Litigation and trial practice

Most lawyers avoid discovery sanctions like the plague. Yet, some parties accept the risk. One recent sanctions award amounted to $2.7 million. In a lawsuit entitled Goodyear Tire & Rubber Co. v. Haeger, the U.S. Supreme Court heard an appeal regarding that very lag sanction award. Justice Elena Kagan ruled in a unanimous opinion that the amount was too large. It exceeds the fees incurred by the wronged party due to Goodyear’s discovery abuse.

The parties had reached an agreement to settle the lawsuit when the plaintiffs learned that Goodyear had failed to produce the results of a tire test. The Arizona judge awarded sanctions based on the legal fees incurred since the date when the defendant failed to produce the requested information. The Supreme Court court, however, said that was error. The amount of the fees should be based on fees incurred due to the discovery abuse. The higher court required a “But for” standard that looks at the expenses incurred due to the discovery abuse. The court asks what would have been incurred but for the discovery abuse.

The plaintiffs responded that $2 million in attorney fees were incurred after the abuse was discovered. The parties would have settled otherwise, they argued. But, the Supreme Court noted the district court awarded $2 million in fees if the $2.7 million was overturned, indicating the district court did not believe the $2.7 million was directly due to the discovery abuse. The federal district court would have to reconsider its $2 million contingent award in night of the Supreme Court ruling. See ABA Bar Journal report.

The President has done it, again. He has said things that were later used against him in court. He issued an Executive Order a few weeks ago threatening to cut off funding to cities and communities that supposedly provide “sanctuary” to unlawful immigrants. The city of San Fransisco and other communities filed suit to stop that obstacle to funding. A federal district judge in San Fransisco found against the administration. The DOJ lawyers argued the cut to finding would only impact a small portion of funding. But, Pres. Trump’s comments indicated differently. The cut to funding, said the President, was a “weapon” against communities that disagreed with his policy. And, in February, Pres. Trump said he would cut off funding to the entire state of California, because it was “out of control.”

These statements, said the judge, indicated the administration intended a very broad cut to funding. Only Congress could tie funding (or no funding) to broad actions by state and local governments. Too, added the judge, the administration cannot tie a lack of funding to a program not related to the order. If the administration wants to control housing, for example it could only limit funding for housing. It could not enact broad limitations. See CBS News report.

Pres. Trump, as I have said before, is the worst client. He cannot avoid saying things that undercut his case. Even worse, he then attacks the judiciary for doing its job. He criticized the Ninth Circuit for this ruling, even though Judge Orrick does not sit on the Ninth Court of Appeals. He is a district judge, not an appellate judge. Reince Priebus, the President’s chief of staff, said Judge Orrick’s decision was the Ninth Circuit going “bananas.” These comments are irresponsible. We all need to respect the decision of the courts, If you cannot beat your adversary in court, do not cry about it later. Especially now when the the best evidence against Trump’s actions is Trump himself.

In a recent decision, the Fifth Circuit reversed the award of attorney fees to a prevailing plaintiff. In Cervantes v. Cotter, the lower court severely reduced the plaintiff’s fee request by some 75% because the plaintiff’s success was, in the view of the trial court, small. The plaintiffs, noted the trial court, were only warded $409 in lost overtime payments. The district court rejected the plaintiffs’ claim for liquidated damages and their claim for retaliation. So, their recovery was just the $409. Yet, the plaintiffs’ attorneys sought $14,000 in attorney fees. The trial court considered that to be an “extraordinary” amount in light of the relief obtained.

But, the purpose of the attorney fee provision in the Fair Labor Standard Act is to to encourage attorneys to accept these small cases. No attorney would accept a case in which the hard, economic damages was a mere $409. And, as the Fifth Circuit noted on appeal, there are twelve factors in assessing attorney’s fees, not just the one factor involving success at trial. See the Fifth Circuit decision here.

The lower court’s decision is not well thought out. The Magistrate discussed the settlement offers and lack of counter-offers by the parties. The Magistrate then concluded that the plaintiff lawyers were “greedy” and the defense attorney was “penny-pinching.” It is an extraordinary decision. The district court ignored eleven of the twelve factors in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). Johnson requires lower courts to look at twelve factors, including the success of the plaintiff, when it assesses a request for attorney’s fees.

The lower court in Cervantes looked just at one factor, the success of the plaintiffs. Then, it went beyond that and looked at the relative settlement success of the two parties. It mentioned one offer of $17,000 in attorney fees and a second offer of $22,000 in attorney fees. It noted the response by the employer of $210 in overtime pay and $1,000 in attorney fees. It almost seemed like the judge was annoyed at having to hear a small case when the parties could have easily settled the matter. I find that unfortunate. These “small” cases are quite large to those involved. The Fair Labor Standards Act is a federal law. If federal courts will not enforce federal laws, who will? In truth, these apparently small cases are not small, at all. These relatively small cases reflect a wider problem with many employers underpaying their employees and generally getting away with it. The Department of Labor can enforce the FLSA, but it rarely does. It is left to these “small” lawsuits to stand up for the little guy whose pay is being stolen by employers. If there is one plaintiff filing a case for a lost overtime of $210, then there are ten others who also suffered similar losses, but chose not to file suit. There was a time when I was working my way through college and law school. In those days, $210 was a very large amount to me indeed.

In effect, the trial court imposed some new requirement that appears to involve second-guessing settlement strategy. I think it was this that caught the eye of the Fifth Circuit. It vacated the trial court’s ruling in a per curiam, unpublished decision. “Per curiam” decisions are those which the court views as simple, routine, not needing extensive explanation. The higher court is saying this should be a simple issue. Courts cannot truly second-guess settlement strategy. There are just too many unknowns.

This lawsuit against Pres. Trump for inciting violence against protesters continues to turn strange. A man known for espousing white supremacy has counter-sued the three protesters and has accused then candidate Trump of directing him and other supporters to remove the protesters. See Politico report. Matthew Heimbach states in his legal pleading that he acted pursuant to the directives and requests of Donald Trump and of the Donald Trump campaign.

Mr. Heimbach is a leader in the white supremacy group, Traditionalist Youth Network. He is acting as his own lawyer in the lawsuit. He asks that any liability for the physical assaults be assigned to the Trump campaign or to Mr. Trump himself. While blaming Mr. Trump, he also states he acted in self-defense or in defense of others. He claims the protesters should not have attempted to disrupt a free assembly and impinge on the rights of others. He claims he relied on the expertise of Donald Trump, a “world famous businessman,” in responding to the protests.

Mr. Heimbach’s pleading is likely his answer to the lawsuit. It sounds like he did indeed rely on Mr. Trump’s guidance. That will not bode well for Pres. Trump’s defense. There are reasons why persons in position of authority in public places are careful about what they say. .

In yet another lawsuit against Pres. Trump, three plaintiffs allege they were physically assaulted at a Louisville, Kentucky rally in 2016 when then Candidate Trump encouraged violence against the three. The three persons attended the rally to protest Mr. Trump. One of the persons who struck the protesters was Alvin Bamberger, a member of the Korean War Veterans Assoc. Mr. Bamberger was also sued. He says he did not strike anyone, but may have touched someone. He says he was inspired to take his actions by Mr. Trump.See Politico news report. That Mr. Bamberger essentially supports the plaintiffs will undermine Mr. Trump’s case.

The candidate was shouting “get ’em out of here” from the podium. The Trump attorneys deny the statement was directed toward the crowd. Sure, it wasn’t, [wink, wink].

The President is claiming immunity from suit. That surely will not work. Pres. Clinton also tried to claim presidential immunity when he was sued for events occurring before he became President and that claim was rejected. No, disingenuous statements in defending a lawsuit, when the events are so well known is not a sound tactic. I do not think this claim of immunity will fly very far. This claim reminds me of the Jon Lovitz character from SNL in the 1980’s. Tommy Flanagan, the pathological liar, would lie even when it was patently obvious he was lying. “Yea, that’s the ticket…”

Mary Ellen Johnson worked at Southwest Research Institute for many years before she was fired. Some time before her termination, she complained about possible discrimination against her due to her gender. She filed an internal complaint with SWRI in June, 2012. She then filed a complaint with the EEOC on Aug. 3, 2012. Several days later, she was fired on Aug. 15, 2012. She was told the reason was failure to observe timekeeping requirements. She had a security clearance in her former position. She lost the clearance when she was fired. The timing of the termination alone suggests the employer was motivated by reprisal because she went to the EEOC.

The employer moved to dismiss the retaliation claim. It claimed she was fired because she lost her security clearance and only because she lost her clearance. If any employer is not motivated by retaliatory intent, but by something neutral, then she could not claim reprisal. When reviewing a motion to dismiss, a judge must look at what the plaintiff says she can show. To dismiss a lawsuit, the judge would have to find there was no set of facts that could support her claim. The employer must show “beyond doubt” that she cannot prove a plausible fact scenario for her retaliation claim.

The court reviewed the papers concerning her termination. It found that the documents were not clear. Neither the memo recommending dismissal or the email concurring in termination mentioned any loss of a security clearance. The letter to the Plaintiff notifying her of her termination does mention a lack of “trustworthiness.” That term matches terminology used for loss of a security clearance. But, said the court, it would be a stretch to conclude from the use of that term that her termination was based on the loss of access to classified material. The letter itself did not otherwise mention the loss of her security clearance.

She might have lost her clearance because she was fired. Or, she might have been fired immediately after losing her clearance. The clearance issue could have come before the termination, or after. The records submitted by the employer did not show one way or the other which came first.

Because the documents are not clear, the motion should be denied. A fact-finder, a jury, should determine what happened. See Johnson v. Southwest Research Institute, No. 15-297-FB (W.D. Tex. 9/28/2016). And, seriously, if the employer makes a claim regarding why someone was fired, but it cannot produce better evidence than the use of one term, with no apparent connection to the decision-making process, then it is either rather very unorganized or it is trying to mis-lead the court. Either way, the employer loses some credibility with the court when it makes an argument based on fairly weak evidence.

The jury trial has greatly diminished in federal court. Where once some 10% of cases filed in federal court resulted in a jury trial in the 1960’s, that number has now decreased to less than 1%. The judge proposed for the U.S. Supreme Court wants to help bring back the federal court trial. Judge Neil Gorsuch, nominated by Donald Trump for the Supreme Court, and Judge Susan Graber propose making jury trials the default for all civil lawsuits filed. Currently, a plaintiff must specifically ask for a jury when s/he files a new lawsuit. The two judges proposed this change to the federal rules of civil procedure in a June, 2016 letter to the federal Judiciary’s Advisory Committee on Rules of Civil Procedure.

The two judges cited several reasons, but their reasons essentially boil down to simply supporting the Seventh Amendment guarantee of jury trials. See ABA Bar Journal report.

Pres. Trump’s case continues to worsen. Ten former State Department officials signed affidavits attesting that the travel ban does not make the U.S. safer. Former CIA Director, Gen. Mike Hayden, former Secretary of State Madeleine Albright, former Secretary of State John Kerry, former National Security Advisor Susan Rice and others have submitted testimony that the ban does not do what the administration claims it does. See NPR news report.

This would be like in an employment suit, former high level managers directly contradicting the employer’s stated rationale for a termination. It would be comparable to several former high level managers saying “No, the revenue projections were positive. Lay-offs were not necessary.” Too, it is just extraordinary when ten former officials care enough to go to the trouble of reviewing and then signing affidavits within such a short amount of time.The exhibit was filed early Monday morning. So, they must have coordinated all this leg-work on Sunday. Judges do take more notice of a lawsuit in which persons with no apparent financial stake in the outcome will go to some trouble to support a lawsuit.

Many of these persons were Democrats. But, for purposes of a lawsuit, that may not matter. What does matter is all ten former officials have expertise regarding the claimed rationale. Many discrimination cases hold that if the stated rationale does not hold water, then the finder of fact can construe the true motive was an improper one, such as discrimination.

The administration starts with a deficit. It is trying to argue that the travel ban is not a Moslem ban. Yet, Donald Trump has been quite well known for proclaiming the need for a Moslem ban for many months. Do his lawyers really expect the judge to disregard his public pronouncements? I doubt it. The Department of Justice lawyers have been given a very difficult case and are doing the best they can with it.

It is very unwise for a party to a lawsuit to discuss the lawsuit or the judge in public. Those statements will almost always become known to the judge. Donald Trump insists on discussing the judge’s actions in the lawsuit over the travel ban. On Sinday, he tweeted that Judge Robart’s decisions was “terrible” and that if there was some mayhem resulting from the lifting of the ban, then the fault would lie with the judge. He accused the judge of placing our country in peril. See CNN news report. There is an old saying: do not mess with teachers in the classroom, policeman on the streets or judges in the court room. Each of those persons are accustomed to being in charge of their respective environments. More importantly, each environment will quickly devolve into chaos if respect and decorum are not maintained.

Comments outside the court room will be noted. Assigning improper motives to the judge will cause some offense. That is so unwise in the midst of a difficult lawsuit. And, it surely drives his legal team crazy. His comments make this lawsuit personal. But, even worse, his comments help show the true motive for this travel ban.

Challenges to the ban are based at least in part on discrimination. The best way to show discrimination is comments by the persons who created or implemented the ban. His comments are admissible evidence. He might well be making his case worse, not better with his tweets.

Donald Trump is involved in many lawsuits. He lost one of them. Mr. Trump purchased a golf course in 2012 ago for $5 million. That was a good price, but part of the deal was that he had to accept the liabilities then pending. Some 65 members were trying to withdraw from their membership. There was some $41 million owed to them as refundable deposits. Under the terms of their agreement, the resignation process was complicated and lengthy. It could take ten years to resign one’s membership. Mr. Trump named the golf course, Trump Golf Course. It is in Jupiter, Florida.

A couple of months after assuming control, Mr. Trump said if they wanted to resign, then they could not have access to the club. Yet, they were still required to pay dues of some $8,000 to $20,000 per year. The members then said well, if they were losing access to the course, then their resignation was final and they were entitled to a refund of their deposits. Mr. Trump’s company refused to issue refunds or to otherwise speed up the resignation process. The members filed a class action lawsuit, saying the new owners were unilaterally changing the terms of their agreement. Eric Trump was the operations person for the golf course and he admitted on the witness stand that paying dues without access to the club violated a fundamental principle of life. Donald Trump testified via videotaped deposition.

The trial was held in federal court last August. This week, the judge issued his ruling in favor of the members. He awarded the members $5.6 million for refunds of their dues and deposits. As always, Mr. Trump said he would appeal. See CBS news report.

But, Mr. Trump’s hardball business tactics did work well in one sense. During the four years of the lawsuit, about half the members changed their mind and withdrew from the resignation list. That saved him tens of millions in refunds he would have owed. See NPR news report. Whether these many lawsuits are good politics is beyond the scope of this blog. But, one must wonder.