News Report: Mr. Mark T. Pappas of Victor Stanley v. Creative Pipe “Fame” Denied Bail

Book Review: “Zubulake’s e-Discovery: The Untold Story of My Search for Justice,” by Ms. Laura A. Zubulake
August 18, 2012
“Too Much Evidence” – Criminal Charges Dismissed
August 19, 2012

The Maryland Daily Record reports that Mr. Mark T. Pappas, protagonist in the “Victor Stanley case,” was denied bail “because of his ‘long history’ of noncompliance [with Court orders] and ‘lack of candor’ in the [Victor Stanley] litigation.  Ben Mook, “Back from Belize, Pappas denied bail,” The Daily Record, Aug. 15, 2012.  The Daily Record reports that Mr. Pappas owes more than $3 million in damages and sanctions, and that an arrest warrant “was issued  on Dec. 28, 2011, after he missed court dates and failed to make required payments to Victor Stanley, Inc. . . .” Id.

Mr. Pappas gained ESI fame in Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D.Md. 2010)(“Victor Stanley I”), aff’d in part, modified in part,  MJG-06-2662 (D.Md. Nov. 1, 2010), subsequent opinion, 2011 WL 2552472 (D.Md. Jan. 24, 2011)(“Victor Stanley II”),  decision on merits, 2011 WL 4596043 (D.Md. Sep. 30, 2011), appeal pending. 

In short, “Pappas competed against Victor Stanley for site furnishing contracts using the pilfered designs under the trade name ‘Fuvista,’ which Pappas later admitted was short for ‘FU Victor Stanley.’”  B. Mook, “Infringer hauled back from Belize to face civil contempt charges,” The Daily Record (Aug. 13, 2012)

Victor Stanley I chronicled, in the Court’s words, defendant “Pappas’s dogged but unsuccessful attempts to prevent the discovery of ESI evidence against him. . . .”  The Hon. Paul W. Grimm described Victor Stanley I as “the case of the ‘gang that couldn’t spoliate straight.’” In the Court’s words: “Plaintiff [Victor Stanley, Inc.] is fortunate that Pappas’s zeal considerably exceeded his destructive skill and his judgment in selecting confederates to assist in his efforts to destroy ESI without detection.”  The Court concluded that plaintiff had proven “grave misconduct that was undertaken for the purpose of thwarting Plaintiff’s ability to prove its case and for the express purpose of hamstringing this Court’s ability to effect a just, speedy, and inexpensive resolution of a serious commercial tort.”

In Victor Stanley II, the Court summarized Victor Stanley I:

Suffice it to say that Defendants repeatedly failed to comply with multiple court orders compelling the preservation and production of ESI in response to Plaintiff’s discovery requests, and their overall behavior included spoliation of evidence and the failure of Mark Pappas, who controls Defendant Creative Pipe, Inc. and is himself a defendant, to tell the truth under oath during court hearings regarding the spoliation. The prolonged length and enormous breadth and scope of the spoliation and other violations reached a truly extraordinary level. As a result, the Court treated Defendants’ behavior as contempt and ordered Defendants to pay Plaintiff’s associated costs and attorney’s fees, among other sanctions. Specifically, the Court ordered that, “

ursuant to Fed.R.Civ.P. 37(b)(2)(C), Defendant shall pay monetary sanctions equivalent to Plaintiff’s attorney’s fees and costs, which will be awarded after further briefing by the parties, and which will include fees and costs associated with all discovery that would not have been untaken but for Defendants’ spoliation, as well as the briefings and hearings regarding Plaintiff’s Motion for Sanctions.”. . . . Additionally, in its Memorandum, Order and Recommendation, the Court stated that “spoliation sanctions shall include costs and legal fees allocable to spoliation. Specifically, as Plaintiff requested, the Court shall award attorney’s fees and costs, including costs related to uncovering Defendants’ discovery abuses; preparing, filing, and arguing all of Plaintiff’s ESI motions; and retaining Guidance Software and Andreas Spruill.”

Thus, in Victor Stanley II, the Court addressed the fees, costs, and expenses to be awarded and wrote “it is hereby ORDERED that relief in the form of payment by Defendants of $1,049,850.04 for attorney’s fees and costs is GRANTED. Defendants already remitted payment of $337,796.37, and shall remit payment of the balance, $712,053.67, to Plaintiff within thirty (30) days of this Order.”

The August 15, 2012, Daily Record reports that:

By December, Pappas had paid $478,409 toward the sanctions, but said he was unable to come up with the balance. He offered to make a $100,000 “good faith” payment and further installments of $20,000 a month, which the court agreed to.

During Wednesday’s deposition, he was questioned about why he had not made the $100,000 payment.

“It was a bad judgment error,” he said. “I should have made it.”

He said he was paid a salary of $190,000 in 2011, while his wife, who also worked for the company, was paid $100,000. He also collected rent from Creative Pipe on office space he owned.