Defendant intentionally destroyed "physical evidence" by moving the Materials. Plaintiff sought a "stringent" sanction: that Defendant be precluded from testifying that he deposited with the Court all of the Materials.

On August 7, 2013, Judge Gorenstein denied Plaintiff's motion in its entirety. See Khaldei, 2013 WL 4016497. Judge Gorenstein flatly rejected Plaintiff's contention "that the act of moving the photographs to Manhattan Mini Storage constituted the destruction of evidence relevant to this case." Id . at *5. Because no evidence was destroyed, Plaintiff was not entitled to spoliation sanctions. Judge Gorenstein also wrote that Defendant had no notice of an obligation to keep the Materials in exactly the same place throughout the litigation. Id . at *5-6. Nor did he find any evidence that Defendant acted with a culpable state of mind. Id . at *6. Judge Gorenstein therefore concluded that Plaintiff had not shown any of the three necessary elements of a spoliation claim, and denied the motion.

II. Discussion

A. Relevant Legal Standards

When a party files an objection to a magistrate judge's order on a non-dispositive matter, the district judge to whom the case is assigned must "modify or set aside any part of the order that is clearly erroneous or is contrary to law." Fed.R.Civ.P. 72(a). "An order is clearly erroneous only when the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." E.g., Surles v. Air France , 210 F.Supp.2d 501, 502 (S.D.N.Y. 2002). It is contrary to law if "it fails to apply or misapplies relevant statutes, case law or rules of procedure." E.g., MacNamara v. City of New York , 249 F.R.D. 70, 77 (S.D.N.Y. 2008). This is a highly deferential standard, and the objector thus carries a heavy burden. U2 Home Entm't, Inc. v. Hong Wei Int'l Trading Inc., No. 04 Civ. 6189 , 2007 WL 2327068, at *1 (S.D.N.Y. Aug. 13, 2007); see also Lugosch v. Congel , 443 F.Supp.2d 254, 276 (N.D.N.Y. 2006) (noting that particular deference is due where "the magistrate judge has been deeply involved in discovery matters in the case for years").

A party seeking sanctions for spoliation 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 evidence was destroyed with a culpable state of mind; and (3) that the destroyed evidence was relevant to the party's claim or defense." Centrifugal Force, Inc. v. Softnet Commc'n, Inc. , 783 F.Supp.2d 736, 741 (S.D.N.Y. 2011) (Gorenstein, J.) (citing Byrnie v. Town of Cromwell, Bd. of Educ. , 243 ...


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