Citizens for Responsibility and Ethics in Washington v. U.S. Department of Veterans Affairs , 134 F. Supp. 3d 63 ( 2015 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
CITIZENS FOR RESPONSIBILITY AND )
ETHICS IN WASHINGTION, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-1481 (PLF)
)
U.S. DEPARTMENT OF VETERANS )
AFFAIRS, )
)
Defendant. )
_________________________________________ )
MEMORANDUM OPINION AND ORDER
In an opinion filed on September 14, 2014, granting the defendant’s renewed
motion for summary judgment and dismissing the complaint in this case, the Court also ordered
the defendant and its counsel to show cause in writing why sanctions, in the form of attorneys’
fees, should not be imposed against them. CREW v. U.S. Dep’t of Veterans Affairs, 69 F. Supp.
3d 115 (D.D.C. 2014). The sanctions issue now has been fully briefed by the parties, and the
defendant’s response to the Order to Show Cause is supported by the declaration of Assistant
United States Attorney Robin M. Meriweather and Department of Veterans Affairs counsel,
Catherine Flatley Nachmann.
The facts of this case and the facts specifically relating to what motivated the
Court to issue its Order to Show Cause are set forth in two prior opinions: CREW v. U.S. Dep’t
of Veterans Affairs, 828 F. Supp. 2d 325 (D.D.C. 2011), and CREW v. U.S. Dep’t of Veterans
Affairs, 69 F. Supp. 3d 115 (D.D.C. 2014). In brief, the Court expressed its concern about the
substance of certain declarations filed by employees of the Department of Veterans Affairs (“the
VA”), the evolving and changing nature of those declarations, and the timing of the revelation of
their contents to counsel for CREW and to the Court. Specifically, as the Court explained in its
2011 Opinion, it was
deeply troubled (1) that Mr. [John] Livornese, prior to his court-
ordered deposition on July 23, 2010, made inaccurate statements in
two declarations; (2) that Mr. Livornese signed a second
supplemental declaration on March 12, 2010 that was not provided
to CREW’s counsel until four months later, at Mr. Livornese’s
court-ordered deposition on July 23, 2010; (3) that Mr. Livornese’s
second supplemental declaration did not correct his prior
inaccurate statements — or even suggest that they were inaccurate
in any way — but simply stated that another, unnamed VA
employee would “provide a declaration further clarifying that
issue,” Mar. 2010 Livornese 2d Supp. Decl. ¶ 6; (4) that the VA
did not provide Mr. [Ronald] Klavohn’s declaration, dated March
31, 2010, to CREW’s counsel at the July 23, 2010 deposition of
Mr. Livornese, even though the substance of the undisclosed
declaration was discussed by Mr. Livornese at the deposition and
counsel for the VA certainly knew of the existence of the Klavohn
declaration; and (5) that even Mr. Klavohn’s first declaration was
incomplete and had to be supplemented after its deficiencies were
pointed out by CREW.
CREW v. U.S. Dep’t of Veterans Affairs, 828 F. Supp. 2d at 333-34; see also CREW v. U.S.
Dep’t of Veterans Affairs, 69 F. Supp. 3d at 124.
The Court further stated in its 2011 Opinion that it believed that counsel for the
VA had decided “as a matter of litigation tactics not to be forthcoming by withholding relevant
evidence until after the limited discovery ordered by this Court was concluded.” 828 F. Supp. 2d
at 334. The Court therefore allowed additional depositions of two Veterans Affairs employees,
both at the VA’s expense. As the Court stated in its subsequent opinion, it remained
deeply troubled by the VA’s litigation conduct in the case:
inaccurate declarations were left uncorrected for months despite
the fact that already-executed declarations to the contrary existed
but were withheld, apparently as a litigation tactic. Nothing stated
in defendant’s motion for reconsideration or other filings has done
anything to mitigate that concern.
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CREW v. U.S. Dep’t of Veterans Affairs, 69 F. Supp. 3d at 124. It therefore ordered the VA to
show cause why sanctions under 28 U.S.C. § 1927, “in the form of attorneys’ fees and costs,
should not be awarded for the additional time and effort CREW’s attorneys were required to
expend due to the VA’s tactics, including, but certainly not limited to, the time spent preparing
for and deposing Mr. Livornese while the VA withheld Mr. Klavohn’s declaration.” Id.
28 U.S.C. § 1927 permits the imposition of sanctions personally in the form of
attorneys’ fees, excess costs, and expenses against “[a]ny attorney or other person admitted to
conduct cases in any court of the United States or any Territory thereof who so multiplies the
proceedings in any case unreasonably and vexatiously . . . .” Courts also have the inherent
authority to impose sanctions in the form of attorneys’ fees, costs, and expenses against both
parties and their attorneys. While it is settled that a finding of bad faith is required in order to
impose sanctions under the Court’s inherent power, the District of Columbia Circuit has not
finally determined whether the standard for the imposition of sanctions under Section 1927 is
also bad faith or whether a lesser standard – namely, recklessness – suffices. United States v.
Wallace, 964 F.2d 1214, 1218-19 (D.C. Cir. 1992); see also LaPrade v. Kidder Peabody & Co.,
146 F.3d 899, 905 (D.C. Cir. 1998). Bad faith requires finding an intent unreasonably to delay
the proceedings, while recklessness does not require showing that unreasonable delay was the
intent or purpose of the attorney’s actions. United States v. Wallace, 924 F.2d at 1219; see id. at
1220 (recklessness requires “deliberate action in the face of a known risk, the likelihood or
impact of which the actor inexcusably underestimates or ignores”). Unintended, negligent, or
inadvertent acts will not support the imposition of sanctions under either standard. Id. at 1219.
Both Assistant United States Attorney Robin Meriweather and Veterans Affairs
attorney Catherine Nachmann have filed declarations explaining the actions they took and the
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reasons for those actions. Each of them states that she had no intent to deceive or hide anything
from the plaintiff or from the Court. See Meriweather Declaration at ¶¶ 4, 19 (Dkt. No. 83-1];
Nachmann Declaration at ¶¶ 32, 35 [Dkt. No. 83-2]. The Court is satisfied from Ms.
Meriweather’s declaration that there are reasonable explanations for most of the decisions she
and her colleagues at the U.S. Attorney’s Office made and plausible explanations for the timing
of the disclosure of relevant facts to plaintiff and its counsel and to this Court. See Meriweather
Declaration at ¶¶ 15, 16, 18, 30, 33, 34, 36, 37, 72, 74, 76, 83, 85, 86. Based on Ms.
Meriweather’s declaration, the Court finds that the delay in providing the Livornese and Klavohn
Declarations was not a litigation tactic designed for purposes of delay or worse. Nevertheless,
once the Court had ordered that the deposition of Mr. Livornese proceed on July 16, 2010 over
the government’s objection, Memorandum Opinion and Order, Civil Action No. 08-1481
(July 14, 2010) [Dkt. No. 35], the wiser course would have been to provide counsel for CREW
with Mr. Livornese’s March 12, 2010 declaration and Mr. Klavohn’s March 31, 2010 declaration
before that deposition took place. On the basis of the facts and the case law, however, the Court
cannot conclude that Ms. Meriweather acted in bad faith or even recklessly in the decisions she
made with respect to those disclosures. Accordingly, there is no basis to require her personally
to pay attorneys’ fees and costs as a sanction.
The declaration of Ms. Nachmann provides very little detail about the decisions
she and others at the Department of Veterans Affairs made with regard to this matter. In any
event, as defendant points out, Ms. Nachmann is a member of the state bar of Rhode Island but,
“to the best of [her] recollection,” she has never been admitted to practice before a federal court.
See Nachmann Declaration at ¶ 1. Since 28 U.S.C. § 1927 only governs attorneys or others
admitted to conduct cases in the courts of the United States or its territories, the statute seems not
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to apply to her. And under the case law governing the Court’s inherent authority, this Court
cannot find that she or the VA acted in bad faith. Accordingly, there is no basis to require Ms.
Nachmann personally to pay attorneys’ fees and costs as a sanction. 1
All of that having been said, the Court remains troubled by the cumulative effect
of the decisions made along the way by the Department of Veterans Affairs and its counsel. As
both Ms. Meriweather and Ms. Nachmann accurately point out, lawyers normally do not file
declarations with the Court untethered to any motion, brief, or other filing. See Meriweather
Declaration at ¶ 10; Nachmann Declaration at ¶ 35. In view of the Court’s expressed concerns in
its opinion and order denying the motion for a protective order, however, see Memorandum
Opinion and Order, Civil Action No. 08-1481 (July 14, 2010) [Dkt. No. 35], it should have been
apparent to counsel that this was not the normal situation. In view of what government counsel
knew – and CREW’s lawyers did not – it should also have been apparent that the questioning of
Mr. Livornese by CREW’s lawyers at the deposition initially scheduled by the Court for July 16,
and then adjourned until July 23, would have been much better informed if counsel had been
provided in advance with the declarations of Mr. Livornese and Mr. Klavohn. Defendant’s
repeated reliance in opposition to this proposition on a cryptic statement it made at the end of a
lengthy footnote buried in its motion for protective order, see Defendant’s Motion for Entry of
Proposed Briefing Schedule and for Protective Order, Civil Action No. 08-1481 (July 1, 2010)
[Dkt. No. 33], at 5 n.1, is disingenuous. It in no way signaled to the Court – or presumably to
plaintiff’s counsel – that there were new declarations forthcoming “that were pertinent to the
1 As for the VA, there is a split in authority as to whether sovereign immunity
insulates the federal government from the imposition of monetary sanctions under the Court’s
inherent authority. Compare United States v. Horn, 29 F.3d 754 (1st Cir. 1994), with FDIC v.
MAXXAM, Inc., 523 F.3d 566 (5th Cir. 2008). But this Court need not resolve that conflict in
this case.
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proposed Livornese deposition.” Meriweather Declaration ¶ 14; see also id. ¶ 72 (“I thought
those statements would make it clear that Mr. Livornese’s prior testimony was mistaken, and that
the forthcoming new declarations corrected that mistake.”)
And if the forthcoming declarations were in fact “pertinent,” why weren’t they
provided at least a few days in advance of Mr. Livornese’s deposition? The answer: a
misguided litigation strategy – not one designed to delay or impede the proceedings or to conceal
relevant facts, or executed in bad faith or with the kind of recklessness outlined by the court of
appeals in Wallace – but a strategy so focused on preparing and then filing a new motion for
summary judgment with supporting and (finally) completely accurate declarations, that the
importance to CREW of the Livornese deposition was put to one side, perhaps viewed by the
government as a mere distraction from its ongoing internal efforts, designed finally to set the
record straight later. See Defendant’s Reply in Further Support of Its Response to the Court’s
Order to Show Cause at 9-15 [Dkt. No. 86]. Unfortunately, the unintended effect of the VA’s
decisions was the multiplication of briefings and depositions. For this, CREW is entitled to
attorneys’ fees, costs and expenses, but not to sanctions. In view of the foregoing, it is hereby
ORDERED that the Order to Show Cause [Dkt. No. 74] why a sanction in the
form of attorneys’ fees should not be entered is DISCHARGED; and it is
FURTHER ORDERED that the parties shall meet and confer and file a joint
report with the Court, on or before September 30, 2015, indicating whether they wish to engage
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in good faith settlement discussions to resolve the pending motion for attorneys’ fees [Dkt. No.
76] before a magistrate judge or a court-appointed mediator.
/s/_______________________
PAUL L. FRIEDMAN
DATE: September 22, 2015 United States District Court
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