United States Court of Appeals
for the Federal Circuit
__________________________
MICRON TECHNOLOGY, INC.,
Plaintiff/Counterclaim Defendant-Appellee,
AND
MICRON ELECTRONICS, INC.
AND MICRON SEMICONDUCTOR PRODUCTS, INC.,
Counterclaim Defendants-Appellees,
v.
RAMBUS INC.,
Defendant/Counterclaimant-Appellant.
__________________________
2009-1263
__________________________
Appeal from the United States District Court for the
District of Delaware in case no. 00-CV-792, Judge Sue L.
Robinson.
__________________________
Decided: May 13, 2011
__________________________
MATTHEW D. POWERS, Weil, Gotshal & Manges LLP,
of Redwood Shores, California, argued for plain-
tiff/counterclaim defendant-appellees and counterclaim
defendants appellees. With him on the brief were JARED
BOBROW, JESSICA L. DAVIS, SVEN RAZ; and LISA R. ESKOW,
of Austin, Texas.
MICRON TECHNOLOGY v. RAMBUS 2
CARTER G. PHILLIPS, Sidley Austin LLP, of Washing-
ton, DC, argued for defendant/counterclaimant-appellant.
With him on the brief were ROLLIN A. RANSOM, ERIC A.
SHUMSKY, ERIC M. SOLOVY, RACHEL H. TOWNSEND, RYAN
C. MORRIS. Of counsel was PETER S. CHOI. Of counsel on
the brief were RICHARD G. TARANTO, Farr & Taranto, of
Washington, DC; and GREGORY P. STONE, PAUL J.
WATFORD, and FRED A. ROWLEY, JR., Munger, Tolles &
Olson LLP, of Los Angeles, California; and MICHAEL J.
SCHAENGOLD, Patton Boggs LLP, of Washington, DC.
__________________________
Before NEWMAN, LOURIE, BRYSON, GAJARSA and LINN,
Circuit Judges.
Opinion for the court filed by Circuit Judge LINN, with
whom NEWMAN, LOURIE, and BRYSON, Circuit Judges,
join.
Concurring-in-part, dissenting-in-part opinion filed by
Circuit Judge GAJARSA.
LINN, Circuit Judge.
Rambus Inc. (“Rambus”) appeals the decision of the
United States District Court for the District of Delaware
holding that the twelve Rambus patents asserted against
Micron Technology, Inc., Micron Electronics, Inc., and
Micron Semiconductor Products, Inc. (collectively, “Mi-
cron”) are unenforceable due to Rambus’s spoliation of
documents. Micron Tech., Inc. v. Rambus Inc., 255 F.R.D.
135 (D.Del. 2009) (“Decision”). Rambus also appeals the
district court’s order piercing Rambus’s attorney-client
privilege on the basis of the crime-fraud exception, Micron
Tech, Inc. v. Rambus Inc., No. 00-792 (D. Del. Feb. 10,
2006) (“Privilege”), and denial of Rambus’s motion to
transfer to the Northern District of California, Micron
3 MICRON TECHNOLOGY v. RAMBUS
Tech, Inc. v. Rambus Inc., No. 00-792 (D. Del. June 14,
2007) (“Transfer”). For the reasons discussed below, this
court affirms-in-part, vacates-in-part, and remands.
I. BACKGROUND
This case and the companion case of Hynix Semicon-
ductor Inc. v. Rambus Inc., Nos. 2009-1299, -1347 (Fed.
Cir. May 13, 2011) (“Hynix II”) (decided contemporane-
ously herewith), concern a group of U.S. patents issued to
Rambus covering various aspects of dynamic random
access memory (“DRAM”). Although semiconductor
memory chips have been used in computers for decades,
advances in other aspects of computer technology by the
early 1990s created a bottleneck in the ability of com-
puters to process growing amounts of data through the
memory. At least two related methods were discovered of
building memory chips (and the interfaces between mem-
ory chips and computer processors) in a way that elimi-
nated or minimized this bottleneck. The founders of
Rambus, Mike Farmwald and Mark Horowitz, developed
one of these methods, which Rambus later commercialized
as Rambus DRAM, or RDRAM. The original Rambus
applications claim the inventions included in RDRAM.
Rambus believed that Farmwald’s and Horowitz’s inven-
tion was broad enough to encompass synchronous dy-
namic random access memory, or SDRAM, the other type
of new memory technology.
Farmwald and Horowitz did not initially file patent
applications with claims explicitly directed at SDRAM.
However, after Rambus’s tenure and resignation as a
member of the standard setting Joint Electron Devices
Engineering Council (“JEDEC”), Rambus amended its
claims to cover the SDRAM technology adopted as the
standard by JEDEC. See generally Rambus Inc. v. In-
fineon Techs. AG, 318 F.3d 1081 (Fed. Cir. 2003) (“In-
MICRON TECHNOLOGY v. RAMBUS 4
fineon”) (discussing Rambus’s participation in JEDEC).
The patents at issue here and their enforceability against
SDRAM products have been the subject of numerous suits
in district courts, the Federal Trade Commission, the
International Trade Commission, and this court. How-
ever, this court has never finally and definitively resolved
the question of whether Rambus engaged in spoliation in
connection with this litigation.
The present appeal began when Micron filed a de-
claratory judgment action against Rambus, asserting that
Micron’s production of SDRAM products do not infringe
Rambus’s patents and that Rambus’s patents are invalid,
unenforceable, and violate antitrust laws. The district
court separated the case into three proceedings: (1) unen-
forceability due to spoliation, (2) invalidity, and (3) in-
fringement. The court held a bench trial on the spoliation
issue, and concluded that the patents in suit were unen-
forceable against Micron because Rambus had engaged in
spoliation by intentionally destroying relevant, discover-
able documents in derogation of a duty to preserve them.
The district court thus did not reach the validity or in-
fringement issues. On appeal, Rambus argues that the
trial court clearly erred in determining that Rambus
spoliated documents, acted in bad faith, and prejudiced
Micron. Rambus also argues that the district court
abused its discretion by dismissing the case as a sanction
for the spoliation. Rambus also puts forth two procedural
arguments: (1) that the district court erred by requiring
the production of documents allegedly subject to attorney-
client privilege; and (2) that the district court erred by
denying Rambus’s motion to transfer the litigation to the
Northern District of California.
The record is lengthy but uncomplicated. In 1990,
Farmwald and Horowitz filed their first patent applica-
tion directed to improving the speed with which computer
5 MICRON TECHNOLOGY v. RAMBUS
memory can function. Rambus was founded the same
year to commercialize this invention. Rambus developed
its proprietary RDRAM technology, and licensed chip
makers to manufacture memory chips incorporating this
technology. Around this time, JEDEC was working to
develop industry standard specifications for memory chips
and the interfaces between memory chips and computer
processor chips, eventually adopting its first SDRAM
standard in 1993. In approximately 1992, Rambus
learned of SDRAM and came to believe that the Farm-
wald and Horowitz invention encompassed SDRAM.
Rambus continued prosecuting multiple patent applica-
tions in the Farmwald/Horowitz family, intending to
obtain issued patent claims that covered SDRAM. Ram-
bus thereafter pursued a two-prong business strategy: it
licensed chip makers to manufacture chips that complied
with Rambus’s proprietary RDRAM standards, and
prepared to demand license fees and to potentially bring
infringement suits against those manufacturers who
insisted on adopting the competing SDRAM standard
instead.
The first prong of Rambus’s strategy went smoothly
for some time. In 1996, Intel licensed the RDRAM tech-
nology and adopted it as the memory interface technology
for its next generation microprocessors. Rambus negoti-
ated licenses with eleven DRAM manufacturers to pro-
duce RDRAM-compliant chips for Intel’s use. By the fall
of 1999, though, these manufacturers had failed to deliver
the promised manufacturing capacity, and Intel was
therefore beginning to rethink its adoption of RDRAM.
Rambus contends that only after RDRAM failed to be-
come a market leader in late 1999 did it to put into action
the second prong of its business strategy, to seek licensing
revenue (and litigation damages) from those manufactur-
ers adopting SDRAM.
MICRON TECHNOLOGY v. RAMBUS 6
Micron disagrees, arguing that Rambus was planning
litigation against SDRAM manufacturers at the same
time it was seeking to license RDRAM manufacturers.
In 1997, Rambus hired Joel Karp as its vice-president
in charge of intellectual property, and on January 7, 1998,
Karp was directed by Rambus’s CEO Tate to develop a
strategy for licensing and litigation. Karp then met with
several transactional attorneys at Cooley Godward.
Because they were not litigation specialists, they referred
Karp to Dan Johnson, a litigation partner at Cooley
Godward. Karp met Johnson on February 12, 1998. At
the meeting with Johnson, Karp discussed licensing
accused infringers, mentioning royalty rates that were so
high that Johnson said “you’re not going to have a licens-
ing program, you’re going to have a lawsuit on your
hands.” Karp said Rambus needed to get “battle-ready,”
by which he meant that Rambus needed to be ready for
litigation. Johnson also advised putting into place a
document-retention policy. In March 1998, Karp pre-
sented his proposal for a licensing and litigation strategy
to the Rambus board of directors. He proposed a 5%
royalty on SDRAM, a rate within the range that had
prompted Johnson to say that litigation would inevitably
follow. In the course of presenting the litigation strategy,
Karp recommended implementing a document-retention
policy.
In August or September 1998, Rambus hired outside
counsel to perform licensing and patent prosecution work
as well as to begin preparing for litigation against
SDRAM manufacturers. In October 1998, Karp advised
Rambus executives that he was planning to assert Ram-
bus’s patents against SDRAM manufacturers in the first
quarter of 2000, explaining that there were good business
reasons for the delay in bringing suit, particularly Ram-
bus’s interest in getting licensing revenues from RDRAM
7 MICRON TECHNOLOGY v. RAMBUS
manufacturers, who would be the same parties it would
seek to license for the production of SDRAM. In Novem-
ber 1998, Rambus executives held an offsite strategy
meeting. The meeting notes show that Rambus planned
to eventually assert its patents against SDRAM, even if
the RDRAM adoption strategy succeeded. In approxi-
mately December 1998, Karp drafted a memo describing a
possible “nuclear winter” scenario under which Intel
moved away from RDRAM. The memo outlined plans for
suing Intel and SDRAM manufacturers, saying that “by
the time we do this, the proper litigants will be obvious.”
The memo also noted that infringement claim charts for
Micron devices had already been completed by December
1998. On April 15, 1999, Karp met with Rambus’s outside
counsel at Fenwick & West to “discuss [Rambus’s] patent
portfolio and potential litigation.”
Thereafter, in 1998, Rambus also began implementing
the portion of Karp’s litigation strategy that required the
institution of a document-retention policy. In the second
quarter of 1998, Rambus established “Top Level Goals”
for “IP Litigation Activity.” These goals included
“[p]ropos[ing] [a] policy for document retention.” In the
third quarter of 1998, Rambus established “Key Goals” for
“IP Litigation Activity.” These goals included
“[i]mplement[ing] [a] document retention action plan.”
On July 22, 1998, Karp presented the finished document
retention policy to Rambus employees. The slides used
for this presentation were titled “BEFORE LITIGATION:
A Document Retention/Destruction Policy.” The policy
explicitly stated that destruction of relevant and discov-
erable evidence did not need to stop until the commence-
ment of litigation. Despite the policy’s stated goal of
destroying all documents once they were old enough, Karp
instructed employees to look for helpful documents to
MICRON TECHNOLOGY v. RAMBUS 8
keep, including documents that would “help establish
conception and prove that [Rambus had] IP.”
The document destruction policy extended to the de-
struction of backups of Rambus’s internal email. On
March 16, 1998, an internal Rambus email discussed the
“growing worry” that email backup tapes were “discover-
able information,” and discussions began regarding how
long to keep these backup tapes. On May 14, 1998, Ram-
bus implemented a new policy of keeping email backup
tapes for only 3 months. Karp said that keeping tapes for
any longer period of time was shot down by “Rambus’[s]
litigation counsel.” Consistent with this policy, in July
1998, Rambus magnetically erased all but 1 of the 1,269
tapes storing its email backups from the previous several
years. The one exempted was a document that helped
Rambus establish a priority date, and, as discussed below,
Rambus went through great lengths to restore that docu-
ment from the backup tapes.
In addition to destroying the email backup tapes,
Rambus began destroying paper documents in accordance
with its newly-adopted document-retention policy. On
September 3-4, 1998, Rambus held its first “shred day” to
implement the policy. In April 1999, Karp instructed
Lester Vincent, Rambus’s outside patent prosecution
counsel at Blakeley Sokoloff, to implement the Rambus
document-retention policy with respect to Rambus docu-
ments in Vincent’s possession. Vincent complied, discard-
ing material from his patent prosecution files. Vincent
continued discarding material through at least July 1999.
He discarded draft patent applications, draft patent
claims, draft patent amendments, attorney notes, and
correspondence with Rambus.
In June 1999, the first patent in suit issued. On June
24, 1999, Karp was instructed by the Rambus CEO to
9 MICRON TECHNOLOGY v. RAMBUS
“hammer out . . . our strategy for the battle with the first
target that we will launch in October [1999].” In June 27,
1999, Rambus established its “IP 3Q ’99 Goals,” including
goals for “Licensing/Litigation Readiness.” These goals
included “[p]repar[ing] litigation strategy against 1 of the
3 manufacturers,” being “[r]eady for litigation with 30
days notice,” and “[o]rganiz[ing] [the] 1999 shredding
party at Rambus.” Planning for litigation continued
when, on July 8, 1999, Fenwick & West prepared a time-
line for the proposed patent infringement suits showing
that Rambus planned to file a patent infringement com-
plaint on October 1, 1999.
On August 26, 1999, Rambus held the “shredding
party” it had planned as part of its third-quarter intellec-
tual property litigation readiness goals. Rambus de-
stroyed between 9,000 and 18,000 pounds of documents in
300 boxes.
Litigation did not ultimately start as planned on Oc-
tober 1, 1999. Still, conditions eventually deteriorated to
the point that Rambus felt it could no longer delay the
litigation it had started planning in early 1998. As noted
above, in the fall of 1999, several RDRAM manufacturers
failed to deliver on their promised production of RDRAM
chips, causing Intel to rethink its commitment to
RDRAM. On September 24, 1999, Karp spoke to Rambus
executives, telling them that the industry did not respect
Rambus’s intellectual property and that Rambus would
“have to ultimately pursue remedies in court.” Karp
asked the board to approve his licensing and litigation
strategy, and the board did so. In October 1999, Rambus
approached Hitachi, seeking license payments for Hi-
tachi’s manufacture of SDRAM. In November 1999,
negotiations with Hitachi broke down. Rambus instituted
a litigation hold in December 1999, and Rambus sued
Hitachi on January 18, 2000. The suit against Hitachi
MICRON TECHNOLOGY v. RAMBUS 10
was settled on June 22, 2000. In the meantime, Rambus
negotiated SDRAM licenses with Toshiba, Oki, and NEC.
Rambus continued to litigate against the members of the
chip-making industry by bringing suit against Infineon on
August 8, 2000. Infineon, 155 F. Supp. 2d at 671. Before
that litigation began, Rambus’s in-house counsel re-
minded Rambus executives on July 17, 2000, to continue
destroying drafts and other materials related to license
negotiations.
On August 18, 2000, Rambus approached Micron
about the possibility of Micron taking a license for its
SDRAM production. Micron filed a declaratory judgment
action against Rambus in the District of Delaware on
August 28, 2000, asserting invalidity, non-infringement,
and unenforceability. The following day, Hynix Semicon-
ductor filed a similar declaratory judgment suit against
Rambus in the Northern District of California. Hynix
Semiconductor, Inc. v. Rambus, Inc., 591 F. Supp. 2d 1038
(N.D. Cal. 2006) (“Hynix I”). The issue of whether Ram-
bus had destroyed relevant documents after it had a duty
to begin preserving documents was litigated in both suits.
The Northern District of California reached the issue
first. Following a bench trial, that court ruled in January
2006 that “Rambus did not actively contemplate litigation
or believe litigation against any particular DRAM manu-
facturer to be necessary or wise before its negotiation with
Hitachi failed, namely in [November] 1999.” Id. at 1064.
The Northern District of California ruled that this made
Rambus’s adoption of its document-retention policy in
mid-1998 a permissible business decision, and the de-
struction of documents pursuant to that policy did not
constitute spoliation. Id. The appeal of that decision is
the subject of the companion Hynix case decided herewith.
Hynix II, Nos. 2009-1299, -1347.
11 MICRON TECHNOLOGY v. RAMBUS
Meanwhile, in the Micron litigation in the District of
Delaware, Micron sought access to communications
between Rambus and its attorneys relating to the adop-
tion of Rambus’s document-retention policy. Courts in
Hynix and Infineon had previously required production of
these documents, and in February 2006, the District of
Delaware agreed after finding that the adoption of the
policy on the advice of counsel raised the likelihood that
Delaware and California criminal statutes prohibiting
destruction of evidence had been violated. The court held
that the attorney-client privilege could be breached under
the crime-fraud exception because Rambus and its coun-
sel had possibly committed a crime. Following this deci-
sion and the favorable ruling of the Northern District of
California on the spoliation issue, Rambus sought on
February 14, 2006, to have the Micron case transferred to
the Northern District of California. The District of Dela-
ware denied the motion to transfer.
In November 2007, the District of Delaware held a
bench trial on the unclean-hands issue asserted by Mi-
cron. Stopping short of reaching the unclean-hands claim,
the district court found that Rambus had engaged in
spoliation; the court accordingly entered judgment in
Micron’s favor as a spoliation sanction. The court found
that litigation was reasonably foreseeable to Rambus “no
later than December 1998, when Karp had articulated a
time frame and a motive for implementation of the Ram-
bus litigation strategy.” The district court thus ruled that
documents destroyed after December 1998 were inten-
tionally destroyed in bad faith. The district court con-
cluded that the only reasonable sanction for the
intentional destruction of documents was to hold Ram-
bus’s patents in suit unenforceable against Micron. Ram-
bus timely appealed.
MICRON TECHNOLOGY v. RAMBUS 12
II. DISCUSSION
A. Spoliation
As the Supreme Court has noted, “[d]ocument reten-
tion policies, which are created in part to keep certain
information from getting into the hands of others, includ-
ing the Government, are common in business. It is, of
course, not wrongful for a manager to instruct his em-
ployees to comply with a valid document retention policy
under ordinary circumstances.” Arthur Andersen LLP v.
United States, 544 U.S. 696, 704 (2005) (internal citation
and quotation marks omitted). Thus, “a party can only be
sanctioned for destroying evidence if it had a duty to
preserve it.” Zubulake v. UBS Warburg LLC, 220 F.R.D.
212, 216 (S.D.N.Y. 2003). The duty to preserve evidence
begins when litigation is “pending or reasonably foresee-
able.” Silvestri v. General Motors Corp., 271 F.3d 583,
590 (4th Cir. 2001). See also West v. Goodyear Tire &
Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) (applying the
same standard). Thus, “[s]poliation refers to the destruc-
tion or material alteration of evidence or to the failure to
preserve property for another’s use as evidence in pending
or reasonably foreseeable litigation.” Silvestri, 271 F.3d
at 590. This is an objective standard, asking not whether
the party in fact reasonably foresaw litigation, but
whether a reasonable party in the same factual circum-
stances would have reasonably foreseen litigation.
When litigation is “reasonably foreseeable” is a flexi-
ble fact-specific standard that allows a district court to
exercise the discretion necessary to confront the myriad
factual situations inherent in the spoliation inquiry.
Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d
Cir. 2001). This standard does not trigger the duty to
preserve documents from the mere existence of a potential
claim or the distant possibility of litigation. See, e.g.,
13 MICRON TECHNOLOGY v. RAMBUS
Trask-Morton v. Motel 6 Operating L.P., 534 F.3d 672,
681-82 (7th Cir. 2008). However, it is not so inflexible as
to require that litigation be “imminent, or probable with-
out significant contingencies,” as Rambus suggests. Reply
Br. of Rambus at 4. Rambus’s proposed gloss on the
“reasonably foreseeable” standard comes from an overly
generous reading of several cases. See Burlington N. &
Santa Fe Ry. Co. v. Grant, 505 F.3d 1013, 1032 (10th Cir.
2007) (noting that “[a] spoliation sanction is proper where
(1) a party has a duty to preserve evidence because it
knew, or should have known, that litigation was immi-
nent, and (2) the adverse party was prejudiced by the
destruction of the evidence” (emphasis added); Trask-
Morton, 534 F.3d at 681 (citing Burlington for the propo-
sition that “courts have found a spoliation sanction to be
proper only where a party has a duty to preserve evidence
because it knew, or should known, that litigation was
imminent,” but holding that “Motel 6 had no reason to
suspect litigation until—at the earliest—Morton’s attor-
ney sent Motel 6 a demand letter” after the alleged spolia-
tion (emphases added)). Burlington merely noted that
imminent litigation was sufficient, not that it was neces-
sary for spoliation, and on the easy facts of Trask-Morton,
it was decided that the alleged spoliator did not even
“suspect” litigation. This court declines to sully the
flexible reasonably foreseeable standard with the restric-
tive gloss proposed by Rambus in light of the weight of
contrary authority and the unnecessary generosity that
such a gloss would extend to alleged spoliators. See
Silvestri, 271 F.3d at 591; West, 167 F.3d at 779 (“Spolia-
tion is the destruction or significant alteration of evi-
dence, or the failure to preserve property for another’s use
as evidence in pending or reasonably foreseeable litiga-
tion.”); Kronisch v. United States, 150 F.3d 112, 126 (2d
Cir. 1998) (“This obligation to preserve evidence arises
when the party has notice that the evidence is relevant to
MICRON TECHNOLOGY v. RAMBUS 14
litigation . . . as for example when a party should have
known that the evidence may be relevant to future litiga-
tion.”); MOSAID Techs. Inc. v. Samsung Elecs. Co., 348 F.
Supp. 2d 332, 336 (D.N.J. 2004) (noting that a litigant “is
under a duty to preserve what it knows, or reasonably
should know, will likely be requested in reasonably fore-
seeable litigation”); Scott v. IBM Corp., 196 F.R.D. 233,
249 (D.N.J. 2000) (same). See also United States v. Rock-
well Int’l, 897 F.2d 1255, 1266 (3rd Cir. 1990) (holding
that for attorney work product to be shielded by the work
product privilege, “[l]itigation need not be imminent . . .
as long as the primary motivating purpose behind the
creation of the document was to aid in possible future
litigation.” (internal citations omitted)). Moreover, it
would make little sense to enjoin document destruction
only when the party clears all the hurdles on the litiga-
tion track, but endorse it when the party begins the race
under the reasonable expectation of clearing those same
hurdles. Thus, the proper standard for determining when
the duty to preserve documents attaches is the flexible
one of reasonably foreseeable litigation, without any
additional gloss.
After carefully reviewing the record, the district court
determined that “litigation was reasonably foreseeable no
later than December 1998, when Karp had articulated a
time frame and a motive for implementation of the Ram-
bus litigation strategy.” Decision, 255 F.R.D. at 150. In
coming to this conclusion, the district court applied the
correct standard, noting that “[a] duty to preserve evi-
dence arises when . . . . litigation is pending or imminent,
or when there is a reasonable belief that litigation is
foreseeable.” Id. at 148.
This court reviews the district court’s factual findings,
such as the date at which litigation was reasonably fore-
seeable, for clear error. Citizens Fed. Bank v. United
15 MICRON TECHNOLOGY v. RAMBUS
States, 474 F.3d 1314, 1321 (Fed. Cir. 2007); Port Auth. of
N.Y. & N.J. v. Arcadian Corp., 189 F.3d 305, 315 (3d Cir.
1999); Brewer v. Quaker State Oil Ref. Corp., 72 F.3d 326,
334 (3d Cir. 1995). Rambus argues that when litigation
was reasonably foreseeable is a “mixed question of law
and fact reviewed de novo.” However, the cases it cites do
not support such a standard in this context. For example,
Traveler’s Indemnity v. Ewing, Cole, Erdman & Eubank,
711 F.2d 14 (3d Cir. 1983), addressed the “issue of
whether the level of care exercised by the defendant
measured up to the standard expected of reasonably
prudent architects” as a mixed question of law and fact.
Id. at 17. However, that question is more about whether
a duty is breached than when the duty commenced.
Similarly inapposite, Pell v. E.I. DuPont de Nemours, 539
F.3d 292 (3d Cir. 2008), concluded that “the District
Court’s determination that 1972 is the appropriate ad-
justed service date is a mixed conclusion of law and fact,”
and that this question is broken down into its “compo-
nents and [the appeals court applies] the appropriate
standard of review to each component.” Id. at 305. Pell
does not specify whether the date at which the duty arises
is a law component or a fact component, and thus does not
persuade this court to review the issue de novo. In a
variety of contexts, foreseeability of an event is a tradi-
tional issue of fact, and is reviewed with deference to the
district court. Cates v. Dillard Dep’t Stores, Inc., 624 F.3d
695, 697 (5th Cir. 2010) (noting that whether a risk of
harm was reasonably foreseeable is a question of fact);
Citizens Fed. Bank v. United States, 474 F.3d 1314, 1321
(Fed. Cir. 2007) (noting that “[f]oreseeability is a question
of fact reviewed for clear error” in the damages context);
United States v. Cover, 199 F.3d 1270, 1274 (11th Cir.
2000) (reasonable foreseeability of a co-conspirators
actions is a question of fact). This court likewise applies a
clear error standard of review.
MICRON TECHNOLOGY v. RAMBUS 16
The district court found that Rambus destroyed rele-
vant, discoverable documents beginning in July 1998,
with the first major shred day occurring in September
1998. The court found that the destruction continued at
least through November 1999, with another major shred
day occurring in August 1999. In addition, the district
court found that Rambus ordered its outside patent
prosecution counsel to purge his files relating to the
prosecution of the prospective patents in suit in April
1999. There is ample evidence to support all these find-
ings, and they are not seriously disputed even by Rambus.
The exact date at which litigation was reasonably fore-
seeable is not critical to this decision; the real question is
binary: was litigation reasonably foreseeable before the
second shred day or after? Therefore, the question this
court must answer is whether the district court clearly
erred when it determined that, at some time before the
second shred day in August of 1999, litigation was rea-
sonably foreseeable. This court cannot conclude that the
district court clearly erred for at least the following five
reasons.
First, it is certainly true that most document reten-
tion policies are adopted with benign business purposes,
reflecting the fact that “litigation is an ever-present
possibility in American life.” Nat’l Union Fire Ins. v.
Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir.
1992). In addition, there is the innocent purpose of sim-
ply limiting the volume of a party’s files and retaining
only that which is of continuing value. One might call it
the “good housekeeping” purpose. Thus, where a party
has a long-standing policy of destruction of documents on
a regular schedule, with that policy motivated by general
business needs, which may include a general concern for
the possibility of litigation, destruction that occurs in line
with the policy is relatively unlikely to be seen as spolia-
17 MICRON TECHNOLOGY v. RAMBUS
tion. Here, however, it was not clear error for the district
court to conclude that the raison d’être for Rambus’s
document retention policy was to further Rambus’s litiga-
tion strategy by frustrating the fact-finding efforts of
parties adverse to Rambus. This is a natural reading of
getting “[b]attle ready.” The preparation of the document
retention policy was one of Rambus’s “IP Litigation Activ-
ity” goals in the second and third quarters of 1998. When
the finished document retention policy was presented to
Rambus employees, the presentation slides used were
titled “BEFORE LITIGATION: A Document Reten-
tion/Destruction Policy.” The policy explicitly stated that
destruction of relevant and discoverable evidence did not
need to stop until the actual commencement of litigation.
Despite the policy’s stated goal of destroying all docu-
ments once they were old enough, employees were in-
structed to look for helpful documents to keep, including
documents that would “help establish conception and
prove that [Rambus had] IP,” and they did keep these
documents. Moreover, on March 16, 1998, an internal
Rambus e-mail noted a “growing worry” that email
backup tapes were “discoverable information,” and dis-
cussions began regarding how long to keep these backup
tapes. On May 14, 1998, Rambus implemented a new
policy of keeping email backup tapes for only 3 months.
Karp said that keeping tapes for any longer period of time
was shot down by “Rambus’[s] litigation counsel.” Karp
also noted that if anyone had questions about the docu-
ment retention policy, they could contact him, but that he
“would prefer to discuss [the] issue face to face,” and that
if they did send e-mails, to “keep them brief, and keep the
distribution narrow.” Shortly after the email backup
destruction policy was instituted, all of Rambus’s old
backup tapes were destroyed. Taken together, the im-
plementation of a document retention policy as an impor-
tant component of a litigation strategy makes it more
MICRON TECHNOLOGY v. RAMBUS 18
likely that litigation was reasonably foreseeable Cf.
United States v. Adlman, 134 F.3d 1194, 1203 (2d Cir.
1998) (adopting a test for work product immunity where a
document is prepared in anticipation of litigation where
the document “can fairly be said to have been prepared or
obtained because of the prospect of litigation”) (emphasis
added) (citing 8 Charles Alan Wright, Arthur R. Miller,
and Richard L. Marcus, Federal Practice and Procedure §
2024, at 343 (1994)).
Second, Rambus was on notice of potentially infring-
ing activities by particular manufacturers. Once the
patent issued, the gun was loaded; when the targets were
acquired, it was cocked; all that was left was to pull the
trigger by filing a complaint. While it may not be enough
to have a target in sight that the patentee believes may
infringe, the knowledge of likely infringing activity by
particular parties makes litigation more objectively likely
to occur because the patentee is then more likely to bring
suit. Here, numerous internal documents manifest Ram-
bus’s plan “to play [its] IP card with the DRAM compa-
nies” against SDRAM products, either through a patent
infringement or a breach of contract suit. See Decision,
255 F.R.D. at 138-48 (noting that even in the early 1990s,
Rambus was already “concerned that DRAM manufactur-
ers were using Rambus’[s] technology to develop their own
competing DRAMs,” and detailing Rambus’s campaign to
capitalize on non-compliant products’ infringement); id. at
144 (“The [Nuclear Winter Memorandum] indicated
specifically that Rambus already had claim charts show-
ing that Micron infringed one of the Rambus patents.”).
See also Br. of Rambus’s at 34 (“Rambus therefore feared
that demanding licenses on non-compatible products (let
alone initiating litigation) would risk undermining its
relationships with the very DRAM manufacturers its
business strategy depended upon.”). In addition, the bulk
19 MICRON TECHNOLOGY v. RAMBUS
of the discussions between CEO Tate, Karp, and Ram-
bus’s attorneys related to SDRAM and Rambus’s licensing
(as Rambus argues) or litigation (as Micron argues) plans.
Either way, Rambus was on notice of activities it believed
were infringing. Cf. Schmid v. Milwaukee Elec. Tool
Corp., 13 F.3d 76, 81 (3d Cir. 1994) (overturning a district
court spoliation sanction in part because the plaintiff’s
expert’s destruction of evidence occurred when “no suit
had been filed and Schmid did not know whether he had a
basis for instituting suit.”). Indeed, Rambus was more
than on notice because, by its own admission, it actively
broadened its claims to cover JEDEC standard-compliant
products, and, according to the testimony of CEO Tate, it
knew that those products would infringe its claims.
Third, Rambus took several steps in furtherance of
litigation prior to its second shredding party on August
26, 1999. Karp had already concluded that Rambus would
“need to litigate against someone to establish [a] royalty
rate and have [the] court declare [the Rambus] patent[s]
valid,” had prioritized defendants and forums, had cre-
ated claim charts and determined an expected timeline
for litigation that it would “launch in October [1999],”
and had as its goal to “be ready for litigation with 30 days
notice” “against 1 of the 3 manufacturers” by the third
quarter of 1999. On June 24, 1999, Karp was instructed
by CEO Tate to “hammer out . . . our strategy for the
battle with the first target that we will launch in October
[1999].” The first steps toward this litigation were spelled
out on June 27, 1999, when Rambus established “IP 3Q
’99 Goals,” including goals for “Licensing/Litigation
Readiness.” These goals included “[p]repar[ing] litigation
strategy against 1 of the 3 manufacturers,” being “[r]eady
for litigation with 30 days notice,” and “[o]rganiz[ing]
[the] 1999 shredding party at Rambus.” Planning for
litigation continued when, on July 8, 1999, Rambus’s
MICRON TECHNOLOGY v. RAMBUS 20
outside litigation counsel, Fenwick & West, prepared a
timeline for the proposed patent infringement suits show-
ing that Rambus planned to file complaints on October 1,
1999. Indeed, the second shredding party was itself part
of Rambus’s third-quarter intellectual property litigation
readiness goals.
Rambus strongly argues that the steps it did not yet
take in furtherance of litigation, i.e. the contingencies,
compel a finding that litigation was not reasonably fore-
seeable. Rambus cites the contingencies accepted by
Judge Whyte in the companion Hynix case as precluding
Rambus from reasonably foreseeing litigation:
(1) the direct RDRAM ramp had to be suf-
ficiently developed so as not to jeopardize
RDRAM production; (2) Rambus’s patents
covering non-RDRAM technology had to
issue; (3) product samples from potentially
infringing DRAM manufacturers had to be
available in the market; (4) the non-
compatible products had to be reverse en-
gineered and claim charts made showing
coverage of the actual products; (5) Ram-
bus’s board had to approve commencement
of negotiations with a DRAM manufac-
turer; and (6) the targeted DRAM manu-
facturer had to reject Rambus’s licensing
terms.
Hynix, 591 F. Supp. 2d at 1062. It is of course true that
had these contingencies been cleared, litigation would
have been more foreseeable. However, it was not clear
error to conclude that overcoming the contingencies was
reasonably foreseeable. For example, Rambus makes
much of the inadvisability of jeopardizing its relationship
with the manufacturers through litigation over SDRAM,
21 MICRON TECHNOLOGY v. RAMBUS
because those same manufacturers were producing
RDRAM, which Rambus hoped would become the market
leader. However, as was made clear in the Nuclear
Winter Memorandum, if RDRAM did not become a mar-
ket leader, Rambus would go after the manufacturers of
SDRAM and if RDRAM did become a market leader, and
the RDRAM ramp “reache[d] a point of no return,” then
Rambus could come out from “stealth mode,” and could
then “ROCK THE DIRECT BOAT” because the manufac-
turers would be locked in to the RDRAM standard. Hence
the use of definitive language of future intention, such as
asking “WHAT’S THE RUSH [to assert patents against
RDRAM partners]?” and noting that it should “not asserts
patents against Direct [RDRAM] partners until ramp
reaches a point of no return (TBD).” (emphasis added).
Similarly, obtaining product samples would certainly be a
reasonably foreseeable event, particularly because Ram-
bus had explicitly broadened its claim coverage in prose-
cution to cover standard-compliant products, which, by
the terms of the standard, all the manufacturers would
meet. It was also reasonably foreseeable that the manu-
facturers would reject Rambus’s licensing terms, because
Karp proposed a five percent royalty rate to the board in
March 1998 that attorney Johnson had called “ridiculous,”
and that the Cooley attorneys informed him would result
in a lawsuit. In December 1998 or January 1999, Karp
opined that in situations where Rambus was “not inter-
ested in settling,” they should propose a royalty rate
between five and ten percent, and noted that “we should
not be too concerned with settlement at this point and
should push for very high rates.” It is thus not clear error
to conclude that Rambus reasonably foresaw that the
manufacturers would reject its licensing offer. The same
is true for the other listed contingencies. Thus, Rambus’s
preparations for litigation prior to the critical date, in-
cluding choosing and prioritizing manufacturers to sue,
MICRON TECHNOLOGY v. RAMBUS 22
selecting forums in which to bring suit within a planned
time-frame, creating claim charts, and including litigation
as an essential component of its business model, support
the district court’s decision that Rambus reasonably
foresaw litigation before the second shredding party on
August 26, 1999.
Fourth, Rambus is the plaintiff-patentee, and its deci-
sion whether to litigate or not was the determining factor
in whether or not litigation would in fact ensue. In other
words, whether litigation was reasonably foreseeable was
largely dependent on whether Rambus chose to litigate.
It is thus more reasonable for a party in Rambus’s posi-
tion as a patentee to foresee litigation that does in fact
commence, than it is for a party in the manufacturers’
position as the accused. 1
Fifth, as discussed above, the relationship between
Rambus and the manufacturers involving RDRAM did not
make litigation significantly less likely, it only delayed
the initiation of litigation until the manufacturers were
either too invested in RDRAM for the SDRAM litigation
to negatively impact Rambus’s sales, or until Rambus had
no choice but to sue because RDRAM was rejected. In
general, when parties have a business relationship that is
mutually beneficial and that ultimately turns sour, spark-
ing litigation, the litigation will generally be less foresee-
able than would litigation resulting from a relationship
that is not mutually beneficial or is naturally adversarial.
Thus, for example, document destruction occurring during
the course of a long-standing and untroubled licensing
relationship relating to the patents and the accused
1 A similar reasoning may apply to accused infring-
ers where there is declaratory judgment jurisdiction
under MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118,
127 (2007), because the accused infringer is then in the
same position to control litigation as the patentee.
23 MICRON TECHNOLOGY v. RAMBUS
products that ultimately become the subject of litigation is
relatively unlikely to constitute spoliation, while destruc-
tion of evidence following repeated failures of a licensee to
properly mark products or remit royalties, is more likely
to constitute spoliation. Because the relationship regard-
ing RDRAM did nothing to make litigation significantly
less likely, and because Rambus and the manufacturers
did not have a longstanding and mutually beneficial
relationship regarding SDRAM, Rambus cannot use its
delay tactics regarding RDRAM to undermine the other
considerations herein discussed.
Rambus argues that the district court clearly erred in
setting December 1998 as the date at which litigation was
reasonably foreseeable, because the only happening on
that date was the issuance of the Nuclear Winter Memo-
randum, which addressed Rambus’s potential response to
the “very unlikely” scenario that Intel would drop its
support for RDRAM. Rambus argues that a document
addressing such a contingency cannot form the basis for
reasonably foreseeable litigation. The district court found
that litigation was reasonably foreseeable “no later than
December 1998, when Karp had articulated a time frame
and a motive for implementation of the Rambus litigation
strategy.” Decision, 255 F.R.D. at 150. The important
inquiry is not whether a particular document made litiga-
tion reasonably foreseeable, but whether the totality of
the circumstances as of the date of document destruction
made litigation reasonably foreseeable. As discussed
above, there was no clear error in the district court’s
holding that they did.
This court thus affirms the district court’s determina-
tion that Rambus destroyed documents during its second
shred day in contravention of a duty to preserve them
and, thus, engaged in spoliation.
MICRON TECHNOLOGY v. RAMBUS 24
B. The District Court’s Choice of Sanction
District courts have the “inherent power to control
litigation,” West, 167 F.3d at 779, by imposing sanctions
appropriate to rectify improper conduct by litigants.
Schmid, 13 F.3d at 78. Such sanctions may include
dismissal. Leon v. IDX Sys. Corp., 464 F.3d 951, 958 (9th
Cir. 2006). The particular sanction imposed is within the
sound discretion of the district court in exercising its
inherent authority and in assuring the fairness of the
proceedings before it. See Silvestri, 271 F.3d at 590 (quot-
ing Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991))
(“The right to impose sanctions for spoliation arises from
a court’s inherent power to control the judicial process
and litigation, but the power is limited to that necessary
to redress conduct ‘which abuses the judicial process.’”).
As such, the district court’s choice of sanction is reviewed
for an abuse of discretion. Mindek v. Rigatti, 964 F.2d
1369, 1373-74 (3d Cir. 1992).
Rambus challenges the district court’s imposition of
the dispositive sanction of dismissal, arguing that Micron
failed to prove bad faith or prejudice, and that the district
court was limited to applying some lesser sanction than
dismissal. This court addresses Rambus’s arguments in
turn.
i. Bad Faith
To make a determination of bad faith, the district
court must find that the spoliating party “intended to
impair the ability of the potential defendant to defend
itself.” Schmid, 13 F.3d at 80. See also Faas v. Sears,
Roebuck & Co., 532 F.3d 633, 644 (7th Cir. 2008) (“A
document is destroyed in bad faith if it is destroyed ‘for
the purpose of hiding adverse information.’”) (citation
omitted); In re Hechinger Inv. Co. of Del., Inc., 489 F.3d
568, 579 (3d Cir. 2007) (noting that bad faith requires a
25 MICRON TECHNOLOGY v. RAMBUS
showing that the litigant “intentionally destroyed docu-
ments that it knew would be important or useful to [its
opponent] in defending against [the] action”); Anderson v.
Cryovac, Inc., 862 F.2d 910, 925 (1st Cir. 1988) (finding
bad faith “where concealment was knowing and purpose-
ful,” or where a party “intentionally shred[s] documents in
order to stymie the opposition”); Gumbs v. Int’l Harvester,
Inc., 718 F.2d 88, 96 (3d Cir. 1983) (noting that an ad-
verse inference from destruction of documents is permit-
ted only when the destruction was “intentional, and
indicates fraud and a desire to suppress the truth”) (cita-
tion omitted). The fundamental element of bad faith
spoliation is advantage-seeking behavior by the party
with superior access to information necessary for the
proper administration of justice.
Here, the district court’s analysis of bad faith follows
its conclusion on spoliation and does not fully explain the
factual underpinnings of its bad faith determination:
55. The court concludes that litigation
was reasonably foreseeable no later than
December 1998, when Karp had articu-
lated a time frame and a motive for im-
plementation of the Rambus litigation
strategy. Moreover, because the document
retention policy was discussed and
adopted within the context of Rambus’
litigation strategy, the court finds that
Rambus knew, or should have known, that
a general implementation of the policy
was inappropriate because the documents
destroyed would become material at some
point in the future. Therefore, a duty to
preserve potentially relevant evidence
arose in December 1998 and any docu-
ments purged from that time forward are
MICRON TECHNOLOGY v. RAMBUS 26
deemed to have been intentionally de-
stroyed, i.e. destroyed in bad faith.
Decision, 255 F.R.D. at 150. A determination of bad faith
is normally a prerequisite to the imposition of dispositive
sanctions for spoliation under the district court’s inherent
power, and must be made with caution. In determining
that a spoliator acted in bad faith, a district court must do
more than state the conclusion of spoliation and note that
the document destruction was intentional. See Mathis v.
John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir.
1998) (“That the documents were destroyed intentionally
no one can doubt, but ‘bad faith’ means destruction for the
purpose of hiding adverse information.”) (emphasis
added). From the district court’s sparse analysis, this
court is unable to determine whether the district court
applied the applicable exacting standard in making its
factual determination that Rambus acted in bad faith.
The district court’s opinion alludes to several key
items, including: (1) facts tending to show that Rambus’s
document retention policy was adopted within the aus-
pices of a firm litigation plan rather than merely carried
out despite the reasonable foreseeability of such litigation,
e.g., Decision ¶¶ 17, 53, 55 and n.29; (2) facts tending to
show the selective execution of the document retention
policy, e.g., Decision ¶ 13 and n. 23, 27; (3) facts tending to
show Rambus’s acknowledgement of the impropriety of
the document retention policy, e.g., Decision ¶¶ 6, 38 and
n.24, 47; and (4) Rambus’s litigation misconduct, Decision
¶¶ 37-39. While these items may lead to a determination
of bad faith, the district court did not make clear the basis
on which it reached that conclusion.
“It is not our task to make factual findings,” Golden
Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367,
1380 (Fed. Cir. 2010), and we will leave it to the district
27 MICRON TECHNOLOGY v. RAMBUS
court’s sound discretion on remand to analyze these, and
any other, relevant facts as they apply to the determina-
tion of bad faith, see Thomas v. Capital Sec. Servs., Inc.,
836 F.2d 866, 873 (5th Cir. 1988) (en banc) (“[T]he district
court will have a better grasp of what is acceptable trial-
level practice among litigating members of the bar than
will appellate judges.”).
We note that the district court applied a “knew or
should have known” standard in its bad faith determina-
tion. On remand, the district court should limit its bad
faith analysis to the proper inquiry: whether Rambus
“intended to impair the ability of the potential defendant
to defend itself,” Schmid, 13 F.3d at 80, without regard to
whether Rambus “should have known” of the propriety of
its document destruction.
Litigations are fought and won with information. If
the district court finds facts to conclude that Rambus’s
goal in implementing its document retention policy was to
obtain an advantage in litigation through the control of
information and evidence, it would be justified in making
a finding of bad faith. If, on the other hand, the district
court determines that Rambus implemented its document
retention policy for legitimate business reasons such as
general house-keeping, a finding of bad faith would be
unwarranted. Without a finding either way, however,
“the opinion explaining the decision lacks adequate fact
findings, [and] meaningful review is not possible.” Denni-
son Mfg. Co. v. Panduit Corp., 475 U.S. 809, 811 (1986).
This court therefore remands for the district court to
further assess the factual record in reaching a determina-
tion on bad faith.
ii. Prejudice
Prejudice to the opposing party requires a showing
that the spoliation “materially affect[s] the substantial
MICRON TECHNOLOGY v. RAMBUS 28
rights of the adverse party and is prejudicial to the pres-
entation of his case.” Wilson v. Volkswagen of Am., Inc.,
561 F.2d 494, 504 (4th Cir. 1977) (internal quotation
marks omitted). In satisfying that burden, a party must
only “come forward with plausible, concrete suggestions as
to what [the destroyed] evidence might have been.”
Schmid, 13 F.3d at 80 (emphases added). See also Leon,
464 F.3d at 960 (“[B]ecause any number of the 2,200 files
could have been relevant to IDX’s claims or defenses,
although it is impossible to identify which files and how
they might have been used. . . . the district court did not
clearly err in its finding of prejudice.”). If it is shown that
the spoliator acted in bad faith, the spoliator bears the
“heavy burden” to show a lack of prejudice to the opposing
party because “[a] party who is guilty of . . . intentionally
shredding documents . . . should not easily be able to
excuse the misconduct by claiming that the vanished
documents were of minimal import.” Anderson v. Cry-
ovac, Inc., 862 F.2d 910, 925 (1st Cir. 1988). See also
Coates v. Johnson & Johnson, 756 F.2d 524, 551 (7th Cir.
1985) (“The prevailing rule is that bad faith destruction of
a document relevant to proof of an issue at trial gives rise
to a strong inference that production of the document
would have been unfavorable to the party responsible for
its destruction.”).
It is undisputed that Rambus destroyed between
9,000 and 18,000 pounds of documents in 300 boxes. The
district court concluded that the destroyed documents
were relevant to at least the following defenses, which
would have been “illuminated by evidence of a non-public
nature, e.g. by internal Rambus documents”: “unenforce-
ability due to patent misuse and violation of the antitrust
and unfair competition laws (based in part on Rambus’s
conduct at JEDEC), as well as inequitable conduct.”
Decision, 255 F.R.D. at 150-51. Documents relating to
29 MICRON TECHNOLOGY v. RAMBUS
Rambus’s conduct at JEDEC, together with documents
reflecting Rambus’s instructions to its patent prosecution
counsel concerning its conduct at JEDEC, could have
helped resolve Micron’s claims relating to patent misuse,
antitrust violations, and unfair competition. Documents
reflecting Rambus’s knowledge of relevant prior art
references could have helped resolve Micron’s inequitable
conduct claims. On the other hand, because it is not clear
what documents were destroyed, it may be, as Rambus
argues, that all the documents destroyed were either
redundant or irrelevant to the trial.
The proper resolution of this issue turns largely on
whether Rambus has the burden to show lack of prejudice
or Micron has the burden to show prejudice. As discussed
above, this turns on whether the district court, on re-
mand, concludes that Rambus was a bad faith spoliator.
The question of prejudice is therefore also remanded.
iii. Dispositive Sanction
In addition to reassessing on remand its determina-
tion of bad faith and prejudice, the district court should
also explain the reasons for the propriety of the sanction
chosen (if any) based on the degree of bad faith and preju-
dice and the efficacy of other lesser sanctions.
Dismissal is a “harsh sanction,” to be imposed only in
particularly egregious situations where “a party has
engaged deliberately in deceptive practices that under-
mine the integrity of judicial proceedings.” Leon, 464 F.3d
at 958 (internal citations omitted). This court agrees that
such sanctions should not be imposed unless there is clear
and convincing evidence of both bad-faith spoliation and
prejudice to the opposing party. Shepherd v. ABC, 62
F.3d 1469, 1472, 1477 (D.C. Cir. 1995) (noting that dis-
missal requires proof by clear and convincing evidence);
Gates Rubber Co. v. Bando Chem. Indus., Ltd., 167 F.R.D.
MICRON TECHNOLOGY v. RAMBUS 30
90, 108 (D. Colo. 1996) (requiring clear and convincing
evidence because “[t]o do otherwise would be to contra-
vene the strong public policy which favors adjudication of
cases on their merits”). Moreover, the presence of bad
faith and prejudice, without more, do not justify the
imposition of dispositive sanctions. In gauging the pro-
priety of the sanction, the district court must take into
account “(1) the degree of fault of the party who altered or
destroyed the evidence; (2) the degree of prejudice suffered
by the opposing party; and (3) whether there is a lesser
sanction that will avoid substantial unfairness to the
opposing party and, where the offending party is seriously
at fault, will serve to deter such conduct by others in the
future.” Schmid, 13 F.3d at 79 (emphases added). See
also Leon, 464 F.3d at 958 (noting that the district court
must consider “(1) the public’s interest in expeditious
resolution of litigation; (2) the court’s need to manage its
dockets; (3) the risk of prejudice to the party seeking
sanctions; (4) the public policy favoring disposition of
cases on their merits; and (5) the availability of less
drastic sanction”). The sanction ultimately imposed must
be commensurate with the analysis of these factors.
The district court must “select the least onerous sanc-
tion corresponding to the willfulness of the destructive act
and the prejudice suffered by the victim.” Schmid, 13
F.3d at 79 (citing Jamie S. Gorelick, Steven Marzen and
Lawrence Solum, Destruction of Evidence, § 3.16, p. 117
(1989)). While the district court noted that “[s]anctions
such as adverse jury instructions and preclusion of evi-
dence are impractical, bordering on meaningless, under
these circumstances and in the context of a typical jury
trial,” and that “the simple imposition of fees and costs is
wholly inadequate under the facts of this case,” Decision,
255 F.R.D. at 151, it did not explain why only dismissal
would “vindicate the trifold aims of: (1) deterring future
31 MICRON TECHNOLOGY v. RAMBUS
spoliation of evidence; (2) protecting the defendants’
interests; and (3) remedying the prejudice defendants
suffered as a result of [Rambus’s] actions.” See West, 167
F.3d at 180.
If the district court again concludes on remand that
there was bad faith and prejudice, the record evidence
may indeed justify a dispositive sanction, but the serious-
ness of such a sanction warrants an analysis of all of the
factors discussed above. Cf. Roadway Express v. Piper,
447 U.S. 752, 764 (1980) (noting that because “inherent
powers are shielded from direct democratic controls,” they
“must be exercised with restraint and discretion”).
C. Piercing of the Attorney-Client Privilege
The district court’s spoliation rulings depended in
part on evidence from communications between Rambus
and its attorneys; these communications were in the
record only because they had been ordered produced by
Rambus after the district court pierced the attorney-client
privilege that otherwise would protect the communica-
tions from disclosure. Rambus appeals the privilege-
piercing ruling, arguing that the district court erred by
finding that Micron had made the required prima facie
showing that Rambus had committed or intended to
commit a fraud or crime and that the attorney-client
communications in question were in furtherance of that
crime or fraud.
Rambus is correct that the crime-fraud exception to
the attorney-client privilege requires such a prima facie
showing. In re Grand Jury Subpoena, 223 F.3d 213, 217
(3d Cir. 2000). But making a prima facie showing is “not
a particularly heavy” burden, In re Grand Jury Investiga-
tion, 445 F.3d 266, 274-75 (3d Cir. 2006), and this court
agrees with the district court that Micron did indeed carry
that burden here. Specifically, there was enough evidence
MICRON TECHNOLOGY v. RAMBUS 32
to find a likely violation of § 135 of the California Penal
Code, which provides that
[e]very person who, knowing that any book, paper,
record, instrument in writing or other matter or
thing is about to be produced in evidence upon
any trial, inquiry, or investigation whatever, au-
thorized by law, willfully destroys or conceals the
same, with intent thereby to prevent it from being
produced, is guilty of a misdemeanor.
As discussed above, there is ample evidence that Rambus
destroyed documents in its possession knowing that they
would likely be forced to be produced in litigation and
intending to prevent that production. There is also ample
evidence that Rambus devised this strategy partly on the
basis of the advice it received from its outside counsel.
The only question therefore is whether the documents
Rambus destroyed were “about to be produced in evi-
dence,” or whether the delay of some months between
Rambus’s destruction of the evidence and Rambus’s final
decision to file suit against Hitachi eliminates any possi-
bility that this element of the California statute could be
satisfied.
Rambus argues that the “about to be produced in evi-
dence” element of § 135 has been interpreted to “connote[]
an immediacy or temporal closeness” between the de-
struction of the evidence and the time when it was to be
produced and that such “temporal closeness” is missing
here. People v. Prysock, 127 Cal. App. 3d 972, 1000-01
(Cal. App. 5th Dist. 1982). However, Prysock is distin-
guishable. There, the criminal defendant committed
murder and, shortly thereafter, burned the clothes he
wore while committing the crime. Id. at 981. Because no
“law enforcement investigation . . . had started” at the
time the defendant destroyed his clothes, and because
33 MICRON TECHNOLOGY v. RAMBUS
“law enforcement was [not] . . . looking for the” clothes at
the time they were destroyed, the California court found
no violation of § 135. Id. at 1001. In Prysock, then, the
defendant controlled the timing of the destruction of
relevant evidence, while law enforcement, acting inde-
pendently, controlled the timing of the initiation of the
investigation that would trigger the application of § 135.
Here, by contrast, Rambus controlled the timing of both
events. It would make no sense to allow Rambus to
escape liability, criminal or otherwise, by intentionally
destroying evidence and then waiting for an arbitrary
period of time before choosing to file suit. Moreover, it is
not clear that California courts would interpret the stat-
ute in such a way as to make the initiation of the “investi-
gation” the time when Rambus filed its complaint.
Instead, the statute could just as reasonably be inter-
preted such that it would be violated by the intentional
destruction of evidence at any time after Rambus began
preparing to file this suit. Interpreted this way, Rambus’s
preparations to file this suit in early 1998 began the civil
equivalent of the criminal law-enforcement investigation
in Prysock, and Rambus’s destruction of documents in late
1998 and 1999 violated § 135 if, as noted above, Rambus
intentionally destroyed those documents with the inten-
tion of keeping them from being produced in the ensuing
litigation. This is clearly a different situation from that
encountered in Prysock, and this court sees no error in the
district court’s distinguishing that case. Because the
district court properly found that Micron made a prima
facie showing that (1) Rambus willfully destroyed docu-
ments it knew would have to be produced in the litigation
it intended to initiate against Hitachi, (2) Rambus de-
stroyed those documents in order to keep them from being
produced, and (3) Rambus began destroying those docu-
ments based on communications from its litigation coun-
sel advising it to begin destroying discoverable
MICRON TECHNOLOGY v. RAMBUS 34
information, this court agrees with the district court’s use
of the crime-fraud exception to pierce the attorney-client
privilege
D. Denial of Transfer
The final issue on appeal concerns the district court’s
denial of Rambus’s motion to transfer this case to the
Northern District of California. As discussed above,
Rambus filed its first suit against SDRAM manufacturers
in January 2000. Micron filed the present declaratory
judgment action against Rambus in August 2000. The
following day, Hynix filed suit against Rambus in the
Northern District of California. The present case was
stayed at Rambus’s request on June 28, 2002, with the
stay apparently lifted in late 2004. Meanwhile, proceed-
ings continued in the Hynix matter in the Northern
District of California. In that case, in January 2006, the
U.S. District Court for the Northern District of California
decided that there had been no spoliation by Rambus.
Following that favorable ruling, Rambus moved to trans-
fer the present case to the Northern District of California
on February 14, 2006. The Delaware district court denied
the motion to transfer on March 29, 2006. At the time of
Rambus’s motion to transfer, the present case had been
pending for five and a half years, and there was a trial
schedule already in place.
In an oral ruling from the bench, the district court re-
ferred to Rambus’s motion to transfer “as clear and obvi-
ous a case of forum shopping as has probably ever existed
in the federal judiciary,” thanks to the motion’s coming
hard on the heels of the favorable spoliation ruling in the
Northern District of California. The district court
weighed several factors, including the forum-shopping
allegation (weighing against transfer), the plaintiff’s
choice of forum (weighing against transfer), the conven-
35 MICRON TECHNOLOGY v. RAMBUS
ience of the witnesses (not weighing in favor of either
transferring or not transferring), and the fact that trial
was scheduled and imminent (weighing against transfer).
Based on these factors, the district court denied the
transfer motion.
This court reviews this issue under the law of the
relevant regional circuit. The Third Circuit reviews
denials of motions to transfer for abuse of discretion.
Jumara v. State Farm Ins., 55 F.3d 873, 878 (3d Cir.
1995). Rambus argues that the district court abused its
discretion here because there were other cases regarding
the same patents pending in the Northern District of
California, and avoiding having the same issues litigated
in multiple forums is the “paramount consideration” when
deciding whether to transfer a case. But, as Micron
points out, treating consolidation of related cases as
“paramount” generally involves transferring all the cases
to the same forum where the earliest-filed action is pend-
ing. Here, the earliest-filed case is the present one,
pending in Delaware; the cases in the Northern District of
California were all filed later. Thus, the “paramount
consideration” might help in an argument to transfer the
Hynix case to the District of Delaware, but it does nothing
to support Rambus’s argument in favor of transferring
this case to the Northern District of California.
Moreover, every other factor either is neutral or sup-
ports the district court’s decision not to transfer the case:
(1) Rambus waited over five years to ask for this case to
be transferred, (2) the motion to transfer came just
months before a scheduled trial, and (3) Rambus filed the
transfer motion only a month after receiving a favorable
ruling by the proposed transferee court, strongly suggest-
ing forum shopping. This forum-shopping should be
discouraged, arguing strongly in favor of denying the
transfer motion. The district court also pointed out that
MICRON TECHNOLOGY v. RAMBUS 36
the convenience of the witnesses did not favor either
forum, because most of the witnesses were employees of
or consultants to the parties and could therefore be en-
couraged to testify in either forum, even if they could not
be compelled to testify in Delaware. This was correct, not
least because Rambus had earlier tried to move a related
case out of the Northern District of California, arguing
that it was inconvenient for its witnesses to testify there.
Given that both parties were incorporated in Delaware,
they had both willingly submitted to suit there, which
weighs in favor of keeping the litigation in Delaware.
Finally, Rambus had previously filed other litigation
regarding the same patents (against Hitachi) in the
District of Delaware, suggesting that it had no difficulty
litigating a patent infringement suit in that court. Given
that all the relevant factors either favor denying the
transfer motion or are neutral, this court holds that the
district court did not abuse its discretion by refusing to
transfer this case to the Northern District of California,
and therefore affirms the district court’s denial of Ram-
bus’s motion to transfer.
III. CONCLUSION
For the reasons stated above, this court affirms the
district court’s determination that Rambus spoliated
documents, but vacates the district court’s dismissal
sanction, and remands for further consideration consis-
tent with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED
37 MICRON TECHNOLOGY v. RAMBUS
COSTS
Each party shall bear its own costs.
United States Court of Appeals
for the Federal Circuit
__________________________
MICRON TECHNOLOGY, INC.,
Plaintiff/Counterclaim Defendant-Appellee,
AND
MICRON ELECTRONICS, INC.
AND MICRON SEMICONDUCTOR PRODUCTS, INC.,
Counterclaim Defendants-Appellees,
v.
RAMBUS INC.,
Defendant/Counterclaimant-Appellant.
__________________________
2009-1263
__________________________
Appeal from the United States District Court for the
District of Delaware in case no. 00-CV-792, Judge Sue L.
Robinson.
__________________________
GAJARSA, Circuit Judge, concurring-in-part and dissent-
ing-in-part.
While I agree with the majority that there was spolia-
tion of evidence by Rambus, I dissent from that part of the
majority’s opinion that remands for a reexamination of
the evidence for bad faith and vacates the district court’s
sanction award. Even though the majority applauds with
one hand the district court’s “inherent power to control
litigation,” West v. Goodyear Tire & Rubber Co., 167 F.3d
MICRON TECHNOLOGY v. RAMBUS 2
776, 779 (2d Cir. 1999), with the other hand it strangles
this power by vacating the district court’s sanction award.
Indeed, the majority does not review the district court’s
sanction award for an abuse of discretion, instead it
reviews the facts and weighs the evidence before it substi-
tutes its judgment for that of the district court, deciding
that based on the district court’s thorough factual analy-
sis, it would not have granted the dispositive sanctions.
Because we should not “disarm the [district] court of its
important power to police its proceedings to ensure trans-
parency and predictability and to discourage mischievous
conduct by litigants,” I dissent. 1 Transclean Corp. v.
Bridgewood Servs., Inc., 290 F.3d 1364. 1374 (Fed. Cir.
2002).
The district court found that Rambus’ conduct “im-
pugned” the very integrity of the judicial system. Micron
Tech., Inc. v. Rambus Inc., 255 F.R.D. 135, 151 (D. Del.
1 Separately, the majority’s discussion of what con-
stitutes reasonably foreseeable litigation in its spoliation
analysis is troubling. See Majority Op. at 12-14. Because
the Third Circuit has not spoken on the outer bounds of
reasonably foreseeable litigation, this court may look to
the law of other circuits to help inform the issue. Loctite
Corp. v. Ultraseal Ltd., 781 F.2d 861, 875 (Fed. Cir. 1985),
overruled on other grounds by Nobelpharma AB v. Im-
plant Innovations, Inc., 141 F.3d 1059 (Fed. Cir. 1998).
While I believe the majority is correct that circuits gener-
ally do not require “imminent litigation” for it to be rea-
sonably foreseeable, the majority uses its “flexible”
standard to overturn the district court’s finding of no
spoliation in Hynix Semiconductor, Inc. v. Rambus, Inc.,
No. 2009-1299, -1347, slip op. at 12-13 (Fed. Cir. May 13,
2011), the companion to this case. I disapprove of this
backdoor imposition of Federal Circuit law in place of that
of the regional circuit and additionally dissent from the
portion of the majority’s Hynix opinion that overturns the
district court’s spoliation determination.
3 MICRON TECHNOLOGY v. RAMBUS
2009) (“District Court Op.”). In so doing, Rambus also
abused the privilege of owning a patent monopoly. “As
recognized by the Constitution, [a patent] is a special
privilege designed to serve the public purpose of promot-
ing the ‘Progress of Science and useful Arts’” and “is an
exception to the general rule against monopolies and to
the right to access to a free and open market.” Precision
Instrument Mfg. Co. v. Automotive Maint. Mach. Co., 324
U.S. 806, 816 (1945). Thus, the public has a “paramount
interest in seeing that patent monopolies spring from
backgrounds free from fraud or other types of inequitable
conduct . . . .” Id. Here, Rambus abused its privilege by
intentionally—as found by the district court—destroying
evidence in bad faith to protect its exclusive monopoly.
Instead of recognizing this abuse by Rambus, the ma-
jority searches to find a needle in the haystack because, in
its collective superior judgment, Rambus’ conduct does
not require taking away that privilege. In fact, the major-
ity fails to consider the “high hurdle” that Rambus must
overcome in showing that the district court abused its
discretion. Tex. Digital Sys., Inc. v. Telegenix, Inc., 308
F.3d 1193, 1218 (Fed. Cir. 2002). In so doing, the major-
ity reweighs the evidence and decides that “several key
items” on which the district court relied “may lead to a
determination of bad faith,” but the basis on which the
district court “reached that conclusion” was not “clear.”
Majority Op. at 26-27.
As an appellate court, we should not decide whether
the facts before us “may” lead to a conclusion that we
agree with, but whether by so concluding the district
court abused its discretion. Indeed, “[t]he question, of
course, is not whether . . . the Court of Appeals, would as
an original matter have [resolved the case in the same
way as the District Court]; it is whether the District Court
abused its discretion in so doing.” Nat’l Hockey League v.
MICRON TECHNOLOGY v. RAMBUS 4
Metro. Hockey Club, Inc., 427 U.S. 639, 642 (1977) (cita-
tions omitted) (rejecting appellate court’s reweighing of
evidence and upholding district court’s imposition of
terminating sanctions for discovery violations as this did
not amount to an abuse of discretion).
Here, the district court followed the appropriate Third
Circuit standard and provided ample basis in fact for its
decision to award dispositive sanctions. District Court
Op. at 148-51. In the Third Circuit, a spoliating party
acts in bad faith when it “intended to impair the ability of
the potential defendant to defend itself.” Schmid v.
Milwaukee Elec. Tool Corp., 13 F.3d 76, 80 (3d Cir. 1994).
Under this standard, the district court did not abuse its
discretion in finding that Rambus did, in fact, act in bad
faith.
First, Rambus used its document retention plan to
disguise and hide its destruction of relevant documents.
Rambus “instructed patent counsel to purge [its] patent
files,” which would have at least been relevant to inequi-
table conduct. District Court Op. at 150. Further, Mi-
cron’s defenses of patent misuse and violations of unfair
trade and antitrust laws could all be “illuminated by
evidence of a non-public nature, e.g., by internal Rambus
documents,” id. at 151, which almost certainly could have
been included in the 300 boxes of documents destroyed in
the second shred day in August 1999, id. at 145, or the
480 boxes destroyed on December 28, 2000, id. at 147.
The district court, however, did not make a blanket
determination that Rambus’ document destruction im-
peded all of Micron’s defenses. In fact, the district court
found Micron’s ability to assert anticipation and obvious-
ness would not have been impaired by Rambus’ spoliation,
as the prior art used to assert such defenses is publicly
available. Id.
5 MICRON TECHNOLOGY v. RAMBUS
Second, Rambus’ document retention policy informed
employees they should “LOOK FOR THINGS TO KEEP,”
including documents that would help establish conception
but “expunge” “documents questioning the patentability of
Rambus inventions.” Id. at 142 n.26. This policy re-
mained in effect even after December 1998, the date after
which destruction of documents was deemed to be spolia-
tion. Id. at 150.
Third, Rambus’ own documents (or, more accurately,
those that did not make it to the shredding bin) demon-
strate that it was aware that its document retention
policy resulted in destruction of documents relevant to
litigation. Outside counsel Neil Steinberg e-mailed Ram-
bus executives on July 12, 2000 explaining his desire for a
new document retention policy that “is similar to the
previous policy—however, this time the IP group will
attempt to execute the policy more effectively.” Id. at 147
n.57. In addition, Rambus’ numerous misrepresentations
about its document retention policy during the litigation
are evidence, as found by the district court, of a guilty
conscience. Id. at 147-48, 151.
In criticizing the district court’s sanctions award, the
majority claims that the district court must explain the
propriety of the sanction “based on the degree of bad faith
and prejudice and the efficacy of other sanctions.” Major-
ity Op. at 30. This misstates the analysis a district court
must undertake to award sanctions for spoliation in the
Third Circuit. Schmid requires that a district court
determine:
(1) the degree of fault of the party who altered or
destroyed the evidence; (2) the degree of prejudice
suffered by the opposing party; and (3) whether
there is a lesser sanction that will avoid substan-
tial unfairness to the opposing party and, where
MICRON TECHNOLOGY v. RAMBUS 6
the offending party is seriously at fault, will serve
to deter such conduct by others in the future.
13 F.3d at 79 (citations omitted). With regard to the first
factor, the district court must determine the “degree of
fault” of the spoliating party, not the degree of bad faith.
It is incongruous to establish a “degree” of bad faith—a
party either did or did not act in bad faith. Indeed,
Schmid recognized this by defining bad faith as whether
the spoliator “intended to impair the ability of the poten-
tial defendant to defend itself . . . .” Id. at 80 (emphasis
added). Requiring degrees of bad faith is the equivalent
of finding whether or not a party is “just a little bit preg-
nant.” The majority’s desire for the district court to define
how “bad is bad” is contrary to Third Circuit law, which
this court must apply.
The majority further states that the district court
failed to satisfy the third Schmid factor by not explaining
how holding Rambus’ patents unenforceable would deter
future spoliation of evidence, protect Micron’s interests,
and remedy the prejudice to Micron. Majority Op. at 31.
Not only is this contrary to the record, but the majority is
now creating requirements for the imposition of disposi-
tive sanctions that do not exist in the controlling regional
circuit law. As explained above, the district court did not
abuse its discretion in finding that Rambus acted in bad
faith or that the destruction of these documents prevented
Micron from mounting an appropriate defense. Further,
the district court specifically found that any sanction
other than a dispositive one would be “impractical [and]
border[] on meaningless” due to the egregiousness of
Rambus’ conduct. District Court Op. at 151. Indeed,
Rambus’ conduct “impugned” “the very integrity of the
litigation process.” Id. Obviously, a dispositive sanction
will serve to deter others from the egregious conduct seen
7 MICRON TECHNOLOGY v. RAMBUS
here. There is no better way for the district court to have
complied with the third Schmid factor.
In vacating the sanctions award, the majority has
called the firing squad to the ready, the squad cocking
their guns and taking aim, but instead of shooting the
appropriate and culpable party, the squad aimed at the
district court’s proper determinations of fact. The major-
ity selectively chooses those facts that support its desired
outcome, while ignoring those that do not. Weighing
evidence as a fact finder is not our function as an appel-
late court. If the evidence that was considered and
weighed by the district court is objectively analyzed by
this court under the abuse of discretion standard, it would
lead all reasonable people to affirm. See Gen. Elec. Co. v.
Joiner, 522 U.S. 136, 143 (1997) (holding that the appel-
late court erred in excluding expert testimony by “apply-
ing an overly ‘stringent’ review to that ruling[ and
thereby] fail[ing] to give the trial court the deference that
is the hallmark of abuse-of-discretion review”). On re-
mand, the district court would not, in my judgment, need
to review any additional evidence; it may only be required
to parse the facts more specifically and again determine
that the only appropriate sanction for Rambus’ egregious
conduct is dismissal of this suit. Moreover, I agree with
the district court that under these facts, such a sanction
would be appropriate.
In substituting its own views for those of the district
court, the majority directly interferes with the sound
discretion of the trial courts in managing their cases and
prevents them from protecting the litigation process,
which they are inherently bound to do. Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 404 (1990) (“Deference to
the determination of courts on the front lines of litigation
will enhance these court’s ability to control litigants
before them.”). Because the majority ignores this essen-
MICRON TECHNOLOGY v. RAMBUS 8
tial and inherent power of the district court, I dissent
from its vacateur of the sanction imposed by the district
court.