Free Reply to Response to Motion - District Court of Arizona - Arizona

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MESCHKOW & GRESHAM, P.L.C.
Jordan M. Meschkow (AZ Bar No. 007454) Lowell W. Gresham (AZ Bar No. 009702) 5727 North Seventh Street Suite 409 Phoenix, Arizona 85014-5818
(602) 274-6996 (602) 274-6970 (facsimile) Attorneys for Plaintiff

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA DAN COOGAN, doing business as COOGAN PHOTOGRAPHIC, Plaintiff, v. AVNET, INC., et al., Defendants. (Assigned to The Hon. Susan R. Bolton) Plaintiff Dan Coogan ("Coogan" or "Plaintiff") submits the following Reply in support of his Motion For Sanctions Due to Spoliation of Evidence and For Order to Show Cause Why Defendants Should Not Be Held In Contempt. Plaintiff supports this Reply with the following Memorandum of Points and Authorities, and all matters of record, all of which are incorporated herein by this reference. MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Defendants' Response does not deny that they have wrongfully withheld discoverable information, that they wrongfully continued to distribute infringing (and undisclosed) Annual Reports as late as two months ago, and that they failed to preserve Case No.: CV-04-0621 PHX SRB PLAINTIFF'S REPLY IN SUPPORT OF MOTION FOR SANCTIONS DUE TO SPOLIATION OF EVIDENCE AND FOR ORDER TO SHOW CAUSE WHY DEFENDANTS SHOULD NOT BE HELD IN CONTEMPT

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key websites. Rather, Defendants employ a myriad of excuses for their conduct, including "it doesn't matter because Plaintiff had it anyway," "Plaintiff's case won't be prejudiced," "we tried not to infringe, but we just kept accidentally doing it," and on and on. These excuses echo the same types of excuses that Defendants used to try to avoid the Court's finding that their infringement was willful. Still, having been found to be willful

infringers, and having submitted a Response that essentially lists admissions--but with excuses--Defendants end their Response arguing that imposing sanctions would be "unduly harsh . . . in light of Avnet's good faith conduct in this case." Defendants' assertion of their "good faith" in this case rings hollow. Moreover, their Response, albeit with excuses, does not contest the key facts in Plaintiff's Motion. Defendants should, therefore, be sanctioned accordingly. II. BACKGROUND Defendants' Response argues that Plaintiff should have met and conferred with them before filing his Motion for Sanctions. As Defendants point out repeatedly,

however, there is nothing left about which to confer. First, Plaintiff has gone to great lengths over the course of this litigation to continually uncover Defendants' withholding of documents. In doing so, Plaintiff has managed to uncover much of the information Defendants should have produced and, therefore, has no reason to confer with Defendants about it. Second, given Defendants' track record, Plaintiff believes more relevant

information exists, but obviously cannot confer with Defendants about that information until Plaintiff discovers what it is. Finally, much of the information that has not been produced has been destroyed by Defendants, which is why Plaintiff's Motion seeks sanctions for spoliation. Plaintiff cannot confer with Defendants to convince them to produce evidence they have destroyed. Rather, Plaintiff seeks sanctions for Defendants' constant misrepresentations, complete failure to adhere to the law and Rules, and admitted spoliation of evidence that Plaintiff will never see.

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A.

Annual Reports

Defendants' Response fully admits that Defendants (1) failed to disclose that the online version of its Annual Reports were changed versions of, and therefore different than the hard copies; (2) failed to disclose that the hard copies continued to contain the infringing photographs even now and were distributed to the public until as late as October 2005; (3) disclosed only the non-infringing online versions of its Annual Reports in response to discovery requests; (4) stalled incessantly to avoid producing the infringing hard copies; and (5) finally produced the hard copies two months ago only after Plaintiff had managed to obtain hard copies and send them to Defendants, catching Defendants in the act of continuing to infringe upon his photographs. Still, Defendants ask this Court not to sanction them because · They did not mean to deceive Plaintiff and this Court by failing to produce the hard copies of the Annual Reports; · They did not know the infringing Reports were still being distributed to the public; · Plaintiff could have, should have, and did find out what they were hiding; · It was a third-party vendor that actually sent out the infringing reports for Avnet, certainly not Avnet itself; · Two years after the institution of this lawsuit, Defendants' counsel finally "instructed Avnet and Corporate Communications Center to stop distributing printed copies of the Annual Reports containing the copyright photographs[,]" the implication presumably being that Avnet was not responsible for its actions prior to this admonition from its attorneys. See Response at 11.

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Defendants' excuses seem to be without end, much of them coming after the Court already found them to be willful infringers! Still, they claim ignorance. Defendants are not above the law, however. Even if all of Defendants' excuses were true, Defendants' lack of attention to this lawsuit and to their infringement is beyond unreasonable and beyond negligent, thus warranting the imposition of sanctions. B. Websites 1. Avnet Websites

Defendants failed to preserve any of the Avnet websites on which the infringing photographs appeared. In Defendants' Response, Defendants make arguments only

regarding third party websites, addressed below. Defendants fail to explain, however, why they failed to preserve their own websites on which the infringing photographs appeared. Indeed, Defendants took active steps to ensure that such websites were not preserved. The website www.archive.org is a website dedicated to preserving old

versions of websites. When Plaintiff went to www.archive.org to again attempt to find the information Defendants had failed to produce1, Plaintiff requested archived web pages for www.avnet.com, among others, and received the following message: "We're sorry, access to http://www.avnet.com has been blocked by the site owner ..." (see Exhibit 1). Thus, Defendants not only failed to preserve the versions of their websites that contain any of Plaintiff's Photographs, but went out of their way to ensure that that the websites and their history(s) were destroyed. 2. Third Party Websites

Defendants also admit that they failed to preserve the contents of third-party websites containing the infringing photographs--websites owned and controlled by entities to which Defendant provided the infringing photographs--and which Defendants

So as to try to test which image-files appeared on which websites, using "properties" signatures of the images as to whether they match. Plaintiff can not now do this, or have his expert witness do this.
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knew contained the infringing photographs. Again, however, Defendants argue that they should not be held responsible for their failure to preserve the evidence because (1) Defendants did not control the websites2 and (2) Plaintiff managed to get most of the information despite Defendants' tactics, so Plaintiff should just be happy with what he got. First, Defendants knew the third-party websites contained the infringing photographs that Defendants had provided, and Defendants had access to the web pages just like any other member of the public. Defendants had a duty to preserve those websites and to ask the owners of the websites to preserve them as well. Going back as far as Defendants' Supplemental Answers to Plaintiff's First Set of Interrogatories, Defendants answered "Identify Defendant's methods for providing Plaintiff's Photographs for posting on any and all Third-party website" (Interrogatory No. 2) with: "...After diligent inquiry, Avnet was unable to locate any correspondence between any other Avnet employees and the other two entities to whom Avnet allegedly "distributed" the Vallee photographs. Avnet notes that generally, third parties seeking to obtain photographs of Roy Vallee and other Avnet Directors and Officers may obtain such photographs by either submitting a request to Avnet's Director of Public Relations Jan Jurcy or by downloading such photographs from the Press Room link at Avnet's website. Neither Jurcy nor Maag can recall receiving a request for the Vallee photographs from either the Arizona Governors' Council on Innovation and Technology or the Supply-Chain Council, leading them to conclude that these two entities must have downloaded the photographs from Avnet's website." Declarations from Supply-Chain Council personnel showed the falsity of this as to the Supply-Chain Council, who remembered Avnet, Inc, Vice President Tom Brunell (a Supply-Chain Council board member/volunteer) through his assistant providing the Supply-Chain Council with Plaintiff's Photograph, months ago. (See Declarations of

Yet, at www.archive.org, Avnet did control the access to any and all Avnet-related websites referenced in the complaint, and at each one you receive the message "We're sorry, access to [INSERT Avnet website name or domain, i.e., www.avnet.com, www.avnet.de, www.aux.avnet.com, www.ir.avnet.com, www.avnet.tv] has been blocked by the site owner via robots.txt." Avnet changed their sites to block the website archive.org to show archives of any and all Avnet-related websites referenced in the complaint for a reason -- this lawsuit. The Defendants are intentionally hiding the history.
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Melinda Spring and Ben Hoffman, attached as Exhibit 2). Now, Plaintiff can show Mr. Vallee must have done the same with respect to the Arizona Governors' Council on Innovation and Technology ­ the February 27, 2003 Minutes of the council show 1) the meeting was organizational and 2) the council had just created the new website at www.gcit.az.gov, while the Agenda of the same meeting addressed "Website" under its Organizational Matters heading. (See Exhibit 3). Being a board member of the Arizona Governors' Council on Innovation and Technology ­ it is equally clear that Mr. Vallee knew that Avnet provided the council with the photograph taken by Mr. Coogan (a photograph that Mr. Vallee himself posed for in April 2001 when Plaintiff shot these photographs not for Defendants, but for use in an article in Upside Magazine). Second, although Plaintiff has done his utmost to piece together his case despite all the obstacles Defendants have thrown in his path; his diligence does not excuse Defendants from their discovery obligations. See Rules 26, 33, 34, 36, and 37, FED. R. CIV. P. Moreover, contrary to Defendants assertions, Plaintiff was not able to preserve the information he needed. Plaintiff has all of the Avnet and third-party web-pages in PDF format; Plaintiff's expert, however, has informed him that, in order to verify Defendants' claims regarding which photograph files appeared on which websites, the expert must have the HTML version of the websites, which should have been preserved on a server unless it was deliberately destroyed. In short, Defendants' excuses are again without merit: Defendants did have a responsibility to preserve the third-party websites, and Plaintiff does not already have the information he needs--such information apparently has been destroyed. III. A "SHOW CAUSE" HEARING IS WARRANTED. Defendants cite the "clear and convincing" standard for finding a party in contempt. That standard, however, is the standard actually employed at the "show cause" hearing to determine whether contempt occurred, not the standard for holding the hearing. See

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Hansbrough v. Birdsell (In re Hercules Enters.), 387 F.3d 1024, 1028 (9th Cir. 2004). Thus, the Court should order a hearing to show cause, at which Defendants can make their arguments regarding the "clear and convincing" standard. Moreover, Plaintiff's evidence set forth herein quite likely will meet the "clear and convincing" standard, as Defendants admit throughout their Response that they withheld evidence, even in violation of the Court's October 3, 2005 Order (the "Order"). They simply argue that because they produced some things, they were justified in putting the onus on Plaintiff to figure out what was missing, thus managing to push themselves over the "good faith" threshold and avoid sanctions. Plaintiff is unaware of any authority supporting this argument by Defendants. IV. SANCTIONS SHOULD BE IMPOSED. A. Defendants Should Be Sanctioned for Violating this Court's October 3, 2005 Order. Defendants incorrectly argue that they did not violate this Court's October 3, 2005 Order. Defendants seem to believe that by producing some things, they can meet the Court's threshold of a "good faith effort". See Order. A good faith effort, however, would have been for Defendants to provide everything they were hiding, not just certain things. This Court is allowed wide discretion in imposing other or additional sanctions under Rule 37, FED. R. CIV. P. While Plaintiff agrees with Defendants that the issue of the number of copyrightable works infringed is now moot, and an adverse inference is not the best solution, Plaintiff submits that the Court still has three viable options for sanctioning Defendants. The first is to dismiss their defenses, essentially granting a default judgment to Plaintiff. Both sides have cited and analyzed National Hockey League et al. v.

Metropolitan Hockey Club, Inc. et al., 427 U.S. 639 (1976) regarding whether dismissal is warranted in this case. Defendants, obviously, do not believe their conduct rises to the level warranting dismissal as a sanction. Defendants state that "[I]n National Hockey League, the Supreme Court reversed the Court of Appeals' finding that the trial court had

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acted beyond its discretion in dismissing an action where there were several admonitions by the Court, unfulfilled promises and commitments by plaintiffs, [and] flagrant bad faith where, after being directed by the court to perform certain acts by a date certain, plaintiffs failed to perform . . .." Response at 13-14. Plaintiff, however, sees little difference between the National Hockey League situation and the instant situation: Defendants have been admonished by the Court, have made many unfulfilled promises and commitments to Plaintiff throughout the course of discovery, and have shown flagrant bad faith in spoliating web pages, withholding infringing Annual Reports, and, even after this Court's finding of willful infringement, refusing to stop distributing infringing Annual Reports until Plaintiff caught them two months ago. As the Supreme Court held, "the most severe in the spectrum of sanctions provided by statute or rule must be available to the district court in appropriate cases, not merely to penalize those whose conduct may be deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in the absence of such a deterrent." National Hockey League, 427 U.S. at 642-43. Thus, the imposition of dismissal of one's defense, while severe, should not be avoided when, as here, it is necessary to deter wrongful and intentional withholding of information. The second option for sanctioning Defendants would be for the Court to allow Plaintiff to present his damage calculations without challenge by Defendants. The Court could impose standards of reasonableness, of course, to avoid an unfair windfall. Such a sanction is severe, but in light of Defendants' willful infringement, willful disregard of the Court's order, and willful spoliation of evidence, is not unreasonable. Third, the Court could simply impose monetary sanctions upon Defendants by ordering Defendants to pay Plaintiff some level of restitution for the incredible lengths to which Plaintiff has had to go to uncover Defendants' schemes and obtain the information relevant to his case. Plaintiff would suggest a monetary sanction in addition to Plaintiff's costs and attorneys' fees discussed below.

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B.

Defendants Should Be Sanctioned for Spoliating Key Evidence.

Courts have broad discretionary power to sanction a party for the destruction or spoliation of relevant evidence. Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir. 1993). In choosing the appropriate sanction, courts consider factors such as egregiousness of the spoliator's conduct, degree of fault by the spoliating party, impact on the non-spoliating party, intent, and whether a lesser sanction would be fair and would sufficiently deter similar conduct in the future). See, e.g., Souza, 191 Ariz. at 250, 955 P.2d at 6 and Schmid v. Milwaukee Tool Corp., 13 F.3d 76, 79 (3d Cir. 1994). Although Souza is an Arizona state case, it gave the most thorough analysis of spoliation Plaintiff could find. Defendants' Response asks the Court to do the analysis, but assures the Court that, "if [it] were to apply the Souza court's reasoning, it would undoubtedly" agree with Defendants. Response at 14-15 (emphasis added). Plaintiff's Motion, on the other hand, actually applies the Souza factors to the situation at hand and, as set forth in the Motion, shows the Court why sanctions--indeed, severe sanctions--are warranted here. Again, Plaintiff suggests that, in addition to the sanction imposed for violation of this Court's order, the Court also impose a sanction of dismissal, exclusion of Defendants' damages evidence, and/or monetary sanctions for Defendants' egregious spoliation of evidence, and award Plaintiff his costs and fees. C. Plaintiff Coogan is Entitled to His Attorneys' Fees and Costs. Plaintiff is entitled to his reasonable costs and attorneys' fees for bringing his Motion (see Rule 37(b), FED. R. CIV. P.) and for all of the efforts he and his counsel have made and continue to make to uncover Defendants' hidden and spoliated evidence, including following up on his numerous discovery requests, drafting correspondence, issuing subsequent discovery requests, drafting discovery and sanction motions, and attending court hearings relevant to obtaining this information. See Rule 37(c), FED. R. CIV. P.

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V.

CONCLUSION In sum, Defendants have intentionally withheld and spoliated some of the most

important documents in this litigation and have prevented Plaintiff from fully prosecuting his case. In light of the importance of these documents, the prejudice caused by their spoliation, and Defendants' bad faith in withholding and spoliating documents, and for all of the reasons set forth herein, Plaintiff respectfully requests that this Court grant his Motion For Sanctions Due to Spoliation of Evidence, issue Order to Show Cause why Defendants should not be held in contempt, and award Plaintiff his costs and attorneys' fees.

Respectfully submitted, this 18th day of December, 2005. MESCHKOW & GRESHAM, P.L.C.

By: s/Jordan M. Meschkow Jordan M. Meschkow Lowell W. Gresham MESCHKOW & GRESHAM, P.L.C. 5727 North Seventh Street Suite 409 Phoenix, Arizona 85014-5818

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CERTIFICATE OF SERVICE I hereby certify that on December 18, 2005 I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Jordan Greene and Charles Houston FENNEMORE CRAIG 3003 North Central Avenue, Suite 2600 Phoenix, Arizona 85012-2913 Attorneys for Defendants

A printed copy is being hand-delivered to Judge's chambers, with the ECF confirmation on December 19, 2005. /s Jordan M. Meschkow

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