Upon review of all of the evidence I conclude that Rule 37 sanctions against Greenberg
Traurig and TD Bank are warranted. Having determined that TD Bank’s discovery violations were willful and resulted in prejudice to Coquina, I must determine what is the appropriate sanction in this case. Coquina urges that I strike TD Bank’s pleadings or its notice of appeal.
Discovery sanctions must be “just” and “specifically related” to the discovery violations.
See Ins. Corp. of Ireland, Ltd. v. Compagnie de Bauxites de Guinee, 456 U.S. 694, 707 (1982); Sierra Chevrolet, 446 F.3d at 1152. The discovery violations in this case resulted in Coquina’s diminished ability to prove that TD Bank’s actions were unreasonable and it had knowledge of fraud. Although the jury found in Coquina’s favor, Coquina now faces post-trial motions, which challenge the sufficiency of the evidence it put forth at trial on these issues. I will therefore direct that the facts that TD Bank’s monitoring and alert systems were unreasonable and that TD Bank had actual knowledge of Rothstein’s fraud be taken as established for purposes of this action. See Fed. R. Civ. P. 37(b)(2)(A)(i). This sanction will prevent further prejudice to Coquina in an eventual appeal on that issue. Greenberg Traurig and TD Bank shall also pay Coquina’s reasonable attorney’s fees and costs associated with bringing and litigating the Fourth and Fifth Motions for Sanctions and its Notice of Supplemental Evidence, and its reasonable attorney’s fees and costs associated with litigation resulting from TD Bank’s Notice of Withdrawal. This sanction serves to compensate Coquina for the added expense caused by Greenberg Traurig’s and TD Bank’s discovery violations and abusive conduct. See Carlucci, 775 F.2d at 1453. Coquina’s counsel shall file a motion for fees and costs within twenty days of this Order.
Judge Cooke, however, did not sanction the individual lawyers.
John Pacenti has the details:
U.S. District Judge Marcia Cooke in Miami found Cherry Hill, New Jersey-based TD Bank manipulated its attorneys and concluded Greenberg was negligent in its handling of the case brought by Corpus Christi, Texas-based Coquina Investments LLC. But she issued no sanctions against any individual attorneys at the Miami-based law firm. Over 200 Greenberg Traurig attorneys were involved in the case, the judge noted.
The investors won a $67 million judgment against the bank in January despite missing key documents, the judge concluded. Discovery violations weren't uncovered until later.
"I will note at the outset that it is difficult to accept that it was a mere coincidence that the late productions on the eve or during trial contained highly relevant documents," Cooke wrote in her 30-page order.
She painted the litigation as nearly farcical, invoking the classic Pink Panther comedy movies about a clumsy and inept detective.
"However, unlike the Pink Panther film, there was nothing amusing about this conduct and it did not conclude neatly," Cooke wrote.
She faulted the bank's in-house counsel for keeping Greenberg attorneys in the dark but also determined the legal term's discovery work was negligent, the legal standard for professional malpractice.
"TD Bank hides behind Greenberg Traurig's mistakes," Cooke wrote. "No one outside attorney was aware of the existence of all the discoverable or relevant materials. TD Bank's general counsel's office, on the other hand, had all the information."
The judge ordered the bank and law firm to pay Coquina's fees and costs for bringing two of five sanctions motion and issued two strong findings to ride with the bank's appeal — "TD Bank's monitoring and alert system were unreasonable and that TD Bank had actual knowledge of Rothstein's fraud."
Coquina had asked that all of TD Bank's pleadings be stricken. Cooke did not go that far but said her actions "will prevent further prejudice to Coquina in an eventual appeal on that issue."