Laurie Webb Daniel of Holland & Knight. (Zachary D. Porter)
Two Atlanta lawyers have asked the U.S. Supreme Court to overturn a $2.7 million attorney fee sanction against Goodyear Tire & Rubber Co. awarded by the U.S. Court of Appeals for the Ninth Circuit, saying the punishment is excessive and violates established rules for making such awards.
Baker Donelson shareholder Linda Klein, current president of the American Bar Association, is listed as counsel of record on an amicus curiae brief filed with the Supreme Court in the Goodyear case. Laurie Webb Daniel, head of Holland & Knight’s Atlanta litigation practice group and chair of the firm’s national appellate team, is of counsel along with firm colleagues Samuel Spital and Matthew Friedlander. They took issue with the Ninth Circuit for upholding the sanction a trial judge imposed against Goodyear for withholding records in discovery for a car crash case involving a tire blowout.
“The sanction was patently over-inclusive, awarding far more than the expenses that were directly caused by the misconduct,” Klein and Daniel wrote. “Because this excessive fee-shifting is more analogous to a criminal fine than traditional civil sanctions, it was error to impose it without observing the heightened procedural protections required of criminal proceedings.”
Klein and Daniel did not object to the sanction, only to the amount, saying that to impose it without due process—including a chance for arguments against it to be heard—violates American Bar Association guidelines based on years of research into case law.
“The ABA fully supports the proposition that federal courts must have adequate power to sanction parties and attorneys for misconduct in the litigation of a case,” Klein and Daniel wrote. “Indeed, the ABA has adopted a strong stance on sanctions for discovery abuse.” They cited the ABA’s own rule: “When a party fails to comply with its disclosure obligations, the court has a duty to impose appropriate sanctions.” But, said Klein and Daniel, “Inherent sanctioning power should be exercised with caution and restraint.”
The ABA has adopted standards to promote uniformity in sanctions, reflecting “the due process requirement that, before sanctions are imposed, the alleged offender must be afforded fair notice and an opportunity to be heard,” Klein and Daniel wrote. Those standards “advise that a court may award reasonable attorney’s fees incurred as a result of the misconduct, but should select the least severe sanction adequate to serve the goal of that punishment.”
While they did not suggest an amount, they suggested the award in this case was far above the damage done.
“The ABA does not condone any discovery abuse,” Klein and Daniel wrote. “On the other hand, even bad faith misconduct does not permit a court to deviate from the established standards that govern attorney-fee sanctions—or the heightened procedural protections that are necessary when a court imposes a fine that goes beyond the amount of the extra expenses caused by the misconduct.”
Daniel declined to comment on the case. Klein couldn’t be reached.
The case is Goodyear v. Leroy Haeger, No. 15-1406.