Episode Transcript
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Kelly Twigger (00:41):
Hi, and welcome
to this week's and the CEO and
founder at Minerva 26, where wetake the insights from my 28
years as discovery strategistand, together with my team,
provide those as a strategiccommand center for litigators to
leverage the power of ESI.
Thanks so much for joining metoday.
Our case of the week segment isbrought to you by Minerva 26 in
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partnership with ACEDS.
On this segment, I analyze arecent decision or, in today's
case, two decisions on discoveryissues involving ESI and talk
about why they matter and whatyou should take away from the
court's decision.
t's no secret that our rulesgoverning discovery are not
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keeping pace with technology.
That's why judicial decisionsinterpreting existing rules in
the context of today'stechnology and the electronic
evidence that we create usingthem act as our guide to how to
advocate for our clients.
Whether those decisions aregood or bad, they are the
roadmap for lawyers to use toargue about discovery.
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Now, as always, judicialdecisions are as good as the
facts and arguments presented tothe court.
So part of what we talk abouthere is the lawyering, the good,
the bad and the very ugly, andunfortunately, today our
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decision is a 300 million dollarexample of why all attorneys
involved in litigation need tounderstand and implement the
principles of e-discovery,specifically, self-collection
tracking of issues, knowingwhat's happening at all times in
terms of managing thecomplexity of high-stakes
litigation.
In this case, it'sself-collection as it pertains
to experts.
Let's dive into these decisionsfor this week.
This week's episode covers tworelated decisions from the case
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titled Guardians Health Incversus Natera Inc.
The first is from October 23rd,2024, and then a follow-up
decision from a couple of weeksago, on July 9th, 2024.
And the court also issued asubsequent decision just last
week, on July 23rd, regardingspecial master.
That we'll get to as well.
Both of the decisions are fromUnited States District Judge
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Edward Chen.
All right, let's take a look atthe background for this case.
Guardian and Natera both makecompeting detection products for
colorectal cancer cells.
After a patient is diagnosedwith colorectal cancer, a
patient's medical team comes upwith a plan, and that plan can
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be surgery or it can beradiation prior to surgery, even
after initial treatment for thedisease, which again can be
either that surgery or thatradiation some colorectal cancer
patients still have a smallnumber of cells remaining in
their body cancer cells that canlater multiply and cause
recurrence of the disease.
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That small number of remainingCRC cells is termed minimum
residual disease or MRD.
Mrd is not detectable withcurrent technologies, so there's
often a question of whether ornot the patient needs
chemotherapy after that initialtreatment to try and kill any
remaining cells.
Chemo is to put it bluntly fromsomeone who's been through it
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the equivalent of putting poisonin your body and a shotgun
approach, as it cannot betargeted to the remaining cancer
cells.
The parties here are trying tofix whether a patient can make a
more educated decision aboutwhether they need chemotherapy
following initial treatment.
Natera, the defendant, developeda product called Signatera that
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uses tumor tissue to detect MRDor tumor-informed assays.
I'm very familiar with theSignatera product because I was
part of a trial when I wasdiagnosed with colorectal cancer
in 2021.
My oncologist enrolled me in atrial with Natera.
I didn't get an option to usethe Guardian.
I just was told that Natera hada trial with Natera.
I didn't get an option to usethe Guardian.
I just was told that Natera hada trial Following surgery to
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remove my cancer the initialtreatment I mentioned.
A tissue sample was removedfrom my tumor and then used to
create a unique set of tumormutations for me.
Then that information was usedto create a custom circulating
tumor DNA or a CTNA test.
That test allowed for highlysensitive and specific detection
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of ctDNA in subsequent blooddraws, which could have
potentially detected any cancerrecurrence or response to
treatment earlier thantraditional methods of wait and
see.
Thankfully, my Natera resultswere always zero post-surgery.
But, as my oncologist stated,even if there were values shown
indicating recurrence, it didn'thelp with a treatment plan
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until they were detectable in away that helped us identify the
location.
Guardiant, the plaintiff here,developed a competing product to
Signatera called Reveal thatuses blood samples to detect
ctDNA in the bloodstream ortumor-naive assays.
I don't have any familiaritywith the Guardant method and,
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frankly, didn't even know thatit existed until I was reading
these opinions.
It's a different method fortrying to identify any minimal
residual disease using blooddraws instead of the tumor
specific version that Signateriuses.
When cancer is identified in thebody, and in my case through a
colonoscopy, doctors want toknow as much as they can about
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it to create a treatment plan.
Part of how they do that is bytaking CT scans or an MRI to
detect the size of the tumor andthe staging.
What you don't learn until yougo through the process is that
scans are very flat images andthey often do not allow for
enough visualization to beaccurate in terms of staging.
That was certainly the case forme.
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They also cannot detect anyminimal growth or stray cancer
cells.
They can only identify growthsthat are large enough to be seen
on a scan.
Once the doctors develop atreatment plan and execute on it
, the question then becomeswhether the patient may have
residual cancer cells that canlead to a recurrence but are not
yet detectable on scans.
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That's the minimal recurrence.
It's a scary time for a patientbecause you have to make a
decision about whether or not todo chemotherapy or other highly
impactful treatments withlittle to no information.
The goal of these products fromGuardian and Natera is to
provide more information forpatients to make a decision
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problem.
The ability to detect whetherMRD exists after initial
treatment affects more than 1.9million people who are diagnosed
with cancer each year, and Ican tell you from personal
experience that chemotherapy isbrutal.
When this lawsuit was filed inMay 2021, five months before I
started the Natera trial theparties accused one another of
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making false or misleadingstatements in their
advertisements regarding theircompeting products.
Now, generally speaking here onCase of the Week.
We stay within the four cornersof the decision that we're
evaluating, but here it wasreally necessary for me to look
back a little bit more at whatthe allegations were of the
parties, and so we'll talk aboutsome of those as we go through
it.
Essentially, I'll give you onethat's important to lay the
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groundwork, and that is that inpart, natera was providing
evidence to oncologists that wascomparing the Signatera product
to Guardiant's product Revealaudience product reveal using
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two separate studies, withoutinforming those oncologists of
the differences between thestudies that might provide
evidence to why the comparisonswere different and why they
could not necessarily beconsidered in the flat way in
which Natera presented them.
That was largely what wasconsidered the false and
misleading advertisements thatwere given to oncologists in
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order to have them choose theSignatera product over the
Reveal product.
All right, fast forward to thefirst of two decisions in this
matter from October 23, 2024.
The parties were before thecourt on Guardian's motion for
evidentiary and monetarysanctions against Natera for
material misrepresentationsregarding Natera's expert
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witness, dr Hoxter.
Dr Hoxter was and is stilllisted, as of last week when I
did this research on the RutgersUniversity website, as a
distinguished professor ofmedicine, the associate director
for clinical research anddirector of GI oncology, as well
as the director of oncologyresearch at Rutgers Cancer
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Institute of New Jersey.
Now, dr Hoxter was retained asan expert for Natera and filed
his original expert report insupport of Natera in October
2022.
In January 2020, so two yearsbefore Dr Hoekstra's report and
a year before this case wasfiled Guardian undertook a
clinical trial sponsored by theNRG Oncology Branch of the
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National Cancer Institute andconducted in partnership with
wait for it the Rutgers CancerInstitute of New Jersey, where
Dr Hoxter worked.
So the clinical trial wascalled the COBRA trial and, to
be clear, the COBRA trial wasbeing run by Guardiant, not
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Natera, who had retained DrHoxter as their expert.
The COBRA trial used a versionof Guardiant's reveal and aimed
to assess the impact of therevealed blood test on enhancing
clinical outcomes for patientsdiagnosed with stage 2 colon
cancer.
The COBRA study assessedwhether the ctDNA is a reliable
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marker for cancer prognosis andwhether the ctDNA testing
offered a more reliable methodfor early detection of cancer
recurrence, as opposed to thecurrent method of cancer
surveillance, which wasobservation scans and blood
tests.
The goal of the COBRA study wasto use an MRD test,
specifically one of Guardian'sctDNA assay tests to identify
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which patients among aparticular cohort of early stage
colorectal cancer patientswould benefit from chemotherapy.
Now, this is a very criticaldecision.
When I went through thisprocess in 2021, the generally
accepted practice was thatanything that was stage three
required chemo post-surgery,regardless of whether there was
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any evidence of remaining cancercells.
The reality is that we don'tyet have accurate science to
know whether there is minimalresidual cancer left in a
patient following treatment.
During the summer of 2023, theCOBRA trial was suspended and
then terminated after Quartinghad learned that a greater than
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anticipated number ofparticipants may have seen false
positives for colorectal cancer, meaning that those patients
were told that they did haveminimal residual cancer, and
those patients receivedchemotherapy as a result of
those false positives.
Now remember that Dr Hoxter isthe head of research at Rutgers
that is partnering on theGuardian study, but he's the
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expert for Natera.
Now here's the important partfor sanctions the timing.
Guardian sent a letter tooncologists participating in the
trial on August 30th 2023, andthe closure of the study was
made available on September 4th2023.
At the time it closed the study, guardian only told the public
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that the study was closing, butnot why?
The why was not available forseveral months.
Neither Natera nor Dr Hoxterinformed the court about the
existence of the study or itsclosure.
Trial was set for the matter inMarch of 2024, so roughly six
months.
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Seven months after this studywas closed.
On January 16th 2024, the studywas published and discussed in
an abstract and slide deck givenout at the American Society of
Clinical OncologyGastrointestinal Cancer
Symposium.
Say that five times fast.
Two weeks after that abstractwas delivered, on January 31st
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2024, dr Hoxter submitted asupplemental expert report
explaining the findings of theCOBRA trial and using it as
further support for hisreluctance to use tumor-naive
diagnostics in his practice,meaning he was advocating for
the tumor assay usage thatNatera leverages versus the
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blood test from Guardiatt.
Expert discovery had closed atthis point and Natera sought to
reopen it to have the reportadmitted.
Guardiant moved to strike thereport as untimely and
prejudicial.
The court denied Guardiant'smotion, allowed the new report
and the COBRA trial to beadmissible and continued the
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trial by four months to allowGuardiant to conduct discovery
and respond to the report.
In making its decision, thecourt pointed to multiple
statements by Natera and itscounsel, both in writing and to
the court directly.
Specifically, the court notedthat counsel advised that it was
not aware that Dr Hoxter hadany early access to the findings
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of the trial prior to theabstract in January 2024.
Further, counsel noted that heknew about the trial when his
original report was filed inOctober 2022, but had no
knowledge about the closureuntil the abstract was published
.
You can see by my emphasiswhere we're going here.
Guardian asked for discoveryfrom Dr Hoxter, including email.
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Hoxter was apparently left tosearch his email himself and
told counsel that he had noresponsive documents that
included communications from him, cobra investigators, nrg or
Natera regarding the Cobra study.
Guardian went to magistrateJudge Kim with the lack of
production, finding that it wasinconsistent with his statements
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in his supplemental reportabout his familiarity with the
lack of production, finding thatit was inconsistent with his
statements in his supplementalreport about his familiarity
with the study from the outset,meaning if you knew about it,
you had to have somecommunications about it.
The Terrace Council againresponded that Dr Hoxter had a
limited role in the study, hadsearched his email again using
the requested search terms andhad no responsive documents.
Counsel again reiterated thesame position at a hearing with
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Magistrate Judge Kim, sayingthat he did the exact search
Guardian asked him to do andthat quote he's not withholding
anything, there's just nothingto compel.
Now I have to stop for a secondand note that all of these
specific statements that counselmade are called out by the
court in its opinion in boldtext Bold text that's not
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something I've seen before.
In an opinion, the districtcourt found that Magistrate
Judge Kim relied on thoserepresentations and denied
Guardian's motion to compelbased on them.
Guardian then went to Rutgers DrHoekstra's employer and home to
the investigators of the Cobrastudy, with a third party
subpoena and you guessed it.
Rutgers produced dozens ofemails between Dr Hoekstra,
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cobra investigators and NRGwhich showed that Dr Hoekstra
knew the study would bediscontinued.
On August 30th 2023, when hereceived the letter from NRG, he
specifically asked for andreceived, a non-public,
embargoed version of theabstract summarizing the study's
results and data.
On September 13th 2023, fourmonths before the abstract was
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presented and after receivingthe shutdown notice, Dr Hoxter
started emailing about the study, making disparaging remarks and
also trying to encourage theinvestigators to substitute
Natera's product into the study.
Guardian moved again and tocompel again and sought a
forensic examination of DrHoxter's emails that had not
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been deleted, despite DrHoxter's statements that they
were, the court granted themotion but before the
examination took place, drHoxter suddenly found emails
with the investigators and thehits just keep on coming.
During his deposition, drHoxter testified that one, he
only searched for emails once,not twice, as counsel had
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represented to the court.
Two, that he performed thesearches on his email himself
and made decisions about whetheremails were responsive to the
subpoena.
And three, that he had noexplanation as to why the emails
produced by Rutgers didn't showup in his searches.
There is nothing in thedecision about counsel providing
any guidance to Dr Hoxter.
The court actually doesn'taddress self collection at all.
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That's an issue that Iidentified and I'm raising.
Guardant then moved to compelthe production of email
communications between Dr Hoxterand the Terrace Counsel that
were listed on a privilege logand magistrate Judge Kim ordered
an in-camera review of thedocuments.
Following that review, judgeKim ordered that the documents
be produced to Gwarden and foundthat the documents revealed
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that Natera's counsel had misledboth Judge Kim and the district
court about the timing of theexpert's knowledge of the COBRA
study results.
The court also found thatNatera had made those
misrepresentations to defeatGordon's motion to compel and to
obtain an order allowing DrHoxter's supplemental report
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about the trial to be submitted.
This is bad.
The court showed that two weekssorry, the documents showed
that two weeks after Dr Hoxterlearned about the results of the
trial, he emailed the studyresults to two of Natera's
counsel, marking it asconfidential.
He sent it directly to the lawfirm.
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Remember that the trialinformation here is key and may
have been likely to have a hugeimpact on the jury in favor of
Natera.
But it's impossible to knowthat.
But it's impossible to knowthat.
The court was furious, went backand recounted all of the times
when counsel had advised thecourt that Natera did not know
of Dr Hoxter's early access tothe study results.
In one of those instances thecourt pulled a statement from
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Natera's counsel, taken directlyfrom the transcript, in which
counsel specifically stated thatquote Natera and its counsel
did not know Dr Hoxter receiveda draft until receiving Rutgers
document production close quote,despite having emails sent
directly to them four monthsearlier.
Based on all the examples, thecourt found that counsel
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knowingly hid the fact that itknew Dr Hoxter had
correspondence with theinvestigators and that he had a
copy of the abstract, and thatit knowingly and deliberately
misled the court.
The court also found theexpert's lack of memory to the
communications implausible giventhe volume and extensiveness of
the exchanges.
As sanctions, guardian askedthe court to exclude the
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supplemental report andtestimonium to Tara's expert
witness, which includedinformation on the COBRA study,
and to exclude the study in itsentirety.
Guardian also asked formonetary sanctions in the form
of payment of its attorney'sfees flowing from the behavior
issue.
Let's look at the court'sanalysis here.
That's a lot of facts to takein and, quite frankly, it's not
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all of them, but we'll get backto those in a minute.
The court looked at thesanctions analysis and found
that Dr Hoxter, natera and itscounsel made misleading and
false statements to MagistrateJudge Kim Gardens, district
court regarding and the districtcourt regarding Dr Hoxter's
email communications with COBRAinvestigators and the NRG and
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his access to the study results,including his receipt of the
abstract months in advance ofhis supplemental declaration
seeking to introduce the COBRAstudy.
The court also found that themisleading statements were made
with quote full knowledge of thetruth.
To the contrary, close quoteand used to gain a litigation
advantage to have the courtreopen evidence to allow the
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introduction of the Cobra studylong after discovery had closed
and on quote the eve of trial.
Close quote.
The court even said that it wasduped into believing that the
Cobra evidence was literallylate breaking, when in reality
Natera had known about it formonths and failed to inform the
court of potential new evidence.
In hindsight, the court statedthat had it known that reopening
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discovery would have openedPandora's box, it would not have
done so and would have excludedthe Cobra evidence.
It's weird to me that nobodyever had anything about the
Cobra trial in discovery in thiscase at all.
As such, the court grantedevidentiary sanctions in the
form of excluding any mention ofor evidence about the Cobra
trial and stated that should DrHoxter continue to testify
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regarding his previous reports,an adverse instruction will be
given regarding his credibility.
Close quote.
Now that's huge.
I don't know whether Dr Hoxterended up being Ms Harris' expert
at trial, whether he ended uptestifying.
Most of what I've read is inthe post-judgment motions, which
only quotes informationprovided by Gwarden's expert.
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In doing so, in excluding allof that evidence, the court
noted that it was turning backthe clock, as if the trial was
happening in March 2024, asplanned.
The court also turned towhether Natera should be
sanctioned for the actions ofits lawyers and identified case
law in which quote courts havegranted evidentiary sanctions
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and even dismissals withprejudice where parties engaged
in deliberate falsity to gain alitigation advantage, as is in
the case here.
Close quote.
As to monetary sanctions, thecourt stated that Guardian may
be entitled to reimbursement forfees and costs related to the
unwarranted extension ofdiscovery and the misconduct,
and set a schedule for aftertrial, which was to begin in two
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weeks.
Now let's fast forward to theend of the trial.
And on November 25, 2024, aunanimous jury awarded Guardant
Health $292.5 million in averdict, including $175.5
million in punitive damages,finding that Natera engaged in a
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deliberate campaign ofmisinformation, making false and
misleading statements toconvince doctors to choose
Signatera over Reveal.
Natera is appealing the verdict.
The court also denied all ofthe post-trial motions just last
week.
That takes us to the seconddecision in our saga the ruling
from the court following thebriefing on the parties for
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monetary sanctions that was leftunresolved.
On the motion for sanctions Now, guardian sought two things an
award of attorney's fees andcosts totaling just under $3
million and punitive sanctions,to be decided at an additional
hearing, and to refer four ofNatera's counsel, who are named
by name in the decision to thestate bar, natera opposed the
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request, arguing that Natera hadalready been sanctioned enough,
supposedly by the exclusion ofthe COBRA study, and that, in
light of the jury's verdict,additional sanctions would
represent a windfall.
Natera also submitteddeclarations from all four
attorneys swearing that therepresentations made to the
court were in good faith and inreliance on Dr Hoxter and that
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they were shocked upon thediscovery that Dr Hoxter
actually had emails and hadreceived an initial draft of the
COBRA study results.
There's nothing in the decisionthat speaks to what those
declarations said about the factthat at least a couple of them
received an actual email from DrHoxter with the study results
attached.
The court again rejectedcounsel's representations, and
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here's what's interesting to me.
Usually in these situations,counsel fall on their sword and
beg for mercy, but not so in thefour corners of this decision,
not here.
Even though the court foundthat the evidence was there that
counsel knew about the expert'sknowledge from emails that
counsel had physically added toa privilege log, the court does
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not mention that counselexpressed remorse at all.
Natera argued that fees shouldbe limited to the but-for
standard in which the court asks, but for the sanctionable
conduct would there be any harmwarranting compensatory relief.
And here the court found thebut-for test was satisfied as a
result of the deliberatemisrepresentations made to the
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court and the court's reopeningof discovery and delaying of
trial.
As a result, the court reviewedGwarden's fee request, found
that the time and hourly rateswere reasonable and customary
and granted the entirety of thefee request for just under $3
million.
The court also stated thatGwarden was entitled to any
further amount of fees and costsincurred in connection with
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this motion for fees.
Further in a footnote the courtnoted that there's an
outstanding question aboutanother $77,000 in fees that
Gwarden incurred as a result ofcanceling the March trial and
that if Gwarden was required topay them, the court would grant
the request for those fees.
As well as to appointments orto who has to pay the sanctions
order.
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Here the court elected to deferthat question and appoint a
special master to resolve thatissue.
Last week the court appointed aspecial master to be paid for
by Natera.
That ruling came out on the23rd.
I believe that appointmentrequires the special master to
hold a hearing and taketestimony and documentary
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evidence to decide how to oneapportion the compensatory
sanctions imposed followingGwarden's sanctions motion among
Natera, natera's law firm andthe individual attorneys from
the firm and two.
Determine any appropriatepunitive sanctions or
disciplinary measures, including, but not limited to, referral
to the State Bar of California,with respect to the individual
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attorneys for their involvementwith the issues addressed in the
court's order.
Wow, this is bad.
It's almost hard to articulatethe takeaways here.
The biggest one is this, and itseems very silly to have to say
it out loud Don't lie to thecourt and if you find out you
did so unintentionally and youbetter be the one to find out.
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You did.
Tell the court and opposingcounsel immediately and fall on
your sword.
Right the wrong, acknowledge it.
Here.
Natera's counsel did theopposite and it cost them and
their clients millions ofdollars, not to mention a
stunning PR nightmare.
There are so many moving piecesto significant, complex
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litigation like this case andthe sheer volume of electronic
communications about the casenot even the documentary
evidence, just the ones aboutthe case can be staggering, and
so much to sort through and somany things that happen at the
same time.
You have to have systems inplace to manage all of that,
especially with remote work.
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It's critical for firms andit's likely a little bit of what
happened here.
Great job by Guardians Councilhere to go to the third party
route when it kept gettingstonewalled by the expert and
for having a time to do that inthe limited discovery period
from the court.
While not detailed in the factsof this case, it's clear that
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Guardians Council just keptdigging for all of the pieces of
the puzzle and putting themtogether for the court.
That is exactly what you haveto do with ESI.
It affords you a tremendousopportunity to do it, but it's
up to you to follow the trail,get the information and put it
together.
You have to understand all theplaces that data can be
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available and leverage them inyour strategy.
To tell a story, counsel heredid a good job of amassing
evidence to bring to the courtto get the order for the
forensic examination and inasking the court to look at the
documents on the privilege login camera.
Before those privilegedocuments came to light, gwarden
had shown a big cover-up by DrHoxter through the documents
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produced by Rutgers, but theprivileged documents tied
counsel to the cover-up as well.
Gwarden's counsel did exactlywhat I tell you to do regularly,
and that is that you have tohave evidence to support going
to the court to challenge anynon-production.
Mere suspicion is never goingto be enough.
Finally, that Natera's counselallowed Dr Hoxter to
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self-collect his documents hereexacerbated the problem
exponentially.
Council need to conductcollection of expert materials
in a situation like this in thesame way they do custodians from
their own clients.
The rule againstself-collection applies to
experts just as well as parties.
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It's one thing that kind ofsticks out to me and obviously
we're money morningquarterbacking here in case of
the week is that it was reallyinteresting that the Rutgers
emails didn't actually includethe emails that were sent from
Hoxter to Natera's counsel.
Those emails were later foundon that privilege log.
Why weren't they in thecollection that Rutgers provided
?
If they still existed, whyweren't they in Dr Hoxter's
emails?
Now there's no way to knowwhether the evidentiary
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sanctions, excluding thesupplemental report about the
COBRA trial, would have impactedthe jury's decision.
The bulk of that seemed to focuson the improper juxtaposition
of two different reports,comparing Signaterra and Reveal
in a way that misrepresented thefindings.
That's what I mentioned to youat the outset.
It could be that after summaryjudgment, which did not go
Naterra's way at all, that was asignal that they needed to find
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something to tip the scales andthe Cobra report was a last
ditch effort.
No one knows that other thanNatera, their counsel and Dr
Hoxter.
But misrepresentations willalways, always come back to
haunt you.
We'll keep an eye out on howthe special master comes down
and let you know about that whenit happens, so we can see the
full consequences of the conducthere by Natera.
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All right, that's our case ofthe week.
Please be sure to follow ourMeet and Confer podcast on your
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Thanks so much.
Have a great week, thank you.