## Facts

- Purchasers of certain Toshiba laptop computers brought a consumer class action alleging a defect; the merits settlement was not at issue on appeal.
- Former class counsel Lori J. Sklar sought exceptionally large attorney-fee awards, supported primarily by her claimed hours and produced PDF time records.
- Sklar represented she worked extreme hours (up to 16 hours per day, seven days a week, for 22 months), prompting a challenge to the authenticity and reliability of her records.
- In fee discovery, Toshiba sought native electronic time records and metadata to test the genuineness of Sklar’s billing entries.
- The trial court ordered production of the native records and later ordered imaging and inspection of Sklar’s hard drives by an independent forensic expert under a protective order and inspection protocol.
- Sklar failed to cooperate with the protocol and canceled the scheduled inspection shortly before it was to occur, citing privilege concerns despite the protective order.
- The trial court found Sklar not credible, deemed her time records unusable to calculate a lodestar, imposed $165,000 in monetary discovery sanctions, and denied fees for Sklar’s own work while allowing only limited staff-related amounts.
- On appeal, Sklar challenged the sanctions and fee rulings; Toshiba cross-appealed the portion of the award attributed to Sklar’s staff and moved to strike parts of Sklar’s appellate appendix for altering the record.

## Issues

1. Whether the trial court abused its discretion by imposing $165,000 in monetary sanctions for discovery misconduct and noncompliance with orders regarding inspection of electronic billing records.
2. Whether the trial court abused its discretion by denying fees for Sklar’s own work based on credibility findings and rejection of her time records under the lodestar method.
3. Whether portions of Sklar’s appellate appendix improperly altered the trial court record, warranting striking material and appellate sanctions.
4. Whether the nature and seriousness of Sklar’s conduct warranted notice to the State Bar under Business and Professions Code § 6086.7.

## Decision

- The court affirmed the $165,000 monetary sanctions, holding the trial court acted within its discretion in responding to discovery abuse and disobedience of inspection-related orders.
- The court affirmed the effective denial of attorney’s fees for Sklar’s own work because the trial court applied the correct legal standard, found Sklar not credible, and found her records unreliable for lodestar calculation.
- The court affirmed in part and reversed in part the limited staff-fee component and remanded for correction of the amount for one staff member and for determination of any allowable costs subject to a capped maximum.
- The court granted in part the motion to strike and imposed appellate sanctions based on alteration of the record in Sklar’s appendix.
- The court directed transmission of a certified copy of the opinion to the State Bar under Business and Professions Code § 6086.7.

## Legal Principles

- Discovery sanctions orders are reviewed for abuse of discretion; a court may impose substantial monetary sanctions for misuse of discovery and failure to comply with court orders.
- When a fee applicant places time records at issue, the court may compel production of verifiable source materials, including native electronic files and metadata, and may order forensic inspection under protective measures.
- A fee applicant bears the burden of producing credible, reliable evidence supporting the lodestar; where the court finds the records unreliable and the applicant not credible, it may drastically reduce or deny fees.
- Privilege concerns generally must be raised and managed through protective procedures; refusal to comply with discovery orders based on privilege assertions, after protective measures are provided, can support sanctions.
- Material alteration of the appellate record may justify striking the affected materials and imposing appellate sanctions.
- Courts may be required to notify the State Bar when attorney misconduct of the type specified by statute is found in connection with judicial proceedings.

## Conclusion

The court upheld severe consequences for litigation misconduct in a fee dispute, affirming discovery sanctions and denial of fees where counsel obstructed forensic examination of electronic billing records and failed to provide trustworthy support for a lodestar request, while also addressing record integrity on appeal and ordering State Bar notification.


Ellis v. Toshiba Am. Info. Sys., Inc., 218 Cal. App. 4th 853 (Cal. Ct. App. 2013)