Ronnie Van Zant, Inc. v. Pyle, No. 17 Civ. 3360 (RWS), 2017 WL 3721777 (S.D.N.Y. Aug. 28, 2017)
In this case, the court imposed an adverse inference against certain defendants for their failure to preserve text messages in the possession of a non-party, where the court found that the defendants had control of the non-partyâ€™s text messages, citing the non-partyâ€™s close working relationship with the defendants, his prior participation in the litigation (e.g., by providing documents, etc.), and his financial interest in the at-issue film (and thus the outcome of the litigation).
This case arises from potentially well-known facts. In 1977, two members of the Southern rock band Lynyrd Skynyrd and several other passengers were tragically killed in a plane crash.Â In subsequent years, disagreement arose between a widow of one of the deceased and surviving band members regarding the use of the bandâ€™s name, resulting in the entry of a Consent Order which controlled the circumstances under which surviving band members could use the name Lynyrd Skynyrd, or the names and images or likenesses of the deceased, among other things.Â Artimus Pyle, the drummer for Lynyrd Skynyrd and a survivor of the 1977 crash was a signatory to the Consent Order (notably signing â€œunder protestâ€�).
In 2016, Defendant Cleopatra Records, through one of its affiliate divisions (both â€œCleopatraâ€�), decided to make a film about the crash. Jared Cohn was hired as the director and screenwriter.Â Cohn was paid by Cleopatra and reported to its founder, but was not an employee.Â In the course of his work on the film, Cohn worked closely with Artimus Pyle, relying substantially on phone calls and text messages to communicate.Â When Plaintiffs learned of the film, they sent a cease and desist letter.Â When they discovered many months later that Cleopatra had continued with production, they initiated the present action alleging violation of the Consent Order.
Weeks after Plaintiffs filed suit and following the end of filming of the disputed movie, Cohnâ€”a non-partyâ€” switched cell phone providers and acquired a new phone.Â â€œAlthough certain data on Cohnâ€™s old phone was backed-up, such as pictures, other data was not preserved, such as Cohnâ€™s text messages, including those sent and received from Pyle.â€�Â As a result, Plaintiffs sought an adverse inference sanction.
In response to Plaintiffsâ€™ motion, Cleopatra argued that it could not be sanctioned for a non-partyâ€™s actions and that the phone was not within its control. The court disagreed, reasoning that the â€œconcept of controlâ€�â€”pursuant to which documents are considered to be under a partyâ€™s control â€œif the party has the practical ability to obtain the documents from another, irrespective of his legal entitlementâ€�â€” â€œhas been construed broadly.â€�Â The court continued:
Here, while Cohn is a non-party, his text messages were, practically speaking, under Cleopatraâ€™s control. Cohn was contracted by Cleopatra to work on the Film, and the evidence has establishes [sic] that he worked closely with Cleopatra for over the past year. Over the course of the instant litigation, Cohn has participated by providing documents and took a deposition sought by Plaintiffs during discovery. As has been found relevant in other cases determining the relationship between a party and non-parties, Cohn also has a financial interest in the outcome of this litigation, since he is entitled to a percentage of the Filmâ€™s net receipts, which would be zero should Plaintiffs prevail. In sum, while determining practical control is not an exact science, â€œcommon senseâ€� indicates that Cohnâ€™s texts with Pyle were within Cleopatraâ€™s control, and in the face of pending litigation over Pyleâ€™s role in the Film, should have been preserved.
(Citations omitted.) The court went on to reject Cleopatraâ€™s arguments regarding the lack of a valid subpoena.
The court also considered the prejudice arising from the loss, accepting Plaintiffsâ€™ claim that they sought Pyleâ€™s text messages â€œto no availâ€� and reasoning that despite Cleopatraâ€™s production of other documents, â€œnone sp[oke] directly to an important piece of this puzzle that would have been covered by the texts: the quality of interaction between Pyle, the Consent Orderâ€™s signatory, and Cohn, the principal writer and singular director of the Film, a relationship that evidence established was principally developed through text messages.â€�Â Finally, the court considered Cohnâ€™s actions as to the lost text messages reasoning that â€œgetting a new phone after Plaintiffs brought the instant action and managing to back-up pictures but, somehow, not text messages,â€”evince the kind of deliberate behavior that sanctions are intended to prevent and weigh in favor of an adverse inference.â€�
Ultimately, the court concluded that an adverse inference would be presumed against the Cleopatra Defendants as to the missing text messages.
A full copy of the courtâ€™s opinion and order (ultimately resulting in a permanent injunction against the Cleopatra Defendants and an order that they pay reasonable attorneys fees and costs) is available here.