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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. I enrolled America's 1st tax-free Health Savings Account (HSA) so you can trust me. I bet 1/3 of my clients were lawyers because they love tax-free deposits, growth and withdrawals or total tax freedom. Most of the time (always) these clients are uninformed about insurance law. Employer-based health insurance is simple if you read the policy. It says, Employers (lawyers) and employees who are working 30-hours-per-week are ELIGIBLE for insurance. Then I show the lawyer the TERMINATION clause which states: When you are no longer ELIGIBLE! Then I ask a closing question (sales term) to the lawyer which is, "If you have a stroke or cancer and become too sick to work can you keep your health insurance?" If the lawyer had dependent children they needed a "Dependent Conversion Privilege" in case their child got sick or hurt which the lawyers never had. Lawyers are pretty easy sales. Save premium, eliminate taxes and build wealth!

  2. Ok, so cheap laughs made about the Christian Right. hardiharhar ... All kidding aside, it is Mohammad's followers who you should be seeking divine protection from. Allahu Akbar But progressives are in denial about that, even as Europe crumbles.

  3. Father's rights? What about a mothers rights? A child's rights? Taking a child from the custody of the mother for political reasons! A miscarriage of justice! What about the welfare of the child? Has anyone considered parent alienation, the father can't erase the mother from the child's life. This child loves the mother and the home in Wisconsin, friends, school and family. It is apparent the father hates his ex-wife more than he loves his child! I hope there will be a Guardian Ad Litem, who will spend time with and get to know the child, BEFORE being brainwashed by the father. This is not just a child! A little person with rights and real needs, a stable home and a parent that cares enough to let this child at least finish the school year, where she is happy and comfortable! Where is the justice?

  4. "The commission will review applications and interview qualified candidates in March and April." Riiiiiight. Would that be the same vaulted process that brought us this result done by "qualified candidates"? http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774 Perhaps a lottery system more like the draft would be better? And let us not limit it to Indiana attorneys so as to give the untainted a fighting chance?

  5. Steal a little, and they put you in jail. Steal a lot, and they make you king. Bob Dylan ala Samuel Johnson. I had a very similar experience trying to hold due process trampling bureaucrats responsible under the law. Consider this quote and commentary:"'When the president does it, that means it is not illegal,' [Richard] Nixon told his interviewer. Those words were largely seen by the American public -- which continued to hold the ex-president in low esteem -- as a symbol of his unbowed arrogance. Most citizens still wanted to believe that no American citizen, not even the president, is above the law." BWHaahaaahaaa!!!! http://www.philly.com/philly/blogs/attytood/When-the-president-does-it-that-means-it-is-not-illegal.html

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