Month: September 2013

District Court Denies Sanctions But Instructs Angry Lawyers To Cool Off

CLAUDE-MORENCY v. University of Miami, Dist. Court, SD Florida 2013 – Google Scholar.

Plaintiff filed a lawsuit against the University of Miami for pregnancy discrimination. The defendant filed a motion for rule 11 sanctions and section 1927 sanctions, alleging that the plaintiff continued to litigate the case after it became clear the case was over.

The district court denied all sanctions motions and admonished counsel to act like adults:

“[G]iven his considerable years of experience, counsel for Defendant should know that though the intent behind filing the motion may not have been to “personal[ly] attack” [DE 33-16, 1] opposing counsel, an allegation of bad faith is inherently personal. Defense Counsel is well aware that sanctions motions must only be filed when the cause is just, the facts certain, and after a thorough reflection on the situation from opposing counsel’s perspective; and even then, only as a last resort. The Court’s expectation is that attorneys of counsel’s stature will take an active role in mentoring younger members of The Bar, and will, at all times, remember their obligation to lead by example. Counsel’s failure to lead, in part, resulted in this needless, time-consuming litigation. Seasoned practitioners, by virtue of their experience know in cases involving emotionally-charged situations — as all employment discrimination cases are — the true art of lawyering is often in the de-escalation of emotion. Wise and experienced counsel who rise to meet this challenge can be invaluable to the Court, and, are relied upon to assist in achieving a just and efficient result as is required by Fed. R. Civ. P. 1. Here, the advocacy on both sides suffered because both counsel compromised their duty of professionalism. It is especially regrettable in Defense Counsel’s case, because, by not showing restraint and better judgment, he missed an important opportunity to lead by example.”

Edward X. Clinton, Jr.

Discovery Sanctions Awarded Against LG Electronics

Slabaugh v. State Farm Fire & Casualty Co., Dist. Court, SD Indiana 2013 – Google Scholar.

This is a case involving a defective washing machine that allegedly caused water damage to the plaintiff’s home. Plaintiff served discovery requests on the U.S. subsidiary of LG Electronics. The subsidiary answered that it did not have the information because the machine was produced by its Korean parent company.

The district court imposed Rule 37 sanctions and ordered LG to produce the information. The court explained:

nstead, in a case where the subsidiary is requested to produce information or documents that are in the possession of its parent company, the rule is that “a subsidiary `need only be able to obtain the documents in question to “control” them, and need not “control” the parent that possesses the documents.'” Ingeteam, 2011 WL 36084 (quoting In re Subpoena to Huawei Tech. Co., Ltd., 720 F.Supp.2d 969 (N.D.Ill.2010)). This ability to obtain the requested information can be difficult to estimate in advance of production, so courts employ various factors to determine the “closeness of the relationship between the entities.” Id. (using five factors to measure “whether a subsidiary has control over documents held by its foreign parent corporation”); In re Subpoena to Huawei Tech. Co., Ltd., 720 F.Supp.2d 969 (N.D.Ill.2010) (using seven factors to measure “the closeness of the relationship between the parties”)….

The Defendant has demonstrated its ability to obtain the requested information and documents, and the Court so finds the Defendant to be in “control” of the materials requested by the Plaintiffs pursuant to Rule 34.

The court described the actions of the defendant as “recalcitrant” and “inexcusable.”

Edward X. Clinton, Jr.

Long Delay In Responding to Discovery Waives Objections

Slabaugh v. State Farm Fire & Casualty Co., Dist. Court, SD Indiana 2013 – Google Scholar.

In this case the defendant electronics company took three months to respond to discovery requests, instead of responding in the required 30 days. The court held that the long delay forfeited the objections to the discovery requests. These waivers are rarely enforced.

The court also disregarded the formal objections that are often put in discovery responses:

When an objection generally asserts that the interrogatory or request is “vague, ambiguous, overly broad, unduly burdensome or that it is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence” without demonstrating its vagueness with specificity, the objecting party has not met its burden.BASF Catalysts LLC v. Aristo, Inc., 2:07-CV-222, 2009 WL 187808 (N.D. Ind. Jan. 23, 2009) (quoting Burkybile v. Mitsubishi Motors Corp., 04 C 4932, 2006 WL 2325506 (N.D. Ill. Aug. 2, 2006)).”

Edward X. Clinton, Jr.

Federal Court Allows Plaintiff To Amend Complaint to Defeat Diversity

Rago v. ING DIRECT, Dist. Court, ND Illinois 2013 – Google Scholar.

This is a decision holding that the court lacks diversity jurisdiction because the plaintiff could not possibly recover the minimum diversity amount, $75,000. The case is interesting because the plaintiff claimed that the defendant bank breached an agreement to refinance his mortgage in the amount of $493,500.

The bank argued that the diversity amount was met by the $493,500 allegation. Judge Durkin disagreed. The court explained:

“The Court finds that there was never any legal basis for Rago to be awarded an amount in excess of $75,000, let alone the $493,700 described in his original complaint. The $493,700 damage figure was never, and will never be, even plausibly possible. Rago alleges that ING breached a contract to refinance his mortgage such that he lost the opportunity to pay a decreased monthly payment at a lower interest rate and to pay down the principal. On the basis of these allegations, the only damages Rago can possibly seek flow from the higher interest he has paid and the fact that no portion of his payments has been applied to the loan’s principal.”

This is an interesting case because the plaintiff was allowed to amend the complaint to arguably defeat diversity jurisdiction.