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A federal appeals court has overturned a Miami judge’s ruling that two plaintiff lawyers who brought a suit against Miami-based Millon Air over a fatal plane crash in Ecuador should pay defense fees and costs because they failed to properly investigate their Ecuadorean clients’ claims. Those claims had been dismissed because of fraud. The three-judge panel of the 11th U.S. Circuit Court of Appeals in Atlanta, which included Chief Judge J.L. Edmondson, unanimously rejected a 2001 order by the late Judge Lenore Carrero Nesbitt of U.S. District Court assessing the plaintiff lawyers $63,000 in fees and costs. The panel wrote that the sanctions order created a risk that “an American lawyer cannot represent a client who resides in a distant country unless the lawyer and the client — before the suit is filed or early in the litigation — meet face-to-face. Such a rule would be a substantial bar to foreign nationals being able to litigate claims in American courts that the law says American courts have the authority to hear.” None of the attorneys on either side of the case responded to requests for comment before deadline. Judge Nesbitt had imposed the sanctions on Houston solo attorneys Newton Schwartz Sr. and Benton Musslewhite Sr. after determining that they’d failed to conduct a proper investigation before filing a lawsuit over the fatal 1996 crash of a Millon Air cargo plane in Manta, Ecuador. The Miami defense lawyers whose fee award was upended by the appeals court are J. Thompson Thornton and Patricia A. Leid of Thornton, Davis & Fein. They represented now-defunct Millon Air, the owner-operator of the Boeing 707 cargo plane that slammed into a teeming residential neighborhood of Manta, a coastal town. The crash killed 33 people, including the jet’s crew of three, and injured many others. After the crash, many Ecuadoreans filed suit in state and federal courts in the United States for negligence resulting in injuries, death and property damages against Millon Air and others. Schwartz and Musslewhite represented Cecilia Guzman Cedeno, whose mother, Rita Patria Cedeno Vera, died shortly after the crash, and Luis Alberto Veliz Cevallos, a burn victim. The Houston lawyers hadn’t met those clients when they were hired. They got them and other clients in cases arising from the Millon Air crash through referrals from a lawyer named Richard Briones, who was licensed to practice in Ecuador and is now deceased. A total of 33 lawsuits were filed in the Southern District of Florida and were later consolidated by the court. These included the claims of Cedeno and Cevallos. In 1998, Judge Nesbitt rejected the jurisdictional claims and dismissed all the cases. Cedeno and Cevallos appealed to the 11th Circuit. While the appeal was pending, the defense discovered that their claims were bogus. According to the 11th Circuit’s order in the current case, medical records “had been altered to make it appear as though they had been victims of the plane crash. Cedeno actually had been admitted to the hospital two days before the crash, and Cevallos had received his burns more than a year before the crash.” Millon Air then moved to dismiss the lawsuits and to sanction Schwartz and Musslewhite. The Houston lawyers did not oppose the motion to dismiss, stating they did not “countenance any fraud.” They claimed that they had made reasonable inquiries into the claims before filing suit and reasonably relied on the investigation conducted by Briones. Judge Nesbitt disagreed. In her June 2001 ruling, she held that Schwartz and Musslewhite had committed an “unreasonable” breach of their duty to investigate their clients’ claims for legitimacy before filing suit in court. The judge said the lawyers wrongly placed their “complete reliance” on Briones and his investigators. In addition, she said Schwartz and Musslewhite failed to act sufficiently on clues — for instance, photographs depicting the “remarkable” recovery of Cevallos — that suggested the claims were without merit. So Nesbitt granted Millon Air’s motion for sanctions against them. The two plaintiff lawyers appealed her sanctions order to the 11th Circuit. Along with Edmondson, the panel that heard the appeal included Judges Joel F. Dubina and William Terrell Hodges, a federal judge for the Middle District of Florida who sat by designation. The panel’s reversing of Judge Nesbitt notes that no one contended that Schwartz or Musslewhite were actually aware of the fraud. In addition, the panel said, the record shows no “bad faith” by either of the two plaintiff lawyers in relying on the representations of Briones, “the duly licensed Ecuadorean counsel who referred cases to them.” “We cannot say that it was unreasonable — to the point of willful abuse of bad faith — for American counsel to rely upon others (especially other legal counsel) who were fluent in Spanish and familiar with local customs in Ecuador and who were on the spot to conduct the investigation,” the order says. The panel judges also said they were unconvinced that the alteration of medical records was “so blatant” as to put Schwartz and Musslewhite on notice that a forgery had occurred. In hindsight, the 11th Circuit wrote, Schwartz and Musslewhite “possibly could have done more and better. But that hindsight observation is almost always true.” The 11th Circuit panel indicated that it did not want to establish a precedent discouraging U.S. lawyers from representing foreign nationals in American courts. “We want no hard-edged rule to come out of this appeal,” the judges wrote.

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