A Sanctions Anniversary

On this date in 2003, the Appellate Division decided Seacoast Builders Corp. v. Rutgers, 358 N.J. Super. 524 (App. Div. 2003).  This was a relatively rare case in which the Appellate Division exercised original jurisdiction under Rule 2:10-5 to decide a discovery issue.  It was an even more rare result, since the panel ordered that documents otherwise protected by privilege be disclosed as a sanction for attorney misconduct.

This was a breach of construction contract case involving the alleged failure of Rutgers University to pay plaintiff on a multi-million dollar change order.  Though the procedural history of the case was lengthy and convoluted, Judge Coburn’s opinion summarized the improper conduct of defendant’s counsel (a major New Jersey law firm) as follows:

“A party’s attorney, after documents have been demanded, (1) removes documents from the files of a non-party witness, and does so without even advising the non-party of its action, thereby leading that non-party into believing it is presenting all its documents; (2) withholds documents without notice and after agreeing not to do so; (3) ultimately provides notice over a year late and only after being twice asked if documents have been withheld; (4) permits documents to be discovered without noticing the other side that documents have been withdrawn; (5) provides an interrogatory answer which implies that no documents have been removed; (6) serves privilege logs which it correctly believes are inadequate, and then ‘remedies’ the situation by submitting supplemental logs to the judge ex parte; (7) files a brief which inaccurately describes the privileged documents; (8) fails to provide adequate factual and legal justification with respect to each document, below or on appeal; and (9) fails to provide the appellate court with the privileged documents under seal until so ordered a second time and despite the fact that the need for the documents is self-evident.”

The panel concluded that “[t]hose circumstances are sufficiently egregious, when taken together, to justify a severe sanction.”  Invoking the court’s inherent authority, the panel ordered that the documents be produced.  The court noted that cases from other jurisdictions, “[i]n a variety of settings,” have declined to honor claims of privilege when attorney misconduct in discovery has been present.  The facts of those cases, the Appellate Division said, were less egregious than those that the panel faced.

Seacoast sought attorneys’ fees for its motions to compel production of the disputed documents.  But Seacoast cited no law to support that request, and the panel stated that it was “not obligated to search for legal authority in support of Seacoast’s position.”  The court declined to engage in such a search, and thus denied the fee request.

Sanctions are not often imposed on parties who flout the discovery rules.  This case, now fourteen years old, is a reminder that attorneys’ duties under the discovery rules are important, and that the violation of those duties can have serious consequences.  Secondarily, the case also highlights that appellate courts will not do a party’s legal research for that party, and will simply deny relief sought if the briefing seeking that relief does not state a valid basis for that relief.

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