In a recent memorandum order, Judge Leonard P. Stark overruled plaintiff’s first and second objections, and affirmed Magistrate Judge Mary P. Thynge’s Orders from April 18, 2012 and August 22, 2012. Magnetar Technologies Corp. et al. v. Six Flags Theme Parks Inc., et al., C.A. No. 07-127-LPS-MPT (D. Del. Feb. 7, 2014). The issues addressed focused heavily on (i) materials produced by third-party Acacia Research Corporation—including the “Zelley memorandum”—in response to a subpoena in another case in California; (ii) the deposition of Geoffrey Zelley, an associate of the firm that previously represented plaintiff in the instant matter. In the April 18, 2012 Order, Judge Thynge found that “the factual part of the Zelley memorandum was discoverable, but the impressions of counsel contained in the document were not.” Id. at 2 n.1 Further, Judge Thynge allowed the Zelley deposition to move forward with certain limitations. Id. Plaintiffs objected to these rulings, arguing that “Mr. Zelley’s deposition should not go forward due to the risk of a waiver of attorney client privilege and attorney work product, that the Zelley memorandum and other assertedly privileged documents should be returned, and that Defendants should not be able to further use such documents.” Id. at 2. Defendant thereafter moved to compel production of certain document’s, and Judge Thynge granted that motion in part. Id. at 2-3 (discussed previously here). In response, plaintiffs filed their second objections. Plaintiffs specifically objected to Judge Thynge’s ruling related to the destruction of documents, which essentially stated that while there was no bad faith by plaintiffs in connection with the destruction of certain documents, a sanction was still warranted, which included producing some documents containing privileged attorney-client communications. Id. at 3.
Judge Stark affirmed Judge Thynge’s rulings, finding they were “neither clearly erroneous nor contrary to law.” Id. at 5. For example, with regard to Judge Thynge’s April 2012 decision, Judge Stark found that Judge Thynge “properly considered Defendants’ substantial need for the information contained in the Zelley Memo and permitted the deposition to go forward on that basis,” and that she also “properly reasoned that Plaintiffs’ spoliation of evidence and other litigation misconduct have created a substantial need for the information contained in the Zelley Memo- information that is no longer available to the Defendants by any other means.” Id. Judge Stark also cited portions of Judge Thynge’s August 2012 order with approval, for example, where she explained that the subject documents “were clearly under the control of [plaintiff] at the time of their destruction. Although the instant matter does not involve the typical intentional withholding of the documents as is routinely involved for an inference, [plaintiff’s] control of the documents and the potential prejudice to defendants, makes an inference a possible sanction for spoliation.” Id. at 5-6. As Judge Stark further explained, “Judge Thynge thoughtfully exercised her discretion in concluding that ‘[a]lthough the absence of evidence of bad faith spoliation does not warrant dismissal or entering an unfavorable judgment, the lack of reasonable preservation measures and prejudice weighs in favor of a lesser sanction.’” Id. at 6.
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