Guardant Health, Inc. v. Natera, Inc.

Background

The court addressed the parties’ supplemental briefs concerning further monetary sanctions against Natera for misconduct involving the COBRA study. In an earlier sanctions order, the court found that Natera’s counsel, Quinn Emanuel, made deliberate misrepresentations to the court and to Judge Kim. The earlier order granted evidentiary sanctions but deferred monetary sanctions and required briefing on the responsibility of individual attorneys.

The court had found that Dr. Hochster and Quinn Emanuel made misleading and false statements about Dr. Hochster’s communications with COBRA investigators and the NRG, his access to study results, and his receipt of a draft abstract. According to the court, those statements were used to obtain a litigation advantage by persuading the court to reopen discovery and postpone trial so the COBRA evidence could be introduced.

Guardant’s Requests and Natera’s Response

Guardant requested $2,985,909.63 in attorneys’ fees and costs connected to the COBRA misconduct, plus any additional fees and costs incurred in connection with the sanctions motion. Guardant also requested punitive sanctions, including personal fines against the attorneys involved, and referrals of Andrew Bramhall, Elle Wang, Brian Cannon, and Ryan Landes to the State Bar of California.

Natera argued that the sanctions already imposed were sufficient and that additional sanctions would be a windfall after the jury’s verdict. Natera also submitted declarations from the attorneys stating that they believed their representations were truthful and had relied on Dr. Hochster. Alternatively, Natera argued that any fee award should be limited to fees and costs meeting a “but-for” causation standard.

Court’s Analysis

The court retained its earlier finding of bad faith, concluding that the attorney declarations did not justify changing that finding. Applying the “but-for” test for compensatory sanctions, the court asked whether the claimed harm would have occurred without the sanctionable misconduct. It concluded that, without the misrepresentations, the court would not have postponed trial or reopened discovery.

The court therefore determined that fees and costs for the resulting additional discovery, depositions, expert work, motion practice, and related litigation were directly caused by the misconduct. It rejected Natera’s narrower view that Guardant could recover only fees related to enforcing the subpoena on Dr. Hochster and pursuing sanctions. The court found Guardant’s requested hours and billing rates reasonable under the fee evidence submitted.

Ruling

The court GRANTED Guardant’s request for attorneys’ fees related to the COBRA misconduct. It deferred the question of apportionment—meaning whether and to what extent the fees should be charged to Natera, Quinn Emanuel, or individual attorneys—and will appoint a special master to resolve that issue initially.

The court also deferred the question of punitive sanctions, including personal fines and a possible State Bar referral, and will have the special master address it initially. The parties were ordered to meet and confer about a proposed special master and to file a joint status report by July 18, 2025 concerning the proposed appointment and its scope.