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Brave Law Firm, LLC v. Truck Accident Lawyers Group, Inc.

United States District Court, D. Kansas

September 20, 2019




         In this case between two competing personal-injury law firms, plaintiff alleges that defendants advertised achieving gross recoveries for past clients that never actually happened. At the heart of the case is defendants’ advertisement that they obtained a $9 million settlement.[1] In an August 8, 2019 order, the court granted plaintiff’s request to compel production of documents related to the advertised settlement.[2] The court also entered a protective order governing disclosure of information in the produced documents, so as to protect the privacy of the past clients (nonparties to this suit).[3]

         From those orders, two new disputes have arisen, which are now before the court. First, plaintiff has filed a motion for sanctions (ECF No. 92), alleging defendants have refused to comply with the court’s order that defendants produce documents responsive to Document Request No. 8. Second, defendants have filed a motion for a protective order prohibiting plaintiff from publicly disclosing the identities of the litigants to the underlying settled lawsuit (ECF No. 96). For the reasons discussed below, both motions are granted.

         Motion for Sanctions Based on Defendants’ Response to Request No. 8 (ECF No. 92)

         In Document Request No. 8, plaintiff sought, “Documents proving you, or any law firm you were associated with, received and/or deposited funds received in connection with the alleged $9, 500, 000 settlement you claim you obtained on behalf of a former client . . . .”[4] Defendants responded, “The only documents in Defendants’ possession, custody, or control responsive to this request are withheld from disclosure and production because such disclosure and/or production is ethically prohibited by KRPC 1.6, because such disclosure and/or production is prohibited by contract, and because the request seeks to invade the privacy rights of individuals and/or entities who/which are not parties to this litigation.”[5]Plaintiff challenged defendants’ objections in a motion to compel, [6] and the parties fully briefed the issue.[7] The court overruled defendants’ objections and ordered defendants to produce responsive documents by August 26, 2019.[8]

         Rather than produce the documents, on August 26, 2019, defendants served a “supplemental response” that stated, “In accordance with the Court’s August 8, 2019 Order, Defendants searched diligently for records reflecting receipt or deposit of such settlements funds and are not in possession, custody, or control of any responsive documents.”[9] In the briefing of the instant motion, defendants say documents produced in response to other requests for production could also prove defendants received funds from the settlement and thus, in hindsight, should have been identified as responsive also to Request No. 8.[10]

         The court finds this “mistake of counsel” explanation wholly unpersuasive. The record is much more consistent with an inference that defendants and their lawyer were intentionally obtuse and evasive in originally answering Request No. 8, essentially inviting plaintiff’s counsel (and the court) to go down a rabbit hole. This is a clear violation of Fed.R.Civ.P. 26(g).

         Rule 26(g)(1) places an obligation on counsel signing a discovery response to conduct a “reasonable inquiry” into whether his client has discoverable information. “Counsel has an obligation to assure that the client complies with discovery obligations and court orders and, thus, careful inquiry by counsel is mandated in order to determine the existence of discoverable documents and to assure their production.”[11] Counsel, or the party on whose behalf they signed, are subject to mandatory monetary sanctions for incorrectly certifying, without substantial justification, a discovery response as complete and correct at the time it is made.[12]

         Here, the record is clear that defendants and their counsel originally indicated documents responsive to Request No. 8 existed. At no time during the pendency of the motion to compel production of said documents did defendants revise their response. Rather, only after the court ordered the documents produced did defendants “search[] diligently” for the documents and come up empty handed. Had defendants and their counsel satisfied their Rule 26(g) obligation to make a reasonable inquiry before serving their signed discovery responses, plaintiff would not have moved to challenge their objections and the court would not have invested time and resources in deciding the matter. Whether defendants’ answer was a blatant lie to mislead plaintiff, or whether it reflects a failure of defendants and their counsel to conduct a “reasonable inquiry” into whether defendants had responsive documents in their possession, custody, or control, ultimately is of no matter.

         Defendants’ recently modified explanation of their actions does not hold water. In their response brief to the instant motion, defendants state documents produced in response to Request Nos. 6 and 7 could also apply to Request No. 8. But the documents defendants reference-the underlying settlement agreement, an attorney’s fee-division agreement, and declarations from co-counsel stating defendants were involved in obtaining the settlement-are not responsive to Request No. 8’s request for documents showing defendants actually received or deposited funds from the settlement. Thus, the court rejects defendants’ after-the-fact creative recasting of the documents.

         In its motion for sanctions, plaintiff requests “the Court order the Defendants to fully respond to Request No. 8 as previously ordered, and that reasonable attorneys’ [fees] be assessed against the Defendants.”[13] The first request for relief appears impossible to grant. In addition to defendants’ supplemental response asserting they have no possession, custody, or control over responsive documents, defendants’ response to the instant motion explains that they have no legal or practical ability to obtain bank records or other documents that might reflect defendants’ receipt of funds.[14]

         The court can, however, grant plaintiff’s request for attorney’s fees. As noted above, such sanctions are mandated by Rule 26(g) based on defense counsel’s violation of that rule. Accordingly, by September 27, 2019, the parties are ordered to confer and attempt to reach agreement on the amount of attorney’s fees defendants and their counsel will pay to plaintiff in connection with Request No. 8. In the hopefully unlikely event the parties cannot reach an agreement, then by October 1, 2019, plaintiff shall file an accounting of the costs and legal fees (including supporting documentation, such as attorney time sheets) it sustained in regard to filing and briefing the portion of its motion to compel attributable to Response No. 8, and to the motion for sanctions. Thereafter, defendants may, if they believe it necessary, file a response to plaintiff’s filing by October 3, 2019. The sanction liability shall be equally divided between defendants and attorney Richard A. Olmstead, the Rule 26(g) signatory to the response. Olmstead is barred from seeking reimbursement from his law firm.[15]

         Motion for Protective Order Prohibiting Plaintiff from Disclosing the Names of the Parties in the Underlying Settled Lawsuit (ECF No. 96).

         The court’s August 8, 2019 order, as noted above, directed defendants to produce a copy of the settlement agreement discussed in their advertisement, and ordered the settlement agreement subject to a simultaneously issued protective order. Defendants produced the agreement, and from it plaintiff learned the names of the settling parties. Plaintiff used that information to locate the underlying lawsuit and files therein. The judgment in the underlying lawsuit (which lays out some of the terms of the settlement reached) is publicly filed, as is the petition therein. Plaintiff has taken the position that the publicly filed documents are not subject to the protective order, so may be publicly disclosed. Defendants argue a ...

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