Archive: January 2017

1
Despite Failure to Employ “Best Practices,” Lack of Sufficient Prejudice Results in Lesser Sanctions
2
Citing Misconduct “As Deep as it is Wide,” Court Imposes Sanctions on Defendants and Counsel
3
Citing “Diminishing Returns,” Court Declines to Compel Additional Discovery

Despite Failure to Employ “Best Practices,” Lack of Sufficient Prejudice Results in Lesser Sanctions

F.T.C. v. DirecTV, Inc., Case No. 15-cv-01129-HSG (MEJ), 2016 WL 7386133 (N.D. Cal. Dec. 21, 2016)

In this case, the Court addressed Plaintiff’s motion for sanctions under Fed. R. Civ. P. 37(e)(1) but, despite acknowledging that Defendant “could have been more forthcoming in its disclosures to the FTC, and/or more proactive in its preservation efforts,” declined to grant the request to exclude evidence, including Defendant’s expert’s report, absent a showing  of sufficient prejudice.  Instead, the Court ordered Defendant to make its expert available for a 4-hour deposition, should Plaintiff find it useful.

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Citing Misconduct “As Deep as it is Wide,” Court Imposes Sanctions on Defendants and Counsel

Arrowhead Capital Fin., Ltd. v. Seven Arts Entm’t, Inc., No. 14 Civ. 6512 (KPF), 2016 WL 4991623 (S.D.N.Y. Sept. 16, 2016)

For Defendants’ egregious discovery conduct, including obstructing depositions and failing to preserve and produce relevant documents, among other things, the Court imposed sanctions, including precluding them from litigating the issue of personal jurisdiction; imposing a “spoliation instruction, as appropriate, on any claims that are ultimately submitted to the jury”; ordering payment of Plaintiff’s attorneys fees related to the misconduct; and ordering the retention of a second outside counsel to review their files for additional discoverable materials and to represent them in future discovery-related proceedings.  Defendants’ manager and sometimes CEO was also found in contempt for his behavior throughout discovery, including attempting to minimize his own responsibility for the discovery deficiencies by claiming limited involvement and blaming others.  Finally, for acting in bad faith in a manner that improperly lengthened the proceedings and for making objections in bad faith, the Court also imposed “modest” sanctions against defense counsel.

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Citing “Diminishing Returns,” Court Declines to Compel Additional Discovery

Armstrong Pump, Inc. v. Hartman, No. 10-CV-446S, 2016 WL 7208753 (W.D.N.Y. Dec. 13, 2016)

“Implicit in both the language and the spirit of the 2015 Amendments is the obligation, at any stage of a case, to prevent parties from expending increasing time and energy pursuing diminishing returns.”

In this case, despite having viewed all of the at-issue documents and printing “approximately half of the total pages” (albeit under strict protocols), Plaintiff sought to compel “formal production” of all of the documents pursuant to the parties’ protective order, arguing that the documents did not contain “actual programming.” Defendant argued that the documents were “functionally equivalent to source code” and should not be subject to production.  Ultimately, the Court reasoned that discovery had “reached the point of diminishing returns” and declined to compel production, with limited exceptions.

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