Philip Charvat v. Carnival Corporation – Spoliation Sanctions Denied

Charvat v. Valente, et al.

2015 WL 4037776 (N.D. Ill. July 1, 2015)

In July 2012, plaintiff Philip Charvat, on behalf of himself and others, alleged defendant Carnival Corporation withheld documents and engaged in document spoliation after plaintiff sought an order compelling defendant to produce specific documents. Sixteen documents were listed by defendant on a privilege log by Carnival, however two of the documents were inadvertently listed twice.

The case stemmed from four complaints received by Carnival Corporation from consumers. These complaints asserted Resort Marketing Group misrepresented its relationship with Carnival, engaging in prohibited telemarketing activities. As Carnival investigated these allegations, outside counsel was retained by the company to determine how to best prevent RMG from continuing to make misrepresentations regarding its relationship with Carnival.

Certain files were deleted from Carnival employee’s computers after the employees left Carnival, which led to the request by plaintiff for spoliation sanctions. Carnival contended the documents in question related to the legal advice sought by Carnival, therefore were properly withheld as privileged. Carnival also contended the documents were protected by the work product doctrine which protects documents prepared in anticipation of litigation. The plaintiff contended work product doctrine did not apply, since the documents in question were prepared in anticipation of separate litigation.

The purpose of attorney-client privilege is to promote open communication between attorneys and their clients, however since that privilege has the effect of withholding certain information, it should be applied only when necessary. The Illinois Supreme Court, in Dexia Credit Local v. Rogan, stated the exception is the attorney-client privilege, not the duty to disclose, therefore privilege should be confined within the narrowest possible limits. Fisher v. United States found that “because the privilege is in derogation of the search for truth, it is construed narrowly.”

The spoliation sanctions requested by plaintiff claimed a failure to preserve relevant evidence, however Carnival claimed the computer files belonging to two employees were deleted 30 days following termination of employment as per routine business practices. In Hobley v. Burge, the court found work product protection “endures after termination of the proceedings for which the documents were created”, and, in Lawrence E. Jaffe Pension Plan v. Household Int’l, Inc., the court found the work product doctrine was best served when extended to subsequent litigation.

Decision

The Court concluded plaintiff provided no evidence Carnival acted in bad faith in the destruction of documents, i.e., the documents were not destroyed for the purpose of hiding adverse information. Plaintiff conceded four of the withheld documents were privileged and the Court found that eight of the documents were privileged, either by virtue of attorney-client privilege or work-product. Therefore, documents 1-12 were not required to be submitted to plaintiff.

Two of the documents, numbers 13 and 14, were ordered to be produced, as the Court found Carnival failed to meet its burden to establish those documents were created in anticipation of imminent litigation. The two documents were e-mail communications between a Carnival paralegal and the director of worldwide sales for Carnival which summarized conversations the two Carnival employees had with RMG account manager. The Court felt the facts described in these two documents were not related to information sought by outside counsel. Thus, the plaintiff’s motion to compel production of documents was granted in part and denied in part, and plaintiff’s request for sanctions was denied.

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