Trials & Litigation

Federal appeals court upholds Judicial Watch's $2.3M judgment against its founder

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Larry Klayman

Larry Klayman. Image from Shutterstock.

A federal appeals court has upheld a $2.3 million judgment obtained by the conservative watchdog group Judicial Watch against its founder, Larry Klayman.

The U.S. Court of Appeals for the District of Columbia Circuit ruled against Klayman on Friday, Law360 reports.

“Despite the volume of his challenges,” the appeals court said, “none is meritorious.”

Jurors awarded $2.3 million to Judicial Watch in 2018 on its claims that Klayman violated a severance agreement that paid him $600,000 and violated the Lanham Act by unfairly competing with the group. The trial was overseen by U.S. District Judge Colleen Kollar-Kotelly of the District of Columbia, according to Law360.

Kollar-Kotelly had imposed two sanctions on Klayman that prevented him from presenting any evidence at trial, other than his own testimony.

The appeals court upheld the sanctions and found that the verdict was supported by sufficient evidence. The court also upheld grants of summary judgment to Judicial Watch that narrowed the claims at trial.

Judge Neomi Rao wrote the opinion for the D.C. Circuit panel, which recounted the history that led up to the judgment.

Klayman founded Judicial Watch in 1994 and was its chairman and general counsel until he left the group in 2003. Klayman said he left to run for the U.S. Senate, while Judicial Watch said he was forced to resign because of a romantic relationship with a Judicial Watch employee and divorce allegations by his wife.

Klayman’s severance agreement required both parties to refrain from disparaging each other, while allowing fair comment, and banned Klayman’s access to Judicial Watch’s donor lists.

Klayman accessed the lists through a third-party vendor to raise money for his Senate campaign. He also launched a website and a “Saving Judicial Watch” campaign, using the same donor list, in which he claimed that Judicial Watch leadership had corrupted and mismanaged the organization. The campaign asserted that Klayman should be reinstated to lead the group.

Klayman sued Judicial Watch in 2006 alleging, among other things, that the group violated the severance agreement’s nondisparagement clause by preventing him from making fair comment. Judicial Watch filed a counterclaim that alleged, in part, that Klayman breached the severance agreement by accessing the donor lists and unfairly competed by falsely claiming that he left the group to run for office.

Kollar-Kotelly had sanctioned Klayman for two failures. One was a failure to produce documents to Judicial Watch as ordered by a magistrate judge. The sanction banned Klayman from presenting any of the documents or testifying about them in support of his claims and defenses.

The second was a failure to provide a list of witnesses and exhibits in a joint pretrial statement. Klayman had described the testimony to be elicited from most witnesses as “all issues” and his exhibits as “all documents” on a particular topic. Kollar-Kotelly struck defective portions of the pretrial statement, which barred Klayman from presenting witnesses or exhibits in support of his claims and defenses.

Neither of the sanctions was an abuse of discretion, the appeals court said.

The discovery sanction “was proportional to Klayman’s flagrant refusal to comply with the court’s discovery order,” the appeals court said. And the pretrial statement sanction was not imposed merely for a lack of detail but for an “utter fail[ure] to discharge his obligations in the course of pretrial proceedings,” the appeals court said.

“Klayman’s multitude of asserted errors fail,” the appeals court said. “Judge Kollar-Kotelly presided over this litigation commendably, without any error that Klayman has identified.”

Klayman didn’t immediately respond to an ABA Journal email seeking comment.

In a separate matter involving Klayman’s battles with Judicial Watch, Klayman was suspended last year for 90 days for switching sides in Judicial Watch matters after leaving the group. According to Law360, “Klayman responded by suing all the judges on the D.C. Court of Appeals.”

See also: “Ethics panel, citing ‘egregious’ violations, recommends 33-month suspension for Larry Klayman”

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