Elliott v. Schlumberger Technology Corporation et al

Filing 411

ORDER 393 ADOPTING REPORT AND RECOMMENDATIONS and Making Additional Rulings; and granting in part and denying in part 335 Motion for Sanctions by Judge Ralph R. Erickson.(SH)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
Chris Elliott, et al.,
Plaintiffs,

Case No. 3:13-cv-79

-vs-

ORDER ON REPORT AND
RECOMMENDATION

Schlumberger Technology Corporation
and Schlumberger Limited,
Defendants.
The court has received a Report and Recommendation from the Honorable Alice R.
Senechal, United States Magistrate Judge, recommending as follows: (1) imposition of
monetary sanctions, subject to the plaintiffs’ proof that Defendant Schlumberger
Technology Corporation’s (“STC”) improper conduct led to increased attorney fees and/or
expenses; (2) that certain evidence be excluded as a sanction; (3) a monetary sanction be
entered against STC’s counsel for failure to take measures to insure his sworn statements
were true; and (4) and imposition of further nonmonetary sanctions requested by plaintiffs
is unwarranted.1
STC objected to the magistrate judge’s Report and Recommendation.2 STC contends
that the sanctions imposed by the magistrate judge are unwarranted, as it has produced
over 61,000 pages of documents, responded to 49 interrogatories, responded to 164
requests for admissions, and explained that sanctions are not justified for its conduct in this
action where the “stakes are high.” STC also indicates that it does not intend to rely on
Jacqueline French’s interview notes and requests that exclusion of the evidence not be

1

Doc. #393.

2

Doc. #402.

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characterized as a sanction. Finally, STC asserts that notice must be given and a finding of
bad faith must be made prior to imposing monetary sanctions against counsel for counsel’s
“honest mistake”. The plaintiffs have filed a response to STC’s objection.3
A district court reviews a magistrate judge’s order with respect to a non-dispositive
motion under an extremely deferential clearly erroneous or contrary to law standard.4 A
finding is “clearly erroneous” when the reviewing court, upon consideration of all the
evidence, is left with a definite and firm conviction that a mistake has been committed.5
The court has reviewed STC’s objections and the magistrate judge’s Report and
Recommendation and is not left with a definite and firm conviction that a mistake has been
made.
Upon review of the record and the parties’ arguments, the court finds the magistrate
judge’s recommendation that STC failed to respond to the plaintiffs’ discovery request
forthrightly is not clearly erroneous. The record establishes that STC failed to respond to
the plaintiffs’ discovery requests forthrightly. In light of STC’s failure to respond to
Interrogatory 2 forthrightly, the plaintiffs might have incurred additional attorney fees or
expenses. The plaintiffs may attempt to establish the additional attorney fees or expenses
incurred by filing a brief within 7 days of the date of this order. STC may file a response
within 7 days of the date the plaintiffs’ brief is filed.
Upon review of the record and the parties’ arguments, the court finds the magistrate
judge’s recommendation that Jacqueline French’s interview notes should be excluded for
their late disclosure is not clearly erroneous. The interview notes were not timely disclosed
3

Doc. #403.

4

28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); District of North Dakota Local Rule 72.1(D)(2).

5

In re Hernandez, 860 F.3d 591, 602 (8th Cir. 2017) (quotation and citation omitted).

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and exclusion is consistent with the court’s order regarding the deadline for documents to
be produced. As a sanction for the late disclosure, French’s interview notes are hereby
excluded from evidence.
Upon review of the record and the parties’ arguments, the court finds the magistrate
judge’s recommendation that a monetary sanction be imposed against STC’s counsel for
submitting a sworn declaration to the court without prior verification as to its accuracy is
not clearly erroneous. Notice was given to STC’s counsel of the proposed sanction by way
of the magistrate judge’s Report and Recommendation and counsel has been given an
opportunity to respond and object. The court is well aware of counsel’s explanation for his
conduct and his objections to imposition of a sanction. STC’s counsel concedes he made
false statements. A review of the undisputed record demonstrates that STC’s counsel failed
to undertake any effort to verify the accuracy of statements he made in a sworn declaration.
In Harlan v. Lewis,6 the Eighth Circuit Court of Appeals concluded that a showing
of bad faith is not necessary to support a monetary sanction against counsel, and recognized
that the “bad faith” requirement does not extend “to every possible disciplinary exercise of
the court's inherent power, especially because such an extension would apply the
requirement to even the most routine exercises of inherent power.” The court, within its
inherent power, hereby imposes a sanction in the amount of $750.00 against STC’s counsel
for his failure to take any measures to insure that all statements he made in a sworn
declaration were true. Lawyers have a duty of candor to the court. There is no evidence to
support a finding that counsel intentionally made the false statements. Rather, counsel
acted recklessly in relying on his memory and, in contravention of his duty of candor,

6

982 F.2d 1255, 1259-60 (8th Cir. 1993).

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undertook no efforts to verify the accuracy of the statements prior to submitting them in
a sworn declaration. The court finds imposition of a modest monetary sanction is the least
severe sanction available that will adequately deter the undesirable conduct. If the court
believed counsel intentionally made the false statements, the sanction would have been
much more severe.
The magistrate judge’s Report and Recommendation is ADOPTED in its entirety.
In addition, the court has set a briefing schedule to allow the plaintiffs an opportunity to
prove the additional attorney fees or expenses it incurred as a result of STC’s failure to
respond to Interrogatory 2 forthrightly. In addition, the court has imposed a monetary
sanction for STC’s counsel’s failure to take any measures to insure the accuracy of sworn
statements it made in this matter. It is HEREBY ORDERED as follows:
(1)

The plaintiffs’ motion for sanctions7 is GRANTED in part and DENIED
in part;

(2)

Jacqueline French’s interview notes are excluded because of their late
disclosure;

(3)

A monetary sanction, subject to the plaintiffs’ proof of additional fees and
expenses to be provided in a supplemental brief within 7 days of the date of
this order, may be imposed against STC for failure to forthrightly respond to
Interrogatory 2; and

(4)

A monetary sanction in the amount of $750.00 is imposed against STC’s
counsel for recklessly submitting a sworn declaration to the court without
prior verification of the accuracy of the statements.

IT IS SO ORDERED.
Dated this 14th day of September, 2017.
/s/ Ralph R. Erickson
Ralph R. Erickson, District Judge
United States District Court

7

Doc. #335.

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