Stemmelin v. Matterport, Inc.

Background

John Stemmelin moved for sanctions under Federal Rule of Civil Procedure 37 based on two groups of complaints. First, he argued that the defendants failed to preserve electronically stored information, including sales scripts, operating manuals, presentations, marketing and announcement materials, website pages, and Gmail, Google Chat, and Google Drive data associated with seven Matterport employees. Second, he argued that two Rule 30(b)(6) witnesses—Daniel Fellars and Kailyn Wilson—were not adequately prepared for deposition.

Deposition-related complaints

The court rejected the requests for sanctions based on the depositions. It said that when a party believes an organizational witness was not adequately prepared, the usual first step is a motion to compel. Stemmelin had not filed such a motion concerning Wilson’s deposition, and the court declined to treat the sanctions motion as a motion to compel. The court cited both procedural reasons—the court’s discovery standing order required discovery disputes to be raised in a joint letter brief, and the local rules required a sanctions motion to be filed separately—and substantive reasons, including Stemmelin’s failure to show that Wilson was required to know the information at issue.

The court also found that several complaints concerned missing or unproduced documents rather than witness preparation. Other complaints involved testimony that the court viewed as helpful to Stemmelin. As to Fellars and Wilson, the court acknowledged that some courts treat the failure to provide a prepared Rule 30(b)(6) witness like failing to appear for a deposition, but found that Stemmelin had not shown that these witnesses were so unprepared that their depositions amounted to nonappearances. The court also noted that Stemmelin had not addressed the standing-order provision stating that an organization need not train an employee on a subject when it cannot reasonably locate a witness with personal knowledge of it.

Electronically stored information

Rule 37(e) applies when electronically stored information that should have been preserved is lost, cannot be restored or replaced through additional discovery, and the loss causes prejudice or results from an intent to deprive another party of the information’s use in the litigation. The court said Matterport failed to preserve the Google data of seven custodians, contrary to its internal document-retention policy. But Stemmelin did not identify any particular information that was uniquely held by those custodians and could not be obtained from other sources.

Even assuming some information had been lost, the court found that Stemmelin showed neither prejudice nor an intent to deprive. Stemmelin did not argue that the seven custodians would have possessed documents different in type or category from documents produced from other custodians. Instead, he argued that the unavailable information would likely have been consistent with the discovery produced. The court found no basis to infer intentional deletion merely because the custodians were former employees when the deletion occurred, and no indication that they possessed uniquely harmful documents.

The court also found that much of Stemmelin’s complaint concerned documents dated before the preservation obligation began in July 2019. Matterport had largely preserved the old Matterport.com website, which it decommissioned in December 2019. Stemmelin did not identify a specific and prejudicial failure to preserve website or other marketing materials in 2019, or assert that Matterport had an obligation to preserve the website materials before that time.

Disposition

The court denied Stemmelin’s motion for sanctions. Magistrate Judge William Alsup did not impose sanctions based on the alleged loss of electronic information or the preparation of the Rule 30(b)(6) witnesses.