A team of Faegre Baker Daniels lawyers has had a recent and significant battle win in a contract case pending in Ohio (though the war rages on).
It is hard to imagine how bad it probably feels for plaintiff Medpace, Inc. because Medpace sued Biothera for non-payment of contractually agreed upon sums (allegedly) (of “at least” $3.5 million) but Medpace now finds itself on the receiving end of a sanctions award of $931,399.01 (here, linked, is the bond that Medpace posted with the Court today). This could be the largest sanction in Sixth Circuit history.
The facts of the sanction are, roughly, as follows: (1) Medpace sued Biothera for not paying for services in connection with design and execution of clinical development programs involving drugs; (2) in Biothera’s defense it was obviously important for Biothera to know exactly what Medpace did and what Medpace did not do; (3) in addition, the data that Medpace collected for Biothera was valuable and, in fact, critical for Biothera; (4) the Court ordered Medpace to give Biothera its “Trial Property” by the Court in November, 2012, and (5) Medpace admitted in October, 2013 that monitoring reports, site contacts, and protocol deviations (800 files in excess of 5,000 pages) were “not uploaded to the FTP site as a part of the Trial Master File” (and thereby were not produced to Biothera after Medpace had been ordered to produce them). (Medpace did not help matters by failing to come clean to Biothera when it discovered the lapse but, instead, Medpace elected to upload the documents and make them available to Biothera without a peep and then “reference them obliquely in a subsequent 86-page supplemental expert report” (as the Court described it)).
The Court (U.S. District Court Judge Timothy S. Black (S. D., Ohio)) expressly found that Medpace’s conduct was more in the nature of negligence than intentional wrongdoing (“the Court does not believe that the conduct rises to the level of either intentional or reckless, although it is a close call as to the latter.”)
Nevertheless, the Court awarded the sanction because “Biothera built much of its litigation and expert strategy on Medpace’s certifications. Specifically, Biothera intended to use the deficiencies in the Trial Property to prove its affirmative contract claim and to defend against Medpace’s claims.”
This should stand as a sobering (if not sickening) reminder of the importance of a thorough document production. A quality control system in place might also be a good idea, particularly when sought after information is highly valuable and specifically ordered to be produced by court order…