Remanded Rambus eDiscovery Case Finds Bad Faith Spoliation

8 Oct 2012

A ruling in the remanded case of Hynix Semiconductor Inc. v. Ranbus, Inc. Case No. C-00-20905 (NDCA Sept. 21, 2012) came down last week after it was sent back to the district court by the Federal Circuit, which found the lower court “applied too narrow a standard of foreseeability” regarding spoliation of evidence. The Federal Circuit vacated the judgment in favor of Rambus and ordered the trial court to reconsider the issue of spoliation in Hynix Semiconductor Inc. v. Rambus, 645 F. 3d 1336 (Fed. Cir. 2011)(“Hynix II”).

Upon remand and reconsideration, the district court found in favor of Hynix, that Rambus acted in bad faith and intentionally destroyed evidence to gain a litigation advantage. Although Rambus had a litigation hold in place that saved data and produced evidence that helped Hynix’s case, the court was disturbed by Rambus’ “Shred days” where, immediately before and immediately after patent litigation began, the company destroyed between 700 and 800 banker boxes of documents. “A corporation cannot blindingly destroy documents and expect to be shielded by a seemingly innocuous document retention policy,” citing Lewy v. Remington Arms Col. Inc., 836 F.2d 1104, 1112 (8th Cir. 1988).

Once it is found that the spoliation was willful or in bad faith, the spoliator has a “heavy burden” to show a lack of prejudice to the opposing party by demonstrating that the destroyed material was inconsequential—which Rambus was unable to do. (It’s not easy to prove documents were inconsequential after one intentionally destroys them!)

So what sanction is appropriate when a company engages in mass shredding days to destroy evidence and gain an advantage in litigation? We will further discuss the sanctions the court considered and entered against Rambus in our next blog.

To learn more about how plaintiff trial attorneys uncover evidence of spoliation by defendants in class action lawsuits and multidistrict litigation, read about our consulting and strategic planning services and call us directly at 888-313-4457.

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