Smith & Fuller, P.A. v. Cooper Tire & Rubber Co.
685 F.3d 486
| 5th Cir. | 2012Background
- Smith & Fuller, P.A. and Hugh N. Smith appeal sanctions awarded to Cooper Tire for violating a district court Protective Order under Fed. R. Civ. P. 37(b).
- In the underlying products liability action, Cooper prevailed at trial in September 2010; a 26(c) Protective Order protected trade secrets and confidential discovery material.
- Smith inadvertently disseminated confidential documents to multiple personal-injury lawyers at a conference when discs containing protected information were copied and shared.
- Cooper moved to enforce the Protective Order; the district court found a violation and then imposed sanctions under Rule 37(b)(2)(C) after considering the circumstances and prior similar violations.
- Cooper sought $29,667.71 in fees and expenses for efforts to identify, enforce, and respond to the violation; the district court awarded this amount.
- On review, the Fifth Circuit affirms, holding the Protective Order was an order to provide or permit discovery and that sanctions and fees were appropriate and reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to sanction under Rule 37(b) | Smith argues no authority to sanction for 26(c) violation. | Cooper contends Rule 37(b) encompasses violations of protective orders. | Sanctions authorized under Rule 37(b) for protective-order violation. |
| Protective Order qualifies as an order to provide or permit discovery | Lipscher limits Rule 37(b) sanctions to discovery orders. | Protective Order governs discovery of confidential information and is enforceable under Rule 37(b)(2). | Protective Order deemed an order to provide or permit discovery; sanctions valid. |
| Reasonableness of attorney’s fees and expenses | Appellants challenge Cooper's claimed fees as excessive or unwarranted. | Fees are reasonable under lodestar method and supported by affidavits and hourly rates. | Fees and expenses awarded were reasonable and supported by the record. |
Key Cases Cited
- Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770 (9th Cir. 1983) (Rule 37(b)(2) authority to impose sanctions including attorney's fees)
- United States v. Nat’l Med. Enters., Inc., 792 F.2d 906 (9th Cir. 1986) (sanctions for violation of a protective order)
- Poliquin v. Garden Way, Inc., 154 F.R.D. 29 (D. Me. 1994) (sanctions for protective-order violations; reasonableness of fees)
- Lipscher v. LRP Publ'ns, Inc., 266 F.3d 1305 (11th Cir. 2001) (limits of Rule 37(b)(2) to discovery orders)
- Westinghouse Elec. Corp. v. Newman & Holtzinger, P.C., 992 F.2d 932 (9th Cir. 1993) (broad authority to fashion remedies under Rule 37(b))
- Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980) (Rule 37 sanctions and deterrence purpose)
- Batson v. Neal Spelce Assocs., Inc., 765 F.2d 511 (5th Cir. 1985) (deterrent value of sanctions; when severe sanctions warranted)
- Adolph Coors Co. v. Movement Against Racism and the Klan, 777 F.2d 1538 (11th Cir. 1985) (sanctions to deter future discovery abuse)
- Tiberi v. CIGNA Insurance Company, 40 F.3d 110 (5th Cir. 1994) (distinction about Rule 37(b) applicability to Rule 26 cases)
- O’Neill v. AGWI Lines, 74 F.3d 93 (5th Cir. 1996) (standard of review for sanctions orders)