Li v. Merck & Co., Inc.

District Court, N.D. California·Decided July 30, 2025·No. 4:23-cv-03347·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 NINA XIAOYAN LI, Case No. 23-cv-03347-JSW (TSH)

8 Plaintiff, DISCOVERY ORDER (PUBLIC 9 v. VERSION OF ECF NO. 162)

10 MERCK & CO., INC., et al., Re: Dkt. No. 89 11 Defendants.

12 13 Defendants (together, “Merck”) have filed a motion for sanctions against Plaintiff. It has 14 three parts. First, Defendants seek a permissible adverse inference instruction pursuant to the 15 Court’s inherent authority (which governs non-ESI sanctions) that Plaintiff deleted three 16 categories of paper documents: (1) pen and paper edits by Plaintiff and her daughter, which 17 Plaintiff admits have been thrown away; (2) documents Plaintiff printed and removed from Merck 18 within the last 90 days of her employment; and (3) documents Plaintiff solicited from a current 19 Merck employee after her termination, which were mailed to her. 20 Second, Defendants seek two alternative sanctions pursuant to Federal Rule of Civil 21 Procedure 37 (which governs ESI sanctions), resulting from Plaintiff’s alleged deletion and failure 22 to preserve communications between herself and third parties. Primarily, Defendants seek an 23 independent, third-party forensic analysis of Plaintiff’s devices as well as devices belonging to her 24 husband. Alternatively, Defendants seek an instruction that Plaintiff deleted electronic 25 communications. 26 Third, Defendants seek sanctions against Plaintiff’s counsel pursuant to Federal Rule of 27 Civil Procedure 26(g)(1)(B) and (g)(3), in the amount of $5,000, for certifying a discovery 1 Plaintiff filed an opposition. ECF No. 101. Merck filed a reply. ECF No. 103. The 2 parties then filed a series of supplemental briefs. ECF Nos. 122, 126, 131-2, 139. The Court now 3 rules as follows. 4 A. Inherent Power Sanctions 5 1. Duty to Preserve 6 A major dispute between the parties that matters a great deal to the inherent power 7 sanctions is when Plaintiff anticipated litigation and thus had a duty to preserve. Merck says that 8 Plaintiff anticipated litigation no later than December 2022. ECF No. 89 at 3-4. Plaintiff says she 9 did not contemplate suing Merck until she was fired in March 2023 and escorted out of the 10 building by security. ECF No. 101 at 3. 11 The Court thinks Plaintiff has the better of the argument. By December 2022, Plaintiff had 12 an HR dispute within Merck, but there is no indication she was thinking of suing the company. In 13 December 2022, Plaintiff’s daughter, Grace Chen, texted Plaintiff a link to a lawyer referral 14 service in Alameda County. ECF No. 89-31. Chen testified she sent the link because her mother 15 “really felt she needed to seek legal consultation to understand her legal rights, and she told me 16 that and how much she was struggling at the time, and that’s the reason why I sent that link to her, 17 so that she could basically find a lawyer who she could just consult with.” ECF No. 89-6 at 26-27. 18 And Plaintiff did consult with a lawyer at the time. ECF No. 86-3; ECF No. 101-2 at 451. When 19 asked “Do you know when your mother first started thinking about filing a lawsuit against 20 Merck?” Chen answered: “I believe we talked about her filing a lawsuit after she was fired and 21 felt that she was wrongfully terminated.” ECF No. 101-3 at 18. 22 Plaintiff similarly testified that she consulted with a lawyer in December 2022 because “I 23 just wanted to find out why I was treated the way I’m being treated, whether it’s legal or illegal. I 24 just want to know about that.” ECF No. 101-2 at 451-52. She says in her declaration that: “In 25 December 2022, I began contacting attorneys to better understand my legal rights. In the 26 meantime, I continued to do everything possible to work within Merck’s system to address the 27 retaliation I continued to face, including further interviews with the Office of Ethics, an extended 1 describing the ongoing retaliation and requesting his intervention. Despite several attorneys 2 offering their litigation services, I declined because I was not interested in litigation at the time. I 3 continued to reach out to HR and the OOE for assistance until my termination.” ECF No. 101-14 4 ¶ 2. Merck tries to spin Plaintiff’s consultation with a lawyer in December 2022 as though she had 5 “lawyered up” at that point. But that’s not true. She did not retain counsel until after she was 6 fired. 7 Merck points to a text message exchange between Plaintiff and Liangsu Wang, her former 8 manager, on December 14, 2022. Plaintiff said: “we talked with two lawyers, both of them want 9 to take my case move forward.” But then she added: “Yeah, the strategy will be settled down 10 with the company, which is the same as what I’m doing by myself. But I think with the lawyer, I 11 have more options.” ECF No. 130-3. It’s not 100% clear what that means, but the better 12 interpretation is the one that is consistent with Plaintiff’s and Chen’s testimony that Plaintiff 13 consulted with an attorney in connection with her HR issue at work, which she was handling 14 through Merck’s internal processes. That was a perfectly good reason to consult with a lawyer, 15 and it doesn’t mean she was considering filing a lawsuit. For a highly skilled employee like 16 Plaintiff to sue a current employer is something many people in Plaintiff’s position would find 17 unpalatable, and there is no indication she was contemplating suing Merck until she was fired. 18 Merck points out that even before December 2022, Plaintiff had been watching YouTube 19 videos “to understand retaliation and discrimination mostly from – trying to understand her legal 20 rights.” ECF No. 89-6 at 24-25; ECF No. 89-3 at 116-17. Merck also points to several instances 21 in which Plaintiff took screen shots or saved documents related to her HR dispute. ECF Nos. 103- 22 6 to 103-12. But this behavior is consistent with having a significant HR dispute at work, and it is 23 clear that she had one. 24 Merck relies on broad propositions of law that the duty to preserve does not arise only 25 when someone has made a final decision to sue, that the duty to preserve can arise long before a 26 lawyer is actually hired, and so on. The Court does not disagree with those general propositions. 27 But on the facts of this case, there is no indication that Plaintiff was contemplating suing Merck 1 acts she is suing over is her termination, which of course did not happen until she was fired. 2 Complaint, ECF No. 1-1 ¶ 13. On that day her efforts to work within Merck’s system came to an 3 end and litigation became her only remedy. It is not strange that someone would begin 4 contemplating a lawsuit when that became her only option. 5 Merck cites Fast v. GoDaddy.com LLC, 340 F.R.D. 326 (D. Ariz. 2022), in which the 6 court found that plaintiff’s duty to preserve began in May 2018, when plaintiff and her co-worker 7 started gathering evidence for a lawsuit, sending messages such as “[s]o if GoDaddy deletes ours 8 on slack between what u have saved and I have u will be good to sue,” and “[y]ep and then sue 9 while on disability” to which plaintiff responded, “Exactly.” Id. at 337 (emphasis added). 10 Plaintiff had also retained counsel in May. This led the court to conclude that the duty to preserve 11 arose in May, “when [plaintiff] formed the intent to sue GoDaddy,” id. But that case merely 12 emphasizes what is missing in this case in the time period before Plaintiff was fired. 13 The other cases Merck cites are a sort of grab bag of preservation cases that do nothing to 14 bolster Merck’s arguments here. See Barsoum v. NYC Housing Authority, 202 F.R.D. 396, 400 15 (S.D.N.Y.

Free access — add to your briefcase to read the full text and ask questions with AI

Li v. Merck & Co., Inc., (N.D. Cal. 2025).

Li v. Merck & Co., Inc. (Li v. Merck & Co., Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Surowiec v. Capital Title Agency, Inc.
790 F. Supp. 2d 997 (D. Arizona, 2011)
Apple Inc. v. Samsung Electronics Co.
888 F. Supp. 2d 976 (N.D. California, 2012)
Barsoum v. NYC Housing Authority
202 F.R.D. 396 (S.D. New York, 2001)
Dawe v. Corrections USA
263 F.R.D. 613 (E.D. California, 2009)
ChampionsWorld, LLC v. United States Soccer Federation
276 F.R.D. 577 (N.D. Illinois, 2011)