Niazi Licensing Corporation v. St. Jude Medical S.C., Inc.

Background

Niazi Licensing Corporation (NLC) brought a patent-infringement action against St. Jude Medical S.C., Inc. Fact discovery closed on September 13, 2019, and expert reports were due on October 15, 2019. NLC then provided St. Jude with a report from its liability expert, Dr. Martin Burke. The report included facts that NLC had not disclosed before the fact-discovery deadline. NLC also had not disclosed Dr. Burke as a fact witness during fact discovery.

St. Jude moved to strike the late-disclosed facts and related testimony, opinions, and arguments. On December 2, 2019, Magistrate Judge Becky R. Thorson ordered the exclusion of the late-disclosed evidence. The district court affirmed that order.

While the parties’ summary-judgment motions were pending, NLC submitted a declaration from Dr. Burke. St. Jude asserted that the declaration included material covered by the December 2 order. After NLC refused to withdraw all of the disputed material, St. Jude moved to enforce the earlier order and sought sanctions.

On April 30, 2020, Magistrate Judge Thorson granted in part St. Jude’s sanctions motion. She found that Dr. Burke’s declaration included excluded subject matter and that NLC’s violation was willful, although NLC had not acted in bad faith. She ordered all facts disclosed by Dr. Burke after the fact-discovery deadline stricken from NLC’s summary-judgment materials and awarded St. Jude attorneys’ fees and costs for bringing the enforcement motion. She declined St. Jude’s request to recommend dismissal as a sanction. NLC appealed that order.

Standard of Review and Analysis

The district court reviewed the magistrate judge’s nondispositive ruling under a highly deferential standard. The order could be changed only if it was clearly erroneous or contrary to law. A court may impose sanctions for violating a discovery order, including striking evidence and awarding reasonable expenses caused by the violation. Courts also have authority to impose sanctions short of dismissal for violations of court orders.

NLC did not dispute that it had violated the December 2 order. It argued instead that the violation was not willful because the order was unclear and ambiguous. Judge Wright explained that a finding of willfulness is not required for the nondispositive sanctions imposed here. In any event, the record supported the magistrate judge’s finding of willfulness because NLC intentionally included the disputed material after St. Jude identified the problem and asked NLC to withdraw it. Acting intentionally did not require a finding of bad faith.

Judge Wright also rejected NLC’s argument that the December 2 order applied only to particular paragraphs or to facts concerning direct infringement. The order addressed all facts that had not been timely disclosed and barred Dr. Burke from serving as a fact witness or presenting or relying on those facts. NLC had not previously objected to the order or sought clarification on the ground that it was unclear. A good-faith mistaken interpretation did not make the order ambiguous.

Disposition

The court held that the magistrate judge’s sanctions were neither clearly erroneous nor contrary to law. Judge Wilhelmina M. Wright affirmed the April 30, 2020 Order.