Plaintiffs allege the Irico Defendants and others conspired to fix prices, allocate market share, and restrict output of products containing cathode ray tubes (“CRT Products”) from March 1995 to November 2007. Plaintiffs specifically assert that Irico participated in dozens of meetings during which the conspirators reached agreements on price, output restrictions, and customer and market allocation.

After appearing in the action, accepting service of process, and joining a motion to dismiss filed by other defendants, Irico made the decision not to answer the complaints based on Irico's belief that it was immune from suit in the United States.[1] In July 2016, the Direct Purchaser Plaintiffs (“DPPs”) and Indirect Purchaser Plaintiffs (“IPPs”) filed for entry of default against the Irico Defendants. The clerk entered default against Irico in favor of both groups of plaintiffs. On Irico's motion, on February 1, 2018, the Court set aside the default.

In that order, the Court considered the Irico Defendants' arguments that the Court lacks subject matter jurisdiction over them under the Foreign Sovereign Immunities Act (“FSIA”), which, with some exceptions, provides immunity for foreign states. The Court found that Irico had failed to show FSIA immunity but recognized the possibility that further proceedings might demonstrate that the FSIA defense applies and the Court lacks jurisdiction.... Accordingly, the Court permitted the parties to undertake jurisdictional discovery.

On March 13, 2019, the Irico Defendants moved to dismiss the claims against them for lack of subject matter jurisdiction under the FSIA. The Court denied the motions and found that its exercise of jurisdiction over the Irico Defendants is not barred by the Foreign Sovereign Immunities Act. On November 22, 2019, the Irico Defendants appealed this ruling to the Ninth Circuit and moved to stay proceedings pending appeal.

The litigation against Irico dragged out far beyond that against all other defendants that have long ago resolved. Major contributors to the delays include: (1) Irico's decision not to answer and defend against the claims against it, resulting in many years of delay, entry of default and motion practice to set aside the default; (2) Irico's appeal to the Ninth Circuit of the court's denial of its motion to dismiss for lack of jurisdiction under the FSIA, which Irico dropped weeks before oral argument was to be heard; and (3) numerous discovery skirmishes throughout the staged jurisdictional and merits discovery and many stipulated extensions to court deadlines. Throughout the entire CRT litigation there have been many discovery disputes, but on a per defendant basis, the discovery motions involving the Irico defendants appear notably numerous. Most of the discovery disputes briefed by Irico and the [Plaintiffs] have resulted in orders compelling Irico to respond to discovery requests.

Despite hiring a reputable United States law firm one month after being served with the complaint on December 25, 2007, Irico waited more than eight months before holding a meeting of the “2008 Litigation Committee” in August 2008 at which “key employees” were charged with providing verbal instructions to other employees to preserve documents related to United States sales of CRT products. Irico's more than eight-month delay before issuing any litigation hold is sufficient to establish a preliminary showing of spoliation. Irico's failure to suspend its automatic email destruction practice as soon as its duty to preserve arose further supports a finding that Irico's document preservation efforts were inadequate. Irico's implementation of an oral litigation hold without documentation further suggests that spoliation occurred.

The inadequacy of Irico's 2008 oral litigation hold is further confirmed by its various discovery responses stating that it conducted a search for documents and information relating to Irico's sales of CRTs in the United States, as opposed to Irico's sales of CRTs globally. Irico stated that in August 2008, it understood that “the focus of the litigation was on sales of CRTs to the United States,” and members of the “2008 Litigation Committee” “were tasked to search for documents and to identify other employees under their supervision and instruct them to search for documents that might relate to the Irico sales in the United States and to preserve such documents, if any existed.” Irico “acknowledges that at the time it misunderstood the scope of document preservation in connection with the litigation in the United States and cannot be certain that all documents related to Irico's global sales of CRTs were preserved.” This evidences that the narrow scope of Irico's preservation did not address the full scope of relevant documents. Irico's response to Issue No 6, identifying “specific documents and information that might have been preserved if the ‘oral instruction’ in 2008 had not been limited to the United States,” included “documents regarding Irico's global sales of CRTs that are more likely to have existed in the summer of 2008” but would not have been preserved in the archives, such as “sales reports containing general CRT market information; CRT sales contracts with customers; [r]ecent correspondence with customers regarding CRT sales; and [h]andwritten working notes regarding recent internal and customer meetings attended by members of Irico's sales team.”

*3 Despite its duty to preserve evidence, Irico recycled computers of departing employees, undoubtedly including the “key employees” who attended competitor meetings during the class period, and “is not aware of whether any of the recycled computers contained: a) any data whatsoever; b) any documents created in the time period 1995 through 2007, or c) any documents relevant or responsive to any of the discovery requests issued to Irico during the course of this litigation.” These “key employees” were “appointed to oversee Irico's response to the litigations in the above referenced action (the ‘2008 Litigation Committee’) in June 2008” and have since left the company. Against this backdrop, Irico's failure to produce any emails, any of its weekly sales and marketing reports, and any “documents from the relevant period from any of its employees' files, including those employees who attended price-fixing meetings with Irico's competitors,” creates a strong inference that many highly relevant documents existed at the time Irico was served with the complaint in this action and were lost or destroyed due to Irico's inadequate evidence preservation efforts. Hence the undersigned finds that an adequate preliminary showing of spoliation has been made, warranting discovery into Irico's evidence preservation documents including those between Irico and its inside and outside counsel.

Irico contends that its email system had already destroyed all relevant documents before its duty to preserve arose. Irico cites its discovery responses and testimony that through the end of 2007, individual employee email accounts typically allowed for storage of only about 1-2 MB of email, Irico's central email server would overwrite older emails every 3-5 days on average and Irico had a back-end server policy to delete all emails older than 20 days during the relevant period. But Irico presents no information about investigating custodial files of “key employees” who may have printed relevant emails, forwarded emails to their personal email accounts or downloaded emails to their work or personal computers or to portable hard-drives. In contrast, Plaintiffs point to emails from an email address ending in @163.com that were authored by Liang Yuan, Irico's Head of Overseas Department and sent to defendant Chunghwa attaching Irico meeting notes and production data in June to July 2007. Irico had identified Liang Yuan as one of the “key employees” who was a member of the “2008 Litigation Committee” appointed to oversee Irico's discovery responses to this litigation. According to Plaintiffs, these emails were sent only four months before the November 2007 government raids on CRT makers and therefore it was unlikely that they and all relevant emails in Liang Yuan's and others' files would have been discarded by the time the duty to preserve arose. On balance, it appears highly likely that relevant evidence was destroyed or lost due to Irico's long-delayed and inadequately implemented litigation hold efforts. Irico's position, supported by its Rule 30(b)(6) witness' testimony, that weekly sales and marketing reports and notes of competitor meetings were not important and not likely to be kept appears implausible.

*4 The court issued its first pretrial order on April 4, 2008, with Article 13 being the most critical to Irico, which sets out the court's requirements for preservation of evidence (including information in electronic form). As we have discussed with Irico, this is an extremely important statutory requirement. If some potentially relevant information is lost or destroyed, this could have very serious consequences for Irico. The pretrial order is attached for your review. We have also attached a Chinese translation of Article 13 for your reference.

[T]his notice shall also be distributed to the appropriate Irico personnel responsible for information technology and records management. The above individuals in charge should be aware of the requirements described in this notice and should consider what steps to take to avoid the loss of any potentially relevant information in the course of the CRT antitrust litigation. The retention of all potentially relevant documents is extremely important, and we recommend that you provide this notice to an employee if you are in doubt as to whether he or she may have potentially relevant documents. Please contact us if you have any questions or would like to discuss who may have custody of potentially relevant documents.

[T]he Yan Document does not contain information about Irico's contacts with competitors, sales information, other facts during the relevant period or facts regarding evidence preservation. The beginning of the Yan Document discusses legal strategy related to the United States litigation, presumably as conveyed by Irico's outside counsel to Irico. The last paragraph of the Yan Document reflects the Committee's decision to stop responding to the litigation.

(1) by delaying disclosure of this document for years, defendants waived their claim to attorney work product; (2) defendants' testimony about this document further waived any attorney work product; (3) defendants' assertion that their failure to answer was due to a belief that they were immune from suit put into issue their state of mind when abandoning this litigation in 2008, (4) the Yan Document is the only contemporaneous document explaining defendants' true reasons for abandoning this litigation and defendants should not benefit from their intentional concealment of a relevant document and (5) the portions of the Yan Document relevant to its reasons for abandoning this litigation are not work product but only business decisions.

*7 In August 2021, the parties began meeting and conferring about depositions of Irico witnesses. Travel restrictions due to the COVID-19 pandemic hindered progress. On October 12, 2021, Plaintiffs noticed the depositions of nine Irico witnesses for early December 2021 and Irico agreed to produce two current employees for remote deposition via videoconference in Hong Kong but provided no dates.

In discovery, Irico had identified its employee, Su Xiaohua, as one of only two remaining witnesses knowledgeable about Irico's meetings and communications with competitors and more than eight of Irico's affirmative defenses. The Stipulated Order set a March 18, 2022 deadline for the deposition of Su Xiaohua.

On May 25, 2022, the Court issued a Stipulated Order re Case Schedule (ECF No 6016) (“Scheduling Order”), specifying:

...[that t]he depositions of Su Xiaohua, Wang Zhaojie, and Yan Yunlong shall be completed by no later than June 30, 2022.

On June 30, 2022, Irico filed its Emergency Motion for Relief from the Scheduling Order requiring Irico employees Wang Zhaojie, Su Xiaohua and Yan Yunlong to appear for deposition by June 30, 2022. In its emergency motion, Irico informed the court that Mr. Su recently resigned, was not willing to travel to Macau for deposition and “resigned from the company rather than endure the required quarantine.” Irico stated: “[o]n May 25, 2022, Su Xiaohua submitted his formal resignation to Irico. Zhang Decl. ¶6.” Irico acknowledged that the hearing date was after the date scheduled for the depositions, but “based on new information from the witnesses and continuing negotiations with the Plaintiffs, Irico is filing this Motion at the first available opportunity.”

On August 11, 2022, the court heard oral argument on Irico's Motion for relief from the Scheduling Order. The court found that the requisite showing of good cause for relief from the scheduling order under Rule 16 had not been made and stated: [“T]he delay in the production of these witnesses unquestionably causes injury to the plaintiffs and also injury and inconvenience to the Court.” The court ordered these witnesses to appear for deposition by September 9, 2022 and “[i]f fewer than all of the witnesses identified in these papers testify, then by September 23, 2022, the parties shall either file a document indicating that they are nonetheless dropping their dispute or setting forth their competing positions on what the legal consequence is of that witness' or those witnesses' failure to appear.”

On August 22, 2022, the parties filed a Stipulation and Order, stating that Irico witnesses Wang Zhaojie and Yan Yunlong agreed to travel to Macau for depositions and there was insufficient time to apply for and receive new visa for travel to Macau before the September 9 deadline and therefore the September 9, 2022 deadline for Irico witnesses to appear for deposition should be vacated. This Stipulated Order addressed only the two named Irico witnesses and did not mention Su Xiaohua.

On October 26, 2022, the parties filed their Joint Brief re: Legal Consequences of Irico's Failure to Produce Su Xiaohua for Deposition. By order dated November 1, 2022, the court referred this discovery matter to the undersigned.

On December 6, 2022, the court adopted the Special Master's Report & Recommendation on Irico's Failure to Produce Su Xiaohua for Deposition. ECF 6115 (“Su Order”). The Su Order required Irico to produce all documents relating or referring to: Su Xiaohua's deposition, resignation (formal or informal), including any conversations or questions about his intended resignation, Su's current or anticipated employment status, including any requests for recommendation or references from any Irico employee or agent, Irico's efforts to comply with the order to produce Su for deposition, the timing of when any Irico employee or agent first learned of Su's resignation, intent to resign and steps taken in preparation for resignation. The Su Order also stated: “the parties may submit motions for sanctions for any discovery misconduct throughout the history of this case” and a “motion for sanctions for Irico's failure to comply with the court's orders that Su's deposition be taken.”

*8 By early July 2023, the briefing on Plaintiffs' Motion for Sanctions was complete.

On July 19, 2023, the undersigned conducted a hearing by videoconference on Plaintiffs' motion for discovery sanctions....

At the hearing, the undersigned asked questions about two Irico documents produced in response to the Su Order that shed light on when Irico first knew about Mr. Su's resignation.

The first is an Irico document dated either March 25, 2022 or May 25, 2022, entitled “Resignation Report” and signed by Su, stating in pertinent part:

At this time, I have reached the upper limit of the employment age for managers. Due to the above personal reasons [caring for elderly mother], I would like to apply for early resignation from my position as a manager and terminate my employment relationship with the company. Please be advised.

The second document is an Irico Group Meeting Minute, dated April 7, 2022, describing Irico's decision to approve Su's request to leave his position “ahead of schedule,” that provides in pertinent part:

Regarding matters related to Su Xiao Hua reaching retirement age and departure * * *

Su Xiao Hua, the regional general manager for the Huanan area of Xianyang Irico Industrial Group Co., Ltd., has reached the upper age limit for employment in March 2022, and will leave his position as manager at the end of December to retire and rest. Because he himself submitted a request to leave the position ahead of schedule, after discussion, it has been agreed that Su Xiao Hua may leave the position ahead of schedule after reaching upper age limit for employment.

These two documents show that Irico knew before May 25, 2022 that Su had submitted his application for resignation before April 7, 2022 and that Irico's senior management approved Su's resignation on April 7, 2022. But these documents do not shed light on the actual date of Su's Resignation Report, except that it was “ahead of schedule” nor do these documents show who was involved in determining or deciding Su's last day of employment at Irico.

According to Plaintiffs, these two documents are the only documents produced by Irico dated before June 7, 2022, (the date Irico informed Plaintiffs of Su's resignation) that mention Su's resignation. Irico does not dispute this fact. Irico's production of documents in response to the Su Order appears extremely curated, incomplete and inadequate. There is no indication that Irico produced any documents from its human resources or other departments about Su's resignation and plans for transition. Nor is there any indication that Irico produced any documents from Su's emails or his computer hard drive regarding his resignation or communications regarding how and with whom Su's last date of employment was determined.

At the July 19, 2023 hearing, Irico's outside counsel, Mr. Werbel, stated that to the best of [Baker Botts'] knowledge, it was their understanding and belief that all documents responsive to the categories in the Su Order had been produced or listed on a privilege log because they had asked Irico for all such documents and it was their understanding that no other documents exist. Irico's outside counsel, Mr. Taladay, also stated that Irico's in-house counsel, Mr. Zhang, had been communicating with Mr. Su on obtaining his visa to attend his Macau deposition up to May 31, 2022, when Mr. Zhang discovered that Su had resigned and left Irico's employ. Irico's outside counsel stated that Su had given them every reason to believe he intended to travel to Macau to be deposed since he was cooperating with obtaining his visa, and as a result, his resignation and departure on May 25, 2022, was a “huge surprise.” Yet, Irico later produced a document dated April 7, 2022, of its approval of Su's request for accelerated resignation before December 2022.

*9 Under these circumstances, including Irico's opaque responses about the facts and timing of Su's resignation and end of employment at Irico, his whereabouts, availability and Irico's possible influence or ability to make Su available notwithstanding his resignation, his apparent uniqueness as the sole remaining individual with knowledge of Irico's participation in competitor meetings and communications and the paucity of disclosures about Irico's information and knowledge about Su's deposition and resignation plans and activities, the undersigned finds that Irico's discovery responses required by the Su Order are not adequate. Irico and its counsel are hereby warned that full compliance with this order and the Su Order is expected. In light of the pending motion for discovery sanctions, Irico's continuing failure to comply with discovery orders risks terminating sanctions as well as less severe sanctions.

Irico's documents produced after multiple court orders and extensions of time reveal that Su did not resign and terminate all relationships with Irico on May 25, 2022. Instead, Su continued his work at Irico with other Irico employees in June and July 2022. It was not until June 17, 2022, that Irico identified Su's successor and July 28, 2022, when the Shareholders' Meeting of Irico (Foshan) Flat Panel Display Co, Ltd resolved “to dismiss Su Xiaohua from his position as a company director.” Thus, it appears that Su remained in Irico's employ through June and July of 2022. As late as September 20, 2022, Su received a text from an Irico employee who sent a “Draft Reply for the South China Region.zip 473.8KB,” to which Su replied: “Received, thank you!” Later exchanging text with the same employee, Su texted a document entitled “Situation Explanation (1).docx 16.3KB *WeChat desktop version” and wrote: “Check if that's okay.” Thus, Su was not only employed by Irico past his scheduled deposition date in June of 2022, but he was within Irico's control. Irico's false representations to the contrary demonstrate its flagrant bad faith, its intentional concealment of the truth and its callous disregard for this court and the litigation process.

Irico also stated that “Irico did everything that it could to secure the testimony of Mr. Su and had every expectation that he would appear for a deposition up until the time of his resignation.” Irico's evidence of doing everything it could was merely to work with Su to obtain his visa for the Macau deposition up until May 25, 2022. Irico has produced no evidence to support that it did everything it could to secure Su's testimony after his purported resignation on May 25, 2022. There are no documents requesting Su to appear for his deposition or offering any incentives or bonuses for Su to appear for his deposition, such as those Irico offered to its two other witnesses, Wang and Yan, as set forth in Zhang Wenkai's Declaration. Contrary to Irico's representation of surprise, its recently produced internal documents reveal that its top executives, Chairman Si Yun-Cong and General Manager Yang Yuan Jiang, both approved on April 7, 2022, Su's request for early retirement (“ahead of schedule”) before December 2022, and also approved the legal department's January 2022 request for Su to travel abroad for his deposition. Thus, it appears that Irico's top executives knew full well that they would allow Su to “resign” early and had no intention of requiring him to be deposed, despite their control over Su throughout his employment, including through June and July of 2022.

Su continued to work for Irico, as late as September 2022, when he exchanged documents with an Irico employee. Irico's human resources employee considered Su “in-service” despite having “officially retired in July.”

Irico continued paying Su well after July 2022. In January 2023, Irico paid Su an annual award and holiday bonus for 2022. In August 2023, Irico paid Su a salary as a business manager and “Mid-Long Term Contract Worker[s].” In August 2023, Su is described as serving as director of Sichuan Century Shuanghong Display Devices Co Ltd, a company that appears related to Irico.

(1) Irico could have required Su to remain on duty until December 2022, his legally appropriate rest period, but instead facilitated Su's purported “early retirement,” by approving his request on April 7, 2022.

(2) Irico failed to produce any evidence after May 25, 2022 in support of its claim to have attempted to persuade Su to have his deposition taken in this case.

(3) Irico considered Su “in-service” and continued paying Su through at least August 2023.

(4) By the date of Su's scheduled deposition in June 2022, Su was still employed by Irico and Irico could have required him to appear for his deposition but did not to do so.

(5) Irico intentionally submitted to the court a false sworn declaration that Su formally resigned on May 25, 2022, and attorney representations that Irico had no control over Su due to his resignation from Irico on May 25, 2022.

(6) Irico intentionally failed to comply with its discovery obligations and numerous court orders to delay the litigation, obstruct discovery and hide the true facts regarding its employment of and control over Su at the time of his scheduled deposition in June 2022;

(7) Only after being ordered to have its United States counsel take primary control over and responsibility for a search for responsive documents set forth in the Su Order, did Irico finally produce documents showing that Su continued working for Irico well after May 25, 2022, after his scheduled deposition of June 30, 2022, was never provided any inducements to attend his deposition, and by August 2023, Su appears to have found employment as a director in a company related to Irico.

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation may:

(A) ) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

*12 Rule 37(e) does not define “intent,” but in context, the word is most naturally understood as involving the willful destruction of evidence with the purpose of avoiding its discovery by an adverse party. Because intent can rarely be shown directly, a district court may consider circumstantial evidence in determining whether a party acted with the intent required for Rule 37(e)(2) sanctions. Relevant considerations include the timing of destruction, affirmative steps taken to delete evidence, and selective preservation.

The Pillsbury communications revealed that Irico had no basis for claiming that from 2008 onward, it misunderstood its duty to preserve potentially relevant documents because from February 15, 2008 through August 18, 2008, Pillsbury provided verbal and detailed written instructions, including a copy of the court's Pre-Trial Order No 1, a comprehensive litigation hold document and instruction that potentially relevant documents included information regarding Irico's global sales of CRTs. The Pillsbury communications also revealed that Irico's representations to the court and in written interrogatory responses claims that it misunderstood its discovery obligations by not issuing a written litigation hold and by not preserving potentially relevant documents from February 15, 2008 onward, were false.

Irico made no efforts to preserve any potentially relevant evidence including ESI from 2008 to the present, failed to search key employees' offices or computers for potentially relevant emails or other ESI, recycled or wiped computers of key departing employees while this litigation was pending and allowed the loss or destruction of ESI that Irico concedes likely existed in 2008.

Nearly all of the employees knowledgeable about what types of documents related to Irico's sales of CRTs were created and/or maintained during the relevant time period are no longer employed by, and are not available to, Irico. Identifying such specific documents that existed in 2008 is nearly impossible given the time that has elapsed and the lack of employees with knowledge of these issues. As discussed, Irico regularly preserved documents and information in its archives pursuant to Chinese law and its internal practices so extensive information regarding Irico's global sales of CRTs was preserved regardless of the oral instruction provided in 2008. These categories of preserved documents are detailed in Irico's Response to Issue Nos. 7 and 11 and include several categories of documents related to sales of CRTs, including but not limited to accounting records, invoices, planning documents, some production and sales reports, and travel and entertainment reimbursements. In terms of documents that would not have been preserved in the archives, Irico identifies the following types of documents regarding Irico's global sales of CRTs that are more likely to have existed in the summer of 2008:

knew that the Irico Defendants were in default by April 29, 2010, when the deadline to file an answer passed. But the DPPs did not move for entry of default against the Irico Defendants until over six years later, on July 18, 2016. And it is not clear that the DPPs would have moved for default at all but for the Court's prompting to do so on June 28, 2016.

The DPPs were inarguably prejudiced by the Irico Defendants' decision to disappear from the case for ten years. The Irico Defendants could have raised their FSIA defense at the outset, and the Court would have then assessed whether it had jurisdiction over the case. Instead, by refusing to appear and litigate the case, the Irico Defendants have delayed resolution of the jurisdictional question for ten years[.] After the passage of so much time, it is likely that documents and data have been lost, that witnesses have become unavailable, or that important details have been forgotten.

Advised by able and experienced counsel, Irico knew at the outset of the litigation of its right to challenge the jurisdiction of the court to proceed with the case. Rather than raise that defense and give the court the opportunity to consider that issue and Irico's possible liability while evidence and witnesses were still available, Irico abandoned the litigation. In doing so, Irico evinced not only contempt for this court, but also defied the basic responsibilities of a civil litigant in the United States. The evidence establishes that Irico knew within months of being named a defendant that it had a right to complete its defense in a timely manner. Instead, Irico instructed its attorneys to abandon responding to the lawsuit.

Irico asserts that it “did not know Mr. Su intended to resign before it happened” and that “Irico only learned of Mr. Su's decision to depart on May 31, 2022, six days after the May 25th Order”. In support, Irico cites the July 21, 2022 declaration of its Deputy General Counsel, Zhang Wenkai, which states: “Although Su Xiaohua formally resigned from Irico Foshan Flat Panel Display Co, Ltd., the Irico subsidiary who most recently employed him, on May 25, 2022, I did not learn of Mr. Su's resignation until May 31, 2022.” The Zhang Wenkai declaration speaks only to his personal knowledge, not Irico's. If Su Xiaohua “formally resigned” on May 25, 2022, he must have taken some actions and submitted written notice of his “formal resignation” to others at Irico. Also, Zhang Wenkai's declaration fails to state when others at Irico first learned of Su Xiaohua's informal resignation, his intent to resign and his decision to resign rather than be deposed. Contrary to Irico's argument, this Zhang declaration cannot be considered “reliable evidence” that “Irico only learned of Mr. Su's decision to depart on May 31, 2022.”

[D]efendants failed to inform the court of their own executives' April 7, 2022 approval of Su's request for early retirement ahead of schedule, while leaving the court with the misimpression that defendants would continue trying to produce Su for his deposition. ... Irico misrepresented that Su had resigned on May 25, 2022 and had terminated all relationship with Irico, when in fact, Su continued to work for Irico through at least the end of July 2022 and later. These misrepresentations reveal Irico's egregious bad faith and willful non-compliance with court orders.

Irico has frustrated plaintiffs' efforts to obtain testimony from Irico's own employees and thus the first-hand witnesses to Irico's conduct. These witnesses are now unavailable for testimony to answer the allegations against Irico which secured this unavailability willfully. [Aside from limited evidence required to be archived by Chinese law,] Irico has destroyed most, nay perhaps all, of its own documents that bear on its conduct during the relevant time period. This destruction was undertaken knowingly. From [the] outset, Irico has had the benefit of the advice and counsel of highly experienced and able counsel who provided Irico appropriate advice on Irico's legal obligations as a defendant in litigation under the Federal Rules. Irico flouted and ignored this counsel.

Irico's spoliation of ESI and other information from the beginning of this case forward has led to wide-scale loss of documents pertaining to Irico's sales of CRTs globally, Irico's production levels of CRTs and its participation in competitor meetings throughout the class period. These types of documents are critical to the claims in this case. While relevant documents reflecting Irico's participation in meetings with other CRT manufacturers were produced by other defendants who have long since settled, such documents are far less compelling than if they had come from Irico's files with Irico's witnesses able to testify regarding them. Irico's ongoing failures to preserve, destruction of documents and meager document productions have substantially impaired plaintiffs' ability to prove their case and interfere with the rightful decision of this case.

For eight years, Irico departed the litigation. It returned only after the court found Irico in default. When Irico returned to the litigation, it had the benefit of other experienced counsel. Yet Irico has made discovery and pretrial preparation in the normal course impossible. The Court already found inarguable prejudice resulting from Irico's decision to disappear from the case for eight years.