A federal judge blasted and sanctioned TD Bank and its law firm, Greenberg Traurig, today for blatant discovery errors in a fraud suit won by investors who were cheated by ex-lawyer Scott Rothstein’s $1.2 billion Ponzi scheme.
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.”
Greenberg Traurig representatives did not immediately respond to email and phone requests seeking comment.