E-Discovery sanctions always draw attention, but in this case, the e-discovery mistakes were so profound, and compounded over so much time, that the presiding judge issued seven-figure sanctions against both the defendant and its former counsel.
Beginning a decade ago in 2012, this case stems from a trademark infringement suit between two electronic cigarette companies. Plaintiff, who held a trademark for the term “21st Century Smoke,” accused the defendant “21 Century Smoking” of violations of the Lanham Act. At the time of the sanctions ruling, the case had still not been resolved.
Throughout e-discovery, the defendant and defendant’s counsel committed numerous e-discovery mistakes resulting in spoliation and production delays, including:
In October 2021, the judge stated the defendant and former counsel “[found] themselves staring down the barrel of a sanctions motion Howitzer.” In October 2022, the judge ruled on the plaintiff’s request for $4 million in e-discovery sanctions.
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This is a classic case of preservation failures and other discovery violations causing extensive wasted time and a frustrated judge. The October 2022 opinion, awarding more than $2.5 million in sanctions, follows the Court’s lengthy January 2021 opinion, cataloging findings of multiple discovery violations and misrepresentations. In its latter opinion, the Court found those sanctions necessary to reimburse plaintiffs for additional fees actually caused by the discovery violations, plus costs of preparing their fee petition.