United States District Court, N.D. New York
GEORGE F. CARPINELLO, ESQ., MICHAEL Y. HAWRYLCHAK, ESQ., BOIES, SCHILLER & FLEXNER, LLP, Albany, New York, Attorney for Plaintiff.
COLLEEN D. GALLIGAN, ESQ., OFFICE OF THE NEW YORK STATE ATTORNEY GENERAL, Albany, New York, Attorney for the State Defendants 
MEMORANDUM-DECISION and ORDER
RANDOLPH F. TREECE, Magistrate Judge.
The issue presently before the Court is whether officials in one governmental agency and their Attorney can be sanctioned for the destruction of email(s), belonging to yet another governmental agency, via the New York State's Email Retention Policy. Essentially, would such an occurrence constitute spoliation of evidence, and, if so, are sanctions warranted? Here, Plaintiff moves this Court to sanction the individually named Defendants, who are employed by New York State's Office of General Services ("OGS"), and their current litigation Counsel, an Assistant Attorney General, for the systematic destruction of the Deputy Secretary of Gaming and Racing, nonparty Bennet Leibman's email(s).
In November 2014, Plaintiff initially raised the matter of Leibman's emails being deleted and requested that the Court take appropriate measures to remedy this spoliation by imposing an adverse inference against the OGS Defendants. Dkt. No. 114, Pl.'s Lt.-Mot., dated Nov. 6, 2014. As one would expect, a motion of this nature provoked an immediate and antagonistic row of Letter-Briefs between the parties. See Dkt. Nos. 120, Defs.' Lt.-Br., dated Nov. 10, 2014, 121, Pl.'s Lt.-Br., dated Nov. 14, 2014. During a Hearing, held on November 19, 2014, the Court addressed a myriad of discovery disputes, including the destruction of Leibman's emails. At that time, the Court declined to address the matter and directed further discovery, including Leibman's deposition in order to better frame the issue. Dkt. No. 125, Disc. Order, dated Nov. 20, 2014, at pp. 4-5. After Leibman's deposition and further discovery were completed, Plaintiff renewed its claim of spoliation of evidence, Dkt. No. 141, Pl.'s Lt.-Br., dated Feb. 20, 2015, to which the Defendants responded, Dkt. No. 143, Defs.' Lt-Br., dated Mar. 4, 2015. See also Dkt. No. 146, Pl.'s Lt.-Br., dated Mar. 9, 2015. Another Hearing was held on March 12, 2015, but to little avail. Because the record remained unclear, the Court directed further submissions. Dkt. Nos. 147, Text Order, dated Mar. 12, 2015, & 153, Hr. Tr., dated Mar. 12, 2015. Both parties filed their respective and final Letter-Briefs. Dkt. Nos. 150, Pl.'s Lt.-Br., dated Mar. 23, 2015, 152, Defs.' Lt.-Br., dated Apr. 17, 2015, & 153, Pl.'s Reply Lt.-Br., dated Apr. 24, 2015. Plaintiff seeks the following relief: (a) a determination of spoliation; (b) upon such a determination, an adverse inference against the Defendants; (c) further discovery; and (d) costs and attorneys' fees. See generally Dkt. No. 150.
I. LITIGATION HISTORY
The Court presumes the parties' familiarity with the facts and circumstances and a full recitation of the facts can be found in Wandering Dago, Inc. v. New York Office of Gen. Servs., 2014 WL 201968, at * 2-6 (N.D.N.Y. Jan. 15, 2014). However to place this Motion in its proper context, and because of the drastic remedy being sought could alter the entire complexion of this case, repetition of known facts and a detailed chronology are compelled.
Principally, this is a First Amendment case initially brought against two distinct organizations premised upon two idiosyncratic occurrences. In July 2013, the Plaintiff applied to be a food vendor at the Saratoga Race Course, which is owned by the New York Racing Association ("NYRA"). It appears that NYRA had received complaints about the "Dago" aspect of Plaintiff's name as being offensive and concluded that it would be in the best interest to remove its food truck from the premises. Included among the complainers was Bennett Leibman, Deputy Secretary of Gaming and Racing, who wrote the following email to Christopher Kay, President of NYRA, on July 19, 2013:
I'm sure that the name of this particular food truck at the track is designed to be self-deprecating, but there is a food truck at the track from Schenectady known as the Wandering Dago. I just believe that people will find the name of the truck both offensive and insensitive, and that the fallout from authorizing this truck will inevitably land on NYRA. Is there some way to at least modify the name of this particular truck? I see this as a problem waiting to blow up.
Dkt. No. 150-1, Ex. A.
Earlier in 2013, Plaintiff filed an application to be a food vendor as a part of OGS's Empire State Plaza Outdoor Lunch Program. Plaintiff's application was initially denied, allegedly for an assortment of procedural and regulatory rationales, but also because of the offensive nature of the name.
In its Complaint, Plaintiff contends that a set of NYRA Defendants and another set of state actors violated the First (Free Speech Clause) and Fourteenth (Equal Protection Clause) Amendments of the United States Constitution as well as the New York State Constitution and its common law. See generally Dkt. No. 1. Compl. Included in the first series of Defendants were the State of New York and the New York State agency OGS. On January 15, 2014, the Honorable Mae A. D'Agostino, United States District Judge, dismissed (1) Plaintiff's federal and state Equal Protection claims against the NYRA Defendants, (2) claims against the State of New York and OGS, and (3) damage claims against the OGS Defendants in their official capacities. See Dkt. No. 54, Mem.-Dec. & Order, dated Jan. 15, 2014. Subsequently, the Plaintiff was permitted to amend its Complaint to include OGS's denial of its 2014 Application to the Empire State Plaza Lunch Program, Dkt. Nos. 85, Mem.-Dec. & Order, dated July 28, 2014, & 86, Am. Compl., and a Stipulation and Order of Dismissal with Prejudice was issued upon the Plaintiff's settlement with the NYRA Defendants, Dkt. No. 140, Stip. & Order, dated Jan. 20, 2015. The remaining Defendants are the OGS Defendants in their individual capacities. See supra note 1.
B. Time Line of Critical Events
To appreciate the competing narratives and the overlap of key events, a chronology will be beneficial.
After Leibman sent his email to NYRA about the Plaintiff's truck on July 19, 2013, three days later, news stories were published about NYRA removing the Plaintiff from the Saratoga Race Course as well as mentioning that it was denied a vendor's license at the Empire State Plaza; the Saratogian newspaper also added that "an unidentified state official  complained that the name was offensive." Dkt. No. 150-7, email, dated July 22, 2013 (with news article embedded therein). On July 22, 2013, Leibman sent an email to the Governor's Executive Chamber, alerting the Governor's secretary, possibly the Governor's Special Counsel, and the Governor's Press Office about his email to NYRA and being the unidentified state official, but not to the Governor. Dkt. No. 152-13. Bennet Leibman Dep., dated Feb. 6, 2015, at pp. 23-24.
On August 13, 2013, Plaintiff's Counsel sent a letter to the Attorney General, Commissioner of OGS, and the President of NYRA about how OGS denied the Plaintiff's application on May 20, 2013, and how NYRA expelled it from the Saratoga Race Course on July 19, 2013, based upon the advice of high-ranking state officials. Dkt. No. 150-4, Pl.'s Lt. Two weeks later Plaintiff commenced this lawsuit against NYRA and the OGS Defendants, but did not include members of the Executive Chamber, the New York State Gaming Commission, nor Leibman. Dkt. No. 1, Compl., dated Aug. 27, 2013. Upon the commencement of this lawsuit, Leibman submitted a weekly report advising the Executive Chambers about the lawsuit and stating that the "[f]ood truck owners [Plaintiff] who were evicted by NYRA due to their use of a defamatory name have brought suit in federal court against NYRA for the ouster and against OGS for not letting it sell at the Empire State Plaza. I may be a witness in the suit." Dkt. No. 150-5, Weekly Rep., dated Aug. 30, 2013.
Immediately after the commencement of the lawsuit, the Plaintiff filed for a Preliminary Injunction and a Hearing was held on September 19, 2013. For the first time, Leibman was publicly acknowledged as the state official who sent the email to NYRA, which was introduced into evidence. Dkt. No. 150-6, Hr. Tr., dated Sept. 13, 2013, at pp. 45-46. In the interim, on September 3, 2013, the Attorney General's Office filed a Notice of Appearance on behalf of all of the State Defendants. Dkt. No. 16, Defs.' Notice of Appearance.
In 2007, New York State instituted an email retention policy, which essentially stated that all email messages older than 90 days would automatically be deleted each evening. Dkt. No. 150-2, Ex. B. Because of this policy, Leibman's emails, dated July 19 and 22, 2013, were deleted on October 17, 2013, and October 20, 2013, respectively. Obviously, a litigation hold had not been instituted to prevent the loss of these emails. However, on May 24, 2014, after the Plaintiff had moved to amend its Complaint in order to add Leibman as a Defendant, a litigation hold relative to this litigation was instituted within the Executive Chamber. Dkt. No. 152, App. 1, Timeline. Since Leibman is not a party to this action, on July 3, 2014, the Plaintiff served a subpoena upon him for the production of documents, including his emails. Upon the service of the subpoena, Leibman requested representation from the Attorney General's Office. And, on or about October 31, 2014, the Plaintiff was advised that Leibman's emails were automatically deleted pursuant to the above mentioned retention policy. Dkt. No. 114, Pl.'s Lt.-Mot., dated Nov. 6, 2014, at p. 1.
II. THE PARTIES' CONTENTIONS ON SPOLIATION
The Plaintiff does not seek sanctions against nonparty Leibman, but rather seeks sanctions against the named OGS Defendants "because of the conduct of their counsel, the Office of the Attorney General, in failing to preserve documents that were clearly relevant to this litigation and were still available to be preserved after this action was brought and after Mr. Leibman's involvement was raised in open court." Dkt. No. 146, Pl.'s Lt.-Br., dated Mar. 9, 2015, at p. 1. The underlying premise of the Plaintiff's position is that the State of New York, as represented by the Attorney General's Office, was on notice that Leibman's emails would be relevant to this litigation, which was commenced on August 27, 2013, and clearly were on notice during the Hearing held on September 19, 2013, when Leibman's identity was publicly exposed and his email was placed into the record. Dkt. No. 114 at p. 2. The Plaintiff further contends that the Defendants and their Counsel had further notice of the litigation and the emails' relevance when Leibman submitted his weekly report to the Executive Chamber, and when it served the Attorney General's Office and OGS with its pre-litigation letter. Dkt. No. 150 at pp. 1-2. The Plaintiff posits that the Defendants, their Counsel, and the Executive Chamber had sufficient notice to preserve these documents before they were automatically deleted pursuant to the State's Email Retention Policy.
Additionally, the Plaintiff submits that it is reasonable to infer there are more than just these two noted emails that may be relevant to this litigation and, in all likelihood, are now missing because of the retention policy. The Plaintiff draws the Court's attention to a July 22, 2013 email from the Executive Chamber and the Governor's public statement on or about September 23, 2013, to support its contention that there was a coordination of effort between various state officials and "multiple arms of State government" with regard to conducting business within the state and the ensuing lawsuit. Dkt. No. 141 at p. 2. Apparently, reporters were asking questions about the expulsion from NYRA and denial of the vendor license. The Governor's press officer sent an email blast to the press officers of the State Department, OGS, and Gaming, as well as Leibman asking whether they had been approached by reporters and if so what had they said. Dkt. No. 150-7, emails, dated July 22, 2013. OGS's press spokesperson, Heather Groll, responded in the negative. Id. ("Nothing - They haven't asked and we haven't reached out[.]"). When questioned by a reporter about what transpired at the Saratoga Race Course, Governor Cuomo strongly defended Leibman, and expressed, "I think if you had a state official that didn't see the name Wandering Dago' and a buzzer went off or a flag was raised, then you would say that person was asleep at the switch, right?" Dkt. No. 150-8. From this, the Plaintiff extrapolates that the Governor "necessarily encourage[d] official action against [it], " and that "[i]t is reasonable to believe that internal Executive Chamber emails would have discussed both incidents." Dkt. No. 153, Reply Lt.-Br., dated Apr. 24, 2015, at p. 4.
In sum, the Plaintiff argues that these Defendants and its Counsel had an obligation to preserve not only Leibman's documents but those emails that may have emerged from the Executive Chamber, that they had the requisite culpable state of mind, even if its is merely negligence, and, because, there is a coordinated campaign by high-level state officials to effectively bar it from operating on state property, ...