Fujitsu v. Tellabs: The District Court Orders Additional Sanctions for Fujitsu's Continued "Contemptuous Conduct"

October 20, 2014

Following the district court's previous order granting a motion to compel against Fujitsu, and Fujitsu's unsuccessful appeal to the Federal Circuit, the district court ordered sanctions in the form of a civil penalty. As the district court explained, the civil penalty was designed to provide an incentive to motivate the Fujitsu Entities to comply with the district court's orders.

The district court was less than impressed with Fujitsu's response. "After stalling for months following Judge Cole's 7/25/2014 order with meritless objections, overruled by this court on 8/19/2014, and an even more meritless mandamus attempt denied by the Federal Circuit yesterday, Fujitsu's counsel cavalierly concludes 'Fujitsu's Response' with 'Fujitsu expects to have the translations ready for production by Friday, October 10, 2014.'

As a result, the district court stated that "[d]iscovery is scheduled to close on October 27, 2014. ( The conduct of the Fujitsu Entities, and that of their counsel, has unreasonably multiplied these proceedings. Yet they contemptuously continue with that conduct."

The district court then ordered the civil penalty to stay in effect, with doubling and compounding added as an additional incentive. "The civil incentive penalty ("CIP"), which is imposed because of the Fujitsu Entities' continuing contemptuous recalcitrance, will remain in effect, doubling and compounding each day at 4:00 CDT until the Fujitsu Entities comply and are no longer in contempt. A chart of the CIP that will be imposed by and including after 4:00 p.m. CDT on October 10, 2014, the date the Fujitsu Entities now say they will comply, is as follows:"

Date After 4:00 p.m. Imposed CIP Accumulated CIP
10/7/2014 $4,000 $4,000
10/8/2014 $8,000 $12,000
10/9/2014 $16,000 $28,000
10/10/2014 $32,000 $60,000

The district court then ordered the penalties to stay in place until Fujitsu ended its "contemptuous conduct. "Based on 'Fujitsu's Response,' the Fujitsu Entities are apparently unfazed by what must to them be the monetary insignificance of the CIP, which will continue to increase and accumulate each day both before and after Friday, October 10, 2014, until the Fujitsu Entities end their contemptuous conduct and comply with the court's orders."

Fujitsu Limited v. Tellabs, Inc., Case Nos. 12 C 3239 (N.D. Ill. Oct. 8, 2014)

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