Judge criticizes 'nasty litigation tactics' while sanctioning BigLaw firm
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A federal judge in Colorado has sanctioned Seyfarth Shaw and its client for misconduct during the discovery process.
Senior U.S. District Judge R. Brooke Jackson of the District of Colorado ordered the law firm and its client, the Howmedica Osteonics Corp., to pay their litigation opponent’s share of the costs of a special master appointed to oversee discovery.
Howmedica Osteonics should pay half of the opponent’s special master costs for failing to preserve text messages, Jackson said in his May 10 opinion. Seyfarth should pay the other half for discovery misconduct by counsel that included “playing fast and loose” with discovery obligations, Jackson said.
Jackson also said he was admonishing counsel.
“This was a large, important case for both parties,” Jackson said. “The parties were entitled to zealous advocacy from their outside counsel and from their inside corporate attorneys. However, zealous advocacy does not justify abusive conduct or hiding the ball.”
Howmedica Osteonics is a subsidiary of the Stryker Corp.
Stryker’s counsel “turned this case sour with nasty litigation tactics,” Jackson said.
The case involved a contract dispute between Howmedica Osteonics and the plaintiff, a company hired to help sell Howmedica Osteonics’ medical-implant products. Jackson entered judgment for the plaintiff, ORP Surgical, ordered Howmedica Osteonics to pay $4.7 million in damages, and ordered Howmedica Osteonics to pay ORP Surgical’s attorney fees, as called for in the breached contract.
Jackson referred to Howmedica Osteonics by the name of its parent company, the Stryker Corp., throughout the opinion.
“I find Stryker’s purported excuses for terminating the joint contract for ‘cause’ to be flimsy and lacking in credibility,” Jackson said.
Among the special master’s findings regarding discovery:
• Stryker failed to preserve text messages sent by an area vice president and a sales manager. After the special master recommended spoliation sanctions, “the missing text messages turned up,” Jackson said. The failure to preserve text messages “was either willful misconduct or gross negligence,” Jackson said.
• A Seyfarth Shaw lawyer behaved inappropriately, disruptively, uncivilly and unprofessionally in defending a Stryker recruiter during a deposition. The special master recommended a reprimand.
• Stryker lawyers improperly coached and insufficiently prepared their witnesses who were supposed to testify about compensation of sales reps. The witnesses “declined to answer questions about compensation and indemnification either because they were unprepared or because objections and instructions from Stryker’s counsel encouraged them to stonewall the questioner,” Jackson said.
• Stryker fell significantly short of its obligation to completely disclose relevant documents in a timely manner.
Stryker had contended that any late-disclosed documents were the result of technical difficulties.
A spokesperson for Seyfarth Shaw did not immediately respond to the ABA Journal’s request for comment.
Hat tip to Law.com, which had coverage of the sanction.
