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Banking on an Adverse Inference – NY Appellate Division Affirms Spoliation Sanctions against Bank in Employment Discrimination Suit

February 14, 2011 Leave a comment

by Christopher D. Dize

Spoliation is the intentional destruction or alteration of evidence.  If proved, a court may allow the jury to infer that the lost evidence was unfavorable to the party responsible.  This type of a sanction can be devastating.

In 2002, bank employee Jacob Ahroner was not happy with his employer, Israel Discount Bank of New York.  Consequently, in July 2003, he brought suit, alleging hostile work environment and discrimination based on race, age, and national origin.

In November 2002, seven months prior to filing the action, however, Ahroner’s attorney wrote to the Bank.  The letter placed the Bank on notice that

“[it] must undertake all efforts to preserve from spoliation all documents and other records relating to our client’s employment, as well as any unlawful conduct of [the Bank] or its employees.  As you may be aware, spoliation gives rise to an inference and instruction that the missing documents would have proved the charging party’s case.”

The Bank replied that it was aware of its obligations.

Notwithstanding this awareness – and notwithstanding a 2004 order from the trial court to produce emails relating to Ahroner’s discharge – emails, backup tapes, and the hard drive of the computer of Ahroner’s direct supervisor were at some point destroyed.  The hard drive allegedly had information relating to the Bank’s decision to terminate Ahroner’s employment.

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9th Circuit to Law Firms: Turn Over to Grand Jury Discovery Documents of Foreign LCD Makers Obtained During Civil Discovery in Related Antitrust Class Action

February 6, 2011 Leave a comment

by Christopher Dize

For foreign companies doing business in the United States, avoiding getting sued may be hard enough without having to worry about whether you’re being investigated by a grand jury and the U.S. Department of Justice.

However, life can be really difficult for foreign companies that are not only getting sued, but also have to turn over their civil litigation documents for investigations of possible criminal conduct.

Under a recent 9th Circuit ruling, this is exactly the kind of misfortune that has befallen several foreign LCD manufacturers. The foreign companies, including LG Display, Sharp, and Chunghwa Picture Tubes, are embroiled in an antitrust class action suit and are simultaneously being investigated for antitrust criminal behavior.

Even though it couldn’t find any precedent to support its decision, the court ruled that if the documents were in the country then they were within the “grasp” of the grand jury.

The 9th Circuit’s ruling comes as a big victory for the DOJ.  It gives prosecutors expanded power to subpoena foreign documents that have entered the country for civil litigation purposes.

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