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Victor Stanley II: Bad Facts Make…Obvious Law

There’s an expression among lawyers that “bad facts make bad law.”  This expression is typically used to describe a judicial opinion in a case with such extreme facts that the judge felt compelled to create a new rule of law, or extend the boundaries of the existing rule, and in doing so caused an outcome that would be inappropriate in just about any other case.  A speaker at a conference I recently attended referred to Magistrate Judge Paul W. Grimm’s September 2010 opinion in Victor Stanley v. Creative Pipe as an example of “bad facts make bad law,” and no one in the audience (including me) questioned the use of that expression.  But upon further reflection, I think that characterization is flat wrong.

In this opinion, Judge Grimm ruled on Plaintiff’s motion for a finding of spoliation and the imposition of sanctions.  The Judge described Defendant Creative Pipe’s actions as “the single most egregious example of spoliation … in any case that I have handled or in any case described in the legion of spoliation cases I have read in nearly fourteen years on the bench.”  In the face of such extreme spoliation – which Creative Pipe actually admitted – Judge Grimm recommended a default judgment be issued on one of the claims. He also ordered that all fees and costs related to the spoliation proceedings be paid by Creative Pipe.  Further, Judge Grimm entered a finding of civil contempt against Mark Pappas, the President of Creative Pipe, and he ordered that Pappas be jailed (for no more than two years) until the fees and costs were paid in full.  This order of jail time – perhaps the first in a spoliation proceeding – had the e-discovery blogosphere all atwitter, and probably gave rise to the offhand characterization of the decision as “bad law” in the face of “bad facts.”

But I think Judge Grimm’s order serves as an example of “bad facts” making “obvious law.”  If civil contempt and possible jail time were not appropriate in this case, when would they ever be?  (Note that on November 1 the District Court ruled on Creative Pipe’s appeal of Judge Grimm’s recommendation.  The Court adopted Judge Grimm’s decision in every respect except the finding that Pappas should be jailed until he paid the award of fees and costs; instead, the District Court decided to first give Pappas the chance to pay the monetary sanctions, and then if he failed to do so, move to further civil or criminal contempt remedies, which presumably would include jail time.)  Given the extreme facts in this case, Judge Grimm could have issued a one or two-page decision explaining his ruling.  But Judge Grimm did a favor for the District and appellate level courts – and every civil litigant and practitioner – conducting a careful, thorough survey of the landscape of spoliation and sanctions law across the country before he reached his conclusion.  Unfortunately the state of the law seems to be in flux, and there are inconsistencies from jurisdiction to jurisdiction.  But there should be no doubt that if a party engages in deliberate, widespread, borderline-criminal destruction of evidence and obstruction of discovery, the most severe sanctions available should be imposed.

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For a further examination and discussion of Judge Grimm’s opinion, please see our DiscoverReady Client Alert on Victor Stanley vs. Creative Pipe.

Maureen O'Neill