United States: A Lesson In What Losing Credibility Can Cost

Last Updated: August 23 2016
Article by Michelle Yeary

Everybody lies, maybe even several times a day. Often we don't even realize it because the lies are small. They are white lies like "of course that shirt looks good on you." What about all those times we nod while someone is talking but we really aren't listening. Aren't those lies too? Then there are those lies we tell ourselves, sometimes necessary to get through the day with our self-esteem intact.

But what about the biggies. The look someone in the face and make up something that is simply not true just to benefit oneself type of lie. The type of lie that is told when someone cheats or steals. Or, the type of lie that is told when a lawyer doesn't do his or her homework but makes representations to the court as if they did. Look, nobody is perfect and there are times, especially in mass torts with lots of plaintiffs, where facts get jumbled or twisted a bit. Times when a little more digging before filing a lawsuit would have revealed different product usage or dates of ingestion. And sometimes those minor differences in facts can lead to cases being dismissed that probably shouldn't have been brought in the first place. But complete fabrications of the core facts on which a case rests, in multiple cases – that's going to get you sanctioned. And worse than a sanction, you're going to lose your credibility with the court.

Losing credibility with the court isn't something any lawyer ever wants to have happen. It also doesn't take the extreme misrepresentations we are going to tell you about with today's case. Promising things by certain dates and not delivering. Overstating a position and not being able to back it up. Being unprepared generally and repeatedly. All of this can lead to a court's disfavor; to a judge doubting a lawyer's veracity. While today's case is very unique and the court's distrust is directed to plaintiffs' counsel, the most important to keep in mind is you don't want to be in this position. Every time you address a court, in writing or in person, know your facts, know your law, and be honest.

That brings us to Johnson v. Smithkline Beecham Corp., No. 2:11-cv-005782-PD (E.D. Pa. Aug. 10, 2016) in which fifty-two plaintiffs born in the late 1950's or early 1960's filed state-court Thalidomide suits in Philadelphia against GlaxoSmithKline and certain of its affiliates ("GSK"), along with Sanofi-Aventis and/or Grunenthal GmbH. The cases were removed to the United States District Court for the Eastern District of Pennsylvania on diversity grounds.

We posted about this case over a year ago when one of the plaintiff's claims was dismissed on summary judgment. At that time we noted that in October 2015, twenty-eight plaintiffs had moved to dismiss their claims against GSK with prejudice (their claims against the other defendants would continue). Those dismissals are the subject of this month's Report and Recommendation by the Special Discovery Master. The ultimate conclusion of the Special Master is that the dismissals should be allowed, the heart of the decision is about why the dismissals were questioned in the first place.

The problems with this group of cases goes back to the original complaints, which were verified, upon information and belief, by plaintiffs' counsel. Because plaintiffs were seeking to bring what amount to 50-year old claims, their complaints had to address how it was that they were unaware of their thalidomide-related injuries until approximately 2010. Johnson, slip op. at 8. At the motion to dismiss phase, the court had to accept these allegations as true. But discovery quickly showed that not to be the case. That's when it was learned, for instance, that three plaintiffs, who in their complaint alleged they couldn't have known about the defendants' roles in their alleged injuries before 2010, had previously filed legal claims for these injuries and at least one was still collecting settlement checks. Id. at 10. Another plaintiff alleged in his complaint that he "was left with no understanding of what it meant to be a thalidomider." Id. at 12. But at his deposition, that same plaintiff not only testified that in the 1960s his mother told him thalidomide had caused his injuries, but also that in 1983 he sought disability for his thalidomide-based injuries, in the 1990s plaintiff's mother gave him the bottle of thalidomide pills she had taken, and in 2000 plaintiff gave an interview in which he stated that his injuries were caused by thalidomide. Id. at 12-13. These "major discrepancies" between the allegations and the facts are what led the court to refer to plaintiffs' counsel as "unreliable bringers of truth." Id. at 12. They also led to GSK filing multiple motions for sanctions against plaintiffs' counsel, at least one of which plaintiffs' counsel didn't oppose. Id. at 13.

It was against that background that the court decide to have the Special Master conduct an investigation into the twenty-eight dismissals with prejudice. The court was concerned that the "deal was suspiciously out of balance." Id. at 2. Plaintiffs were dismissing their claims against GSK for seemingly "no discernible benefit" while their lawyers on the other hand reaped a significant advantage. In return for the dismissals, GSK agreed to drop the sanctions motions and forego any monetary payment in relation thereto. Id. at 15. While concerning on its own, the dominant consideration for the court in deciding to investigate the dismissals was that it "had lost confidence in the [plaintiffs'] lawyers' ability and willingness to tell the truth about critical facts when addressing the Court." Id. at 3. Wow. That's a punch in the gut no lawyer ever wants to receive.

The court ordered the Special Master to "ensure that [plaintiffs' counsel] obtained the knowing, voluntary consent of each Plaintiff before agreeing to dismiss his or her case against the GSK Defendants with prejudice." Id. at 17. The Special Master determined that to fulfill this directive, he had to interview each plaintiff directly. First, plaintiffs' counsel challenged that the court had the power or jurisdiction to do this at all. Plaintiffs argued that because GSK wasn't opposing the dismissals, the court had no discretion other than to enter them. Rule 41(a)(2), however, provides that dismissal requires a court order and must be "on terms the court considers proper." Id. at 26. The court wasn't questioning the terms of the dismissal or whether they were reasonable, only whether plaintiffs were adequately informed and the dismissals were in fact voluntary. Plaintiffs' counsel's second road block to the interviews was to suggest that everything the court needed to know could be conveyed via either declarations signed by each of the plaintiffs or in writing in response to a questionnaire. Id. at 19. But as each of those options still contained the possibility of lawyer involvement and may not be a first-hand account, the court rejected them both. Finally, the interviews were conducted in the presence of both plaintiff and defense counsel.

Throughout the process, the Special Master was acutely aware that he was walking right along the edge of the attorney-client privilege and if you read his very detailed report, you'll see he took great care to make sure the privilege wasn't violated. But that didn't stop plaintiffs' counsel from making statements at the start of each interview about the privilege. Those statements turned into accusations against the Special Master and the court that they were intentionally seeking to violate the privilege and calling the entire process a "sham" and an attempt to "embarrass plaintiffs and their counsel." Id. at 30-32. Not sure plaintiffs' counsel were in any position to be accusing the court of wrongdoing. Feels a bit like a schoolyard bully whose bluff has been called and his last resort is "I know you are but what am I."

Left with healthy skepticism about whether plaintiffs' counsel "painted a picture of a judiciary so hostile, so malevolent, that the Plaintiffs were incapable of making a reasonably informed decision," but unwilling to violate the attorney-client privilege, the Special Master concluded that each plaintiff demonstrated a cogent rationale for deciding to dismiss his/her claims against GSK while continuing to pursue claims against the other defendants. It appears most learned that GSK had not been involved with thalidomide at the time their mothers' ingested it. Id. at 28.

The issue must still be resolved by the court, which we do not believe will be very pleased with the way plaintiffs' counsel conducted themselves throughout the interview process. So, while it is likely the dismissals will be granted, plaintiff's counsel are in a hole we aren't sure they'll ever be able to climb out of.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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