Archive for January 2011

The Nevada Supreme Court upheld a jury’s verdict awarding $30 million against Goodyear Tire & Rubber Co., and the trial judges decision to strike Goodyear’s answer to the lawsuit and its ability to assert its defenses to the allegations in the lawsuit. As a result, the jury was left to consider only the damages to be awarded in a case that involved a rollover accident that allegedly was caused by a tire failure and which resulted in the death of 3 people and in severe injuries to another person.

Judge Sally Loehrer, sanctioned Goodyear after the judge found company attorneys acted in bad faith and engaged in stall tactics. Goodyear’s actions in the case involved providing attorneys for the plaintiffs 74,000 documents that were not labeled or sorted by category, and Goodyear representatives failed to attend their own deposition.

Goodyear argued to the Nevada Supreme Court that Goodyear was entitled to due process rights of an evidentiary hearing to determine how severe and how much damage the delays caused. The Court ruled that the trial judge can impose severe sanctions without a hearing if the sanction is “non-case concluding.”

Justice Kris Pickering, dissented in the opinion, calling the ruling a civil death penalty. However, the majority of the Court noted the Nevada Rules of Civil Procedure and state case law clearly allow a judge to “strike a party’s pleadings if that party fails to obey a discovery order or fails to attend his or her own deposition,” which is precisely what Loehrer determined Goodyear had done.

Without a doubt, one of the least favorite things judges do in cases is having to rule on discovery disputes between parties. Although there are clearly times when the parties and the lawsyers have good faith disputes about what information can and cannot be requested and what information should or should not be disclosed, too often, discovery disputes have become part of the litigation game. Sometimes, parties or lawyers are trying to resist turning over information that may be damaging to the case, while other times, a party or lawyer may be seeking information to which it is clearly not entitled. In any event, often these games are seen as an effort to try to prevent a trial based upon the true merits of the case. As a result, judges have the ability to sanction the lawyers and the parties they believe are not obeying the rules of civil procedure, particularly if judges feel the conduct is egregious.

If this case had been decided in Texas, it is likely that a different result would have been reached. In Texas, when a court decides to issue sanctions in a case as a result of discovery abuse similar to what was involved in the Goodyear case, the Texas Supreme Court has declared that the Court must go through a specific analysis of the conduct at issue, and the harm. In Transamerican v. Powell, 811 S.W.2d 913 (Tex. 1993) the Texas Supreme Court required trial judges issuing discovery sanctions to conduct a hearing on the record, and before sanctions can be assessed, the court must find:

(1) a direct relationship must exist between offensive conduct and the sanction imposed, which means the sanction must be directed against abuse and toward remedying prejudice caused to the innocent party, and that the trial court must at least attempt to determine whether the offensive conduct is attributable to counsel only, or the party only, or both, and second the sanction must not be excessive.

(2) The Court must consider the availability of less stringent sanctions and whether lesser sanctions would fully promote compliance. In conducting this analysis, the Court should consider whether there is evidence that the offensive conduct was committed in flagrant bad faith or callous disregard of the rules of civil procedure by a party or counsel and whether such conduct may have precluded a trial on the merits.

As the Texas Supreme Court wrote in Smith v. Southwest Feed Yards, 835 SW2d 89 (Tex. 1992), in our system of justice, discovery plays a vital role to assure “that disputes [are] decided by what the facts reveal, not by what facts are concealed.” Jampole v. Touchy 673 S.W.2d 569, 573 (Tex. 1984). A trial should be based upon the merits of the parties’ claims and defenses rather than on a advantage obtained by one side through a surprise attack. In fact, the salutary purpose of Rule 215.5 is to require complete responses to discovery so as to promote responsible assessment of settlement and prevent trial by ambush. See Clark v. Trailways, Inc., 774 S.W.2d 644, 646 (Tex. 1989).

In Texas, it is very rare for a judge to strike portions of pleading to prevent parties from presenting a defense unless the conduct is clearly in bad faith or in violation of a previous court order.