HYC Logistics, Inc. v. OJCOMMERCE, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

HYC LOGISTICS, INC., )

)

Plaintiff/ )

Counter-Defendant, )

)

v. ) No. 23-cv-02050-TLP-tmp

)

JACOB WEISS, INDIVIDUALLY, )

)

Defendant, )

)

and )

)

OJCOMMERCE, LLC D/B/A )

OJ COMMERCE, LLC, )

)

Defendant/ )

Counter-Plaintiff, )

)

v. )

)

562 EXPRESS, INC., )

)

Counter-Defendant. )

ORDER ON MOTION TO STRIKE AND OMNIBUS MOTIONS IN LIMINE (ECF

NOS. 232 AND 233)

Before the court by order of reference are defendants Jacob

Weiss and OJCommerce, LLC’s (“OJ Commerce” or “OJC”) Motion to

Strike and Omnibus Motions in Limine, filed on August 16, 2024.

(ECF Nos. 232, 233.) Plaintiff HYC Logistics, Inc. (“HYC”) and

counter-defendant 562 Express, Inc. (“562”) filed their response

on August 30, 2024. (ECF Nos. 235, 236.)

I. Defendants Weiss and OJ Commerce’s Motion to Strike

In their first motion, defendants ask the court to strike

“improper allegations” relating to HYC and 562’s repeated

references to OJC’s previous litigation in HYC’s complaint and

subsequent motions. (ECF No. 232 at PageID 3536.) Defendants assert

that these allegations are inadmissible, irrelevant, and

prejudicial to OJC and Weiss. (Id. at PageID 3533–36.) In Exhibit

A to defendants’ motion, they identify six filings from which they

ask the court to strike such allegations, including HYC’s original

complaint and five of HYC and 562’s responses to defendants’

various motions. (ECF No. 232-1 at PageID 3539–40.) In their

response, HYC and 562 assert that defendants’ motion should be

denied as untimely because it was “filed well past [the] 21-day

deadline” provided by Federal Rule of Civil Procedure 12(f) and is

improperly directed towards motions, which “are not [] pleading[s]

for purposes of the Rules of Federal Procedure.” (ECF No. 235 at

PageID 3645-46.) The court agrees with HYC and 562.

Under Rule 12(f), “[t]he court may strike from a pleading an

insufficient defense or any redundant, immaterial, impertinent, or

scandalous matter.” Fed. R. Civ. P. 12(f). The court may do so “on

its own; or on motion by a party either before responding to the

pleading or, if response is not allowed, within 21 days after being

served with the pleading.” Fed. R. Civ. P. 12(f)(1)–(2) (emphasis

added). “Motions to strike are viewed with disfavor and not

frequently granted.” Operating Eng’rs Loc. 324 Health Care Plan v.

G & W Constr. Co., 783 F.3d 1045, 1050 (6th Cir. 2015) (citing

Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819,

822 (6th Cir. 1953)). “Any doubt whether the challenged material

is redundant, immaterial, impertinent, or scandalous should be

resolved in favor of the non-moving party.” Jewell v. Shelby Cnty.

Gov’t, No. 13-2048-STA-dkv, 2013 WL 5306102, at *4 (W.D. Tenn.

Sept. 20, 2013) (citing 5C Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure § 1382 Motion to Strike — Redundant,

Immaterial, Impertinent, or Scandalous Matter (3d ed. 2004)).

First, defendants’ motion is untimely. Rule 12(f) provides

that any motion to strike must be made “within 21 days after being

served.” Fed. R. Civ. P. 12(f)(2). Failure to timely file is a

proper basis for denial. Cherry v. Apple CLK, LLC, No. 3:20-cv-

00176, 2020 WL 5912814, at *2 (M.D. Tenn. Oct. 6, 2020) (denying

a motion to strike filed ninety days after the challenged

pleading). HYC filed its initial complaint on February 2, 2023,

and its last filing referencing defendants’ purported litigation

history was on July 5, 2024. (ECF Nos. 1, 213.) Defendants did not

file their motion to strike until August 16, 2024, well past the

twenty-one-day deadline for even the most recent challenged

filing. (ECF No. 232.) Although the court may exercise its

discretion to consider the merits of defendants’ argument

regardless of timeliness, see Lyons v. Erie Ins. Co., No. 3:19-

CV-325-HBG, 2021 WL 848173, at *2 (E.D. Tenn. Mar. 5, 2021)

(denying plaintiffs’ motion to strike on the merits despite its

untimeliness), the court declines to do so here and instead

considers the admissibility of HYC and 562’s allegations under

defendants’ motion to exclude below.

Second, defendants’ Rule 12(f) motion is procedurally

improper with respect to HYC and 562’s responses to motions. The

text of Rule 12(f) “provides a basis for striking pleadings, not

motions.” Kremer v. Reddit, Inc., No. 2:21-cv-00038, 2021 WL

4909953, at *1 (M.D. Tenn. Oct. 18, 2021). “For purposes of the

Federal Rules of Civil Procedure, a motion and its contents are

not ‘a pleading.’” Reynolds & Reynolds Co., Inc. v. Alan Vines

Auto. of Jackson, LLC, No. 1:20-mc-0003-STA, 2020 WL 5797922, at

*2 (W.D. Tenn. Sept. 28, 2020); see also Fed. R. Civ. P. 7(a)

(defining pleading). Because five of the six documents identified

by defendants are HYC and 562’s responses to motions, not

pleadings, defendants’ motion to strike portions of those

responses under Rule 12(f) is improper.

For the above reasons, defendants’ motion to strike is DENIED.

II. Defendants Weiss and OJ Commerce’s Omnibus Motions in Limine

A. Motion #1 to Exclude Evidence Concerning Prior Lawsuits

In their first motion in limine, defendants seek to exclude

evidence of the same twenty-two case litigation history at issue

in their motion to strike. (ECF No. 233.) Defendants assert that

such evidence is inadmissible under Federal Rules of Evidence 402,

403, and 404 because it is irrelevant, unduly prejudicial, and

improper character evidence. (Id. at PageID 3543.)1 HYC and 562

counter that this evidence is admissible under Rule 404(b), as

evidence of defendants’ “state of mind,” and under Rule 406, as

evidence of defendants’ routine practice. (ECF No. 236 at PageID

3651-52.)

Under the Federal Rules of Evidence, relevant evidence is

generally admissible. Fed. R. Evid. 402. “Evidence is relevant if:

(a) it has any tendency to make a fact more or less probable than

it would be without the evidence; and (b) the fact is of

consequence in determining the action.” Fed. R. Evid. 401. Under

Rule 403, a “court may exclude relevant evidence if its probative

value is substantially outweighed by danger of . . . unfair

prejudice, confusing the issues, misleading the jury, undue delay,

wasting time, or needlessly presenting cumulative evidence.” Fed.

R. Evid. 403.

Rule 404 prohibits the use of character evidence “to prove

that on a particular occasion the person acted in accordance with

[that] character or trait.” Fed. R. Evid. 404(a)(1). Under Rule

404(b), “[e]vidence of any other crime, wrong, or act is not

1Defendants correctly note that irrelevant evidence is excluded

under the Federal Rules of Evidence, but incorrectly cite Rule 401

(defining relevance) for this proposition. (ECF No. 233 at PageID

3543.)

admissible to prove a person’s character in order to show that on

a particular occasion the person acted in accordance with the

character.” Fed. R. Evid. 404(b)(1). However, such “evidence may

be admissible for another purpose, such as proving motive,

opportunity, intent, preparation, plan, knowledge, identity,

absence of mistake, or lack of accident.” Fed. R. Evid. 404(b)(2).

The Sixth Circuit applies a multi-part test to determine whether

prior acts evidence is admissible:

(1) the evidence must be directed toward establishing

something other than a party’s propensity to commit the

act charged; (2) the other act must be similar enough

and close enough in time to be relevant to the matter at

issue; (3) the evidence must be such that the jury could

find that the act occurred and that the party in question

committed it; and (4) the prejudicial effect of the

evidence must not clearly outweigh its probative value.

McLeod v. Parsons Corp., 73 F. App’x 846, 854 (6th Cir. 2003).2

Here, HYC and 562 assert that evidence of defendants’

litigation history should be admitted under Rule 404(b) because it

establishes a “prior, similar course of conduct” and is evidence

of defendants’ state of mind, “including [defendants’] notice of,

knowledge about, and deliberate intent and practice to not pay

service providers.” (ECF No. 236 at PageID 3651.) The court finds

2The Sixth Circuit has sometimes applied a similar three-part test.

Compare United States v. Bell, 516 F.3d 432, 440-41 (6th Cir. 2008)

(outlining a three-part test) with McLeod, 73 F. App’x at 854

(including the additional factor that the evidence must be “similar

enough and close enough in time to be relevant to the matter at

issue”).

that evidence of defendants’ prior lawsuits is inadmissible under

Rule 404(b). See McLeod, 73 F. App’x at 854 (affirming district

court's exclusion of evidence of prior litigation filed against

the defendant under Rule 404(b) because it was not relevant, there

was no nexus to the current litigation, and there was a potential

for prejudice); Garren v. CVS RX Servs., Inc., No. 3:17-CV-149,

2021 WL 781677, at *11 (E.D. Tenn. Mar. 1, 2021) (ruling that

evidence of prior employment discrimination lawsuits filed against

the defendant was inadmissible under Rule 404(b)); Haley v. Kundu,

No. 1:11-CV-265, 2013 WL 12030021, at *6 (E.D. Tenn. Apr. 11, 2013)

(excluding evidence of defendant’s prior litigation under Rule

404(b) because it “b[ore] little to no relevance to the case at

hand, any probative value would be clearly outweighed by prejudice

to Defendants, and it would likely mislead or confuse the jury”).

Evidence of defendants’ prior litigation also would violate

Rule 403 because of its potential for unfair prejudice and to

confuse and mislead the jury. See Ross v. Am. Red Cross, No. 2:09-

cv-00905, 2012 WL 2004810, at *5-6 (S.D. Ohio June 5, 2012)

(excluding evidence under Rules 402 and 403 because the “marginal

relevance” of other lawsuits “is substantially outweighed by the

danger of unfair prejudice and confusion of the issues” and such

evidence “may also invite mini-trials about facts and

circumstances that may not be similar to the present case”); see

also Sadler v. Advanced Bionics, LLC, No. 3:11-CV-00450-TBR, 2013

WL 1340350, at *4 (W.D. Ky. Apr. 1, 2013) (“[T]he number of other

lawsuits filed against Defendant should be excluded as irrelevant

and because the risk of unfair prejudice substantially outweighs

any probative value of its evidence.”).

HYC’s complaint alleges a pattern of non-payment by

defendants, but its only “evidence” is merely a list of twenty-

two previously filed complaints with no additional details. (ECF

No. 1 at PageID 6.) In their response to defendants’ motion, HYC

and 562 highlight two additional examples of litigation (filed

after the present litigation) in which OJC is involved, without

providing further evidence beyond the bare-bones allegations

within those two complaints. (ECF No. 236 at PageID 3650, 3652.)

These allegations in complaints from other lawsuits fall well short

of the admissibility requirements of the Federal Rules of Evidence.

HYC and 562 have likewise failed to explain how the questionable

probative value of this evidence outweighs its potential for undue

prejudice against the defendants, or how they can avoid confusing

the issues or misleading the jury here when attempting to prove

allegations contained within twenty-two separate, distinct

complaints. As such, evidence of defendants’ litigation history is

not admissible at trial under Rules 403 and 404(b).

Finally, HYC and 562 assert that evidence of defendants’

litigation history is admissible under Rule 406 as evidence of

OJC’s routine practice. (ECF No. 236 at PageID 3652.) This argument

is also unpersuasive.

Rule 406 provides that “[e]vidence of a person’s habit or an

organization’s routine practice may be admitted to prove that on

a particular occasion the person or organization acted in

accordance with the habit or routine practice.” Fed. R. Evid. 406.

To be admitted, the proponent of routine practice evidence must

show that “any specific conduct or event . . . is so automatic, so

repetitive, that it might approach evidence of habit; it must be

done unwittingly.” Mattner v. Tom A. Jennaro & Assocs., 941 F.2d

1210 (Table), 1991 WL 159452, at *2 (6th Cir. 1991). The proponent

“must establish the degree of specificity and frequency of uniform

response that ensures more than a mere ‘tendency’ to act in a given

manner, but rather, conduct that is ‘semi-automatic’ in nature.”

Infocision Mgmt. Corp. v. Found. for Moral Law Inc., No. 5:08-cv-

1342, 2011 WL 3022002, at *4 (N.D. Ohio July 22, 2011) (quoting

Simplex, Inc. v. Diversified Energy Sys., Inc., 847 F.2d 1290,

1293 (7th Cir. 1988)). HYC and 562’s recitations of unproven

complaints are not sufficient to show that defendants’ conduct

rises to the level of being reflexive or semi-automatic. HYC and

562 have not shown that evidence of defendants’ litigation history

is admissible under Rule 406.

For the above reasons, defendants’ first motion in limine to

exclude evidence of their litigation history is GRANTED.

B. Motion #2 to Prohibit Labeling of Defendants

Defendants’ second motion in limine seeks to prohibit counsel

for HYC and 562 from referring to defendants as “fraudsters,”

“serial litigants,” “litigious,” and “frauds.” HYC and 562 do not

oppose this motion and agree to refrain from referring to

defendants Weiss and OJC in this manner at trial. (ECF No. 236 at

PageID 3653.) Accordingly, it is GRANTED.

C. Motion #3 to Preclude Plaintiffs from “Lumping” OJ

Commerce and Weiss as Defendants

In their third motion, defendants insist that “[i]t would be

highly prejudicial to OJC and Weiss for HYC to be allowed to lump

them together during trial,” asking that the court prohibit counsel

for HYC and 562 from doing so pursuant to Rule 403. (ECF No. 233

at PageID 3545.) This argument is without merit. It would not be

highly prejudicial to refer to OJC and Weiss collectively as

defendants because they are, collectively, the defendants. As

such, the probative value of referring to OJC and Weiss as

defendants is not substantially outweighed by its potential for

confusion or undue prejudice. Defendants’ third motion in limine

is therefore DENIED.

D. Motion #4 to Preclude Characterization of the Parties’

Standard Operating Procedures as Unilateral

Defendants next claim that, in HYC’s complaint and subsequent

filings, HYC and 562 allege that OJC and its CEO Weiss “induced”

HYC into continuing the parties’ business relationship via a set

of “standard operating procedures” (“SOP”).3 (ECF No. 233 at PageID

3546.) In contrast to HYC and 562’s characterization, defendants

argue that the SOP was in fact a “collaborative effort” between

HYC and OJC, as admitted by HYC’s President Uri Silver at his

corporate deposition. (Id.) Defendants now seek to bar HYC and 562

from making any future allegations “that the ‘collaborative’ SOP

drafted by HYC’s agent . . . was a ‘ploy’ or instrument of fraud

by OJC or Weiss.” (Id. at PageID 3547.) They claim permitting such

testimony would be highly prejudicial, confuse the issues, mislead

the jury, and violate Federal Rule of Civil Procedure 30(b)(6).

(Id.)

In their response, HYC and 562 maintain that HYC was

“absolutely induced into continuing to provide services to OJC”

because of promises made by Weiss and the parties’ collaboration

on the SOP document. (ECF No. 236 at PageID 3655.) In effect, HYC

and 562 admit that the SOP was “collaborative” and not

“unilaterally proposed” by OJC; nonetheless, HYC and 562 assert

that the false promise of cooperation reflected in the SOP was

3As defendants highlight in their motion in limine, HYC and 562

allege: “In or around November 2022, . . . in order to induce HYC

to provide additional services, OJ Commerce proposed a set of

standard operating procedures for future shipments to streamline

the process of pick [up] and transport. . . . OJ Commerce had no

intention of paying HYC. The standard operating procedure was

simply a ploy to get HYC to continue to provide services -- while

OJ Commerce refused to pay for said services.” (ECF No. 233 at

PageID 3546.)

used to “induce” HYC into continuing its relationship with OJC.

(Id. at PageID 3654-55.)

Federal Rule of Evidence 403 permits the court to exclude

evidence if its “probative value is substantially outweighed by a

danger of . . . unfair prejudice, confusing the issues, [or]

misleading the jury[.]” Fed. R. Evid. 403. To rise to the level of

“unfair prejudice,” challenged evidence must “suggest decision on

an improper basis, commonly, though not necessarily, an emotional

one.” Fed. R. Evid. 403 advisory committee’s note to 1972 proposed

rules. Rule 403’s balancing test is “strongly weighted toward

admission,” and trial courts enjoy “‘broad discretion’ in making

the prejudice determination.” United States v. Asher, 910 F.3d

854, 860 (6th Cir. 2018) (quoting United States v. Carney, 387

F.3d 436, 451 (6th Cir. 2004)).

Here, the risk of unfair prejudice, confusing the issues, or

misleading the jury does not substantially outweigh the probative

value of either party’s testimony concerning the SOP document. The

parties are entitled to present their evidence and argument

regarding the SOP, and it will be up to the jury to decide what

weight, if any, to give this evidence. See Goldman v. Healthcare

Mgmt. Sys., Inc., 559 F. Supp. 2d 853, 870-71 (W.D. Mich. 2008)

(concluding that “factual problems” identified by defendants were

not reasons to limit witness’s testimony, but instead should be

resolved by jury after cross-examination).

Defendants’ argument under Federal Rule of Civil Procedure

30(b)(6) is also unpersuasive. Relying on Convertino v. United

States Department of Justice, No. 07-13842, 2013 WL 153311 (E.D.

Mich. Jan. 15, 2013), defendants assert that HYC should be bound

by the deposition testimony of its Rule 30(b)(6) witness Silver

that the SOP document was “a collaborative effort.” (ECF No. 233

at PageID 3547.) But HYC and 562 do not contest the accuracy of

Silver’s testimony. Rather, HYC and 562 argue that the parties’

“collaborative” drafting of the SOP further “induced” HYC into

continuing to provide services to OJC. This disagreement again

raises a question of weight for the jury’s consideration, not a

question of admissibility for the court. Defendants are free to

challenge HYC and 562’s theory at trial.

For these reasons, defendants’ fourth motion in limine is

DENIED.

E. Motion #5 to Sanction HYC and 562 for Alleged Spoliation

of Text Messages

In their fifth motion, defendants seek an adverse inference

sanction against HYC and 562 for failing to preserve relevant text

messages.4 (ECF No. 233 at PageID 3551.) OJC sent a litigation hold

on December 19, 2022, demanding that HYC and 562 preserve any

physical or electronic documentation relevant to its forthcoming

4HYC and 562 do not argue that a motion in limine is an improper

means of seeking a spoliation sanction. Thus, the court will

address the merits of the motion.

litigation, including “correspondence . . . voicemails, text

messages, [and] instant messages[.]” (ECF No. 1-11 at PageID 74.)

During a deposition of former 562 employee Dayana Diaz, Diaz

testified that she communicated with 562 drivers via text message

concerning pick-up of nine shipping containers owned by OJC.5 (ECF

No. 233-4 at PageID 3601-03.) At issue in this litigation is

whether 562, acting at the direction of HYC, committed conversion

when it transported these containers to 562’s own shipyard, where

they remain today. Diaz also testified that the text messages at

issue were sent from her personal cell phone and subsequently

destroyed by an automatic one-year deletion setting on her iPhone

after this litigation ensued. (Id.) She admitted that neither

counsel for, nor any other employee of, HYC or 562 had instructed

her to preserve the text messages before their deletion. (Id.)

Based on Diaz’s testimony, defendants claim that HYC and 562

engaged in spoliation by failing to preserve Diaz’s text messages.

(ECF No. 233 at PageID 3549-50.) They seek an adverse inference

instruction “that 562 knew that it was willfully acting against

OJC’s wishes and instructions when 562 picked up OJC’s nine

containers and delivered them to 562’[s] yard, not OJC’s

warehouse.” (Id. at PageID 3551.)

5Diaz was added as a counter-defendant on September 9, 2023, but

was later dismissed by the court on August 5, 2024. (ECF Nos. 49,

226).

Although HYC and 562 do not deny that Diaz’s text messages

were destroyed after this litigation began, they argue that

sanctions are nonetheless inappropriate given HYC and 562’s

adoption of the underlying facts. (ECF No. 236 at PageID 3655-56.)

HYC and 562 point to deposition testimony of Silver and Antonio

Hernandez confirming that HYC did direct 562 to reroute OJC’s nine

shipping containers. (Id. at PageID 3656.) Given this uncontested

fact, HYC claims there is “no dispute” about the directions given

to 562’s truckers and thus “no probative value” to the destroyed

text messages. (Id.) As such, defendants have failed to show how

HYC and 562’s conduct was “so prejudicial that it substantially

denied defendants’ ability to defend the case.” McCarty v. Covol

Fuels No. 2, LLC, 644 F. App’x 372, 380 (6th Cir. 2016). Rather,

the pertinent dispute is whether HYC had a right to redirect the

containers because of OJC’s alleged failure to pay.

Courts are afforded “broad discretion” in deciding whether

and how to impose sanctions for evidence spoliation. Adkins v.

Wolever, 554 F.3d 650, 654 (6th Cir. 2009) (en banc). “Spoliation

is ‘the intentional destruction of evidence that is presumed to be

unfavorable to the party responsible for its destruction.’”

Capital Senior Living, Inc. v. Barnhiser, No. 3:22-CV-00606, 2024

WL 278105, at *3 (N.D. Ohio Jan. 25, 2024) (quoting Nationwide

Mut. Fire Ins. Co. v. Ford Motor Co., 174 F.3d 801, 804 (6th Cir.

1999)). A court may impose a range of spoliation sanctions

depending on the circumstances, “including dismissing a case,

granting summary judgment, or instructing a jury that it may infer

a fact based on lost or destroyed evidence.” Adkins, 554 F.3d at

654. “The severity of sanctions issued is determined on a case-

by-case basis, depending in part on the spoliating party’s level

of culpability.” Barnhiser, 2024 WL 278105, at *3 (quoting Flagg

v. City of Detroit, 715 F.3d 165, 178 (6th Cir. 2013)).

A party seeking sanctions for evidence spoliation under

Federal Rule of Civil Procedure 37 must establish the following:

“(1) the party with control over the evidence had an obligation to

preserve it at the time it was destroyed; (2) the party destroyed

the evidence with a culpable state of mind; and (3) the destroyed

evidence was relevant to the opposing party’s claim or defense.”

Ecolab Inc. v. Ridley, No. 1:22-cv-50, 2023 WL 11762828, at *10

(E.D. Tenn. Aug. 1, 2023)(quoting McCarty, 644 F. App’x at 378 and

Byrd v. Alpha All. Corp., 518 F. App’x 380, 383–84 (6th Cir.

2013)).

“For purposes of spoliation motions, courts deem evidence to

be ‘under a party’s control when that party has the right,

authority, or practical ability to obtain the [evidence][.]”

Barnhiser, 2024 WL 278105, at *3 (quoting Goodman v. Praxair

Servs., Inc., 632 F. Supp. 2d 494, 515 (D. Md. 2009)). “A party to

civil litigation has a ‘duty to preserve relevant

information . . . when that party has notice that the evidence is

relevant to litigation or . . . should have known that the evidence

may be relevant to future litigation.’” Phoenix Process Equip. Co.

v. Cap. Equip. & Trading Corp., No. 3:16-CV-00024-CHB, 2022 WL

3094320, at *5 (W.D. Ky. July 18, 2022) (quoting John B. v. Goetz,

531 F.3d 448, 459 (6th Cir. 2008) (internal quotation marks

omitted)). “To prove culpability, the party claiming spoliation

must show ‘the evidence was destroyed knowingly, even if without

intent to breach a duty to preserve it, or negligently.’” Id.

(quoting Beaven v. U.S. Dep’t of Just., 622 F.3d 540, 554 (6th

Cir. 2010)). “In determining whether a party should have known

that evidence may be relevant to future litigation, courts apply

an objective, not subjective, standard.” Ecolab Inc., 2023 WL

11762828, at *10 (citing Byrd, 518 F. App’x at 384). “Because the

intentional or negligent destruction of relevant evidence

necessarily hinders the jury’s ability to decide a case based on

a full understanding of the facts, a proper spoliation sanction

‘will serve both fairness and punitive functions’ by ‘leveling the

evidentiary playing field’ and deterring other litigants from

engaging in similar conduct.” Tolson v. Washburn, No. 3:19-cv-

00175, 2022 WL 1479942, at *5 (M.D. Tenn. May 10, 2022) (quoting

Adkins, 554 F.3d at 652).

Here, the court finds that HYC and 562 spoliated evidence by

failing to notify Diaz of the preservation letter, which resulted

in Diaz negligently auto-deleting her text messages. See

Barnhiser, 2024 WL 278105, at *5 (noting that spoliation can occur

if a party acted “negligently” when destroying relevant evidence).

Diaz confirmed in her July 17, 2024 deposition that she primarily

communicated about container pick-up and delivery with 562 drivers

via text message, and that any messages Diaz sent or received

during HYC and OJC’s business relationship were deleted after a

litigation hold was in place. (ECF No. 233-4 at PageID 3600-02.)

In their response, HYC and 562 also do not dispute that they owed

a duty to preserve the text messages and that Diaz was within the

category of employees covered by the litigation hold.

Nevertheless, the facts here do not support that HYC and 562’s

conduct rose to the level of culpability justifying an adverse

inference sanction. Under Rule 37, the court may instruct the jury

that it can presume as unfavorable to a party information lost

because that party failed to take reasonable steps to preserve it.

Fed. R. Civ. P. 37(e)(2). However, this adverse inference

instruction is appropriate “only upon finding that the party acted

with the intent to deprive another party of the information’s use

in the litigation.” Id. (emphasis added). Here, Diaz’s deposition

testimony, which defendants rely on as their sole evidence of HYC

and 562’s “culpable state of mind,” Phoenix Process, 2022 WL

3094320, at *5, at best supports a finding of negligent conduct

and not an intent to deprive:

Q And do you still have the same phone that you use while

you were working with 562 today?

A Yes. I still have the same phone number, not the same

phone.

Q So, you changed the phone?

A Yes.

Q What phone d[id] you have back then?

A I had an iPhone, I think 12 Pro Max at the time.

Q And what phone do you have now?

A An iPhone 15 Pro Max.

Q So, when you transfer -- is that -- was that the only

transfer you did, like, with your phone?

A Yes.

Q Now, when you transferred that iPhone, did it transfer

also all of the old text messages and –

A No. So, for my iPhone, I have the feature where it

deletes messages after one year, which is safe storage.

Q So, now, all of your messages are deleted?

A Yes.

Q And that happened a year after –

A Yes.

Q -- after the -- after those messages were sent,

correct?

A Correct.

Q Did you ever receive, you know, like, any message or

any letter, any other communication from anybody telling

you, “Hey, a lawsuit was filed. Don’t delete anything?”

A No.

Q Nobody ever told you that?

A No.

Q Okay. Is it fair to say that those messages were

deleted after the lawsuit was filed?

A I think so, yes.

(ECF No. 233-4 at PageID 3601-02.) The court therefore does not

find that an adverse inference sanction is warranted under the

circumstances.

For this reason, defendants’ fifth motion in limine is DENIED.

F. Motion #6 to Exclude Evidence of “Pass Through” Payments

Not Already Disclosed by HYC and 562

Defendants lastly seek to exclude any underlying

documentation or testimony alleging that HYC and 562 made “pass

through” payments for which OJC would be liable. (ECF No. 233 at

PageID 3553.) The contract between HYC and OJC specified that

certain “custom duties, transportation charges, and related

payments advanced by [HYC]” during transportation of the latter’s

containers would be treated as “pass through payments” for which

HYC could charge OJC. (Id. at PageID 3552.) Defendants have

repeatedly alleged that they requested underlying documentation

“for numerous improper charges” listed on HYC’s invoices to OJC,

but HYC and 562 to date have produced only “minimal” documentation

of certain waived per diem charges. (Id.) In support of their

motion, defendants posit that the court, under Federal Rule of

Civil Procedure 37(c)(1), may “proactively limit” the evidence a

party may use at trial because of that party’s failure to fulfill

its discovery obligations. (Id. at PageID 3553) (citing Ross v.

Am. Red Cross, 2012 WL 2004810, at *7).

Rather than addressing whether they possess additional

documentation not already disclosed to defendants, HYC and 562

reassert that they are owed the contested per diem charges. (ECF

No. 236 at PageID 3558-59.) HYC and 562 explain that the “per diem”

rates are the sole “pass through” payments in contention and appear

to suggest that they have already provided documentation of these

charges during discovery. (Id.)

Under Rule 37, a party who “fails to provide

information . . . as required by Rule 26(a) or (e)” is prohibited

from using that information “to supply evidence on a motion, at a

hearing, or at a trial, unless the failure was substantially

justified or is harmless.” Fed. R. Civ. P. 37(c)(1). In addition

to this sanction, Rule 37 grants the court discretion to order

payment of expenses, inform the jury of the party’s failure, and

impose any other “appropriate sanctions.” Id.

Here, the parties acknowledge that HYC has provided some

documentation of the per diem rates charged in its invoices to

OJC. In fact, by order dated February 29, 2024, the undersigned

previously ordered HYC to produce all documents underlying the

itemized charges in its invoices. (ECF No. 115 at PageID 1061.) In

compliance with the February 29 order, counsel for HYC and 562

verified by notice dated March 12, 2024 that they served defendants

“billing information related to the itemized charges appearing on

HYC’s invoices.” (ECF No. 125 at PageID 1089.) “[T]o the extent

that additional information regarding Plaintiff's alleged damages

exists, and to the extent that such information was not produced

or otherwise made known to [the defendants] during discovery (in

depositions, for example), Plaintiff is precluded from introducing

that information—through documentary evidence, witness testimony,

or any other means—at trial.” Ross, 2012 WL 2004810, at *8

(emphasis added). Defendants’ sixth motion in limine is therefore

GRANTED with respect to HYC and 562’s introduction of or reliance

on any documentation of “pass through” charges not already provided

to defendants during discovery.

IT IS SO ORDERED.

s/Tu M. Pham

TU M. PHAM

Chief United States Magistrate Judge

September 17, 2024

Date