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Attorney G. Ware Cornell of Fort Lauderdale, Fla., was undone by a pretty pair of panties. In 1994, Maria Vargas, the former maid of wealthy corporate raider Nelson Peltz, filed an explosive sexual discrimination suit against her ex-boss. She claimed that Peltz, who had a home in Palm Beach, Fla., gave her a sexy item of lingerie and asked her to put it on and pose for him. She also alleged that Peltz asked her to leave her husband and two children for him. According to Vargas, when she spurned his advances, he fired her and her husband, who was Peltz’s butler. Cornell, of Cornell & Associates in Fort Lauderdale, filed a lawsuit in U.S. District Court in West Palm Beach on her behalf. At an impromptu news conference after filing the suit, a confident Vargas flashed the “smoking gun” panties in front of TV cameras. But Peltz’s lawyer, Marty Steinberg, then a partner at Holland & Knight in Miami, was suspicious, and hired a private investigator to check out the alleged evidence. The private eye discovered that this line of panties wasn’t produced until a year after Peltz supposedly gave the undergarment to Vargas. And it was only sold at Target, where Steinberg doubted his client — worth more than $450 million — shopped. Hearing that, U.S. District Judge Kenneth L. Ryskamp not only dismissed the case but asked the U.S. Attorney and the Immigration and Naturalization Service to investigate Vargas. He also directed a federal magistrate to determine whether Cornell should face sanctions for filing a fraudulent lawsuit. Cornell eventually settled with the opposing attorneys for an undisclosed sum before the sanctions were ordered. Sources close to the case say his insurer paid out nearly $500,000. Tales like this strike terror in the hearts of South Florida plaintiffs’ lawyers who handle employment litigation, including complaints of racial, sexual and age discrimination and employer retaliation. Employment discrimination lawsuits have become the second-most common type of filing in federal courthouses around the country. Many of these suits are “he said, she said” cases not unlike Vargas’. Even plaintiffs’ attorneys concede that all too often, the allegations turn out to be untrue. That hurts people who have legitimate complaints — and it has placed employment lawyers in increasing peril. Both plaintiffs’ and defense lawyers say federal judges are imposing sanctions on plaintiffs’ attorneys with greater frequency for filing frivolous suits and other violations. These problems frequently arise from attorneys being misled by their clients. While experts say there are ways conscientious attorneys can minimize the chances of facing sanctions, there are no guarantees in this difficult area of litigation. “It all began with the Peltz case,” says James Green, the former head of the Florida American Civil Liberties Union who now has a plaintiff practice in West Palm Beach. He bemoans the increase in sanctions, but says he’s largely given up handling employment cases due to the risk. “This has taken the fun and satisfaction out of doing employment and civil rights law,” he says. Cornell says he doesn’t know what he would do differently now if Vargas asked him to represent her. “Clients will lie to you,” he says. “I don’t know what you can do to prevent that.” SERIES OF SANCTIONS A judge can impose sanctions against a lawyer for a long list of transgressions — from lying to destroying documents to not properly investigating a client’s claims. Federal judges can impose sanctions under 28 USC 1927 or Rule 11 of the Federal Rules of Civil Procedures. Sanctions also can be issued by Florida state judges under Rule 57-105, but that rarely happens. The sanctions may include fines paid to the court, payments to the opposing lawyers to compensate them for their time and costs, an order to attend continuing legal education courses and referrals to the Florida Bar disciplinary committee. In August, U.S. Magistrate Barry Garber recommended sanctions against Barry Mandelkorn, a partner at Ruden McClosky Smith Schuster & Russell in Fort Lauderdale, and against the firm itself; the lawyer and the firm could be forced to pay $700,000. The penalty stemmed from a racial discrimination suit brought by 34 employees against Ocean Spray. Garber found that Mandelkorn made unsubstantiated allegations, neglected to correct factual inaccuracies in plaintiffs’ pleadings ever after the defense pointed them out, and failed to conduct a reasonable investigation of the claims prior to filing suit. It was the second time this year that Mandelkorn was hit with sanctions. In February, U.S. District Judge Donald M. Middlebrooks slapped Mandelkorn with sanctions in a racial discrimination suit Mandelkorn filed against BellSouth. As penance, Mandelkorn agreed to contribute $10,000 to the University of Miami’s Center for Ethics and Public Service, take at least 20 hours of ethics courses, retake the Florida Bar exam portion on ethics, perform 100 hours of free legal services, apologize to former clients in the case, and only appear in federal court with a supervising attorney. Additionally, Ruden McClosky agreed to pay $250,000 to disgruntled plaintiffs. In July, Middlebrooks, a former employment defense lawyer, issued an $8,800 sanction against Charles Whitelock of Whitelock & Associates of Fort Lauderdale for filing a “baseless” employment discrimination and retaliation suit. U.S. District Judge Joan Lenard ordered sanctions last March against Karen and Bill Amlong of Amlong & Amlong, a Fort Lauderdale employment discrimination law firm, for filing a baseless lawsuit. Magistrate Judge John O’Sullivan recommended in December that the Amlongs pay $500,000, plus interest, though Lenard has yet to rule on the final amount. And in a previously undisclosed 1998 action, Fort Lauderdale attorney Bartley Miller was ordered to pay $100,000 in fees to opposing counsel for lying about when his client received a right-to-sue letter from the U.S. Equal Employment Opportunity Commission. Then-U.S. District Judge William Zloch referred the case to the Florida Bar disciplinary committee; Miller, the former general counsel for Nova Southeastern University, is currently fighting the Bar’s disciplinary committee finding of probable cause. In court papers, Miller, a solo attorney, said he couldn’t afford to pay the fees due to his legal costs related to fighting disbarment; the judge subsequently lowered the penalty to $20,000. Miller did not return calls from the Daily Business Review for comment. DEFENSE WEAPON Plaintiffs’ lawyers say defense lawyers increasingly are using the threat of sanctions as a club to discourage lawsuits against employers. Tom Harper, an employment defense lawyer at Haynsworth Baldwin Johnson & Greaves in Jacksonville, Fla., and publisher of the Florida Employment Law Newsletter, agrees there’s an increase in defense requests for sanctions; he’s had two such requests granted this year. “I’m seeing them granted more and more,” says Harper, who defends companies such as Kmart, Wal-Mart and Sears in employment discrimination litigation. Green says defendants often seek sanctions in employment cases because of the emotionally volatile and personally damaging nature of the allegations. “When you’re making allegations that someone has violated someone’s constitutional rights by discriminating against them, you are saying that person is a bad person,” Green explains. “The defendant gets angry.” Another factor in the growth of lawyer sanctions, according to Robert Weisberg, a veteran plaintiffs’ lawyer, is that many lawyers inexperienced in employment law have rushed to file employment suits as the field has become hot. “A lot of lawyers doing these cases are not skilled enough, and they do a disservice to the Bar,” says Weisberg of the Law Office of Robert E. Weisberg in Coral Gables, Fla. But a more fundamental problem for plaintiffs’ lawyers is that employment lawsuits often come down to one person’s word against another’s — whether the boss told his female employee that she wouldn’t get a promotion unless she was “nice” to him, or whether a supervisor hurled racial epithets at an African-American worker. There seldom is hard evidence. “These are difficult cases to win, due to complex legal doctrine and difficult facts,” says Mike Massinter, a professor at Nova Southeastern University’s law school who teaches employment discrimination law. “Proving the state of mind of the defendant often comes down to circumstantial evidence.” Weisberg agrees. “Proving intentional discrimination is very difficult,” he says. “Sometimes I think there’s got to be easier ways of practicing law.” In the wake of the Mandelkorn experience, Ruden McClosky managing partner Carl Schuster says his firm has decided not to represent any more plaintiffs with employment complaints. “Taking that case was the worst mistake we ever made,” he says. DON’T GET FOOLED AGAIN How can employment lawyers avoid sanctions? Some precautions seem obvious. Experienced attorneys in the field advise that lawyers try to find witnesses who can corroborate claims of discrimination. The Amlongs, for example, had no witnesses to the claims of their client Floride Norelus that she was raped at work by her supervisors at a Denny’s restaurant in Miami. But Bill Amlong points out that there often are no witnesses around when bad things happen. “People don’t commit rapes in the lunchroom, let’s face it,” he says. Another safeguard is thoroughly preparing clients for deposition by holding a mock deposition. That wasn’t done by Mandelkorn in the Ocean Spray case, say plaintiffs’ lawyers who reviewed the case file at the request of the Daily Business Review. Neither was it done by Amlong & Amlong in the Floride Norelus case; her deposition testimony showed literally hundreds of discrepancies with her complaint. Employment law experts also caution against the practice of shotgunning — assembling a diverse group of plaintiffs for a lawsuit against an employer using overly general allegations. Lawyers should cite each plaintiff’s specific cause of action against each defendant, they say. Mandelkorn’s failure to do that is at least partly what landed him in trouble, according to Green and Massinter. “When you have nine identical causes of action against each defendant, that looks a little fishy,” Green says. Another piece of advice: Don’t take cases from a referring lawyer without checking out the lawyer and his or her clients. Massinter says that’s another factor which led to Mandelkorn’s woes. In both of the cases for which Mandelkorn was sanctioned, the referring lawyers were Norman Ganz and Saul Smolar, who were working with a paralegal named Brian Neiman. The Florida Bar began investigating Ganz and Smolar back in 1997 for filing a string of racial discrimination lawsuits in association with the Broward chapter of the NAACP. The Bar disciplinary cases are pending before the Florida Supreme Court. Neiman pleaded guilty last year to criminal charges of practicing law without a license. If an attorney discovers that a client has lied to him or her, or if the attorney finds that the client’s story has changed for any reason, the lawyer should amend the complaint as quickly as possible, the experts say. In the Ocean Spray case, Magistrate Garber chastised Mandelkorn for failing to amend the complaint even after defense lawyers pointed out inconsistencies in the plaintiffs’ stories. Furthermore, if an attorney loses confidence in a client or a case, experts advise withdrawing as soon as possible. “If your client lied in deposition, that’s a federal crime,” Massinter warns. Massinter also urges lawyers to write a file memo before filing a suit, laying out how they investigated the complaint prior to filing. That memo can serve as evidence if the lawyer is hit years later with a defense allegation that the case is frivolous. Such memos are standard practice in large law firms, but are not typically done in small plaintiffs’ firms. “You hope you never have to use it, but if you do four years later, you’ll have the information,” Massinter says. In a different approach to protecting themselves, many plaintiffs’ lawyers now prefer to file employment lawsuits in Florida’s circuit courts, where judges are less apt to impose sanctions and where it’s more likely that complaints will reach juries and not get thrown out on summary judgment. “You don’t have to look over your shoulder for people gunning for you,” Bill Amlong says. Still, when it comes down to it, lawyers must rely on their gut instincts in deciding whether they can trust a client. “Spend a couple hours with the client, get to know what kind of people they are,” Weisberg counsels. But, alas, good vibes are no guarantee. “Sometimes your intuition tells you that they’re telling the truth and they’re not,” Weisberg acknowledges. “I’ve been burned, I’ve been lied to. There is no way to avoid it.” WON’T BE BULLIED Amlong says he’s learned from his mistakes. If he could start over with Norelus, Amlong says he would make sure that he or his wife was present at Norelus’ deposition. “We had nobody but a baby associate there,” he laments, explaining that he and his wife were both out of town for a trial that day. Amlong says he requested a continuance from the magistrate for the deposition so that he or his wife could attend, but the magistrate refused. “I should have gone straight to the trial judge,” he says in retrospect. Norelus, a Haitian immigrant, was “emotionally fragile,” and got “beaten up” in the deposition by aggressive defense lawyers, Amlong says. That treatment, combined with her poor grasp of English, is why she repeatedly contradicted her earlier statements, he believes. Still, Amlong insists that his client was “absolutely, unequivocally” telling the truth and that he would take her case again in a heartbeat. “We’re not going to let some defense bully scare us away,” he says.

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