decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


To read comments to this article, go here
More on Adverse Inferences, and Fairness, or Lack Thereof, in Apple v. Samsung ~pj - Updated
Wednesday, August 22 2012 @ 05:21 PM EDT

While the nine jurors in the Apple v. Samsung trial are busy working their way through the verdict form [PDF], trying to keep straight all the instructions they were read yesterday, I want to show you something that speaks to the issue of fairness, or lack thereof, in the trial. Reading two recent orders in the case will give you a clue, I think, as to why Samsung's lawyer, John Quinn of Quinn Emanuel, earlier dramatically said what he did to Judge Koh, after Samsung was not allowed, once again, to present evidence because it was allegedly "too late", "Why even have a trial? What's the point?" He was saying in effect that Samsung wasn't being treated fairly.

Was he right? We get a window into the matter, because we have now both the order [PDF] by the magistrate judge denying Samsung's request for an equal adverse inference order against Apple on the purported grounds that it was too late to file it, and the order [PDF] that overruled it by the presiding judge, the Hon. Lucy Koh. She wrote that it was "contrary to law" to hold it was untimely. And besides, there was a question of fairness:

It is only fair that the same standard of analysis be applied in adjudging the merits of Samsung’s motion as was applied to Apple’s.
Finally, she decided that the sanction language he had earlier chosen against Samsung had been too harsh anyhow. So she has, to her credit, righted that wrong. Although Judge Koh appeared annoyed in the moment, I think when Quinn stood up and publicly said what he did, it may have caused her to think more deeply about whether or not this trial *was* being fairly handled by one and all. In at least this issue, the answer is that it was not. And it's a fairly egregious example. So let's take a look. For sure, if Samsung loses, this issue is going to resurface, I would think, in the inevitable appeal.

Jump To Comments

Ultimately, as you know, the decision, after the hearing on the matter of adverse inference instructions, was that neither party would be sanctioned, and now we'll see the details.

Yesterday, Apple's lawyer said in his closing statement that we should place things in a chronology, so let's do that. It all started when Apple decided to push for a sanction against Samsung for not preserving emails allegedly effectively enough from a particular point in time. I can't show you that motion, as it was filed under seal. Apple was successful in getting the magistrate to agree that the point in time Apple chose was correct and that although Samsung did start saving emails at that time, it could have done a better job and that it should be sanctioned. However, Apple itself had not started saving *any* emails at that date. It didn't start until almost a year later.

Keep in mind that there is no specific math for when you are supposed to figure out that litigation is likely. That is the trigger, when a reasonable party would figure that out. But if Samsung was supposed to know that date was the date, and if Apple itself was pointing to that date as the right one, what about Apple? Why didn't it start saving emails back then too?

In the magistrate's order, he wrote that because Apple had filed a motion for the sanction, he was issuing the order against only Samsung as requested, but that Samsung had always been free to ask for a similar sanction against Apple, at the appropriate time.

When Samsung then filed for an equal adverse inference instruction against Apple the very next day, as the magistrate seemed to have indicated would be acceptable, yet he ruled that Apple should not be sanctioned because Samsung was filing its request too late.

One day later.

Imagine if that had held. The jury would have been told that Samsung had failed to preserve evidence, meaning they could assume, if they wanted, that evidence against Samsung was involved, but they never would have heard that Apple had behaved equally culpably, as Judge Koh said, or maybe even worse. Considering that the jury is trying to decide if either party has behaved willfully, would that have been fair?

Are you starting to see what Quinn was apparently seeing? Keep in mind all the rulings about Samsung evidence being offered "too late". Was it? Or was there an issue of fairness? I don't know, personally, since we didn't track this litigation from early on. But I'm sure you couldn't help noticing in the closing statement that Apple said Samsung failed to present evidence for certain points. To which Samsung lawyers were perhaps thinking, even if they couldn't say it, that a lack of certain evidence wasn't because it doesn't exist but rather because they were not allowed to present it. In the appeal, if there is one, look for all that.

Let me show you the language the magistrate used, in case you are not yet convinced:

ORDER DENYING SAMSUNG’S
MOTION FOR AN ADVERSE
INFERENCE JURY INSTRUCTION

(Re: Docket No. 1388)

Before this case the undersigned thought the proposition unremarkable that courts set schedules and parties follow them. This basic division reflects a division not of power, but responsibility, for in setting schedules courts are responsible not only to the parties in one case but to parties in all cases. And the undeniable fact is that because they allow the court to allocate time and other resources in an orderly fashion, schedules and their deadlines in one case can and do impact those in every other case on a judge’s docket.

But in so many ways this case has challenged the remarkable and the unremarkable alike. And so papers are filed hours before hearings rather than the days provided by local rule. Hearings themselves are presented on shortened rather than standard time, at least six times before the undersigned alone. Now the court is presented with a motion for an adverse jury instruction based on facts known to the moving party months and months ago in the middle of trial. And the justification for this latest demand outside of any rationale notion of compliance with the schedule of this case? The fact that a timely motion brought by the other side yielded an instruction that could harm the moving party’s chances with the jury, and “fairness” somehow demands a similar instruction as to both parties.

Except that it doesn’t. There is nothing at all unfair about denying relief to one party but not the other when the one but not the other springs into action long after any rational person would say it could have done so. The court has bent itself into a pretzel accommodating the scheduling challenges of this case. But at some point the accommodation must end, lest the hundreds of other parties in civil rights, Social Security, and other cases also presently before the undersigned and presiding judge might reasonably ask: what makes the parties in this patent case so special? We are at that point in this case, and perhaps beyond. And so as a matter alone of this court’s well-recognized discretion to hold parties to a schedule and insist upon requests that are timely, Samsung’s motion is DENIED.

IT IS SO ORDERED.

Dated: August 16, 2012

_________/s/______
PAUL S. GREWAL
United States Magistrate Judge

Attitude much? Can you imagine? The court is too busy with other cases to consider fairness in this case? After his earlier ruling excluding Apple from the sanction even though he knew it had behaved worse than Samsung, and saying that Samsung was "always free" to file an equivalent motion, and when they did the very next day, he says it's too *late*? Too late based on what rule or statute? See any referenced? Me either. Neither did Judge Koh, as I'll show you.

Maybe Samsung drove him out of his everloving mind. High-powered law firms can do that, because they don't just sit there and let judges do what they do without objecting. And the extra paperwork from all the motions and objections can be overwhelming. Or maybe he just thinks local rules are more important than ultimate fairness issues -- it's now official that Judge Koh has ruled his sanctioning only Samsung wasn't fair -- but judges aren't supposed to let emotions affect their rulings, which are supposed to be based on the law.

Of course, judges are only human, and they try hard in a job that is truly thankless, in that *somebody* is going to hate each and every one of their rulings, no matter what they decide. It's built in. So I always want folks here to show respect to judges, because they have a truly impossible job for mere mortals to always carry out perfectly. So please keep that in mind when you respectfully comment.

Still, this order presented an issue for the presiding judge right away, because Samsung brought it to her. You can find all the back and forth motions the parties filed with her on our Apple v. Samsung page, and Apple v. Samsung page 2. The judge's order lists in the first paragraph the numbers of all the motions. Or just search for the word 'adverse' on the pages.

Now, before you read what she said about the order she overruled in part, I want you to understand that presiding judges normally support their magistrate judges, whenever possible. And Judge Koh begins by supporting his decision to choose the date he did and to sanction Samsung, although she felt the language he chose was too harsh. Remember that he had stated that there was no bad faith found on Samsung's part.

But she heard Samsung's argument that Apple hadn't saved emails at all from that chosen date, unlike Samsung who at least tried, even if they had not done a perfect job of it. So she concluded that the magistrate had erred in not sanctioning equally.

Judge Koh's order is 30 pages long, so I'm going to do it as text only in part, but if anyone wants to do the rest as HTML, I'll gladly plug it in here later. Note what Judge Koh writes in her opening paragraph:

Samsung moves for relief from portions of Granting-in-Part Apple’s Motion for an Adverse Inference Jury Instruction. See ECF No. 1321 (“Adverse Inference Order”); ECF No. 1392 (“Motion”). Apple filed an opposition, ECF No. 1531 (“Opp’n”); Samsung filed a reply, ECF No. 1579 (“Reply”); and Apple filed a motion for leave to file a sur-reply, ECF No. 1614 (“Sur-reply”), which this Court GRANTS. Samsung also moves for relief from Magistrate Judge Grewal’s August 16, 2012 Order Denying Samsung’s Motion for Adverse Inference Jury Instruction. See ECF No. 1792 (“Denial Order”); ECF No. 1799 (“Second Motion”). After the Court provided the parties with its tentative rulings on these two motions, see ECF No. 1848, Apple responded to Samsung’s Second Motion. See ECF No. 1856 at 1-4. The parties were given an opportunity to address both motions at the hearing on Final Jury Instructions on August 20, 2012. For the reasons discussed herein, Samsung’s motion for relief from Judge Grewal’s Adverse Inference Order is GRANTED IN PART and DENIED IN PART, and Samsung’s motion for relief from Judge Grewal’s Dismissal Order is GRANTED.
So those are all the motions, if you want to track them. And please notice that she references her earlier *tentative" orders, using that very word. I highlight it because when they were posted, I pointed out that they were exactly that, tentative, not final orders, something FOSSPatents had gotten wrong, as you can now see for yourself in black and white.

At the hearing to determine what the final order would be, the parties decided they'd prefer not to have either side sanctioned, if both had to be. Or, as our reporter told us, it was like this: Apple didn't want that to happen, a sanction against Apple too, so it agreed to the whole thing being dropped, and Samsung said, fine.

Let's see now what Judge Koh had to say about why she was overruling the magistrate, leaving out the background material and the issues not relevant to this discussion, like whether the magistrate had the authority to sanction (she ruled he did) and whether this was a "dispositive" motion (she ruled it was not) and whether he picked the right date (she ruled it was not clearly erroneous), and that left the question: what about Apple and what would be the right level of sanction, if any, against the parties?

We'll begin on page 18 of the order, and we'll go to the end:

In considering what spoliation sanction to impose, if any, courts generally consider three factors: “‘(1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party.’” Nursing Home Pension Fund v. Oracle Corp.,

18

254 F.R.D. 559, 563 (N.D. Cal. 2008) (quoting Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir. 1994)); see In re Napster, 462 F. Supp. 2d at 1066-67. 10 Thus, while a finding of bad faith is not a prerequisite for an adverse inference sanction, “a party’s motive or degree of fault in destroying evidence is relevant to what sanction, if any, is imposed.” In re Napster, 462 F. Supp. 2d at 1066-67 (citing Baliotis v. McNeil, 870 F. Supp. 1285, 1291 (M.D. Pa. 1994)). Courts should choose “the least onerous sanction corresponding to the willfulness of the destructive act and the prejudice suffered by the victim.” Schmid, 13 F.3d at 79. Ultimately, the choice of appropriate spoliation sanctions must be determined on a case-by-case basis, and should be commensurate to the spoliating party’s motive or degree of fault in destroying the evidence. See Unigard Security, 982 F.2d at 368; In re Napster, 462 F. Supp. 2d at 1066-67. Consistent with this principle, some courts have denied requests for an adverse inference instruction even where the three-part test for spoliation was satisfied, upon concluding that the degree of fault and level of prejudice were insufficient to justify imposition of the sanction. See Chin, 685 F.3d at 161-62 (holding that district court did not abuse its discretion in denying an adverse inference instruction notwithstanding a finding of spoliation); Hamilton, 2005 WL 3481423, at *6-9.

“The prejudice inquiry ‘looks to whether the [spoiling party’s] actions impaired [the non-spoiling party’s] ability to go to trial or threatened to interfere with the rightful decision of the case.’” Leon, 464 F.3d at 959 (quoting United States ex rel. Wiltec Guam, Inc. v. Kahaluu Constr. Co., 857 F.2d 600, 604 (9th Cir. 1988)). Again, the Court finds no clear error in Judge Grewal’s finding of prejudice. “In the Ninth Circuit, spoliation of evidence raises a presumption that the destroyed evidence goes to the merits of the case, and further, that such evidence was adverse to the party that destroyed it.” Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc., No. C 06-3359 JF, 2009 WL 1949124, at *10 (N.D. Cal. July 2, 2009) (citing Phoceene Sous-Marine, S.A. v. U.S. Phosmarine, Inc., 682 F.2d 802, 806 (9th Cir. 1982)); see Hynix Semiconductor, Inc. v. Rambus

19

Inc., 591 F. Supp. 2d 1038, 1060 (N.D. Cal. 2006) (“[I]f spoliation is shown, the burden of proof logically shifts to the guilty party to show that no prejudice resulted from the spoliation” because that party “is in a much better position to show what was destroyed and should not be able to benefit from its wrongdoing”), rev’d on other grounds, 645 F.3d 1336, 1344-47 (Fed. Cir. 2011); Nat’l Ass’n of Radiation Survivors v. Turnage, 115 F.R.D. 543, 557 (N.D. Cal. 1987) (“Where one party wrongfully denies another the evidence necessary to establish a fact in dispute, the court must draw the strongest allowable inferences in favor of the aggrieved party.”); see also Residential Funding, 306 F.3d at 109 (noting that holding victims of spoliation “‘to too strict a standard of proof regarding the likely contents of the destroyed evidence . . . would . . . allow parties who have . . . destroyed evidence to profit from that destruction’”) (quoting Kronisch, 150 F.3d at 128). In Leon, the Ninth Circuit found that “because any number of the 2,200 files could have been relevant to IDX’s claims or defenses, although it is impossible to identify which files and how they might have been used. Because of the obvious relevance of [the despoiled] files to the litigation . . . the district court did not clearly err in its finding of prejudice.” Leon, 464 F.3d at 960. Likewise here, though neither Apple nor the Court may ever know the contents of any destroyed Samsung emails, the fact that the emails of key Samsung witnesses were among those destroyed permits the reasonable inference that Apple was prejudiced by Samsung’s spoliation.

Nonetheless, while the Court agrees with Judge Grewal’s conclusion that Samsung’s conduct justifies imposition of an adverse inference instruction, the Court does not find that such a strong adverse inference instruction is justified by this record. As noted above, courts must choose “the least onerous sanction corresponding to the willfulness of the destructive act and the prejudice suffered by the victim.” Schmid, 13 F.3d at 79. Moreover, any exercise of a court’s inherent powers must be exercised with great restraint and discretion. See Chambers, 501 U.S. at 50; Roadway Exp., 447 U.S. at 764. Certainly, an adverse inference instruction is a “lesser” sanction than dismissal or default. That it is a comparatively less severe sanction, however, does not mean it should be imposed casually. See Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 619 (S.D. Tex. 2010) (adverse inferences are “among the most severe sanctions a court can administer”); Keithley v. Homestore.com, Inc., 2008 WL 4830752, at *10 (N.D. Cal. Nov. 6, 2008)

20

(“[A]n adverse inference instruction is a harsh remedy.”); Consol. Aluminum Corp. v. Alcoa, Inc., 244 F.R.D. 335, 340 (M.D. La. 2006) (adverse inference sanctions are “drastic”); Thompson v. U.S. Dep’t of Housing & Urban Dev., 219 F.R.D. 93, 100-01 (D. Md. 2003) (adverse inference sanctions are “extreme” and “not to be given lightly”); Zubulake, 220 F.R.D. at 219-20 (“In practice, an adverse inference instruction often ends litigation – it is too difficult a hurdle for the spoliator to overcome. . . . Accordingly, the adverse inference instruction is an extreme sanction and should not be given lightly.”).

As Judge Grewal correctly observed, “‘an adverse inference instruction can take many forms, again ranging in degrees of harshness.’” Adverse Inference Order at 22 (quoting Pension Committee of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 470 (S.D.N.Y. 2010)). Here, the Adverse Inference Order imposes a relatively harsh adverse inference instruction. First, it instructs the jury that “Samsung has failed to prevent the destruction of relevant evidence for Apple’s use in this litigation,” rather than allowing the jury to decide whether Samsung has destroyed documents, and if so, whether those documents are relevant. Second, it permits the jury to draw an adverse inference and to find this adverse inference “determinative, somewhat determinative, or not at all determinative in reaching your verdict.” Adverse Inference Order at 24. By contrast, evidence of Apple’s resulting prejudice is not particularly strong. Here, Samsung produced over 12 million pages of documents, including over 80,000 emails, gathered from more than 380 witnesses. Decl. of Alex Binder in Supp. of Samsung’s Opp’n to Apple’s Mot. Adverse Inference Jury Instruction, ECF No. 987-39 (“Binder Decl.”), ¶¶ 5-8. This includes over 9,880,000 pages of documents in the ITC Investigations (794/796), and an additional over 2,150,000 pages of documents in this suit, totaling 14 terabytes of data. Id. Moreover, Samsung produced over 70,000 pages, comprised of 5,159 documents and emails, from the very custodians whose documents Apple identified as having been likely destroyed. See Binder Decl. ¶ 18. Samsung also produced non-custodial emails that were sent to or received by the key Samsung custodians identified by Apple. Id. ¶ 19. Finally, Apple deposed a substantial number of the key Samsung witnesses whose emails Apple suspects may not have been preserved. Id. ¶¶ 12-17. Thus, Apple “should have been able to glean” much material evidence “from the documents

21

actually produced, the extensive deposition testimony, and the written discovery between the parties.” In re Oracle, 627 F.3d at 386. On the one hand, “the loss of an entire source of documents significantly hampers [an opposing party’s] ability to prepare and prosecute their case.” In re Napster, 462 F. Supp. 2d at 1077. On the other hand, the Court finds it difficult to conclude that Apple’s “ability to go to trial” was significantly hampered where discovery in this case has been so voluminous. See Leon, 464 F.3d at 959; see In re Oracle, 627 F.3d at 386 (limiting scope of adverse inference instruction where ample discovery was produced); Pension Committee, 685 F. Supp. 2d at 479 & n.97 (where the parties seeking spoliation sanctions had already “gathered an enormous amount of discovery – both from documents and witnesses,” “[u]nless they can show through extrinsic evidence that the loss of the documents has prejudiced their ability to defend the case, then a lesser sanction than a spoliation charge is sufficient to address any lapse in the discovery efforts of the negligent plaintiffs”), abrogated on other grounds by Chin v. Port Auth. of New York & New Jersey, 685 F.3d 135 (2d Cir. 2012). On this record, the Court concludes that Apple was prejudiced, but that Apple has not made a showing of prejudice sufficient to warrant a strong adverse inference instruction that permits the jury to find Samsung’s spoliation “determinative” of all issues in the case.

Finally, the Court is unable to find justification for imposing an adverse inference instruction against all three Samsung entity defendants, where the record only supports a finding that Samsung Electronics Co., Ltd. (“SEC”) engaged in any spoliation of evidence. See Adverse Inference Order at 1 n.3 (“Only SEC’s document preservation policies are at issue here because Samsung affiliates SEA and STA use Microsoft Outlook.”). Indeed, to prove its spoliation claim, Apple pointed to the disparity between the significant e-mail document production by SEA and STA custodians and the comparatively paltry production by SEC custodians. See Order at 21 & n.6.

Accordingly, the Court modifies the adverse inference instruction as follows:

Samsung Electronics Company has failed to preserve evidence for Apple’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.

22

IV. DENIAL ORDER

On August 17, 2012, Samsung moved for relief from Judge Grewal’s August 16, 2012 Order Denying Samsung’s Motion for an Adverse Inference Jury Instruction. See ECF No. 1799. This Court issued a tentative adverse inference instruction against Apple on August 19, 2012. On August 20, 2012, Apple filed objections, and the Court held a hearing. 11

Judge Grewal denied Samsung’s motion as untimely but did not cite to any particular Federal Rule of Civil Procedure or previously imposed Court deadline governing the timing of Samsung’s motion. To this Court’s knowledge, under Federal Rule of Civil Procedure 51(a)(1), a party’s request for a jury instruction is timely if made “[a]t the close of the evidence or at any earlier reasonable time that the court orders.” Thus, Samsung’s motion appears to be timely under the Federal Rules of Civil Procedure. Apple argues that Samsung’s motion is untimely under Civil Local Rule 7-8(c), which requires that a sanctions motion be filed “as soon as practicable” after the movant learns the facts that give rise to its motion. See ECF No. 1856 at 1. The Court finds that Samsung’s motion is also timely under the Civil Local Rules. Samsung has consistently maintained the position that its duty to preserve did not arise until April 15, 2011, when Apple filed its complaint in this action. See ECF No. 987 (Samsung’s opposition to Apple’s adverse inference motion) at 14-15. Thus, Samsung did not learn of the facts giving rise to its adverse inference motion until Judge Grewal’s July 24 Order found that the parties’ duty to preserve in fact arose in August 2010, not April 2011. Samsung filed its motion for an adverse inference instruction against Apple the very next day. Samsung was therefore not untimely under Civil Local Rule 7-8(c).

In addition, although the Court agrees that Samsung could have moved for an adverse inference instruction at the same time Apple moved for an adverse inference instruction, the Court does not find that Apple was in any way prejudiced by the timing of Samsung’s motion. As already noted, Samsung has consistently maintained the position that its duty to preserve did not arise until April 15, 2011, when Apple filed its complaint in this action. See ECF No. 987

23

(Samsung’s opposition to Apple’s adverse inference motion) at 14-15. Furthermore, as Apple itself acknowledges in its Motion to Strike Samsung’s Untimely Motion for Adverse Inference Instruction, Samsung argued in its May 29, 2012 opposition to Apple’s motion for an adverse inference that Apple itself had not issued litigation hold notices in August 2010. See ECF No. 1402 (Apple’s motion to strike) at 2; ECF No. 987 (Samsung’s opposition) at 14-15 & n.16, 17 n.19. Thus, Apple was on notice as of May 29, 2012, that Apple could be subject to the same document retention and discovery obligations to which Apple sought to hold Samsung. Moreover, Apple argued for an August 2010 preservation duty trigger date knowing full well that Apple itself did not issue any litigation hold notices until after filing suit in April 2011, eight months later. Apple’s current situation is therefore of its own making. Finally, Samsung argued in its May 29, 2012 opposition to Apple’s adverse inference motion that “[i]f spoliation were a simple numbers game, then Apple itself would be guilty.” ECF No. 987 at 17-18 (explaining that, if a disparity between a custodian’s custodial and non-custodial file productions is a measure of spoliation, “Apple has engaged in spoliation on a far wider scale than anything alleged against Samsung,” and providing illustrative examples). In short, since May 29, 2012, when it filed its opposition to Apple’s adverse inference motion, Samsung has consistently maintained the position that it is guilty of spoliation only to the extent Apple is also guilty of spoliation. Indeed, had Samsung filed its own adverse inference request against Apple before Judge Grewal made a finding that the duty to preserve arose in August 2010, Samsung would have been taking inconsistent positions.

In light of the foregoing, and pursuant to FRCP 51, the Court determines that Samsung’s motion is timely. The Court further determines that the timing of Samsung’s motion does not prejudice Apple, who has to a large degree been on notice of the arguments contained in Samsung’s motion since May 29, 2012, and who both filed an opposition to Samsung’s adverse inference motion on August 6, 2012, see ECF No. 1591, and argued the motion before Judge Grewal on August 7, 2012. Moreover, Apple moved for an adverse inference instruction against Samsung based on the August 2010 preservation duty trigger date and knew better than anyone else its own document retention policies. Apple cannot now claim that it is prejudiced by having the same standard applied to itself. Accordingly, the Court must conclude that Judge Grewal’s

24

Denial Order was contrary to law and that Samsung’s underlying Motion for Spoliation Adverse Inference Instruction Against Apple is subject to de novo review. See ECF No. 1388 (Samsung’s Motion); ECF No. 1591 (Apple’s Opposition); ECF No. 1600 (Samsung’s Reply).

A. Spoliation

As previously stated, “a party seeking an adverse inference instruction based on the destruction of evidence must establish[:] (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed ‘with a culpable state of mind’; and (3) that the evidence was ‘relevant’ to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.” Residential Funding Corp., 306 F.3d at 107 (quoting Byrnie, 243 F.3d at 107-12). The Court addresses each element in turn.

1. Duty to Preserve

As this Court has already determined, this litigation was reasonably foreseeable as of August 2010, and thus Apple’s duty to preserve, like Samsung’s, arose in August 2010. See Micron Tech., 645 F.3d at 1320; Zubulake, 220 F.R.D. at 216. Apple’s argument that its duty to preserve arose later than Samsung’s because “[o]nly Samsung knew that its continuing conduct would provoke litigation between the parties” is unpersuasive. ECF No. 1591 at 9. As recognized by the Federal Circuit, “[i]t is . . . more reasonable for [a plaintiff-patentee] to foresee litigation that does in fact commence, than it is for a [a defendant-accused].” Micron Tech., 645 F.3d at 1325; see id. at 1325 n.1 (noting that the same reasoning applies to an accused infringer who brings a declaratory judgment action). Moreover, Apple sought at trial to exclude evidence of the August 2010 licensing discussion pursuant to Federal Rule of Evidence 408. Apple argued strenuously that “there was a dispute as of August of 2010.” Trial Tr. at 1663:23-25; see id. at 1734:25-1735:8. Thus, for the reasons discussed above with regard to Samsung’s appeal of Judge Grewal’s Adverse Inference Order, the Court finds that just as Samsung’s duty to preserve relevant evidence arose in August 2010, so too did Apple’s.

Notwithstanding this duty, Apple did not issue any litigation hold notices until after filing its complaint in April 2011. See Binder Decl. ¶¶ 22-29 & Exs. 2, 3; Decl. of Alex Binder in Supp.

25

of Samsung’s Mot. for Adverse Inference Jury Instruction, ECF No. 1388-1 (“2d Binder Decl.”), ¶ 7 (Apple’s first litigation hold notices issued April 29, 2011). Moreover, although Apple does not employ an automatic e-mail destruction policy like SEC’s mySingle, “employees whose email accounts are too large may receive automatic notices requesting that they reduce the size of their email accounts,” and “[e]mployees who are not subject to document retention notices are encouraged to keep the size of their email accounts below certain limits.” Decl. of Beth Kellermann in Supp. of Apple’s Opp’n to Samsung’s Mot. for Spoliation Adverse Inference Instruction Against Apple, ECF No. 1593 (“Kellermann Decl.”), ¶ 5. In short, Apple did not issue litigation hold notices to any of its employees for the first eight months after its preservation duty arose. Moreover, even after filing its complaint against Samsung, Apple still did not issue litigation hold notices to several key custodians, including designers and inventors on the patents at issue in this litigation, until September 2011, December 2011, January 2012, or later. See Binder Decl. ¶¶ 24-29; 2d Binder Decl. ¶¶ 7-11. During that time, not only were employees given no affirmative instructions to preserve potentially relevant documents, but some employees may have been encouraged to keep the size of their email accounts below certain limits, and moreover may have received automatic notices requesting that they reduce the size of their email accounts. On these facts, the Court finds that Apple destroyed documents after its duty to preserve had already arisen.

2. Culpable State of Mind

Next, the Court considers whether Apple acted with the requisite mens rea when destroying documents. In the Ninth Circuit, a party may be entitled to an adverse inference instruction based on spoliation even in the absence of a finding of bad faith. See Unigard, 982 F.2d at 368 n.2 (citing Halaco Eng’g Co. v. Costle, 843 F.2d 376, 380 (9th Cir. 1988)). The Court need only find that Apple acted with “conscious disregard” of its obligations. See Hamilton, 2005 WL 3481423, at *7; Io Group, 2011 WL 4974337, at *7.

As already discussed, as the plaintiff-patentee in this suit, “[Apple’s] decision whether to litigate or not was the determining factor in whether or not litigation would in fact ensue.” Micron Tech., 645 F.3d at 1325. Thus, Apple was on even greater notice than was Samsung of the

26

reasonable likelihood of this litigation. Apple’s primary defense regarding state of mind is its unmeritorious position that “Apple was under no duty to preserve until it learned of Samsung’s intent to release new infringing products in Spring 2011.” ECF No. 1591 (Apple opposition) at 11. Yet Apple approached Samsung in August 2010 with a presentation of Apple’s infringement positions, which Apple has argued triggered Samsung’s preservation duty. Apple’s argument that it had no reasonable expectation of litigation until Samsung released yet another generation of allegedly infringing products is simply not credible. Another Apple argument is that it had no obligation to issue litigation hold notices because many of its employees were already subject to numerous document retention notices related to other litigations, and that “Apple has a culture of document retention.” ECF No. 1856 at 2. However, the fact that Apple may have been in compliance with its document preservation duties related to other litigations, which may have involved different parties, different claims, different products, and different witnesses, does not in any way absolve Apple of its preservation duties in relation to this lawsuit that Apple filed against Samsung. By failing to do as little as issue a litigation hold notice to any employees for eight months after its preservation duty arose, and by further delaying issuance of litigation hold notices to several key custodians, the Court finds that Apple acted with not just simple negligence but rather conscious disregard of its duty to preserve.

3. Relevance

Finally, the Court considers whether the documents destroyed by Apple were relevant to this litigation. “[S]poliation of evidence raises a presumption that the destroyed evidence goes to the merits of the case, and further, that such evidence was adverse to the party that destroyed it.” Dong Ah Tire & Rubber Co., 2009 WL 1949124, at *10 (citing Phoceene Sous-Marine, 682 F.2d at 806). “[I]f spoliation is shown, the burden of proof logically shifts to the guilty party to show that no prejudice resulted from the spoliation” because that party “is in a much better position to show what was destroyed and should not be able to benefit from its wrongdoing.” Hynix Semiconductor, 591 F. Supp. at 1060.

Here, Samsung points to the paltry production of emails and documents from at least 13 key Apple witnesses, including Chris Stringer (a named inventor on the D’677 and D’889 Patents);

27

Shin Nishibori (a named inventor on the D’889, D’087, and D’677 Patents); Jonathan Ive (a named inventor on the D’087, D’677, and D’899 Patents); Scott Forstall (a named inventor on the ’163 Patent); and Steve Jobs (former CEO of Apple and a named inventor on the D’087, D’677, and D’889 Patents). See Binder Decl. ¶¶ 20-21; see ECF No. 1388 (Samsung’s motion) at 6-8; ECF No. 1600 (Samsung’s reply) at 10-11. For example, Chris Stringer produced only 38 custodial documents and only 15 custodial e-mails, compared to 519 non-custodial e-mails. See Binder Decl. ¶¶ 20-21; Decl. of Jason Bartlett in Opp’n to Samsung’s Mot. for Adverse Inference Jury Instruction, ECF No. 1592 (“Bartlett Decl.”), ¶ 2. Shin Nishibori produced only 94 custodial documents and 18 custodial e-mails, compared to 136 non-custodial e-mails. See Binder Decl. ¶¶ 20-21; Bartlett Decl. ¶ 2. Steve Jobs produced only 54 custodial documents and 51 custodial e-mails, compared to 1,670 non-custodial e-mails. See Binder Decl. ¶¶ 20-21; Bartlett Decl. ¶ 2. Finally, Scott Forstall produced only 172 custodial e-mails, compared to 1,027 non-custodial e-mails. See Binder Decl. ¶¶ 20-21; Bartlett Decl. ¶ 2. It is reasonable to infer that documents produced by these key Apple witnesses, who are named inventors on various Apple patents asserted in this suit, would have been relevant to this litigation, and likewise that the destruction of any such documents prejudiced Samsung. See Leon, 464 F.3d at 960; Residential Funding, 306 F.3d at 109; In re Napster, 462 F. Supp. 2d at 1078. This same type of statistical analysis was used by Judge Grewal to support his finding that Samsung spoliated evidence, notwithstanding Samsung’s substandard preservation efforts. See Adverse Inference Order at 19-21. Furthermore, although Apple argues that it was more prejudiced by the destruction of Samsung documents between August 2010 and April 2011, when Samsung was still in the process of designing some of the accused products, than vice versa, the Court agrees with Samsung that Apple’s destruction of documents during that same time period also prejudiced Samsung. Apple’s documents during that time period, which may have included Apple’s internal assessments, teardowns, and other analyses of Samsung products, would be highly probative of issues in this case. It is only fair that the same standard of analysis be applied in adjudging the merits of Samsung’s motion as was applied to Apple’s.

28

In sum, the Court finds that Apple’s failure between August 2010 and April 2011 to issue any litigation hold notices or take other precautionary measures to ensure the preservation of evidence relevant to this litigation violated Apple’s duty to preserve.

B. Sanction

As a sanction for Apple’s spoliation of relevant evidence, Samsung requests that the Court grant adverse inference instructions against Apple “in the same manner and in the same language that it gives any such instruction with respect to Samsung.” ECF No. 1388 (Samsung Motion) at 9. For the same reasons discussed above with respect to Samsung’s appeal of Judge Grewal’s Adverse Inference Order, the Court determines that only a mild adverse inference instruction is warranted in light of the degree of Apple’s fault and the degree of prejudice Samsung suffered. See Nursing Home Pension Fund, 254 F.R.D. at 563. Accordingly, in light of the foregoing, the Court GRANTS Samsung’s motion for a mirror adverse inference instruction against Apple. In light of all the foregoing discussion, the Court will instruct the jury as follows:
Apple has failed to preserve evidence for Samsung’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.
V. CONCLUSION

For all the foregoing reasons, the Court GRANTS-IN-PART and DENIES-IN-PART Samsung’s motion for relief from Judge Grewal’s July 24, 2012 Order, and GRANTS Samsung’s motion for relief from Judge Grewal’s August 16, 2012 Order. In lieu of the adverse inference instruction in Judge Grewal’s July 24, 2012 Order, the Court finds the following jury instructions are warranted:

Samsung Electronics Company has failed to preserve evidence for Apple’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.

Apple has failed to preserve evidence for Samsung’s use in this litigation after its duty to preserve arose. Whether this fact is important to you in reaching a verdict in this case is for you to decide.

29

However, the parties indicated at the August 20, 2012 hearing that if the Court decided to issue identical adverse inference instructions against both parties, they prefer that neither adverse inference instruction be given. Accordingly, the Court will not give either jury instruction.

IT IS SO ORDERED.

Dated: August 21, 2012

[signature]
LUCY H. KOH
United States District Judge

____________
10 Other factors considered by some courts include whether an adverse inference jury instruction sanction would “‘serve [] [the] threefold purpose of (1) deterring parties from destroying evidence; (2) placing the risk of an erroneous evaluation of the content of the destroyed evidence on the party responsible for its destruction; and (3) restoring the party harmed by the loss of evidence helpful to its case to where the party would have been in the absence of spoliation.’” Chin v. Port Auth. of New York & New Jersey, 685 F.3d 135, 162 (2d Cir. 2012) (quoting Byrnie, 243 F.3d at 107).

11 Apple was given the opportunity to respond to Samsung’s motion for relief both in writing, see ECF No. 1856 at 1-4, and orally at the August 20, 2012 hearing. Accordingly, Apple’s objection on procedural grounds pursuant to Civil Local Rule 72-2 is without basis.

30

I think you can see with your own eyes that the sanction against Samsung was not fair, now that it has all played out. And you can see that Samsung was wise to appeal it all to the presiding judge. But what about Apple? Did it pay off, trying to find fault with Samsung on this issue? I think not. Not in the courtroom. But what about in the media? Did you see a lot of articles about Samsung being too late, complaining out of dramatics instead of substance, etc.? I did too. Of course, as I showed you earlier, FOSSPatents was spinning it that way.

But now we know the rest of the story.

Update: I just noticed that in the other Apple v. Samsung litigation, also before Judge Koh, Samsung mentions [PDF] on page 3 of the PDF, that when the parties met about patents in 2010, when Apple talked about its patents, Samsung replied by mentioning its patents it thought were infringed:

Samsung admits that Apple and Samsung discussed Apple’s allegations of patent infringement in late summer 2010. Samsung admits that Samsung informed Apple of Apple’s infringement of Samsung’s patents during those discussions.
So for sure Apple was on notice from that date if Samsung was.

  View Printable Version


Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )