LIES HAVE CONSEQUENCES: PART II, by Kate Neiswender and Mark Neiswender

In response to November’s article on lying in the courtroom (“Lies Have Consequences,” November, 2013), we received many phone calls and emails, all in agreement with the premise: lying has become a bigger problem, more common, more dangerous to the health of the system and the integrity of the profession.

Several judges contacted us in response to the article. To a person, they agreed that misrepresentations by counsel had become a commonplace problem. To a person, they agreed that discovery had become a game of hide-the-ball rather than the self-executing system envisioned by the legislature. But all felt constrained in what they could do about it. Most asserted that the unrelenting volume of court business – particularly given significant underfunding of the courts – leaves judges with too little time and too few resources to do in-depth evaluation of discovery disputes. Others mentioned that the training judges receive encourages them to allow all relevant evidence to go to the jury regardless of prior discovery abuses. Under the current thinking, when a judge balances the “bad” of discovery misconduct against the “bad” of not allowing cases to be tried on the merits, allowing all the evidence to go to the jury wins out.

Unfortunately, these responses, one pragmatic and one philosophical, lead to both greater waste of court resources and less fairness in the system, as well as encouraging the disturbing and growing perception among the public that the court system is rigged to benefit lawyers and wealthy institutional clients.

There are two ways one can evaluate these problems. One can take a “micro” view of how attorney  misrepresentations and discovery abuses affect the case at hand, or one can take a “macro” view of how attorney misrepresentations and discovery abuses affect the court system at large. Under either approach, both the “press of business” response and the balancing act justification to abusive practices are counterproductive.

Inside the case at hand, the offending party’s misconduct is a direct attempt to secure an unjustified strategic advantage. It drives up the cost for all parties, diminishes the chances of settlement, and slows down resolution of the case. The only weapon against such misconduct is for the aggrieved party to file a motion to compel, and such motions will proliferate in direct proportion to the amount of discovery abuse. In the short run it may seem that court resources are preserved by a de minimis judicial response to attorney misrepresentations and discovery abuses. However, we would suggest that it seems highly unlikely that – with more motions to compel – court time is “saved.” Such a judicial response may actually exacerbate the problem. Further, there is a common feeling that the courts are unaffordable for the middle class. While the courts can’t solve intractable problems with economic equality, the current sanction regimen doesn’t help the perception that our courts favor the rich. For example, assume  that AIG is the insurer for the defense. AIG – even after the mess they helped make of the economy – made approximately $6.6 billion after tax income in 2012. If you sanction the lawyers for that company $2,000, that amounts to 0.00003% of AIG’s 2012 profit – the amount of money made by AIG in roughly ten seconds. On the other hand, consider the same monetary sanction against a construction worker who makes about $70,000 per year and sues the business that caused him grave bodily injury. To pay that same $2,000 sanction, after taxes, the construction worker would have to work for two weeks. The disincentive for AIG is obviously next to nothing; for the construction worker it is an enormous hardship. Further, it is a rare day when the actual cost of bringing the motion is reimbursed; a sanction of $1,000 after multiple discovery abuses is more common than reimbursement of the $3,000, or more, it actually cost. Even when misconduct is sanctioned by the court, the aggrieved party is damaged.

Likewise, under a macro view, there are several reasons a harsher judicial response is appropriate and in fact necessary. In one discussion we had with a judge, he emphasized that sanctions are not supposed to be punitive, but rather are designed to secure compliance with discovery law. We disagree. Sanctions in civil litigation, just as in any other area of the law, are intended not only to remedy the current situation but also to deter future bad conduct by the sanctioned party and others. Appropriate sanctions can be a deterrent, and should be. Under the current regimen, the dishonest party rolls the dice, tries to pull a fast one, and even if they are caught, the damage primarily falls on the innocent party. The current system encourages dishonest behavior – it makes lying economically rational.

Courts must be open not only to monetary sanctions, but to evidentiary and issue sanctions as well. The incentive to lie – as well as the untoward effects of economic disparity – dramatically diminish when evidence or issue sanctions are a realistic  possibility. And we must remember we are talking about utterly unjustifiable behaviors: direct misrepresentations by a lawyer, a sworn officer of the court, and misrepresentations in discovery responses provided under penalty of perjury. Misrepresentations by an officer of the court are inexcusable. Misrepresentations under oath are a felony, and society should not be deferential to criminal behavior. All too often, evasive and inaccurate discovery responses are followed up with last minute attempts to sneak in previously undisclosed evidence on the eve of trial. These should be summarily denied, and the case law gives judges that discretion.

If a party objected and failed to answer interrogatories fully, or withheld documents, then the evidence should be excluded, period. If the dishonesty arose with the lawyers, the client has a legal remedy against them. If the dishonesty arose with the client, then the client deserves to be sanctioned.

Over the past two months, we have spoken with dozens of judicial officers, lawyers and clients, all seeking an answer to this problem. Unfortunately, we could not come up with a fix that is self-executing or that takes the burden off the already-burdened judicial system. What we heard from many is that the existing system of monetary, evidentiary and issue sanctions should be enforced more strictly and more often. As more judges adopt a strict approach, with less reluctance to order issue and evidence sanctions, the less the lying will distort our system. At least, that is our hope.

Kate Neiswender is a Ventura-based land use and environmental l a w y e r. M a r k Neiswender is a trial lawyer in Riverside County who has been practicing for more than 32 years.

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