Earlier this week, we wrote about a pair of prominent partners at Skadden Arps who got hit with a big-time benchslap. A federal judge in Chicago issued an order to show cause, requiring the Skadden lawyers to explain why they should not be sanctioned for failing to cite a highly relevant (arguably dispositive) Seventh Circuit case when briefing a motion to dismiss. The judge also set “a status hearing in open court…. [at which the attorneys] are all directed to appear in person.”
The Skadden partners filed a contrite response. They apologized profusely to the court, explained why they viewed the Seventh Circuit as distinguishable, and argued that even though they erred, their conduct didn’t merit sanctions. They announced to the court that they had settled the case in question, with Skadden “contributing to the settlement amount in order to personally redress plaintiffs’ counsel for responding to the motion to dismiss.” (In a classy move, they also extracted their associate from under the bus, explaining that he played no substantive role in the briefing.)
Despite the apology and the settlement, the status hearing went forward as scheduled yesterday. What happened?
We don’t have the transcript yet, but we did have a tipster in attendance. Judge Matthew Kennelly (N.D. Ill.) began the hearing by telling Andrew Fuchs, the Skadden associate who was mentioned with the two partners in the order to show cause, that he (Fuchs) was off the hook. He accepted the partners’ representations that Fuchs played no significant role in preparing the substance of the brief and should therefore not be held accountable for the failure to cite Wigod (the Seventh Circuit case). According to Judge Kennelly, the Chicago-based Fuchs essentially performed the role of local counsel for the two D.C.-based partners.
Then Judge Kennelly turned his attention to the two partners: John Beisner, the co-head of Skadden’s incredibly successful mass torts and insurance litigation group, and his longtime colleague, Jessica Miller (who worked with him back when he was at O’Melveny). He asked the partners questions regarding Wigod and why it wasn’t cited in their opening brief. Miller acknowledged that while they were aware of Wigod, they didn’t put a huge amount of thought into not citing it — i.e., they didn’t make some highly considered decision to hide the Wigod ball from the court. Both lawyers apologized extensively to the court.
Judge Kennelly lectured Beisner and Miller for a while on the operation of the U.S. court system. He explained that in the American adversarial system, unlike the systems of certain other countries, lawyers play a key role in identifying the relevant law and facts for the court. Even though judges (and their clerks) must independently look into the law, they rely on counsel to guide their investigation and analysis. So counsel’s duty of candor is an important responsibility.
Then Judge Kennelly really dug into the Skadden partners. He explained that another federal judge, upon hearing of John Beisner’s conduct in this case (perhaps through ATL?), emailed Judge Kennelly a reported decision in which Beisner was previously called out by the Court for misleading case citations. In open court, Judge Kennelly read aloud this language from In re FedEx Ground Package System, Inc., Employment Practices Litigation, 273 F.R.D. 424 (N.D. Ind. 2008), in which Beisner served as counsel of record:
[I]n case after case in which these rulings are made, the court has marveled at the elasticity of the holdings in the cases FedEx Ground cited for various propositions. Today’s opinion sets forth several of the most remarkable examples. Based on this experience of reviewing 40 pages of FedEx Ground briefs in each of 29 cases, the court urges whatever counsel signs future FedEx Ground briefs to carefully read both the authorities cited in those briefs and Rule 11 of the Federal Rules of Civil Procedure.
Judge Kennelly added that if a lawyer repeatedly plays fast and loose with citing precedent, “bad things start to happen.”
Where did Judge Kennelly leave things at the end of the hearing? He said that even though he was not inclined to impose monetary sanctions on Beisner and Miller, he would consider revoking their pro hac vice status and require them to disclose the revocation in future pro hac applications. The judge indicated that he was inclined to impose more than just a slap on the wrist in light of Beisner’s track record.
Such sternness in the courtroom didn’t come as a surprise to our source. Judge Kennelly, according to our tipster, is “not a guy you want to piss off,” with a “strict, no B.S. personality” when on the bench. Although he’s supposed to be “a great guy, a nice guy” when off the bench, and is also very courteous to pro se litigants, he can be a hard-ass to lawyers, especially lawyers who misbehave.
But perhaps Judge Kennelly mellowed upon returning to chambers. The memorandum opinion and order that he issued today, while harsh in parts, does not yank pro hac vice status or impose any sanction beyond the benchslappery.
We’ve reprinted the full opinion on the next page. It begins by putting poor Andrew Fuchs’s exoneration on the record (citations omitted):
First of all, the Court vacates the order to show cause as to Mr. Fuchs. In the attorneys’ written response, they stated that Mr. Fuchs “was neither the principal drafter of the briefs nor tasked with conducting research related to the briefs”; he relied on the other two attorneys concerning the legal content of the briefing; and he was not personally aware of the Seventh Circuit decision in question…. Mr. Fuchs is an associate, and the other lawyers are senior to him. The Court accepts the attorneys’ statement and vacates the show cause order as it relates to Mr. Fuchs.
The opinion then explains — persuasively, in my view — why Wigod was on all fours with Thul, the case at bar. One can see why the Skadden partners didn’t want to cite it: it’s quite on point, and it’s quite bad for their client’s position.
And one can see that the Skadden partners were in a tough position. One could argue (even if it would be a terrible argument): hey, isn’t this like the Fifth Amendment privilege against self-incrimination? Were the Skadden partners really required to set up their own gallows and hang themselves? In our adversarial system, isn’t it the responsibility of opposing counsel to find cases like Wigod and shove them in Skadden’s face (as opposing counsel did in this case, for the record)?
But the duty of candor requires more. And if your position is so weak that you have to go around playing the ostrich and pretending adverse precedent doesn’t exist, then maybe you need to think about settling the case (which is, of course, what ultimately happened here).
Here’s how the opinion concludes (citations omitted — but we’re not trying to hide the ball from you, since you can read the full order on the next page):
The question now before the Court is what further action it should take with regard to Mr. Beisner and Ms. Miller’s conduct. Determination of this issue turns on not just what counsel did that got them into this position in the first place, but what has happened since then. First of all, the Court’s prior ruling, which like this one identified Mr. Beisner and Ms. Miller by name, is a matter of public record. That is of no small consequence to a professional whose reputation “is his or her bread and butter.” Second, Mr. Beisner and Ms. Miller took full responsibility for their actions, apologized sincerely, and took Mr. Fuchs off the hook. Third, OneWest promptly settled the case; the attorneys’ law firm has contributed financially to the settlement; and the settlement takes into account the additional expense plaintiffs’ counsel incurred due to the filing of the motion to dismiss.
The Court fully understands the impact that a finding of misconduct can have upon an attorney even without the imposition of additional sanctions. This impact was brought home to the Court by counsel’s demeanor when they spoke in the courtroom and when they listened to the oral admonition that the Court rendered. Given all the circumstances, the Court’s issuance of the earlier decision and this one as well as the oral admonition amounts to a sufficient remedy. The Court trusts that Mr. Beisner and Ms. Miller will be more cautious in the future. The Court will impose no further sanction.
Yes, being the subject of extensive benchslap coverage on Above the Law is sanction enough. We’ve moved past the days of scarlet letters, but Google footprints have much greater reach.
(Flip to the next page to read the full opinion and order in Thul v. OneWest Bank, FSB.)