Vir2us, Inc. v. Invincea, Inc.

235 F. Supp. 3d 766, 96 Fed. R. Serv. 3d 1028, 2017 WL 385044, 2017 U.S. Dist. LEXIS 11720
CourtDistrict Court, E.D. Virginia
DecidedJanuary 27, 2017
DocketCivil Action No. 2:15cv162
StatusPublished
Cited by10 cases

This text of 235 F. Supp. 3d 766 (Vir2us, Inc. v. Invincea, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vir2us, Inc. v. Invincea, Inc., 235 F. Supp. 3d 766, 96 Fed. R. Serv. 3d 1028, 2017 WL 385044, 2017 U.S. Dist. LEXIS 11720 (E.D. Va. 2017).

Opinion

OPINION & ORDER

Henry Coke Morgan, Jr., Senior United States District Judge

This matter is before the Court on Plaintiff Vir2us, Inc.’s (“Plaintiff’) two motions seeking disciplinary action against Invincea, Inc. and Invincea Labs, LLC (collectively, “Defendant”): an Emergency Motion to Show Cause for Why Invincea Should Not Be Held in Contempt for Violating the Court’s Order Compelling Discovery (“Show Cause Motion”), Doc. 430, and a Motion to Strike Defendants’ Exhibits Never Produced During Discovery and Never Disclosed to Vir2us (“Motion to Strike”), Doc; 461. For the reasons set forth below, the Court GRANTS IN PART the Show Cause Motion, Doc. 430, and DENIES the Motion to Strike, Doc. 461, as MOOT.

I. BACKGROUND

A. Procedural History

On April 15, 2015, Plaintiff filed its complaint in this action alleging that Defendant infringed Plaintiffs patents relating to computer system software security. See generally Compl. The Parties engaged in discovery; argued at a Markman claim construction hearing, Docs. 65, 78; filed discovery motions, Docs. 126, 192, 400; and filed motions in limine, Docs. 158, 171, 178, 185, 200, 202, 204, 206, 208, 210, 218, 220, 222. Late on May 31, 2016, the night before trial, the Parties settled the case. See Hearing Tr. at 2:13-18, June 1, 2016. On June 1, 2016, the Court held a hearing on the remaining motions, including those currently pending before the Court. Doc. 466. On June 20, 2016. Defendant filed its opposition to the Show Cause Motion and [770]*770lodged supporting documents with the Court. Doc. 490.

B. Facts

On April 20, 2016, the Parties completed fact and expert discovery. See Doc. 24 at 2. On May 17, 2016, the Court conducted a final pretrial conference, ruled on several outstanding motions, and filed the final pretrial order. Doc. 414; see Docs. 141, 158, 165, 171, 178, 185, 192, 200, 202, 204, 206, 208, 210, 216, 218, 220, 222, 400, 405. On May 24, 2016, Plaintiff filed its Show Cause Motion. Doc. 430. On May 31, 2016, Plaintiff .filed its Motion to Strike. Doc. 461.

Defendant’s failure to comply with the Federal Rules of Civil Procedure and the Court’s discovery orders on this issue needlessly burdened discovery. The April 21, 2016 hearing on Plaintiffs Motion to Compel. Doc. 126, resulted in the Court’s ordering Defendant to make several statements under oath: (1) that no investor presentations existed for the period of 2009 through 2013 and that the six (6) produced were the only remnants, Hearing Tr. at 21:23-23:5, Apr. 21, 2016; (2) that all Board meeting minutes and presentations containing sales, product, or competition information had been produced, id. at 24:11-25:9, 33:20-35:6; and (3) that the production of documents after the first deposition of Management Employee A1 did not change Defendant’s supplemental answer to' Plaintiffs interrogatory No. 5, id. at 26:22-27:25. The Court also allowed Plaintiff to take a limited subsequent deposition of Management Employee A to address questions that arose when Defendant produced supplemental documents after her first deposition. Id. at 32:18-33:3¡ However, the Court stated at the pretrial conference that Defendant’s certifications following the previous hearing did not “satisfy the spirit of the Court’s order” because they addressed only the fact of production, not the substance of the produced documents. Hearing Tr. at 17:25-18:8, May 17, 2016. In granting Plaintiffs request to file supplemental damage and expert reports, therefore, the Court stated, “[T]his opens the door for you to file anything you want that’s related to these documents which were produced late. Anything you think that’s related to that you can produce or amend, whatever you want.” Id. at 19:21-20:2.

C. Late Production Timeline

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[772]*772II. LEGAL STANDARDS

“[T]he district court has broad discretion in determining the appropriate sanction for a party’s noncompliance with a discovery request.” Majestic Distilling Co., Inc. v. Stanley Stawski Distrib. Co., 205 F.3d 1333, 2000 WL 227919, *4 (4th Cir. 2000) (unpublished table decision); see also Wilson v. Volkswagen of Am., Inc., 561 F.2d 494, 505 (4th Cir. 1977). Even after parties settle, a court may impose sanctions “to ensure the proper functioning of judicial process.” Bradley v. Am. Household Inc., 378 F.3d 373, 380 (4th Cir. 2004).

Determining whether discovery sanctions are appropriate requires a three-step analysis of (1) whether a party violated a discovery order or Federal Rule of Civil Procedure; (2) whether the violation was “harmless” or “substantially justified;” and (3) which sanction is appropriate for the violation. Samsung Elecs. Co., Ltd. v. Nvidia Corp., 314 F.R.D. 190, 195-96 (E.D. Va. 2016).

Rule 26 requires parties to disclose relevant information during discovery.3 Fed. R. Civ. P. 26. Rule 37(c) requires parties to disclose relevant information under Rule 26(a) and (e) and supplement earlier incomplete or incorrect responses. Fed. R. Civ. P. 37.4 Rule 16(f) allows a court to impose sanctions if a party fails to obey a scheduling or other pretrial order. Fed. R. Civ. P. 16(f)(1)(C); see Fed. R. Civ. P. 37(b). A court may also “order the party, its attorney, or both to pay the reasonable expenses—including attorney’s fees—incurred because of any noncompliance with this rule, unless the noncompliance was substantially justified or other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 16(f)(2).

[773]*773III. ANALYSIS

A. Defendant Violated Rules 37 and 26.

Defendant committed numerous discovery violations during the pendency of this case.

i. Defendant Failed to Properly Search for and Produce Responsive Invincea Investor and Board Materials.

Through interrogatories and Court intervention, Plaintiff requested all of Defendant’s presentations to investors as well as presentations and minutes taken during Invincea’s Board of Directors (“Board”) meetings. See Doc. 508 at 2. In March 2016, Management Employee A claimed with regard to the investor materials, “After a reasonable search, Invincea produced all the written investor presentations, memorandums offering securities, offering memorandums, private placement memorandums and similar documents providéd to actual and potential investors and lenders that could be found in Invincea’s files and computers.” Mgmt. Emp. A Decl. ¶ 6, Apr. 29, 2016, Doc. 402, Ex. A.

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235 F. Supp. 3d 766, 96 Fed. R. Serv. 3d 1028, 2017 WL 385044, 2017 U.S. Dist. LEXIS 11720, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vir2us-inc-v-invincea-inc-vaed-2017.