Sanctions Issued in California Trade Secrets Case - Against A Party and its Attorneys

Law.com is reporting that a special master has ordered sanctions against Applied Materials Inc. and attorneys at Boston-based Goodwin Procter for stalling in releasing an e-mail by the company's chief executive.

Special master Thomas Denver, in the U.S. District Court for the Northern District of California, ordered Applied Materials and Goodwin Procter on Friday to pay Advanced Micro-Fabrication a yet-to-be-finalized monetary award. The sanctions follow Advanced Micro-Fabrication's repeated demand during discovery for an e-mail written by Applied Material's Chief Executive Michael Splinter.

Applied Materials, which makes machines that manufacture semiconductor chips, sued competitor Advanced Micro-Fabrication for allegedly stealing trade secrets, interfering with contractual relations, conversion and unfair competition under California laws.

Advanced Micro-Fabrication asked for $25,777.50 in sanctions based on the costs associated with filing a second motion to compel, and Denver asked the company to produce invoices to support the request.

Denver also ordered Applied Materials to review its discovery responses, particularly interrogatory responses "to see that they have been appropriately supplemented in light of the subject email."

The judge wrote, "Plaintiff's failure to produce the email in question is all the more troubling in that defense counsel had provided significant detail as to the document sought in the course of this litigation."

Denver later noted, "Any reasonably organized electronic search should have identified this document, resulting in production."

The order further noted that the plaintiff's estimated cost for searching for the e-mail is not disproportionate "to litigation of this magnitude" and "not a justification for an inadequate search."