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Eivaz v. Edwards

United States District Court, E.D. Wisconsin

September 13, 2016

RAMIN EIVAZ, Plaintiff,
MARK JONATHAN EDWARDS, et al, Defendants.


          William C. Griesbach, Chief Judge

         This case was dismissed in September 2014 based upon this court's ruling that the Plaintiff's conduct during the discovery process-failing to produce documents and leaving a deposition before it was finished-was unreasonable. On January 5, 2015, this court granted the Plaintiff's motion for reconsideration. In the January reconsideration order, I concluded that although Eivaz and his attorney acted improperly by terminating a deposition early and by failing to comply with discovery requests, dismissal was too harsh of a sanction. I reinstated the action but approved an award of attorney's fees of some $117, 000. In that order, I also noted that any further discovery violations would be grounds for dismissal. (ECF No. 98 at 11.) Unfortunately, that was not the end of the matter. The Defendants have now filed a second motion for sanctions, which is based on Eivaz' alleged duplicity and continued pattern of obstructive conduct. For the reasons given below, the motion will be granted and the case will be dismissed.

         In 2013 Red Dot requested production of all documents relating to Plaintiff's claim that he was entitled to more than a million dollars in compensation. Plaintiff responded by producing only 31 pages of documents, explaining that emails from the relevant period (2007-09) were lost due to two computer crashes he sustained. Plaintiff protested that he had conducted an exhaustive search for any other responsive documents, and testified in a deposition that his email hosting provider, ReadyHosting, only kept his emails for 30 days. This meant that there was no way to recover emails from the 2007-09 time period.

         The Defendants, in their initial motion for sanctions, argued that the computer crash issue was concocted by Eivaz, and, in a September 19, 2014 order granting the Defendants' motion for sanctions, I concluded that their concerns were “not unfounded” but that there was not clear and convincing evidence that Eivaz had lied. (ECF No. 74 at 14-18.) I also noted that Eivaz had offered to cooperate in the production of emails from ReadyHosting.

         Red Dot soon issued discovery requests to ReadyHosting, but Plaintiff found the requests overbroad and moved to quash the subpoena in the District of Massachusetts. Red Dot argues that if ReadyHosting truly did not have any of Plaintiff's emails, as Eivaz had earlier claimed, then an “overbroad” subpoena would not make any difference. That is, Eivaz was essentially moving to quash a subpoena for emails he had earlier said didn't exist, a complete about-face.

         Red Dot argues that by admitting that the emails do exist on the ReadyHosting server, Plaintiff was also conceding that he was wilfully refusing to produce those emails. Regardless of whether Red Dot's own subpoena was overly broad, Plaintiff himself could have arranged with ReadyHosting to obtain emails responsive to its 2013 discovery request. Instead, he and his attorneys litigated the motion to quash (which was granted on the grounds of overbreadth) instead of turning over responsive documents. Failing to produce the documents is sanctionable, Red Dot argues, because this court already ordered production of the documents in November 2013 (more than two years ago), and because Eivaz assured the court that he would cooperate in producing them. It is also sanctionable because Eivaz, who has a background in computers, has made a 180-degree turn with his story. While earlier he argued that the documents did not even exist (an argument founded upon the questionable theory that two computer crashes had destroyed them), now he argues that they do exist but that he is unwilling to agree to let his provider respond to the subpoena. In short, Red Dot's motion is founded both on Eivaz' untruthfulness and his unwillingness to cooperate in turning over responsive documents.

         I will focus on Eivaz' alleged untruthfulness, which is a more serious allegation. Recall that Eivaz' explanation for the absence of his emails was two-fold. First, he stated that he sustained two separate computer crashes during the relevant time period, and those events accounted for the loss of all of his emails during the relevant period. Normally, a crash on one's personal computer would not destroy emails because emails are typically stored on a third-party hosting site. Thus, the second pillar of Eivaz' explanation was that, the third-party host, kept his emails for just thirty days. He explained in a December 2013 deposition that because he had no need for storage of emails longer than thirty days, he signed up only for the company's “basic service offering.” “If you have a business, ” he explained, or “for some reason you need additional services, you could pay more and maintain - have them maintain stuff for you longer. In my case, I didn't have to. I didn't want to pay more, so I have their basic service offering, which is about a hundred bucks a year or something.” (ECF No. 51-10 at 52.)

         The Defendants challenged this explanation. First, in the abstract, it would be highly unusual for emails to be automatically deleted within 30 days. Storage of emails is not particularly costly, and it is not hard to imagine the customer complaints and chaos that would ensue if every user's emails simply got wiped away after a mere thirty days. It is commonly known that even free email sites such as Yahoo! or Gmail allow emails to be stored as long as there is room in the customer's account-sometimes for decades. In short, a thirty-day deletion protocol seemed unusual.

         Second, the Defendants contacted ReadyHosting and even set up a ReadyHosting account of their own. Based on their experience, the basic service package allows the capacity for 10, 000 emails, without any provision that emails are deleted after a certain period of time (much less after only thirty days). A ReadyHosting customer service employee also explained that the company has never offered a “basic service package” that would automatically delete emails after thirty days. (ECF No. 52, ¶¶ 3-4.)

         Third, the Defendants noted that two emails Eivaz did produce, which were from October 2007, had date stamps of 1/15/2012 on them, suggesting that Eivaz (or someone else) had printed them out in 2012. It follows that if the emails were retrievable in 2012, then certainly the emails had not been deleted within 30 days, as Eivaz claimed.

         Although there was much “force” to Red Dot's evidence, I was reluctant to conclude that Eivaz had lied. (ECF No. 74 at 17.) Giving Eivaz the benefit of the doubt, I relied on the possibility, as Eivaz himself suggested, that if he used a program such as Microsoft Outlook on his own computer, he could have set that program to delete the emails on the ReadyHosting server once they had been downloaded to his computer. I further noted that there was no evidence that ReadyHosting had confirmed that the emails actually existed.

         Based on the entirety of the record now before me, however, I am able to conclude that Eivaz' explanation for the missing emails is untrue. First, it is now evident that Eivaz' Microsoft Outlook theory is wholly inconsistent with his own, earlier, testimony. Recall that his deposition testimony was that ReadyHosting deleted his emails after thirty days because he had signed up only for the “basic” package. (ECF No. 51-10 at 52.) As an individual, he'd explained, he had no need for more storage and thus declined to pay extra for it. (Id.) This explanation was not an off-handed remark speculating about why the emails were gone. Instead, it was a clear statement that they were gone by design, i.e., because he was unwilling to pay the hosting company extra money to keep them longer. He said he signed up only for the “basic service package, ” which deleted emails after 30 days.

         A few months later, in response to the Defendants' evidence that ReadyHosting allowed for up to 10, 000 emails to be stored indefinitely, Eivaz changed his mind and theorized that his emails might have been deleted due to a setting on Microsoft Outlook, which could have caused the emails to be deleted on ReadyHosting's server. He stated, in an un-notarized affidavit: “The variety of settings available in Outlook for archiving and deleting make it possible that an email could have been archived or deleted after 30 days. If archived, it would have been stored on the computer and not with If the computer crashes and is no longer usable, the emails are gone as well. I know that, due to space limitations, I did have some sort of archiving setting in place with Microsoft Outlook.” (ECF No. 58, ¶ 19.)

         This latter explanation is fundamentally at odds with his earlier and unambiguous testimony from only a few months earlier that he intentionally signed up for an account at ReadyHosting knowing that the host would be automatically deleting his emails. Deletion after thirty days, he said, was part of the bare-bones plan he signed up for. It was only when the Defendants exposed the fact that ReadyHosting did not delete emails after thirty days that Eivaz pivoted 180 degrees and then claimed that the deletion must have been due to a setting on his own computer's Outlook program. But because that explanation ...

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