Sanctions for Stryker and Seyfarth Shaw LLP Over Discovery

The court is not happy with Stryker Corporation and its law firm, Seyfarth Shaw LLP for their litigation conduct and they are going to have to collectively pay fees and costs as a result.

The sanctions stem from a lawsuit between Colorado-based medical device distributor ORP Surgical, LLC (ORP) and its manager Lee Petrides who sued New Jersey-based Howmedica Osteonics Corp., a subsidiary of Stryker (Stryker). ORP and Petrides sued Stryker for alleged wrongful actions during the winding down of their business relationship. Stryker brought counterclaims against the two. For OTW’s original coverage of the matter, see “ORP Surgical Sues Stryker.”

The sanctions have less to do with the lawsuit and more to do with the antagonism between the parties during discovery. According to the recent Findings of Fact, Conclusions of Law, and Order of Judgment by Senior Judge R. Brooke Jackson of the District of Colorado the litigation “has been characterized by vigorous advocacy, to say the least.” The court noted that because “of the volume and antagonistic nature of the discovery disputes that were occurring, the Court ultimately appointed a special master to assist in managing the discovery process.” By the time of trial, the special master had recommended that “Stryker and its counsel be severely sanctioned.”

One recommendation for sanctions came as a result of text messages, or a lack thereof. The special master recommended sanctions after he found that “Stryker did not fulfill its duty to preserve and protect” text messages. He recommended spoliation sanctions but also “recommended that the sanction be reduced if the relevant text messages were recovered from other phones.” The missing text messages then appeared.

Judge Jackson initially did not impose any sanctions for the missing texts. However, after additional motions, Judge Jackson found that “Stryker failed to meet some of its preservation obligations, and that Stryker’s counsel turned this case sour with nasty litigation tactics.”

Judge Jackson additionally noted, “As I stated during the trial, I was ‘appalled’ at Stryker’s lawyers’ ‘playing fast and loose’ with discovery obligations.”

In another report, the special master found that Stryker and/or its counsel had engaged in three kinds of misconduct. In the order, Judge Jackson notes that the special master and Judge Jackson both struggled to find appropriate sanctions. Ultimately, Judge Jackson ordered Stryker and its counsel to reimburse ORP and Petrides for their share of the special master fees and costs.

Judge Jackson elaborated that half of the reimbursement “should be paid by Stryker for its failure to preserve text messages, and the other half should be paid by the Seyfarth Shaw LLP law firm for the misconduct of counsel during the discovery process. The Court also admonishes counsel.”