A federal judge in Indianapolis has decided disciplinary actions aren't needed against a handful of attorneys relating to their conduct in a clean air trial last year, though he hasn't changed his mind about setting aside the jury verdict and holding a new trial as a result of the behavior of in-house counsel.

U.S. District Judge Larry McKinney in the Southern District of Indiana issued an order late Monday in U.S., et al. v. Cinergy Corp, et al., 1:99-CV-1693, which involved a nine-year-old case that culminated with a trial and jury verdict in May 2008. Jurors had found that Cinergy - bought by Duke Energy in 2006 - violated federal rules at its Wabash plant in Terre Haute, but cleared the company regarding modifications made at four other plants in Indiana and Ohio.

Following that verdict, attorneys discovered a previously undisclosed consulting agreement with a witness that raised questions about the company's central theme at trial and whether it was tainted by misleading testimony. In mid-December, Judge McKinney ordered that Cinergy's legal team, including in-house counsel and some local lawyers working for the company, show cause as to why they shouldn't be sanctioned and suspended from practicing before the court.

Local counsel is from Taft Stettinius & Hollister: current attorneys Scott Alexander, Robert Clark and John Papageorge, as well as Debra McVicker Lynch who's since been appointed as a federal magistrate for the Southern District. The in-house counsels were Julie E. Ezell, Dean Moesser, and trial counsel Kathryn Thompson.

A hearing originally set for this morning was vacated after the judge issued an 11-page order late Monday, finding that no discipline is warranted but upholding his previous decision for a new trial.

"Setting aside a verdict is a harsh penalty... A harsh penalty called for by what the Court considers the egregious nature of the attorney inaction," Judge McKinney wrote. "The publishing of this and prior orders is sufficient. Further proceedings would create time consuming litigation threatening to overtake the issues of the case and draw time and energy from the Court's and the attorneys' task of bringing this litigation to a close with little delay as possible."

In his order, Judge McKinney wrote that most of the counsel involved - including those local attorneys - weren't aware of the agreement between Cinergy and a witness, or didn't have a hand in the trial testimony aspect.

In a 38-page response for the Duke/Cinergy counsel, Barnes & Thornburg attorneys John Maley and Larry Mackey disputed the court's findings of misconduct and wrote that counsel hadn't mislead anyone in the case. The brief also includes references from several prominent Indianapolis-area attorneys who've reviewed the issues and determined they are legal, ethical, and reasonable.

Magistrate Lynch filed a separate response, denying any misconduct or knowledge of wrongdoing. She wrote that after her withdrawal from the case in October, she became "generally aware" that a motion for a new trial was based on an undisclosed matter, but she didn't find out about it in full until reading Judge McKinney's order in December.

She also pointed out that her involvement in the trial and the two months beforehand was limited, and that she wasn't involved in compiling or providing discovery responses, witness preparation, or trial strategy. Most of her tasks involved coordinating with the court and co-counsel regarding logistical arrangements for various proceedings, she wrote, and her total time spent on the litigation in May 2008 amounted to only about two-tenths of a billable hour.

The judge accepted those declarations from most of the counsel involved, and the attorneys now have no further responsibility to the court. However, he also ordered that Duke's legal team pay the plaintiffs' attorney fees, and gave the plaintiffs 30 days to submit a statement about those costs. A bench trial is set for Feb. 2.

Look for the Jan. 21-Feb. 3 issue of Indiana Lawyer for more coverage.