A former Colorado Supreme Court justice issued a blistering critique of EchoStar Communications Corp.’s conduct in a long-simmering dispute with resellers of its Dish Network satellite-TV service.
The retired judge, serving as a court-appointed special master in the case, rebuked EchoStar for “flagrant misconduct,” “acts of bad faith,” misrepresentations and violations of court orders.
Howard Kirshbaum, now an arbitrator with the Denver-based Judicial Arbiter Group Inc., said in a report issued Monday that EchoStar destroyed e-mails that the retailers have sought to try to build their case.
He also determined that EchoStar misled him during his inquiry and undermined the retailers’ efforts to conduct fact-finding.
“EchoStar respectfully disagrees with the Special Master’s decision,” the company said in a statement. “EchoStar and its counsel acted properly at all times, including throughout the discovery process. EchoStar produced or made available for inspection well over 500,000 pages of documents in discovery.”
An Arapahoe County District Court judge will consider Kirshbaum’s recommendation for sanctions against EchoStar, based in Douglas County. The nation’s second-largest satellite-TV company could be ordered to pay a portion of the retailers’ legal costs.
In addition, EchoStar’s effort to have the retailers’ claims disqualified could be thrown out. No trial date has been set in the 6-year-old lawsuit, filed by Air Communication & Satellite Inc. of Jacksonville, Fla., against EchoStar. The suit accuses EchoStar of unfair dealing, violations of the Colorado Consumer Protection Act, fraud and conspiracy. Two other retailers joined the suit. They are seeking class-action status to allow as many as 20,000 others to join.
They say EchoStar relied heavily on them to grow between 1996 and 1999 but then began phasing them out in violation of their agreements with the company.
EchoStar has denied the claims, which it says are not supported by evidence. The company submitted affidavits from 20 retailers supporting its position.
Attorneys for the retailers say they’re concerned that their clients will never get a fair hearing.
“How do you give the retailers a fair trial now that the special master has concluded there has been a systematic destruction of the evidence?” said Denver attorney Robert Hill. “That’s a difficult task. Some would say it’s impossible.”
If the court follows Kirshbaum’s recommendations, it would be the fourth time EchoStar or its attorneys have been sanctioned for misconduct since 2004.
Last year, a federal judge in Maryland determined that EchoStar destroyed e-mail evidence in a sexual-harassment lawsuit brought by a former technician.
The judge sanctioned EchoStar, ordering it to pay the plaintiff, Dino Broccoli, $37,000, after Broccoli had lost his $8 million claim in a jury trial.
In the Broccoli and Air Communication cases, EchoStar is accused of having an ill-defined e-mail retention policy in which most e-mails were destroyed after 30 days. The company also is accused in both cases of failing to save e-mails related to the cases either after it was sued or when it became aware that litigation was possible.
Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.
