An adverse inference and fees sanction was entered against the plaintiff, Louis Vuitton (“LV”), in Louis Vuitton Malletier v. Dooney & Bourke, Inc., 2006 U.S. Dist. LEXIS 87096 (S.D.N.Y. Nov. 30, 2006). LV, the well known maker of expensive leather bags and accessories, is supposedly the most counterfeited brand in fashion history. It is no wonder they often sue for trademark infringement.
They may still win this case, but they are off to a very shaky start. The magistrate’s 50 page order sanctioned LV for misleading the court about e-discovery. The Court also disapproved of LV’s refusal to use outside experts to help LV’s IT personnel extract emails from its computer database.
In the words of Magistrate Dolinger, who seems quite upset:
There is no question that LV has failed to comply with its discovery obligations, misled its adversary and the court, and flouted a court order. . . . That application triggered a representation by LV that it had undertaken an appropriate search for customer communications about S-lock products and had no such communications. It is evident that this representation was false, and in the absence of any explanation by LV for this misstatement, we have no reason to infer that it was other than knowingly false.
So once again we see a party burned for saying it searched and had no emails, when later events show this to be false. Nothing new here. But the Court’s criticism of LV’s reliance solely on its IT department is unusual and no doubt will be heavily cited by vendors in the future.
The affidavit by LV’s IT employee swore to the difficulties they had in searching the emails maintained in their Kana Oracle database. In footnote 10, the reason alleged for this difficulty was, in the words of LV’s IT employee, that:
the e-mails are stored in a raw format which includes both HTML-formatted e-mails as well as e-mails with foreign-language encoding
CV went on to argue that they would have had to hire experts in both Oracle and Lotus Notes to properly search and extract the emails. The ironic footnote 10 recounts how LV considered the $15,000 price tag for those expert services to be too expensive, and so they tried to do it themselves. As you might imagine, the work they did was deficient in the magistrate’s view, not to mention late. Ultimately LV was hammered with an adverse inference, and ordered to pay the defendant’s reasonable fees, which, it is safe to assume, will make the $15,000 quote seem cheap.