Thursday, June 3, 2010

No incentive for lawyers to act properly

In one of today's sessions at the annual conference of the ABA Center for Professional Responsibility we discussed cases of misconduct in the process of litigation - both during the pre-trial process and the trial itself. After illustrating many instances of misconduct with cases from the last 12 months, we discussed the possible reasons for the many reported instances of misconduct and there seemed to be some consensus that courts are not doing enough to discourage improper conduct.

Here is a recent example. Pharmalot is reporting that a federal court judge has imposed sanctions on Novartis for misconduct in the process of discovery. However, when I read the judge's opinion (here) what I see is a little different.

In this case, Novartis asserted it did not have any direct to consumer ads to produce during discovery because it never ran any direct to consumer ads. After plaintiffs lawyers found examples of ads in a magazine distributed to cancer patients, the company claimed they had not been produced because those ads were what it called "direct-to-patient ads" (as opposed to direct to consumer ads; see the difference?).

The plaintiffs asked the court to impose sanctions and to mandate the payment of attorney's fees. The Court granted the request for attorney's fees, but denied the imposition of sanctions.

The Court found that the distinction between "direct to consumer" and "direct to patient" ads was misleading concluding that "[t]here is no logical separation between consumers and patients in this context. The target market for these limited-use drugs is cancer patients and cancer patients are the consumers of Novartis products.”

The judge, however, denied the requested sanctions finding that there was no showing that the defendant "deliberately withheld" the documents in question. Apparently, the defendant had, in fact, produced one copy of a magazine which contained an ad as part of its first production of documents.

It seems to me the court did not really think this one through. The facts of the case show that the defendant drugmaker affirmatively denied the existence of relevant ads (in deposition testimony) while at the same time apparently produced one example of such an ad in a production of documents. When exposed with more ads found independently by plaintiffs' counsel, the defendant changed its legal claim to attempt to justify its initial denial of evidence it is now clear it knew existed.

These facts suggest to me there is more to the story and the court is not doing anything to find out. I think the court should have tried to determine if, in fact, the defendant had acted with intent to withhold the information in order to decide whether to impose sanctions. I think the facts suggest at least a possibility that it did. One question I have is how come the first magazine ad went undiscovered if it was in fact provided in response to a production of documents request. Was it perhaps because the production was an attempt to bury it within tons of other documents? If I had been the judge, I would have liked to find out about that before denying the requested sanctions.

The court did not call for an evidentiary hearing and simply said there is no evidence to suggest misconduct. In doing so, it gave the defendant (and its lawyers) a pass.

This is all reminiscent of Washington St. Phys. Ins. Exchange & Ass’n v. Fisons Corp, 858 P.2d 1054 (Wash. 1993), in which the court imposed financial sanctions for somewhat similar conduct.

In neither case, though, were the attorneys disciplined.

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