The Modern Archivist

What will be the end when we arrive?

                And the Rambus drama continues… .  The Federal Circuit, in its May 13^th decision Micron v. Rambus , agreed with the lower court that Rambus engaged in spoliation, but it remanded the matter for a determination of whether bad faith and prejudice were sufficient enough to warrant the terminating sanction issued by the District of Delaware.  The Federal Circuit also remanded the companion case Hynix for further proceedings that are to conform with Micron.  Whether or not this is good news for Rambus remains to be seen.  For the moment, however, the Federal Circuit seems to be intimating that the terminating sanction issued by the District of Delaware in Micron might be a tad harsh and need to be reconsidered to ensure that Rambus actually acted with sufficient bad faith that prejudiced the other parties.

                It seems like a strange decision in the face of facts that seem to point in only one direction:  bad faith and prejudice.  Rambus implemented a document retention plan that required destruction of relevant and discoverable evidence until the commencement of litigation despite the inevitability of litigation. “Despite the policy’s stated goal of destroying all documents once they were old enough, [Rambus’s VP of IP]  instructed employees to look for helpful documents to keep, including documents that would “help establish conception and provide that [Rambus had] IP.”  See pages 7-8 of Micron v. Rambus.  The document destruction extended to email backup tapes because Rambus feared that the tapes had “’discoverable information.’”  The litigation department would not let Rambus keep the tapes for longer than three months with one exception – a tape that had documents that were beneficial to Rambus.

                Additionally, Rambus held two “shred days” where employees shredded 700 boxes of paper documents.  No record of what was shredded was kept.  Rambus also instructed its patent prosecution counsel to shred documents that were relevant to the supposed IP.  Sounds almost conspiratorial in nature and makes me think of Broadcom v. Qualcomm.  Moreover, the record is replete with comments from Rambus executives of impending litigation, delays in litigation, licensing or litigation its IP, etc. 

                Despite the Federal Circuit’s hesitation on confirming the Delaware District Court’s terminating sanction, one thing does appear to be clear:  where documents are destroyed under a retention policy requiring destruction, with the exception of those documents that are favorable to the company, even though litigation is inevitable even if not imminent results in spoliation.  Of course it is not wrongful for a business to have a valid retention policy that rids it of unneeded documents.  But, what a valid policy is, however, still has plenty of shades of grey.  “[W]here a party has a long-standing policy of destruction of documents on a regular schedule, with that policy motivated by general business needs, which may include a general concern for the possibility of litigation, destruction that occurs in line with the policy is relatively unlikely to be seen as spoliation.”  See page 16 of Micron v. Rambus.  Regardless, frustrating your opponent’s ability to defend itself in litigation is not a valid retention policy.

                Despite the evidence against Rambus that strongly supports a conclusion of bad faith and prejudice, we will have to wait for another day to learn what sanctions might be applied to Rambus’s spoliation.  Perhaps the courts will consider a scarlet letter sanction such as the one issued in Green v. Blitz?  Not that Rambus hasn’t already been dragged through the limelight.