Ruling Proves to Be Primer on E-Discovery Enforcement

Judge Paul Grimm's recent opinion both a road map and commentary on spoliation, sanctions

A federal judge's most recent opinion in an ongoing matter provides remarkable insight into several issues that arise frequently in e-discovery.

Magistrate Judge Paul Grimm's lengthy opinion in Victor Stanley Inc. v. Creative Pipe Inc., filed Sept. 9, is worth the read if only for its review and distillation of the case law regarding spoliation and remedies. But the opinion is newsworthy because it sets out a harsh remedy for the defendant whom he found had destroyed evidence, lied to the court and dragged out proceedings -- civil contempt, with the defendant facing severe costs and fines or a two-year prison sentence if he fails to pay that fine.

The court's focus upon and analysis of the costs -- in time, money, effort, and expertise -- of spoliation and dilatory tactics to the justice system is both spot on and timely. The lessons drawn from the reality underlying the court's analysis, however, are discouraging.

Victor Stanley's 2006 complaint alleged that Creative Pipe and its president, Mark Pappas, downloaded Victor Stanley design drawings and specifications from its website using the pseudonym "Fred Bass" and used those drawings improperly in competition with Victor Stanley. The complaint alleged copyright, patent, and unfair competition violations.

During four years of discovery, Pappas, in the court's words, "engaged in a cat and mouse game to hide harmful ESI from production during discovery, repeatedly trying to stall or prevent VSI from discovering evidence that he improperly accessed or used VSI's website or drawings."

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Source: law.com
By: Leonard Deutchman