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Attorney Sanctions: Firm Fined for Leaking Discovery Documents

By Robyn Hagan Cain on June 26, 2012 | Last updated on March 21, 2019

You know how people occasionally spill secrets? Accidentally hit "Reply All" on a sensitive email? It can be embarrassing.

For lawyers, however, divulging information that should be kept quiet can lead to thousands of dollars in attorney sanctions.

Last week, the Fifth Circuit Court of Appeals upheld $29,667.71 in sanctions against a Florida tire litigation firm that accidentally distributed material that was subject to a protective order in a products liability case, the ABA Journal reports.

Hugh N. Smith of Smith & Fuller, P.A. represented the Trenado family in a products liability suit against Cooper Tire & Rubber Company. Prior to trial, the district court entered an Amended Protective Order of Confidentiality to protect Cooper's trade secrets and confidential information produced during discovery. The protective order strictly limited access of protected information to "authorized persons, solely in the performance of their duties in connection with the trial preparation of this case."

Smith and his firm, however, inadvertently disseminated Cooper's trade secrets and confidential information to a number of personal injury lawyers during a conference about obtaining discovery from Cooper. (Someone from Smith's firm mistakenly copied the information onto compact discs that were then distributed to the attorneys attending the conference.) Cooper discovered the violation when its counsel in this case received documents from a plaintiff's attorney in an unrelated suit against Cooper. Many of those documents were marked with Trenado Bates numbers, and had been deemed confidential.

Smith and his law firm do not dispute that they violated the protective order.

The district court ordered Smith and the firm to take immediate action to enforce the protective order and to correct the violation. (Sidebar: Is there a way to unring that bell?) The court eventually held that the firm didn't willfully violate the protective order, but determined that sanctions should still be imposed.

In this case, Cooper had sought a strongly-worded protective order, and had vigorously moved for its enforcement. Smith understood that Cooper was producing confidential documents in reliance upon the court's protections. Smith, nonetheless, allowed that information to be disseminated to personal injury lawyers who sue Cooper and to other tire manufacturers. As a result, Cooper incurred attorneys' fees and expenses in its effort to identify the violation and to enforce the protective order.

The district court noted that Smith had previously violated a similar protective order in another case against Cooper, and ordered him to pay Cooper almost $30,000 in reimbursements for time and expenses stemming from the document leak.

Federal Rule of Civil Procedure 37(b) gives a court the authority to impose attorney sanctions for failures to obey discovery orders. In addition to a broad range of sanctions, including contempt, Rule 37(b) authorizes the court to impose a concurrent sanction of reasonable expenses, including attorney's fees, caused by the failure to obey a protective order. Here, the Fifth Circuit Court of Appeals concluded that the district court had not abused its discretion in ordering attorney sanctions to reimburse Cooper.

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