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Indiana Law Firm Sanctioned for Discovery Violations

In an unusual ruling, Bose McKinney & Evans (BME), an Indianapolis law firm, was sanctioned on June 5, 2009 by the U.S. District Court, Southern District of Indiana, for conduct that violated the Federal Rules of Civil Procedure: purposely withholding documents responsive to discovery requests. The firm’s client, defendant Red Spot Paint & Varnish Co., Inc. (Red Spot) was severely sanctioned as well.

The case involves a seven-acre site in Evansville owned by a redevelopment company called 1100 West LLC. The site was heavily contaminated by toxic chemicals from nearby Red Spot Paint & Varnish Co. Inc. After filing a state court suit in 2003 about the alleged contamination, 1100 West took the case to federal court in 2005 and sought injunctive relief under the federal Resource Conservation and Recovery Act.

1100 West asked the judge to order removal of all the chemicals near its property and for the company to stop discharging any of the hazardous and solid waste from its nearby property.

A central issue in the case was whether particular chemicals were used at the site, and both sides debated during discovery whether those chemicals were ever stored or used at the Red Spot site. Former Red Spot President and Chairman Charles Storms and environmental manager Susan Henry testified throughout the litigation that the company hadn’t used or stored specific chemicals.

Indianapolis Business Journal

The role of BME’s paralegal in the litigation involved submitting a FOIA request to the EPA at her supervising attorney’s request. In August 2007, BME received the EPA RCRA file, which included evidence that Red Spot used the relevant chemicals and had violations regarding storage and disposal of hazardous waste materials.

But BME lead counsel Richard VanRheenan denied having requested or received the EPA file as late as October 14, 2008, stating, “We have not seen any such file.” However, at the first October 15, 2008 emergency hearing on plaintiff’s motion for sanctions due to newly discovered evidence from the EPA, Mr. VanRheenan admitted the file had been received – and only reviewed the night before the emergency hearing.

The 66-page June 5, 2009 order contains an extensive list of facts regarding BME’s failure to disclose the EPA file in its entirety, as well as other evidence, but at various points in the discovery dispute, these documents were described as “forgotten”, “misplaced” and as having fallen into “a black hole.”

The order states: “While there may have been some legitimate objections to some of 1100 West’s discovery requests, the crux of the requests—that is, where and when and whether certain chemicals, including TCE or PCE, were ever used or stored or were part of the waste stream of Red Spot—was never responded to with candor” and that “Red Spot has made a mockery of the discovery process and has subjected the truth to ridicule.”

Judge Larry J. McKinney explained the basis for his severe sanctions:

“However, in this case, where three partners of the firm had knowledge of its client’s apparent disregard for those rules and failed to properly supervise an associate and paralegal who had knowledge of adverse facts that remained undisclosed to the opposing party, the Court can only conclude that the firm must be held accountable under its inherent authority to deter such conduct in the future.”

This case had serious repercussions for the BME attorneys involved and their client. Former partner, Richard VanRheenen, resigned and an associate working with him on the case, Amy Cueller, was fired. Red Spot was deemed to have waived its attorney-client privilege in regard to the undisclosed documents and was subjected to the severest sanction of all: issuance of a default judgment.

The sanctions include finding Red Spot liable for its chemical contamination of plaintiff’s property and an award of plaintiff’s attorney fees and costs for discovery dating back to March 2006. I recommend reading the order in its entirety for an eye-opening account of what not to do in environmental litigation cases.

Also, my favorite word from the order, describing Red Spot’s egregious conduct is “contumacious“, meaning “willfully and obstinately disobedient”.

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Contact Info:

Lynne J. DeVenny, N.C. State Bar Certified Paralegal

Owner & Virtual Paralegal, DeVenny Paralegal Services

Email: lynne.devenny[at]gmail.com

Telephone: 336-582-0003

Inquiries are welcome, with free quotes available.

Meet Lynne:

Lynne DeVenny is a North Carolina State Bar Certified Paralegal with over 27 years of experience working on complex litigation cases, including medical malpractice, personal injury, workers’ compensation, and Social Security disability.

Disclosure: I am not a lawyer and cannot provide legal representation or legal advice.

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