The case involves Innovative Waste Management (IWM) bringing a lawsuit against Dunhill Products, Crest Energy Partners, and individuals Henry Wuertz and Edward Girardeau for breach of contract, fraud, misappropriation of trade secrets, and other claims. After years of contentious discovery disputes, the circuit court sanctioned the defendants by striking their answer and counterclaims due to repeated non-compliance with discovery orders. The defendants appealed and the South Carolina Court of Appeals affirmed the circuit court’s decision in an unpublished opinion, which was affirmed and published by the South Carolina Supreme Court.

The dispute between IWM and the defendants centered on a series of discovery failures that began as early as 2012. IWM served discovery requests, including interrogatories and document demands, but the defendants consistently failed to provide timely responses or complete disclosures. Despite several motions to compel and court orders requiring the production of financial documents, tax returns, and other evidence, the defendants’ responses were incomplete or delayed, forcing IWM to pursue motions to compel to enforce the discovery obligations. By 2019, the defendants had still not fully complied, leading IWM to request sanctions for their ongoing discovery abuse.

The circuit court finally sanctioned the defendants for their repeated failures to comply with discovery orders. As sanction for defendants’ misconduct, the circuit court struck their pleadings. The appellate court affirmed such sanctions due to the circuit court’s broad discretion to impose sanctions and the repeated bad faith conduct of defendants. The defendants also appealed the discovery orders in favor of IWM but the appellate court ruled defendants waived their right to appeals of these interlocutory orders due to their failure to preserve objections to those orders which would have led to appealable contempt orders.

The decision was appealed up to South Carolina’s supreme court, which is unusual for discovery disputes. However, the appellate posture makes sense in light of defendants’ deliberate disregard of their discovery obligations and it follows that the supreme court likely took the case to issue binding case law that underscored the importance of timely and complete compliance with discovery obligations. The case serves as a reminder of the consequences of deliberate discovery violations in business litigation.

If your organization is seeking support with eDiscovery, our team has solutions to address all phases of the discovery process. At CODISCOVR, we deliver client-focused, defensible, and scalable solutions using advanced technology and intelligent review practices to meet eDiscovery, document review, and information governance needs in a manner that reduces the risks and costs associated with electronically stored information (ESI). Reach out to Nick Berenato for more information. Nick focuses his practice on information governance and electronic discovery in the construction, higher education, financial services, antitrust, government investigations, white-collar, insurance defense, and health care and life sciences industries.