Greenberg Traurig and the TD Bank To-Do: What Happened at the Contempt Hearing?
Remember the discovery dust-up involving Greenberg Traurig, which gave rise to contempt proceedings? The two-day hearing took place last week. What happened?
The “It firm” of May 2012 would appear to be Greenberg Traurig. It’s the Biglaw behemoth that’s generating the greatest buzz and the most headlines right now (not counting Dewey & LeBoeuf, which will soon find itself in bankruptcy).
Whenever there’s a big story, GT is there. In the past month, it has appeared in these pages as the possible savior of Dewey, the actual savior of Dewey’s Poland operations, and the victim of some alleged rudeness by a divorce lawyer in Texas.
And, of course, Greenberg Traurig has found itself at the center of the TD Bank controversy. Late last week, Judge Marcia Cooke held a contempt hearing, to decide whether Greenberg should be sanctioned due to a discovery debacle.
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The hearing spanned two days and featured some high-powered witnesses. What happened?
We mentioned the contempt proceedings in today’s Morning Docket. This might have been the highlight of the hearings, from the Miami Herald:
The head of Miami’s powerful Greenberg Traurig law firm, embarrassed over its failure to turn over key financial records to investors who sued one of the firm’s clients, said he was sorry to a federal judge Friday.
“I want to apologize. Obviously, mistakes were made,” Cesar Alvarez, executive director of the 1,800-lawyer Greenberg Traurig firm, told U.S. District Judge Marcia Cooke near the end of a two-day contempt hearing. “I am very saddened for the firm and for the lawyers.”
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What happened here was very unfortunate, but props to GT for owning up to its mistakes — and sending the head of the entire firm, an M&A lawyer who was not involved in litigating the underlying case, to issue a public apology. That’s how to handle a situation like this one.
So that’s the apology. How exactly did the discovery screw-up occur? Per the Herald:
On April 24, Greenberg lawyers [Mark] Schnapp and [Holly] Skolnick disclosed to the judge that TD Bank possessed a key financial document on its anti-money laundering policy that the bank and its attorneys had said did not exist during the trial. The document, called a “Standard Investigative Protocol,” spelled out the steps TD Bank must take under federal law to know its customers and prevent money-laundering activities.
On Friday, [Greenberg shareholders] Schnapp and Skolnick took the witness stand and told Cooke that they learned of the document’s existence in mid-April from fellow Greenberg attorney [Donna] Evans. Based in Boston, she was mainly responsible for coordinating the bank’s evidence for trial.
Evans, who left Greenberg in late April amid the controversy, also took the stand and answered questions about the document.
Evans first told the judge that she had received an email a year ago from a TD Bank anti-money laundering officer that contained attachments of the missing document. But she said:
“I don’t know if I looked at the emails.”“I don’t know if I had opened any or not.”
UPDATE (5/31/2012): The transcript of the hearing shows that Evans did not say what the Miami Herald originally quoted her as saying (the material now in strikethrough text). Evans did not say that she did not know if she opened an email she received. She was asked by the judge whether she opened attachments that were contained in an email she had received a year earlier, and she responded, “I don’t know if I had opened any or not.” (The Herald has revised its article, and we have accordingly revised our quotation from it, as reflected above.)
We’ve said it once, and we’ll say it again: CHECK YOU EMAIL (sic). Including attachments.
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There’s a bit more to it than that. Here’s additional reporting, from Paul Brinkmann of the South Florida Business Journal:
On the stand on Friday, Evans offered an apology regarding the document issue. She said she relied on bank personnel to tell her what documents existed….
Evans said she requested all the bank’s policies and procedures were, but the SIP document wasn’t included in what the bank gave her.
We saw this coming. As we mentioned in our first story on the Coquina contretemps, “[W]hat about the client? Did any employees or in-house lawyers at TD Bank tell Greenberg Traurig as outside counsel that there was no such thing as a ‘Standard Investigative Protocol’ [the document at the center of this discovery dust-up]?”
It seems there was some in-house confusion over the “Standard Investigative Protocol” versus the “Standard Investigative Tools,” according to testimony summarized by the Biz Journal:
[T]hree TD Bank employees testified: Sara Pinkus, who printed out one of the documents at Evans’s request; Amanda Spencer, who handled investigations in the Enhanced Due Diligence department; and Vincent Auletta, a senior VP for anti-money laundering…. Spencer and Auletta were asked why Spencer changed her story during the case, regarding the existence of the SIP document….
She testified Thursday that she was mistaken, and it was actually called Standard Investigative Excel Spreadsheet. Auletta testified that he had a different name for the document, calling it Standard Investigative Tools. According to Spencer and Auletta, the confusion over the name of the document led them to sign written affidavits, at Evans’s request, stating that the bank had no document actually called Standard Investigative Protocol. But later they found out that it did exist.
Document collection and document review: these processes aren’t fun, but they’ve got to be done right. The discovery process is one of the worst things about civil litigation, but handling it — and handling it competently — is why major corporations hire Biglaw firms (or e-discovery vendors, who are becoming increasingly popular, thanks to their often lower cost and higher expertise levels).
At the end of the contempt proceedings, Judge Cooke took the matter under advisement; expect a decision sometime this summer. Greenberg might not have much cause for optimism, based on some benchslaps dispensed by Her Honor during the hearing. Judge Cooke said at one point that “it is hard for me to describe in words the difficulty throughout this trial related to documents and discovery,” and she also mentioned that she’s considering criminal as well as civil contempt. Ouch.
Maybe Judge Cooke will follow the lead of another judicial diva and sentence the Greenberg Traurig lawyers to some compulsory reading. The Florida Rules of Professional Conduct and the Federal Rules of Civil Procedure might be a good start.
Miami’s Greenberg Traurig law firm apologizes, admits mistakes in Rothstein-related investment trial
[Miami Herald]
Greenberg Traurig chair Alvarez apologizes to court [South Florida Business Journal]
Attorney: TD Bank’s errors in Rothstein case were ‘strategy’ [South Florida Business Journal]
Fifth motion to penalize TD Bank is sealed [South Florida Business Journal]
Lawyers behaving badly [Southern District of Florida Blog]
Earlier: Greenberg Traurig Gets Dropped By Client After Alleged Misstatement To Court
More About the TD Bank To-Do: In Defense of Greenberg Traurig
Greenberg Traurig and the TD Bank To-Do: A Final Rebuttal
