Brigham Young University et al v. Pfizer et al

Filing 945

MEMORANDUM DECISION denying 762 Motion for Sanctions. Signed by Magistrate Judge Brooke C. Wells on 04/16/2012. (lnp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
BRIGHAM YOUNG UNIVERSITY, a Utah
Non-Profit Education Institution; and Dr.
DANIEL L. SIMMONS, an individual,,

MEMORANDUM DECISION AND ORDER
DENYING PLAINTIFFS' MOTION FOR
SANCTIONS (FURTHER DISCOVERY
SANCTIONS)

Plaintiffs,
v.

Case No. 2:06-cv-890 TS

PFIZER, INC., a Delaware corporation; G.D.
SEARLE & COMPANY, a Delaware
corporation; G.D. SEARLE LLC, a Delaware
limited liability company; MONSANTO
COMPANY, a Delaware corporation; and
PHARMACIA CORPORATION, a Delaware
corporation,,
Defendants.

District Judge Ted Stewart
Magistrate Judge Brooke Wells

This matter is before the Court on Brigham Young University’s and Dr. Daniel Simmons’
(collectively BYU) Motion for Sanctions (Further Discovery Sanctions). 1 This Court has held
numerous hearings regarding discovery in this case and is very familiar with the arguments made
by the parties and the circumstances and background giving rise to the discovery disputes. Given
the Court’s familiarity with the case and pursuant to Local Rule 7-1(f) of the Rules of Practice
for the United States District Court for the District of Utah, the Court concludes that oral
argument would not be materially helpful and is not necessary. Accordingly, the Court will
determine the motion on the basis of the written memoranda. 2 The Court has carefully
considered the memoranda along with hundreds of pages of attachments. Having reviewed the

1

Docket no. 762.

2

See DUCivR 7-1(f) (2011).

materials from the parties as well as relevant case law the Court finds the sanctions sought by
Plaintiffs in this motion are not warranted and therefore DENIES the motion as set forth below.
I. BACKGROUND
The facts of this case are set forth fully in the Court’s prior discovery sanctions order
dated October 28, 2009. 3 Additionally, Chief Judge Ted Stewart has recently aptly summarized
the facts of this case in an order dated March 13, 2012, 4 so the Court need not repeat those facts
here. The additional facts mentioned below are pertinent to the instant matter.
On October 28, 2009, the Court entered an order granting in part and denying in part
BYU’s initial request for sanctions. 5 In that order the Court considered the factors set forth by
the Tenth Circuit in Ehrenhaus v. Reynolds, 6 and found that Pfizer’s conduct as of that time rose
to a level justifying the entry of monetary sanctions in the amount of $852,315.80. The Court
noted that Pfizer’s conduct had not risen to a level of willful and intentional disobedience, but
“Pfizer’s production [had] been negligent to the point that it closely approach[ed] a finding of
bad faith.” 7 Notwithstanding Pfizer’s conduct, which the Court concluded had come about as
close as a party could to a finding of bad faith, the Court declined BYU’s request to enter more
severe sanctions. 8 Instead, the Court adopted the approach set forth in Ehrenhaus trying the
efficacy of lessor sanctions before proceeding, if warranted, to more severe sanctions.

3

Docket no. 303.

4

Docket no. 896.

5

See Order dated October 28, 2009, docket no. 303.

6

965 F.2d 916, 921 (10th Cir. 1992).

7

October 28, 2009 order p. 14.

8

See id. p. 14-18.

2

In March of 2010, BYU filed a second motion for sanctions arguing that there had been
further misconduct by Pfizer during the discovery process. 9 Approximately two months later,
the Court denied that motion without prejudice noting the length of the memorandum in support
of the motion and BYU’s failure to more narrowly tailor the issues regarding Pfizer’s compliance
with discovery. 10
BYU filed a third Motion for Dispositive Sanctions in July 2010. BYU asked the Court
to “strike Pfizer’s answer, find Pfizer liable to BYU, and limit trial in this case to damages,” 11 or
in the alternative, “allow the jury to presume that missing information would have been
detrimental to Pfizer.” 12 The Court denied without prejudice this third motion for discovery
sanctions. In its order the Court cited to the numerous discovery disputes in this case and the
need to conserve the resources of both the parties and the Court. Seeking to avoid “piecemeal
litigation” of repeated motions for sanctions, the Court determined it best to allow the case to
proceed to the conclusion of discovery and then if appropriate BYU could file a motion for
dispositive sanctions.
BYU filed the instant Motion for Sanctions (Further Discovery Sanctions) in November
2011 following the close of discovery. 13 In support of its Motion for Further Discovery
Sanctions BYU filed a memorandum consisting of approximately 132 pages along with hundreds
of pages of exhibits.14 The Court denied BYU’s request to file this over length memorandum
and required BYU to file a new memorandum shorter in length with a “Statement of Facts of not

9

Docket no. 351.

10

See Order dated May 4, 2010 p. 2.

11

Mtn. p. 2, docket no. 453.

12

Id.

13

Docket no. 762.

14

Docket nos. 763 and 764.

3

more than 60 pages with the remaining sections complying with the rules.” 15 BYU complied
with the Court’s order. 16 Defendants Pfizer Inc. et al filed an opposition to BYU’s motion on
January 24, 2012. 17 BYU filed its reply on February 24, 2012. 18
II. STANDARD OF REVIEW
Rule 37 of the Federal Rules of Civil Procedure permits a court to impose a number of
sanctions for a party’s failure to comply with a court’s discovery orders. Such sanctions include,
but are not limited to:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)

directing that the matters embraced in the order or other designated facts be taken
as established for purposes of the action, as the prevailing party claims;
prohibiting the disobedient party from supporting or opposing designated claims
or defenses, or from introducing designated matters in evidence;
striking pleadings in whole or in part;
staying further proceedings until the order is obeyed;
dismissing the action or proceeding in whole or in part;
rendering a default judgment against the disobedient party; or
treating as contempt of court, the failure to obey any order except an order to
submit to a physical or mental examination. 19

The Court has discretion to impose any such sanction that is “just and related to the
particular claim which was at issue in the order to provide discovery.” 20 But, the Court’s
discretion “’is limited in that the chosen sanction must be both just and related to the particular
claim which was at issue in the order to provide discovery.’” 21
In general, before imposing severe sanctions such as striking a parties’ answer, courts
should consider the Ehrenhaus factors. The Tenth Circuit set forth these factors in affirming a
15

Order dated November 28, 2011, docket no. 785.

16

Docket no. 786.

17

Docket no. 853.

18

Docket no. 878.

19

Fed. R. Civ. P. 37(b)(2)(A) (2009).

20

Ehrenhaus v. Reynolds, 965 F.2d 916, 921 (10th Cir. 1992).

21

Procter & Gamble Co. v. Haugen, 427 F.3d 727, 738 (10th Cir. 2005) (quoting Ehrenhaus, 965 F.2d at 920).

4

district court’s decision to dismiss a complaint with prejudice as a sanction for violating a
discovery order. While not establishing a “rigid test,” 22 the following factors should be
considered and applied: (1) the degree of actual prejudice to the other party; (2) the amount of
interference with the judicial process; (3) the culpability of the litigant; (4) whether the court
warned the party in advance that dismissal of the action would be a likely sanction for
noncompliance; and (5) the efficacy of lesser sanctions. 23 These factors are not exhaustive, nor
are the factors necessarily of equal weight. 24 “Only when the aggravating factors outweigh the
judicial system’s strong predisposition to resolve cases on their merits is dismissal an appropriate
sanction.” 25 Because of this strong preference, the Tenth Circuit has held that a “dismissal or
default sanctions order should be predicated on ‘”willfulness, bad faith, or [some] fault”’ rather
than just a simple ‘”inability to comply.’” 26
III. DISCUSSION
As noted by the Tenth Circuit in Ehrenhaus, it is proper for a court to attempt the efficacy
of lesser sanctions before entering severe sanctions like those sought by BYU. Thus, the
question before the Court is, does Pfizer’s conduct following the entry of monetary sanctions in
the amount of $852,315.80 rise to a level warranting dispositive sanctions and the other sanctions
sought by BYU?

22

Ehrenhaus, 965 F.2d at 921.

23

See id.; see also Procter & Gamble Co., 427 F.3d at 738; Gripe v. City of Enid, 312 F.3d 1184, 1187 (10th Cir.
2002).

24

See Chavez v. City of Albuquerque, 402 F.3d 1039, 1044 (10th Cir. 2005).

25

Ehrenhaus, 965 F.2d at 921 (internal quotation marks omitted) (emphasis added).

26
Lee v. Max International, LLC., 638 F.2d 1318, 1321 (10th Cir. 2011) (alteration in original) (quoting Archibeque
v. Atchison Topeka & Santa Fe Ry., 70 F.3d 1172, 1174 (10th Cir. 1995) (quoting Nat’l Hockey League v.
Metropolitan Hockey Club, 427 U.S. 639, 640 (1976)).

5

In its motion, BYU seeks an order from the Court striking Pfizer’s answer and limiting
this case to a trial regarding damages. 27 In the alternative, BYU seeks the following relief:
•

An order precluding Pfizer from arguing or presenting evidence at trial that BYU’s COX2 clones and antibodies did not work or did not express protein;

•

An order allowing BYU to put on evidence at trial regarding Pfizer’s discovery failures;

•

An order in the nature of a spoliation instruction or adverse inference instruction;

•

An order precluding Pfizer or its damage expert from using estimated data to argue that
BYU has understated Pfizer’s costs in BYU’s damage calculations. 28

In support of these sanctions BYU argues Pfizer lost or destroyed critical documents
when it had a duty to preserve them. BYU next asserts that Pfizer’s records’ management
practices are unreasonable and have made relevant documents practically inaccessible. In
addition, Pfizer has repeatedly disregarded this Court’s discovery orders. Next, BYU argues
“Applying the Ehrenhaus factors to the totality of Pfizer’s discovery abuse justifies further
serious sanctions.” 29 And finally, BYU argues that Pfizer’s conduct has not changed from the
Court’s entry of its prior sanctions order and this justifies serious sanctions including dismissal.
Thus, BYU argues that this Court should look at the totality of the case in determining sanctions
and also Pfizer’s conduct since its October 2009 order. BYU primarily cites to Lee v. Max
International, LLC.30 and Phillip M. Adams & Assoc. v. Dell, Inc. 31

27

Mem. in sup. p. 81.

28

Id.

29

Reply p. 24.

30

638 F.3d 1318.

31

621 F.Supp.2d 1173 (D. Utah 2009).

6

In Lee, the Tenth Circuit upheld the undersigned’s recommendation to the district court
that it grant the defendant’s motion to dismiss as a sanction for the plaintiffs’ misconduct. 32 The
plaintiffs in Lee were given three opportunities to produce requested relevant discoverable
materials. Yet, they failed to comply. 33 This included repeated failures after twice being ordered
to comply by this Court. To further aggravate the situation, the plaintiffs filed a misleading
affidavit stating that they had complied, but then produced missing records after filing the
affidavit. In short, the plaintiffs conduct in Lee was a blatant and willful disregard for the
Court’s authority and a stark failure to comply with a party’s discovery obligations under the
Federal Rules. 34 Tellingly, the materials plaintiffs failed to produce were also unquestionably
under their control.
While helpful to the current analysis the Court finds this case is not analogous to Lee.
Unlike in Lee, here there are questions about who controlled certain alleged missing discovery
materials. “Discovery is not supposed to be a shell game, where the hidden ball is moved round
and round and only revealed after so many false guesses are made and so much money is
squandered.” 35 Parties can turn the control of documents into a shell game by hiding certain
materials in subsidiaries or sister corporations. But, the Court is not convinced by BYU’s
arguments that this has occurred in the instant matter. Rather, changes in control of certain
materials were the natural result of business transactions. Further, the Court finds that while
Pfizer’s conduct during discovery has not always been commendable, it does not rise to the level

32

See Lee, 638 F.3d at 1319.

33

See id.

34

See id. at 1321.

35

Id. at 1322.

7

of plaintiffs’ misconduct in Lee. Thus, the analysis in Lee is helpful, but my decision in that case
is not controlling of the current matter.
In Adams & Assoc., 36 Judge Nuffer of this Court held that the defendant company had a
duty to preserve evidence which it failed to do. This failure resulted in spoliation of evidence
that warranted the entry of sanctions. A determination of the exact sanctions, however, was left
until after the close of discovery when the parties were directed to provide the court with
additional information regarding the evidence that was missing. 37
BYU asserts that just like in Adams Pfizer had a duty to preserve documents and it failed
to do so. BYU urges this Court to adopt a preservation date of April 1992, which according to
BYU was the date by which Monsanto, Pfizer’s predecessor in interest, anticipated litigation
regarding termination of the Research Agreement. The facts do not support BYU’s argument for
designation of this date. A party’s duty to preserve evidence arises when the party “knew, or
should have known, that litigation was imminent.” 38 Here, the Court is not convinced that
Monsanto knew or should have known in April 1992 that litigation was imminent. The Research
Agreement was signed by “July 8, 1991” 39 and on March 27,1992, BYU sent a letter
“acknowledging the termination of the Research Agreement” 40 pursuant to mutual agreement.
In addition, an aggrieved party seeking an adverse inference—such as BYU—must also
prove bad faith. “Mere negligence in losing or destroying records is not enough because it does

36

621 F.Supp.2d 1173.

37

See 621 F.Supp.2d at 1195.

38

Turner v. Pub. Serv. Co. of Colo., 563 F.3d 1136, 1149 (10th Cir. 2009).

39

Amended Compl. ¶ 77.

40
Id. at ¶ 121. BYU alleges in its Complaint that Monsanto inappropriately terminated the agreement after
successfully testing for COX-2 selectivity. Such contentions, however, are not material to the Court’s instant
decision.

8

not support an inference of consciousness of a weak case.” 41 BYU takes issue with Pfizer’s
records’ management practices and specifically attacks its record keeping facility, the PRSC,
arguing that Pfizer has used it to spoliate or hide documents. BYU, however, has failed to show
that Pfizer’s record management practices rise to a level more than mere negligence. Moreover,
according to Pfizer, BYU has declined opportunities to search the PRSC facility. Thus the Court
finds BYU has failed to prove bad faith.
Finally, BYU seeks to expand Pfizer’s duty to preserve, asserting that Pfizer’s duty arises
not only from an awareness of this action, but rather from other sources such as Monsanto’s
document retention policies, Pfizer’s document retention policies and its obligations to the
Federal Government as well as Pfizer’s litigation with other parties. As noted by the Tenth
Circuit, this line of argument conflates two very different things. “When you violate a corporate
policy you may well be in trouble with your boss, but that doesn't necessarily mean you have
committed a tort.” 42 A violation of private corporate policy does not always equate to a violation
of the law and BYU fails to establish a connection between the duty Monsanto or Pfizer had to
itself and the duty Pfizer has to BYU to provide discovery in this litigation.
In similar fashion, the Court cannot see how a duty owed to the Federal Government,
which was allegedly violated, translates into sanctionable conduct toward BYU. Any recourse
for such misconduct would belong to the Government and not a private third party. Likewise,
any duty Pfizer owed parties in other litigation would belong to that party and not BYU. BYU
asserts that “The duty to preserve runs to the legal system generally.” 43 The Court disagrees.
While litigation can help “sensitize” a defendant to issues that may arise in other lawsuits and

41

Abramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir. 1997).

42

Johnson v. Liberty Mut. Fire Ins. Co., 648 F.3d 1162, 1165 (10th Cir. 2011).

43

Reply p. 3.

9

trigger a need to preserve in certain instances, BYU’s suggested duty is simply too broad. It is
difficult for the Court to imagine how a party could ever dispose of information under such a
broad duty because of the potential for some distantly related litigation that may arise years into
the future. Thus, the Court finds this case is distinguishable from Adams.
Admittedly, the conduct of Defendants and even Plaintiffs 44 has not been perfect since
the entry of its prior order regarding discovery sanctions. For example, following a motion to
compel by BYU the Court found it necessary to order Pfizer to produce an index of all scientific
notebooks that may be relevant to the issues in this case. 45 Later, the Court again found it
necessary to order Pfizer to submit an affidavit about whether BYU was denied access to any
biological samples at the Lancaster facility. 46 Nonetheless, the Court finds that overall, the
conduct of Pfizer following the Court’s entry of its prior sanctions order, has improved. Indeed,
there have been times when an actual spirit of cooperation existed among the parties and counsel.
Additionally, as noted by the Court in its prior sanctions order, 47 the problems with
discovery in this case cannot be viewed in a vacuum. One cannot simply overlook the important
fact that the majority of documents and facts giving rise to this dispute come from events in the
early 1990s. The passage of time can have an impact on any case—memories fade, documents
become worn or lost and they can change hands through business transactions such as mergers.
Witnesses may forget whether they did certain things—such as whether they kept or checked in a
laboratory notebook. Evidence may simply be discarded as a result of good faith business
procedures. Clearly there is a duty on a party to preserve evidence when it is anticipating
44

For example the Court entered sanctions against BYU due to a questionable motion it brought to disqualify
Pfizer’s entire team of lawyers that unreasonably multiplied the proceedings in this case. See docket no. 580. See
also 28 U.S.C. § 1927.
45

See Order Granting in Part Motion to Compel, docket no. 499.

46

See Order from April 7, 2011 status conference, docket no. 624.

47

See October 28, 2009 order p. 14.

10

litigation, 48 yet such a duty cannot prevent the inadvertent destruction or misplacement of
evidence that can occur before such a duty arises. Nor can it prevent the fading of human
memories.
The Court finds many of BYU’s complaints concern documents that likely fall within
such categories. Evidence changed hands and was discarded before a duty to preserve was in
place. The “Federal Rules protect from sanctions those who lack control over the requested
materials or who have discarded them as a result of good faith business procedures.” 49
Other materials were eventually produced in a time frame unacceptable to BYU. While
not always commendable, a “rolling production” is not unexpected in a very large case such as
this. Each case should be examined in the context of the claims made and the discovery sought.
Given certain circumstances it may be impractical to think that a party should be expected to
produce the entire galaxy of relevant documents in one or two weeks or even after one or two
requests for production. The Court does not seek to minimalize the seriousness of the discovery
issues in this case and the sanctions it entered against Pfizer, but discovery is a process of give
and take between the parties in litigation. It is expected that a party requests certain items,
reviews those items and then makes further requests. It is also expected that a party in good faith
comply with discovery requests and only when necessary seek Court guidance about the
production of items.
The Court has given much time and consideration to BYU’s arguments and has carefully
reviewed the documents submitted in support of its motion. The Court has also once again
reviewed the history of this case. After doing so, the Court finds Pfizer’s conduct following the
entry of the Court’s order of monetary sanctions has not risen to a level warranting the sanctions
48

See Adams & Assocs., 621 F.Supp.2d at 1190-91.

49

Lee, 638 F.3d at 1321.

11

now sought be BYU. Instead, the Court finds that lessor sanctions have proven fruitful to the
judicial system’s strong predisposition toward resolving a case on its merits. 50 The Court now
turns to BYU’s specific requests in its motion.
Dismissal of an action as a sanction for discovery violations represents an extreme
sanction and is appropriate only in cases of willful misconduct. 51 Here, after viewing the totality
of the circumstances in this case, the Court finds Pfizer has not acted willfully or in bad faith.
Thus, it is improper to essentially declare BYU the prevailing party and strike Pfizer’s answer.
The Court, therefore, declines to do so.
Next, the Court finds BYU has failed to establish an entitlement to an order precluding
Pfizer from arguing or presenting evidence at trial that BYU’s COX-2 clones and antibodies did
not work. BYU’s support for this requested relief is filled with speculation and arguments
implying that because Pfizer failed to produce any evidence showing the COX-2 clones and
antibodies did work, then Pfizer must have destroyed or hidden such evidence. Such arguments
are based upon BYU’s alleged theory of the case and are presumably to be argued at trial subject
to further trial court rulings.
The Court also declines BYU’s invitation to enter a spoliation instruction or adverse
inference instruction. As stated previously, an aggrieved party must prove bad faith “Mere
negligence in losing or destroying records is not enough because it does not support an inference
of consciousness of a weak case.” 52 BYU has failed to establish bad faith since the imposition of
the Court’s prior sanctions order and BYU’s arguments for this requested relief are once again
based in part on the premise that missing evidence regarding its COX-2 clones establishes the

50

See Ehrenhaus, 965 F.2d at 921.

51

See id. at 920.

52

Abramburu, 112 F.3d at 1407.

12

fact that Pfizer destroyed or hid such evidence. Such arguments are better left for presentation at
trial to be judged by the discerning eyes of a jury and subject to district court rulings. While the
discovery process has been far from perfect, there is nothing before the Court indicating a willful
or blatant attempt by Pfizer to hide or destroy evidence after the entry of the October 2009
sanctions order.
In similar fashion the Court is not persuaded that it should enter an order precluding
Pfizer or its damage expert from using estimated data to argue that BYU has understated Pfizer’s
costs in BYU’s damage calculations. Evidence of damage calculations should be presented to
the jury when appropriate.
Finally, the Court notes that denying BYU’s motion does not equate to a ruling on a
motion in limine preventing BYU from introducing evidence regarding Pfizer’s conduct during
trial. Nor, does this Court’s decision fatally impact BYU’s desire to obtain certain jury
instructions regarding spoliation. Those issues, in the Court’s view, are better left for a
determination at trial as the evidence is presented by both sides before the critical eyes of a jury.

13

IV. CONCLUSION
Based upon the Court’s discretion in resolving discovery disputes 53 and after a thorough
review of both the entire history of this case and Pfizer’s conduct following the Court’s prior
sanctions order entered in October 2009, it is
ORDERED that BYU’s Motion for Sanctions (Further Discovery Sanctions) is DENIED.

DATED this 16 April 2012.

Brooke C. Wells
United States Magistrate Judge

53

See Ehrenhaus, 965 F.2d at 920 (“Determination of the correct sanction for a discovery violation is a fact-specific
inquiry that the district court is best qualified to make.”).

14