In this patent infringement action, plaintiff Performance Chemical Company (“PCC”) filed a motion for sanctions based on defendant, True Chemical Solutions (“True Chem”) concealing of evidence until a few weeks before trial.
In analyzing the motion, the district court noted that the allegations of misconduct were largely undisputed:
What distinguishes this case from the more “routine” situation where the Court has to determine whether the allegations of misconduct are true, is that PCC’s contentions of True Chem’s misdeeds are largely undisputed. It is really not in serious dispute that (a) True Chem hid material evidence, (b) True Chem disregarded and disobeyed not just normal discovery practices but a specific mandate from the Court to provide a complete frac trailer for inspection, (c) True Chem failed to preserve evidence and may have destroyed evidence by dismantling a trailer for the specific purpose of hiding evidence of automation, (d) True Chem filed a declaratory judgment action alleging non-infringement without sufficiently reviewing its own documents and emails, and (e) True Chem’s employees — no other phrase encapsulates it — lied under oath when asked direct questions about automation. The Court is therefore forced to conclude that True Chem acted deliberately and in bad faith.
Based on these allegations, the district court was left with the question of what sanction to impose. PCC sought the death penalty sanction. Continue reading