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Leidig v. Buzzfeed, Inc.

United States District Court, S.D. New York

December 19, 2017

MICHAEL LEIDIG, et al., Plaintiffs,
v.
BUZZFEED, INC. Defendant.

          OPINION AND ORDER

          GABRIEL W. GORENSTEIN, UNITED STATE MAGISTRATE JUGDE.

         Defendant Buzzfeed, Inc. (“Buzzfeed”) brings this motion seeking sanctions for spoliation of evidence against plaintiffs Central European News Ltd. (“CEN”) and Michael Leidig.[1] 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.

         I. BACKGROUND

         A. Initiation of Lawsuit

         This 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.

         Two 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.[2] 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.

         On 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 14-15.

         B. Beginning of Discovery

         Some 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, [3] 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.

         Buzzfeed 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.

         C. Conference on Motion to Compel

         After 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.

         D. Second Production

         Following 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.

         First, 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”).

         Second, 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 Tr. 85:19-87:21.

         Third, 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.

         Finally, 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 Strom”).

         E. Pre-Motion Conference

         At 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”).

         F. Rule 30(b)(6) Deposition

         The 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.

         Leidig 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.

         Leidig 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, id. 73:12-15.

         Leidig 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.

         Nevertheless, 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.

         Buzzfeed thereafter filed the instant motion for sanctions on September ...


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