Lawyer Misled By Client About Existence of Thumb Drive Can't Be Held in Contempt

The eDiscovery Resource Center™ is Bloomberg BNA’s comprehensive research solution for litigators and in-house counsel who require authoritative guidance on the handling,...

Jan. 16 — A trial court abused its discretion by issuing a contempt citation against a lawyer who “unknowingly repeated” his client's false representations about the existence of a thumb drive the client was ordered to produce, the U.S. Court of Appeals for the Fifth Circuit held Jan. 14.

Judge Priscilla R. Owen, writing for the court acknowledged that the “prima facie elements of contempt were present” because the lawyer failed to produce the item (a USB “thumb drive”) “with knowledge of the court order.” But “an alleged contemnor may defend against a prima facie showing of contempt by demonstrating a present inability to comply with a court order,” the appeals court said.

That defense applied here because the “record reveals [the client] misled [the lawyer] as to the existence of the thumb drive,” it said.

The panel also rejected two other bases the trial court cited in the contempt order. Further, it held that because the sanctioned lawyer did not receive “sufficient notice,” the contempt order could not stand even if the reasons underlying the order had been valid. (See box.)

‘Immediate Steps to Distance Himself.'

Waste Management Inc. (WM), the plaintiff in the underlying litigation, argued that even if defense attorney Michael A. Moore's misrepresentations were attributable to client deception, he “still had a duty to correct those statements after he determined that [the client] did in fact possess the [thumb] drive, and his continued silence at that point made him complicit in the deception.”

But the appeals court said ameliorative measures taken by Moore—who immediately contacted an ethics expert and withdrew from the representation after the client belatedly told him the thumb drive did in fact exist—were sufficient to absolve the lawyer of contempt liability.

Waste Management relied on In re Rosenthal, No. H-04-186 (S.D. Tex. March 28, 2008), an unpublished decision in which a lawyer was sanctioned for failing to disclose immediately that a client deleted relevant, subpoenaed e-mails.

“But this court reversed Rosenthal in [Ibarra v. Baker, 338 Fed. App'x 457, 2009 BL 161691 (5th Cir. 2009)] because the lawyer, upon discovering that his client had deleted the responsive e-mails, took immediate steps to recover the lost information and informed opposing counsel of the conduct after the extended Thanksgiving weekend,” the court said.

“Although this case differs from Ibarra because Moore played a somewhat less proactive role in alerting the court to the deceptive conduct, he did take immediate steps to distance himself from [his client], and the court and opposing counsel did learn of [the client's] refreshed recollection within one week,” Owen said. “Accordingly, we conclude that here, as in Ibarra, Moore's conduct ‘did not amount to assisting a fraudulent act.'”

Other Grounds Rejected

The panel also vacated a finding that Moore engaged in contempt when he refused to comply with an order to produce images on his client's iPad. That refusal was predicated on Moore's objection that the requested material contained privileged information, and “a party's good-faith claim of attorney-client privilege can serve as a valid defense to a finding of contempt,” the appeals court said.

The trial court held that Moore also engaged in contempt by failing to produce the iPad device itself. “However, no contempt liability may attach if a party does not violate a ‘definite and specific order of the court,'” the Fifth Circuit said, citing Hornbeck Offshore Servs., LLC v. Salazar, 713 F.3d 787 (5th Cir. 2013).

Here, “Moore was under the understandable impression that the only order in place was to produce an image of the device,” the court said.

“[G]iven the degree of confusion surrounding whether the district court ordered production of the physical device, we conclude that Moore did not violate a definite and specific order of the court,” it said.

Judges E. Grady Jolly and Patrick E. Higginbotham joined Owen's opinion.

Thompson & Knight LLP represented Moore. Hunton & Williams LLP represented Waste Management.

The full text of Waste Mgmt. of Wash., Inc. v. Kattler, is available at http://www.bloomberglaw.com/public/document/Waste_Mgmt_of_Wash_v_Kattler_No_1320356_2015_BL_8449_5th_Cir_Jan_

Threshold Problem: Insufficient Notice

The panel said that because the lawyer cited for contempt had not received sufficient advance notice of that possibility, the contempt order couldn't stand, even if the reasons underlying it had been valid.

“Adequate notice typically takes the form of a show-cause order and a notice of hearing identifying each litigant who might be held in contempt,” the court said. But here, the notice published by the trial court “did not signal to Moore that he could be found in contempt, because it identified [his client] alone as the party whose contempt liability was to be adjudicated,” it said.