IN 2009, E.I. du Pont de Nemours and Company filed suit against Kolon Industries, Inc., a South Korean corporation, and its U.S. subsidiary alleging that Kolon conspired to misappropriate DuPont's trade secrets and confidential information about DuPont's KEVLAR aramid fiber. (1) The action against Kolon, a relative new-comer to the aramid fiber market, was prompted by Kolon's entering into a consulting agreement with a former DuPont employee, Michael Mitchell. (2) Upon leaving DuPont, Mitchell violated the terms of his employment agreement by keeping and files containing DuPont proprietary information related to Kevlar. (3) While consulting for Kolon, Mitchell transferred DuPont's trade secrets and confidential business information to Kolon, allowing Kolon to successfully enter the market for aramid fibers. (4) DuPont's trade secret suit against Kolon prompted a counterclaim for attempt to monopolize the U.S. para-aramid fiber market in violation of Section 2 of the Sherman Act. (5) The ensuing volley of discovery requests, motions, and rulings would eventually take the case up to the Fourth Circuit led Kolon to produce nearly 1.2 million pages of discovery. (6) DuPont uncovered screenshots taken by Kolon employees in the days following the filing of DuPont's complaint that indicated that employees deleted or intended to delete emails from their personal email accounts. (7) DuPont moved for sanctions relating to Kolon's spoliation of evidence, alleging that Kolon executives and employees deliberately deleted relevant evidence and then engaged in prolonged efforts to conceal that conduct. (8) After an independent third party engaged in targeted discovery into the spoliation of the evidence, (9) the court found that key employees, who were likely to have relevant evidence, intentionally deleted relevant files and email items from their personal computers after Kolon's duty to preserve had been triggered and with knowledge of the filing of DuPont's Complaint. (10) Simply put, Kolon spoliated evidence. The court held that default judgment was an inappropriately stringent punishment, even though the actions were taken intentionally and in bad faith. (11) Despite the numerous deletions by Kolon employees, the company had circulated two litigation hold memos and had preserved numerous other files. (12) Additionally, prejudice to DuPont was minimized because Kolon was able to retrieve some of the files from back up tapes. (13) But, Kolon's spoliation compromised and limited DuPont's ability to present its case, in addition to spurring additional time and expense in litigating the spoliation issue. (14) The court awarded DuPont attorneys' fees, expenses, and costs related to the spoliation motion and granted an adverse inference instruction for the unrecoverable deleted information. (15) In Kolon, the foreign defendant was sanctioned for spoliation of electronic documents where its employees had intentionally and in bad faith destroyed the information. Had Kolon been headquartered in a jurisdiction where production of the spoliated documents was prohibited by that jurisdiction's law, should Kolon still have been subjected to spoliation sanctions? This article suggests that the foreign forum's data privacy laws would not be sufficient to insulate the foreign defendant from liability for spoliating electronically stored information, and thus local sanctions remain appropriate. This article first provides a brief overview of electronically stored information (ESI). This article next discusses the federal law that allows a United States court to order discovery in contravention of foreign laws and provide a brief overview of some of the foreign laws that would prohibit the production of ESI to a United States court. After briefly discussing spoliation and its accompanying sanctions, this article asks whether a United States court would sanction a foreign defendant for ESI spoliation where the defendant is operating in a jurisdiction where domestic law would prohibit providing that data to a foreign court. …
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