During the Litigation
Sanctions for ongoing misconduct during the litigation. If opposing counsel is driving up your client’s costs with baseless and excessive disputes, 28 U.S.C. § 1927 (Counsel’s liability for excess costs) provides:
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.
Sanctions under section 1927 can involve “situations in which counsel have acted recklessly, counsel raised baseless claims despite notice of the frivolous nature of these claims, or counsel otherwise showed indifference to statutes, rules, or court orders.” Kotsilieris v. Chambers, 966 F.2d 1181, 1184–85 (7th Cir. 1992). “If a lawyer pursues a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound, the conduct is objectively unreasonable and vexatious.” Kapco Mfg. Co. v. C & O Enters., 886 F.2d 1485, 1491 (7th Cir. 1989). Generally, at least objective bad faith is required, which occurs when “an attorney knowingly or recklessly pursues a frivolous claim or engages in litigation tactics that needlessly obstruct the litigation of non-frivolous claims.” Eldredge v. EDCare Mgmt., Inc., 766 F. App’x 901, 907 (11th Cir. 2019).
For example, in a product liability action involving breast implants, plaintiffs’ counsel were sanctioned for filing a motion to compel and for sanctions that argued that the defendant had failed to comply with the court’s order to produce certain complaint files related to specific adverse events. In fact, the defendant had produced the required complaint files. But finding those complaint files unhelpful, plaintiffs’ counsel instead argued that the defendant should have been required to produce all complaint files from the year in question. Plaintiffs’ counsel ignored the defendant’s protestations that it had complied fully with the court’s order during a pre-filing meet and confer. Only after they filed the motion did plaintiffs’ counsel obtain a transcript of a hearing that confirmed the defendant had complied with its obligation, but plaintiffs’ counsel still did not withdraw the motion. Instead, they doubled down, arguing that despite their misinterpretation of the order, the defendant did not satisfy “the spirit” of the court’s order. In granting the defendant’s motion for sanctions under section 1927, the court held, “Prudent attorneys who had conducted a minimally reasonable pre-filing review would never have filed that motion, and they would never had persisted with that motion upon conceding that it was premised on a misunderstanding of what the court had required of [the defendant] in the October 2019 order.” Gravitt v. Mentor Worldwide LLC, 2021 WL 5564862, at *2 (N.D. Ill. Nov. 29, 2021).
Unlike Rule 11, section 1927 does not have a safe harbor provision. And unlike Rule 11, which is triggered by the signing of a pleading, section 1927 regulates attorneys’ conduct throughout the litigation and can be cumulative.
Proportionality. Proportionality is a welcome concept to many drug and medical device manufacturers when it comes to conducting discovery. Generally, the burden of discovery is largely borne by corporate defendants, while plaintiffs might produce little to no information in discovery. After the 2015 amendments, courts and litigants must now consider the various Rule 26(b) factors pertaining to proportionality when crafting discovery:
- the importance of the issues at stake in the action;
- the amount in controversy;
- the parties’ relative access to relevant information;
- the parties’ resources;
- the importance of the discovery in resolving the issues; and
- whether the burden or expense of the proposed discovery outweighs its likely benefit.
For example, in the situation described above in Gravitt v. Mentor Worldwide LLC, the district court considered a document request by the plaintiffs for the defendant manufacturer to produce individual complaint files for certain adverse events. The defendant had already produced voluminous aggregate and summary reports of those adverse events for all relevant years and argued that the production of thousands of individual complaint reports that would have to be redacted of patient information and information identifying the sources of adverse event reports would be unduly time-consuming and expensive; redaction alone would cost hundreds of thousands of dollars. It was also duplicative of discovery already produced and therefore not important to the issues in the case. The plaintiffs argued that they needed the individual complaint files to confirm the accuracy of the defendant’s aggregate and summary data, given that their claim was based on a failure to report adverse events accurately.
The district court compromised by allowing the plaintiffs to seek one year of individual complaint reports for certain adverse events, to compare those data against the aggregate and summary data already produced, and ordered the plaintiffs to pay for the cost of redacting those complaint files. If there were material discrepancies between the individual complaint files and the summary and aggregate data, the plaintiffs would be given leave to seek additional years of individual complaint files and the defendant would have to pay for redactions.
The court’s solution was a reasonable one that recognized and respected both parties’ proportionality concerns.
At the End
Costs. When a defendant prevails on summary judgment or at trial, filing a bill of costs is good practice to recoup at least some portion of the defendant’s expenses incurred in litigating the case. Rule 54(d)(1) provides that “[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.” Federal courts have generally upheld the award of costs to prevailing parties unless an exception applies, such as indigency or fraud or misconduct of the prevailing party.
Categories of taxable costs under 28 U.S.C. § 1920 can include fees of the clerk and marshal; fees for service of summons and subpoena; transcript costs including hearing, trial, and deposition transcripts, including video; witness fees; costs of court-appointed experts; costs of interpreters; and copy fees, which has been broadly interpreted to include the costs of obtaining a plaintiff’s medical records in a case alleging injury due to a defective drug or medical device, as well as the costs of converting and processing electronically stored information for production, like TIFF conversion, branding, and optical character recognition costs. See Africano v. Atrium Med. Corp., 2022 WL 1989450, at *5–10 (June 6, 2022) (granting defendant’s bill of costs for more than $50,000 following defense verdict in medical device case).
When faced with blatantly meritless claims and bad-faith discovery tactics, defendants have numerous fee-shifting provisions available under state or federal law. Swift and decisive responses to such ploys not only compensate your client for fees and costs unnecessarily incurred but can deter future unscrupulous conduct.