“The power of a U.S. Court to require compliance with U.S. discovery obligations does not arise until and unless the Court has jurisdiction.”

Lunkenheimer Co. v. Tyco Flow Control Pacific Party Ltd., No. 1-11-cv-824, 2015 WL 631045 (S.D. Ohio Feb. 12, 2015)

In this case, the court addressed several discovery issues, including the question of when Defendant’s duty to preserve arose.  The Intervenor/Counter Defendant asserted the duty arose in 2002.  Defendant—an Australian Corporation—asserted the duty could no t have arisen before August 2012, when it consented to U.S. jurisdiction and, “even if it had, it was not before [Defendant] was served on December 8, 2011.” Acknowledging that the defendant was not excused from the preservation obligation merely because it is a foreign company, the court nonetheless determined that because Defendant was an Australian company with no presence or significant sales in 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:

PFCP is an Australian company with offices and facilities only in Australia. (Doc. 143–1, Ex. B). Australian Law governs the License and was the anticipated jurisdiction for License-related disputes. (See Doc. 140–1, Ex. 3, ¶ 18.1). No significant sales of Licensed Products were made into the U.S., and PFCP had (and has) no U.S. presence. (Doc. 143–1, Ex. B).

PFCP is not excused from an obligation to preserve evidence simply because it is a foreign company. See Reino de Espana v. Am. Bureau of Shipping, No. 03 CIV. 3573, 2006 WL 3208579, at *8 (S.D .N.Y. Nov. 3, 2006). However, the only place litigation might at some point have been anticipated was in New South Wales, Australia-not Ohio or anywhere else in U.S. Accordingly, notwithstanding the fact that it may not have had jurisdiction over the PFCP until 2012, and in the absence of evidence that PFCP should have reasonably anticipated litigation in the United States any earlier, the Court finds that the duty to preserve began on December 8, 2011.FN19

FN19. The power of a U.S. Court to require compliance with U.S. discovery obligations does not arise until and unless the Court has jurisdiction. See e.g., In re Uranium Antitrust Litigation, 480 F.Supp. 1138 (N.D.Ill.1979); see also Rashbaum, et al.,U.S. Legal Holds Across Borders; A Legal Conundrum,” 13 N.C.J.L. & Tech 69 (Fall 2011).

A full copy of the court’s order is available here.

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