In a recent order, Administrative Law Judge (“ALJ”) Shaw denied Complainants’ Paice LLC and the Abell Foundation, Inc. (“Paice”) motion for evidentiary sanctions against Respondent Ford Motor Company (“Ford”) for allegedly violating previous discovery-related Order 17. In the Matter of Certain Hybrid Electric Vehicles And Components Thereof, Inv. No. 337-TA-1042, Order No. 32 (December 7, 2017). Specifically, Paice alleged that Ford failed to produce emails from three retired employees and Board of Directors’ (“BOD”) meeting records relating to Ford’s hybridization efforts. Paice sought “an adverse inference that Ford: (1) studied and learned Paice’s patented method of control from 1999 through 2004; (2) monitored Paice’s progress in licensing the asserted patents with various automakers knowing full well of its infringement; and (3) copied Paice’s patented method of control.”
As authorized by 19 U.S.C. § 1337(h), Commission Rule 210.33(b) gives the Commission authority to prescribe sanctions for abuse of discovery and abuse of process to the extent authorized by Rule 11 and Rule 37 of the Federal Rules of Civil Procedure. As ALJ Shaw explained, for him to grant sanctions under Rule 37(e)(2), Paice must prove that relevant emails that should have been preserved were lost after a duty to preserve had arisen, that the emails cannot be replaced through additional discovery, and that Ford acted with the intent to deprive Paice of the information’s use in litigation.
Analyzing the parties’ arguments, ALJ Shaw concluded that Ford was not withholding any documents and that Paice had not shown there were any lost or destroyed emails that should have been retained by Ford. Accordingly, ALJ Shaw concluded that Ford did not violate Order 17 with respect to the retirees’ emails.
However, for the corporate meeting records, ALJ Shaw explained that “[m]inutes from meetings of the Ford Board of Directors are within the plain language of the RFP quoted in Order No. 17,” which sought “documents relating to environmental sustainability, hybridization, and/or electrification.” Therefore, “Ford should, at a minimum, have searched the Board of Directors minutes or other documents for any responsive information.” ALJ Shaw noted that since Ford did not produce any such documents, “Ford could be subject to sanctions for failure to produce minutes or other documents from its Board of Directors.”
Ultimately, ALJ Shaw refused to grant the requested sanctions against Ford because the request sanctions were too broad in relation to Ford’s behavior and while he “considered whether it might be appropriate to break apart the three elements of the requested inference” he concluded that “such a severing of the elements was not requested by Paice, and was not addressed in the pending motion.” Therefore, Paice’s motion was denied.
Parties at the ITC do not often request sanctions from the ITC, so ALJ Shaw’s order is instructive. Much like in federal court, an accusation of spoliation is a serious matter and specific proof will likely be required for the movant to prevail. In many instances, a showing of intent may be a difficult hurdle to overcome. However, to the extent multiple failures are being alleged, it may be beneficial for the movant to tailor their requested relief to the individual failures. If such a motion is not structured in this manner, it may be susceptible to attack.