Judge sanctions Buchalter over $147K for 'unsupported arguments' and misleading assertions
“Buchalter raised wholly unsupported arguments, made false or misleading assertions under oath, and unreasonably delayed—if not obstructed—discovery in this matter, making litigation more difficult and expensive for plaintiffs,” said U.S. District Judge Robert S. Lasnik of the Western District of Washington. Image from Shutterstock.
A federal judge in Seattle has ordered Buchalter to pay more than $147,000 to its opponents for prolonging discovery through "unsupported arguments" and false or misleading assertions in litigation.
U.S. District Judge Robert S. Lasnik of the Western District of Washington said in a Sept. 25 order Buchalter “unreasonably and vexatiously multiplied and obstructed the proceedings” over several years, Law360 reports.
Lasnik ruled in a class action alleging that coffee distributors, wholesalers and retailers were wrongly labeling ordinary coffee as Kona coffee. Buchalter represented a defendant, the now-bankrupt Mulvadi Corp.
Lasnik imposed the sanctions on Buchalter after ruling July 19 that its lawyers were responsible for decisions that prolonged discovery and failed to ensure that their client conducted diligent searches for requested discovery material.
“Buchalter raised wholly unsupported arguments, made false or misleading assertions under oath, and unreasonably delayed—if not obstructed—discovery in this matter, making litigation more difficult and expensive for plaintiffs,” Lasnik said in the July 19 order.
Law360 has previous coverage.
Lasnik referred to a “pleading promise” defense “invented” by Buchalter that it later used to justify the Mulvadi Corp.’s failure to participate in discovery. The plaintiffs formerly described the defense as an allegation that the plaintiffs breached a pleading promise through bad-faith lawsuit claims. Lasnik said he struck the defense, yet Buchalter continued to refer to it.
Lasnik recounted plaintiffs’ discovery troubles in a July 2022 decision.
The Mulvadi Corp. had made it “incredibly difficult” to test the company’s assertions about the coffee that it bought, how much it pays for Kona coffee and how much it profited from the sales, Lasnik said in the July 2022 decision. The company had shown “recalcitrance in the face of clear and unambiguous discovery orders” and had chosen a path “that would make discovery as difficult and expensive as possible” at “virtually every step.”
Lasnik provided details. The Mulvadi Corp. had asserted that its business records were maintained in paper form, and the plaintiffs should travel to its warehouse to review boxes of documents. The Mulvadi Corp. was ordered to scan and produce the documents in searchable format.
Yet the Mulvadi Corp. produced almost 120,000 pages of paper documents, “the majority of which have nothing to do with Kona coffee products,” Lasnik said the July 2022 decision.
The plaintiffs recognized that some of the documents reflected QuickBooks data and sought reports. Lasnik ordered access, but the version of the data made available to the plaintiffs’ expert severely restricted her ability to access it.
Buchalter lawyer Bradley P. Thoreson had visited Kona, Hawaii, to see the three farms said to be supplying the Mulvadi Corp. with Kona coffee. When the plaintiffs were unable to confirm the existence of one of the three farms, Thoreson signed a declaration attesting that he had visited the farm, supposedly owned by Pacifica Services, and supplied photos of the entrance. The land does not appear to be associated with Pacifica Services, an investigator found.
“Thoreson took it upon himself to attest, under penalty of perjury, that certain facts were true,” Lasnik wrote in the July 19 order, citing representations about the coffee farm and the Mulvadi Corp.’s claim that it lacked electronic records.
Lasnik required Buchalter to pay fees for its opponents’ legal work on the sanctions motion but not for “the excess fees and costs plaintiffs were forced to incur in their yearslong attempt to obtain basic discovery from Buchalter’s client and to rebut Mr. Thoreson’s declarations.”
Neither Thoresen nor a Buchalter spokesperson immediately responded to the ABA Journal’s emails requesting comment.