Complainants Rohm and Haas Company, Rohm and Haas Chemicals, LLC, and the Dow Chemical Company (collectively "Dow") filed a motion for default and other sanctions against Respondents Organik Kimya San. Ve Tic. A.S., Organik Kimya Netherlands B.V., Organik Kimya U.S., lnc. (collectively "Organik Kimya").

The product at the center of this investigation allowed for the covering of old paint with a new color, using as little paint as possible. The way of hiding existing paint was to use paints with a high "reflectance value," and the best way to make paint with a high reflectance value was to use titanium dioxide (TiO2) in the paint. The more TiO2 used, the higher the reflectance value. However, titanium dioxide was expensive. 

To avoid needing to use as much TiO2, Complainant Rohm and Haas scientists began developing (as early as 1979) opaque polymers that could achieve a high reflectance value when mixed in paint and thus could be substituted for some of the TiO2 currently used. The process the Rohm and Haas scientists developed were first introduced to the coatings market in l982 with its ROPAQUE line of opaque polymers. Dow alleged it owned trade secrets that contained: (1) highly confidential manufacturing instruction for the ROPAQUE-Ultra line of products; and (2) highly confidential recipes for the "seed" polymer used as a starting material for ROPAQUE Ultra products. Organik Kimya hired several former Rohm and Haas employees relevant to this matter, including Dr. Guillenno Perez Lorenzo and Leonardo Strozzi.

While consulting with Dr. Dillip Nene, Dow alleged that one or more of the former Rohm and Haas employees revealed Rohm and Haas trade secrets, which Organik Kimya misappropriated in the development and commercial marketing of its own opaque polymer products. Furthermore, Dow argued that Organik Kimya was responsible for the spoliation of certain evidence that was in the possession of three people: Dr. Dilip Nene, Dr. Guillermo Perez, and Mr. Leonardo Strozzi. 

To prove sanctions are warranted for spoliation of evidence, a party must show: (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed or materially altered; (2) that the records were destroyed or materially altered with a "culpable state of mind;" and (3) that the destroyed or materially altered evidence was "relevant" to the claim or defense of the party that sought the discovery of the spoliated evidence, to the extent that a reasonable fact finder could conclude that it would support that claim or defense. 

The sanctions available for imposition for a parties' failure to make or cooperate in discovery could be found in Rule 210.33. 19 C.F.R. 210.33. "Sanctions for spoliation should be designed 'to punish the spoliator, so as to ensure that it does not benefit from its misdeeds; to deter future misconduct; to remedy, or at least minimize, the evidentiary or financial damages caused by the spoliation; and last, but not least, to preserve the integrity of the judicial process and its truth-seeking function.'"

In his findings of fact, the Administrative Law Judge (ALJ) found that the evidence showed:

• Three days after the ALJ issued its Order No. 16, a large "unallocated" space on Perez's laptop's "C" drive was overwritten by copying the Program Files folder at least one hundred eight (108) times (thus, by copying the Program File folder 108 times, Organik Kimya managed to overwrite one hundred ninety (190) gigabytes worth of unallocated space on Perez's laptop's "C" drive." 

• On the day before the ordered forensic inspection, the evidence showed Organik Kimya ran a program called "CCleaner" "multiple times to delete a large percentage of the C drive and all of the D drive in Dr. Perez's laptop."

• The forensic inspection of Mr. Strozzi's laptop revealed that one day after the ALJ issued a Preservation Order, someone deleted over 2,700 files. These files and folders were not found in the Recycle Bin, indicating that they were deleted in a manner that circumvented the Recycle Bin. Evidence of at least 20 external storage media devices had been connected to his laptop after May 2013. And that these external storage devices were left at a bathroom at a highway rest stop "accidentally." 

• Dr. Nene was served a subpoena for documents and testimony." He insisted that during his four years of consultation with Organik Kimya, the only information he provided involved basic chemistry and plant safety. One document produced by Organik contradicted Dr. Nene's deposition testimony that he did not do any opaque polymers work. At the beginning of the inspection, counsel for Dr. Nene disclosed for the first time that Dr. Nene had replaced his hard drive in mid-2013 and that he no longer had the original hard drive. Dr. Nene further represented that he purchased a new hard drive four months later, which he subsequently installed on his personal laptop without transferring anything over from his old hard drive.

Citing these examples, the ALJ found Organik Kimya's conduct with regard to the laptop it issued to Dr. Perez and that it actually possessed at the time of the spoliation to be more than sufficient to justify the default sanction against Organik Kimya, along with an attorneys' fees Sanction. The ALJ also found Organik Kimya's "contumacious and inexplicable conduct with regard to computer it issued to Mr. Strozzi to be sufficient to independently justify the most severe sanction." While the ALJ found Dow's arguments concerning Dr. Nene to be both attractive and logical, the ALJ did not find sufficient actual proof of bad faith imputable to Organik Kimya. "Nevertheless, the entire chapter with regard to Dr. Nene, including the false statements during his first deposition and that of [Mr. Kaslowski], which appear coordinated, to be more indicative of something I have no adequate sanction to address. Taken together, the facts discussed in this Determination are disheartening and leave all of those who practice before the U.S. International Trade Commission diminished by the experience."

As sanctions for the bad faith spoliation of evidence in this investigation in violation of Commission Rule 210.33(b), the ALJ found Organik Kimya in default with regard to Dow's allegations of trade secret misappropriation and awarded Dow costs and fees. 

Having found Organik Kimya in default, pursuant to 19 C.F.R. 210.17(b)(4). Organik Kimya "shall be deemed to have waived its right to appear, to be served with documents, and to contest the allegations at issue in the investigation."