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Monetary Sanctions and Adverse Inference Instruction Ordered Following Document Destruction

Posted on January 4th, 2016

In the patent case of Star Envirotech, Inc. v. Redline Detection, LLC et. al., Case No. 12-01861 (C.D. Cal., Dec. 16, 2015), Defendant failed to produce documents responsive to several of Plaintiff’s document requests. After motion practice, the court twice ordered Defendant to produce requested customer information and sales data but Defendant failed to produce the data from the ordered time period. Plaintiff filed a Motion for Sanctions, alleging that not only did Defendant fail to comply with the two court orders, but also that it destroyed and concealed other important evidence. Plaintiff’s motion sought terminating sanctions, and monetary sanctions in the alternative.

With regard to the spoliation allegation, Plaintiff cited the deposition testimony of Defendant’s president, who indicated that Defendant had destroyed advertisements, manuals, and DVDs relevant to the issues of the case. Defendant countered that it kept electronic versions of these materials, but Plaintiff pointed to hard copies of Defendant’s advertisements that Defendant had not produced. Defendant countered that the retailers had made these hard copies themselves. Defendant also contended that it destroyed certain information after Plaintiff filed its suit because it did not want the materials used if they violated a patent.

After reviewing the evidence, the court concluded that spoliation had not occurred because Plaintiff had not shown bad faith or a “nefarious purpose” in Defendant’s destruction of the paper files. The court specifically noted that Plaintiff did not show the required relevance of the paper files it sought. The court did, however, find that Defendant had delayed the case by not turning over the data sought. The court held that delay is an insufficient reason for terminating sanctions, but did order monetary sanctions and an adverse inference instruction.

ILS – Plaintiff eDiscovery Experts

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