Chief Judge Stark Denies Plaintiff’s Motion for Sanctions

September 1, 2016

Publication| Intellectual Property

In W.L. Gore & Associates, Inc. v. C.R. Bard Inc. and Bard Peripheral Vascular, Inc., C.A No. 11-515 (D. Del. July 27, 2016), Chief Judge Stark denied the plaintiff’s motion for sanctions against the defendants. In its motion, the plaintiff alleged that, on the morning of trial, the defendants contended that they had recently found a previously unknown and potentially relevant report (the “Teece Report”) from a Maryland and Missouri tax proceeding involving the plaintiff. The uncovering of this report led to a continuance of trial. Upon further investigation, the plaintiff found that the defendants had prior knowledge of the Teece Report and had in fact used the Teece Report in a case against the plaintiff in 2009 in an Arizona federal court. The plaintiff also found that one of the attorneys in the Arizona case had been lead counsel for the defendants in this case. Further, upon retrieving the Teece Report from the Maryland court, the plaintiff found that each page of the report was marked “Confidential – Subject to Protective Order” and alleged that one of the defendants’ counsel had improperly obtained the Teece Report at the clerk’s office and copied it.

First, Chief Judge Stark found persuasive the defendants’ argument that counsel did not remember the Teece Report from the prior litigation in Arizona, noting that the defendants had “raised the Teece Report in a significantly different context during the Arizona case” and that defendants’ counsel had submitted unrebutted declarations concerning the relevant facts.

Second, Chief Judge Stark rejected the plaintiff’s argument that the defendants’ counsel breached confidentiality provisions by accessing the Teece Report from the court in Maryland. The Court found that “it appears that at all times [the defendants’ counsel] proceeded in compliance with the instructions and representations he received from Maryland court personnel, and he was permitted to rely on such statements.” Chief Judge Stark was unpersuaded by the plaintiff’s argument that the defendants’ counsel should have known the Teece Report was not to be viewed because it was marked “confidential” and “subject to protective order,” noting that “[d]ocuments that may at one time be marked ‘confidential’ are frequently ‘de-designated.’” Finally, he invited additional briefing on the defendants’ motion for attorneys’ fees that were incurred in responding to the plaintiff’s motion for sanctions. Chief Judge Stark found that the plaintiff’s sanctions motion “leveled serious accusations of misconduct against highly-experienced attorneys and . . . the record does not support these allegations.”

Key Points: The Court’s decision reflects the need to carefully consider a motion for sanctions before filing it, particularly when it levels charges against opposing counsel.

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