On August 3, 2012, a U.S. District judge in the Southern
District of Florida levied sanctions against TD Bank and its
outside counsel in Coquina Investments v. Rothstein, 2012
WL 3202273 (S.D. Fla. Aug. 3, 2012, Case No. 10-60786).
Coquina was a high profile case regarding TD Bank's
alleged assistance with a Ponzi scheme that resulted in a $67
million verdict against the bank. Judge Marcia Cooke issued a
post-trial order against the bank for concealing evidence that
would have been relevant at trial and against its counsel for
negligently failing to turn over documents.
Judge Cooke cited numerous discovery violations in the order,
including the failure to conduct an adequate search for documents.
Perhaps most importantly, however, was the finding regarding
the failure to produce a document in a manner that preserved the
document's qualities. The order stated the document
"should have been produced in either a native format or in
color tiff." The order also criticized counsel for
failing to realize that some information was lost due to formatting
and for failing to realize "that further printing or copying
of the document would result in degradation of the document's
clarity or quality." Additionally, the order criticized
outside counsel's reliance on the bank's corporate in-house
counsel to locate relevant documents. Using particularly
strong language throughout the order, the judge referenced the
bank's outside counsel's use of more than 200 attorneys on
the case as "too many cooks spoiling the broth" and went
on to describe the litigation as being "conducted in an
Inspector Clouseau-like fashion."
As part of the sanctions against the bank, the judge made the
following finding of fact: "I will therefore direct that the
facts that TD Bank's monitoring and alert systems were
unreasonable and that TD Bank had actual knowledge of
Rothstein's fraud be taken as established for purposes of this
action." As a result of these findings of fact, it may
be impossible for the bank to successfully appeal the $67 million
verdict against it. The judge also ordered that the bank and
its counsel must pay attorney's fees and costs for Coquina
Investments' added expenses resulting from the violations.
This ruling is one of many recent discovery opinions throughout
the country that emphasize the significant need for attorneys to
closely advise and work with their clients on discovery issues.
Further, in regard to electronic discovery, counsel and
clients should take steps to preserve documents in their native
forms. Producing hard copies of documents, or even electronic
copies in an altered format may no longer be enough to satisfy a
discovery request. Attorneys should also diligently endeavor to
recognize deficiencies in the documents produced by their clients
and use due diligence in ensuring that discovery requests are
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A discussion on the jurisdictional limitations of forum-selection clauses, the inconsistencies with their enforceability, and the potential for the establishment of a standardized procedure to enable companies to evaluate forum-selection clauses with more certainty going forward.
Under what is commonly called the Sporck doctrine, the opinion work product doctrine can sometimes protect the identity of certain documents that do not themselves deserve intrinsic privilege or work product protection, as long as the adversary also has the documents and the identity could reflect a lawyer's opinion.
In Upjohn Co. v. United States, 449 U.S. 383 (1981), the court interpreted federal common law as extending privilege protection to communications between a company's lawyer and any level of employee, if that employee has facts the lawyer needs when advising the corporate client.