Case Law

Failure to Engage in Basic Litigation Hold Results in Sanction


HM Electronics, Inc. v. R.F. Technologies, Inc., 2015 WL 4714908 (S.D. Cal. Aug. 7, 2015) In this trademark infringement case, the plaintiff claimed that the defendants interfered with the plaintiff’s prospective economic advantages by showing documents relating to the plaintiff’s allegedly failed electronics to the plaintiff’s competitors, customers and prospects. The plaintiff claims that the defendants purposefully fabricated reports and engaged in the destruction of highly relevant ESI. The defendants did not dispute the claims, but they did dispute whether their behavior during the discovery period was sanctionable. In reviewing the plaintiff’s request for spoliation sanctions, the court found that the defendants did not engage in reasonable steps to preserve ESI, nor did the defendants engage in any basic attempts to implement a litigation hold once litigation was imminent. The defendants’ counsel did not supervise employees and inform attorneys about the need to follow data collection and preservation processes, and thus even though a vast amount of data was produced, a critical amount of highly relevant data was deleted. Further, citing to the new California state bar ediscovery ethics opinion, the court highlighted the importance of attorney competency relating to ediscovery. As such, the court granted the plaintiff compensatory sanctions in the form of all attorneys’ fees and costs incurred in seeking discovery, as well as granting the plaintiff’s request for an issue of adverse inference instructions against the defendants should the matter proceed to trial.

Keywords: procedure, ESI, sanction