Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Mosaid Technologies Incorporated v. Samsung Electronics Co.

December 7, 2004

MOSAID TECHNOLOGIES INCORPORATED, PLAINTIFF,
v.
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., AND SAMSUNG AUSTIN SEMICONDUCTOR, L.P., DEFENDANTS.



The opinion of the court was delivered by: Martini, District Judge

OPINION

This matter is before the Court on defendants Samsung Electronics Co., et al.'s ("Samsung's") appeal of Magistrate Judge Hedges' July 7, 2004 and September 1, 2004 Orders. Samsung appealed four different sanctions. Previously, this Court affirmed two of the four sanctions: proof of infringement as to representative parts determines infringement for all parts, and Samsung is precluded from challenging MOSAID Technologies Inc.'s ("MOSAID's") expert evidence as to the operation of the representative parts to the extent those challenges rely on any assumptions made as a part of performing simulations or other analyses of representative DRAMs.

(October 1, 2004 Op. and Order). The remaining two sanctions--a spoliation inference jury instruction concerning Samsung's destruction of e-mails and monetary sanctions constituting attorneys' fees and costs associated with MOSAID's motion for sanctions and attempts to obtain discovery--will now be addressed.

BACKGROUND

In addition to the discovery shortcomings discussed in this Court's October 1, 2004 Opinion, Samsung also came up short in its obligation to preserve and produce e-discovery materials. More specifically, after the inception of this litigation in September 2001, Samsung never placed a "litigation hold" or "off switch" on its document retention policy concerning email. Unchecked, Samsung's automatic computer e-mail policy allowed e-mails to be deleted, or at least to become inaccessible, on a rolling basis. As a result, Samsung failed to produce a single technical e-mail in this highly technical patent litigation because none had been preserved.

For Samsung's complete and utter failure to produce e-mails responsive to MOSAID's document requests, MOSAID sought sanctions before Magistrate Judge Hedges. Magistrate Judge Hedges held several hearings concerning the nonproduction of e-mails, as well as Samsung's other discovery deficiencies. During the May 10, 2004 and May 19, 2004 hearings, Magistrate Judge Hedges expressed serious concern for Samsung's lack of a "litigation hold" preventing the destruction of e-mails. On May 24, 2004, Magistrate Judge Hedges issued a Dunbar notice, *fn1 informing Samsung that it faced potential serious, non-monetary sanctions. On July 1, 2004, pursuant to the Dunbar notice, he held a hearing during which he stated that he would allow a spoliation inference because of Samsung's actions.

On July 7, 2004, Magistrate Judge Hedges issued his first opinion and order concerning the spoliation inference. After finding Samsung's reasons for failing to produce any technical emails to be unconvincing, he granted MOSAID's request for the spoliation inference. He then directed the parties to submit proposed jury instructions. He also granted MOSAID's request for reasonable attorneys' fees and costs associated with the motion for sanctions and MOSAID's attempts to secure discovery.

On September 1, 2004, Magistrate Judge Hedges issued his second opinion and order concerning the spoliation inference. In this opinion, he discussed the parties' proposed jury instructions and their deficiencies in light of the remedial, punitive and deterrent rationales undergirding spoliation sanctions. Rather than adopt either of the proposed instructions, Magistrate Judge Hedges found that the following instruction was more appropriately tailored to redress Samsung's conduct:

You have heard that defendants failed to produce virtually all technical and other e-mails in this case. Plaintiff has argued that these e-mails were in defendants' control and would have proven facts relevant to the issues in this case.
If you find that defendants could have produced these e-mails, and that the evidence was within their control, and that the e-mails would have been relevant in deciding disputed facts in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to defendants.
In deciding whether to draw this inference you may consider whether these e-mails would merely have duplicated other evidence already before you. You may also consider whether you are satisfied that defendants' failure to produce this information was reasonable. Again, any inference you decide to draw should be based on all the facts and circumstances of this case.

(Mosaid Techs. Inc. v. Samsung Elecs. Co., 224 F.R.D. 595, 599 (D.N.J.2004)) (citing Zubulake v. UBS Warburg LLC, 2004 WL 1620866, at *15 (S.D.N.Y. July 20, 2004)). Regarding the monetary sanctions, Magistrate Judge Hedges awarded MOSAID a total of $566,839.97 in fees and costs.

Samsung timely appealed those orders. On appeal, Samsung contends that the spoliation inference is an extreme sanction that was wrongly imposed given the facts of this case. According to Samsung, the Magistrate Judge gave short shrift to the following "critical" facts: MOSAID's document requests did not specifically and explicitly state that they sought e-mails and MOSAID never raised the topic of e-mails at any discovery conference prior to the close of fact discovery; MOSAID never complained about Samsung's failure to produce e-mails until after the close of fact discovery; and MOSAID represented to the Court at a January 2003 hearing that it did not need e-mails. Samsung also contends that the spoliation inference jury instruction chosen by the Magistrate Judge is contrary to established Third Circuit law because it would permit an adverse inference to be drawn for negligent ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.