e-Discovery Team

There has been more action in one of everyone’s favorite e-discovery cases, Victor Stanley v. Creative Pipe. On Tuesday, June 14, 2011, District Court Judge Marvin J. Garbis affirmed Magistrate Judge Paul Grimm’s prior Report and Recommendation. Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. 2010). Judge Grimm’s order required the defendant, Creative Pipe, Inc., to pay a total of $1,049,850.04 in attorney’s fees and costs to the plaintiff, Victor Stanley, Inc., as a monetary sanction for spoliation. A copy of the Judge Garbis Order Affirming Sanctions Amount is here linked. The award was for attorneys fees in the amount of $901,553.00 and costs of $148,297.04. This is the amount that Judge Grimm found was required to cover all of the fees and costs incurred by the plaintiff, Victor Stanley, because of the defendant’s intentional spoliation of evidence. Recall this is the case with Judge Grimm’s great line about the gang who couldn’t spoliate straight, referring to the defendants, Mark Pappas and his company Creative Pipe, Inc. See my article: “Victor Stanley 2″ – Judge Grimm Imposes Prison Sanction for Spoliation by a Defendant Reminiscent of the Leader of “The Gang That Couldn’t Shoot Straight.”

Judge Garbis explained his affirmance of the recommended $1,049,850.04 sanction:

The Court awarded sanctions equivalent to Plaintiff’s fees and costs “associated with all discovery that would not have been un[der]taken but for Defendants’ spoliation, as well as the briefings and hearings regarding Plaintiff’s Motion for Sanctions.” …

The Court’s stated standard for includible fees and costs is consistent with the purpose of designing a sanction that will “restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party.” Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 534 (D. Md. 2010)(citing West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)). …

The Court agrees with the Magistrate Judge’s Decision and finds that the recommended award is only for those fees and costs reasonably flowing from the abuse of the discovery process. Plaintiff provided sufficient detail to support its claim, and Defendants have not met their burden to demonstrate that the fees and expenses outside their suggested time period are unrelated to the spoliation. See Thompson v. HUD, No. MJG- 95-309, 2002 WL 31777631, at *9-10 (D. Md. Nov. 21, 2002) (describing the respective burdens that each party bears in establishing and challenging fees).

Judge Garbis discussed Creative Pipe’s multiple objections as to the amount of the award, and rejected all of them. He instead adopted Judge Grimm’s findings that all of these fees were in fact related to the discovery malfeasance.

Creative Pipe has already paid a total of $478,409.92,2 leaving a balance now due under this order of $571,440.12. The Order concludes with the following:

Defendants shall, by July 15, 2011, pay Plaintiff $571,440.12, constituting the balance due of a total sanction award of $1,049,850.04.

Noticeably absent is Judge Grimm’s original automatic jail sanction if the fees are not timely paid. That portion of Judge Grimm’s order had previously been overturned by Judge Garbis, but recall Judge Garbis also said he might still impose jail sanctions depending on defendant’s conduct if and when the fee sanction was upheld.

The amount of sanctions have now been upheld and the clock is running. It will be interesting to see what happens next. Will the remaining $571,440.12 be timely paid? Will this be further appealed to the Circuit Court and bonded off? Will there be further enforcement if it is not bonded? Could their yet be jail time for the infamous Mr. Papas?

Also remaining to be see is who will win on the merits of the case itself. The bench trial has already taken place, but Judge Garbis has not yet issued his ruling. Could Mark Pappas, the leader of the gang who couldn’t spoliate straight, possible still prevail?

This entry was posted on Thursday, June 16th, 2011 at 3:26 pm and is filed under Evidence, Lawyers Duties, New Rules, Search, Spoliation/Sanctions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.