Discovery Sanctions: The Wisdom of an Iowa Farmer

In Re: Boehringer Ingelheim Pharmaceuticals | 13-3898

January 2014

Sanctionable discovery conduct has seen a precipitous rise, especially in the context of e-discovery. According to industry studies, from 2009 to 2012, parties sought sanctions for discovery abuses in 459 cases. Boehringer reminds us that parties engaged in such spats should remember a wise saying often used by Iowa farmers: “Pigs get fat, and hogs get slaughtered.”

Boehringer is embroiled as a defendant in litigation surrounding the accuracy of the warning label on a blood-thinning drug that it manufactures. The district court responsible for managing discovery believed Boehringer had engaged in “interminable discovery delays,” and as one of several sanctions sought by the plaintiff, the district court ordered that depositions of 13 Boehringer employees be taken in New York City, or a location otherwise agreeable to the parties, as opposed to the previously agreed upon location of Amsterdam. Ten of the Boehringer employees to be deposed were German citizens; three were U.S. citizens.

On appeal, the Court had no problem with the $1 million in fines levied as a sanction by the district court. But the Court did find that the sanction of requiring non-U.S. citizens to travel to the U.S. for the depositions was ultra vires, essentially infringing on the sovereignty of Germany and its citizens. The Court ultimately found that the district court exceeded its power by ordering foreign nationals to travel to the U.S. for depositions.

So what of the pigs and the hogs? Boehringer disagreed with the discovery sanctions, and successfully appealed their position.  Yet as Judge Hamilton explained in great detail in his dissent, the district court will now have an opportunity to fashion a new set of sanctions, and “the second sanctions order may leave [Boehringer] wishing they had just complied with the order to do some depositions in New York.” Plaintiff, for its part, by shooting for the moon and seeking such an order, ended up with an undoubtedly costly interlocutory appeal on their hands. Not to mention the cost of relitigating sanctions in the district court.

Perhaps the best lesson from this case has nothing to do with the limits of sovereignty, or the propriety of discovery sanctions. Perhaps the lesson is that sometimes – when practitioners become so emotionally and professionally embroiled in discovery that they seek sanctions – it is best to take a step back, talk to some colleagues and friends, assess the situation with cooler minds, and ask, “What would an Iowa farmer do here?”