Metricolor, LLC v. L Oreal S.A., 2:18-cv-00364

Metricolor LLC sued L'Oréal entities, alleging patent infringement and trade secret misappropriation over a hair coloring system, specifically focusing on a "first-generation" trade secret system.
After several early procedural rulings, including dismissals, the complaint was amended and the case proceeded to discovery, where Metricolor produced key documents in support of its claims.
During discovery, L'Oréal identified inconsistencies and suspected some Metricolor documents were fabricated or altered post-litigation.
Forensic investigations—spurred by L'Oréal's concerns—uncovered evidence of fabrication, deletion, and withholding of key documents by Metricolor, particularly involving plaintiff representative Sal D'Amico.
The court found that relevant evidence had been not only created and produced after litigation began, but that entire categories of responsive documents were deleted, and others withheld during forensic reviews.
L'Oréal moved for terminating sanctions, arguing this pattern of bad faith conduct irreparably tainted the case and precluded a fair trial; the court granted the motion, dismissing the action with prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Fabrication of Evidence	Any errors in document handling were unintentional, meant as internal notes for counsel, or due to confusion; no intent to deceive.	D'Amico willfully fabricated evidence to bolster claims; dishonesty repeated, detailed, and intentional.	Court found willful, bad faith fabrication by plaintiff.
Destruction and Deletion of Evidence	Conduct was not intentional; cited technical errors and confusion, emphasized production of thousands of documents.	Plaintiff deleted tens of thousands of files during litigation to conceal evidence, making true facts unrecoverable.	Court found willful destruction of evidence by plaintiff.
Withholding of Discoverable Evidence	Claimed no obligation to produce certain forensic image files, characterized withheld documents as cumulative or irrelevant.	Plaintiff failed to produce and actively concealed highly relevant, responsive documents; failed supplement obligations.	Court found egregious and prejudicial withholding.
Remedy: Terminating Sanctions	Proposed lesser sanctions, such as barring use of certain documents or waiting until trial for further review.	Only full dismissal cures prejudice and preserves integrity; integrity of process irreparably tainted.	Terminating sanctions (dismissal with prejudice) imposed.

Connecticut Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091 (9th Cir. 2007) (sets out the five-factor test for case-dispositive sanctions where bad faith destruction of evidence is at issue)
Anheuser-Busch, Inc. v. Nat. Beverage Distribs., 69 F.3d 337 (9th Cir. 1995) (upholding terminating sanctions where party lied and concealed evidence)
Anderson v. Air West, Inc., 542 F.2d 522 (9th Cir. 1976) (district court may impose severe sanctions for egregious discovery violations)
Jorgensen v. Cassiday, 320 F.3d 906 (9th Cir. 2003) (willfulness and bad faith required for terminating sanctions)