The e-discovery community has been monitoring DR Distribs., LLC v. 21 Century Smoking, Inc., (N.D. Ill. Oct. 6, 2022) with interest, after prior opinions in the case addressed technology competence and a slew of e-discovery miscues. In his latest order, Illinois District Judge Iain Johnston opened by stating: “If Dante were a judge, he would have placed fee litigation as an inner circle of judicial hell.” He went on to award significant monetary sanctions to the plaintiffs, including attorney’s fees.

In the case, the plaintiff, who held a trademark for the term “21st Century Smoke,” accused the defendant “21 Century Smoking” of violations of the Lanham Act. The trademark infringement dispute between the two electronic cigarette companies began in 2012 and has not been fully resolved to date.

Statements by defense counsel revealed a lack of requisite technical knowledge. According to Judge Johnston, counsel did not understand the need to collect web-based chats or that web-based email would not be stored on the defendants' hard drive. The ESI collection was delegated to an inexperienced associate with no appropriate guidance and supervision.

In his October 2022 opinion, Judge Johnston awarded more than $2.5 million in sanctions. The Court findings included multiple discovery violations and misrepresentations. Defendant told his counsel that all relevant ESI was preserved but failed to disclose relevant materials saved online. Some examples of defense counsels’ errors include a failure to timely issue a written legal hold, failure to conduct custodian interviews, failure to ensure the client had halted automatic email deletion, and allowing the client to self-collect ESI. Counsel also failed to disclose in a timely manner that relevant emails had been lost due to automatic deletion.

As David Cohen noted in a recent Exterro Case Law Alert, "This is a classic case of preservation failures and other discovery violations causing extensive wasted time and a frustrated judge."

More information on the case can be found in the Exterro case law alert.