• On January 31, 2012, a New York appeals court affirmed a trial court’s sanctions against EchoStar Satellite for its failure to preserve documents relating to Cablevision’s $2.5 billion breach-of-contract action against it. The appellate court agreed that EchoStar’s duty to preserve relevant emails and other records arose once it threatened to terminate its contract with Cablevision, which made a lawsuit foreseeable, and certainly once Cablevision filed the suit. EchoStar was deemed grossly negligent for failing to issue the litigation hold until four months after litigation began. The court also affirmed the “adverse inference” sanction against EchoStar, which essentially allows the trial court to instruct the jurors that EchoStar’s now-missing evidence was going to be harmful to EchoStar’s case. As the Court of Appeals noted, “Although [Cablevision] may have other evidence to point to, the missing evidence is from a crucial period during which EchoStar appears to have been searching for a way out of its contract.” Voom HD Holdings LLC v. EchoStar Satellite LLC, No. 600292-2008 (N.Y. S. Ct., App. Div.).
  • On February 1, 2012, the Second Circuit Court of Appeals held – for the third time, and despite the Supreme Court’s recent decisions in Stolt-Nielsen and Concepcion – that American Express’s no-class-suit-or-arbitration clause in its merchant agreements is not enforceable because it would effectively preclude claimants’ ability to obtain relief. The court distinguished the Supreme Court decisions, stating “It is tempting to give both Concepcion and Stolt-Nielsen such a facile reading, and find that the cases render class action arbitration waivers per se enforceable. But a careful reading of the cases demonstrates that neither one addresses the issue presented here: whether a class-action arbitration waiver clause is enforceable even if the plaintiffs are able to demonstrate that the practical effect of enforcement would be to preclude their ability to vindicate their federal statutory rights.” The plaintiffs had provided expert proof from an economist that no sensible plaintiff or competent attorney would prosecute the antitrust claim at issue against American Express as an individual claimant, which American Express did not rebut. In re American Express Merchants’ Litigation, No. 06-1871.