Flouting of e-discovery orders leads to rare sanction of default

A misappropriation-of-trade-secrets case that generated more meritorious motions to compel and sanctions for failure to produce documents than any in his 37-year career warranted the rare sanction of entering default judgments against the defendants on all the plaintiff’s claims, a federal judge in Massachusetts has said.

After the plaintiff had filed an initial motion to compel in the wake of what it saw as an inadequate response to its discovery request, U.S. District Court Judge Mark L. Wolf ordered the defendants to review their Google Suite documents thoroughly, an order that one of the defendants attested twice had been complied with.

But, attributing the oversight to employee error, the defendants belatedly turned over a trove of documents, which contained “significant evidence” to support the claims that the defendants had misappropriated the plaintiff’s trade secrets and engaged in unfair and deceptive trade practices, according to Wolf.

Later, the plaintiff received communications sent through the business messaging app Slack that should have been produced in 2019. The plaintiff soon came to suspect there were more to be found.

Sure enough, after the plaintiff filed a second motion for sanctions, the defendants produced additional, highly relevant Slack messages.

Wolf noted that he had extended discovery deadlines multiple times and then postponed the trial, which had been scheduled to start on Aug. 11, to deal with the second motion for sanctions.

“The court recognizes that entering a default judgment for violation of discovery orders is a drastic sanction,” Wolf wrote. “However, in this case it is fully justified and, indeed, necessary to do justice in this case and to deter others from engaging in similar extreme misconduct.”