In many ways sanctions cases are the lifeblood of the electronic discovery industry. While the FRCP, Sedona Conference and EDRM are all out there as shining examples of what to do, it seems like more practitioners learn from the scared straight cases like Zubulake, Morgan Stanley, Pension Committee, etc. Well, if you liked those horror stories, Philips Elecs. N. Am. Corp. v. BC Tech., may certainly keep you up at night.
In this intellectual property (IP) case with copyright infringement, misappropriation of trade secrets, and associated claims, the court entered a number of discovery orders compelling both production and preservation. The court found that, despite these orders, a proper litigation hold was not issued until 19 months after the duty to preserve arose and thousands of files were deliberately deleted from five key players’ computers. Not surprisingly, the plaintiff moved for a finding of contempt and for terminating sanctions.
In this decision, Magistrate Judge Samuel Alba goes the extra mile in his initial opinion (which was upheld on appeal) to detail the defendant’s significant errors. While it doesn’t quite rise to the maliciousness demonstrated in Victor Stanley 2 (by the “gang that couldn’t spoliate straight”), it still provides a textbook example of “worst” practices.
To begin, Magistrate Alba cites Pension Committee for the general notion that “[c]ourts cannot and do not expect that any party can meet a standard of perfection. Nonetheless, the courts have a right to expect that litigants and counsel will take the necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records are collected, reviewed, and produced to the opposing party.” Despite the early recognition that the electronic discovery process need not be perfect, he then uses most of the 48 page opinion to detail the parade of horrors committed by the defendant:
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Source: e-Discovery 2.0
By: Dean Gonsowski
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