Case Report – Appeal court restores defence struck as a remedy for spoliation

On February 13th the Prince Edward Island Court of Appeal held that a motions judge erred in striking a statement of defence as a sanction for non-production. The Court suggested that such a strong sanction should not be utilized for discovery abuse in the absence of a finding of bad faith or contempt given the difficulties in assessing relative prejudice before trial. It nonetheless sanctioned the defendant by imposing conditions on the use of records subsequently found, by specifying that the trial judge may presume damages and by awarding costs of the motion and appeal to the plaintiff.

Jay v. DHL, 2009 PEICA 2 (CanLII).

Case Report – Defendant sanctioned for failure to produce despite partial proportionality plea

On February 13, 2008, the Supreme Court of Prince Edward Island (Trial Division) struck a statement of defence as a sanction for non-production. The judgement is notable for its strong statements in favour of full-production despite burden and despite any assignment of particular value to the evidence sought. However, the defendant’s ability to raise proportionality was limited by a number of factors, including that the burden of production appeared to have been caused by a failure to take reasonable preservation steps (i.e. there was a so-called “downgrading” of data). The defendant also raised the burden of production late in the dispute in response a contempt motion.

Thanks again to Peg Duncan for passing this on. Peg edits the case digests on LexUM’s e-Discovery Canada site. Please check them out!

Jay v. DHL, 2008 PESCTD 13 (CanLII).

Case Report – Motion for discovery sanctions dismissed, conduct not proven to be deliberate

On January 29th the New Brunswick Court of Queen’s Bench dismissed a contempt motion and a request for sanctions in a protracted discovery dispute.

Based on an earlier motion, decided on July 16, 2006, the defendants were ordered to provide a further and better affidavit of documents and to provide direct access to a computer system (including active and archived data). They did not provide such access and were sluggish in disclosing documents. The plaintiffs then brought a second motion in June 2007, asking the Court to infer malfeasance from the sluggishness and the fact that the defendants had continued to disclose documents after certifying earlier that they did not exist.

The plaintiffs’ motion was initially heard in June but concluded in late December. While the Court remained seized of the motion, in late November and December, the defendants provided two further and better affidavits and provided access to the computer system as previously ordered (without a cost-shifting order as they had requested). The Court held that the plaintiffs had received meaningful production by December 2007 and rejected the plaintiffs’ sanction request.

The Court stressed the high standard for the requested order – framed as a contempt order and striking a defence which the court said had merit. While it held that the defendants were not diligent in preventing electronic information from being downgraded (i.e. altered to be stored in a less accessible form) and even stated that it wondered whether this downgrading was purposeful, it held that this conduct did not merit a contempt order. It also did not draw an inference of malfeasance from the defendant’s sluggishness, recognizing that the discovery task wasn’t easy:

However, as we know, the parties were dealing, amongst other things, with 498 bankers’ boxes of documents and 427 backup tapes that contained information from Spielo’s previous computer system. Certain discrepancies in disclosure, or the misplacement or inadvertent overlooking of a document, is understandable given the enormous volume of material involved in this matter. This is not necessarily indicative of any culpable conduct or malfeasance on the part of the defendants.

While dismissing the motion, the Court did note that cross-examination at trial may shed more light on the issue of deliberate non-disclosure.

Doucet v. Spielo Manufacturing Inc., [2008] N.B.J. No. 27 (QL) (N.B. Q.B.). [CanLII award not yet available.]

More on Qualcomm v. Broadcom Sanctions Case

As I’ve said, there will be lots of commentary about the Qualcomm v. Broadcom case from Americans, and I’d rather leave it to them than wade in myself. So this is just a teaser for those who are unfamiliar with the issue. I’ve also provided some links below if I’ve managed to pique your interest.

The order, released on Monday by a California court, brought an end to an intense dispute about failure to produce relevant e-mails that began this January 26th when a witness for Qualcomm in a patent dispute admitted that she had received e-mails from a mailing list (called the “avc_ce” list) which was evidence of Qualcomm’s participation in a standards setting body (called “JVT,” on the “H.2264” standard) before a specific point in time. In the Court’s words, Qualcomm’s assertion that it had not participated in the JVT was “vital” to its success in defeating Broadcom’s waiver argument, and two days after the admission was made a jury returned an advisory verdict that claimed two of Qualcomm’s patents were unenforceable because of waiver.

After the trial Broadcom asked Qualcomm to conduct additional searches to determine the scope of its discovery violation, and eventually Qualcomm agreed to search the current and archived e-mails of its five witnesses based on the terms “avc_ce,” “JVT,” and “H.2264.” Then, in April, Qualcomm’s general counsel and the lead counsel at trial wrote the trial judge to apologize for failing to produce relevant documents.

Qualcomm eventually located over 46,000 responsive and undisclosed records by searching the e-mail archives of 21 employees. Then…

  • …Broadcom filed a motion for sanctions
  • …Qualcomm’s lawyers were ordered to show cause why they should not be sanctioned
  • …Qualcomm came into conflict with its lawyers about who was responsible and refused to waive its solicitor-client privilege for use by the lawyers in the show cause
  • …which all led to the recent order.

This week Magistrate Judge Barbara L. Major held that both Qualcomm and six of its attorneys committed misconduct, focusing on the failure to conduct an e-mail search on obvious custodians on obvious terms on an issue that was obviously central to the case. She ordered Qualcomm to pay over $8.5 million for Broadcom’s attorneys’ fees and other litigation costs (less costs ordered to be paid earlier), referred six lawyers on Qualcomm’s litigation team to the State Bar of California for investigation and ordered these lawyers and some of Qualcomm’s in-house lawyers to participate in a program to craft a model case management protcol to prevent similar events in the future. It appears this protocol – deemed the “Case Review and Enforcement of Discovery Obligations” or “CREDO” protocol – will become a public source of guidance. The Court said:

While no one can undo the misconduct in this case, this process, hopefully, will establish a baseline for other cases. Perhaps it also will establish a turning point in what the Court perceives as a decline in and deterioration of civility, professionalism and ethical conduct in the litigation arena. To the extent it does so, everyone benefits – Broadcom, Qualcomm, and all attorneys who engage in, and judges who preside over, complex litigation. If nothing else, it will provide a road map to assist counsel and corporate clients in complying with their ethical and discovery obligations and conducting the requisite “reasonable inquiry.”

Here is a copy of the order and here are some links to the early comments and articles: