Ellis v. Toshiba America Information Systems., Inc.
218 Cal. App. 4th 853
Cal. Ct. App.2013Background
- Plaintiffs (Caddell & Chapman and Lori Sklar / Sklar Law Offices (SLO)) settled a class action against Toshiba for defective laptop covers; settlement approved and judgment entered in 2007.
- Sklar repeatedly represented very large fee claims (initially ~ $24.7 million based on a valuation; later lodestar requests up to ~$12 million) and submitted extensive time records.
- Toshiba sought discovery into Sklar’s electronic billing records (native files and metadata). The trial court ordered production and forensic inspection; Sklar produced PDFs and searchable Word files but had deleted/‘wiped’ original files and resisted forensic inspection.
- Toshiba moved for monetary sanctions for discovery misuse; the trial court found Sklar disobeyed orders and had failed to meet-and-confer in good faith and awarded Toshiba $165,000 in sanctions.
- At the fee petition hearing, the trial court found Sklar’s time records unreliable, invoked negative inferences, denied fees to Sklar personally, awarded $176,900 for SLO staff time (later reduced net of sanctions), and left cost issues for remand. Sklar appealed; Toshiba cross-moved to strike portions of the appendix and sought sanctions on appeal.
Issues
| Issue | Plaintiff's Argument (Sklar) | Defendant's Argument (Toshiba) | Held |
|---|---|---|---|
| 1) Were monetary sanctions for discovery misuse proper? | Refused inspection based on privilege/privacy and contested protocol; argued orders unclear and inspection unreasonable. | Sklar deleted native files/metadata, resisted ordered inspections and meet-and-confer, necessitating sanctions. | Affirmed: court acted within discretion; Sklar disobeyed orders and failed to meet-and-confer in good faith; $165,000 sanctions appropriate. |
| 2) Was the fee denial to Sklar for attorney work an abuse of discretion? | Contended lodestar/calculation errors and that records supported fees; asserted denial was punitive and unfair. | Argued records were fabricated, overwritten, unreliable; initial $24M demand was outrageous; discovery abuses justify denial. | Affirmed: trial court properly rejected Sklar’s evidence as not credible/unusable and permissibly drew negative inferences; denial of fees to Sklar upheld. |
| 3) Was awarding fees for SLO staff (and amount) erroneous? | Argued staff time should be compensated at paralegal rates and records support greater award. | Argued staff records flawed and staff did not meet California paralegal qualifications so no recovery. | Affirmed in part/reversed in part: court may award fees for staff whose records were reliable; award remanded to correct a math error (Mouser hours) and to reassess certain costs. Toshiba’s broader challenge to staff qualification rejected. |
| 4) Should portions of Sklar’s appellate appendix be stricken and appellate sanctions awarded? | Denied alteration; said discrepancies were inadvertent or otherwise explained. | Contended appendix altered/added material not in trial file; asked to strike and obtain sanctions. | Partly granted: 96 pages of handwritten records not in trial file struck; appellate sanctions ordered (trial court to determine attorney fees related to motion to strike). |
Key Cases Cited
- Serrano v. Unruh, 32 Cal.3d 621 (denial/reduction of fees justified where fee request is unreasonably inflated)
- Wanke, Industrial, Commercial, Residential, Inc. v. Keck, 209 Cal.App.4th 1151 (party must obey court orders even if arguably erroneous; collateral attack limits)
- Clement v. Alegre, 177 Cal.App.4th 1277 (monetary sanctions properly imposed for discovery misuse; meet-and-confer obligations)
- Electronic Funds Solutions, LLC v. Murphy, 134 Cal.App.4th 1161 (sanction review is deferential; imaging/forensic steps in ESI disputes)
- EnPalm, LLC v. Teitler, 162 Cal.App.4th 770 (lodestar calculation and equitable reductions; trial court discretion on fee awards)