A CHILLING AFFIRMANCE FROM THE FOURTH CIRCUIT

(Posted May 31, 2018) On what has proved to be something other than a slow news day, the Fourth Circuit hands down an opinion in a sanctions appeal. The case is Six v. Generations Federal Credit Union, and comes to Richmond from the Middle District of North Carolina.

Here’s an early quote from the opinion that will get your attention:

This case presents at least one clear, affirmative misrepresentation: one attorney asserted under oath that, after two years of litigation over the authenticity of the loan agreement, the plaintiff’s attorneys had never challenged authenticity. The remainder of the sanctioned conduct forms a mosaic of half-truths, inconsistencies, mischaracterizations, exaggerations, omissions, evasions, and failures to correct known misimpressions created by their own conduct that, in their totality, evince lack of candor to the court and disrespect for the judicial process. The district court relied, to its detriment, on these distortions.

I read through the rest of the opinion in a daze; language like this is horrifying. But the details unfold relentlessly over 25 agonizing pages as the panel outlines how three attorneys effectively – in every sense of that adverb – misled the district judge assigned to their case.

I’m not going to recount every step of this tortuous journey; you can explore the extensive factual recitation at your leisure. The legal analysis is comparatively short. Today’s panel (Judge Duncan writes for Judges Keenan and Thacker) spends fully ¾ of the opinion laying out the nature of the deceptions.

The panel rules that the district judge did not abuse her discretion in imposing $150,000 in sanctions, jointly and severally, against the lawyers and their law firms. The juniormost lawyer’s liability is capped at $100,000; I earnestly hope that he doesn’t have to add that to student-loan debt, which is all too common among associates these days.

As often happens in rulings like this, the most devastating sanction is nonmonetary: The opinion is published, and will be a permanent feature in Federal Reports, 3d Series. These lawyers’ grandchildren will be able to read about what their ancestors did. In the short run, the lawyers’ professional reputations will suffer from the revelation that they violated one of the basic commandments of legal ethics: Thou shalt speak candidly before thy tribunal.