Failure to Produce Slack Messages and the Smoking Gun

In a case involving misappropriation of trade secrets, an employee of Red Wolf Energy Trading allegedly used the company’s proprietary software to place mock trades on behalf of BIA Capital Management. The presiding judge, Massachusetts District Judge Mark L. Wolf stated, “This case has generated more meritorious motions to compel and for sanctions against defendants for failure to produce documents than any other case in which this court has presided in more than 37 years.”

In 2021, defendant Greg Moeller twice filed sworn affidavits on behalf of the defendants, claiming to have complied with the discovery requirements. The defendants later produced documents including Slack communications that should have been produced in 2019 and others significant to the plaintiff’s claims. Plaintiff believed that it still had not received all the relevant Slack messages and, in June 2022, filed a Second Motion for Sanctions. Judge Wolf awarded a default judgment sanction against the defendants for “repeated” discovery misconduct, including failing to produce a smoking gun Slack exchange between Moeller and defendant Michael Harradon. Wolf stated that “default judgments are justified and the Rule 37(b)(2) sanction most appropriate to do justice in this case and to send a message to other litigants that it is perilous to repeatedly disobey court orders.“