Addressing sanctions awards against plaintiff and its counsel, the Federal Circuit found that plaintiff’s counsel personally violated discovery orders and that sanctions were appropriate. Rates Tech., Inc. v. Mediatrix Telecom, Inc., Case No. 11-1384 (Fed. Cir. July 26, 2012) (Bryson, J.).
RTI sued Mediatrix for infringement of two patents directed to systems for minimizing the cost of placing long-distance phone calls. Mediatrix was granted early, limited discovery of RTI’s infringement contentions. To aid RTI in preparing its contentions, Mediatrix was ordered to produce technical documents. RTI was given four opportunities to provide its infringement contention, but failed to give an adequate response. As a result of RTI’s failure, the magistrate judge filed reports and recommendations that RTI’s failure was willful, that the case should be dismissed and that attorneys’ fees should be assessed equally against RTI and its lead counsel under Fed. R. Civ. P. 37(b)(2)(C). The district court refused to hear oral arguments and adopted the magistrate judge’s recommendation in its entirety.
On appeal, RTI’s lead counsel argued that he should not be sanctioned for failing to provide information not within his possession, that the sanction violated due process, that he should not be sanctioned because he did not personally violate any discovery orders and that the district court improperly denied his request for oral arguments on the motion for sanctions. The Federal Circuit panel rejected each of these arguments.
First, the Federal Circuit noted that the magistrate judge had made a finding that Mediatrix’s production was substantial and that RTI had more than enough information to respond to the contention interrogatory. Therefore, the Court concluded that RTI’s lead counsel was not sanctioned for failing to produce information that he did not have. Second, his due process argument was rejected because the lower court found that he had sufficient information to respond to the contention interrogatory. Third, the Court rejected the argument that RTI’s lead counsel did not personally violate the discovery orders by holding that, as lead counsel, he had a duty to comply with the district court’s orders, which he failed to do. Fourth, the Court looked to regional circuit law (the U.S. Court of Appeals for the Fourth Circuit), which only requires notice and an opportunity to respond by brief or oral argument, to uphold the district court’s refusal to hear oral arguments on the sanctions motion. In fact, the Federal Circuit noted that the parties had ample opportunity to argue the sanctions issue at a hearing in 2007. Finally, the Court noted that the lead counsel’s brief on appeal contained several statements that the Court characterized as “misleading or improper,” although the Court stated that this played no role in its ultimate decision.