Two Prominent US Cases address sanctions for E-Disovery misconduct
Joni Shrogen, Esq., Kroll Ontrack
Since September 2007, the US legal community has been awaiting the decision of Magistrate Judge Barbara Major regarding possible attorney sanctions in the case of Qualcomm v. Broadcom, 2008 WL 66932 (S.D.Cal. Jan. 7, 2008). It appears the final chapter in this controversial and widely recognised electronic discovery dispute was concluded on January 7, 2008, when Magistrate Judge Barbara Major issued a lengthy order setting forth sanctions for “monumental” discovery violations.
Analysing the element of “good faith”, Judge Major explained that attorneys and clients must work diligently to keep the good faith discovery system successful in the electronic age. Unfortunately in this case, this delicate balance was upset, with a failure to produce 46,000 highly relevant e-mails in a production totalling approximately 1.2 million pages.
The strong language against the actions of both Qualcomm and its attorneys led many to believe heavy sanctions were warranted.
Further Sanctions
The sanctions imposed by the judge left some commentators confused and disappointed. However, Qualcomm did not receive any further sanctions apart from the previous order to pay Broadcom’s attorney fees. Major noted that a further monetary penalty was unnecessary as it was unlikely to alter Qualcomm’s future conduct significantly more than the previously imposed $8.5 million sanction.
Six Qualcomm attorneys were sanctioned but none received monetary penalties. Instead, Judge Major instructed the attorneys to forward the order to the State Bar of California for a hearing. The attorneys were also ordered to attend and adequately participate in a Case Review and Enforcement of Discovery Obligations (CREDO) programme. Judge Major opined that the attorneys’ involvement with this programme may lead to deterrence from this conduct in further cases and provide a “road map to assist counsel and corporate clients in complying with their ethical and discovery obligations in conducting a reasonable inquiry.”
Other Cases
Qualcomm is not the only recent news-worthy case in the US where sanctions were imposed as a result of discovery misconduct. In the case of Columbia Pictures v. Bunnell, No. 2:06-cv-01093 (C.D. Cal. Dec. 13, 2007), the court granted the plaintiffs’ motion for default judgment and terminated the case in favour of the plaintiffs due to the defendant’s wilful spoliation of key evidence.
The court granted the default motion upon determining the plaintiffs suffered irreparable harm as a direct result of the defendants’ discovery misconduct, which included wilful destruction of user forum postings, directory headings referencing copyrighted works and user IP addresses. According to the court, an adverse jury instruction would not have alleviated the harm suffered and monetary sanctions had already proved ineffective against the defendants’ continued spoliation of evidence. The defendants claim to be considering an appeal but many commentators believe their egregious discovery conduct will make a reversal highly unlikely. In essence, the defendants’ wilful destruction and withholding of evidence allowed the plaintiffs to win the case by default with little focus on the merits.
Both of these US cases highlight the critical nature of sound electronic discovery practices in litigation. Today, judges are not willing to look the other way when one party destroys or covers up relevant electronically stored information.
Joni Shrogen is a Staff Attorney at Kroll Ontrack Legal Technologies in Minnesota, USA.
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