Court Fines Defendants $931,500 in Pradaxa Class Action After Repeated Failures to Implement Legal Holds

The class action product liability case against Boehringer Ingelheim Pharmaceuticals Inc., or BIPI, regarding the blood thinning drug sold as Pradaxa took a stunning turn with December 9, 2013 opinion by Chief Judge David R. Herndon of the Southern District of Illinois. In the blistering opinion the Court cited failure after failure, including misrepresentation of BIPI’s efforts to issue an adequate litigation hold, which resulted in a fine of $931,500 plus additional costs of the Plaintiffs Steering Committee (PSC) in pursuing these allegations.

When we first reported on the September 25, 2013 opinion, BIPI had avoided sanctions for failure to preserve a key executive’s files by showing that the information was deleted according to a standard retention policies prior to the trigger event. From September to December, many revelations showed that BIPI had wholly inadequate preservation processes in place that led to a finding of bad faith.

The Court zeroed in on four key failures as follows:

  1. The failure to preserve the records of Prof. Thorsten Lehr, a “high-level scientist” (*9) who had published articles on Pradaxa and was clearly a key custodian in the product’s development.
  2. Inadequate and untimely implementation of supplemental litigation holds for sales representatives, including taking a piecemeal approach in issuing the hold incrementally rather than to all of the correct custodians resulting in some not being instructed to preserve data until more than a year after the duty to preserve attached.
  3. Not giving the company handling collections passwords for the shared network drive resulting in tardy efforts to identify and produce responsive information.
  4. The failure to save text messages, a primary system for internal communications between employees and supervisors, by not instructing custodians to preserve them and not disabling the automatic deletion of the messages.

In assessing the findings of bad faith and culpability, the Court was unwavering:

“The Court finds the actions and omissions of the defendants… to be in bad faith. The defendants argue that their failure to produce the many thousands of documents they are now producing… are the result of a good faith measured approach to the production of millions of documents over a fairly short period of time. They contend their failure to designate certain employees as subject to a hold is part of a reasonable hold strategy based on a measured and proportioned approach to cost benefit analysis dependant (sic) on scope of litigation. They base their failure to include one scientist in the litigation hold on a failure of their opponents to designate him and their own determination that he singularly was not important enough in light of including his coworkers whose custodial materials were being provided…. They have made misrepresentations to the Court in open court and in chambers. The defendants have caused the Court to believe that each defendant had a litigation hold, company-wide, on all relevant personnel and all relevant documentation and data (in their broadest definitions) at all relevant times.” (*18)

In light of the Court’s finding that the defendants acted in bad faith by making misrepresentations and obfuscating their actions and motives, the Court imposed a financial sanction as a way to modify behavior. Chief Judge Herndon assessed BIPI $500 per plaintiff resulting in a fine amounting to $931,500. Further discovery was ordered as well as covering attorneys’ fees for the plaintiff to bring these motions.

It is interesting the contrast the September 25th and December 9th opinions. In the former, the Court ruled on a very narrow preservation motion; whereas in the latter the scope of the preservation failures had ballooned. The Court’s observation of the defendants’ poor efforts followed by misleading and weak arguments about the causes led directly to the onerous monetary fine. As In re Pradaxa progresses, we will look forward to seeing how central the poor decisions by the defense in preserving evidence impacts the ultimate outcome.

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