Judge Marcia G. Cooke

Judge Cooke’s ruling appears below (via Scribd). It contains numerous cautionary tales and words of warning for litigators, in-house lawyers, e-discovery vendors, and anyone involved in the nightmare that we call civil discovery. Some highlights:

1. Page 2: This is where the Pink Panther language appears. Also: “Over 200 Greenberg attorneys were involved in this case.” Ugh — major coordination problems. And how many billable hours did they rack up?

2. Page 11: I previously wondered whether Donna Evans, the ex-GT shareholder who left the firm in the wake of the TD Bank controversy, received bad information from one of her associates. It seems that perhaps she did.

3. Page 15: Oh, the perils of e-discovery! “For the fault of one mouse click this matter would not be before me.”

4. Page 16: More on the dangers of discovery. If your documents are in too many places, it’s easy to overlook locations where relevant documents might be found.

5. Pages 23: This is the heart of the ruling as to Greenberg Traurig — and scary stuff for anyone involved in document production. From the ruling:

Greenberg Traurig acted negligently in failing to produce the CDD form in a manner that preserved the document’s qualities. It is clear that, to preserve all its original qualities, the CDD form should have been produced in native format or color tiff.

For better or worse, it’s not common for documents to produced in ways that fail to preserve their full, original qualities. Lawyers involved in document production need to be alert to situations where this could present a problem. This isn’t always an easy task, especially when millions and millions of pages are being produced and lawyers are just trying to meet their production deadlines.

6. Page 25: And here is scary stuff for in-house counsel:

It appears that TD Bank’s in-house counsel were conspicuously absent from any involvement in supervising or assisting in the litigation of this matter. In-house counsel did not participate in preparing witnesses for deposition or trial…. It also does not appear that in-house counsel was involved in ascertaining the existence of the Standard Investigative Protocol document or in adequately reviewing documents prior to production….

Further, TD Bank compartmentalized its groups of attorneys and segregated information from the trial attorneys in this case. The Greenberg Traurig attorneys dealt with different individuals depending on the subject matter or nature of the inquiry….

I do conclude…. that TD Bank willfully concealed relevant evidence from its trial counsel. In doing so, TD Bank prevented trial counsel on both sides from fully and accurately presenting the issues in this case, and interfered with the judicial process.

I suspect that some of these practices — delegating almost all trial prep to outside counsel, having outside counsel “deal[] with different individuals depending on the subject matter or nature of the inquiry” — are engaged in by some if not many in-house lawyers. Corporate counsel, consider yourselves warned.

Here’s the full ruling for your reading pleasure:

Judge Cooke – Ruling on Sanctions Motion

MANDEL & MANDEL LLP — PRESS RELEASE — FEDERAL COURT JUDGE SANCTIONS TD BANK, GREENBERG TRAURIG

Sanctions for Negligence, Willful Misconduct Relate to Discovery Violations in Rothstein Ponzi Scheme Trial

MIAMI, FL – AUGUST 3, 2012 – Today, United States District Court Judge Marcia G. Cooke issued sanctions against TD Bank and Greenberg Traurig, ruling that the bank acted in bad faith and its former law firm acted negligently, engaging in a pattern of discovery violations during a landmark civil case last January. The sanctions were sought by Miami-based Mandel & Mandel, which obtained a $67 million verdict on behalf of Texas-based Coquina Investments, a victim in ex-attorney Scott Rothstein’s $1.2 billion Ponzi scheme.

“We are extremely pleased that Judge Cooke recognized the bank’s misconduct for what it was, willful and in bad faith,” David Mandel said of the judge’s ruling. “Her sanctions ruling establishes once and for all that TD Bank knowingly participated in the Rothstein Ponzi scheme. The implications of the Court’s factual findings and legal conclusions will be far reaching.”

Judge Cooke found explicitly “that TD Bank’s monitoring and alert systems were unreasonable and that TD Bank had actual knowledge of Rothstein’s fraud.” Greenberg Traurig and TD Bank must also pay attorney’s fees and costs associated with litigating the motions for sanctions brought by Mandel & Mandel.

She also compared the TD Bank and Greenberg’s conduct to the antics of a popular who-done-it comedy. “…it often times appears that this litigation was conducted in an Inspector Clouseau-like fashion. However, unlike a ‘Pink Panther’ film, there was nothing amusing about this conduct and it did not conclude neatly.”

Her ruling, however, did not include sanctions against any individual attorney in the case.

The altered document at the center of the sanctions, TD Bank’s “Customer Due Diligence” form, was entered into evidence at the Coquina trial with solid black bands concealing the fact the bank had labeled Rothstein’s law firm at “high risk” for money laundering. In testimony at the trial, and in using the altered document for defense, the bank maintained that since the Rothstein account was not flagged as high risk, it did not conduct a more thorough due diligence that might have detected Rothstein’s fraud. However, the same form was produced in discovery in a related case against TD Bank without the black bands and with the words “HIGH RISK” in red as the document’s heading. Upon learning of the unaltered Customer Due Diligence form, Mandel moved for sanctions last March.

Also at the Coquina trial, TD Bank asserted it did not have a “Standard Investigative Protocol” document — steps anti-money laundering officials at the bank should take in their due diligence research — when in fact it did. After learning that the document existed from depositions by the bank’s anti-money laundering investigators, Mandel filed again for sanctions against the bank in April. The bank subsequently admitted to making inaccurate statements about the protocol document at the Coquina trial.

Ultimately, Mandel maintains that had these documents been fully and correctly admitted into evidence during the Coquina trial, the jury’s verdict could have been substantially higher than the $67 million it awarded. In her ruling today, Judge Cooke essentially agreed, saying that TD Bank’s actions resulted in prejudice to Coquina at the January trial.

“Judge Cooke’s thorough and well-reasoned opinion sends a clear message to all litigants,” Nina Mandel noted, “that this kind of conduct will not be tolerated.”

# # #

About Mandel & Mandel:

Miami-based Mandel & Mandel LLP is a litigation firm whose practice is devoted primarily to complex business litigation and white collar criminal defense. The firm is frequently retained in cases involving difficult legal, economic and factual issues and in matters requiring top-flight legal scholarship and forensic skills. The firm practices in federal and state trial and appellate courts throughout the country and in various arbitration tribunals. The firm also represents clients before administrative and regulatory bodies and in grand jury proceedings. For more information, visit www.mandel-law.com.

TD Bank, Greenberg Traurig Sanctioned Over Documents [Bloomberg]
TD Bank sanctioned [Tampa Bay Business Journal]
BREAKING — Judge Cooke issues order in the TD Bank case [Southern District of Florida Blog]
Judge orders Greenberg Traurig, TD Bank to pay fees to Rothstein investor attorneys [Daily Business Review (sub. req.)]
Judge orders Greenberg Traurig, TD Bank to pay fees to Rothstein investor attorneys [Am Law Daily (reg. req.)]
Greenberg Traurig says capital call is buffer against uncertainty [Daily Business Review]
Greenberg Traurig confirms capital call [South Florida Business Journal]
Greenberg Traurig willing to pay $61 million in mortgage case [South Florida Business Journal]

Earlier: Prior ATL coverage of Coquina Investments v. TD Bank
Greenberg Traurig and the TD Bank To-Do: What Happened at the Contempt Hearing?
Greenberg Traurig and the TD Bank To-Do: A Final Rebuttal
More About the TD Bank To-Do: In Defense of Greenberg Traurig
Greenberg Traurig Gets Dropped By Client After Alleged Misstatement To Court


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