For Halloween 2013 I offer a trick: be careful what you put in writing. Cleverley v. Ballantyne, 2013 U.S. Dist. LEXIS 123833 (D. Nev. Aug. 29, 2013) demonstrates the importance of this professional trick. Defendants filed a motion to stay discovery pending a ruling on a motion to dismiss. Plaintiff opposed and then Defendants replied. Part of the reply argued a stay was warranted by Plaintiff’s litigation tactics.
[Plaintiff]’s counsel has represented to Defendants’ counsel that the pending, and anticipated, discovery is a means to that end: we are spending monopoly money and we really don’t care how much of it we spend prosecuting this case. We have exactly zero incentive to keep the costs of this litigation down because we are in the rare position of essentially being guaranteed to get it all back from Snyder’s malpractice carrier. Charlie, on the other hand is spending real money that he will never get back. Does he understand that he is the only one spending real money? I doubt it. I suspect he thinks this is a war of attrition and that Grant will blink first – he won’t. He won’t blink for the simple reason that he isn’t writing any checks to fund this litigation. Charlie is the only one doing that.
(emphasis in original).
Plaintiff did not appreciate that section of the reply and filed a motion for sanctions because of it. He sought sanctions because “(1) Defendant failed to inform the Court that Mr. Thompson’s statement was contained in an email letter relating to settlement negotiations and (2) Defendants misrepresented the communication by only quoting the highlighted portions of the letter as set forth above.” Plaintiff attached the entire email to the motion for sanctions. This tactic backfired.
The Court finds that it was not improper for Defendants to quote relevant portions of Mr. Thompson’s April 25, 2013 letter in support of their motion for stay. Rule 408(a) of the Federal Rules of Evidence provides that evidence of settlement offers or statements made during settlement or compromise negotiations are not admissible “to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction.” Rule 408(b) states, however, that “[t]he court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.” Defendants only quoted those portions of Mr. Thompson’s letter which supported their argument that Mr. Thompson and his client had no incentive to keep the costs of litigation down and intended to punish the Defendants through the conduct of excessive discovery. Having reviewed the email letter in its entirety, the Court finds that the excerpt was not taken out of context and did not misrepresent the actual meaning of the quoted statements. Defendants’ counsel should have identified the date and nature of the letter in the reply brief and in his declaration. The failure to do so, however, does not support a finding of bad faith because Defendants did not gain any particular advantage by not so doing. If Defendants had attached Mr. Thompson’s entire letter to their reply brief, their argument regarding Plaintiff’s alleged intent to abuse the discovery process would have been just as strong, if not stronger.
As you might guess, the motion for sanctions was denied. I would also guess that MJ Foley might keep a watchful eye on this case.