Personal Audio, LLC v. Apple, Inc., et. al., 9:09cv111 (E.D. Tex. 6/16/11)
Judge: Ron Clark
Holding: Motion for Discovery Sanctions GRANTED
Today's theme seems to be things not to do three weeks before trial.
Three weeks before the second trial setting in this case, defendant Apple produced to plaintiff Personal Audio approximately 418 documents totaling more than 6,300 pages. Personal Audio moved for sanctions in light of the late document production, and the court held an expedited hearing on the motion. For the reasons stated in this order and on the record at the hearing, Judge Clark concluded, the late production was not substantially justified or harmless, and granted Personal Audio’s motion for sanctions. He also imposed a monetary sanction in the amount of $10,000 "in order to deter future similar conduct both by Apple and by other litigants" and assessed other procedural sanctions as noted below.
The majority of the newly-produced documents came from a nine-year-old disk that Apple said the relevant witnesses didn't remember and which wasn't discovered until one of the witnesses moved offices recently. "A reasonable inquiry should have revealed these items long ago," Judge Clark concluded. "Despite the fact that Mr. Robbin appears to be an important Apple witness who was involved in the early design of the iPod, Apple only perused Mr. Robbin’s email. Apparently, Apple never inquired whether he had any non-electronic documents or items that might be relevant to this case."
The thing that is worth noting about this opinion is Judge Clark's inclusion of several paragraphs in the order of what he told the parties about the importance of the court's mandatory disclosures back at the scheduling conference in this case. It's a familiar speech to practitioners in Judge Clark's court (we refer to it as the "Judge Clark's dad speech" but we all know what it means), and he requires a corporate representative to be present at that conference to hear it. (Phone is fine although he noted that Apple had a representative there live in this case). In this case, Judge Clark said the following:
While many of you and probably Apple have been involved in many cases in the Eastern District, this is a district of open disclosure and full disclosure, more so, as near as I can tell, than most districts in the country; and it’s something that’s been going on before we had very many patent cases here.
The reason this is important is—and it was my experience in dealing with clients when I was an attorney—is many times clients don’t believe it because they’re used to trying things in other places. And, so, the local counsel or trial counsel tells them what needs to be done and they don’t believe it and then they’re surprised at trial when witnesses aren’t allowed to testify on their behalf, experts are struck, evidence doesn’t come in because it wasn’t timely disclosed or there were attempts made to hold things back.
And I’ve also had some unfortunate circumstances where the engineers who really knew what was going on failed to tell the attorneys because they’re engineers and they’re out there trying to make a profit and build products and, like my dad who was an engineer, did not like talking to attorneys. And, so, it’s very important that corporate representatives make real sure that these key engineers take the time to speak with counsel early on because a month before trial is too late.
And I’ve seen cases lost on the mere fact of an engineer who just had too many things to do but a month before trial or when everybody was getting ready says, “Oh, what about this?” He comes up with a bunch of documents and a bunch of reasons. That’s not coming in.
But, of course, outside counsel has no real control over the people like the corporate representatives do. So, please make them understand this is real. These are the rules they’re operating under, and the information up-front is what counsel need.
(Emphasis mine). Note Judge Clark's repeated emphasis on "a month before trial"? It's almost like he understands how these cases are prepared, and was trying to warn practitioners that that dog won't hunt around here.
Judge Clark also emphasized that "[t]his is not the first time that important evidence has untimely emerged in this case" noting that a prior late disclosure of a "very important piece of potentially invalidating prior art" resulted in a continuance of the case's first trial setting. (Readers might recall that I posted a few months back where Judge Davis encountered a similar situation and decided to exclude one piece of late-disclosed prior art but allow the other in the Acqis v. IBM case). "The court finds that Apple has engaged in a pattern of failing to meet its obligations to search its records and files and question those employees known to have information that Apple may use to support its claims or defenses, and to disclose such information in accordance with the Federal Rules of Civil Procedure and the orders of this court."
In addition to the $10,000 fine, the Court also entered the following sanctions:
(1) Personal Audio may depose Stan Ng in Houston, Texas on Friday, June 17, 2011. Apple shall make Anthony Fadell and Jeff Robbin available for deposition in the evening two days prior to the day on which each is expected to testify at trial. The total time allotted for each of these depositions is two (2) hours;
(2) All of the newly-produced documents and MP3 players are admissible for Personal Audio’s use at trial;
(3) Apple may not use or introduce the newly-produced documents and MP3 players as evidence at trial. Apple’s experts shall not rely on or discuss any of the newly-produced documents or MP3 players. Apple may, however, cross-examine Personal Audio’s witnesses about any document or MP3 player introduced by Personal Audio;
(4) When asking questions about one of, or a group of, the newly-produced documents or MP3 players, Personal Audio may tell the jury that the item or items were produced less than a month before trial. Personal Audio may utilize this sanction only twice.