SAN JOSE — A state judge has proposed heavy sanctions against a Cupertino law firm for what she has called “egregious” and “extreme” ethical violations, including the manufacture and destruction of evidence. Santa Clara County Superior Court Judge Mary Arand is prepared to impose a combined $500,000 in sanctions against Grellas Shah partners George Grellas and Dhaivat Shah, associate David Siegel and their client, public safety software provider VeriPic Inc.

VeriPic and its lawyers continued to pursue a 2009 defamation lawsuit against VeriPic competitor Foray Technologies, even after they should have known the suit had no merit, Arand wrote in a 59-page order issued Friday. In addition, it appears the attorneys instructed their client to fabricate certain evidence and destroy other evidence to support the fictitious claims, Arand wrote.