Like an old vaudeville act, the court spends a meticulous amount of time setting up the punch lines in Merck Eprova AG v. Gnosis S.P.A. et al., 07 cv 5898 (S.D.N.Y. Apr. 20, 2010). Like an old Italian film, the punch lines are subject to interpretation and may have meaning on many levels.
This lawsuit against an Italian manufacturer alleges that defendants mislabeled the nutritional ingredient called methyltetrahydrofolate in violation of the Latham Act and New York state law. The court ultimately holds that the failure to issue a written litigation hold is gross negligence requiring some form of sanction. This is certainly a punch line (although not very funny) for foreign corporations landing in federal court.
The court relies heavily on the Pension Committee case to award costs, attorneys’ fees and a $25,000.00 fine to be apportioned between attorneys and clients. The court leaves it up to defendants and their counsel to determine who pays the sanctions. If they can not agree, the court will apportion it for them. Forcing the lawyers and the clients to agree on who pays what part of the fine seems like another punch line (albeit a cruel one.)