Defendant Samsung had a rough week in court. Apple had sued Samsung for patent infringement, and the defendant was ill-equipped for electronic data discovery. This led to a breach of its duty to preserve evidence and might have contributed to the $1 billion verdict entered against it by a jury in Apple v. Samsung Electronics Co., C 11-1846 LHK (N.D. Ca.) (2012).
Samsung has an email policy whereby all its company emails are systematically deleted, and that led to a finding of spoliation and an adverse jury inference instruction. Our last blog noted how litigation holds are easy in theory, difficult in practice. This was illustrated very clearly in this case, as Samsung claimed to have had a litigation hold in place for its email chains once the Apple lawsuit commenced, yet thousands of messages were systematically destroyed by its auto-delete system for seven months after.
This led to Apple’s motion for a finding of spoliation and an adverse jury inference instruction. In granting the motion, Magistrate Judge Paul S. Grewal noted he cannot overlook the defendant’s lack of electronic discovery preservation, “Rather than building itself an off-switch—and using it—in future litigation such as this one, Samsung appears to have adopted the alternative approach of ‘mend it don’t end it.’ Samsung’s mend, especially during the critical seven months after a reasonable party in the same circumstances would have reasonably foreseen this suit, fell short of what it needed to do.” However, Samsung was not the only one guilty of failing to preserve relevant data. An appeal of the order also found that Apple had also engaged in destruction of evidence and identical adverse jury instructions were ordered for each party, who then agreed to not read either adverse instruction to the jury.
Surely a giant multinational corporation that does huge business in this country would be more than apprised of the current case law regarding the duty to preserve electronic evidence and data. What is especially egregious in this case is the defendant had made the exact same mistake in 2004 in Mosaid Technologies Inc. V. Samsung Electronics Co., No. 01-CV-4340 (Dec. 7, 2004), which found spoliation by citing the famous eDiscovery case Zubulake V.
Some corporate defendants may never learn.
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