Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_00-cv-00113/USCOURTS-caed-2_00-cv-00113-23/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:9607 Real Property Tort to Land

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1

 Also pending before the court are ten motions for summary

judgment. These motions are set for oral argument on September 1,

2006. The court will issue a separate order as to those motions

sometime after the hearing. 

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

AMERIPRIDE SERVICES, INC.,

A Delaware corporation,

NO. CIV. S-00-113 LKK/JFM

Plaintiff,

v.

VALLEY INDUSTRIAL SERVICE, INC.,

a former California corporation,

et al.,

Defendants.

 /

AND CONSOLIDATED ACTION AND

CROSS- AND COUNTER-CLAIMS.

 /

Pending before the court is plaintiff and counter-defendant

Huhtamaki Foodservice Inc.’s (“Huhtamaki”) motion for sanctions.1

Huhtamaki alleges that defendant and counter-claimant, AmeriPride

Services Inc. (“AmeriPride”) intentionally destroyed crucial

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2

 Huhtamaki’s complaint raises seven causes of action: (1)

cost recovery under CERCLA; (2) cost recovery under the California

Carpenter Presley-Tanner Hazardous Substances Account Act; (3)

public nuisance; (4) private nuisance; (5) trespass; (6)

2

evidence relating to Huhtamaki’s claim that hazardous substances

were being released from AmeriPride’s wastewater system. Huhtamaki

requests that the court enter default judgment against AmeriPride

on the issue of liability under the Comprehensive Environmental

Response, Compensation & Liability Act (“CERCLA”) and Huhtamaki’s

tort claims as well as dismissing AmeriPride’s counterclaims

against Huhtamaki, or, in the alternative, award any sanction that

the court deems appropriate. The court decides the matter based

on the parties’ papers and after oral argument. 

I. 

BACKGROUND FACTS 

A. BRIEF OVERVIEW OF THE HUHTAMAKI v. AMERIPRIDE CASE

This case involves the migration of contaminated groundwater

from an industrial laundry facility in Sacramento that is currently

owned by AmeriPride to neighboring properties, including property

owned by Huhtamaki. The hazardous substance at issue is

perchloroethene, also known as “perc” or “PCE.” Before the

groundwater was contaminated, Huhtamaki used the groundwater

(pumped through two wells located on Huhtamaki’s property) to

manufacture paper plates. Huhtamaki seeks an order requiring

AmeriPride to remove the contamination and to compensate Huhtamaki

for its response costs, including the cost of procuring clean

replacement water. Huhtamaki also seeks damages.2 

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negligence; and (7) declaratory judgment. 

3 AmeriPride asserts that the general schedule was “contained

in a public documents [sic] that had been reviewed and received by

Huhtamaki.” AmeriPride’s Opp’n at 3-4. Huhtamaki denies having

learned of the fact through public record and AmeriPride fails to

provide any evidence to the contrary. 

3

AmeriPride brought three counterclaims against Huhtamaki: (1)

contribution under CERCLA; (2) negligence; and (3) equitable

indemnity. 

B. FACTS RELEVANT TO THE MOTION FOR SANCTIONS 

Huhtamaki maintains that the day before it was to inspect the

AmeriPride plant, AmeriPride began construction of a new on-site

groundwater treatment system. The court reviews the key facts in

chronological order. 

1. Construction Schedule

In May of 2003, the Central Valley Regional Water Control

Board (“Regional Board”) ordered that a new groundwater treatment

system be installed at the AmeriPride facility. The new

groundwater system was one of several provisions in the Cleanup and

Abatement order that governed the AmeriPride facility. Over the

course of several negotiations, the time-table to begin

construction was set for the fall of 2005. Cleanup and Abatement

Order, Ex. B to Lee Smith Dec. in Supp. of AmeriPride’s Opp’n to

Mot. for Sanctions (“Smith Dec.”).3

On September 19, 2005, AmeriPride’s hired consultant, Delta

Environmental, informed the Regional Board that construction would

begin on October 17, 2005. Email from Jeffery Thuma to Water

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4

 On October 20, 2005, Mission Linen Supply also objected to

the inspection because they failed to get notice until the 18th of

October. Mission Linen Objections, Ex. D of Smith Dec. 

4

Board, Ex. C to Smith Dec.

2. Huhtamaki’s Rule 34 Notice of Inspection

On October 12, 2005, Huhtamaki served on AmeriPride a Notice

of Inspection pursuant to Fed. R. Civ. P. 34. The notice requested

an on-site inspection of AmeriPride’s facility beginning on October

18, 2005. Huhtamaki Rule 34 Notice, Ex. D to Smith Dec. The

request stated that Huhtamaki sought to “examine the location of

releases of hazardous substances from the AmeriPride facility and

its infrastructure, hazardous materials handling equipment or

areas, and wastewater treatment equipment and/or areas.” Id. The

request specified forty-two (42) separate areas, including: (8)

wastewater treatment system; (10) any discharge to sewer lateral

and discharge points; (11) lateral to main, if on AmeriPride

property; (16) concrete wash pad to east of building; (25) sewer

compliance sampling point; and (28) all sewer floor drains. Id.

All these identified areas are located in the southeast corner of

the AmeriPride facility. 

 Around this same time, AmeriPride objected to the inspection,

stating that there was too little time to allow four parties and

their respective consultants to schedule the inspection for October

18. AmeriPride Opp’n at 4.4 

No site inspection occurred on October 18, 2005.

////

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3. Commencement of Construction & Removal of Soil and Pipes

On October 17, 2005, the day before Huhtamaki asked to inspect

the facility, construction began on the new groundwater treatment

system. Jeff Thuma Dec., Ex. E of Stephen J. Darmody Dec. in Supp.

of Mot. for Sanctions (“Darmody Dec.”). Construction was ongoing

from this date until October 30th. Craig Johnson Dec., Ex. F to

Smith Dec. 

The construction took place outside of the facility in the

southeast corner of the property. The construction involved the

removal of the concrete wash pad and “associated soils at the front

of the building.” Jeffery Thuma Dep., Ex. E to Darmody Dec.

Approximately 110 tons of soil was taken from the area.

Huhtamaki’s Mot. for Sanctions at 4, citing Don Tilford Excavation

invoices, Ex. I to Darmody Dec. 

During the construction process, two wastewater pipes were

broken and the broken portions of the pipes were ultimately removed

and discarded. The soil around the broken pipes was also removed.

The first break occurred on October 19, 2005. A drain pipe 12

inches in diameter that ran from the plant to the sump was

accidentally broken during excavation around the pad area.

Although both ends of the pipe were capped, the pipe spilled about

50 gallons of wastewater for several minutes into the excavated

area. Johnson Dec., Ex. F of Smith Dec. The released water was

later pumped back into the sump. Id. The broken pipe was removed

and discarded. Id. It is important to note that the broken and

removed section of pipe remained at the AmeriPride facility until

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6

January 17, 2006, when it was discarded. Thuma Dec., Ex. E of

Darmody Dec. 

The second pipe break occurred on October 24, 2005. While

digging a trench as part of the new groundwater system, the

subcontractors damaged the sewage pipe that ran from the sump to

the main sewer line. Johnson Dec., Ex. F and Field Notes, Ex. G

of Smith Dec. Although a small hole was created at the top of the

pipe, no water ran out. The contractors waited until the plant

stopped operating and replaced a 16-inch portion of the pipe.

During repairs, a “cupful” of water was spilled and returned to the

sump. Id. The 16 inch portion of broken pipe was removed and

discarded at an unknown time. 

No samples were taken of the materials inside either of the

removed wastewater pipes prior to their disposal. Thuma Dep., Ex.

H to Darmody Dec. 

The 110 tons of soil was removed from the AmeriPride site

between October 19, 2006 and October 29, 2006. This soil was

randomly sampled to determine “whether, in the aggregate, the soil

needed to be disposed of as hazardous waste under the Solid Waste

Disposal Guidelines.” The soil was then disposed of in a landfill.

Thuma Dec., Ex. E to Darmody Dec. 

4. Communication Between Huhtamaki and AmeriPride

On October 19, 2005, one of Huhtamaki’s plant managers

observed the construction and removal of soil at AmeriPride’s

facility. Dec. of Craig Komulainen, Ex. G of Darmody Dec. On

October 25, 2005, counsel for Huhtamaki contacted counsel for

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AmeriPride concerning the on-site construction. On or about the

same date, counsel for AmeriPride in turn contacted the

AmeriPride facility and “for the first time discovered that

construction had actually begun and was ongoing.” AmeriPride’s

counsel then instructed AmeriPride’s consultants to ensure that

their subcontractor test any soil that was excavated at the site.

Smith Dec ¶ 14. 

On October 26, 2005, AmeriPride’s counsel transmitted the

construction schedule to Huhtamaki’s counsel to indicate to him

that the construction had been scheduled for October 17, 2005

since September of that year. The same letter noted that

Huhtamaki had not yet attempted to reschedule the inspection.

October 26, 2005 Letter from Smith to Darmody, Ex. J of Smith

Dec. 

On October 28, 2005, Huhtamaki’s counsel transmitted a

letter to AmeriPride. The letter expressed concern that the

excavation was occurring in the exact areas identified in the

Rule 34 notice. The letter stated: “Huhtamaki and its experts

had intended to analyze the concentration of contaminants in

these areas to pinpoint the sources of contaminants released from

the AmeriPride facility. Now that may be impossible.” Letter

from Darmody to Smith, Ex. D of Darmody Dec. The letter went on:

“Huhtamaki is quite concerned that the actions taking place on

the AmeriPride facility may be destroying evidence that is

relevant to this action.” Id. 

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8

On November 4, 2005, AmeriPride’s counsel responded to the

October 28, 2005 letter, indicating that additional sampling of

the soil that was removed during construction would take place.

November 4, 2005 Letter from Smith to Darmody, Ex. L of Smith

Dec. The letter also stated that “no material evidence has been

lost or will be lost.” Id. 

5. Subsequent Rule 34 Notices Filed by Huhtamaki

On December 16, 2005, Huhtamaki submitted a revised Rule 34

Notice to inspect AmeriPride’s facility on January 13, 2006.

Revised Notice of Rule 34 Inspection, Ex. J to Darmody Dec. The

only change from the original request was the addition of the

following language to item 11 of the specific items or areas

Huhtamaki sought to inspect: “. . . and all plumbing and water

supply infrastructure.” Id. AmeriPride claims this revised

request attempted to “retroactively include the areas of

construction, absent from Huhtamaki’s original Rule 34

inspection.” Opp’n at 6.

On December 28, 2005, AmeriPride again filed objections to

this revised request. Among other things, AmeriPride claimed

that the descriptions of the areas that Huhtamaki sought to

inspect were too broad. With respect to the request to view the

concrete wash pad, AmeriPride stated that “the concrete in this

area was replaced during the scheduled installation of the onsite

treatment center.” AmeriPride’s Objections dated Dec. 27, 2005,

Ex. K to Darmondy Dec. 

////

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9

On January 6, 2006, Huhtamaki served AmeriPride with a final

request for inspection. This notice was one page and set the

inspection date for February 11, 2006. Revised Rule 34 Notice,

Ex. O of Smith Dec. On February 6, 2006, Huhtamaki provided

AmeriPride with a work plan, that included the testing protocol

and indicated that the inspection might take two days. Work

Outline, Ex. P of Smith Dec.

 6. The Rule 34 Inspection & Beyond

On February 11 and 12, 2006, Huhtamaki conducted its

inspection of AmeriPride’s facility. During the inspection,

Huhtamaki observed newly paved areas in AmeriPride’s parking lot

and videotaped the inside of AmeriPride’s wastewater pipes,

“discovering for the first time that portions of the pipes had

been replaced.” Mot. for Sanctions at 6. 

On February 20, 2006, Huhtamaki requested production of the

missing pipes and soil that AmeriPride removed from its facility.

Request for Production of Evidence, Ex. N of Darmody Dec.

On March 20, 2006, AmeriPride filed its response to

Huhtamaki’s request for production, stating, inter alia, that it

no longer had control over the items in question. AmeriPride’s

Objections, Ex. O of Darmody Dec. 

On May 15, 2006, the assigned magistrate judge ordered that

by the end of the day AmeriPride produce the requested items or

to have a person with authority at AmeriPride file a declaration

stating that the items sought were not in AmeriPride’s custody

or subject to its control. May 15, 2006 Order, Ex. Q to Darmody

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5

 The court notes that sanctions pursuant to Rule 37 are not

applicable in this case. Generally, discovery violations are

properly remedied pursuant to Rule 37 of the Federal Rules of Civil

Procedure. Rule 37 permits the district court, in its discretion,

to enter a default judgment against a party who fails to comply

with an order compelling discovery. Fed. R. Civ. P. 37(b)(2)(C);

Computer Task Group, Inc. v. Brotby, 364 F.3d 1112, 1115 (9th Cir.

2004). In the case at bar, however, there was no outstanding court

order which AmeriPride violated. Therefore, Rule 37 is

inapplicable. See, e.g., Unigard Sec. Ins. Co. v. Lakewood

Engineering & Mfg. Corp., 982 F.2d 363 (9th Cir. 1992)(Rule 37

sanctions do not apply in cases where party's alleged

discovery-related misconduct is not encompassed by language of

rule.)

10

Dec. 

On May 15, 2006, AmeriPride filed the declaration of Jeffery

Thuma, which stated that the items were not under AmeriPride’s

custody or subject to its control. Thuma Dec., Ex. E to Darmody

Dec.

III.

STANDARD FOR THE IMPOSITION OF SANCTIONS

Courts are invested with inherent powers that are “governed

not by rule or statute but by the control necessarily vested in

courts to manage their own affairs so as to achieve the orderly

and expeditious disposition of cases.” Chambers v. NASCO, Inc.,

501 U.S. 32, 43 (1991). As part of its powers, courts have

“broad discretion to make discovery and evidentiary rulings

conducive to the conduct of a fair and orderly trial.” Campbell

Indus. v. M/V Gemini, 619 F.2d 24, 27 (9th Cir. 1980) (citations

omitted). This includes sanctioning parties for spoliation or

destruction of evidence. Unigard Sec. Ins. Co. v. Lakewood

Engineering & Mfg. Corp., 982 F.2d 363, 368 (9th Cir. 1992).5 

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11

A party's destruction of evidence need not be in “bad faith”

to warrant the imposition of sanctions. Glover v. BIC Corp., 6

F.3d 1318, 1329 (9th Cir. 1993); Unigard, 982 F.2d at 368 n. 2.

The Court may impose sanctions against a party that merely had

notice that the destroyed evidence was potentially relevant to

litigation. Glover, 6 F.3d at 1329; Akonia v. United States, 938

F.2d 158, 161 (9th Cir. 1991), cert. denied, 503 U.S. 962 (1992).

Indeed, as soon as a potential claim is identified, a

litigant is under a duty to preserve evidence which it knows or

reasonably should know is relevant to the action. National Ass'n

of Radiation Survivors v. Turnage, 115 F.R.D. 543, 556-57 (N.D.

Cal. 1987).

A court may sanction parties responsible for spoliation of

evidence by instructing the jury that it may draw an inference

adverse against the party or witness responsible for destroying

the evidence. See Glover, 6 F.3d at 1329; Akiona, 938 F.2d at

161. As our sister court has held, “[w]here one party

wrongfully denies another the evidence necessary to establish a

fact in dispute, the court must draw the strongest allowable

inferences in favor of the aggrieved party.” National Ass'n of

Radiation Survivors, 115 F.R.D. 543, 557 (N.D. Cal. 1987).

The adverse inference is based on two rationales, one

evidentiary and one prophylactic: 

The evidentiary rationale is nothing more than the common

sense observation that a party who has notice that a

document is relevant to litigation and who proceeds to

destroy the document is more likely to have been threatened

by the document than is a party in the same position who

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6

 Although not explicitly adopted by the Ninth Circuit,

several unpublished cases from the Northern and Central Districts

have concluded that a moving party seeking an adverse inference

must establish that: (1) the party with control over the evidence

had an obligation to preserve it at the time it was destroyed; (2)

the party that destroyed the evidence had a sufficiently culpable

state of mind; and (3) some evidence suggests that a document or

documents relevant to substantiating the claim of the party seeking

sanctions would have been included among the destroyed files. See

Housing Rights Center v. Sterling 2005 WL 3320739, *7 (C.D. Cal.

2005); Hamilton v. Signature Flight Support Corp., 2005 WL 3481423

(N.D. Cal. 2005)(citing Residential Funding Corp. v. DeGeorge Fin.

Corp., 306 F.3d 99, 105 (2d Cir. 2002)). 

12

does not destroy the document . . . . The other rationale

for the inference has to do with its prophylactic and

punitive effects. Allowing the trier of fact to draw the

inference presumably deters parties from destroying

relevant evidence before it can be introduced at trial.

Akiona, 938 F.2d at 161 (quoting Nation-Wide Check Corp. v.

Forest Hills Distribs., Inc., 692 F.2d 214, 218 (1st Cir.

1982)).6

IV.

ANALYSIS

For the reasons discussed herein, the court concludes that

evidence was destroyed by AmeriPride and that sanctions are

warranted. 

A. DESTRUCTION OF EVIDENCE 

1. AmeriPride’s Duty to Preserve The Evidence

Neither party disputes that over 110 tons of soil and two

pieces of pipe were removed from the AmeriPride facility and

discarded. The court must determine if AmeriPride had a duty to

preserve this evidence. 

As our sister court remarked, 

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7

 See also Graham v. Teledyne-Continental Motors, 805 F.2d

1386, 1390 n. 9 (9th Cir. 1986)("sanctions available to punish

those who alter or destroy evidence"); Struthers Patent Corp. v.

Nestle Co., 558 F.Supp. 747, 765-66 (D.N.J. 1981) (the destruction

of documents which the party knew or should have known would be

relevant to a lawsuit soon to be filed is sanctionable).

13

Sanctions may be imposed against a litigant who is on

notice thatdocuments and information in its possession

are relevant to litigation, or potential litigation,

or are reasonably calculated to lead to the discovery

of admissible evidence, and destroys such documents

and information. While a litigant is under no duty to

keep or retain every document in its possession once

a complaint is filed, it is under a duty to preserve

what it knows, or reasonably should know, is relevant

in the action, is reasonably calculated to lead to the

discovery of admissible evidence, is reasonably likely

to be requested during discovery, and/or is the

subject of a pending discovery request.

Wm. T. Thompson Co. v. General Nutrition Corp., 593 F.Supp. 1443,

1455 (C.D. Cal. 1984).7

In the case at bar, AmeriPride was well aware of the nature

of Huhtamaki’s claim and should have known that the evidence

removed from the facility was relevant to the pending action.

To compound the matter, AmeriPride was explicitly given notice

that Huhtamaki sought to inspect the very evidence that was

removed and discarded. 

As both parties know well, one of the key issues in the

pending case is whether AmeriPride discharged PCE into the soil.

Huhtamaki’s complaint specifically alleges that “[o]perations at

the AmeriPride Site have resulted in the release of contaminants

into the soil and groundwater . . . [these] operations have

contaminated the groundwater beneath the Huhtamaki facility with

PCE and its degradation compounds.” Complaint at ¶¶ 6 & 7. 

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 AmeriPride claims that the PCE detected in both the soil and

groundwater was caused by previous owners of the facility and

that AmeriPride did nothing to contribute to the contamination.

See AmeriPride’s SUF 1 & 2 in Supp. of its Motion for Summary

Judgment on Huhtamaki’s State Law Claims. AmeriPride maintains

that there is no evidence that the pipes and wastewater system

leaked after 1983 (the year AmeriPride took ownership of the

facility). See, e.g., AmeriPride’s Opp’n to Huhtamaki’s Mot. for

Summ. J. for Cost Recovery Under Federal and State Law, at 7:17-

8:16. (“Huhtamaki has not cited any evidence that AmeriPride’s

discharges to the sanitary sewer have contaminated the

property.”) 

The removed evidence would have either revealed that there

were no leaks and thus, no on-going contamination (which is what

AmeriPride claims); or that there were leaks and that there was

on-going contamination (which is what Huhtamamki claims). For

these reasons, the removed soil and pipes were clearly relevant

to the pending action. 

This dispute – whether the PCE-contaminated wastewater

leaked through the pipes at the AmeriPride facility – centers on

the exact area where the October 2005 construction occurred and

where 110 tons of soil and two pipes were removed. AmeriPride

should have been aware that the removed soil and pipes were

important and relevant to the issues at play in the pending case.

Even if AmeriPride was not independently aware of the

importance of the soil and pipes in the pending case (a somewhat

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implausible conclusion), Huhtamaki provided ample notice that it

wanted to test and inspect the exact area where the soil and

pipes were removed. Thus, not only should AmeriPride have known

to preserve this evidence, AmeriPride did know that the evidence

was important to Huhtamaki. 

On October 12, 2005, Huhtamaki served a Notice of Inspection

pursuant to Rule 34 on AmeriPride. The notice stated that

Huhtamaki sought to “examine the location of releases of

hazardous substances from the AmeriPride Facility, as well as the

structure of the AmeriPride Facility and its infrastructure,

hazardous materials handling equipment or areas, and wastewater

treatment equipment and/or areas.” Huhtamaki Rule 34 Notice, Ex.

C, Darmody Dec. Among other things, the Notice specifically

requested inspection of the wastewater treatment system; any

discharge to sewer lateral and discharge points; lateral to main,

if on AmeriPride property; concrete wash pad to east of building;

drainage pipe to southwest of building from drop inlet to

drainage ditch; sewer compliance sampling point; and all sewer

floor drains. The Notice requested that the inspection occur on

October 18, 2005. 

Although the court notes that neither party explained the

meaning of some of these terms, from what the court can decipher,

several items mentioned in the Rule 34 notice were either removed

or altered during the October construction. The concrete pad

which was identified in the Rule 34 notice was removed during

construction, as was soil surrounding the “wastewater treatment”

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area. Moreover, a part of the sewer pipe that ran from the

lateral to main was removed. These removals occurred after

Huhtamaki served its Rule 34 notice that specifically identified

these areas for inspection. 

The first Rule 34 Notice was not the only time that

AmeriPride was made aware of Huhtamaki’s intent to inspect the

area where the soil and pipes were removed. On October 28, 2006,

while construction was ongoing, Huhtamaki wrote to AmeriPride’s

counsel expressing concern that “the actions taking place on the

AmeriPride facility may be destroying evidence that is relevant

to this action.” Oct. 28 Letter from Darmody to Smith, Ex. F of

Darmody Dec. Counsel for Huhtamaki concluded the letter by

stating, “please let me know immediately what actions AmeriPride

has taken to preserve the physical evidence Huhtamaki notified

you it intends to inspect.” Id. As noted above, this letter was

written while construction was ongoing and at a time when

AmeriPride could have taken steps to preserve the removed pipes

and soil. 

Counsel for AmeriPride responded to Huhtamaki’s letter on

November 4 and stated that “no material evidence has been or will

be lost.” November 4, 2005 Letter from Smith to Darmody, Ex. N

of Smith Dec. 

AmeriPride was once again given notice of the importance of

this evidence when, on December 16, 2005, Huhtamaki filed a

revised Rule 34 notice in which it specifically sought to inspect

“all plumbing and water supply infrastructure.” Revised Notice

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of Rule 34 Inspection, Ex. J to Darmody Dec. Despite this

notice, AmeriPride failed again to take any steps to preserve the

pipes and soil that was removed from the site. As mentioned

previously, one of the two removed pipes remained on AmeriPride’s

property until January 16, 2006, when it was discarded. 

2. AmeriPride’s Failure To Preserve the Evidence in

Question 

On October 17, 2005, the day before Huhtamaki had asked to

inspect the facility, construction began at the AmeriPride site.

On October 25, after learning of the construction, Huhtamaki’s

counsel contacted counsel for AmeriPride. Counsel for AmeriPride

“in turn, contacted the AmeriPride plant and for the first time

discovered that construction had actually begun and was ongoing.

Counsel for AmeriPride then instructed the consultants to ensure

that their subcontractors tested any soil that was excavated at

the site.” AmeriPride Opp’n at 5. Despite this instruction,

over 110 tons of soil and two pipes were removed and discarded.

AmeriPride’s counsel clearly failed to preserve evidence

that he knew or should have known was relevant to the immediate

litigation. See National Ass'n of Radiation Survivors v.

Turnage, 115 F.R.D. 543, 556-57 (N.D. Cal. 1987). AmeriPride’s

actions are unacceptable.

The court rejects AmeriPride’s contention that the

litigation counsel was unaware of the construction schedule and

therefore had no way of knowing that the destruction of evidence

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8

 The court notes that this contention is also somewhat

disingenuous. AmeriPride argues that the construction schedule was

public knowledge, and thus Huhtamaki should have known about it,

and yet, AmeriPride’s own counsel apparently did not even know when

the construction began. Clearly, the construction start date was

not as well publicized as AmeriPride maintains. 

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was occurring.8 This is no excuse. Counsel should have been in

contact with his client. As one district court remarked, the

“obligation [to preserve evidence runs] first to counsel, who

ha[s] a duty to advise his [or her] client of the type of

information potentially relevant to the lawsuit and of the

necessity of preventing its destruction.” Donato v. Fitzgibbons,

172 F.R.D. 75, 79 (S.D.N.Y. 1997). Counsel for AmeriPride should

have known when the construction was to begin, especially in

light of Huhtamaki’s request to conduct a site visit on the day

after construction was set to begin. 

It is evident to the court that AmeriPride failed to take

appropriate action to preserve the evidence in question. Upon

receipt of Huhtamaki’s Rule 34 notice, the October 28 Letter and

the Revised Rule 34 notice, AmeriPride should have taken steps

to preserve the evidence at issue. Instead, time passed and the

evidence was removed and discarded. As previously noted, the

last of the soil was not removed until October 29, 2005 and one

of the two broken pipes remained on AmeriPride’s property until

January 17, 2006. 

Moreover, AmeriPride appears to admit that evidence

requested by Huhtamaki was removed and discarded. On March 20,

2006, Huhtamaki filed a second request for production of

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documents. Among other things, Huhtamaki requested any and all

soil removed from the AmeriPride facility on or after October 12,

2005. Huhtamaki also requested any and all wastewater pipes

removed from the facility. AmeriPride responded and stated that

Huhtamaki’s request “calls for the production of materials which

plaintiff is well aware have been already removed from the site.”

AmeriPride’s Response to Huhtamaki’s Request for Production, Ex.

O to Darmody Dec. In short, AmeriPride destroyed evidence

clearly relevant to the pending case. 

3. Prejudice to Huhtamaki

There are numerous ways in which Huhtamaki was prejudiced

by the destruction of the evidence in question. Most obviously,

AmeriPride destroyed evidence which may have revealed that PCE

contaminated wastewater was released into the soil through

AmeriPride’s wastewater system and pipes. Huhtamaki’s Mot. For

Sanctions at 13. AmeriPride’s own environmental consultant

concedes that the highest concentrations of contaminates released

from sewer leaks are likely to be observed in a “linear pattern

along the sewer line.” Thuma Dep., Ex. H to Darmody Dec. Thus,

the soil that was adjacent to the pipes and wash pad may have

shown this “linear pattern.” 

AmeriPride, meanwhile, is using the lack of evidence to its

advantage and to Huhtamaki’s disadvantage. For example, in

AmeriPride’s Opposition to Huhtamaki’s Motion for Summary

Judgment for Cost Recovery Under Federal and State Law,

AmeriPride states “Huhtamaki has not cited any evidence that

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AmeriPride’s discharges to the sanitary sewer have contaminated

the property.” Opp’n to Huhtamaki’s Mot. for Summ. J. for Cost

Recovery Under Federal and State Law at 7:17-8:16. Similarly,

in AmeriPride’s Opposition to Huhtamaki’s Motion for Summary

judgment on Tort Causes of Action, AmeriPride states: “The

evidence is disputed as to whether any activities that occurred

after 1983 at the site contributed to the groundwater

contamination.” AmeriPride’s Opp’n to Huhtamaki’s Mot. for

Summ. J. on Tort Causes of Action at 11:11-18. 

In short, AmeriPride is using the lack of evidence as proof

that a disputed fact remains regarding AmeriPride’s contribution

to the groundwater contamination. Because of the missing

evidence, it is impossible for Huhtamaki to determine with any

degree of certainty whether the lack of evidence means that there

were no leaks in the pipes or if the evidence was simply

destroyed. 

In its defense, AmeriPride lists several reasons why

Huhtamaki is not prejudiced by the destruction of evidence. 

These arguments are unavailing.

First, AmeriPride contends that the “soils tested were

subjected to the same testing that Huhtamaki indicated in its

outline for the site inspection.” AmeriPride Opp’n at 11. This

argument is without merit. There is no evidence that the testing

performed on the soil was similar to the testing Huhtamaki would

have performed. Although AmeriPride attaches as Exhibit H the

results of the tested soil, this document is incomprehensible to

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a non-scientist. What the court can decipher, however, is that

the removed soil was tested in the aggregate and at random. In

other words, the soil that was directly adjacent to pipes, the

wash pad, and close to where the spills occurred was not

segregated from the rest of the soil and specially tested. See

Thuma Dec., Ex. E to Darmody Dep.; AmeriPride Documents, Ex. I

to Darmody Dec.

Similarly, the contention that the 12-inch wide pipe had not

been in use is also without merit. It is undisputed that when

contractors broke the pipe, wastewater came out of the pipe.

Clearly, there was liquid in the pipe. Moreover, there is simply

no evidence before the court as to whether or not the pipe was

in use.

The court further agrees with Huhtamaki that although the

removal of the pipes was fully documented and photographed,

“[s]cientific testing cannot be conducted on field notes.

Samples cannot be taken from photographs.” Huhtamaki’s Reply at

8. 

Finally, AmeriPride also asserts that Huhtamaki was provided

with a full opportunity to test anywhere on the facility on

February 11, and even if the pipes had not been removed, testing

the pipes would have been impossible since the pipes were

underground. Again, this argument is unavailing. First, when

Huhtamaki’s experts inspected the property, they were able to

videotape the inside of the other pipes, so clearly, the fact

that pipes are underground does not preclude inspection. See

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9

 See also Residential Funding Corp. v. Degeorge Financial

Corp., 306 F.3d 99 (2nd Cir. 2002)(“Culpable state of mind” factor

required for adverse inference instruction based on breach of

discovery obligation is satisfied by showing that destruction of

or failure to produce evidence was knowing or negligent, a showing

of bad faith or gross negligence is not required).

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Mot. for Sanctions at 6. Second, although Huhtamaki extensively

tested the soil and pipes that remained at the facility on

February 11, the fact remains that parts of two pipes and 110

tons of soil were not available to be tested and inspected. 

For these reasons, Huhtamaki clearly suffered prejudice from

the destruction of the evidence at issue. The court turns next

to the question of sanctions.

B. SANCTION: ADVERSE INFERENCE 

In a case such as this, the court may permit a jury to draw

an adverse inference from the destruction or spoliation of

evidence against the party or witness responsible for that

behavior. Glover, 6 F.3d at 1329; Akiona, 938 F.2d at 161. 

An adverse inference may be appropriate even absent “bad

faith” on the part of the party responsible for destroying the

evidence. “Surely a finding of bad faith will suffice, but so

will simple notice of ‘potential relevance to the litigation.’”

Glover, 6 F.3d at 1329 (citing Akiona, 938 F.2d at 161); See also

B.K.B. v. Maui Police Dept., 276 F.3d 1091, 1108 (9th Cir. 2002)

(bad faith does not require actual ill will; substantial and

prejudicial obduracy may constitute bad faith).9

AmeriPride, while perhaps not acting with ill-will, acted

with “substantial and prejudicial obduracy,” when it failed to

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take steps to preserve the soil and pipes in question, especially

in light of Huhtamaki’s Rule 34 Notices and subsequent letters.

B.K.B., 276 F.3d at 1108.

There are several ways that AmeriPride acted with

“substantial and prejudicial obduracy.” First, when AmeriPride

received Huhtamaki’s Rule 34 notice, it failed to alert Huhtamaki

that construction would begin the day before Huhtamaki sought to

inspect the facility. As discussed previously, this construction

took place in the exact areas Huhtamaki sought to inspect. 

Second, AmeriPride was completely unaware of construction

occurring at its own facility, construction which directly

impacted evidence in the pending litigation. Third, once

AmeriPride was alerted to the construction and the removal of

soil, it did little to preserve the evidence that was

specifically identified by Huhtamaki. 

The rationale on which the adverse inference principal is

based also lends support to imposing such a sanction in this

case. A party who is on notice that evidence is relevant and

then destroys that evidence is “more likely to have been

threatened” by that evidence. Akiona, 938 F.2d at 161. Here,

AmeriPride vehemently argues that it did not contribute to the

discharge of PCE into the soil. As Huhtamaki aptly points out,

“AmeriPride’s destruction of the pipes and adjacent soils has

conveniently made its claims that those particular wastewater

pipes were not leaking into the soils and were not the source of

the PCE contamination extraordinarily difficult to counter.” 

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10 The court notes that Huhtamaki’s motion for sanctions

focused primarily on imposing default judgment as a sanction. 

Where a dismissal or entry of default judgment is contemplated as

a sanction pursuant to the court's inherent authority, several

factors must be considered: (1) whether willfulness, bad faith, or

fault can be attributed to the offending party, (2) whether certain

extraordinary circumstances exist, (3) whether lesser sanctions

would be efficacious, (4) the relationship or nexus between the

misconduct and the matters in controversy in the case; and (5) the

prejudice to the party victim of the misconduct. Halaco v. Costle,

843 F. 2d 376, 380 (9th Cir. 1988). In the case at bar, several

of the Halaco factors weigh in favor of default judgment. However,

as discussed herein, lessor sanctions (such as drawing an adverse

inference) are just as efficacious and thus, default judgment is

not appropriate.

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Huhtamaki’s Reply at 8.

The other rationale, that an adverse inference acts as a

deterrent, is also relevant. In the case at bar, it is

imperative that AmeriPride fully understand and appreciate the

consequences of destroying evidence. Drawing an adverse

inference addresses this prophylactic rationale. 

In short, the court finds that drawing an adverse inference

against AmeriPride is an appropriate sanction.10 Specifically,

the court will instruct the jury that the removed pipes leaked

PCE-contaminated wastewater into the soil and groundwater and

that this contamination was a cause of the contamination on the

Huhtamaki property. AmeriPride will be prohibited from

presenting any evidence which denies that AmeriPride contributed

to the soil and groundwater contamination. 

////

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IV. 

CONCLUSION 

Huhtamaki’s motion for sanctions is GRANTED. The court

imposes sanctions as detailed in the order. 

All parties shall file supplemental briefs no longer than

ten (10) pages addressing how the adverse inference affects the

pending motions for summary judgment and for good faith

settlement. The supplemental briefs are due no later than August

15, 2006 at 10:00 a.m. 

IT IS SO ORDERED. 

DATED: August 8, 2006.

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