A judge for the U.S. District Court for the Southern District of California recently declined to award spoliation sanctions to a plaintiff embroiled in a lawsuit against Cox Communications. The case is Cottle-Banks v. Cox Communications, Inc., a dispute developing in the district court, and the ruling is the subject of today’s e-Discovery examination.

The plaintiff, Brittni Cottle-Banks, was an unsuspecting cable customer in 2006. She had ordered cable service from Cox Communications after speaking with a customer service representative over the phone. When she opted to do a self-installation, Cox sent her a DVR unit, an additional set-top converter box, and two remotes. Cottle-Banks had not been told by Cox that she would receive an additional box, nor that she would be charged a separate monthly fee for it, but she did not call Cox to ask why she had received it. It was July 2006—with summer repeats of The Office in full swing, there was no time to waste. Cottle-Banks hooked up the additional box thinking it was free, and she continued enjoying television.

By February 2007, Cottle-Banks moved and canceled her cable account. During the entire lifecycle of her account with Cox, however, she had never looked at a bill. Always paying her bills electronically, Cottle-Banks had no idea she was being charged monthly for the additional set-top converter box at a rate of $5.25-$7.50 per month. Accordingly, when Cottle-Banks signed up for cable again in August 2007, she still had no idea about the extra surcharge. It wasn’t until February 2008, 19 months after her first sign-up with Cox, that Cottle-Banks finally began reviewing her monthly bills and discovered the surcharge for the extra set-top converter box.

This lawsuit was born in 2010 when Cottle-Banks filed suit against Cox on claims of consumer fraud. The theory of the suit was that Cox charged customers for converter boxes: (1) without informing customers of the equipment offered and the prices to be charged; and (2) without first obtaining each customer’s affirmative acceptance of the equipment and prices. Cottle-Banks alleged that this practice violated the Communications Act of 1934, 47 U.S.C. § 543(f).

In its infancy, the lawsuit experienced a lot of procedural upheaval with multiple forum changes and substantial motion practice between the parties, but for the purposes of our e-Discovery discussion, we fast-forward to Cottle-Banks’s two recent motions that were ultimately denied by the court. First, Cottle-Banks moved to certify a class of similar victims as her. The proposed class was defined as:

All persons who, at any time from September 13, 2006, to the present (“Class Period”), paid a rental fee to CCI [Cox] for the use of a cable television converter box and/or remote control device in connection with cable television service they received within the state of California (the ‘Class’).

Plaintiff Cottle-Banks’s idea to move for a class certification was not necessarily a bad strategic thought, especially in light of the statute Cox was alleged to have violated:

A cable operator shall not charge a subscriber for any service or equipment that the subscriber has not affirmatively requested by name. For purposes of this subsection, a subscriber’s failure to refuse a cable operator’s proposal to provide such service or equipment shall not be deemed to be an affirmative request for such service or equipment. (emphasis added).

The problem for Cottle-Banks was trying to prove that other Cox customers suffered a similar fate—or, more precisely, that Cox failed to inform all its customers of the surcharge in the same way she alleged to have been misled.

Persuasive evidence in the form of customer call recordings ultimately swayed the judge. You know, those “This call may be monitored for quality assurance” messages actually mean something—and in Cox’s case, the company actually recorded customer phone calls. Out of 200 recorded customer phone calls that Cox produced, Cottle-Banks claimed only ten were relevant. But of those ten, Cottle-Banks was only able to point to two phone calls in which Cox’s customer service representatives failed to provide information regarding monthly equipment charges. Meanwhile, Cox presented seven examples of customer service representatives disclosing the monthly fees for its set-top converter boxes:

Based on the sampling of call recordings, significantly more CSRs disclosed equipment and its fees for set-top boxes than those that did not. Plaintiff’s evidence merely establishes that certain CSRs deviate from Defendant’s uniform policy and practice of informing customers of monthly charges. Plaintiff’s evidence does not establish a uniform policy.

That evidence led the judge to conclude that a class-action would be inappropriate:

Absent a uniform policy, the only means to determine whether customers were informed of the monthly charges and accepted them would necessarily involve a customer-by-customer inquiry. This would create a scenario of thousands of mini-trials which would not conserve judicial resources.

Turning to Cottle-Banks’s motion for spoliation sanctions, the recorded customer phone calls again came into play. The motion was based on Cox’s policy of not permanently preserving its recorded customer phone calls. A day’s worth of recordings from California would typically take up 20 gigabytes of storage space, and because of limited server storage, Cox employed a system that resulted in recordings being overwritten every 45 days. Cox also backed up its servers in case of emergency, keeping the backups for 30 days. It was not until June of 2011 when Cox maintained backup tapes of its call recordings because of a litigation hold.

Cottle-Banks made a request for production of all customer phone recordings, including her own from 2008, but Cox countered that her recording, because of its preservation system, had been overwritten even before her lawsuit was filed. But even after Cox produced 200 recordings, and then 80 more, Cottle-Banks moved to have Cox produce 400 beyond that, eventually withdrawing that request and moving for spoliation sanctions.

The court considered Cottle-Banks’ spoliation motion and request for an adverse inference under a three-part test that originated from the Second Circuit but has since been adopted by the district courts in California:

(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed;

(2) that the records were destroyed ‘with a culpable state of mind’; and

(3) that the evidence was ‘relevant’ to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.

The court found in favor of Cottle-Banks on Prongs 1 and 2. Cox’s duty to preserve its call recordings arose in September 2010, and since most of its customers ordered cable service over the phone, it was reasonably foreseeable that those telephone recordings would become relevant. Moreover, the court found the “culpable state of mind” satisfied by Cox’s negligence in preserving its recordings. For that prong, bad faith spoliation demonstrates relevance of the spoliated evidence. But for negligently spoliated evidence, the party seeking sanctions must prove its relevance.

And that is where Cottle-Banks came up short. On Prong 3, the court found for Cox because there was no evidence to suggest that the deleted call recordings would be supportive of the plaintiff’s claim. As a result, Cottle-Banks failed to meet all three prongs of the test, and contrary to Meat Loaf’s passionate appeal, two out of three ain’t good enough for spoliation sanctions.

By IT-Lex Intern Joey Chindamo (LinkedIn | Website)