Adam T. Schramek and Nathan C.N. Damweber 2015-09-30 02:36:57
Litigation ethics at trial and deposition. Being honest and upfront with opposing counsel and the court is the bedrock principle of our civil litigation system. Witnesses take oaths to tell the truth when questioned. Attorneys are not just paid advocates but are also officers of the court. Attorneys and clients must review and produce the relevant documents they possess in order for justice to be done. As the recent decision in Tesco Corp. v. Weatherford International, Inc. demonstrates, when these principles are not adhered to, costly sanctions and case-ending dismissals are possible. The Texas Lawyer’s Creed In the late 1980s, members of the Texas Supreme Court noticed a rise in abusive litigation tactics ranging from “lack of civility to outright hostility and obstructionism.”1 In response, the justices formed the Supreme Court Advisory Committee on Professionalism in 1989.2 This group drafted a code of conduct to address the situation and promote public confidence in the legal profession. On November 7, 1989, the Texas Supreme Court and the Texas Court of Criminal Appeals adopted the Texas Lawyer’s Creed—A Mandate for Professionalism.3 Texas lawyers must abide by the Texas Disciplinary Rules of Professional Conduct, which reflect the required minimum standard of ethical behavior. The creed provides standards to further guide attorneys. And while it is supposed to be “aspirational,” courts often look to the creed for additional support of sanctions awards or in condemning attorney conduct. Litigation Wins and Losses In Tesco Corp. v. Weatherford International, Inc., the U.S. District Court for the Southern District of Texas permitted post-trial discovery due to inconsistencies in the jury’s verdict regarding the validity of various patents and “because of concern—re-enforced during the trial in no small part because of the events discussed herein—that Tesco had not produced all of the discovery that Defendants had properly requested.”4 The post-trial discovery revealed that Tesco’s counsel “affirmatively misrepresented to the Court the statements of key witnesses regarding important evidence.” A case-determinative issue was whether a Tesco marketing brochure from 2002 displayed the invention at hand, a casing drive system used on an oil drilling rig, which would invalidate the company’s patent on the tool.5 During trial, Tesco’s counsel asked the court for time to examine the history of the brochure to “find out what this rendering is, where it came from. ...”6 A few days later, Tesco’s counsel explained: The animators that actually did the brochure and that actually did the rendering are prepared to swear and testify that this is not [the invention at issue]; and in fact, there is no doubt it’s not [the invention at issue]. ... [T]hat is what [the animator is] going to say; and he’s going to say unequivocally that this is not it.” The court allowed a post-trial deposition of the animator, who testified that he was “not involved in the brochure,” there was “no way [he] did that brochure,” he had not created the image at issue, and the statement by Tesco’s counsel was “not true in any way, shape, or form.”8 He went on to say that he had told another of Tesco’s counsel that he “had nothing to do with it.”9 He further testified that he was unable to determine whether the brochure depicted the invention or not because the image was of such poor quality.10 The court concluded that the animator’s deposition testimony was “clearly and directly contrary to the representations [Tesco’s counsel] made to the Court during trial,” and that “this [was] not a simple case of innocent mischaracterization.” The court further noted that if “the actual statements made by [the animator] at this critical inflection point had been reported to the Court,” opposing counsel’s “trial strategy would have been entirely different” and “the Court would, in all probability, have entered judgment for the Defendants forthwith.”11 Noting that counsel “owes the Court a duty of complete candor at all times,”12 as well as the court’s “independent obligation to safeguard its own integrity,” the judge concluded that counsel’s “advantage-seeking misrepresentations ... could not have been calculated to assist the Court in the administration of justice, but only to win an advantage.” 13 Concluding that “[l]esser sanctions will not suffice” and that “the penalty must be severe enough to act as a deterrent,” the court dismissed the case with prejudice.14 The lesson of Tesco is hardly groundbreaking: Unethical litigation conduct can lead to severe sanctions. But is unethical conduct sometimes acceptable in order to win? An informed litigator might point to Rawlins v. Rawlins, where an appellate court chided a lawyer who exploited a clerical judicial error for her own financial advantage.15 In Rawlins, a trial court signed an agreed divorce decree that dissolved the marriage between the attorney (“the mother,” who was representing herself) and her husband (“the father”) and required the father to pay child support. 16 Two years later, the father filed a motion for judgment nunc pro tunc, arguing that that final decree of divorce contained a clerical error regarding the start date for support payments.17 The mother argued that the error was not a clerical error, but rather a judicial error, and therefore the trial court could not correct the error after it lost its plenary power.18 She made the same arguments in a writ of mandamus.19 The court reluctantly held that it was a judicial error and ruled in the mother’s favor.20 Citing the Texas Lawyer’s Creed, the court stated: Because of an apparent typographical or drafting error, Mother will receive a windfall of undeserved child-support payments encompassing a period of time when the family was still intact and living together. The fact that Mother is a Texas attorney, knows that the judgment contained a mistake, and is exploiting that error to her own financial advantage, makes the result even more intolerable. We would hope that an attorney, who is charged with safeguarding the integrity of the legal process, would not insist upon erroneous back childsupport payments—even to the point of appealing from the trial court’s rather transparent efforts to correct the mistake.21 While Rawlins represents a litigation win, it also represents an ethical dilemma far different than that in Tesco. Knowingly providing false information in the course of litigation is never proper or ethical, and, as the Tesco court noted, such conduct is “an abuse of the judicial system” and degrading.22 The ethical dilemma in Rawlins was whether to enforce a rule of law, which, in most circumstances, is per se ethical. The real lesson from Rawlins is one few attorneys will find surprising: The law is imperfect and can be misused. For example, simply because a statute of limitations may bar a claim for conversion or prosecution for theft does not mean the act of stealing was proper. And while many equitable doctrines attempt to prevent unfair results, inequities persist. It is here, more than anywhere, that the creed is intended to help guide attorneys to make the right decisions.23 In other words, whether a claim is barred or not, the thief should return the stolen property. Or in the case of Rawlins, an attorney should not insist on enforcing what everyone acknowledges was a mistake. Finally, there is a “sanction” of sorts that resulted from Rawlins: Having made the decision to pursue what she knew was an unjust result, the attorney now must live with an appellate opinion forever documenting and condemning her action. So was the win really a win? What is the value of an attorney’s reputation? Conducting Ethical Depositions Both the Texas Lawyer’s Creed and disciplinary rules guide attorney conduct in taking and defending depositions. The creed addresses abusive litigation tactics that delay and often deny justice. It instructs attorneys to treat adverse parties and witnesses “with fairness and due consideration” 24 and to advise clients that they will not pursue conduct that is “intended to harass or drain the financial resources of an opposing party.”25 Similarly, Disciplinary Rule 4.04 states: In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.26 Nor shall a lawyer “ask any questions intended to degrade a witness or other person except where the lawyer reasonably believes that the question will lead to relevant and admissible evidence; or engage in conduct intended to disrupt the proceedings.”27 As such, an attorney should refrain from using derogatory language and attempting to embarrass or intimidate a witness. Both the creed and the rules prohibit a lawyer from making false statements and misrepresentations during depositions. The creed states that an attorney will not “knowingly misrepresent, mischaracterize, misquote, or miscite facts or authorities to gain an advantage.”28 Disciplinary Rule 4.1 prohibits a lawyer from making a false statement or misrepresentation during a deposition,29 and Rule 8.4 prohibits a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.30 An attorney may be disciplined for making false or misleading statements during a deposition.31 For example, in In re Kluge, the court disciplined an attorney for lying about being a notary and administering an oath to a deponent and recommended that the attorney be suspended from the practice of law for five years.32 An attorney also may not elicit false testimony from a vulnerable witness, which is prohibited by Disciplinary Rule 3.04.33 The creed states that the “conduct of a lawyer should be characterized at all times by honesty, candor, and fairness.”34 An attorney also cannot take advantage of a deponent who is inadequately protected by counsel,35 such as by using a leading question that contains a false statement (i.e., an attorney asking a deponent, “The car you saw was blue, right?” when the attorney knows the car was green).36 Such a question may violate the creed as well as Disciplinary Rules 3.04 and 8.4(a)(4). Furthermore, an attorney may be held responsible for unethical deposition conduct even without having participated in the deposition. Pursuant to Rule 5.01, a lawyer can be disciplined for another lawyer’s violation of these rules if he or she is a partner or supervising lawyer and orders, encourages, or knowingly permits the conduct involved. Furthermore, Rule 8.04 prohibits a lawyer from helping another or using a third person to violate the rules. Controlling a Client’s Unethical Conduct Attorneys may have a duty to intervene during depositions to prevent their clients from acting inappropriately. In GMAC Bank v. HTFC Corp., a federal judge in Pennsylvania addressed not only “what to do about uncivil conduct by a witness in a deposition” but also “the duty of counsel who is confronted by uncivil conduct by his own witness.”37 In GMAC, plaintiff’s counsel brought a motion to compel and for sanctions after he deposed Aaron Wider, owner and CEO of HTFC Corp., about a contract for the sale of certain loans.38 The court found that Wider said “f---” during the deposition at least 73 times, while he used the word “contract” only 14 times.39 Furthermore, on several occasions, Wider improperly refused to answer certain questions. 40 Throughout Wider’s nearly 12 hours of deposition testimony, his attorney “persistently failed to intercede and correct” his client’s inappropriate behavior.41 The court issued a sanctions order spanning dozens of pages. It required Wider and HTFC’s counsel—jointly and severally—to pay the fees and expenses incurred in connection with the motion to compel as well as 75 percent of the fees incurred by the defendant in connection with the deposition.42 The sanction was issued pursuant to Federal Rule of Civil Procedure 30(d)(2), which permits “appropriate sanctions” when a person “impedes, delays, or frustrates the fair examination of the deponent.”43 The court concluded that “Wider’s conduct was outrageous” and HTFC’s counsel’s “complicity” was inexcusable44 and found that Wider engaged in three types of inappropriate behavior, including hostile, uncivil, and vulgar conduct; impeding, delaying, and frustrating fair examination; and failure to answer, as well as intentionally evasive answers.45 The court based the attorney’s liability on his willful failure to intervene and control the client from engaging in obstructive behavior,46 stating that an attorney may not “sit back, allow the deposition to proceed, then blame the client when the deposition process breaks down.”47 The importance of GMAC is clear. Attorneys must affirmatively take action to prevent their clients from using abusive and harassing litigation tactics. Conclusion Attorneys are always looking for an edge, and litigators hate to lose. But the desire to prevail must never win out over the importance of ethical conduct. As Tesco reminds us, lawyers may be subject to severe penalties if they engage in unethical conduct during litigation. In fact, attorneys may be sanctioned for their partners’, employees’, or even clients’ unethical behavior. Attorneys in Texas are well advised to adhere closely to the Texas Lawyer’s Creed and Texas Disciplinary Rules of Professional Conduct in order to avoid potential sanctions, losses in court, harm to client relationships, and damage to their reputations. A version of this article was originally presented at the 38th Annual Page Keeton Civil Litigation Conference in October 2014. Notes 1) See generally the Texas Lawyer’s Creed—A Mandate for Professionalism (adopted by the Supreme Court of Texas and the Court of Criminal Appeals Nov. 7, 1989), reprinted in Texas Rules of Court 803, 804-05 (West 2010). 2) See Texas Center for Legal Ethics, History of the Texas Lawyer’s Creed, http://www.legalethicstexas.com/Ethics-Resources/Rules/Texas-Lawyer-s-Creed/History-of--the-Texas-Lawyer-s-Creed.aspx. 3) See Id. 4) Tesco Corp. v. Weatherford International, Inc., No. 4:08-cv-02531 (S.D. Tex. Aug. 25, 2014), at 3. 5) Id. at 5. It was also disputed whether the brochure at issue had ever been produced. It appears that even if it had been produced, it was not produced in color. 6) Id. at 5. 7) Id. at 6. 8) Id. at 6-8. 9) Id. at 8. 10) Id. 11) Id. at 10-11. 12) Id. at 11. 13) Id. 14) Id. at 12. 15) See Rawlins v. Rawlins, 324 S.W.3d 852, 857 n.5 (Tex. App.—Houston [14th Dist.] 2010, no pet.). 16) Id. at 853. 17) Id. 18) Id. at 853-54. 19) Id. at 855. 20) Id. at 856-57. 21) Id. at 857 (emphasis added). 22) Tesco, No. 4:08-cv-02531 at p. 12. 23) The concept of “fairness” or equity is often debatable given a particular set of facts and circumstances, and attorneys are well suited to ethically participate on either side of such debates. But the spectrum of equity has its extremes, and the creed is one tool that helps attorneys recognize when they have reached one end or the other. 24) Texas Lawyer’s Creed, Art. II, § 6. 25) See id. at Art. II, § 7. 26) Tex. Disc. R. Prof. Conduct 4.04(a). 27) Id. at (c)(4)-(5). 28) Texas Lawyer’s Creed, Art. IV, § 6. 29) Tex. Disc. R. Prof. Conduct 4.1. 30) Id. 8.4(a)(3). 31) See, e.g., In re Kluge, 27 P.3d 102 (Or. 2001); see also David B. Markowitz & Joseph L. Franco, Ethics in Deposition: Do the Rules of Professional Conduct Require Self-Restraint by the Questioning Lawyer? 32 Or. State Bar Lit. J. 12 (Fall 2013). 32) In re Kluge, 27 P.3d at 104. 33) Tex. Disc. R. Prof. Conduct 3.4(b). 34) Texas Lawyer’s Creed. 35) See Markowitz & Franco, Ethics in Deposition, supra. 36) See Id. 37) GMAC Bank v. HTFC Corp., 248 F.R.D. 182, 184 (E.D. Pa. 2008). 38) Id. 39) Id. at 187. 40) Id. at 189. 41) Id. at 194. 42) Id. at 199. 43) Id. at 198. 44) Id. at 198. 45) Id. at 186. 46) Id. at 196-97. 47) Id. at 195. ADAM T. SCHRAMEK is a commercial litigation partner in the Austin office of Norton Rose Fulbright. His practice focuses on class actions, multidistrict litigation, and technology disputes. He also chairs the firm’s pro bono committee. NATHAN C.N. DAMWEBER is a litigation associate of the Austin office of Norton Rose Fulbright.
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