Blawgletter®

When Judges Get Mad: Third Circuit Tosses Mistrial, Sanction over Spoliation That Didn't Happen

Nightmare on the stand

The trial judge asks your client what happened to the originals of two key documents. Your client admits she has them at home. The UPS lawyer loudly insists that he'd asked for the "originals" over and over again in discovery. 

What does the trial judge do? Order a recess until your client retrieves the originals? Instruct the jury to infer something bad about the documents, as the UPS lawyer asked him to do? No. The judge sends the jury home. He declares a mistrial. And he invites UPS to move for sanctions. Then he grants UPS's motion and tosses your client's case with prejudice under his "inherent authority".

The Third Circuit today reversed, largely because of "misrepresentations of the record promulgated by UPS." Bull v. United Parcel Service, Inc., No. 10-4339, slip op. at 13 (3d Cir. Jan. 4, 2012). It shows how nutty spoliation claims can become -- and what happens when a judge's pique colors judgment. Cf. Achilles, Wrath of.

Holdings

The panel first ruled that spoliation includes not only destroying evidence but also hiding it. Their honors also agreed with the district court that Ms. Bull could have foreseen "the future need to provide access to the original notes", which might have shown signs of alteration undetectable on copies.

The court then held that the trial judge clearly erred in finding that Ms. Bull "withheld" the originals -- not least because UPS never asked for them in discovery. That fatal flaw also doomed the conclusion that Ms. Bull acted in bad faith. How could she withhold something in bad faith if she didn't even know the other side wanted it?

The panel reversed the judgment and remanded the case for a retrial.

"Originals" of e-docs?

The court also spoke in a footnote to the strangeness of applying spoliation concepts to electronic information:

As electronic document technology progresses, the concept of an "original" document is becoming more abstract. Moving from the more easily distinguishable photocopy or facsimile to documents created, transmitted and stored in an electronic form means that it will be increasingly difficult to ascertain where the boundary of an objectively reasonable duty to preserve such documents lies. There are—and increasingly will be—circumstances in which the foreseeability of a duty to preserve the information contained in a particular document is distinguishable—under an objective analysis—from the need to preserve that information in its "original" form or format. Indeed, arriving at a common understanding of what an "original" is in this context is challenging enough. Although it does, and always will rest with the courts to preserve the distinction between an objectively foreseeable duty and actual knowledge of such a duty, there is a concomitant obligation that counsel must assume to clearly and precisely articulate the need for parties to search for, maintain, and—where necessary—produce "original" or source documents. This case gives us one more opportunity to highlight our position that clarity in communications from counsel that establish a record of a party’s actual knowledge of this duty will ensure that this technology-driven issue does not consume an unduly large portion of the court’s attention in future litigation.

Id. at 23 n.12.

 

Federal Circuit Upholds $4.6MM Worth of Patent Prosecution Estoppel

If you wonder what "prosecution history estoppel" in a patent infringement case means, you might check out MarcTec, LLC v. Johnson & Johnson, No. 10-2085 (Fed. Cir. Jan. 3, 2012), in which the court affirmed an award of $4,683,653.03 in fees and expenses to the defendants.

MarcTec alleged infringement by the "Cypher stent" -- "a balloon expandable drug-eluting stent" that aims to help people with coronary artery disease. But, during the prosecution of the patents, MarcTec overcame objections to the applications by saying two key things -- that coating of the device with medicine had to occur as a result of applying heat and that the patent didn't cover -- you guessed it -- stents. The record revealed that the drug on the Cypher stent didn't bond to it as a result of heat. Yet MarcTec insisted that the Cypher stent infringed.

The district court ruled that patent history estoppel barred MarcTec from claiming that the patents covered the Cypher stent. It also deemed the case "exceptional" due to MarcTec's "bad faith" in pressing the claims and awarded Johnson & Johnson and Cordis more than $4.6 million in fees, expert expenses, and other outlays. The court of appeals affirmed.

On the "heat" bonding issue, the panel wrote:

As Cordis correctly argues, MarcTec cannot claim to be ignorant of the references to heat in the claims, the language in the specification discussing the importance of heat to the bonding process, or Dr. Bonutti’s statements to the PTO. Indeed, as we noted in the prior appeal, the doctrine of prosecution history estoppel prevented MarcTec from asserting its construc-tion of the term "bonded." After careful consideration and review of the record, we agree with the district court that MarcTec’s proposed claim construction, which ignored the entirety of the specification and the prosecution history, and thus was unsupported by the intrinsic record, was frivolous and supports a finding of bad faith.

MarcTec, slip op. at 18. On the question of stent v. no stent, the court said:

While it is clear that "[d]efeat of a litigation position, even on summary judgment, does not warrant an auto-matic finding that the suit was objectively baseless," here the record supports the district court’s finding that Marc-Tec pursued objectively baseless infringement claims. . . . The district court found that the "written description and prosecution histories of the patents-in-suit, and other documentary evidence, demonstrate that MarcTec’s patent infringement case was baseless." . . . . The court further found that, because MarcTec disclaimed stents to overcome the prior art, it could not turn around and assert infringement against the Cypher stent. Because the specification and prosecution history clearly refute MarcTec’s proposed claim construction, the district court did not err in finding that MarcTec’s infringement claims were objectively baseless.

Id. at 19 (omitting citations).