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. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

  3. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.