sanctions

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Addressing an issue of first impression, the Second Circuit held recently that bankruptcy courts have inherent authority to impose non-nominal civil contempt sanctions, including per diem sanctions and attorneys’ fees, arising out of an attorney’s failure to comply with the bankruptcy court’s discovery orders.

A recent order from a federal magistrate judge provides helpful insight to parties concerning the destruction of evidence and the proof required to obtain the ultimate sanction of dismissal of a case as a result of such destruction. 

In McLaughlin v. Lenovo Global Tech. (United States) Inc., Magistrate Judge Gail Dein of the District of Massachusetts issued numerous sanctions against plaintiff but decided that dismissal of plaintiff’s case was too harsh a punishment after he wiped his company-issued laptop prior to returning it to defendant.

ChatGPT may be smart enough to pass the bar exam, but lawyers should take caution before relying on the Artificial Intelligence (“AI”) platform to conduct any legal business.

On June 22, 2023, Judge P. Kevin Castel of the Southern District of New York released a lengthy order sanctioning two attorneys for submitting a brief drafted by ChatGPT. Judge Castel reprimanded the attorneys, explaining that while “there is nothing inherently improper about using a reliable artificial intelligence tool for assistance,” the attorneys “abandoned their responsibilities” by submitting a brief littered with fake judicial opinions, quotes and citations.

The Second Circuit has recently held that the Government must account for rental income it denied a property owner during a period of illegal seizure even though the Government was able to establish probable cause at a post-seizure hearing.  The appeal stemmed from a decades-long sanctions and civil forfeiture action in which the U.S. Department of Justice has sought to forfeit, among others, a 36-story skyscraper located at 650 Fifth Avenue in Midtown Manhattan co-owned by the Alavi Foundation, an entity accused of laundering money for Iran.

As the legal profession continues to adjust to the COVID-19 pandemic, even something as normal and regular as a deposition has often become an adventure. Even after accounting for the immediately obvious questions (is in-person too dangerous or not allowed? If conducting a remote deposition, what vendor should I use?) and all-to-common glitches like connectivity issues, new problems continue to pop up, even when seemingly doing the right thing. Take, for example, a deposition in Webber v. Dash, a libel and copyright case in S.D.N.Y.  Plaintiffs attempted to depose the defendant, Damon Dash, best known as a cofounder of the hip hop label Roc-A-Fella Records with Jay-Z and Kareem “Biggs” Burke. According to the Plaintiffs, there was a big problem: Dash’s testimony could not be clearly heard. In seeking termination sanctions, the plaintiffs accused Dash of purposefully speaking in a low voice behind the two masks he was wearing. (Dash may have been ahead of the curve, as shortly after the order came down, the CDC started to recommend “double masking”—wearing a cloth mask over a disposable mask—though the court’s order is unclear as to the nature of his two masks.)

Parties should think twice before posting potential evidence on social media, as the Plaintiff in Guarisco v. Boh Brothers Construction learned recently. The Eastern District of Louisiana imposed sanctions on Plaintiff for deliberately producing an altered photo, which Plaintiff had previously posted on social media in its unaltered form. Rather than relying on Rule 37(e), which it found was not applicable to the facts, the court exercised its inherent power to issue sanctions for such improper discovery tactics.