Counsel Sanctioned for Misrepresentations and Citations to “Badly Out of Date” Federal Rules

Fulton v. Livingston Fin., LLC, No. C15-0574JLR, 2016 WL 3976558 (W.D. Wash. July 25, 2016).

After a motion to compel in which the defendant sought to obtain all “relevant and non-privileged” information, the court sanctioned defense counsel for his “inexplicable” and “inexcusable” reliance on case law defining relevant discovery prior to the December 2015 rule amendments.

The plaintiff, Richard Fulton, sued Livingston Financial LLC for violating the Fair Debt Collection Practices Act by wrongfully serving Fulton “in a collection lawsuit filed against another individual.” In March 2016, before the case settled, Livingston “moved to either compel discovery or exclude [Fulton’s] medical evidence” because Fulton “did not seek formal medical treatment” and therefore “was not seeking recovery for any medical condition.” Although he filed the motion after the December 2015 amendments to the Federal Rules of Civil Procedure, Livingston further argued that “information and documents are discoverable if they are relevant and non-privileged,” citing case law that defined “relevance” under the old rules.

At the hearing on Livingston’s motion, the court found Livingston’s inference that lack of medical treatment precluded recovery for any medical condition “so unreasonable as to constitute a misrepresentation to the court.” The court also “found inexplicable [counsel’s] citations to outdated case law and concluded that misrepresentation also warrants sanctions.” The court therefore issued an oral ruling of sanctions against Livingston’s counsel, John Ryan, “for his bad faith in briefing Defendants’ motion to compel.” Those sanctions were both monetary—Fulton’s fees and costs in defense of the motion—and extrajudicial, as the court ordered Ryan to explain to the three “individuals in charge” of his law firm “‘that the court is entering sanctions against [him] for quoting provisions of the civil rules that are badly out of date, and also making direct misrepresentations to the court.’”

After the hearing, the court permitted Ryan to file a memorandum addressing “the additional sanction of requiring [him] to report this sanction on future pro hac vice applications.” Ryan complied, claiming that he acted in “good faith,” that his arguments were “‘arguably proper,’” and that any mistakes were “‘unintentional.’”

The court disagreed. As for the misrepresentations, while the court initially noted that Fulton “shared [Ryan’s] understanding” that “garden-variety emotional distress,” for which Fulton did seek recovery, is distinct from a “medical condition,” for which he did not, the court found that this “common understanding” merely “temper[ed] the degree of bad faith.”

More importantly, the court found Ryan’s citation to case law interpreting the earlier Federal Rules “inexcusable.” In so doing, the court rejected Ryan’s argument that the amended rules “may not apply to this action.” While the case predated the amendments, the new rules applied to “‘all proceedings pending’ as of December 1, 2015, ‘insofar as just and practicable.’” Ryan did not suggest “that applying the amended Rule 26 would be unjust or impracticable,” and “his brief made no reference whatsoever to the amended rule.” By citing the previous rule, Ryan omitted the amended Rule 26(b)(1)’s further limitation on discovery: that information must be not only relevant and nonprivileged but also “proportional to the needs of the case.”

The court concluded that “at a minimum,” Ryan “recklessly misrepresented the law and the facts to the court in an effort to limit the evidence that [Fulton] could present at trial.” The court further stated that “rather than owning up to his misrepresentation, Mr. Ryan disingenuously [attempted] to excuse his error.” The court therefore found clear and convincing evidence “tantamount to bad faith” supporting its sanctions. While the court did not require that Ryan report the sanction on future pro hac vice applications, it did order him to disclose this order to any federal court that “threatens or imposes sanctions” in the next five years and ordered the senior members of Ryan’s law firm to file an affidavit “confirming that they have reviewed” the court’s orders.

Fulton v. Livingston Fin., LLC, No. C15-0574JLR, 2016 WL 3976558 (W.D. Wash. July 25, 2016).


If your case predates the December 2015 rule amendments, do not assume that it is automatically governed by the previous rules. In most cases, courts are applying the current version of the rules to motions filed in 2016. However, if it is to your advantage to argue for the application of a standard from the former rules, be sure to address why applying the amended rules would not be “just and practicable” in your circumstances.

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