Posts tagged as:

sanctions

U.S. District Judge Mark Bennett of the Northern District of Iowa, presiding over a product liability case, has asked defense counsel “to show cause as to why he should not be sanctioned for the ‘serious pattern of obstructive conduct’ he displayed” in a client’s deposition, which seemed aimed both at interruption for its own sake and at coaching the witness as to how to answer. “The attorney objected so many times that his name was found, on average, three times per page of deposition transcript.” [Nick Farr, Abnormal Use]

Rather than fine the lawyer, Judge Nelson ordered him to create and write a training video explaining the basis of the sanctions and demonstrating how to comply with the rules during depositions in state and federal court.

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Federal judge Mark Bennett has resorted to what might be called a creative sanction against out-of-state law firm Jones Day following what he considered excessive interruption and witness-coaching during discovery in the case of Security National Bank of Sioux City v. Abbott Laboratories. [Above the Law]

Ken at Popehat has the story on a court’s ruling for fees and costs in Ergun Caner v. Jonathan Autry, filed by a religious leader who had come under criticism for less-than-forthright descriptions of his own past. “The court ruled that Caner (1) pursued the case after Autry took the videos down, (2) demanded, as a condition of settlement, that Autry’s young children sign a non-disparagement agreement, (3) delayed the case, (4) failed to seek discovery, opposed the motion to dismiss on the grounds that he needed to take discovery, but could not articulate what discovery he needed, (5) contradicted himself, (6) made unreasonable legal arguments without any support (like the ‘you must be qualified to criticize’ argument), and most importantly (7) filed the case to silence criticism.” Under the prevailing “American Rule” on fees it’s extremely hard for the victim of a meritless suit to recover attorney’s costs, but this one was extreme enough to be an exception.

Sanctions have a role to play in managing litigation, and are probably under-used in the American courtroom, but this would seem to go too far. Saudi Arabia: “The Ministry of Justice plans to introduce tough new legislation to penalize malicious litigants, which would include fines, prison and lashes.” [Arab News via Crossroads Arabia]

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A year and a half ago, as I noted at the time, the American Society for the Prevention of Cruelty to Animals (ASPCA) “agreed to pay $9.3 million to settle racketeering and other charges arising from alleged litigation abuse in lawsuits beginning in 2000 over elephant welfare,” while “other defendants in the countersuit, including the Humane Society of the U.S., have declined to settle [with Feld Entertainment/Ringling Bros.] and remain in the litigation.” Now the Humane Society and other groups have agreed to pay more than $15 million, suggesting the ASCPA settlement was not a freak occurrence. [AP/Houston Chronicle, Charles Schelle/Bradenton Herald]

My piece on the ASPCA settlement is here and Overlawyered coverage of the long-running litigation here.

“Tom Goldstein’s letter for rich client who threw porn star off roof for video” [@RandyEBarnett] is an “instant classic” [@adamliptak]. Goldstein is a prominent member of the Supreme Court bar and co-founder of SCOTUSBlog. [Josh Blackman] Concluding passage of letter:

If she sues, the complaint will be sanctionably frivolous. Your client should just box up almost every last bit of her property (please exclude all videos and photographs, as well as the seemingly inevitable small yappy dog) and drop it off with you in safe-keeping for Mr. Bilzerian. After he receives the judgment in his favor, he will have it all delivered to him. Then he will probably blow it up with a mortar in the desert.

I enjoyed our brief correspondence.

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May 5 roundup

by Walter Olson on May 5, 2014

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EEOC roundup

by Walter Olson on March 18, 2014

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February 20 roundup

by Walter Olson on February 20, 2014

  • “Woman Arrested Nine Years After Failing to Return Rented Video” [S.C.: Lowering the Bar, more]
  • “Why India’s Ban Against Child Labor Increased Child Labor” [James Schneider, EconLib]
  • “I’ve never seen an attorney general sanctioned.” Court hits Nevada AG Catherine Cortez Masto with sanctions after collapse of robosigning suit against mortgage servicer that state hired D.C.’s Cohen Milstein to bring [Daniel Fisher, update (case settles)]
  • Another review of the new collection The American Illness: Essays on the Rule of Law (Frank Buckley, ed.) [Bainbridge, earlier]
  • They would be major: “The Gains from Getting Rid of ‘Run Amok’ Occupational Licensing” [David Henderson]
  • E-cigarettes could save lives [Sally Satel, Washington Post]
  • How incentives to avoid tax can lead to social tragedy, in this case via ABBA stage outfits [Guardian]

“In a blistering ruling against Cal Fire, a judge in Plumas County has found the agency guilty of ‘egregious and reprehensible conduct’ in its response to the 2007 Moonlight fire and ordered it to pay more than $30 million in penalties, legal fees and costs to Sierra Pacific Industries and others accused in a Cal Fire lawsuit of causing the fire. … Sierra Pacific, the largest private landowner in California, was blamed by state and federal officials for the blaze, with a key report finding it was started by a spark from the blade of a bulldozer belonging to a company working under contract for Sierra Pacific.” The company has contended that the cause determination was reached in haste and pursued with an eye to extracting legal proceeds for an agency-run settlement fund later found to be illegal. [Sacramento Bee; Robert Hilson, Association of Certified E-Discovery Specialists]

On the other hand, it seems to be open season on opponents in the Nutmeg State: lawyers will continue to enjoy “absolute immunity” from being sued by their opponents on charges of fraud. “Donna Simms [client of the lawyers in question] said she wasn’t excited about the decision because she’s been involved in court proceedings with her ex-husband for three decades and there may be more legal fights.” [Insurance Journal]

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It’s against a law firm for allegedly wrongly naming a car dealership as a defendant in an asbestos case. The (unpublished) decision, denying a SLAPP-law motion, is here (Tulare SAG, Inc. v. Keller, Fishback, and Jackson LLP). Note: Link is a document download, not a page, and may not work for all browsers or users.

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Undocumented = unmentionable?

by Walter Olson on September 21, 2013

“An Indiana lawyer has been suspended for 30 days for a comment about the immigration status of his divorce client’s spouse in a letter sent to opposing counsel and the judge in the case.” [ABA Journal]

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Intellectual property roundup

by Walter Olson on September 18, 2013

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Ethics roundup

by Walter Olson on June 10, 2013

  • FBI looks at allegations Dallas DA filed fraud suit as favor to donor [Free Beacon]
  • “Suing ex-client for $500K in divorce fees led to disbarment ruling for former bar president” [Virginia; former "titan" of D.C. matrimonial bar, ABA Journal]
  • “Appeals court cuts ‘unconscionable’ estate legal bill from $44M to perhaps $3M” [ABA Journal on Graubard Miller / Alice Lawrence case, earlier]
  • Empirical puzzler: advent of lawyer advertising doesn’t seem to have had the expected fee-reducing effect [Nora Freeman Engstrom, SSRN via LEF] Law firm marketers were all over the Metro-North crash case [Eric Turkewitz]
  • “DOJ Inspector General’s report: US Attorney unlawfully leaked to discredit critic” [of "Fast and Furious" operation; John Steele]
  • “Lawyer accused of bilking real estate investors through false claims of criminal probes takes plea” [New Jersey; ABA Journal]
  • Claim: disciplinary decisions to reinstate errant lawyers should be more guided by experts [Bruce Green and Jane Moriarity, SSRN via LEF]
  • If you find it hard to believe opponents would gin up flimsy “speech-gave-offense” charges against Fifth Circuit Judge Edith Jones, recall the earlier ginned-up (and now mostly forgotten) charges against distinguished appellate judges Dennis Jacobs and Alex Kozinski.

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A lawyer who’d been widely and scathingly criticized over his handling of a case — unfairly he thought — proceeded to sue bloggers and journalists for defamation, so many that the total of defendants reached 74. It’s over now, but a New York state judge declined to award sanctions, which may possibly say something about the difficulty of obtaining sanctions under today’s prevailing legal standards, especially in New York. [Tom Crane, San Antonio Employment Law Blog; Popehat ("Our legal system is so broken that it can take years to resolve even the most patently vexatious, harassing, and incompetently prosecuted lawsuits like this one.")]

P.S. “Loser pays would have been valuable here. Costs to each defendant would teach a memorable lesson.” [@erikmagraken]

To allege scienter (intent or knowledge of wrongdoing) in securities fraud cases, lawyers sometimes avow to the court that they have one or more confidential sources who tipped them off to the wrongdoing. If the court accepts this story, they may keep a case alive for which there would otherwise be no or inadequate evidence. Trouble is, the confidential informants can be, if not entirely a mirage, then flimsier on inspection than the court might have assumed. Cory Andrews of WLF tells of a recent ruling by Judge Richard Posner in a case called City of Livonia Employees’ Retirement System v. Boeing:

Seeking hundreds of millions of dollars in damages, plaintiffs filed a putative class action alleging that Boeing Company, along with its CEO and the head of its commercial aircraft division, committed securities fraud in violation of federal law. The district judge dismissed the complaint for failing to allege sufficient facts to properly plead the requisite scienter for fraud. Not to be deterred, plaintiffs promptly filed an amended complaint, but this time with detailed bombshell revelations from a confidential source. Ultimately, however, the allegations in the amended complaint could not withstand even the slightest scrutiny.

As Posner describes it:

The plaintiffs’ lawyers had made confident assurances in their complaint about a confidential source — their only barrier to dismissal of their suit — even though none of the lawyers had spoken to the source and their investigator acknowledged that she couldn’t verify what (according to her) he had told her.

Their failure to inquire further puts one in mind of ostrich tactics —of failing to inquire for fear that the inquiry might reveal stronger evidence of their scienter regarding the authenticity of the confidential source than the flimsy evidence of scienter they were able to marshal against Boeing.

Noting that the same law firm [Robbins Geller Rudman & Dowd] had been accused of “similar conduct” in three other reported cases, Posner [on behalf of a unanimous panel] remanded the matter back to the district judge, who would be in a better position to calculate a dollar amount for Rule 11 sanctions.