Opinion ID: 3034224
Heading Depth: 3
Heading Rank: 2

Heading: Damages Award for Failing to Preserve Records

Text: The district court awarded IPC $50,000 for G&T’s breach of its license by failing to preserve all of its records of Idaho potato sales and purchases. The court found the breach to be relatively serious because of IPC’s resulting discovery problems and the attendant discovery disputes involving the court. It did not explain how or why it chose the $50,000 figure. 6 G&T also argues that the $1 award is improper because IPC waived its right to require G&T to comply with its variety labeling rule. G&T points to an October 1997 letter that IPC wrote to G&T warning it against unlicensed use of IPC marks and against using unlicensed repackers and container manufacturers. In G&T’s view, by failing to mention that G&T was also required to follow other IPC rules as provided in its license, IPC waived the right to enforce the variety labeling rule against G&T. As IPC points out, G&T offers no authority for the proposition that warning a person about certain legal requirements under a license waives other legal requirements. G&T’s waiver argument therefore fails. IDAHO POTATO COMMISSION v. G&T TERMINAL 13937 G&T argues that the lack of record evidence of damage to IPC resulting from the breach renders the $50,000 an improper contract damages award. It also argues that the award is improper as beyond the scope of the relief sought by IPC. IPC counters that we can uphold the $50,000 award as a discovery sanction or as a civil penalty under Idaho Code § 22-1213, implicitly conceding the lack of support for a contract damages award. It goes on correctly to point out that the district court may award relief not prayed for under Federal Rule of Civil Procedure 54(c). Finally, it argues that we should remand to the district court for further explanation of the $50,000 award in the event that we decide not to affirm the award.
IPC first argues that we can uphold the $50,000 award as a discovery sanction based on G&T’s violation of its ongoing duty to preserve evidence. See Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d Cir. 2001) (observing that a district judge has discretion to impose an appropriate sanction when he or she has determined that a party on notice of its obligation to preserve evidence intentionally destroyed it). While G&T stipulated that it failed to preserve some of its records of sales and purchases of Idaho potatoes, the district court’s factual findings contain no indication that G&T intentionally destroyed records with knowledge that those records were relevant to this litigation. Cf. United States v. Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002) (holding that defendants did not engage in spoliation of evidence when records were intentionally destroyed in accordance with a document retention policy and state regulations before litigation commenced). Our review of the record does not reveal any evidence supporting the conclusion that G&T intentionally destroyed evidence and IPC points to none. The record is thus insufficient to allow us to affirm the award as a discovery sanction. 13938 IDAHO POTATO COMMISSION v. G&T TERMINAL
IPC also argues that we can affirm the award as a civil penalty under Idaho Code § 22-1213. As discussed above, § 221213 does not authorize a court to impose the civil penalties it creates. We therefore cannot affirm the award as a § 221213 civil penalty. [11] Because our review of the record reveals no basis upon which the district court could properly have imposed a damages award of $50,000, we decline IPC’s invitation to remand the award for further explanation. Accordingly, we reverse the $50,000 damage award.