Sanctions orders are traditionally relatively rare in the Eastern District of Texas, in part because so many lawyers in the district are repeat players, and have a clear understanding what conduct Eastern District courts believe is and is not appropriate.
However, from time to time there are factual situations that generate sanctions orders that provide us all with some useful data points on what conduct is not proper.
How Not to Read a Calendar
For example, in a recent patent case in Marshall in which the defendant was represented solely by an out-of-state attorney, the court addressed a motion to compel on emails. The parties had agreed on search terms, but were not able to come to agreement on a date for production. The court declined to accept the representation that the party was "trying to get it as quickly as they possibly can," and pressed for a date certain. The party's counsel then offered two weeks, with a representation that it would try to get it before then if it could. Unfortunately the party didn't make that date, but instead produced several hundred thousand pages of documents approximately a month after the deadline.
"The most troubling aspect of this record," the Court observed was that counsel "continue to maintain that his clients complied with the court's order. When asked, point blank, 'and you still contend that you complied with this order?' he responded 'I do, Your Honor.' The court finds this lack of candor to be below the standard expected from officers of this court." (Emphasis mine). The order went on to state that the court believed that the party had a "fundamental misconception" about what it means to comply with an order to produce by documents by a certain date and to clear this up specifically rejected the position that a party can withhold from production any documents that hit a "privilege screen" composed of certain keywords designed to indicate which documents might be privileged, and then produce those documents after the deadline. Such privilege screens can be used to assist their review of documents, the Court observed, "but the law requires this review to be accomplished in time to produce all non-privileged documents by the deadline, and provide a privilege log listing the documents withheld by that deadline as well." Again, keep in mind that this was a case where the Court set an outer limit deadline - which was one that the producing party proposed, and never sought to have modified.
With respect to a remedy, the court declined to strike witnesses, and concluded that there did not appear to be a deliberate attempt to delay the production, but instead a failure to devote the additional resources necessary to comply or to properly confer with opposing counsel and seek leave of court to adjust the schedule for document production when it potentially became necessary. The court did, however, assess as a sanction all expenses, including reasonable attorneys fees, incurred by the plaintiff as a result of the need to file and argue the underlying motion to compel and motion for sanctions. The parties subsequently met and conferred on the relevant amount and reached agreement on $30,000.
"Complete good faith compliance with protective orders is essential to modern discovery practices"
In another patent case, the defendant asserted that plaintiff's counsel disclosed information protected by the amended protective order entered in the case three times in an unrecorded hearing at the Patent Trial and Appeal Board (PTAB). The court disagreed with respect to two of the three asserted improper disclosures, but did agree that there had been disclosure of information regarding the defendant's litigation budget and revenues, both of which were designated as confidential under the protective order entered by the court in the case. The Court found the disclosing that information to the PTAB panel violated its protective order, and was conduct subject to sanction.
With respect to the appropriate sanction, while the Court directed the plaintiff to join in a motion with the defendant to the PTA be requesting that the information be sealed, it did not consider that requirement to be a sanction, let alone one sufficient for deterrent purposes.
In determining an appropriate sanction, the Court found that plaintiff's counsel's conduct was far less egregious than conduct referenced in cases cited to the court, and concluded that defendant's counsel had failed to mitigate the breach. Accordingly, it denied the defendant's request for attorneys fees. However, the Court noted "the need to promote respect for, and meticulous observance of protective orders, to deter plaintiff from repeat offense, and to deter others from similar conduct" as important objectives, in addition to the factors that look to the actual injury to the aggrieved party and that party's efforts to mitigate damage.
"Complete good faith compliance with protective orders is essential to modern discovery practices," the Court wrote, "and counsel must temper their zeal and representing their clients with their overreaching duty as officers of the court. Given the amount at issue in this case, and the importance of scrupulous adherence to protective orders in intellectual property cases to promote the exchange of confidential and proprietary technical information, the court finds that a sanction of $2,500 is the least onerous sanction that is sufficient to remind counsel of this duty, deter future violations in the suit, and serve as an adequate general deterrent for similar conduct. A lesser sanction would not be sufficient to achieve these objectives."