A criminal investigation involving eBay is a game changer that should slow Craigslist's attempts to obtain documents and depositions in a parallel civil case, an eBay lawyer said in court.
The U.S. Department of Justice has launched a criminal probe into whether eBay employees took confidential information from classified ad website Craigslist as eBay sought to build a rival service.
The two companies have also been litigating for years in a San Francisco civil court over similar allegations that eBay took a stake in Craigslist and misappropriated information.
In a hearing on Thursday, eBay attorney Mark Lambert said Craigslist sought the criminal investigation.
A grand jury subpoena was issued in San Jose, California, last week on behalf of the U.S. Justice Department.
It names lots of individuals and creates tremendous uncertainty, Lambert said.
San Francisco Superior Court Judge Richard Kramer said he was mindful of the constitutional implications of the probe, as individuals may not answer questions in a deposition for fear of implicating themselves in the investigation.
However, Kramer said he would not order a complete cessation of the civil case because of the criminal probe.
Craigslist attorney Michael Clyde opposed eBay's request to slow interviews in the case.
We don't think the criminal subpoena has any impact on this case, Clyde said. After the hearing, Clyde declined to comment on whether Craigslist sought the criminal probe.
Last year, a Delaware Chancery Court judge ruled that Craigslist properly removed an eBay representative from its board. The judge also ruled that Craigslist could not dilute eBay's 28.4 percent stake in the company.
The civil case in San Francisco Superior Court is Craigslist Inc. v. eBay Inc. et al., 08-475276.
(Reporting by Dan Levine; Editing by Steve Orlofsky)