Marianne T. O'Toole v. The City of New York

Background

Marianne T. O’Toole was substituted as plaintiff solely as the Chapter 7 trustee of Pedro Serrano’s estate. Serrano alleged, among other things, that he faced retaliation after filing a discrimination complaint with the United States Office of Equal Employment Opportunity against his supervisors. He alleged that his supervisors learned of the complaint on February 7, 2013, and began retaliating against him during his shift that day.

Serrano requested his police memo book, which contained a contemporaneous February 7, 2013 entry. The defendants produced about five photocopied pages but stated that they no longer possessed the memo book itself. Serrano then sought sanctions for spoliation—the failure to preserve potentially relevant evidence. Magistrate Judge Sarah L. Cave found that the defendants had a duty to preserve the book, failed to preserve it with a culpable state of mind, and prejudiced Serrano. She imposed an adverse inference, meaning that the factfinder could infer that the destroyed book would likely have supported Serrano’s claims of adverse employment action and retaliation.

Judge Cave later upheld the sanction on reconsideration. The defendants objected, and the district court previously overruled those objections. After a later summary-judgment decision, the defendants again sought relief, arguing that Serrano should not be allowed to discuss the adverse inference at trial because it had been imposed against the City rather than McCormack, and that imposing it against McCormack required a finding of his personal culpability and sufficient notice. Judge Cave denied that request, leading to the objections addressed in this order.

Arguments and Legal Standards

The district court reviewed the magistrate judge’s nondispositive order under Federal Rule of Civil Procedure 72(a). Under that rule, the court could modify or set aside the order only if it was clearly erroneous or contrary to law. The court also considered Rule 54(b), which permits revision of an interlocutory decision before final judgment in limited circumstances, such as an intervening change in controlling law, newly available evidence, clear error, or manifest injustice.

The defendants argued that Judge Cave had used Rule 60(b), rather than Rule 54(b), as the governing standard for revisiting the sanction. They also argued that the adverse inference could not apply to McCormack because the earlier orders did not find that he personally had a duty to preserve the memo book or provide him with sufficient notice of the conduct that supported the sanction.

Court’s Analysis

The court held that the defendants had not shown a basis to disturb the October 21, 2022 order or the earlier decisions upholding the sanction. The court emphasized that this was the defendants’ fourth attempt to set aside the adverse inference and that they offered no reason why their arguments concerning McCormack had not been raised earlier.

The court also concluded that applying Rule 54(b), rather than Rule 60(b), would not change the result. There had been no intervening change in controlling law, no new evidence, and no clear error or manifest injustice requiring correction. The defendants did not identify a controlling Second Circuit decision establishing that McCormack personally had to have a preservation duty and notice of sanctionable conduct before the adverse inference could apply to the defendants. The court further stated that Judge Cave had broad discretion to impose an appropriate sanction for the defendants’ spoliation.

Finally, the court held that the defendants’ yearslong delay and repeated motion practice independently supported denying relief because they had earlier opportunities to litigate the arguments they were now presenting.

Disposition

The court overruled the defendants’ objections to Judge Cave’s October 21, 2022 order. It adopted that order in its entirety, so the adverse-inference sanction remained in place.