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U.S. judge sanctions Indianapolis law firm

Michael W. Hoskins
January 1, 2009
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A federal judge has sanctioned an Indianapolis law firm that employed a few attorneys he says helped abuse the discovery process, failed to correct misleading or false statements made by its client, and didn't properly turn over to the court or opposing counsel key documents relating to an environmental contamination case out of Southern Indiana. In a 66-page order issued Friday, U.S. District Judge Larry McKinney in the Southern District of Indiana determined that Bose McKinney & Evans should be sanctioned for its attorneys' actions that "skated the edge of its responsibility," and for acting like "a chameleon" in becoming indistinguishable from its client and allowing that client to evade the truth. "The Court notes that it may be unusual to sanction a law firm for conduct that violates the Federal Rules of Civil Procedure," the judge wrote. "However, in this case, where three partners of the firm had knowledge of its client's apparent disregard for those rules and failed to properly supervise an associate and paralegal who had knowledge of adverse facts that remained undisclosed to the opposing party, the Court can only conclude that the firm must be held accountable under its inherent authority to deter such conduct in the future." Specifically, the judge's order focuses on former Bose attorneys Richard VanRheenen and Amy Cueller, who firm leaders asked to leave late last year because of this case. A declaration submitted to the court by Bose Managing Partner Kendall Crook shows that VanRheenen voluntarily resigned his partnership effective Jan. 1, 2009, and remained on a limited contract attorney basis until Feb. 20 to transition his practice and clients to a new firm; Cueller declined to resign and was fired Jan. 6. Others mentioned include partner Kathleen Lucas, who remains at the firm; former associate Matthew Klein and former partner Jan Nelson, both of whom are no longer listed on the firm's Web site; and an unnamed paralegal who assisted on the case. In a statement issued to Indiana Lawyer today, Crook wrote, "This remains a pending matter and we intend to work diligently to seek an appropriate resolution. We have taken this matter extremely seriously and took prompt action to address the issues described in the Court order. The two principal litigators involved in this case are no longer associated with the firm." The case, 1100 West LLC v. Red Spot Paint & Varnish Co., No. 1:05-CV-1670, involves a business's 7-acre site in the Evansville area that 1100 West claims was heavily contaminated with toxic chemicals from the nearby Red Spot property. After filing a state court suit in 2003 about the alleged contamination, 1100 West took the case to federal court in 2005 and sought injunctive relief under the federal Resource Conservation and Recovery Act. 1100 West asked the judge to order the removal of all the chemicals near its property and for the company to stop discharging any of that hazardous and solid waste from its nearby property. A central issue in the case was whether particular chemicals were used at the site, and both sides debated during discovery whether those chemicals were ever stored or used at the Red Spot site. Former Red Spot president and board chairman, Charles Storms, and environmental manager Susan Henry, testified throughout the litigation that the company hadn't used or stored specific chemicals. But discovery withheld from the court and opposing counsel showed otherwise, Judge McKinney wrote, and he noted that the company continued pressing that claim up to October 2008 when those previously withheld documents were discovered. Lucas began as Red Spot's counsel in 2003 to enroll its property in the voluntary remediation program. Lucas later brought in VanRheenen as the primary litigator before Cueller joined the case, according to the order, and the others assisted throughout the years. In October 2008, attorneys for 1100 West filed a motion for sanctions and after a two-day hearing on May 6 and 7, 2009, the judge issued his decision late last week. He found the conduct goes back to at least the summer of 2006, and that both Henry and Storms had on several occasions misrepresented facts. As a result, Judge McKinney entered a default judgment against Red Spot and determined the company had forfeited the right to have these issues determined on the merits. "But, BME, through both Cueller and VanRhennen and, to a lesser extent, Lucas, had opportunities to steer Red Spot, particularly Henry and Storms, on a different path and it never did," the judge wrote. "If all BME had was one individual who wished to ignore a small amount of information, it would be one thing. In this case, however, the evidence that Red Spot had used (those chemicals) was too persuasive for BME to continue to ignore." Judge McKinney later wrote, "Being a zealous lawyer does not mean zealously believing your client in light of evidence to the contrary." The attorneys for 1100 West have until Aug. 4 to submit a proposed remedial plan for its property, and a show cause hearing is set for Nov. 4 to allow Red Spot to respond to the appropriateness of that plan. Judge McKinney also ordered that 1100 West is entitled to attorneys' fees and costs from all discovery dating back to May 23, 2006, and for the fees and costs associated with the sanctions' motions and hearings. A report is due by mid-July on those costs, and Judge McKinney has ordered that Red Spot and Bose McKinney shall each pay one-half of those determined costs.

Let us know what you think about the sanctions at our blog, First Impressions.
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  1. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  2. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  3. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

  4. Duncan, It's called the RIGHT OF ASSOCIATION and in the old days people believed it did apply to contracts and employment. Then along came title vii.....that aside, I believe that I am free to work or not work for whomever I like regardless: I don't need a law to tell me I'm free. The day I really am compelled to ignore all the facts of social reality in my associations and I blithely go along with it, I'll be a slave of the state. That day is not today......... in the meantime this proposed bill would probably be violative of 18 usc sec 1981 that prohibits discrimination in contracts... a law violated regularly because who could ever really expect to enforce it along the millions of contracts made in the marketplace daily? Some of these so-called civil rights laws are unenforceable and unjust Utopian Social Engineering. Forcing people to love each other will never work.

  5. I am the father of a sweet little one-year-old named girl, who happens to have Down Syndrome. To anyone who reads this who may be considering the decision to terminate, please know that your child will absolutely light up your life as my daughter has the lives of everyone around her. There is no part of me that condones abortion of a child on the basis that he/she has or might have Down Syndrome. From an intellectual standpoint, however, I question the enforceability of this potential law. As it stands now, the bill reads in relevant part as follows: "A person may not intentionally perform or attempt to perform an abortion . . . if the person knows that the pregnant woman is seeking the abortion solely because the fetus has been diagnosed with Down syndrome or a potential diagnosis of Down syndrome." It includes similarly worded provisions abortion on "any other disability" or based on sex selection. It goes so far as to make the medical provider at least potentially liable for wrongful death. First, how does a medical provider "know" that "the pregnant woman is seeking the abortion SOLELY" because of anything? What if the woman says she just doesn't want the baby - not because of the diagnosis - she just doesn't want him/her? Further, how can the doctor be liable for wrongful death, when a Child Wrongful Death claim belongs to the parents? Is there any circumstance in which the mother's comparative fault will not exceed the doctor's alleged comparative fault, thereby barring the claim? If the State wants to discourage women from aborting their children because of a Down Syndrome diagnosis, I'm all for that. Purporting to ban it with an unenforceable law, however, is not the way to effectuate this policy.

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