Discovery -- 2017

Goodyear Tire & Rubber Co. v. Haeger   (U.S. Supreme Court)

Penalties for discovery misconduct

This case is about how big a penalty to impose on a company for misconduct by their lawyers during the discovery phase of a case. The Ninth Circuit upheld a $2.7 million award imposed against Goodyear to sanction it for failing to turn over a document in discovery. The award was supposed to be for the amount of legal fees incurred by the opposing party from the misconduct, however, the case settled. The parties sought to recover fees they did not actually incur from the misconduct.

The NAM filed an amicus brief arguing that failure to require a direct causal link between a litigant’s alleged discovery violations and compensatory damages to other parties can lead to abusive sanctions. The question will have far-reaching implications for businesses and their in-house counsel.

On April 18, 2017, a unanimous (8-0) Supreme Court found in favor of Goodyear, holding that, when a court sanctions conduct by ordering the litigant to pay the opposing party's legal fees, the award must be limited to fees incurred solely because of the misconduct at issue. The court overturned the $2.7 million award and remanded the case to the lower courts for determination of the appropriate sanction.

Related Documents:
NAM amicus brief  (November 21, 2016)


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