Lasar v. Ford Motor Co.

Decision Date03 March 2005
Docket NumberNo. 03-35093.,03-35093.
Citation399 F.3d 1101
PartiesSteven Mark LASAR, Plaintiff-Appellee, v. FORD MOTOR COMPANY, Defendant-Appellant, and Lawrence Sutter, Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Theodore J. Boutrous, Jr., Los Angeles, CA, for appellant Lawrence Sutter.

Richard A. Derevan, Irvine, CA, for appellant Ford Motor Co.

Michael D. Weisman, Boston, MA, for the appellee.

Appeal from the United States District Court for the District of Montana; Donald W. Molloy, District Judge, Presiding. D.C. No. CV-99-00177-DWM.

Before: TASHIMA, PAEZ, and BEA, Circuit Judges.

PAEZ, Circuit Judge:

While driving a Ford pick-up truck, plaintiff Mark Lasar was involved in a rollover accident. Lasar subsequently brought a products liability damages action against Ford Motor Company. This appeal arises from sanctions that the district court levied against Ford and its counsel, Lawrence Sutter, for statements that Sutter made during his opening statement to the jury that ultimately resulted in a mistrial.

In imposing sanctions, the district court determined that Sutter violated two pretrial in limine orders prohibiting Ford from introducing evidence that Lasar had been drinking before the accident and had not been wearing his seatbelt at the time of the accident. At the conclusion of a sanctions hearing, the district court ordered Ford and Sutter to pay sanctions to Lasar and to the District Court. The sanctions were intended to reimburse Lasar for unnecessary expenses and attorney's fees, and to reimburse the district court for the costs of empaneling the jury. The court also found Sutter in contempt of court for deliberately violating the pretrial order relating to alcohol use. Finally, the court revoked Sutter's pro hac vice status and permanently barred Sutter from appearing pro hac vice in the Missoula Division of the United States District Court for the District of Montana.

Ford and Sutter timely appealed the district court's ruling. We address four questions relating to the court's imposition of sanctions. First, did the district court provide adequate due process? Second, did the court comply with the procedural requirements of its local rules? Third, did Sutter violate the pretrial evidentiary rulings and fail to disclose a prior disciplinary matter in his pro hac vice application? Finally, were the sanctions, and rulings relating to Sutter's pro hac vice status, an appropriate response to Sutter's misconduct? With one limited exception, we answer each question in the affirmative. We affirm the district court's ruling as to all sanctions except the permanent ban on Sutter's pro hac vice appearance before that court, which we reverse.

We also must decide whether the settlement of the dispute between Ford and Lasar while these appeals were pending renders them moot, so that we lack jurisdiction. Although the settlement agreement barred Ford from obtaining reimbursement of the monetary sanctions it paid to Lasar, we conclude that the agreement did not affect Ford's right to seek reimbursement of the sanctions it paid to the district court. Similarly, since Sutter was not a party to the settlement agreement, we conclude that it could not affect his right to appeal the sanctions award, the contempt citation or the pro hac vice rulings.1

I.

Steven Lasar was severely injured when he was ejected from his Ford Ranger during a rollover accident. Lasar filed a products liability action against Ford alleging that Ford had designed the Ranger's door-latch mechanism defectively. The district court granted pro hac vice status to Sutter, an attorney from Ohio, to represent Ford at trial. Local Rule 83.3(e), United States District Court for the District of Montana ("Local Rules"). John Stephenson served as Sutter's local co-counsel.

Before the jury trial began, the magistrate judge issued two in limine rulings. The first prohibited Ford from introducing evidence that Lasar had consumed alcohol on the day of the accident. The second prevented Ford from telling the jury that Lasar was not wearing his seat belt at the time of the accident. Ford challenged these rulings before the district judge, but the district judge overruled both objections.

When the trial began, Sutter made two comments during his opening statement that the district court ultimately determined were violations of the pretrial orders. Initially, Sutter told the jury:

At about 5:00 that morning, Mr. Lasar got out of bed and went hunting for the morning. Some time in the afternoon, he met up with some of his friends and spent the day playing pool, visiting some local establishments. Somewhere around 10:00 that night, he made the decision to drive himself home. He got into his car and he began his way back to his homestead.

Later in his opening statement, Sutter stated:

Now, inside the vehicle, something else was going on; Lasar was what we call a free-floating body. His body was banting about inside the car as it was rolling over. And because of what happens during the rollover, something all of us learned in high school and most of us tried to forget, centrifugal force. All that is, is something spinning around like a yo-yo on a string; it wants to keep going outward.

Lasar's attorney requested a sidebar at the conclusion of Sutter's opening statement, but the district court did not allow Lasar to present his objection until the end of the day. When the court permitted Lasar's attorney to explain the objection, Lasar's attorney argued that Sutter's reference to Lasar "visiting some local establishments" and to Lasar's "free-floating body" violated the evidentiary rulings. Although Lasar's attorney requested a curative instruction at a later point in the trial, he also noted a dilemma: "how do we correct the problem without drawing attention to it?"

The district court immediately stated that both of Sutter's statements were "absolutely unacceptable violations of the orders in limine...." The court then informed Lasar's attorney that it would grant a mistrial and award Lasar his costs. Before finally deciding the issue, however, the district court offered Sutter and Stephenson an opportunity to respond. Sutter, in response to the court's concerns, argued that he had utilized great care in preparing his opening statement, that his reference to Lasar playing pool at some local establishments was ambiguous, and that it was impossible to describe the accident without discussing Lasar's free-floating body. Lasar's attorney requested that the district court direct a verdict in Lasar's favor, but the district court rejected this option, stating "Ford has a legitimate defense."

The next morning, Lasar moved for a mistrial. After hearing additional oral argument about Sutter's opening statement, the district court stated that it was "inconceivable" that Sutter could argue "with a straight face" that he had not violated the order regarding alcohol. The court determined that a curative instruction would not "overcome the prejudice" of Sutter's opening statement. Accordingly, the court granted Lasar's motion for a mistrial and discharged the jury.

The court also notified the parties that it was prepared to impose monetary sanctions based on "an intentional effort, reckless and in bad faith ... to ignore the court's orders...." The court ordered Lasar's attorneys to prepare an affidavit detailing Lasar's costs and attorney's fees incurred over the previous two weeks and to serve the affidavit on Ford and Sutter by the end of the day. The court also orally notified the parties that it would issue an order to show cause ("OSC") why Sutter should not be held in contempt and have his pro hac vice status revoked. Later that day, the district court issued an OSC.

Two days later, the court held a sanctions hearing. At the hearing, Stephenson, Sutter's co-counsel, questioned Sutter. During the course of his examination, Stephenson asked Sutter, "Have you ever been found in contempt?" Sutter replied:

I was involved in a case approximately two years ago called [Kaffeman] v. Yellow Freight with a judge in Cleveland, Ohio by the name of Patricia Cleary who found me in contempt for attempting to place on the record certain objections. After the trial, I filed a motion with the Ohio Supreme Court to have her recused from that litigation. The Ohio Supreme Court reviewed the transcript in total and issued an opinion exonerating me and indicating that I had taken reasonable steps to put things on the record and removing Judge Cleary from further activity in that case.

On cross-examination, Sutter again testified that he "was found in contempt" in the Kaffeman case.2 Lasar's attorney then attempted to introduce an Ohio Supreme Court opinion in that case, which resulted in the disqualification of the trial judge. See In re Disqualification of Cleary, 723 N.E.2d at 1108. Stephenson did not object, stating, "[w]e cited to the Court[;] we have no objection."

The court also questioned Sutter about the court's rulings in the Kaffeman case. For the third time, Sutter testified that the judge in the Kaffeman case had "held me in contempt." The district court asked Sutter why he had not disclosed the contempt citation in his pro hac vice application. Sutter initially responded that under his reading of the Local Rules, he "thought that the only thing I had to disclose was if I had been sanctioned by a Bar Association or the local investigatory body." The court pointed out that the Local Rules require attorneys applying for pro hac vice admission to disclose if they have "ever been held in contempt, [or] otherwise disciplined by any court for disobedience to its rules or orders...." Local Rule 83.3(e)(3)(E). Sutter then explained:

Well, Your Honor, to be perfectly honest with you, I told John Stephenson two days ago that I had never been held in contempt, and I truly believe...

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