Court Orders Production of Documents Related to Retention Policy in light of “Shred Day”

Rambus, Inc. v. Infineon Tech. AG, 220 F.R.D. 264 (E.D. Va. 2004)

Plaintiff had brought parallel patent infringement suits against a number of defendants in several forums. After it was discovered that the plaintiff had committed various acts of litigation misconduct, including the intentional destruction of relevant documents, the defendant moved to compel discovery into the plaintiff’s document retention, destruction, collection, and production.

Plaintiff resisted the discovery, claiming it was protected by the attorney/client and work product privileges. The defendant offered two grounds in support of the motion, one based on spoliation and the other based on the subject-matter waiver rule.

The defendant argued that the crime/fraud exception to the attorney-client privilege should apply, since the requested documents pertained to spoliation. The court agreed, holding that the crime/fraud exception extended to materials or communication created for planning, or in furtherance of, spoliation of evidence. It stated that, to defeat the claim of privilege, the defendant needed to show: (1) that the plaintiff was engaged in or planning a scheme of spoliation when it sought the advice of counsel or the input of the lawyers’ work product to further the scheme; and (2) that the documents containing the communications or work product bear a close relationship to the plaintiff’s scheme to engage in spoliation.

The court then discussed the facts presented by the parties, and highlighted the timing of and stated rationale for the plaintiff’s adoption of a document retention policy. The evidence showed that plaintiff was developing a document purging system in early 1998:

That summer, Karp and other Rambus executives gave presentations on the document retention policy, presenting several slide shows to employees to inform them of their duties under the system. Then, Karp kicked-off the document retention program on September 3, 1998 with “Shred Day” an event at which each employee at Rambus’ corporate headquarters in Mountain View, California was provided with a burlap bag with the instructions to bag all documents slated for the shredder. Infineon, of course, casts Shred Day in a rather sinister fashion, pointing to internal Rambus e-mails that reflect that Shred Day culminated in a 5:00 PM beer, pizza, and champagne “celebration.” Rambus, in contrast, frames this beer, pizza, and champagne treat not as a “celebration,” but rather as corporate incentive and morale boosting after a day of heavy sack lifting and laborious document review. Regardless of Rambus’ motivations, however, it is uncontested that, all told, Rambus employees shredded approximately 20,000 pounds of documents on Shred Day–some 2 million pages of documents. Then, on several additional days in the fall of 1998, the shredder trucks returned to Rambus, resulting in the destruction of additional documents.

220 F.R.D. at 284. The plaintiff’s privilege log illustrated that the plaintiff was developing both a patent litigation strategy and its document retention program at the same time. Thus, the court concluded, the plaintiff clearly anticipated some type of litigation at the point it destroyed documents.

Further, the court observed that, having allowed testimony about the reasons for creating the document retention program and how it was implemented, it was arguable that the plaintiff could not, under claims of privilege, restrict access to documents that address those topics.

The court ordered the plaintiff immediately to produce (to the court for in camera review) documents that contain information about or relate to the creation, preparation, or scope of its document retention policy. The court expect that its in camera review would shed light on whether the sought-after documents bore a close relationship to the spoliation scheme, and would provide meaningful guidance as to the scope of any subject matter waiver. The court retained the motion under consideration, pending its in camera review.