Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Citing “breathtaking and absolute spoliation” that, at the least, comprised “extremely reckless behavior,” a federal magistrate judge imposed $566,838 in sanctions against Samsung Electronics Co. and related entities for destroying e-mails in a patent infringement case. U.S. Magistrate Judge Ronald Hedges set the fee award on Sept. 1 in Mosaid Technologies Inc. v. Samsung Electronics Co., 01-CV-4340. It includes $455,010 in fees run up by lead plaintiff’s counsel, Jones Day of Cleveland, and $108,831 by local counsel Connell Foley of Roseland, N.J., plus $2,997 in costs. In the suit, Mosaid Technologies, an Ottawa-based semiconductor company, alleges that Samsung, a Korean electronics company, infringed its patents for dynamic random access memory, or DRAM, chips. Many of the documents in the case, including most of the motion papers, were filed under seal, presumably to protect the parties’ intellectual property. Hedges’ ruling this month followed up on his July 7 opinion that found the plaintiff entitled to monetary sanctions for fees and costs it spent pursuing discovery and moving for sanctions. Samsung was required to preserve and disclose the e-mails even though Mosaid did not expressly ask for them in its document request, Hedges found. “No reasonable litigant could believe that [Mosaid's definition of "document"] did not include e-mails,” he wrote. Samsung pointed to its own explicit discovery request for e-mails, but that merely “underscores defendants’ belief that e-mails were an essential source of evidence,” Hedges wrote. He also spurned Samsung’s arguments that Mosaid had not shown evidence of prejudice and never raised the e-mail issue until after the close of discovery, stating “the prejudice resulting from complete and total spoliation seems particularly obvious.” Samsung’s “effective concession of absolute spoliation of technical e-mails” was enough to support an inference of relevance, he said. In addition, Mosaid made a prima facie showing with an affidavit from a former Samsung employee on the extensive use of e-mail at the company, Hedges pointed out. On the general duty to preserve the e-mail, defendants had sole control over them and “knew or should have known they were discoverable, given their heavy reliance on e-mails obtained from plaintiff during discovery, not to mention the obvious realities of modern litigation.” In the July ruling, Hedges denied Mosaid’s request to sanction Samsung with a finding of infringement but held that, on top of the monetary sanctions, he would tell the jury it could draw adverse inferences from Samsung’s failure to produce the e-mails. In the Sept. 1 opinion, Hedges specified the phrasing of the adverse inference jury instruction. Jurors will be advised that “defendants failed to produce virtually all technical and other e-mails in the case” and that plaintiffs contend the e-mails are relevant to their claims. They will also be told that, if they find Samsung “could have produced these e-mails, and that the evidence was within their control, and that the e-mails would have been relevant in deciding disputed facts in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to defendants.” Mosaid had requested stronger language that would have referred to a court finding that Samsung had destroyed all the e-mail messages and would have instructed jurors that they could infer the content of the missing e-mails would have been harmful to Samsung. But Hedges said Mosaid’s suggested instruction would have advanced the punishment and deterrence goals of an adverse inference instruction but its effect would have gone beyond the aim of making the wronged party whole and “would elevate these e-mails to an arguably unjustified level of importance and create a potentially insurmountable hurdle for defendants.” On the other hand, he found Samsung’s requested wording too weak. Referring to the e-mails as having been deleted in the ordinary course of business “grafts a certain innocence onto the event that is unwarranted by my findings, and, more important, that will need to be proven at trial,” Hedges wrote. Further, to instruct the jurors, as Samsung wanted, that they could draw a negative inference if they decide evidence is lacking to establish a material fact would reward the spoliation “because only the evidence they chose to produce would be factored into the calculus of whether a material fact had been ‘sufficiently established,’” wrote Hedges. Hedges based the sanctions ruling on his inherent power as a judge and on Fed. R. Civ. P. 37, which authorizes penalties for not complying with discovery. The sanctions were well below the more than $1.35 million in fees and cost requested by Mosaid. Hedges disallowed more than $250,000 in expert fees as well as attorney fees for work that appeared duplicative or unrelated or was too vaguely described. He also excluded fees for time spent reviewing materials produced by Samsung because Mosaid would have had to do that anyway. He made no reductions, however, in the hourly billing rates. The rates ranged from $170 for Connell Foley associate Thomas Pasuit up to $640 for Jones Day partner Robert Kahrl. Samsung’s lawyer, Robert White, of Morgan Lewis & Bockius in Princeton, declines comment, as does Liza Walsh of Connell Foley. Kahrl did not return a call.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.