GN Netcom, Inc. v. Plantronics, Inc., 930 F.3d 76

GN Netcom sued Plantronics for antitrust violations based on Plantronics’ Plantronics-Only Distributor (POD) program; litigation began after GN’s demand letter (2012) and complaint (2012).
Plantronics issued litigation holds, but senior salesperson Don Houston directed employees to delete emails referencing competitors and deleted many of his own emails; forensics indicated thousands of deleted emails some of which were likely responsive.
Plantronics engaged forensics vendors (Stroz) and discovery vendors but did not complete analyses, destroyed backup tapes, and produced only preliminary findings; GN’s expert (Gallivan) estimated substantially more relevant deletions than Stroz.
The District Court found Plantronics acted in bad faith and prejudiced GN but denied GN’s motion for default judgment, imposing instead a permissive adverse-inference instruction, monetary fines, and spoliation-related fees.
Before trial the District Court limited live spoliation evidence by reading stipulated facts to the jury and excluded live testimony from GN’s spoliation expert Gallivan; the jury returned a verdict for Plantronics on the antitrust claims.
On appeal the Third Circuit affirmed the District Court’s choice of sanctions under Rule 37 but held that excluding Gallivan’s expert testimony was an abuse of discretion and not harmless, and remanded for a new trial.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether default (dispositive) sanction under FRCP 37 was required for spoliation	GN: Plantronics’ intentional deletions and concealment warranted default judgment	Plantronics: lesser sanctions sufficed; remedial steps taken; case-specific discretion	Affirmed: District Court did not abuse discretion in imposing lesser sanctions (permissive adverse inference, fines, fees)
Whether a permissive vs. mandatory adverse inference was required	GN: harsh sanction needed given scope and bad faith	Plantronics: permissive instruction appropriate; factfinder should weigh prejudice	Affirmed: permissive adverse inference was within court's discretion
Whether the District Court properly excluded GN’s spoliation expert (Gallivan) under FRE 403	GN: Gallivan’s testimony was highly probative on scope of deletions and necessary for jury to apply adverse inference	Plantronics: testimony would be inflammatory, distract jury, cumulative to stipulations	Reversed: exclusion was abuse of discretion; probative value not substantially outweighed by prejudice; error not harmless; new trial ordered
Whether exclusion of Gallivan was harmless	GN: exclusion likely affected jury’s adverse-inference application and trial outcome	Plantronics: GN failed to show how testimony would overcome case against it	Held for GN: court cannot be ‘sure’ the error did not affect outcome; not harmless error

McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240 (3d Cir.) (standard of review for sanctions and evidentiary rulings)
Forrest v. Beloit Corp., 424 F.3d 344 (3d Cir. 2005) (Rule 403 and abuse-of-discretion review for evidentiary rulings)
Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76 (3d Cir. 1994) (three-factor test for spoliation sanctions)
Bull v. United Parcel Serv., Inc., 665 F.3d 68 (3d Cir. 2012) (dispositive sanction appropriate only when non-responsible party’s case is severely impaired)
Flury v. Daimler Chrysler Corp., 427 F.3d 939 (11th Cir. 2005) (dispositive sanction where destroyed evidence was critical)
Silvestri v. Gen. Motors Corp., 271 F.3d 583 (4th Cir. 2001) (dismissal where sole critical evidence was destroyed)
Coleman v. Home Depot, Inc., 306 F.3d 1333 (11th Cir. 2002) (Rule 403 balancing; strong presumption in favor of admission)
Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011) (bad-faith requirement for certain spoliation inferences)