Another “Civil Vigilante” or, Don’t Steal the Opponent’s Documents

Mr. Gruendel took a collection of documents from his former employer, defendant Figure AI, Inc. The court ordered them returned and, “Mr. Gruendel and his counsel must destroy and must not retain any of the Figure documents, and must cause the vendor to destroy the vendor’s copy of the Figure documents….”  Figure was then ordered to search the documents and produce any responsive, non-privileged documents to Mr. Gruendel. Gruendel v. Figure AI, Inc., 2026 WL 1947626 (N.D. Cal. Jul. 7, 2026).

I have previously written about “Civil Vigilantism” – Sanctions for Surreptitious “Self-Help” Investigation (Mar. 9, 2023). That post discussed three cases demonstrating that surreptitious “self-help” to obtain evidence from an opponent outside of the discovery process, even if it occurs prior to commencement of an action, is – at a minimum – imprudent.  See also “Self Help” Discovery in Someone Else’s Dropbox is Held to be Sanctionable (Nov. 10, 2023); Sanction for Dropbox Rummaging Affirmed (Jun. 3, 2024).  One decision stated that “a litigant may not invoke the courts to assert their legal rights, then engage in extralegal conduct.”  “Self Help” Discovery Results in Striking of Wrongfully Obtained Evidence (Mar. 3, 2025).

The details of Gruendel are interesting. Mr. Gruendel developed and enforced Figure’s global safety strategy.  He developed many safety documents, but “formed the view “that Figure’s robots posed a danger to humans.”  He raised his concerns and was subsequently terminated. He sued, alleging retaliation for whistleblowing. Figure contended that he was terminated for poor performance.

Figure also filed a counterclaim alleging misappropriation of trade secrets: “Figure alleges that Mr. Gruendel ‘secretly and indiscriminately’ copied ‘vast numbers’ of Figure documents, including confidential and trade secret information, for his own personal use; retained and continued to access the documents following his termination; and then attempted to ‘cover his tracks’ by deleting them.”

Figure was correct. The court wrote: “Mr. Gruendel acknowledges that he obtained and continues to retain thousands of Figure’s documents—at least 17,880 documents and perhaps as many as 40,000 documents—which were stored on or accessible from Mr. Gruendel’s Figure-issued laptop and a flash drive (‘Figure documents’)…. He concedes that this collection includes documents containing privileged communications for which Figure is the privilege holder, and he does not dispute that the documents include Figure’s confidential and proprietary information.”

The court framed the issue: “The question presented by this dispute is how the Figure documents should be treated in discovery, including whether Mr. Gruendel should be permitted to retain and access any of them.”

The parties’ positions were:

• “Figure argues that the Figure documents were ‘stolen,’ and that no authority permits Mr. Gruendel or his counsel to retain and access any of these documents, unless Mr. Gruendel makes a particularized showing that specific documents are reasonably necessary for pursuit of his whistleblower claims.”
• “Mr. Gruendel responds that he has identified the specific categories of documents he obtained and their direct relationship to his claims…. In addition, he argues that taking even large volumes of documents in aid of his whistleblower claims is permissible protected activity.”

The court wrote that the parties missed the discovery issue: “The parties’ arguments and authorities focus on the merits of Mr. Gruendel’s and his attorney’s conduct—such as, whether taking a former employer’s documents violates the employee’s confidentiality obligations, constitutes trade secret misappropriation, or warrants disqualification of counsel, or whether public policy permits an employee to take and use a former employer’s documents in aid of a whistleblower claim or other claim against the employer, and further permits him to share those documents with his counsel. A discovery dispute is not the appropriate vehicle for determination of the merits of the parties’ respective claims and counterclaims, and the Court will not resolve those questions here. Rather, the Court considers the question of how best to manage discovery pertaining to the Figure documents, given the circumstances presented.” Id. at *2 [emphasis added]. It reasoned:

The record before the Court on this discovery dispute reflects that Mr. Gruendel took tens of thousands of documents from his former employer. He has made no showing that he requires any specific documents or specific categories of documents to pursue his whistleblower claims against Figure. At most, Mr. Gruendel refers to categories of data that he labeled with his own name (e.g., “Rob Screenshots”), suggesting that such labeling reflects he made deliberate and particularized determinations about what to take from his former employer…. At worst, Mr. Gruendel describes other categories of documents he took in the most generic terms (e.g., “internal communications”), with no explanation about the need for any specific document…. In any event, Mr. Gruendel has not made a particularized showing that he requires access to the entire collection of Figure documents in order to prosecute his claims. Perhaps he will be able to make such a showing, as to some or all of the documents, on the merits at the appropriate time, but he has not made it here.

As the Figure documents are indisputably Figure’s documents, and because they appear to include the company’s confidential and proprietary information, as well as documents protected from disclosure by a privilege or protection, the Court concludes that Figure should be responsible for the review and production of responsive documents from this collection during discovery.

The court ordered:

1. If Mr. Gruendel has not already done so, he must produce (or cause his vendor to produce) all of the Figure documents to Figure by July 8, 2026.
2. Thereafter, Mr. Gruendel and his counsel must destroy and must not retain any of the Figure documents, and must cause the vendor to destroy the vendor’s copy of the Figure documents by July 9, 2026.
3. Mr. Gruendel and his counsel must certify in a writing delivered to Figure’s counsel by July 10, 2026 that they have complied with (1) and (2), above.
4. Figure must preserve and maintain the Figure documents as a distinct collection for the duration of this action, unless relieved of this obligation by stipulation of the parties or by a court order.
5. If it has not done so already, Figure must produce to Mr. Gruendel the non-privileged documents from the Figure documents to which the complaint refers in paragraphs 18-75 by July 17, 2026.

I don’t do whistleblowing litigation and there may be special issues there.  However, in Campbell v. Aberdeen Providing Ground Federal Credit Union, 2025 WL 608046 (D. Md. Feb. 25, 2025), the court wrote that: “Under the inherent authority of the federal courts to safeguard the integrity of their proceedings, this Court may prohibit a litigant from using information they obtained and/or used improperly, even if the relevant acts occurred prior to the litigation. Based on the record the parties have assembled, the Court finds that Campbell improperly used confidential materials she found on Aberdeen FCU’s computer systems. She will be barred from using those materials as affirmative evidence in her case, even if the materials would have been obtained through discovery.” [Emphasis added]. The sanction “signals to Campbell and other litigants that one must deal honestly before the courts.”

Maryland decisions have long condemned self-help instead of rules-based discovery.  Courts have said that the proper method to obtain information is to use the discovery process. “Civil Vigilantism” – Sanctions for Surreptitious “Self-Help” Investigation