29,395.18 Reasons to Play “Nicely”

Rule 37 awards are thankfully relatively rare despite the fact that many attorneys seem to request them as a matter of course. Occasionally an award is granted that makes me thankful I was not involved and serves as a reminder to play relatively nicely.

Rapaport v. Soffer[1] arose from Rapaport’s purchase of Soffer’s “online luxury watch marketplace known as the Watch Dealer’s Network (“WDN”).” Apparently after the purchase was complete both were able to appoint board members. Things did not go well and litigation resulted. The litigation also did not go well for Mr. Soffer and apparently there were numerous discovery disputes.

The disputes culminated in a ruling from Magistrate Johnson that concluded “Soffer: (1) failed to pay timely $1,500 in sanctions flowing from a previous sanctions order; (2) failed to respond properly to interrogatories, (3) failed to respond properly to requests for production, and (4) refused to cooperate at his own deposition.” As a consequence, Judge Johnson “imposed $29,395.18 in sanctions jointly and severally against Soffer and his attorney Efrem Rosenfeld and his law firm, Rosenfeld & Bauman, and recommended that this Court strike Soffer’s amended answer, enter default against him, and dismiss both his counterclaim in this case and his complaint in the Consolidated Case with prejudice.” Mr. Soffer followed the usual playbook in this situation. He hired a new lawyer, objected to Judge Johnson’s recommendation and argued “[a]ll discovery failures were wholly the result of counsel’s inexcusable acts and omissions, [thus it would be] unjust to hold Soffer accountable for his attorney’s malpractice whereas Soffer was not complicit in his attorney’s failures.”

The district court granted Mr. Soffer’s objections in part and also denied in part. The district reduced Mr. Soffer’s individual liability to $14,402.77 as there was no evidence presented to indicate he had any personal role in some of the improper written discovery responses. However, the individual lawyer and law firm retained jointly and severally liable for the entire $29,395.18. The court then set deadlines for compliance and noted failure to substantively comply would lead to dismissal.

I suspect there are many lawyers who could not individually pay a $29,395.18 sanction. There are probably more than a few law firms in a similar situation. For those fortunate enough to work for one that could absorb it, you might still see that amount tacked on to your nut for the year. In any event, avoiding sanctions, especially of this magnitude, ought to be a consideration when answering discovery and participating at a deposition.

[1] No. 2:10-cv-935, 2013 U.S. Dist. LEXIS 173114, 2013 WL 6451768 (D. Nev. Dec. 9, 2013).