Monday, September 24, 2018

Case of the Day: Export-Import Bank of Korea v. ASI Corp., 2018 U.S. Dist. LEXIS 111198 (C.D. Cal. June 28, 2018)


Defendant alleged the plaintiff EXIM Bank of Korea improperly deleted relevant documents, in violation of the court order. Plaintiff's counsel first issued the litigation hold on June 5, 2015 and issued another litigation hold the day before filing suit on March 25, 2016. The counsel, however, did not circulate the litigation hold to top executives of the plaintiff bank. In March 2017, the plaintiff wiped the computer of the bank's president when he retired, although the president had relevant documents. Plaintiff did not notify the defendant of the deletion; the defendant only learned it by asking questions during a deposition. 

Initially, the magistrate judge imposed monetary sanctions on the plaintiff and ordered additional discovery. The defendant further moved for evidentiary sanctions. The magistrate judge issued the findings of fact that while the plaintiff improperly discarded relevant material and failed to timely search for responsive documents, there was no irremediable prejudice to the defendant, nor was there an intent to deprive defendants of information.


This can never be said enough: when working with a non-US party, the attorney must be extremely, extremely, extremely cautious that the client is complying with the litigation hold. Litigation hold is peculiar to US court actions, and foreign parties often do not understand how strictly a litigation hold must be observed, or how severe the consequences are if the hold is violated. This particular situation is doubly bad because the party in violation of the hold is the plaintiff. This is certainly an easy way to lose all credibility for your case before the judge.

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