PSD wins a federal sanctions award against a plaintiff’s firm that helped its client misappropriate corporate records for employment lawsuits

Earlier today, a federal judge in the Southern District of Florida issued a 44-page opinion in favor of PSD’s clients, finding that a plaintiff’s law firm that sued them acted in bad faith from the outset of the litigation.

The court granted PSD’s clients’ motion for sanctions and ordered that the plaintiff’s firm pay the legal fees and costs incurred by PSD’s clients defending the two related cases, one a discrimination case and the other a FLSA case.  After an evidentiary hearing, the court accepted testimony that the fees at issue exceeded $500,000 and has allowed PSD up to 30 days to submit documentation supporting the request for reasonable attorneys fees in such an amount.

In its findings, the court explained that the plaintiff had violated the company’s confidentiality policies by retaining a large volume of corporate records including the entire “my documents” folder from the CEO’s laptop.  Further, the court found that the plaintiff’s firm accepted and kept all of the company’s documents that the former employee provided and then knowingly and recklessly held back and did not produce the bulk of these documents in the face of demands for the return of company property and discovery requests until compelled to do so by court orders.  The court found that both cases filed by the plaintiff’s firm were frivolous ab initio.  The court further found that only after discussions with the plaintiff’s law firm did plaintiff’s focus, and later, her testimony, become more skewed toward describing her duties in a way to try to create claims.  The court explained that the lead counsel at plaintiff’s firm needlessly obstructed the litigation.  Despite statements by plaintiff’s counsel to the contrary, within a month of filing the case, the plaintiff’s lead lawyer knew full well that her client had retained and provided to her firm company property in the form of, at least, a box of documents, a thumb drive, and a CD containing the CEO’s “my documents” folder from his laptop.  The court found that the plaintiff’s lawyer engaged in “sheer and unadulterated obfuscation.”  By use of this subterfuge, the plaintiff’s firm kept the company and its counsel in the dark about the fact that it had possession of voluminous documents, which were critical to the litigation.  The court also stated that the plaintiff’s lawyers “were less than candid in their testimony at the evidentiary hearing and [the lead plaintiff’s counsel] required admonishment due to her evasiveness and non-responsiveness.”

In conclusion, the court held that plaintiff’s counsel “engaged in knowing and reckless conduct throughout the FLSA case and the Discrimination case, which infected the entire … litigation.  To make matters worse, rather than acknowledge the impropriety of such conduct and rectify it, they used smoke and mirrors each time they were called to account, even to the point of failing to render credible testimony at the final evidentiary hearing to which they were entitled.”

Defendants were represented in the matter by Barry Pollack and Joshua Solomon of PSD.