The ABA/BNA Lawyers’ Manual on Professional Conduct™ is a trusted resource that helps attorneys understand cases and decisions that directly impacts their work, practice ethically, and...
By Samson Habte
Aug. 31 — A federal judge abused his discretion by requiring a Jones Day lawyer to make a training video as a sanction for what he deemed her obstructionist deposition tactics, the U.S. Court of Appeals for the Eighth Circuit held Aug. 27.
The opinion from Judge Diana E. Murphy vacates a sanction order that drew national headlines and applause from plaintiffs' lawyers groups—several of which submitted amicus briefs arguing that the district court's ruling properly addressed a proliferating pattern of abusive discovery tactics employed by law firms that defend big corporations.
Murphy said the sanctions order was defective under Fed. R. Civ. P. 30(d)(2) because nobody complained about the misconduct when it occurred, the trial judge waited too long before initiating sanction procedures and the lawyer didn't receive “particularized notice” about the “unusual nature” of the sanction.
Daniel Reidy, the Jones Day partner who successfully argued the firm's appeal, said in an e-mailed statement: “We are gratified that the Eight Circuit agreed with us that the district court's order should be reversed in its entirety and no sanction imposed.”
The district court's sanction order was supported by the American Board of Trial Advocates, whose membership includes defense counsel as well as plaintiffs' lawyers.
ABOTA President Joel W. Collins Jr. and Christopher A. Duggan, who co-authored the organization's amicus brief in this appeal, told Bloomberg BNA they were disappointed with the outcome but gratified by aspects of the court of appeals' decision—which, they said, was largely based on procedural and notice-related infirmities during the proceedings that led to the sanction but didn't erode trial courts' authority to issue similar orders or invalidate the possibility that the challenged conduct in this case could have been subject to an appropriate sanction.
“It's fair to say that the Eighth Circuit opinion does not foreclose the trial judge from trying to fashion a creative remedy or a creative sanction for obstructionist deposition conduct,” said Collins, of Collins & Lacy P.C. in Charleston, S.C. Duggan is a partner of Smith Duggan Buell & Rufo LLP in Boston.
The sanction order was issued by Judge Mark W. Bennett of the U.S. District Court for the Northern District of Iowa in a products liability action against Abbott Laboratories. Among the lawyers representing Abbott Labs was June K. Ghezzi, of Jones Day in Chicago, whom Bennett praised for her trial skills but condemned for using inappropriate tactics during depositions.
As an “outside the box” sanction under Rule 30(d)(2), Bennett instructed Ghezzi to write and produce an instructional video about improper deposition tactics—including “unspecified ‘form' objections, witness coaching, and excessive interruptions”—that he said she engaged in while successfully defending Abbott Labs in a lawsuit over tainted baby formula that allegedly caused a child to suffer permanent brain damage.
Rule 30(d)(2) states that “The court may impose an appropriate sanction—including the reasonable expenses and attorney’s fees incurred by any party—on a person who impedes, delays, or frustrates the fair examination of the deponent.”
Ghezzi and Jones Day argued that neither the purpose nor the language of Rule 30(d)(2) authorizes district courts to impose sanctions on their own motion.
The Eighth Circuit disagreed. It said the rule's provisions are generally “congruent” with Rule 26(g), which governs discovery abuses and expressly allows courts to impose sanctions “on [their] own” motion.
Additionally, the panel said allowing judges to impose Rule 30(d)(2) sanctions sua sponte serves the rule's purpose: “to deter ongoing and future misconduct.”
The appeals court said that while discovery abuse is “a topic of widespread concern in the legal community,” the order couldn't stand for several reasons.
Murphy said two problems were that “opposing counsel did not raise any objection” at the time of Ghezzi's conduct, and that Bennett waited 16 months before taking the issue up on his own motion.
“With few exceptions, sanctions should be imposed ‘within a time frame that has a nexus to the behavior sought to be deterred,'” Murphy said, quoting case law.
“This is especially true when sanctions are imposed sua sponte after the fact, for delay allows potential violations to pass unchecked and undeterred,” she added.
The panel also took issue with Bennett's failure to provide Ghezzi with “advance notice” of “the unusual nature of the sanction being considered.”
“Before imposing the ‘most severe sanctions,' a district court should provide ‘clear notice' as to the form of the sanction,” Murphy wrote, again quoting precedent.
“Particularized notice may be of critical importance when ‘a lawyer or firm's reputation is at stake' because ‘sanctions act as a symbolic statement about the quality and integrity of an attorney's work—a statement which may have a tangible effect upon the attorney's career,'” she said.
“Once information about an unusual sanction appears in public, the damage to the subject's career, reputation, and future professional opportunities can be difficult if not impossible to repair,” Murphy added. She said that “So unusual a sanction required the district court to give particularized notice of the nature of the sanction it had in mind so that counsel would have a meaningful opportunity to respond.”
The court said that although it often remands cases for further proceedings after vacating sanction orders, a remand “would have little value” in the present case.
“Assuming without deciding that there was sanctionable conduct here, defense counsel has already suffered ‘inevitable financial and personal costs,' and any additional sanction proceeding so long after the disputed conduct would not usefully serve the deterrent purpose of Rule 30(d)(2),” Murphy said.
Judge Jane Kelly joined Murphy's opinion. Judge Steven M. Colloton concurred, except for the section on the effect of the delay between Ghezzi's conduct and the sanctions proceeding.
The ruling represents a loss for plaintiffs' lawyers groups that argued in amicus briefs that the sanction order was a measured and effective response to what they see as corporate defense counsel's pervasive use of obstructionist deposition tactics.
The Iowa Association for Justice argued in its brief that opposing counsel's failure to contemporaneously object to Ghezzi's tactics did not preclude the trial court from addressing the misconduct on its own motion later in the proceedings.
“Right or wrong, many attorneys have become complacent with regard to discovery abuse, often due to other litigation deadlines,” the IAJ brief said. “There comes a time when the parties have to move forward with the case they have. Therefore, when a judge has the rare opportunity to consider the kind of deposition discovery abuse at play here, it is vital that the judge exercise her discretion to curb the abuse.”
The IAJ also defended the nature of the sanction, arguing that it was crafted to have a deterrent effect that wouldn't have been possible had the trial judge chosen a more traditional penalty.
“For large, national or international firms, if the only possible sanctions are monetary sanctions, then the cost-benefit analysis of engaging in obstructive discovery practices will always weigh in favor of being obstructionist,” the IAJ brief said.
“When big firms, representing big corporations, are handed drop-in-the-bucket monetary sanctions for obstructing the discovery of relevant evidence, it is far more likely that the attorney gets a pat on the back than a slap on the wrist,” the brief stated.
Jones Day represented itself and Ghezzi. Lommen Abdo represented the plaintiffs.
To contact the reporter on this story: Samson Habte in Washington at email@example.com
To contact the editor responsible for this story: Kirk Swanson at firstname.lastname@example.org
Copyright 2015, the American Bar Association and The Bureau of National Affairs, Inc. All Rights Reserved.
Notify me when updates are available (No standing order will be created).
Put me on standing order
Notify me when new releases are available (no standing order will be created)