In Fharmacy Records v. Nassar, 2010 WL 2294538 (6^th Cir. 2010), the United States Court of Appeals for the Sixth Circuit affirmed a trial court's decision to sanction the Plaintiffs in the form of dismissal for "[making] numerous false statements, [destroying] or [hiding] evidence, [fabricating] evidence, [suborning] perjury, and generally [abusing] the legal process." 

There, Fharmacy Records accused the Defendant of infringing on a copyrighted "rhythm line" or "beat" in producing "the rap song ‘Shot Down,' a track on rap artist DMX's platinum-selling album ‘Grand Champ,' which was released in 2003."  The Court found that the Plaintiffs' discovery failures included: Promising to produce authentic CD recordings and later claiming the CD was lost; backdating a 2006 computer file to claim it was created in 2001 on a specific computer, when the computer was manufactured in 2003 and the hard drive in 2005; Promising to produce original copies of agreements, and later claiming they were lost; Offering a forensic computer expert to the Court and submitting a report, falsely stating it to be authored by him and claiming him to be an expert, where the individual testified that he is not a computer forensic expert; and counsel's submission of a false declaration claiming his client gave him a copy of the beat 2-3 years prior to meeting him.

In upholding the trial court, the Court found that the actions of the Plaintiffs and their attorney were "so egregious that they have forfeited their right to proceed in court...[and] [t]he Plaintiffs clearly have no respect for the civil justice system, and it would be unfair to require the defendants to defend this case any further.  The Court analyzed the following four factors in reviewing the trial court's decision: (1) whether the party's conduct was due to willfulness, bad faith, or fault; (2) whether the adversary was prejudiced by the dismissed party's conduct; (3) whether the dismissed party was warned that failure to cooperate could lead to dismissal; and (4) whether less drastic sanctions were imposed or considered before dismissal was ordered.  The Court quickly found that the Plaintiffs conducted a "campaign of fraud," amounting to bad faith, prejudiced the Defendant by losing, tampering with and compromising evidence, and the trial Court had already imposed lesser sanctions and "anything less than dismissal would be futile."  Although the Court found that the Plaintiffs were not necessarily warned that discovery misconduct could lead to dismissal, the Court reasoned that this fact was not dispositive and a "party does not need formal notice to know that spoliation of evidence and misrepresentations may lead to dismissal."  In doing so, the Court affirmed dismissal as a sanction for "egregiously improper and abusive" discovery misconduct.

For a copy of the opinion, including a more complete copy of discovery abuses, click here.