CA Court of Appeals Upholds Sanctions Against Caremark for Underhanded Electronic Discovery Tactics in False Claims Act Case

A California Court of Appeals upheld sanctions against Caremark Rx, LLC for failing to preserve electronic databases of their prescription drugs in a readily-accessible format even though Caremark knew for over two years that lawsuits based on that data were imminent.  The trial court found that:

1. The electronic data evidence was vital to the litigation;
2. Caremark had “acted in bad faith in all aspects of the production of their prescription data base;
3. Caremark had consistently failed to be candid with this court as to the cost and difficulty of retrieval of their prescription data base; and
4. That in light of the multiple disparate cost estimates, “given without foundation” by Caremark, the court “no longer [had] faith” in Caremark’s ability or willingness to state an accurate estimate for cost of retrieval.

The court granted plaintiff’s motion for sanctions including $43k in attorney’s fees and costs.

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