Robotic FX Concedes it May Deserve Sanctions for Ahed’s “Improper” Actions—But Asks Court to Forego Default Judgment Against It
There was another small flurry of filings late last week in Alabama and Massachusetts courts, where Burlington, MA’s iRobot (NASDAQ: IRBT) is bringing two different suits against Illinois-based Robotic FX. Most were focused on procedural matters, but a more substantive one was made on Thursday in U.S. District Court in Alabama. It’s a brief filed by Robotic FX attorneys to oppose iRobot’s recent motion for sanctions against the firm for founder Jameel Ahed’s destruction of evidence relating to the case. In it, Robotic FX tries to strike a balance between acknowledging that Ahed’s bad behavior could merit sanctions and arguing that his actions aren’t bad enough to warrant a default judgment against Robotic FX before the case even goes to trial.
“Robotic FX does not dispute that information potentially relevant to the present action may have been destroyed,” writes Robotic FX attorney Luther M. Dorr, Jr. of Maynard, Cooper & Gale in Birmingham, AL. Moreover, he says, “Robotic FX acknowledges that Mr. Ahed’s actions were improper and concedes that reasonable sanctions may be appropriate under the circumstances.” But citing, among other things, the 29-year-old Ahed’s youth and the pressures he was under while scrambling to win a $279.9 million government contract and facing the iRobot lawsuits, Dorr writes that “extreme sanctions” are not warranted. In particular, he argues that Robotic FX does not deserve “the ultimate sanction,” a default ruling in the case for iRobot.
Like a trade secrets and confidential information case in Massachusetts (where trial is slated to begin by next April 7), iRobot’s Alabama case—a patent infringement suit—alleges, essentially, that Robotic FX’s Negotiator robot is a knock-off of iRobot’s PackBot. On November 5, iRobot attorneys filed a motion in the Alabama case seeking sanctions against its rival based on Ahed’s destruction of evidence after the lawsuits were filed—much of which Ahed and Robotic FX have admitted. Such sanctions, iRobot wrote, could run from financial penalties to a default judgment against Robotic FX.
That default judgment is what Robotic FX now seems most focused on avoiding. Dorr devotes a large portion of his brief to a 1987 case in Florida, Telectron Inc. v. Overhead Door Corp., that iRobot cited in its request for sanctions as involving destruction of evidence that was “highly analogous” to Ahed’s actions in this case. Dorr outlines what he argues are several key differences between the iRobot case and the Florida case, in which both monetary sanctions and a default judgment were issued against Overhead Door.
We haven’t studied the particulars, and can’t bear the thought of diving into another case. But according to Dorr’s brief, the Florida case involved systematic destruction of corporate sales and pricing records and correspondence over the course of almost two years, where the “primary wrongdoer” was an in-house attorney. By contrast, Dorr argues, “Jameel Ahed is a 29 year-old engineer with no legal training and no substantive litigation experience prior to the present action,” and his “destruction of materials took place over a period of approximately 48 hours.”
What’s more, the records destroyed in Telectron were central to the legal action. IRobot, Dorr argues, has other means available to it to prove its case, including a copy of Robotic FX’s Negotiator robot purchased in December 2006 and records that were seized from the Illinois company.
Dorr also counters one of the central contentions in iRobot’s motion for sanctions—that Ahed violated the Alabama court’s temporary restraining order and destroyed evidence after the TRO was issued and served. By way of background, both sides seem to agree that most (if not all) of Ahed’s known destruction of evidence occurred over the weekend of August 18: the 18th was the day iRobot detectives observed Ahed throwing dozens of items into a dumpster. The TRO was not issued until Monday, August 20, and was served the next day.
Ahed ultimately admitted that, in addition to throwing out most of the items the detectives found in the dumpster (he suggests at least one item was planted), he had also shredded some 100 data CDs and erased several computer hard drives by the time U.S. Marshals arrived on August 21 to serve the TRO and conduct several searches. After first searching Robotic FX’s offices and Ahed’s parents’ home, they moved to the Chicago apartment of Kimberly Hill, Ahed’s girlfriend and Robotic FX’s Chief Operating Officer. In requesting sanctions against Robotic FX, iRobot has focused on a laptop—one of the computers whose hard drive Ahed erased—that Ahed hid under a bed when he reached Hill’s apartment ahead of the marshals. According to a report from the forensics examiner who found the laptop, the computer was warm when he found it, and the completion message from the disk-scrubbing program was displayed on the screen when he lifted the lid.
Dorr concedes that Ahed hid the laptop. But he says iRobot has not shown than the TRO was violated. “There is no evidence that any information on the laptop was destroyed after the entry of the Court’s TRO,” he writes. Robotic FX, he adds, “respectfully submits that iRobot has not demonstrated that Robotic FX has violated this Court’s TRO and sanctions should not be imposed or enhanced on that basis alone.”
Dorr concludes: “An entry of default in this action is an extreme penalty that should not be imposed where other sanctions could properly redress the wrongdoing. Indeed, iRobot’s ability to proceed with its claim of patent infringement against Robotic FX has not been prejudiced by Mr. Ahed’s actions. This Court should fashion a lesser remedy and allow this action to proceed to resolution on the merits.”
A hearing on iRobot’s motion for sanctions is set for Friday, December 7, before U.S. District Judge U. W. Clemon. (Clemon is the judge who issued the TRO in the first place, though not the judge assigned to hear the patent-infringement suit.)
You can read Robotic FX’s entire brief here.