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Magistrate Recommends Granting of Fees and Costs from Counsel for Vexatious Pursuit of Matter Despite Damning Email

Posted in CASE SUMMARIES

Rousseau v. Echosphere Corp., 2005 WL 2176839 (W.D. Pa. Aug. 30, 2005)

Charles A. Lamberton (“Lamberton”) represented Thomas R. Rousseau (“Rousseau”) in an action alleging retaliatory termination by Echosphere Corporation (“Echosphere”). The termination was allegedly due to Rousseau’s filing of a workers’ compensation claim and his having requested a workplace accommodation. Plaintiff claimed that Echosphere’s proffered reason for the termination, that Rousseau had knowingly falsified company documents by providing two different social security numbers, was merely a pretext for unlawful termination.

Rousseau had submitted different social security numbers in connection with his employment with Echosphere. One number was submitted with his employment application of March 29, 2002, and two different numbers were entered on his Employment Eligability Verification (INS Form I-9) completed on April 28, 2002. Plaintiff claimed that this was a simple mistake caused by mild adult dyslexia and a number of mental illnesses that cause memory impairment. However, Lamberton apparently had evidence which refuted this position in the form of an email sent by Rousseau to Alex Wagner (“Wagner”), Rousseau’s supervisor.

This email was not produced until after the close of discovery and was on the bottom of a page which had been produced with a blank space where this email might have been originally. See FN6. In this email sent on April 14, 2002, Rousseau writes that someone had used his social security number the previous year and had “bagged” his refund, so he had secured a temporary number. He notes that if use of the temporary number is problematic he can supply his old number and the new number will be used for “tax stuff.” Around the time that Lamberton produced this message, the claim regarding Rousseau’s alleged dyslexia was supplemented by claims that Rousseau suffers from mental illness that impairs memory and that Rousseau has a tendency to fill-in gaps of memory with inaccurate information.

On March 23, 2004, Defendant filed a motion for Rule 37 sanctions (which was supplemented on March 25) requesting dismissal and alleging that Plaintiff had abused the discovery process, committed fraud on the court and attempted to conceal the one document that would expose Plaintiff’s fraudulent conduct. Lamberton filed a brief in response and a cross-motion for sanctions under Rule 11. Defendant moved to strike the opposition brief and Rule 11 motion. Defendant filed motions for extension of time, which were opposed by Lamberton.

The Court denied Defendant’s motion for sanctions, finding that dismissal should be reserved only for extreme cases. Plaintiff’s opposition brief and motion for Rule 11 sanctions were stricken, Defendant’s second motion for extension of time was granted and Defendant was afforded an additional 60 days to conduct discovery due to Plaintiff’s belated production of the April 14 email. Plaintiff appealed the “sanction” of 60 additional days for discovery, which Defendant moved to strike. The appeal was denied for several reasons, including that the extra time for discovery was not a Rule 37 sanction and the Magistrate Judge was merely exercising her discretion. Lamberton also filed a motion for a protective order to prevent further deposition of his client, which was denied although Defendant agreed to employ certain protective limitations during the deposition.

Sometime between November 24 and early December, Lamberton spoke with Rousseau and Rousseau admitted that he had recorded two numbers on purpose. Lamberton revealed Rousseau’s admission to Echosphere’s counsel and Rousseau instructed Lamberton to end the litigation. On December 6, the matter was dismissed with prejudice via stipulation of the parties. On January 31, Defendant filed a motion for attorneys’ fees and costs.

The Magistrate found that Lamberton had possession of the April 14 email no later than March 25, 2004 yet “vexatiously and unreasonably” multiplied the proceedings by filing various motions and an appeal. Pursuant to 28 U.S.C. �� 1927, Lamberton should be required to pay excess costs, expenses, and attorneys’ fees reasonably incurred because of his conduct between March 25 and December 6.

  • http://www.lambertonlaw.com Charles A. Lamberton

    The conclusion to this story, had there ever been an interest in accurate reporting, would have gone something like this:

    The District Court did not adopt the Magistrate’s recommendation, and Echostar later withdrew its motion for sanctions. Lamberton credits his victory to his persuasive briefing and powerful oral argument. “The bottom line is that we have an adversarial system for a reason. Lawyers are supposed to fight for their clients, not go belly up.” “The Magistrate got the law and facts wrong in about 20 different ways. Even a first year law student could spot the reversible errors in her report.”