Spoliation Rulings Appealed in Plantronics Antitrust Case
GN Netcom Inc. has filed an appeal in its high-profile antitrust suit against rival headset-maker Plantronics Inc., challenging a Delaware federal judge's handling of spoliation that resulted in the destruction of thousands of emails potentially relevant to the case.
February 13, 2018 at 05:42 PM
4 minute read
GN Netcom headset. Photo Credit: GN Netcom
GN Netcom Inc. has filed an appeal in its high-profile antitrust suit against rival headset-maker Plantronics Inc., challenging a Delaware federal judge's handling of spoliation that resulted in the destruction of thousands of emails potentially relevant to the case.
In a court filing on Monday, Denmark-based GN said it was appealing an order from U.S. District Judge Leonard P. Stark of the District of Delaware's denying a new trial and additional sanctions, as well as “all other spoliation related” rulings in the case, which the company valued at $212 million. The appeal was filed with the U.S. Court of Appeals for the Third Circuit.
A GN spokesman did not immediately respond Tuesday to an email that was sent just after 9 p.m. local time in Europe.
A Wilmington jury in October cleared Plantronics of allegations that it had violated U.S. antitrust law, despite instructions that the panel could assume the deleted emails would have cut against the company's defense.
In post-trial briefing, GN argued that Stark's punishment did not go far enough. The company argued in court papers that the instructions had only confused the jury, and Santa Cruz, California-based Plantronics instead should have been hit with a dispositive sanction, in addition to a $3 million penalty that had already been levied by the court.
GN moved for a new trial, saying Stark's decisions had denied it a fair trial.
“The jury's verdict makes clear that the court's sanction of a permissive adverse inference did nothing to cure the prejudice to GN caused by Plantronics' spoliation of evidence,” GN's attorneys said in November.
Stark, however, denied the request and entered a final judgment in favor of Plantronics on Jan. 11.
The case centered on Plantronics use of so-called “Plantronics-only distributors,” or PODs, to allegedly control prices and box competitors out of the market.
GN had accused Plantronics in 2012 of developing its POD program in violation of the Clayton and Sherman Acts. According to GN, the POD program began around 1997, in response to increased competition for headset sales to call centers in the United States and Canada. Plantronics denied any wrongdoing and said the agreements were actually pro-competitive.
But the company later complained that GN had turned its antitrust lawsuit into a case about spoliation, after it was discovered that Don Houston, Plantronics' senior vice president of sales at the time, had ordered employees to delete corporate emails during discovery.
Houston left the company last July, but issues surrounding the spoliation continued to follow the litigation.
According to Plantronics' regulatory filings, the email deletion cost Plantronics $3 million in sanctions and another $2 million in attorney fees and costs. Stark also narrowed the scope of Plantronics' motion for summary judgment in early 2017.
Spoliation, though, seemed to have little bearing on the jury's final determination. The panel deliberated for just over one hour before returning its verdict in favor of Plantronics Oct. 18, 2017.
The underlying case was captioned GN Netcom v. Plantronics.
GN was represented by Christopher S. Finnerty, Jeffrey S. Patterson, Michael R. Murphy and Morgan T. Nickerson of K&L Gates and Joseph J. Farnan Jr., Brian E. Farnan and Michael J. Farnan of Farnan LLP.
Plantronics was represented by Jonathan M. Jacobson, Chul Pak, David H. Reichenberg, Robert Corp and Yuan Ji of Wilson Sonsini Goodrich & Rosati and Jack B. Blumenfeld, Rodger D. Smith II and Jennifer Ying of Morris, Nichols, Arsht & Tunnell.
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