U.S. International Trade Commission (ITC) Administrative Law Judge Thomas B. Pender (ALJ) recently imposed sanctions on Apple due to the intentional misrepresentations of fact in the opening statement and briefing.1 This sua sponte ruling indicates an increased willingness by the ITC to police alleged misconduct, and may potentially embolden litigants to independently seek sanctions.
The ALJ characterized Apple's attempt to "blame the misrepresentation" on a combination of a miscommunication with an associate and the press of litigation as "the legal equivalent to 'the dog ate my homework excuse.'"2 The ALJ expressly concluded that "without sufficient or credible reason or excuse, [Apple] misrepresented the facts and its intentions to Complainant and me and therefore caused additional confusion, expenditures, delay, and increased the potential for injustice."3
The provision invoked by the ALJ, 19 C.F.R. § 210.4, is the ITC analog to Fed. R. Civ. P. 11. It was only after the ALJ ordered Apple to show cause why it should not be sanctioned4 and entertained briefing that he made his findings. The sanction imposed was reimbursement to the opposing party of all legal fees incurred during a certain time period to deal with the representation that was found to be false.5
Historically, ALJs have shown little appetite for imposing sanctions such as these. The last time that sanctions were imposed sua sponte by an ITC ALJ for alleged misrepresentations was in 2005.6 The pace of ITC proceedings does not afford the tribunal or parties time for satellite proceedings. The ALJ's decision to expend scarce judicial resources7 in this undertaking, thus, is particularly noteworthy.
Apple will be entitled to Commission review of the ALJ's imposition of sanctions, and may expect some relief, at least in the amount of damages awarded. In its review of the last sua sponte imposition of sanctions by an ALJ, the Commission held that the monetary penalty must be only so much as is necessary to deter future misconduct, and must be paid to the U.S. Treasury (not the opposing party).8
Opening statements at ITC hearings are unlike those before juries in district courts. Not every ALJ welcomes an opening statement since the ALJ is already familiar with the case from the required extensive pre-hearing briefing. Accordingly, opening statements at the ITC rarely resemble their district court counterparts. A decision sanctioning a party for alleged misrepresentations of fact during an opening statement is a reminder to ITC counsel that all oral representations will be held to as high a degree of veracity in that forum as would any statement before a jury in a district court, irrespective of the ultimate outcome in this case
If you have any questions about this Alert, please contact Rodney R. Sweetland III, any member of the ITC Section 337 Litigation Practice Group or any attorney in the firm with whom you are in regular contact.
1. Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, Inv. No. 337-TA-745, Order No. 34 (April 24, 2012).
2. Id. at 4.
4. Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, Inv. No. 337-TA-745, Order No. 32 (December 15, 2011).
5. Order No. 35 at 5–6.
6. Certain Point of Sale Terminals and Components Thereof, Inv. No. 337-TA-524, Order No. 48 (June 7, 2005).
7. The ITC's caseload is at historically high levels.
8. Certain Point of Sale Terminals and Components Thereof, Inv. No. 337-TA-524, Comm'n Op. at 20–22; 26 (February 28, 2006).
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