Legal Ethics

Hagens Berman argument 'gives new meaning to frivolous,' judge says; sanctions imposed

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Hagens Berman Sobol Shapiro will have to pay reasonable fees and expenses for “bad-faith advocacy” in its pursuit of three thalidomide birth-defect cases.

U.S. District Judge Paul Diamond imposed the sanction in a March 9 opinion (PDF), finding that Hagens Berman pursued the cases after the law firm knew they were baseless or time-barred, the Legal Intelligencer reports. The money will have to be paid to Grünenthal GmbH, which is seeking $177,000 in fees.

Diamond said Hagens Berman didn’t help its case when it objected to a report and recommendation for sanctions by special master William Hangley. The law firm’s Dec. 18 filing claimed Hangley made errors in his conclusions and denied the law firm due process. “Hagens Berman’s 67-page brief appears to do little more than confuse and exhaust the reader,” Diamond said.

One of the due-process violations alleged by the law firm—based on the special master’s failure to quote the same interrogatory sentence used in the sanctions motion—“gives new meaning to ‘frivolous,’ ” Diamond said.

The three cases were among 49 suits filed by Hagens Berman that alleged thalidomide use by pregnant women in the 1950s and 1960s, caused birth defects. The law firm had claimed that fraudulent concealment tolled the statute of limitations.

In the cases that resulted in sanctions, the evidence shows that one plaintiff had been told by his mother in the 1960s that thalidomide caused birth defects, Diamond said. Hagens Bergman initially contended that fraudulent concealment made it impossible for the plaintiff to know thalidomide caused his particular type of birth defect until 2012.

When the evidence showed the plaintiff didn’t rely on any misrepresentation, Hagens Bergman argued that the limitations clock was tolled because the plaintiff didn’t know—to a certainty—that thalidomide caused his injuries. “I thus agree with Mr. Hangley,” Diamond wrote. “Unfortunate as the firm’s initial allegation was, in dishonestly resisting sanctions, ‘Hagens Berman made it worse.’ “

In the second case, there was no evidence that the plaintiff’s birth mother had ever taken thalidomide, Diamond said. In the third, the plaintiff admitted he knew of nothing to support his claim that thalidomide caused his birth defects.

Hagens Berman spokesman Nick Styant-Browne said the law firm respectfully disagrees with Diamond’s findings. “Although we recognize these cases raised challenging legal and factual issues, we believed in good faith that the claims of these newly discovered thalidomide victims should be pursued,” Styant-Browne said.

“Regrettably, the judge determined to adopt the report of his special master without bothering to address a single objection raised by the firm in its extensive brief setting out the multiple flawed bases for the sanctions. In particular, the judge relied on facts that were not in the record, and ascribed bad faith motives to the firm without any foundation. We look forward to the opportunity for the 3rd Circuit to hear and address our arguments as soon as we are able to appeal.”

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