So we've talked before about the virtual impossibility of getting an electronic discovery-related order overturned on appeal. Every once in a while, though, a case comes along in which it happens.
The California Court of Appeals recently issued a decision in just such a case. See Doppes v. Bently Motors, Inc., -- Cal. Rptr. 3d --, 2009 WL 1578384 (Cal. App. 4 Dist. June 8, 2009) (click here). In Doppes, a consumer brought various breach of warranty claims arising out of a foul odor emanating from his new Bentley automobile.
The court made the "extraordinary, yet justified, determination that the trial court abused its discretion by failing to impose terminating sanctions against defendant for misuse of the discovery process. The record demonstrates defendant engaged in repeated and egregious violations of the discovery laws that not only impaired plaintiff's rights, but threatened the integrity of the judicial process." Id. at *1. The opinion chronicles a lengthy history of ongoing obstruction by the defendant in refusing to produce documents, intentionally moving emails to locations where they would not be captured in the electronic searches, failing to abide by court-ordered discovery, witnesses misrepresenting facts and general cover-up of reams of relevant and discoverable information, including entire file cabinets worth of documents.
Prior to trial, the trial court appointed a discovery referee to oversee the contentious discovery battles. The referee ultimately rejected plaintiff's request for entry of default against the defendant based on the electronic discovery abuses, but recommended that the court give an adverse inference instruction at trial. The trial court did so. In the midst of trial, the plaintiff was given leave to conduct additional depositions, which disclosed even more discovery violations. Still the trial court declined to enter the ultimate sanction fo default against the defendant. The plaintiff ended up prevailing on most of his claims at trial, but lost on a his fraud claims.
On appeal, the court noted that the discovery statutes in California "evince an incremental approach to discovery sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination." Id. at *17. The court concluded that, with respect to the trial court's decision to give an adverse inference instruction based on the discovery violations prior to trial, the appellate court "cannot say ... the trial court abused its discretion initially in approving the discovery referee's recommendation ... of imposing the 'more narrow' sanction of giving the jury instruction." Id. at *18. Yet by the time of trial, the uncovering of additional serious violations mid-trial demonstrated that the defendant had "flagrantly engaged in such further discovery abuses so as to compel the trial court to impose the next level of sanctions-terminating sanctions." Id. Accordingly, "Terminating sanctions against [defendant]were imperative." Id. Therefore, the court of appeals "reverse[d] the judgment on the fraud cause of action, with directions to the trial court to strike [defendant's] answer, enter a default and default judgment against [defendant] on that cause of action," and directed the trial court to conduct further proceedings to establish plaintiff's entitlement to damages and penalties. Id. at *20.
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