PSD WINS 11TH CIRCUIT APPEAL IMPOSING $422,433 IN SANCTIONS AGAINST OPPOSING COUNSEL

On March 19, 2019, a federal appellate court issued a decision affirming a sanctions award against opposing counsel in the full amount of $422,433.

PSD Discovers Misappropriation of Documents

During two related employment lawsuits in the Southern District of Florida, PSD represented a health care company, EDCare Management. In the course of discovery, it became clear that the plaintiff, a former Executive Assistant, had removed and retained documents that belonged to EDCare. As the appellate court described: “Although the defendants had sent Eldredge a written request for the return of company property and the Amlong firm [which represented her] a civil-theft demand letter, Eldredge and
her lawyer failed to disclose the EDCare documents in their possession and then used some of these confidential records during a deposition. … [The trial court] ordered Eldredge to conduct a diligent search, to return to the defendants all company property in her possession, and to provide an affirmative statement that she has turned over all company property in
her possession. In response to the magistrate judge’s order, Eldredge produced three boxes of documents, two thumb drives, and a disk, almost all of which contained confidential EDCare information.”

PSD Lawyers Obtain Waiver of Privilege from Plaintiff

PSD lawyers negotiated the dismissal of claims against EDCare and exchanges of releases with Eldredge, while she also waived her attorney-client privilege so that sanctions could be pursued against her counsel. The waiver resulted in a massive unraveling of case-long scheme by Eldredge and her counsel to withhold a massive amount of materials that she had retained.

PSD WINS $422,433 IN SANCTIONS AGAINST OPPOSING COUNSEL

PSD persuaded the trial court that the cases were essentially frivolous ab initio and that misconduct so permeated the case that an award of fees from near the outset of the action was appropriate. The Eleventh Circuit Court of Appeals affirmed the entirety of the award issued by the trial court.

LAW360 reported the successful appellate win by PSD and EDCare. Lead counsel on the case, founding PSD partner Barry Pollack, was quoted in the article: “Today’s decision makes clear what most people learn in kindergarten. You are not allowed to take what belongs to others. Especially if you are a lawyer.”

PSD represented a corporation in the District of Massachusetts accused of False Claims Act violations and retaliation under federal and state laws. The Complaint alleged that plaintiff was hired by the corporation, which was in turn allegedly compensated through Medicare, Medicaid and Mass Health. Plaintiff further alleged that assessments were not done, were done less often than required for the patients for at minim the last three years and potentially longer.

PSD successfully argued that the plaintiff failed to state a claim under federal or state law. A copy of the federal court opinion dismissing the False Claims Act and retaliation claims can be found at this link: Federal Court Dismissal Order

PSD represented a former employer in the District of Maryland. The former employee brought claims that the employer violated the False Claims Act, that certain officers conspired to violate the False Claims Act, and that the employer fired the employee in retaliation for her reporting wrongdoing and refusing to violate the law herself. The federal court dismissed all claims with prejudice. A copy of the opinion can be found at this link: 181028 Memorandum Opinion and Order Dismissing with Prejudice

PSD made a novel argument over the language in the specific claim forms and focused on the lack of quality of the plaintiff’s reporting of the issue.

In a 5-page decision, a federal judge in the Southern District of New York dismissed two individual defendants from a complex commercial litigation. An underlying dispute arose from a sale of an 81% interest in a company holding certain railway property and assets with an enterprise value of more than $180 million. An affiliate of the seller has a separate pending action against the buyer based on allegations that the buyer has knowingly aided and abetted breaches of fiduciary duty. In a separate action, Plaintiffs brought certain claims against a Canadian citizen and a Florida citizen who were the indirect beneficial owners of the seller.  The federal court granted the individuals’ motion to dismiss on personal jurisdiction grounds. The court explained:

“Plaintiffs misleadingly suggest that the SPA was ‘the genesis of all the disputes between the parties.’ (Pl.’s Opp’n 10). Yes, the SPA is the ‘genesis’ of all Plaintiffs’ claims insofar as it is how CMC Acquisition acquired an interest in CMC Industries. But that aside, CMC Industries’s claim against the Individual Defendants has nothing to do with the SPA. The claim does not involve the parties to the SPA, it does not allege breach of the SPA, and it does not call for interpretation of the SPA; instead, it involves an internal corporate governance dispute between a Texas corporation and foreign shareholders of that corporation governed by Texas law. Notably, elsewhere, CMC Acquisition itself has conceded that ‘the SPA includes no provision concerning the post-acquisition management of CMC or TRT LeaseCo,’ (Docket No. 54, at 17), rendering it irrelevant to the corporate governance dispute underlying the claim against the Individual Defendants. That is correct — and defeats Plaintiffs’ reliance on the SPA for personal jurisdiction over the Individual Defendants. ‘Where, as in the present action, the rights being asserted do not originate from the contract containing the forum selection clause, the clause does not apply.’”

PSD’s clients’ claims related to corporate governance and contract issues remain pending in both federal actions. A copy of the September 14, 2018 decision can be found here: 180914 Memorandum Opinion and Order

The Governor’s office, state Senate and House conferred upon PSD recognition for its launch of the PSD International Child Rescue Project at an event hosted at PSD’s Back Bay offices.

A federal judge denied a motion to dismiss by Metropolitan Property & Casualty Insurance Company and the Commerce Insurance Company in a civil RICO case. PSD represents a large plaintiffs’ law firm. The firm brought claims against the insurance companies asserting that they improperly imposed prohibitions on healthcare providers’ cooperation with insurance claims by patients. As alleged, the insurance companies also purported to give criminal releases to those providers in return for those restraints, indicating that the insurers threatened the use of criminal charges in a civil context. The federal court found that the allegations stated plausible claims. Also, the federal court found agreed with PSD that the insurance carriers had inappropriately tried to combine multiple briefs in order to avoid page limitations.

The Court’s decision can be found here: 10 Order on Motions to Dismiss Counterclaims and to Strike

In a hotly contested RICO case, a PSD client won a motion to compel on several grounds. In the process, the federal court ruled that Plaintiffs Metropolitan Property & Casualty Insurance Company and the Commerce Insurance Company violated the Order governing an e-discovery protocol. Specifically, these insurance carriers did not allow their vendor to participate in efforts to resolve e-discovery issues. Metropolitan’s and Commerce’s lawyers had argued that they did not want to put their vendors in the position of being cross-examined. The federal court rejected that position. In so doing, the federal court held that Metropolitan’s and Commerce’s “refusal to allow participation by their vendors in the meet and confer process violates both the spirit and the letter of the December 20, 2017 Order Governing E-Discovery Protocol.”