Mar. 8, 2019
Dishonest Attorneys Face Severe Consequences
In recent years, courts have shown little hesitation in imposing severe sanctions on attorneys if the court determines that the attorneys have not been truthful either in response to inquiries from the court during hearings or in written pleadings.
In recent years, courts have shown little hesitation in imposing severe sanctions on attorneys if the court determines that the attorneys have not been truthful either in response to inquiries from the court during hearings or in written pleadings. While part of an attorney's role as an advocate often involves arguing over disputed facts, judges are demonstrating that they will not tolerate advocacy that crosses the line into misrepresenting the facts.
In particular, a 2016 order in a high-profile case brought the issue of candor to the court to the forefront. In Texas v. United States, the U.S. District Court for the Southern District of Texas issued a scathing order criticizing the conduct of several Department of Justice attorneys defending the federal government against a suit brought by a group of 26 states. The court found that the DOJ attorneys violated their duty of candor by "making statements that clearly did not match the facts" during hearings and in pleadings regarding the government's compliance with prior orders or rulings.
As a result, the court imposed sanctions not only against those DOJ attorneys involved in the case (revoking their pro hac vice status), but also against all DOJ attorneys employed in Washington. Eventually, the sanctions would be withdrawn after the DOJ was able to persuade the court that the misstatements were inadvertent. Nonetheless, the order served as a powerful reminder to all attorneys that playing fast and loose with the facts can be met with harsh consequences.
Indeed, courts often bring swift punishment when they believe that an attorney has misrepresented the facts. In Heller v. Cepia LLC, 560 F. App'x 678 (9th Cir. 2014), the 9th U.S. Circuit Court of Appeals affirmed the trial court's order requiring the plaintiff's attorney to pay $5,000 to the defendant as a sanction for filing a complaint containing certain allegations that were not grounded in fact. Even though the complaint did contain some supported allegations and was not determined to be baseless as a whole, the 9th Circuit affirmed the imposition of the admittedly "hefty" sanctions based on the district court's determination that no evidence supported two specific factual allegations made in the complaint.
The decision in Heller is especially noteworthy as it involved statements made in a complaint, in which attorneys may be inclined to make wide-ranging allegations regarding their client's claims before the actual facts are known. As discussed below, these orders provide a number of lessons for attorneys to avoid incurring the wrath of the court. Seek Clarification If Necessary
If the attorney believes that there is any ambiguity regarding what the court is asking of the litigants or their counsel, attorneys can consider seeking clarification before taking action that might be construed as inconsistent with the court's instructions. Although some issues arise even when there is no ambiguity or confusion, asking the right questions may minimize the likelihood that a pleading or statement contains (even inadvertent) misstatements of fact.
Attorneys can also take care when making representations to the court regarding their client's conduct. For example, some attorneys have found themselves in hot water by making a personal representation to a court on an issue of discovery or document preparation -- such as that the client has not destroyed any documents or that the client has searched the relevant folders for responsive materials -- that turns out not to be true.
It is typically reasonable for attorneys to rely on the representations of their clients, and attorneys typically cannot be expected to know in all instances whether what they are being told is true. The key is to ask the right questions so that an attorney can then reasonably rely on the information provided by the client in response.
Potential Impact on the Client
In Heller, the court chose to impose a monetary sanction on the attorney which, while undoubtedly painful to swallow for the attorney, is in some ways less harmful than other potential sanctions available to the court. In Texas v. United States, the court considered the various potential sanctions available and, while finding that certain sanctions were inappropriate under the circumstances, nonetheless demonstrated the potential scope of sanctions that might be imposed when an attorney makes misrepresentations.
In particular, the court considered dismissing the case as a sanction and noted that its inherent power and the "egregious conduct" of the attorneys supported dismissal. However, because the litigation had "national importance" and because the Supreme Court was considering the merits of the litigation, the court determined that dismissal was not warranted.
Certainly, Texas v. United States involved unique circumstances. However, had similar conduct occurred in a more typical case, the court signaled that it would have found that dismissal would have been supported and likely awarded. That is clearly a serious sanction that goes beyond just directly punishing the offending attorney and also punishes the client. Even if the court finds that dismissal is not warranted, other courts have deemed it appropriate to strike pleadings or to otherwise craft sanctions that might impair the client's ability to succeed in the case.
Advising the client of the risk in advance may minimize the likelihood that a client pushes an attorney toward a risky approach. It also minimizes the likelihood of a successful claim by that client against the attorney if the worst-case scenario happens and the court awards sanctions.
Potential Impact on the Firm
Another takeaway from these recent decisions is that courts may seek to craft sanctions in a manner that punishes an attorney's entire firm, despite the fact that the misrepresentation may have been made only by a single attorney at that firm. Indeed, one sanction originally ordered in Texas v. United States was for all attorneys at the DOJ's home office who appear or seek to appear in any court in any of the 26 plaintiff states to take three hours of ethics courses every year for the next five years.
Although that sanction was later withdrawn, the DOJ had already taken steps to comply with the court's ruling at the time of withdrawal of the sanction. In any event, the decision served as a stark reminder that attorneys could potentially implicate their entire firm when making representations to the court.