Sanctions for Discovery Misconduct

The ABA reports that a Judge criticizes ‘nasty litigation tactics’ while sanctioning BigLaw firm (abajournal.com)[1]  Sanctions were based on statements the court deemed to be untrue and deposition conduct the court deemed to be unprofessional and rude.[2]

The court wrote:

After considering all the evidence and arguments, I find that Stryker failed to meet some of its preservation obligations, and that Stryker’s counsel turned this case sour with nasty litigation tactics. As I stated during the trial, I was “appalled” at Stryker’s lawyers’ “playing fast and loose” with discovery obligations. I agree with the Special Master that Stryker’s failure to preserve text messages in December 2019 was either willful misconduct or gross negligence. That action may have become water under the bridge with the recovery of most text messages. But Stryker’s counsel’s November 1 representation that “ all texts between the Sales Reps and Mr. Jacobs and/or Mr. Bonessi during the alleged spoliation period are being produced today,”… (emphasis in original), was simply untrue.

ORP Surgical, LLP v. Howmedica Osteonics Corp, 2022 WL 1468115, at *13 (D. Colo. May 10, 2022).[3]  It wrote:

This conduct by lawyers of a respected Chicago-based law firm convinces me that sanctions are appropriate but, like the Special Master, I struggle to find the appropriate ones. The Special Master believed — as do I — that the sanctions should have teeth….  The Court orders defendant and its counsel to reimburse plaintiff for the full amount of plaintiffs’ share of the Special Master’s fees and costs. Half of this reimbursement should be paid by Stryker for its failure to preserve text messages, and the other half should be paid by the [name omitted] law firm for the misconduct of counsel during the discovery process. The Court also admonishes counsel. This was a large, important case for both parties. The parties were entitled to zealous advocacy from their outside counsel and from their inside corporate attorneys. However, zealous advocacy does not justify abusive conduct or hiding the ball.

In a prior decision, the court addressed the trigger of the duty to preserve: “The duty to preserve evidence is triggered when a defendant reasonably anticipates litigation involving the evidence.… The Special Master found that Stryker, a large and sophisticated company with experienced lawyers on staff, should have been alerted to the need to preserve evidence at least by preservation demands in letters from ORP’s litigation counsel to Stryker’s employment counsel dated December 12, 2019 and a letter from ORP’s counsel to Stryker’s in-house counsel dated January 16, 2020.”  ORP Surgical, LLP v. Howmedica Osteonics Corp, 2021 WL 5280192, at *2 (D. Colo. Nov. 12, 2021).

It then added: “If appropriate steps had been taken within a few days after January 16, 2020, the auto delete function would have been turned off and text messages on or after December 20, 2019 would have been preserved. Stryker had an obligation to preserve Jacobs’ and Bonessi’s text messages made in their capacity as employees and representatives of Stryker.”

Unfortunately: “[t]he Special Master further found that there was no evidence before him that any of the deleted text messages could be recovered, although to the extent they could be recovered in time for ORP’s use at trial, that would reduce any sanction.”

After the Special Master recommended sanctions: “Stryker then indicated that the text messages had been recovered from the Sales Representatives’ phones and “all texts between the Sales Reps and Mr. Jacobs and/or Bonessi during the alleged spoliation period are being produced today.” Id. (emphasis in original).”  In the words of Ms. Weiss’s ABA article:

After the special master recommended spoliation sanctions “the missing text messages turned up,” [Judge] Jackson said. [emphasis added].

The court wrote:

Stryker is indeed a large and sophisticated company. It has sophisticated counsel, both in-house and outside. Stryker’s counsel absolutely should have made it their business after receiving ORP’s preservation demands in December 2019 and January 2020 to assure that text messages of its employees who were communicating with the 14 sales representatives would be preserved. Their failure to do so was either intentional or grossly negligent, and I am not inclined to find that sophisticated in-house litigation counsel and any outside counsel from whom Stryker was seeking advice as to the ORP matter at the time would make such mistakes. Had the messages not been recovered, and had this been a jury trial, I would have given the adverse inference instruction. That itself may be considered to be a sanction of sorts.

Id.[4]  For a discussion of “zealous advocacy,” see M. Berman and The Hon. Paul W. Grimm, “The Duty to Cooperate in Discovery,” in M. Berman, et al., eds. “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), Chap. 14.

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[1] Debra Cassens Weiss, ABA Journal (May 17, 2022).

[2] See generally Rule 11 Sanctions for Impugning Character of Opposing Counsel.

[3] As to deposition misconduct, the court “reviewed a video of a portion of the Shackelford deposition, and I agree that defense counsel’s conduct was rude, unprofessional, and inappropriate.”  ORP Surgical, 2022 WL 1468115, at *14.  Additionally, a Rule 30(b)(6) designee was not properly prepared.

[4] The court also addressed overuse of AEO and confidentiality designations: “The Court adds that counsel’s labeling of every text message as ‘attorney’s eyes only’ or ‘confidential’ when most of them are likely innocuous and undeserving of such labels was inappropriate and has wasted both parties’ money and the time of the Special Master and the Court.”  ORP Surgical, LLP, 2021 WL 5280192, at *2.