Discovery Sanctions: Default Judgment, $1M Fine

Per BNA's U.S. Law Week, March 15, 2011, Volume 79 No. 34:

A patent case plaintiff's discovery misconduct elicited sanctions of a default judgment and a $1 million fine from the U.S. District Court for the Northern District of Illinois Feb. 23. The court initially sanctioned the plaintiff when its witness made statements during his deposition that contradicted the statements made in the plaintiff's motion for summary judgment. The same witness subsequently admitted that he turned back the clock on source code on zip disks at issue in the case, as well as “wiping” USB drives, which makes deleted files unrecoverable even with advanced equipment. The court also found that the plaintiff's responses to numerous discovery orders were excessively delayed. The court said that a “party's failure to preserve evidence alone constitutes bad faith, [and] the additional destruction of evidence is beyond sufficient to warrant a default judgment against that party.” It also imposed a $1 million fine on the plaintiff, and required counsel to pay costs and attorneys' fees related to the sanctions motion. Rosenthal Collins Group LLC v. Trading Technologies International Inc., N.D. Ill., No. 05 C 4088, 2/23/11.