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March 10, 2015 Practice Points

Fabricated Evidence Forces Plaintiff to Walk Away from $1.3 Billion Lawsuit

Successfully exposing falsified evidence can dramatically change the landscape of a case. Failure to guard against it can result in years of wasted effort.

By Daniel Elms

With a revelation that could come from the pages of the latest legal thriller, Moncrief Oil International consented to the dismissal, with prejudice, of its $1.37 billion lawsuit against Russian oil & gas producer Gazprom when Gazprom discovered that a key piece of Moncrief’s evidence had been falsified. Moncrief had sued Gazprom in state court in Fort Worth, Texas, for allegedly backing out of a deal to jointly develop natural gas fields in Siberia and for stealing Moncrief’s trade secrets. Moncrief Oil International, Inc. v. OAO Gazprom, Case No. 017-229664-08, was filed in the District Court for Tarrant County, Texas, in 2008, and finally went to trial in February. 

Four weeks into the trial, Moncrief sought to introduce a document containing an economic analysis allegedly proving that Gazprom had misappropriated Moncrief’s trade secrets.  In reviewing that proposed exhibit, Gazprom’s lawyers spotted a footnote labeled “Figure 11, Revision 6, December 2004.” Upon investigation, they discovered that the referenced Figure 11 was from an article that was not published until 2012. Gazprom asked the court to sanction Moncrief for falsifying the document, and Moncrief agreed to drop its case.  It is unclear whether Moncrief will suffer any further sanction for submitting the tainted evidence.    

Moncrief’s counsel was apparently unaware of the doctored document and described it as a “tragic mistake” by one of Moncrief’s senior executives. But as soon as either side’s lawyer became aware of the fabricated document, he or she was required to disclose it to the court. ABA Model Rule of Professional Conduct Rule 3.3(a)(3) prohibits a lawyer from “offer[ing] evidence that the lawyer knows to be false. If a lawyer, the lawyer's client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.” Although disclosure of the doctored evidence was mandated, Moncrief’s counsel took the further action of falling on the sword, and consenting to the dismissal of the case. 

Although it should go without saying, there is no harm in a lawyer telling his or her clients not to falsify or doctor any evidence. When big money is at stake in litigation, there are those who will go to any lengths—including the fabrication or manipulation of evidence—to prevail. Lawyers should take reasonable measures to satisfy themselves that all of the evidence submitted by all parties to a case is proper and legitimate. Successfully exposing falsified evidence can dramatically change the landscape of a case, and failure to guard against it can result in years of wasted effort.

Daniel P. Elms is a partner with Bell Nunnally in Dallas, Texas.

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Daniel Elms – March 10, 2015