Meet and Confer with Kelly Twigger

The $3 Million Lesson in What Not to Do in Discovery

• Kelly Twigger

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What happens when discovery misconduct meets a high-stakes cancer detection technology dispute? A $292.5 million verdict, nearly $3 million in discovery sanctions, and potential disciplinary action against attorneys.

The recent Guardant Health v. Natera litigation serves as a reminder of the devastating consequences of discovery misrepresentations and improper ESI management. At its core, this case involved competing technologies designed to detect minimal residual disease in colorectal cancer patients – a critical advancement that helps determine whether patients need to undergo grueling chemotherapy after initial treatment.

What began as false advertising claims spiraled into a discovery nightmare when Natera's expert witness, Dr. Hochster, failed to disclose his communications about a crucial clinical trial. Despite having early access to negative study results regarding Guardant's product, both Dr. Hochster and Natera's counsel repeatedly claimed ignorance when questioned. The truth only emerged when Guardant subpoenaed Rutgers University directly, uncovering dozens of emails showing the expert's knowledge – including communications where he sent the embargoed study results directly to Natera's attorneys months before they claimed ignorance to the court.

The judge's frustration leaps from the page in these decisions, highlighting statements from counsel in bold text and finding they "knowingly and deliberately misled the court." The sanctions were severe: complete exclusion of the clinical trial evidence, nearly $3 million in attorney fees, and appointment of a special master to determine potential disciplinary measures and state bar referrals for the attorneys involved.

For litigators, this case underscores critical e-discovery principles: never allow witnesses to self-collect documents, implement robust systems to track ESI in complex litigation, and above all – be truthful with the court. When mistakes happen, transparency is the only viable path forward.

Want to avoid multimillion-dollar sanctions and professional discipline? Make ESI management a priority in your practice and remember that in the digital age, deception leaves an electronic trail that persistent investigation will almost always uncover.

Thank you for tuning in to Meet and Confer with Kelly Twigger. If you found today’s discussion helpful, don’t forget to subscribe, rate, and leave a review wherever you get your podcasts. For more insights and resources on creating cost-effective discovery strategies leveraging ESI, visit Minerva26 and explore our practical tools, case law library, and on-demand education from the Academy.

Kelly Twigger:

Hi, and welcome to this week's and the CEO and founder at Minerva 26, where we take the insights from my 28 years as discovery strategist and, together with my team, provide those as a strategic command center for litigators to leverage the power of ESI. Thanks so much for joining me today. Our case of the week segment is brought to you by Minerva 26 in partnership with ACEDS. On this segment, I analyze a recent decision or, in today's case, two decisions on discovery issues involving ESI and talk about why they matter and what you should take away from the court's decision. t's no secret that our rules governing discovery are not keeping pace with technology. That's why judicial decisions interpreting existing rules in the context of today's technology and the electronic evidence that we create using them act as our guide to how to advocate for our clients. Whether those decisions are good or bad, they are the roadmap for lawyers to use to argue about discovery. Now, as always, judicial decisions are as good as the facts and arguments presented to the court. So part of what we talk about here is the lawyering, the good, the bad and the very ugly, and unfortunately, today our decision is a 300 million dollar example of why all attorneys involved in litigation need to understand and implement the principles of e-discovery, specifically, self-collection tracking of issues, knowing what's happening at all times in terms of managing the complexity of high-stakes litigation. In this case, it's self-collection as it pertains to experts. Let's dive into these decisions for this week.

Kelly Twigger:

This week's episode covers two related decisions from the case titled Guardians Health Inc versus Natera Inc. The first is from October 23rd, 2024, and then a follow-up decision from a couple of weeks ago, on July 9th, 2024. And the court also issued a subsequent decision just last week, on July 23rd, regarding special master. That we'll get to as well. Both of the decisions are from United States District Judge Edward Chen. All right, let's take a look at the background for this case.

Kelly Twigger:

Guardian and Natera both make competing detection products for colorectal cancer cells. After a patient is diagnosed with colorectal cancer, a patient's medical team comes up with a plan, and that plan can be surgery or it can be radiation prior to surgery, even after initial treatment for the disease, which again can be either that surgery or that radiation some colorectal cancer patients still have a small number of cells remaining in their body cancer cells that can later multiply and cause recurrence of the disease. That small number of remaining CRC cells is termed minimum residual disease or MRD. Mrd is not detectable with current technologies, so there's often a question of whether or not the patient needs chemotherapy after that initial treatment to try and kill any remaining cells. Chemo is to put it bluntly from someone who's been through it the equivalent of putting poison in your body and a shotgun approach, as it cannot be targeted to the remaining cancer cells. The parties here are trying to fix whether a patient can make a more educated decision about whether they need chemotherapy following initial treatment.

Kelly Twigger:

Natera, the defendant, developed a product called Signatera that uses tumor tissue to detect MRD or tumor-informed assays. I'm very familiar with the Signatera product because I was part of a trial when I was diagnosed with colorectal cancer in 2021. My oncologist enrolled me in a trial with Natera. I didn't get an option to use the Guardian. I just was told that Natera had a trial with Natera. I didn't get an option to use the Guardian. I just was told that Natera had a trial Following surgery to remove my cancer the initial treatment I mentioned. A tissue sample was removed from my tumor and then used to create a unique set of tumor mutations for me. Then that information was used to create a custom circulating tumor DNA or a CTNA test. That test allowed for highly sensitive and specific detection of ctDNA in subsequent blood draws, which could have potentially detected any cancer recurrence or response to treatment earlier than traditional methods of wait and see. Thankfully, my Natera results were always zero post-surgery. But, as my oncologist stated, even if there were values shown indicating recurrence, it didn't help with a treatment plan until they were detectable in a way that helped us identify the location. Guardiant, the plaintiff here, developed a competing product to Signatera called Reveal that uses blood samples to detect ctDNA in the bloodstream or tumor-naive assays. I don't have any familiarity with the Guardant method and, frankly, didn't even know that it existed until I was reading these opinions. It's a different method for trying to identify any minimal residual disease using blood draws instead of the tumor specific version that Signateri uses.

Kelly Twigger:

When cancer is identified in the body, and in my case through a colonoscopy, doctors want to know as much as they can about it to create a treatment plan. Part of how they do that is by taking CT scans or an MRI to detect the size of the tumor and the staging. What you don't learn until you go through the process is that scans are very flat images and they often do not allow for enough visualization to be accurate in terms of staging. That was certainly the case for me. They also cannot detect any minimal growth or stray cancer cells. They can only identify growths that are large enough to be seen on a scan. Once the doctors develop a treatment plan and execute on it, the question then becomes whether the patient may have residual cancer cells that can lead to a recurrence but are not yet detectable on scans. That's the minimal recurrence. It's a scary time for a patient because you have to make a decision about whether or not to do chemotherapy or other highly impactful treatments with little to no information. The goal of these products from Guardian and Natera is to provide more information for patients to make a decision problem. The ability to detect whether MRD exists after initial treatment affects more than 1.9 million people who are diagnosed with cancer each year, and I can tell you from personal experience that chemotherapy is brutal.

Kelly Twigger:

When this lawsuit was filed in May 2021, five months before I started the Natera trial the parties accused one another of making false or misleading statements in their advertisements regarding their competing products. Now, generally speaking here on Case of the Week. We stay within the four corners of the decision that we're evaluating, but here it was really necessary for me to look back a little bit more at what the allegations were of the parties, and so we'll talk about some of those as we go through it. Essentially, I'll give you one that's important to lay the groundwork, and that is that in part, natera was providing evidence to oncologists that was comparing the Signatera product to Guardiant's product Reveal audience product reveal using two separate studies, without informing those oncologists of the differences between the studies that might provide evidence to why the comparisons were different and why they could not necessarily be considered in the flat way in which Natera presented them. That was largely what was considered the false and misleading advertisements that were given to oncologists in order to have them choose the Signatera product over the Reveal product. All right, fast forward to the first of two decisions in this matter from October 23, 2024. The parties were before the court on Guardian's motion for evidentiary and monetary sanctions against Natera for material misrepresentations regarding Natera's expert witness, dr Hoxter. Dr Hoxter was and is still listed, as of last week when I did this research on the Rutgers University website, as a distinguished professor of medicine, the associate director for clinical research and director of GI oncology, as well as the director of oncology research at Rutgers Cancer Institute of New Jersey. Now, dr Hoxter was retained as an expert for Natera and filed his original expert report in support of Natera in October 2022.

Kelly Twigger:

In January 2020, so two years before Dr Hoekstra's report and a year before this case was filed Guardian undertook a clinical trial sponsored by the NRG Oncology Branch of the National Cancer Institute and conducted in partnership with wait for it the Rutgers Cancer Institute of New Jersey, where Dr Hoxter worked. So the clinical trial was called the COBRA trial and, to be clear, the COBRA trial was being run by Guardiant, not Natera, who had retained Dr Hoxter as their expert. The COBRA trial used a version of Guardiant's reveal and aimed to assess the impact of the revealed blood test on enhancing clinical outcomes for patients diagnosed with stage 2 colon cancer. The COBRA study assessed whether the ctDNA is a reliable marker for cancer prognosis and whether the ctDNA testing offered a more reliable method for early detection of cancer recurrence, as opposed to the current method of cancer surveillance, which was observation scans and blood tests. The goal of the COBRA study was to use an MRD test, specifically one of Guardian's ctDNA assay tests to identify which patients among a particular cohort of early stage colorectal cancer patients would benefit from chemotherapy. Now, this is a very critical decision. When I went through this process in 2021, the generally accepted practice was that anything that was stage three required chemo post-surgery, regardless of whether there was any evidence of remaining cancer cells. The reality is that we don't yet have accurate science to know whether there is minimal residual cancer left in a patient following treatment.

Kelly Twigger:

During the summer of 2023, the COBRA trial was suspended and then terminated after Quarting had learned that a greater than anticipated number of participants may have seen false positives for colorectal cancer, meaning that those patients were told that they did have minimal residual cancer, and those patients received chemotherapy as a result of those false positives. Now remember that Dr Hoxter is the head of research at Rutgers that is partnering on the Guardian study, but he's the expert for Natera. Now here's the important part for sanctions the timing. Guardian sent a letter to oncologists participating in the trial on August 30th 2023, and the closure of the study was made available on September 4th 2023. At the time it closed the study, guardian only told the public that the study was closing, but not why? The why was not available for several months. Neither Natera nor Dr Hoxter informed the court about the existence of the study or its closure. Trial was set for the matter in March of 2024, so roughly six months. Seven months after this study was closed. On January 16th 2024, the study was published and discussed in an abstract and slide deck given out at the American Society of Clinical Oncology Gastrointestinal Cancer Symposium. Say that five times fast.

Kelly Twigger:

Two weeks after that abstract was delivered, on January 31st 2024, dr Hoxter submitted a supplemental expert report explaining the findings of the COBRA trial and using it as further support for his reluctance to use tumor-naive diagnostics in his practice, meaning he was advocating for the tumor assay usage that Natera leverages versus the blood test from Guardiatt. Expert discovery had closed at this point and Natera sought to reopen it to have the report admitted. Guardiant moved to strike the report as untimely and prejudicial. The court denied Guardiant's motion, allowed the new report and the COBRA trial to be admissible and continued the trial by four months to allow Guardiant to conduct discovery and respond to the report. In making its decision, the court pointed to multiple statements by Natera and its counsel, both in writing and to the court directly. Specifically, the court noted that counsel advised that it was not aware that Dr Hoxter had any early access to the findings of the trial prior to the abstract in January 2024. Further, counsel noted that he knew about the trial when his original report was filed in October 2022, but had no knowledge about the closure until the abstract was published. You can see by my emphasis where we're going here.

Kelly Twigger:

Guardian asked for discovery from Dr Hoxter, including email. Hoxter was apparently left to search his email himself and told counsel that he had no responsive documents that included communications from him, cobra investigators, nrg or Natera regarding the Cobra study. Guardian went to magistrate Judge Kim with the lack of production, finding that it was inconsistent with his statements in his supplemental report about his familiarity with the lack of production, finding that it was inconsistent with his statements in his supplemental report about his familiarity with the study from the outset, meaning if you knew about it, you had to have some communications about it. The Terrace Council again responded that Dr Hoxter had a limited role in the study, had searched his email again using the requested search terms and had no responsive documents. Counsel again reiterated the same position at a hearing with Magistrate Judge Kim, saying that he did the exact search Guardian asked him to do and that quote he's not withholding anything, there's just nothing to compel. Now I have to stop for a second and note that all of these specific statements that counsel made are called out by the court in its opinion in bold text Bold text that's not something I've seen before. In an opinion, the district court found that Magistrate Judge Kim relied on those representations and denied Guardian's motion to compel based on them.

Kelly Twigger:

Guardian then went to Rutgers Dr Hoekstra's employer and home to the investigators of the Cobra study, with a third party subpoena and you guessed it. Rutgers produced dozens of emails between Dr Hoekstra, cobra investigators and NRG which showed that Dr Hoekstra knew the study would be discontinued. On August 30th 2023, when he received the letter from NRG, he specifically asked for and received, a non-public, embargoed version of the abstract summarizing the study's results and data. On September 13th 2023, four months before the abstract was presented and after receiving the shutdown notice, Dr Hoxter started emailing about the study, making disparaging remarks and also trying to encourage the investigators to substitute Natera's product into the study.

Kelly Twigger:

Guardian moved again and to compel again and sought a forensic examination of Dr Hoxter's emails that had not been deleted, despite Dr Hoxter's statements that they were, the court granted the motion but before the examination took place, dr Hoxter suddenly found emails with the investigators and the hits just keep on coming. During his deposition, dr Hoxter testified that one, he only searched for emails once, not twice, as counsel had represented to the court. Two, that he performed the searches on his email himself and made decisions about whether emails were responsive to the subpoena. And three, that he had no explanation as to why the emails produced by Rutgers didn't show up in his searches. There is nothing in the decision about counsel providing any guidance to Dr Hoxter. The court actually doesn't address self collection at all. That's an issue that I identified and I'm raising.

Kelly Twigger:

Guardant then moved to compel the production of email communications between Dr Hoxter and the Terrace Counsel that were listed on a privilege log and magistrate Judge Kim ordered an in-camera review of the documents. Following that review, judge Kim ordered that the documents be produced to Gwarden and found that the documents revealed that Natera's counsel had misled both Judge Kim and the district court about the timing of the expert's knowledge of the COBRA study results. The court also found that Natera had made those misrepresentations to defeat Gordon's motion to compel and to obtain an order allowing Dr Hoxter's supplemental report about the trial to be submitted. This is bad. The court showed that two weeks sorry, the documents showed that two weeks after Dr Hoxter learned about the results of the trial, he emailed the study results to two of Natera's counsel, marking it as confidential. He sent it directly to the law firm. Remember that the trial information here is key and may have been likely to have a huge impact on the jury in favor of Natera. But it's impossible to know that. But it's impossible to know that.

Kelly Twigger:

The court was furious, went back and recounted all of the times when counsel had advised the court that Natera did not know of Dr Hoxter's early access to the study results. In one of those instances the court pulled a statement from Natera's counsel, taken directly from the transcript, in which counsel specifically stated that quote Natera and its counsel did not know Dr Hoxter received a draft until receiving Rutgers document production close quote, despite having emails sent directly to them four months earlier. Based on all the examples, the court found that counsel knowingly hid the fact that it knew Dr Hoxter had correspondence with the investigators and that he had a copy of the abstract, and that it knowingly and deliberately misled the court. The court also found the expert's lack of memory to the communications implausible given the volume and extensiveness of the exchanges. As sanctions, guardian asked the court to exclude the supplemental report and testimonium to Tara's expert witness, which included information on the COBRA study, and to exclude the study in its entirety. Guardian also asked for monetary sanctions in the form of payment of its attorney's fees flowing from the behavior issue.

Kelly Twigger:

Let's look at the court's analysis here. That's a lot of facts to take in and, quite frankly, it's not all of them, but we'll get back to those in a minute. The court looked at the sanctions analysis and found that Dr Hoxter, natera and its counsel made misleading and false statements to Magistrate Judge Kim Gardens, district court regarding and the district court regarding Dr Hoxter's email communications with COBRA investigators and the NRG and his access to the study results, including his receipt of the abstract months in advance of his supplemental declaration seeking to introduce the COBRA study. The court also found that the misleading statements were made with quote full knowledge of the truth. To the contrary, close quote and used to gain a litigation advantage to have the court reopen evidence to allow the introduction of the Cobra study long after discovery had closed and on quote the eve of trial. Close quote. The court even said that it was duped into believing that the Cobra evidence was literally late breaking, when in reality Natera had known about it for months and failed to inform the court of potential new evidence. In hindsight, the court stated that had it known that reopening discovery would have opened Pandora's box, it would not have done so and would have excluded the Cobra evidence. It's weird to me that nobody ever had anything about the Cobra trial in discovery in this case at all.

Kelly Twigger:

As such, the court granted evidentiary sanctions in the form of excluding any mention of or evidence about the Cobra trial and stated that should Dr Hoxter continue to testify regarding his previous reports, an adverse instruction will be given regarding his credibility. Close quote. Now that's huge. I don't know whether Dr Hoxter ended up being Ms Harris' expert at trial, whether he ended up testifying. Most of what I've read is in the post-judgment motions, which only quotes information provided by Gwarden's expert. In doing so, in excluding all of that evidence, the court noted that it was turning back the clock, as if the trial was happening in March 2024, as planned. The court also turned to whether Natera should be sanctioned for the actions of its lawyers and identified case law in which quote courts have granted evidentiary sanctions and even dismissals with prejudice where parties engaged in deliberate falsity to gain a litigation advantage, as is in the case here. Close quote. As to monetary sanctions, the court stated that Guardian may be entitled to reimbursement for fees and costs related to the unwarranted extension of discovery and the misconduct, and set a schedule for after trial, which was to begin in two weeks.

Kelly Twigger:

Now let's fast forward to the end of the trial. And on November 25, 2024, a unanimous jury awarded Guardant Health $292.5 million in a verdict, including $175.5 million in punitive damages, finding that Natera engaged in a deliberate campaign of misinformation, making false and misleading statements to convince doctors to choose Signatera over Reveal. Natera is appealing the verdict. The court also denied all of the post-trial motions just last week. That takes us to the second decision in our saga the ruling from the court following the briefing on the parties for monetary sanctions that was left unresolved. On the motion for sanctions Now, guardian sought two things an award of attorney's fees and costs totaling just under $3 million and punitive sanctions, to be decided at an additional hearing, and to refer four of Natera's counsel, who are named by name in the decision to the state bar, natera opposed the request, arguing that Natera had already been sanctioned enough, supposedly by the exclusion of the COBRA study, and that, in light of the jury's verdict, additional sanctions would represent a windfall.

Kelly Twigger:

Natera also submitted declarations from all four attorneys swearing that the representations made to the court were in good faith and in reliance on Dr Hoxter and that they were shocked upon the discovery that Dr Hoxter actually had emails and had received an initial draft of the COBRA study results. There's nothing in the decision that speaks to what those declarations said about the fact that at least a couple of them received an actual email from Dr Hoxter with the study results attached. The court again rejected counsel's representations, and here's what's interesting to me. Usually in these situations, counsel fall on their sword and beg for mercy, but not so in the four corners of this decision, not here. Even though the court found that the evidence was there that counsel knew about the expert's knowledge from emails that counsel had physically added to a privilege log, the court does not mention that counsel expressed remorse at all.

Kelly Twigger:

Natera argued that fees should be limited to the but-for standard in which the court asks, but for the sanctionable conduct would there be any harm warranting compensatory relief. And here the court found the but-for test was satisfied as a result of the deliberate misrepresentations made to the court and the court's reopening of discovery and delaying of trial. As a result, the court reviewed Gwarden's fee request, found that the time and hourly rates were reasonable and customary and granted the entirety of the fee request for just under $3 million. The court also stated that Gwarden was entitled to any further amount of fees and costs incurred in connection with this motion for fees. Further in a footnote the court noted that there's an outstanding question about another $77,000 in fees that Gwarden incurred as a result of canceling the March trial and that if Gwarden was required to pay them, the court would grant the request for those fees. As well as to appointments or to who has to pay the sanctions order. Here the court elected to defer that question and appoint a special master to resolve that issue. Last week the court appointed a special master to be paid for by Natera. That ruling came out on the 23rd. I believe that appointment requires the special master to hold a hearing and take testimony and documentary evidence to decide how to one apportion the compensatory sanctions imposed following Gwarden's sanctions motion among Natera, natera's law firm and the individual attorneys from the firm and two. Determine any appropriate punitive sanctions or disciplinary measures, including, but not limited to, referral to the State Bar of California, with respect to the individual attorneys for their involvement with the issues addressed in the court's order.

Kelly Twigger:

Wow, this is bad. It's almost hard to articulate the takeaways here. The biggest one is this, and it seems very silly to have to say it out loud Don't lie to the court and if you find out you did so unintentionally and you better be the one to find out. You did. Tell the court and opposing counsel immediately and fall on your sword. Right the wrong, acknowledge it. Here. Natera's counsel did the opposite and it cost them and their clients millions of dollars, not to mention a stunning PR nightmare.

Kelly Twigger:

There are so many moving pieces to significant, complex litigation like this case and the sheer volume of electronic communications about the case not even the documentary evidence, just the ones about the case can be staggering, and so much to sort through and so many things that happen at the same time. You have to have systems in place to manage all of that, especially with remote work. It's critical for firms and it's likely a little bit of what happened here. Great job by Guardians Council here to go to the third party route when it kept getting stonewalled by the expert and for having a time to do that in the limited discovery period from the court. While not detailed in the facts of this case, it's clear that Guardians Council just kept digging for all of the pieces of the puzzle and putting them together for the court. That is exactly what you have to do with ESI. It affords you a tremendous opportunity to do it, but it's up to you to follow the trail, get the information and put it together. You have to understand all the places that data can be available and leverage them in your strategy.

Kelly Twigger:

To tell a story, counsel here did a good job of amassing evidence to bring to the court to get the order for the forensic examination and in asking the court to look at the documents on the privilege log in camera. Before those privilege documents came to light, gwarden had shown a big cover-up by Dr Hoxter through the documents produced by Rutgers, but the privileged documents tied counsel to the cover-up as well. Gwarden's counsel did exactly what I tell you to do regularly, and that is that you have to have evidence to support going to the court to challenge any non-production. Mere suspicion is never going to be enough. Finally, that Natera's counsel allowed Dr Hoxter to self-collect his documents here exacerbated the problem exponentially. Council need to conduct collection of expert materials in a situation like this in the same way they do custodians from their own clients. The rule against self-collection applies to experts just as well as parties.

Kelly Twigger:

It's one thing that kind of sticks out to me and obviously we're money morning quarterbacking here in case of the week is that it was really interesting that the Rutgers emails didn't actually include the emails that were sent from Hoxter to Natera's counsel. Those emails were later found on that privilege log. Why weren't they in the collection that Rutgers provided? If they still existed, why weren't they in Dr Hoxter's emails? Now there's no way to know whether the evidentiary sanctions, excluding the supplemental report about the COBRA trial, would have impacted the jury's decision.

Kelly Twigger:

The bulk of that seemed to focus on the improper juxtaposition of two different reports, comparing Signaterra and Reveal in a way that misrepresented the findings. That's what I mentioned to you at the outset. It could be that after summary judgment, which did not go Naterra's way at all, that was a signal that they needed to find something to tip the scales and the Cobra report was a last ditch effort. No one knows that other than Natera, their counsel and Dr Hoxter. But misrepresentations will always, always come back to haunt you. We'll keep an eye out on how the special master comes down and let you know about that when it happens, so we can see the full consequences of the conduct here by Natera. All right, that's our case of the week. Please be sure to follow our Meet and Confer podcast on your favorite podcast platform or, if you follow us on our blog, you can sign up for that at minerva26. com/ blog. Thanks so much. Have a great week, thank you.

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