The Duty to Preserve, Mate

The Duty to Preserve, Mate

When does an international company have to comply with U.S. discovery demands? For the Australian corporation defendant in the case of Lunkenheimer Co. v. Tyco Flow Control Pacific Party Ltd., when it was served with the complaint.

The February 2015 order addressed intervenor/counter defendant Nilmini Klur’s allegation that Pentair Flow Control Pacific (PFCP) refused to comply with the October 2014 discovery order. In particular, that PFCP “failed to preserve, or satisfactorily search for and produce, evidence relating to this action.” As a result, Klur asked the court to impose sanctions, including that PFCP damaged the plaintiffs in connection with its breaches in the amount of nearly $25 million dollars.

Per K&L Gates’ order summary, while the court acknowledged that the defendant was not excused from preservation simply because it was an international company, however, because the Australian company had “no presence or significant sales in the United States and because Australia was the anticipated jurisdiction of ‘License-related disputes,’ the duty to preserve arose when Defendant was served with the complaint in December, 2011.”

While Klur’s request for sanctions was denied, the court agreed that Klur was entitled to an additional discovery set.

For more on U.S. discovery demands of international companies, particularly in Asia, download LLM, Inc.’s latest white paper.





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