Court Opinion

ID: 2708969
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:09:06.581873+00
Date Added: 2024-06-11T12:50:17.587438
License: Public Domain

In the

     United States Court of Appeals
                  For the Seventh Circuit
                      ____________________ 
No. 13‐3898 
IN RE PETITION OF BOEHRINGER INGELHEIM PHARMACEUTICALS, 
  INC., and BOEHRINGER INGELHEIM INTERNATIONAL GMBH, 
  IN PRADAXA (DABIGATRAN ETEXILATE) PRODUCTS 
  LIABILITY LITIGATION. 

                      ____________________ 
                                      
                Petition for a Writ of Mandamus to the 
    United States District Court for the Southern District of Illinois. 
   No. 3:12‐md‐02385‐DRH‐SCW — David R. Herndon, Chief Judge. 
                      ____________________ 

  SUBMITTED JANUARY 17, 2014 — DECIDED JANUARY 24, 2014 
                 ____________________ 

   Before POSNER, SYKES, and HAMILTON, Circuit Judges. 
     POSNER,  Circuit  Judge.  Pradaxa  is  a  prescription  blood‐
thinning  drug  manufactured by  an American  company  and 
its  German  affiliate  (collectively  Boehringer).  A  number  of 
suits  against  Boehringer  complaining  about  the  accuracy  of 
the warning label on the drug have been consolidated in the 
Southern District of Illinois for pretrial proceedings. The liti‐
gation  is in  the  discovery stage. On December 9  of the just‐
ended  year,  the  district  judge  presiding  over  the  litigation 
imposed  sanctions  on  Boehringer  for  discovery  abuse. 
2                                                      No. 13‐3898 

Boehringer has petitioned us for a writ of mandamus quash‐
ing the sanctions. 
     The  sanctions  include  fines,  totaling  almost  $1  million, 
that  the  judge  imposed  for  various  abuses;  this  part  of  his 
order is not so questionable (if it is questionable at all) as to 
be  a  plausible  candidate  for  mandamus.  But  in  addition  he 
imposed a nonmonetary sanction that is deeply troubling. It 
relates to depositions that the plaintiffs’ counsel wants (and 
is  entitled)  to  take  of  13  employees  of  Boehringer,  all  of 
whom  work  in  Germany  and  10  of  whom  are  German  citi‐
zens  (the  other  three  are  U.S.  citizens).  The  parties  had 
agreed  that  the  depositions  of  these  13  potential  witnesses 
would be conducted in Amsterdam. But when the plaintiffs 
asked  the  district  judge  to  impose  sanctions  on  Boehringer 
for discovery abuses, one of the sanctions they asked for was 
(we  quote  the  judge)  that  the  site  of  the  depositions  be 
changed to “a place convenient to the [plaintiffs] and [to] the 
defendants’  [Boehringer’s]  United  States  counsel.  This  is  a 
financial  issue  but  also  a  timing  issue  because  of  the  many 
delays  caused  by  the  defendants[’]  actions  and  the  extraor‐
dinary time it takes to fly to Amsterdam and the logistics of 
setting  up  the  necessary  working  space  there.”  Because  of 
what  the  judge  found  (and  we  do  not  take  issue  with  his 
finding)  to  be  Boehringer’s  interminable  discovery  delays, 
the  judge  determined  “an  appropriate  sanction  pursuant  to 
[his]  inherent  powers  to  be  to  require  [Boehringer]  to  pro‐
duce  all  employees  for  deposition  in  the  United  States,”  ei‐
ther “in New York City or such other place as the [plaintiffs] 
and the defendants shall unanimously agree upon” (emphasis 
added). Obviously the plaintiffs will not agree either to a Eu‐
ropean locus for the depositions, or to any place in the Unit‐
No. 13‐3898                                                             3 

ed States that Boehringer might prefer to New York City. So 
New York (in all likeilihood) it will be.  
     A federal judge is empowered to subpoena a U.S. citizen 
living abroad to appear before him and be deposed, but only 
if  the  citizen’s  testimony  can’t  be  obtained  in  admissible 
form otherwise, 28 U.S.C. § 1783(a)—and here it can be, by a 
deposition conducted in Amsterdam. So that statute was not 
authority  for  what  the  judge  did,  even  with  regard  to 
Boehringer’s  U.S.  citizen  employees  in  Germany.  And  for‐
eigners who are not in the United States are beyond the sub‐
poena  power  of  our  courts  even  if  their  testimony  can’t  be 
obtained  in  admissible  form  otherwise.  Relational,  LLC  v. 
Hodges,  627  F.3d  668,  673  (7th  Cir.  2010)  (“foreign  nationals 
are  beyond  the  court’s  subpoena  power”);  United  States  v. 
Drogoul, 1 F.3d 1546, 1553 (11th Cir. 1993). There is a possible 
exception,  but  it  is  immaterial:  Fed.  R.  Civ.  P  30(b)(6)  pro‐
vides  that  “a  party  may  name  as  the  deponent  a  public  or 
private corporation, a partnership, an association, a govern‐
mental  agency,  or  other  entity  and  must  describe  with  rea‐
sonable  particularity  the  matters  for  examination.  The 
named  organization  must  then  designate  one  or  more  offic‐
ers, directors, or managing agents, or designate other persons who 
consent  to  testify  on  its  behalf”  (emphasis  added).  If  it  be  as‐
sumed  that  the  rule  is  applicable  to  a  foreign  corporation 
whose officers, etc., are all foreigners, still the passage we’ve 
italicized indicates that only certain types of individual may 
be designated to testify at such a deposition, and there is no 
suggestion  that  any  of  the  13  persons  whom  the  district 
judge  in  this  case  has  ordered  be  deposed  in  the  United 
States  fit  any  of  the  categories.  Finally,  nothing  in  Fed.  R. 
Civ.  P.  37,  the  source  of  judicial  power  to  impose  sanctions 
for  disobeying  a  discovery  order,  and  the  stated  ground  of 
4                                                        No. 13‐3898 

the sanctions order in this case,  purports  to  enlarge judicial 
power to impose such orders against foreigners. 
    It’s true that the order changing the location of the depo‐
sitions is addressed to Boehringer rather than to the 13 wit‐
nesses—Boehringer  is  “require[d]”  to  produce  them  for 
deposition  in  the  United  States  (since,  armed  with  the 
judge’s order, the plaintiffs will not consent to depose them 
elsewhere).  But  what  if  the  witnesses  refuse?  They  are  not 
parties. They can’t be forced to come to the United States to 
be  deposed.  And  is  using  an  employer’s  leverage  over  his 
employees  a  proper  means  of  circumventing  limitations  on 
deposing  persons  in  foreign  countries  (including  U.S.  citi‐
zens,  if  they  can  be  deposed  satisfactorily  in  the  foreign 
country they’re residing in, or, as in this case,in  a neighbor‐
ing country). 
     The plaintiffs ask: since Boehringer was willing to allow 
its  employees  to  be  deposed  outside  Germany,  why  should 
it  object  to  their  being  deposed  in  another  foreign  country, 
the  United  States?  Well,  we  don’t  know  where  in  Germany 
all  13  employees  live  or  work,  but  Amsterdam  is  only  265 
miles  from  Ingelheim,  the  headquarters  of  Boehringer’s 
German  affiliate,  while  New  York  City  is  3,830  miles  from 
Ingelheim. 
    But finally we have difficulty understanding the order to 
change  the  site  of  the  depositions  as  a  sanction.  The  parties 
were all set to conduct the depositions in Amsterdam. Sup‐
pose  that  because  of  unjustifiable  delay,  Boehringer  has 
made  it  more  costly  for  the  plaintiffs  to  conduct  discovery 
there—maybe  the  plaintiffs  bought  nonrefundable  plane 
tickets  which  they  couldn’t  use  because  Boehringer  post‐
poned  the  depositions.  Certainly  the  judge  could  make 
No. 13‐3898                                                              5 

Boehringer pay for the tickets, or for any other unreasonable 
expense  that  it  imposed  on  the  plaintiffs  relating  to  the 
scheduled  depositions;  Boehringer  is  a  huge  pharmaceuti‐
cals enterprise. The problem is the form the sanction ordered 
by  the  judge  took—ordering  Boehringer  to  be  the  court’s 
agent in violating federal legal limitations on compelled dis‐
covery in foreign countries, merely so that depositions could 
be shifted to a place inconvenient for the witnesses who are 
to be deposed. They are to be punished for the sins of their 
employer.  And  they  are  not  even  corporate  bigwigs,  who 
might  feel  humiliated  by  a  travel  order;  so  far  as  appears, 
they are merely research scientists. They are not responsible 
for  Boehringer’s  contumacy,  yet  they  are  the  targets  of  the 
sanction.  
   And  suppose  Boehringer  complains  to  the  German  gov‐
ernment,  or  for  that  matter  the  U.S.  State  Department,  that 
the  judge’s  order  is  ultra  vires  and  infringes  German  sover‐
eignty. Do we need that? 
    We conclude that the district judge exceeded his authori‐
ty  in  ordering  the  location  of  the  depositions  changed  to 
punish Boehringer. And when a discovery order “amount[s] 
to a judicial usurpation of power or a clear abuse of discre‐
tion,”  Cheney  v.  United  States  District  Court  for  the  District  of 
Columbia,  542  U.S.  367,  371  (2004)  (citations  and  quotation 
marks  omitted),  or  otherwise  works  a  manifest  injustice,  a 
party may petition the court of appeals for a writ of manda‐
mus.  Although  the  Supreme  Court  has  refused  to  include 
discovery  orders  within  the  class  of  “collateral  orders,” 
which are appealable though interlocutory, see, e.g., Mohawk 
Industries,  Inc.  v.  Carpenter,  558  U.S.  100,  103  (2009),  it  has 
made  clear  that  mandamus  provides  a  “safety  valve”  ena‐
6                                                        No. 13‐3898 

bling  appellate  review  of  such  an  order  in  the  exceptional 
case. Id. at 111; see Ott v. City of Milwaukee, 682 F.3d 552, 554–
55  (7th  Cir.  2012).  This  is  one  of  those  rare  “safety  valve” 
cases  for  mandamus  because  of  the  risk  of  international 
complications  arising  from  a  U.S.  judge’s  having  ordered 
foreigners to be brought to the United States to be deposed, 
when  there  is  no  legal  authority  for  such  an  order;  because 
alternative  sanctions  are  readily  available;  and  because  the 
particular sanction punishes innocents—the inventors whom 
the order requires Boehringer to fly to the United States to be 
deposed, rather than their being deposed in nearby Amster‐
dam as the parties had agreed. 
   We  therefore  direct  that  the  order  be  rescinded;  in  all 
other respects the petition for a writ of mandamus is denied. 
No. 13-3898                                                   7

   HAMILTON, Circuit Judge, dissenting. Petitioners are not
entitled to any mandamus relief from the portion of the district
court’s sanctions order requiring them to produce thirteen
employees based in Germany for depositions in the United
States. The writ is being misused here to obtain immediate
appellate review of an interlocutory discovery sanction. The
defendant-petitioners even admit as much. They have told us
they filed for the writ because they were simply unwilling to
annoy the district judge further by inviting an appealable
contempt sanction.
    On the merits, the defendant-petitioners have failed to
show a clear and undisputable right to the writ. The district
judge ordered a foreign corporation to produce its witnesses
for depositions in the United States not as a matter of routine
case management, but as a well-aimed sanction for repeated,
bad-faith discovery abuses. No authority teaches that the
sanction was even unreasonable, let alone unauthorized.
    In fact, when properly understood, the district court’s
sanction was superbly tailored to solve the problem the court
faced. The defendant-petitioners had built a lengthy record of
discovery abuses and failures showing that they and their
lawyers were not taking the district court’s orders or their
discovery obligations seriously. The order moving depositions
from Amsterdam to New York was targeted to get the personal
attention of the executives and lawyers, yet without affecting
the merits of the litigation. For these reasons, explained in
detail below, I respectfully dissent.
    No member of the panel disagrees, however, with the
district court’s finding of bad faith or with the imposition of
substantial monetary sanctions. The district court was planning
to revisit the issue of sanctions in any event. After the writ
8                                                  No. 13-3898

issues, the district court will need to revise its package of
sanctions. At that point, frankly, the petitioner-defendants may
regret the issuance of the writ. Many other sanctions are
available to the district court to serve the same purposes—to
compensate plaintiffs for wasted time and money, and to show
the defendants, their lawyers, and their senior executives that
they need to respect the litigation, the court, and their discov-
ery obligations, and they need to comply with court orders and
even their own promises to the court. Other sanctions that the
district court should consider may have much more serious
consequences for the litigation than the cost and inconvenience
of some transatlantic flights.
I. Mandamus is Not Necessary
   Myriad cases teach that discovery orders, including
sanctions, simply are not immediately appealable. Appellate
review must await a final judgment. See, e.g., Reise v. Board of
Regents, 957 F.2d 293, 295 (7th Cir. 1992). A party who believes
a district court has made a serious mistake has the option of
refusing, respectfully, to comply with the court order. A
sanction of contempt or a default judgment or dismissal can
then be appealed. Mohawk Industries, Inc. v. Carpenter, 558 U.S.
100, 110–11 (2009); Marrese v. American Academy of Orthopaedic
Surgeons, 706 F.2d 1488, 1492–93 (7th Cir. 1983). Mandamus
may be an option, but only in extraordinary cases, and only
where there is no other adequate remedy and the petitioner’s
right is clear and undisputable. Gulfstream Aerospace Corp. v.
Mayacamas Corp., 485 U.S. 271, 289 (1988); Kerr v. United States
District Court, 426 U.S. 394, 402 (1976) (denying mandamus);
Powers v. Chicago Transit Auth., 846 F.2d 1139, 1142–43 (7th Cir.
1988) (dismissing appeal and denying mandamus).
No. 13-3898                                                        9

   The extraordinary thing in this case is that the petitioners
themselves recognize these alternatives, but they just seem too
weak-kneed to use them. They explain in note 6 of their
petition that they do not want to refuse to comply with the
order because they respect the court and because they do not
want “to further jeopardize their interactions with the [district]
court by willfully disregarding its order.”
   We should not enable this approach to litigation. With all
due respect, this is a major league discovery dispute in high-
stakes international litigation. Refusing to comply with a
discovery order you believe is unlawful is the respectful course
and the orderly procedure. E.g., Allendale Mut. Ins. Co. v. Bull
Data Systems, Inc., 32 F.3d 1175, 1179 (7th Cir. 1994) (dismissing
appeal of discovery order where party failed to take that step).
Refusal is a serious step that makes a party think hard about
how important the issue is and how confident it is in its
position. See, e.g., Ott v. City of Milwaukee, 682 F.3d 552, 555 (7th
Cir. 2012) (“The adversely affected party is expected to put its
money where its mouth is, so to speak, before an appeal will be
heard.”); Reise, 957 F.2d at 295–96.
    Judges understand that the option of refusal and contempt
is available for a party that is truly serious about wanting
prompt appellate review of a discovery order. Taking this
option does not indicate the kind of lack of respect that these
defendants had been showing prior to the second sanctions
order. The petition should be rejected on procedural grounds
alone. We need not and should not enable the use of manda-
mus as an alternative, thereby inviting far too many interlocu-
tory appellate reviews of discovery orders.
10                                                   No. 13-3898

II. No Clear and Undisputable Right
    Even if a writ of mandamus were the only path to meaning-
ful appellate review, the writ should not issue unless the
petitioner could show a “clear and undisputable right” to the
writ. Cheney v. United States District Court, 542 U.S. 367, 380–81
(2004); Kerr, 426 U.S. at 402; In re Whirlpool Corp., 597 F.3d 858,
860 (7th Cir. 2010). That standard has not been met here. No
one has cited applicable authority indicating that the sanction
was not authorized. In fact, the district court used its sanction
power to take only a small step beyond its ordinary case
management powers.
   As a general rule, of course, a federal court has no power to
subpoena non-citizens who are outside the United States.
Relational, LLC v. Hodges, 627 F.3d 668, 673 (7th Cir. 2010).
(Subpoenas can reach U.S. citizens abroad under 28 U.S.C.
§1783.) The deponents in question here have not yet been
shown to be directors, officers, or managing agents subject to
direct deposition notices and the court’s discretionary power
over the locations of depositions. So the district court’s order
on the location of these depositions would not have been
authorized other than as a discovery sanction.
   Yet even without discovery sanctions, district courts
managing civil cases have extensive discretion over the
locations of depositions. Numerous cases hold that a federal
court may order a deponent designated under Rule 30(b)(6) to
appear for the deposition in the forum district even if the
deponent is a foreign citizen and resident. See, e.g., New
Medium Technologies LLC v. Barco N.V., 242 F.R.D. 460 (N.D. Ill.
2007) (Cole, M.J.); Cadent Ltd. v. 3M Unitek Corp., 232 F.R.D.
625, 629–30 (C.D. Cal. 2005); In re Vitamin Antitrust Litig., 2001
WL 35814436 (D.D.C. Sept. 11, 2001); Custom Form Mfg., Inc. v.
Omron Corp., 196 F.R.D. 333, 335–36 (N.D. Ind. 2000) (collecting
No. 13-3898                                                     11

cases); M&C Corp. v. Erwin Behr GmbH & Co., 165 F.R.D. 65, 68
(E.D. Mich. 1996); Roberts v. Heim, 130 F.R.D. 430, 439–40 (N.D.
Cal. 1990). Extensive persuasive authority holds that a court
may order a foreign defendant’s officers, directors, or manag-
ing agents to appear for depositions in the United States. See
In re Honda American Motor Co. Dealership Relations Litig., 168
F.R.D. 535, 541–42 (D. Md. 1996) (Motz, J.); see also
Angiodynamics, Inc. v. Biolitec AG, — F. Supp. 2d —, 2014 WL
129035 (D. Mass. Jan. 14, 2014) (entering default against
defendant who refused to present managing director in United
States for deposition); Peerless Industries, Inc. v. Crimson AV,
LLC, 2013 WL 85378, at *2 (N.D. Ill. Jan. 8, 2013); Schindler
Elevator Corp. v. Otis Elevator Co., 657 F. Supp. 2d 525, 529–30
(D.N.J. 2009); Triple Crown America, Inc. v. Biosynth AG, 1998
WL 227886, at *4 (E.D. Pa. April 30, 1998).
    As further evidence that the issue here is at least debatable
even absent the record supporting sanctions, see the divided
panel’s opinions in Rosenruist–Gestao E Services LDA v. Virgin
Enterprises Ltd., 511 F.3d 437, 445–46 (4th Cir. 2007), in which
the Fourth Circuit held that a foreign applicant for a United
States trademark could be ordered to produce a witness for a
Rule 30(b)(6) deposition in the United States. And in the
context of discovery sanctions, where the district court’s power
is greater and more flexible, the Second Circuit has affirmed
dismissal as a sanction against foreign plaintiffs who refused
to produce their common manager for a deposition in the
United States. Republic of the Philippines v. Marcos, 888 F.2d 954,
956–57 (2d Cir. 1989).
   The district court here went a step further, of course, by
applying a similar order to deponents chosen by the opposing
parties rather than under Rule 30(b)(6), and who apparently
are not directors, officers, or managing agents of defendants.
12                                                 No. 13-3898

There is no explicit authority for the sanction order, but there
is also no authority against it. Given the district court’s broad
powers to impose much more draconian discovery sanctions
under Rule 37, this much milder sanction should be within the
court’s power, and certainly not so far out of bounds as to
justify a writ of mandamus.
   The sanction is an order directed to parties over whom the
court has jurisdiction. Those parties have repeatedly acted in
bad faith and refused to comply with their obligations to
preserve documents and to produce them in discovery. Those
parties, in turn, have the power as employers to order selected
employees to travel to the United States for depositions.
    There is no reason for this court to have qualms about
whether the defendants can or will order their employees to
comply with the district court’s sanctions order. Courts
routinely issue orders to corporate parties that require them to
order their employees to do things they might prefer not to do,
such as appear for a deposition, answer interrogatories, or
search for documents for discovery. Nor is there anything
unusual about having these defendants order an employee to
travel across an international border, whether for meetings or
for depositions. These defendants are part of a global pharma-
ceutical enterprise. Their employees travel across international
borders all the time. See, e.g., New Medium Technologies, 242
F.R.D. at 468 (rejecting undue burden arguments by noting
how often foreign deponents traveled to United States on
business). If the employees refused such travel, they could be
subject to discipline up to and including the loss of their jobs.
And in this case, the defendants already agreed to produce
their Germany-based employees for depositions in Amsterdam
or London. In making that agreement, the defendants surely
No. 13-3898                                                           13

believed they had the power to order any reluctant employees
to make that trip.
    Along these lines, Minebea Co. v. Papst, 370 F. Supp. 2d 302,
309–10 (D.D.C. 2005), is persuasive and almost directly on
point. Foreign inventors in that case had agreed in a contract
assigning their inventions to the defendant to testify in court
proceedings at its request. Judge Friedman ordered the
defendant to use its contractual rights to ensure that the
inventors appeared in the United States for trial, particularly
against a background of discovery abuses and delays. The
judge knew he could not directly order the foreign inventors
to appear, but he could order the defendant, over whom he did
have jurisdiction, to use its contractual rights to ensure their
appearance. The order was backed up by the threat of inviting
the jury to draw adverse inferences against the defendant if the
foreign inventors failed to appear. Judge Friedman’s order is
thus quite similar to what the district ordered here.
     The defendants got this court’s attention by arguing that
the district court’s order would evade and possibly violate
agreements between the United States and German govern-
ments. That argument was guaranteed to get our attention, but
it’s a red herring.
   As noted, the defendants agreed at the beginning of the
case to have their German employees travel to Amsterdam or
London for depositions.1 Whatever the effects of the

1
   The Amsterdam/London option was practical and in every party’s
interest. If depositions are taken in Germany under the Federal Rules of
Civil Procedure, they must be taken in just one particular room in the
United States Consulate in Frankfurt am Main that will hold only ten
people. The parties must provide at least six weeks’ notice, and prior
                                                           (continued...)
14                                                            No. 13-3898

U.S.–German agreements might be, these defendants assured
the district court that they were willing to order their employees
to travel across international borders for depositions. Now the
district court has ordered defendants to order the employees
to travel to New York instead of Amsterdam. The difference
between Amsterdam and New York is substantial in terms of
miles and hours, but not in terms of sovereignty, international
comity, or employer-employee relationships. The difference is
certainly not so legally significant as to warrant a writ of
mandamus.
III. The Well-Tempered Sanction
     A. The Defendants’ Record of Discovery Failures
    In his second order imposing sanctions, Chief Judge
Herndon explained in detail how the defendants have repeat-
edly shown their disrespect for the litigation, the court and its
orders, and their discovery obligations. See In re Pradaxa
(Dabigatran Etexilate) Products Liability Litig., 2013 WL 6486921
(S.D. Ill. Dec. 9, 2013) (Case Management Order 50). He
reviewed the long history of problems with defendants’
discovery in this matter, including counsel’s confident assur-

1
  (...continued)
approval by the German Ministry of Justice is required. Once the deposition
is scheduled, the hours are restricted and electronic devices are not
permitted (though a pay telephone is available in the public waiting room).
See Federal Republic of Germany, Judicial Assistance: Taking of Evidence,
Agreements effected by exchange of notes, 32 U.S.T. 4181; Consulate
General of the United States, General Information About Depositions in
Frankfurt, available at http://germany.usembassy.gov/english-speaking-
services/2008-deposition-instructions.pdf (last visited Jan. 21, 2014). Taking
depositions in Germany would reward defendants for their pattern of
discovery abuses in this case with more delay and severely restricted
oversight by the district court.
No. 13-3898                                                  15

ances to the court at the beginning of the case that a complete
litigation “hold” was in place company-wide to preserve
relevant documents. He reviewed the many problems and
excuses offered that led him to impose tighter control over
discovery process without imposing sanctions, as part of his
Case Management Order 38, issued July 10, 2013. Id. at *2–3.
    Judge Herndon then reviewed his first sanctions order
issued on September 18, 2013 in the face of continued failures
to comply with the court’s discovery orders. That first order
imposed relatively mild sanctions but warned that continued
failures would draw much more serious sanctions. Id. at *3–5.
He then turned to the subjects of plaintiffs’ second motion for
sanctions. His account of the defendants’ numerous and
inexcusable failures and their disingenuous arguments to
justify them is thorough and compelling.
    First, for example, defendants failed to take the obvious
step of preserving documents in the control of Dr. Thorsten
Lehr, who played a key role in developing and testing Pradaxa.
Dr. Lehr left the defendants’ employ in September 2012,
several months after the MDL had been established and after
defense counsel had assured the court and plaintiffs that they
had a complete litigation hold in place. Yet defendants told the
court they chose not to preserve the documents in Dr. Lehr’s
custody because, at the time of his departure in September
2012, he had not been identified as a custodian of relevant
documents. That failure was simply inexcusable. Judge
Herndon explained that defendants could not credibly contend
they did not know Dr. Lehr’s files contained relevant informa-
tion. Id. at *10. He was the defendants’ expert on Pradaxa. His
work had been reviewed at the highest levels of the company.
Id. at *10–12.
  Defendants also tried to justify their failure by arguing that
when Dr. Lehr left in September 2012, plaintiffs had not yet
16                                                  No. 13-3898

identified him as a person of interest. Judge Herndon correctly
rejected this position as “nonsense.” Id. at *12. The purpose of
the duty to preserve is to protect relevant information so it will
be available when and if requested by an opposing party. In
September 2012, defendants were in a far better position than
plaintiffs to understand how important Dr. Lehr and his files
would be. In further nonsense from the defendants, moreover,
they tried to excuse their failures by arguing that because their
preservation obligation was first triggered in February 2012,
they were under no duty to produce documents created before
February 2012. Id. at 13. Under that theory, a party who knows
it is likely to be sued would be entitled to shred or erase every
relevant document created up until the time it learned of the
planned lawsuit. Enough said on that.
    Second, defendants also failed to impose a litigation hold
on documents of all sales representatives, clinical science
consultants (CSCs) and medical science liaisons (MSLs) until
August 2013. The explanation was that they did not under-
stand the scope of the litigation until then. More than a year
earlier, however, defendants themselves had persuaded the
Judicial Panel on Multidistrict Litigation to establish the
Pradaxa MDL because the litigation was nationwide. Id. at *7
and *15. Judge Herndon was “amazed” by the new argument,
as I am. The defendants also sought to justify their failure by
saying they had imposed a unilateral “proportionality” test on
the litigation hold. That was inconsistent with what they had
been telling the court and the plaintiffs for more than a year.
Judge Herndon described it accurately as a desperate “post-
debacle” argument. Id. at *15.
   Even more striking, defendants claimed their failures
would not prejudice plaintiffs because sales representatives,
CSCs, and MSLs had been instructed not to use material
outside an authorized database when selling Pradaxa, and the
authorized material had been produced. Judge Herndon
No. 13-3898                                                    17

mildly described this argument as “ridiculous.” Id. I would
add “dishonest” and “insulting” to describe this notion that the
plaintiffs should just take on faith defendants’ assurances that
hundreds or thousands of representatives always complied
with their instructions when trying to promote the drug. I
doubt, for example, that defendants are just taking on faith the
plaintiffs’ testimony supporting their claims.
    Judge Herndon then reviewed defendants’ failures to
produce documents from an important shared computer drive
known as the “G Drive,” which contained millions of poten-
tially relevant documents. Long after defendants had shown
repeated failures to comply with discovery obligations,
defendants information technology staff gave authority to a
third-party vendor handling discovery to access the G Drive.
But defendants gave the vendor only minimal access, with
generic passwords that failed to provide access to a large
fraction of the G Drive with more sensitive documents. Judge
Herndon reasonably said that if such a mistake had occurred
at the beginning of the case, he could have understood it. At
this late stage, though, it was reasonable to infer bad faith. Id.
at *16.
     Finally, Judge Herndon reviewed defendants’ failure to
impose a litigation hold on employees’ text messages until
mid-October 2013, which was long after serious problems with
the scope of the litigation hold had surfaced, and even after the
first sanctions order had been issued. Id. at *17. Defendants’
arguments to justify their failure were as dishonest and
ridiculous as those offered to justify other failures. Text
messages were not relevant, they said, though they had
instructed employees to use text messages for business
purposes. We didn’t know text messages were covered by the
litigation hold or the discovery requests, they said, yet the
scope of the requests was plainly broad enough, and defen-
dants themselves were seeking text messages from plaintiffs.
18                                                  No. 13-3898

Yes, we failed to disable the auto-delete function on company-
owned cell phones, but that would have been too burdensome.
As Judge Herndon explained, if defendants thought the hold
would be too burdensome, they had an obligation to raise the
problem with the court. They were not entitled to make a
unilateral decision that ensured the destruction of relevant
documents. Id. at *17–18. In light of the cumulative effect of the
defendants’ repeated and serious failures, the district court’s
inferences of bad faith were reasonable and well supported.
     B. The Package of Sanctions
    When Judge Herndon had to decide the second set of
sanctions, he faced an important and delicate problem. The
defendants simply were not complying with his orders and
their discovery obligations. At the same time, given the stakes
in the litigation and courts’ general preference for deciding
cases on their merits rather than through discovery sanctions,
he was reluctant to use the most powerful sanctions he could
impose. Those could directly affect the outcome of the law-
suits.
   The first set of sanctions had not been sufficient to convince
defendants and their counsel to make serious efforts to comply
with the court’s orders and their obligations, or to compensate
plaintiffs for the prejudice they experienced. The second set of
sanctions was measured and well-tempered. The financial
consequences went from $30,000 in the first order to nearly $1
million in the second, plus plaintiffs’ fees and costs tied to the
motion. The judge also ordered defendants to make immediate
and complete disclosures of the extent of their failures and to
produce what they could retrieve from the omitted materials.
He also made clear that he would make a final decision about
additional sanctions after receiving such disclosures. Id. at
*19–20. And of course, he ordered thirteen depositions moved
from Amsterdam to New York.
No. 13-3898                                                            19

     As we evaluate that last sanction, the important thing to
keep in mind is that Rule 37 authorizes discovery sanctions
that can have devastating effects on a party’s position in the
litigation. They include striking portions of pleadings, such as
specific defenses or claims, or declaring that certain issues will
be determined against the party as a sanction. The most serious
against a defendant is entry of default judgment. See Fed. R.
Civ. P. 37(b)(2)(A), (b)(2)(B), (c)(1)(C), and (d)(3).
    The portion of the sanctions order changing the location of
the depositions from Amsterdam to New York was a careful
and temperate stroke by a veteran judge experienced in the
challenges of multi-district litigation. Changing the location
would have no effect on the merits of the litigation. Yet it
would get the very personal attention of the deponents and
senior management, as well as their lawyers. The lawyers
would have to explain to their clients why they would need to
have the deponents take the extra time to fly to New York
instead of Amsterdam. The correct explanation would have to
be because those involved—counsel and clients together—had
been failing to respect the court and its orders.
    The explanation would also include a warning that if their
conduct continued, they could simply lose the lawsuits,
regardless of their defense on the merits. The sanction would
also provide a form of compensation to plaintiffs, whose
counsel have had to spend an inordinate amount of time
dealing with defendants’ delays, malfeasance, and nonfeasance
in discovery. The writ of mandamus mistakenly deprives the
district court of one useful tool. But the court will have plenty
of other tools available when it revisits the second sanction
order to decide on the complete package.2

2
   Even if the district court had not planned to return to the topic of
sanctions after defendants made further disclosures, the second sanctions
                                                            (continued...)
20                                                              No. 13-3898

   For example, the monetary sanctions imposed thus far seem
not to have had much effect. (The non-monetary sanction
regarding deposition locations seems so well-aimed because it
will affect counsel and witnesses personally.) But there surely
are levels at which monetary sanctions will get these defen-
dants’ attention, punish the defendants, and compensate the
plaintiffs. The district court retains the power to find those
levels, proportional to the failings. See generally Salgado v.
General Motors Corp., 150 F.3d 735, 740 (7th Cir. 1998) (discov-
ery sanctions must be proportionate; affirming dismissal as
discovery sanction).
    The district court will also act well within its discretion if it
decides instead to impose some other non-monetary sanctions
authorized by Rule 37, even if they might directly affect the
merits of the litigation. A revised package of sanctions de-
signed to be at least as effective as the entire package in the
second sanctions order may leave defendants wishing they had
just complied with the order to do some depositions in New
York.

2
  (...continued)
order put together a package of sanctions, just as a criminal sentence can
package several different sanctions for intended effects. When appellate
review removes one piece from a sentencing package, the usual effect of the
remand is to let the district court revisit the entire package. See, e.g., United
States v. White, 406 F.3d 827, 831–33 (7th Cir. 2005) (collecting cases and
explaining practice); United States v. Smith, 103 F.3d 531, 534–35 (7th Cir.
1996); United States v. Shue, 825 F.2d 1111, 1113–14 (7th Cir. 1987), quoting
United States v. DiFrancesco, 449 U.S. 117, 135 (1980) (“The Constitution does
not require that sentencing should be a game in which a wrong move by the
judge means immunity for the prisoner.”). The district court should revisit
the entire package now that this relatively mild sanction about deposition
location has been removed.