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.