It’s the nightmare scenario of every discovery: what if the client forged all these documents? There really are very few checks upon your own client beyond crafting careful instructions and trusting that it dutifully fulfilled all of them in gathering documents for your review (or at least your contractors’ review). Hounding the client for assurances can only go so far if the client is committed to deceiving the tribunal.

That’s the nightmare a Biglaw firm just faced, and after the firm won a big jury verdict in its client’s favor, the truth came out. How would the firm react?

Our hearts go out to Akin Gump, and specifically Sanford E. Warren Jr. and his team. Warren represented LBDS Holding Co., a tech company alleging that a South Korean entity known as ISOL Technology and its principals breached a contractual agreement and misappropriated its trade secrets in MRI imaging. After prosecuting his client’s claims since August of 2011 and coming away with a verdict in excess of $24 million, Warren received an emergency motion from the defendants alleging that Warren’s client and its principals “manufactured and falsified evidence used in this litigation, testified falsely, and committed a fraud upon this Court.”

Unfortunately, according to Warren’s motion, the defendants turned out to be right. After Warren called LBDS and purportedly got all its principals on the phone, this allegedly transpired:

[Principal] Mr. [Bert] Davis told Mr. Warren that the allegations in the Motion were “essentially correct.” Specifically, Mr. Davis told Mr. Warren that the “Cerner contract,” upon which Plaintiff relied at trial, was not authentic. According to Mr. Davis, although there had been an actual contract with Cerner Corporation, that contract had been altered and had certain schedules attached to it which were forgeries.

We can only imagine that conversation. “That contract? Well, yeah, that’s not real. Is that a problem?”

Hopefully this was a tragic, but isolated incident. Naw, just kidding:

Further, Mr. Davis said that those on the call had set up a fictitious domain name and sent emails from that domain name to create the impression that certain emails, introduced into evidence at the trial of this case, were sent by Cerner Corporation, when in fact they were not.

That Go Daddy receipt is going to end up haunting them. Apparently, according to Warren’s account of the call, Davis explained that this activity dated clear back to 2009 — before litigation even began.

Credit Akin Gump’s swift response. Warren told his client to come clean with the court lest Texas rules require the firm to disclose the apparent fraud. The client, for its part, declined the invitation to report these alleged deeds, and Warren filed a motion to withdraw laying out his account of the call.

The moral of the story is to be ever vigilant. If you think the kind of shadiness described in this motion can’t happen with “Biglaw clients,” you’re wrong. It’s just much more sophisticated and harder to detect when a deeper pocket decides to play fast and loose with the facts. A partner once warned me during a document collection in a white-collar case, “Remember you’re dealing with the criminal f**king element.” Not that we necessarily thought our client was a wrongdoer or that we weren’t prepared to offer a zealous defense, but he meant that when gathering documents from someone accused of a crime they are either innocent, knowingly guilty, or in denial, and two out of those three demand a skeptical approach to gathering facts.

And while that was a criminal investigation, the same holds for any case: at some point, the best service you can offer the client is not taking their story at face value. Stopping a clueless (or ill-intentioned) client before they defraud the court is in their interest, even if it makes for some unpleasant early conversations.

There may have been no way for Akin Gump to have seen this one coming, but that doesn’t mean anyone should ever let their guard down.

To read Akin Gump’s withdrawal motion in its entirety, click on….


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