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Defendant Receives Terminating Sanctions and More for “Persistent Contemptuous Behavior”: eDiscovery Case Law

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

In Teledyne Technologies Inc. v. Shekar, No. 15-1392 (N.D. Ill., Aug. 22, 2016), Illinois District Judge Ronald A. Guzmàn, finding that the defendant “has failed to purge himself of contempt for the repeated refusal to comply with this Court’s orders”, entered judgment against the defendant, dismissed his counterclaims, and directed him to pay the plaintiff’s reasonable attorney’s fees and costs incurred as a result of having to pursue relief for the defendant’s “persistent contemptuous behavior”.

Case Background

In this case against a former employee seeking injunctive relief relating to the return of the plaintiff’s property and confidential information following the defendant’s termination, the Court issued a temporary restraining order (“TRO”) in February 2015, finding that the plaintiff “established a substantial likelihood of success with respect to its claims that Shekar, without authorization and in violation of his contractual obligations, misappropriated confidential information and trade secrets from Teledyne; intentionally deleted Teledyne computer files; engaged in deceptive trade practices; interfered with its business relationships; and converted its property, all of which threatened to cause irreparable harm to Teledyne.”  The TRO was replaced with a preliminary injunction (“PI”) in March 2015; a week later, the plaintiff filed a Motion for Rule to Show Cause why the defendant should not be held in contempt for failing to comply with the TRO and PI, which was granted.

After an evidentiary hearing, the Court found the defendant in contempt, and ordered that he purge the contempt by:

  1. produce his home computer and any other devices or electronic storage media accessible to him;
  2. produce at a minimum the three external hard drives connected to the plaintiff-issued laptop on or after his termination date, and either produce or account for the whereabouts of the other eight hard drives or other devices which have connected to the laptop since July 13, 2013;
  3. truthfully and completely answer all interrogatories served upon him in this matter under oath;
  4. turn over, without keeping any copies, all plaintiff’s information including emails and the November 2014 backup files;
  5. explain the nature of the February 3, 2015 data transfer between the plaintiff’s servers and his work laptop, and turn over any such data still accessible to him; and
  6. truthfully divulge the passcode required to access the plaintiff-issued iPhone he previously produced.

The defendant then “engaged in a series of evasions and misrepresentations seeking to vacate or modify the order that he purge himself of contempt”, which included “offensive personal attacks” on the plaintiff’s counsel and even on his own attorneys. The Court eventually ordered the defendant to turn himself in to be detained and committed to the custody of the Bureau of Prisons, but was then contacted by multiple attorneys that the defendant attempted to engage, who notified the court that he had threatened suicide. Even after the court stayed the incarceration order, the defendant still failed to comply with the order to turn over his electronic devices and data, producing a laptop without its original hard drive, an iPhone with only four calls in the call log and a hard drive that had been wiped.

Judge’s Ruling

With the defendant’s history of “manipulations”, Judge Guzmàn stated and ruled, as follows:

“Shekar is clearly in willful contempt. He has been ordered time and again to comply with the Court’s orders and has never manifested the slightest intention to do so. Worse still, he has attempted to deceive the Court at every step of the way. Both before being found in contempt and afterwards, he has displayed a total lack of respect for the truth or the integrity of the legal process. When the Court threatened fines and attorney’s fees, Shekar remained unwavering in his contemptuous behavior. When the Court threatened compulsory imprisonment, Shekar took advantage of the Court’s concern for his well-being — all the while continuing his contemptuous refusal to comply. The Court has paid a high price in the expenditure of time and resources in dealing with Shekar’s persistent misconduct as has the plaintiff. The record is clear that ordinary sanctions have been and will continue to be unavailing, and Shekar leaves the Court with no choice but to impose harsh sanctions, which are not only appropriate, but required.

For the reasons stated above, the Court enters judgment against Shekar on all of Teledyne’s claims, dismisses his counterclaims, and, in addition to the usual bill of costs, assesses Shekar Teledyne’s reasonable attorney’s fees and costs stemming from its arduous efforts in demonstrating Shekar’s contempt.”

So, what do you think?  Were the extreme sanctions deserved?  Please share any comments you might have or if you’d like to know more about a particular topic.

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