In Twins Special Co. v. Twins Special, LLC (S.D. Cal. 2025), the plaintiff, Twins Special Co. of Thailand, sought sanctions against defendants Nicholas and Christopher Mechling and their U.S. entities for repeated discovery misconduct. The court found that defendants failed to comply with multiple discovery orders, withheld responsive documents, and engaged in spoliation of ESI. These actions triggered the application of Federal Rule of Civil Procedure 37 (Rule 37), which governs sanctions for discovery violations, as well as the court’s inherent authority to protect the integrity of judicial proceedings.
Under Rule 37(b), courts may impose sanctions when a party disobeys a discovery order, including striking pleadings, dismissing the action, or entering default judgment. Here, the defendants repeatedly violated discovery orders, producing only a fraction of responsive records while concealing financial and sublicensee information central to the case. The court determined their conduct was willful and in bad faith, meeting the standard for terminating sanctions. Importantly, the court emphasized that mere late compliance cannot cure prejudice caused by years of obstruction and nonproduction.
The court also applied Rule 37(e), which specifically addresses spoliation of ESI. Evidence showed the Mechlings wiped their iPhones shortly after being ordered to submit them for forensic review and deleted spreadsheets and financial records before handing over devices. Because this data could not be restored or replaced and the timing of destruction indicated intent to deprive the plaintiff of evidence, the court found the prerequisites for Rule 37(e)(2) satisfied. This permitted the harshest sanctions, including terminating sanctions, since the spoliation was intentional.
The Rule 37 analysis required weighing factors such as prejudice to the plaintiff, the court’s ability to manage its docket, and the availability of lesser sanctions. The court found that defendants’ misconduct prejudiced plaintiff’s ability to prepare for trial, consumed judicial resources, and showed a pattern of deception that undermined confidence in the discovery process. Although public policy favors resolving cases on the merits, the court determined lesser sanctions had already failed—defendants had ignored monetary sanctions and prior warnings. Thus, default judgment was the only effective remedy under Rule 37.
In conclusion, the court recommended granting terminating sanctions against the defendants under both Rule 37(b) for disobeying discovery orders and Rule 37(e) for intentional spoliation of ESI. Monetary sanctions were also imposed in part, while contempt and sanctions against defense counsel were denied. The decision underscores how Rule 37 serves as a critical enforcement mechanism, allowing courts to protect the integrity of litigation when parties engage in willful noncompliance, spoliation, and discovery abuse.
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