5th Circuit OKs $30K Sanction for Law Firm's Accidental Distribution of Opposing Side's Secret Info
A federal appeals court has upheld a sanction of nearly $30,000 against a plaintiff’s firm in a products liability case for accidentally distributing material it was required to keep secret under a protective order.
The $29,667.71 covers fees and costs to the defendant, Cooper Tire & Rubber Co., as it scrambled to try to get its trade secrets material back from other personal injury attorneys to whom it had been inadvertently distributed by Smith & Fuller at a conference, explains the New Orleans-based 5th U.S. Circuit Court of Appeals in a Thursday opinion (PDF).
The law firm had argued that the amount of legal fees OK’d by a U.S. District Court judge in the Southern District of Texas was unreasonable. However, “our review of the record shows no abuse of discretion by the district court,” the appellate panel writes. “This is particularly true since Cooper did not learn of the violation until the eve of trial in the underlying action when its lead counsel was engaged in trial preparation, thereby causing a need for additional involvement by Cooper’s national discovery counsel.”
The protective material was inadvertently released “when someone from Smith’s firm mistakenly copied it onto compact discs that were then distributed to the attorneys attending the conference,” the opinion explains. “Cooper discovered the violation when its counsel in this case received documents from a plaintiff’s attorney in an unrelated suit against Cooper. Many of those documents were marked with … Bates numbers” specific to the law firm’s client, the court notes, “and had been deemed confidential.”
Hat tip: Law 360 (sub. req.).