United States District Court, S.D. New York
OPINION AND ORDER
GABRIEL W. GORENSTEIN, UNITED STATE MAGISTRATE JUGDE.
Buzzfeed, Inc. (“Buzzfeed”) brings this motion
seeking sanctions for spoliation of evidence against
plaintiffs Central European News Ltd. (“CEN”) and
Michael Leidig. For the reasons stated below, this motion
is granted in part and denied in part, and the sanctions
described in section II.C below are imposed on plaintiffs.
Initiation of Lawsuit
case stems from an article published by Buzzfeed on its
website bearing the headline “The King of Bullsh*t
News, ” of which plaintiffs are the subjects (the
“Article”). See Complaint, filed Jan.
25, 2016 (Docket # 1) (“Compl.”) ¶ 1; The
King of Bullsh*t News (annexed to Compl.) (“The
Article”). Plaintiffs allege that the Article defamed
them by, among other things, accusing them of
“fabricating and selling fake news stories.”
See Compl. ¶ 8. In particular, plaintiffs argue
that the Article defamed them by disputing the veracity and
newsgathering efforts behind specific stories sold or
published by plaintiffs (the “Disputed Stories”),
including stories about people walking cabbages like pets in
China due to loneliness, id. ¶¶ 27-32;
“a Chinese man who had reportedly gotten tapeworm from
eating too much sashimi, ” id. ¶¶
38-44; “a [Russian] woman named Elena Lenina, who dyed
her kitten pink, which supposedly caused the animal's
death from blood poisoning, ” id. ¶¶
45-54; Russian women who lost their jobs after stripping in
public, id. ¶¶ 55-6; and a two-headed goat
in China, id. ¶¶ 62-68. In addition to
selling the Disputed Stories, plaintiffs also published some
of these stories to websites they maintained, including the
“Austrian Times, Croatian Times, ” and others.
See Plaintiffs' Initial Disclosure (attached as
Ex. 5 to Bolger Decl.) (“Initial Disclosure”), at
4; The Article at 5, 7, 8, 10, 11, 15, 17.
days before the Article was published, Buzzfeed sought
comment from Leidig regarding its contents. See
Letter from Carter-Ruck to Alan White Dated Apr. 22, 2015
(annexed as Ex. 1 to Bolger Decl.) (“Carter-Ruck
Letter”). In response, Carter-Ruck, a London law firm,
sent a letter dated April 22, 2015 to Buzzfeed on behalf of
plaintiffs. See Bolger Decl. ¶ 1; Carter-Ruck
Letter. In this letter, Carter-Ruck stated, inter
alia, that if Buzzfeed published the Article, the
allegations contained therein would be “highly
defamatory of [plaintiffs] and . . . are likely to cause
serious reputational harm, in particular in the eyes of their
customers.” Carter-Ruck Letter at *4. It also asserted
that “the proposed publication of the allegations is
calculated to damage CEN's business, ” Id.
The letter concluded by stating that plaintiffs “will
take very seriously the publication of any false allegations
about them” and that they reserved “all their
legal rights.” Id. at *6. Buzzfeed published
the Article on April 24, 2015. Compl. ¶ 1. Plaintiffs
and Buzzfeed continued to correspond through counsel in
August, September, and October of 2015. See Bolger
Decl. ¶¶ 4-5; First Email from Nabiha Syed (annexed
as Ex. 3 to Bolger Decl.); Second Email from Nabiha Syed
(annexed as Ex. 4 to Bolger Decl.). On January 25, 2016,
plaintiffs filed the instant complaint against Buzzfeed,
alleging libel. Compl. ¶¶ 94-103.
March 25, 2016, Buzzfeed answered the complaint and asserted
affirmative defenses that the Article is “substantially
true, ” and that “[p]laintiffs are public figures
and cannot prove constitutional malice by clear and
convincing evidence.” Answer to Complaint, filed Mar.
25, 2016 (Docket # 8), ¶¶ 105-06. Plaintiffs later
moved for partial summary judgment on the ground that,
inter alia, they were not public figures.
See Plaintiffs' Memorandum of Law in Support of
a Motion for Partial Summary Judgment, filed Jan. 13, 2017
(Docket # 20), at 15-17. This motion was denied, and the
court noted that the issue of whether plaintiffs were public
figures was “far from settled.” See
Decision and Order, filed May 9, 2017 (Docket # 47), at
Beginning of Discovery
time after filing the complaint, plaintiffs submitted their
initial disclosure to Buzzfeed pursuant to Federal Rule of
Civil Procedure 26(a)(1)(A). See Initial Disclosure.
In this disclosure, plaintiffs indicated that they had
“taken down” websites on which they had
previously published articles (including the Austrian Times
and Croatian Times), but planned to use screenshots of these
websites as they appeared before they were taken down.
Initial Disclosure at 4. Plaintiffs also indicated in this
disclosure that Kathryn Quinn,  the News and Picture Editor for
CEN, and John Feng, the China Desk Manager for CEN, had
information relevant to the preparation of the Disputed
Stories. See id. at 1-2.
served a document request on July 14, 2016. See
Bolger Decl. ¶ 8; Buzzfeed Inc.'s First Request for
the Production of Documents and Things to Plaintiffs
(attached as Ex. 6 to Bolger Decl.) (“First Document
Request”). This request sought documents relating to,
inter alia, “the distribution channels of CEN
News Items, ” First Document Request ¶ 76; the
identification of websites “purchased, created, or
maintained by CEN and/or Leidig, ” id. ¶
80; the disabling of such websites, including the ones
mentioned above, id. ¶¶ 81-82;
plaintiffs' social media accounts, broadcasts,
publications, awards won, and other public communications,
id. ¶¶ 85-92, 94; and the Disputed
Stories, id. ¶¶ 8-77. In response,
plaintiffs produced 400 documents over the course of two
productions in October 2016. See Bolger Decl. ¶
11. These productions included “documents bearing no
metadata, including manually manipulated PDFs, summaries of
underlying documents not produced, and screenshots and other
text files generated by Plaintiffs after production of the
Article, ” but did not include “any preserved
copies of the now-disabled websites.” Id.
Conference on Motion to Compel
this production, Buzzfeed moved to compel the production of
“authentic” documents responsive to the First
Document Request. See Bolger Decl. ¶ 15; Notice
of Defendant Buzzfeed, Inc.'s Motion to Compel, filed
Feb. 16, 2017 (Docket # 26). This Court held a conference on
April 12, 2017. See id. ¶ 15; Transcript, filed
May 1, 2017 (Docket # 44) (“Tr. 1”) 1. With
respect to electronically stored information
(“ESI”), the Court ordered that plaintiffs
produce the original versions of the documents responsive to
the First Document Request in a format Buzzfeed could use,
id. 9:12-15, 9:21-24, along with the corresponding
metadata, id. 20:8. The Court specifically forbade
plaintiffs from producing screenshots of original documents,
or from otherwise having the client create new documents for
production. Id. 10:10-15, 11:9-12, 12:5-17. The
Court also noted the possibility of spoliation sanctions
should original versions of plaintiffs' disabled websites
not be produced. Tr. 117:12-14.
this conference, plaintiffs produced more documents. To aid
in these productions, plaintiffs retained TransPerfect Legal
Solutions (“TransPerfect”), an e-discovery
vendor. See Leidig Tr. 112:8-16; Seigle-Morris Decl.
¶ 1. Alex Seigle-Morris of TransPerfect was
“responsible for [plaintiffs'] case.”
See Leidig Tr. 112:17-21. Although plaintiffs
produced additional documents after the Court's order,
Buzzfeed contends that such productions failed to conform to
the instructions set forth by the Court and to
plaintiffs' discovery obligations in a number of
respects. See Bolger Decl. ¶¶ 16-18.
plaintiffs failed to produce preserved versions of the
disabled websites, saying that they had no such copies, and
instead directed Buzzfeed to access data from a website that
purportedly archives internet websites. Id.; Letter
from Harry H. Wise III to Katherine M. Bolger Dated June 14,
2017 (annexed as Ex. 13 to Bolger Decl.) (“Letter from
Wise to Bolger”).
plaintiffs produced screenshots from plaintiffs'
“Global Internet News” (“GIN”)
system. Bolger Decl. ¶ 18.a; Screenshots from GIN
(annexed as Ex. 14 to Bolger Decl.). GIN is plaintiffs'
proprietary software that contains the first and last drafts
of articles produced by plaintiffs - including some of the
Disputed Stories - as well as the source material gathered
while researching these stories. See Leidig Tr.
17:4-18:3, 22:6-23:18, 50:6-16. These screenshots contained
metadata indicating that they had been created after this
litigation had been initiated. See Bolger Decl.
¶ 18.c-d; Chart of Plaintiffs' Improperly Produced
Documents (annexed as Ex. 17 to Bolger Decl.)
(“Metadata Chart”). Leidig has explained that the
reason for this production format is because GIN was not
designed with an extraction feature, and thus no GIN files
with original metadata could be produced. See Leidig
plaintiffs produced ESI with missing or incorrect metadata.
Some documents were produced with metadata indicating that
the files had been created after this lawsuit was initiated.
See Bolger Decl. ¶ 18.c-d; Metadata Chart.
Other documents contained no metadata whatsoever.
See Bolger Decl. ¶ 18.d; Metadata Chart.
plaintiffs produced an email from May 1, 2017, from Feng to
Leidig that forwarded an April 27, 2015, email from Feng to
Quinn, but plaintiffs failed to produce the underlying April
27, 2015, email. See Bolger Decl. ¶ 18.e; Email
from John Feng to Michael Leidig Dated May 1, 2017 (annexed
as Ex. 18 to Bolger Decl.) (“Leidig Email”). This
email concerned Feng's research and sources relating to
one of the Disputed Stories. See Leidig Email.
Plaintiffs later produced the underlying April 27, 2015,
email, but instead of containing the text of the email within
the email itself, this newly produced version contained the
text of the email as an attachment with no metadata.
See Bolger Decl. ¶ 18.e; Email from John Scot
Feng to Kathryn Quinn Dated Apr. 27, 2015 (annexed as Ex. 19
to Bolger Decl.) (“Quinn Email”). Plaintiffs
claimed that this issue “happened due to [the email]
being taken from a Mac version of outlook.”
See Bolger Decl. ¶ 18.e; Email from Harry Wise
to Rachel Strom Dated June 23, 2017 (annexed as Ex. 20 to
Bolger Decl.); Seigle-Morris Decl. ¶ 10. Plaintiffs also
later noted that some of Quinn's emails were
“produced from other data bases but not from computers
at CEN's office in Vienna.” Bolger Decl. ¶
18.e; Letter from Harry H. Wise III to Katherine M. Bolger
and Rachel Strom Dated June 27, 2017 (annexed as Ex. 21 to
Bolger Decl.) (“Letter from Wise to Bolger and
Buzzfeed's request, this Court held a pre-motion
conference in contemplation of the instant motion on July 14,
2017. See Bolger Decl. ¶¶ 19-20;
Transcript, filed Aug. 10, 2017 (Docket # 59) (“Tr.
2”). At this conference, the Court granted Buzzfeed
permission to file a motion for spoliation of evidence, Tr. 2
2:14-16, and ordered a Rule 30(b)(6) deposition of CEN
relating to the production of documents, id.
17:3-15. The Court opined that at such a deposition, CEN may
need to designate more than one deponent if one person was
not “totally educated” on the document production
process. Id. 12:2-7. On August 4, 2017, Buzzfeed
served notice of the Rule 30(b)(6) deposition on CEN's
counsel, which indicated that the deposition topics would
include, inter alia, “efforts to collect
documents and metadata for Your document production, ”
including “the software used to prepare the production
and the transfer of data to counsel for both parties, ”
and “[w]here the collection of documents and/or
metadata for Your document production took place, including,
but not limited, [sic] where the servers and custodians were
located as well as where the person(s) conducting the
searches, collection and production were located.”
See Amended Notice of Deposition Pursuant to Rule
30(b)(6) Dated Aug. 4, 2017 (annexed as Ex. 24 to Bolger
Decl.) (“Buzzfeed's Noticed Topics”).
Rule 30(b)(6) Deposition
Rule 30(b)(6) deposition was held on August 11, 2017.
See Leidig Tr. 4:10-12. CEN's Rule 30(b)(6)
designee was Leidig, id. 5:8-11, who testified that
to prepare for the deposition, he “read through as much
documentation as [he] could in [his] office, ”
including Court documents and correspondence with his lawyer,
and had “about a one-and-a-half hour meeting with [his
lawyer] Mr. Wise, ” id. 6:16-7:12.
was unable to answer a number of questions relating the Quinn
Email and documents extracted from Feng's computer. When
asked about the Quinn Email, Leidig testified that it was
produced by TransPerfect in cooperation with Feng, but that
he did not know how it extracted the email. Id.
225:10-226:24. Similarly, Leidig testified that he did not
know whether the original version of this email was extracted
from the Leidig Email or from the original email as sent,
id. 227:4-17, but that Seigle-Morris knew the answer
to that question, id. 227:18-20. Leidig also
testified that he was not sure why this document lacked
metadata, but that TransPerfect “would be able to
inform [Buzzfeed] as that - whether it's an error or not,
I'm afraid I don't know.” Id.
234:5-14. Leidig also testified that he did not know what, if
anything, the discovery expert did to extract files from
Feng's computer. Id. 127:20-129:8.
was also unable to answer certain questions relating to GIN.
Leidig testified that he did not know where the server for
GIN was located, but was “pretty certain” it was
in Germany. Id. 25:9-26:17. Leidig also demonstrated
a non-technical understanding of GIN at times, stating
inter alia, that “GIN is not maintained . . .
it just works, ” id. 71:18-21, and that GIN
stores no documents but is “purely information, ”
id. 74:6-9. Leidig also testified that he knew that
documents could not be “downloaded” from GIN
because he designed GIN. Id. 72:13-21. When further
pressed on whether information could be downloaded from GIN,
Leidig responded that “[y]ou can't do it because it
wasn't programmed like that and it wasn't designed to
do that, ” id. 87:2-11, and that Granger
Laffan, a communications expert and IT technician who helped
to design GIN, id. 27:20-28:19, had told him
“the only information that is available is what you
see. What you see is what you get, ” id.
87:17-21. He also noted that Laffan had stated approximately
“four years ago” that it would have been
“expensive and complicated” to modify GIN to
export documents, id. 72:22-73:6, and that since the
Article's publication, he had not asked anyone whether it
was possible to “download information” from GIN,
was also unable to answer certain questions relating to the
recovery of emails for production. Leidig testified that he
did not know whether CEN had an email server. Id.
34:18-35:2. He further stated that his IT expert, Harold
Fuchs, told him that the emails sent from CEN staffers to
third parties could not be obtained using those staffers'
email domain names, but that he could not recall the reason
Fuchs provided for this. Id. 35:21-36:18.
Leidig offered information relevant to plaintiffs'
document collection during his deposition. Leidig confirmed
that, with the exception of materials saved in GIN with
respect to the preparation of a story, “no special
effort was made to preserve documents concerning the Buzzfeed
piece” prior to “the decision to proceed with the
lawsuit.” Id. 44:23-46:12. Leidig further
testified that he was instructed by counsel to preserve
evidence only after the lawsuit was filed, id.
106:21-107:2, and that he began preserving data and
information relevant to this lawsuit “within an hour of
the information of the actual case litigation being filed,
” id. 149:10-19. Similarly, Leidig testified
that he began notifying staff to preserve documents relating
to this litigation only after it was initiated. Id.
220:16-221:24. With respect to the disabled websites, Leidig
testified that plaintiffs disabled the “vast
majority” of them on May 7, 2015. Id. 11:4-22.
Regarding emails, Leidig stated that some of Quinn's
emails had been deleted by an IT consultant either to create
additional space or because they were corrupted. Id.
40:1-42:20. More specifically, Leidig suggested that the
original Quinn Email may have been deleted, but in any event
had not been preserved. Id. 222:8-223:15. With
respect to metadata, Leidig noted that he inadvertently
changed or deleted the metadata for certain produced
documents when he attempted to manually move the files to
another hard drive containing materials to be produced,
thereby deleting the original file and creating a new version
with new metadata. Id. 113:10-115:4. Finally, with
respect to GIN, Leidig stated that he retrieved the produced
information from GIN by taking screenshots of the relevant
material. Id. 50:6-51:8, 52:17-19. However, Leidig
admitted that he did not ask the German company that
maintains the GIN server whether GIN documents could be
retrieved from the server. Id. 85:8-18.
thereafter filed the instant motion for sanctions on