Trial Judge Acts Over Hacking of Plaintiffs' Emails In Media Dispute

The lawsuit, brought in 2014 by India-based Iris MediaWorks and its Brooklyn-based U.S. subsidiary, claims that Vasisht, a former Iris CEO, schemed with others to misappropriate trade secret information from Iris while forming a direct competitor that sought to steal both programming and DISH Network business.

Specifically, the lawsuit claims that Iris owned a South Asian entertainment channel called Get Punjabi that DISH broadcast on its satellite in the U.S., and that Vasisht set up IKK Inc., a competitor that now broadcasts extensive programming previously shown on Get Punjabi. The complaint names six defendants and includes 12 causes of action, including claims for breach of fiduciary duty, misappropriation of trade secrets, breach of contract and unfair competition.

In striking Vasisht's answer, Justice Chan chastised Vasisht and implied he had orchestrated a hacking of the email account of Rajendra Karnik, Iris's chairman and managing director. Justice Chan stopped short of providing evidence of the hacking or explaining exactly how it was effected. She wrote that Iris alleged that Vasisht stole “privileged communication between plaintiffs' principal and their attorney and materials prepared for litigation” that were work product. The justice then called Vasisht's denial of such hacking “half hearted.”

Vasisht told the court that he did not know about certain accounts used in the hacking and if he did receive the hacked emails, “there was a high probability he did not care about them and sent it to the junk file,” Justice Chan noted.

“Vasisht does not dispute or contradict any of plaintiffs' computer forensics expert's findings,” the judge added. “His defense that there was no evidence of him sending emails to the Anonymous or Sameer accounts does not speak to his receipt of the emails from the Karnik account. And his suggestion that there is a high probability that he never took the Karnik account emails seriously offers no comfort nor is it a defense as to how the emails were obtained or what the emails contained. In sum, while Vasisht's affidavit contains a general denial of knowing about the Anonymous and Sameer accounts, the denial is self-serving, as is his affidavit.”

Russell Bogart, of counsel at Kagen & Caspersen in Manhattan, represents Iris. He declined to comment. Robert Knuts, a partner at Sher Tremonte in Manhattan representing the defendants, did not return a call seeking comment.

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Jason Grant is a litigation reporter for the New York Law Journal, an ALM sibling of Entertainment Law & Finance.

A New York trial court judge struck a defendant's answer in a media-based breach of fiduciary duty and unfair competition suit, after finding that 2,000 emails, including attorney-client privileged information possessed by the plaintiffs, had been hacked and stolen. Iris Media Works v. Vasisht, 652143/14.

“The hacking of plaintiffs' email during litigation can only be seen as an attempt to undermine plaintiffs' case. It is also indicative of [defendant Manish Vasisht's] disregard for the judicial process,” wrote Manhattan Supreme Court Justice Margaret Chan in a decision and order critical of Vasisht.

“While striking a defendant's answer is an extreme sanction, it is warranted here,” Justice Chan added, “as hacking plaintiffs' email to obtain information during litigation without going through proper discovery channels is an egregious act and sidesteps discovery procedures.”

The lawsuit, brought in 2014 by India-based Iris MediaWorks and its Brooklyn-based U.S. subsidiary, claims that Vasisht, a former Iris CEO, schemed with others to misappropriate trade secret information from Iris while forming a direct competitor that sought to steal both programming and DISH Network business.

Specifically, the lawsuit claims that Iris owned a South Asian entertainment channel called Get Punjabi that DISH broadcast on its satellite in the U.S., and that Vasisht set up IKK Inc., a competitor that now broadcasts extensive programming previously shown on Get Punjabi. The complaint names six defendants and includes 12 causes of action, including claims for breach of fiduciary duty, misappropriation of trade secrets, breach of contract and unfair competition.

In striking Vasisht's answer, Justice Chan chastised Vasisht and implied he had orchestrated a hacking of the email account of Rajendra Karnik, Iris's chairman and managing director. Justice Chan stopped short of providing evidence of the hacking or explaining exactly how it was effected. She wrote that Iris alleged that Vasisht stole “privileged communication between plaintiffs' principal and their attorney and materials prepared for litigation” that were work product. The justice then called Vasisht's denial of such hacking “half hearted.”

Vasisht told the court that he did not know about certain accounts used in the hacking and if he did receive the hacked emails, “there was a high probability he did not care about them and sent it to the junk file,” Justice Chan noted.

“Vasisht does not dispute or contradict any of plaintiffs' computer forensics expert's findings,” the judge added. “His defense that there was no evidence of him sending emails to the Anonymous or Sameer accounts does not speak to his receipt of the emails from the Karnik account. And his suggestion that there is a high probability that he never took the Karnik account emails seriously offers no comfort nor is it a defense as to how the emails were obtained or what the emails contained. In sum, while Vasisht's affidavit contains a general denial of knowing about the Anonymous and Sameer accounts, the denial is self-serving, as is his affidavit.”

Russell Bogart, of counsel at Kagen & Caspersen in Manhattan, represents Iris. He declined to comment. Robert Knuts, a partner at Sher Tremonte in Manhattan representing the defendants, did not return a call seeking comment.

*****
Jason Grant is a litigation reporter for the New York Law Journal, an ALM sibling of Entertainment Law & Finance.