Friday, February 3, 2012
From Legal Blog Watch comes this story about a California case in which attorneys sought sanctions against government lawyers for allegedly failing to preserve key documents. Rather than grant the requested sanctions, the presiding federal district court judge instead turned it around on counsel for the moving parties by admonishing them for their hyperbolic writing. The underlying case involves a suit by the Federal Deposit Insurance Corp. against two former banking executives for IndyMac. Legal Blog Watch takes it from there.
In the course of defending themselves against the FDIC, the IndyMac executives aggressively attacked the FDIC for its failure to preserve certain documents. In court papers seeking sanctions, counsel for the defendants accused the agency of a "stunning display of incompetence" for failing to preserve documents. "The breadth and depth of the government's document-retention failures are staggering, and violations of this magnitude rarely occur," they argued. "It is a stunning display of incompetence from an agency that is supposed to be the expert at seizing and managing banks."
On Jan. 30, Central District of California Judge Dale Fischer held a hearing on the defendants' motion seeking sanctions, dismissal of certain counts of the lawsuit and an adverse instruction to the jury based on the government's failure to preserve evidence. As reflected in this transcript of the hearing, Fischer was not all pleased with the exaggerated rhetoric employed by counsel for the IndyMac executives. The judge stated:
... I also want to tell you, I don't know why lawyers do this, and there's a lot of them in the room so take heed, all of you, language like failures are staggering, violations of this magnitude rarely occur, stunning display of incompetence, bitter irony, breathtaking dereliction of duty are not only unpersuasive, they're somewhat annoying. I don't have time for rhetoric. I'm really, really busy.
After an aside in which she wondered why anyone would even want her job of federal judge, the court further scolded defense counsel on their approach to the matter, adding
I don't know whether you stay up nights trying to think of clever phrases, but trust me, no judge that I've ever spoken to has ever said, Boy, can that guy turn a phrase. They only say, Boy, why didn't he get to the point. So, please, in future pleadings, remember that.
Returning her attention again to the specific rhetoric in defendants' brief, the judge offered a reminder to counsel that "I've been around awhile both in practice and on the bench, so I suspect I've seen a few more cases than you, and really, it's not all that staggering and it's not all that great a magnitude, so when your experience and mine differ, it just takes all of the punch out of those comments."
Bottom line: After scolding counsel for a bit in the hearing, Fischer denied the defendants' motion.
The story came to the attention of the Legal Blog Watch via the blog The D&O Diary.