Sec. Nat'l Bank of Sioux City v. Day, 14–3006.

• Citation: 800 F.3d 936
• Decision Date: 27 August 2015
• Docket Number: No. 14–3006.,14–3006.
• Parties: SECURITY NATIONAL BANK OF SIOUX CITY, IA, as conservator for JMK, a Minor, Plaintiff–Appellee v. Jones DAY; June K. Ghezzi, Appellants–Appellants v. Abbott Laboratories, Defendant. American Association for Justice ; American Board of Trial Advocates; Iowa Association for Justice; Thomas M. Melsheimer; Stephen D. Susman, Amici Curiae.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

800 F.3d 936

SECURITY NATIONAL BANK OF SIOUX CITY, IA, as conservator for JMK, a Minor, Plaintiff–Appellee

v.Jones DAY;

June K. Ghezzi, Appellants–Appellants

v.Abbott Laboratories, Defendant.

American Association for Justice ;

American Board of Trial Advocates;

Iowa Association for Justice;

Thomas M. Melsheimer;

Stephen D. Susman, Amici Curiae.

No. 14–3006.

United States Court of Appeals, Eighth Circuit.

Submitted: April 14, 2015.

Filed: Aug. 27, 2015.

Daniel E. Reidy, argued, Chicago, IL (Shay Dvoretzky, Washington, DC, Kenton J. Skarin, Chicago, IL, on the brief), for Appellants–Appellants.

The appellee did not file a brief. Appellee did not participate in argument.

Christopher A. Duggan, argued, Boston, MA, (Mark P. Robinson, Newport Beach, CA, on the brief), for Amicus American Board of Trial Advocates.

Stephen D. Susman, Houston, TX, Thomas M. Melsheimer, Dallas, TX, on the brief, for amicus Stephen D. Susman and Thomas M. Melsheimer.

Thomas J. Duff, George F. Davison, Jr., Des Moines, IA, Elaine F. Gray, Fort Madison, IA, Emily Anderson, Cedar Rapids, IA, Chad A. Swanson, Waterloo, IA, for Amicus Iowa Association for Justice.

Valerie M. Nannery, Lisa Blue Baron, Washington, DC, for Amicus American Association for Justice.

Before MURPHY, COLLOTON, and KELLY, Circuit Judges.

Opinion

MURPHY, Circuit Judge.

Security National Bank of Sioux City, Iowa, acting as conservator for minor J.M.K., brought this products liability action against Abbott Laboratories, alleging that Abbott's baby formula caused permanent brain damage to J.M.K. After the trial jury found in favor of Abbott, the district court ordered defense counsel June K. Ghezzi to show cause why she should not be sanctioned under Federal Rule of Civil Procedure 30(d)(2) for obstructing each deposition in which she had participated. Defense counsel was subsequently ordered 1) to produce a discovery training video dealing with the impropriety of form objections, witness coaching, and excessive interruptions and 2) to distribute the video to most of the attorneys in her national law firm. Ghezzi and Jones Day appeal. After careful review of the entire record, we reverse.¹

I.

Security National Bank (the Bank) filed this action on February 15, 2011, alleging that Abbott's baby formula contained a harmful bacteria called enterobacter sakazakii which caused J.M.K. meningitis

and permanent brain damage. The Bank sought $16 million in compensatory damages as well as punitive damages. Because the parties could not agree on discovery deadlines, the Bank filed a motion requesting “a scheduling or planning conference with [a] magistrate judge,” which was granted, and a scheduling conference was held on April 4, 2011. A scheduling order, discovery plan, and trial management order were entered one week later. After certain amendments to the scheduling order, the magistrate judge set a November 30, 2012 discovery deadline and a March 20, 2013 dispositive motion deadline. Beyond setting those deadlines, granting a joint motion for a protective order, and denying the Bank's motion to extend the amended discovery deadline, the magistrate judge was apparently not involved in any other aspect of the case.

On August 13, 2012 the Bank deposed Dr. Bridget Barrett–Reis, a research scientist in Abbott's nutrition department, and then on August 22 it deposed Sharon Bottock, an assurance manager in one of Abbott's manufacturing facilities. The depositions were taken by the Bank's lead counsel, Stephen Rathke, and defended by Ghezzi, a partner at Jones Day who had never been sanctioned in her 31 year career. During the discovery period no complaint was ever raised about any of the objections by defense counsel, nor did plaintiff's counsel suggest that he needed more time to complete the depositions or was unable to depose the witnesses fairly and fully. Of the seven hours permitted by Federal Rule of Civil Procedure 30(d)(1), the Bottock deposition lasted four hours and ten minutes; the Barrett–Reis deposition took three hours and two minutes. By the close of discovery, neither party had requested judicial intervention from the magistrate judge or the assigned senior district judge regarding any counsel's deposition conduct.

The case was transferred to the trial judge on May 21, 2013, and he subsequently granted Abbott's motion for summary judgment in part while denying its “motion to exclude or limit [the Bank's] proposed expert testimony on medical and scientific causation.” The trial judge also criticized defense counsel and her firm for failing “to cite a contrary, but non-controlling decision” and warned that “[h]ide and seek litigation strategy seldom works and did not work here.” The judge also commented that defense counsel's “lack of candor” was “not an auspicious beginning for counsel before a judge newly assigned to the case.” After a status conference at which the trial judge denied a joint motion for a brief postponement, the court emailed defense counsel, directing them to think “about reasonable [trial] time limits” because in his experience “out of state large firms waste tons [of] time.” The court emphasized the point by including a picture of a clock at the bottom of the message. Later at an August 16, 2013 pretrial conference, the court commented that “large-firm lawyers” had to be “put on the clock” because the “only thing they know [how to do is] to obstruct things.” Defense counsel were also criticized for attempting to present too many trial exhibits “just because [they had] a lot of associates to keep busy” and asked if pretrial stipulations were “some kind of novel concept [since they apparently didn't learn] that at Rambo litigation school.”

In preparation for trial, the parties filed their deposition designations, counter designations, and objections. The trial judge overruled all of defense counsel's objections on December 30, 2013, finding them “reprehensible,” “frivolous,” and “among the most obstructionist [he had] ever seen in over 35 years in the legal profession.” A sanctions hearing was to be held during trial to determine whether the court had “the authority to and should order appropriate sanctions against defense counsel for ... incredible obstructionist conduct.” Trial began on January 6, 2014. On the third day of trial the judge ordered defense counsel to show cause why Rule 30(d)(2) sanctions should not be imposed against her “for making numerous objections that lacked a good faith basis in law or fact and which impeded, delayed, or frustrated the fair examination of [each] deposition which [she had] defended.”

Plaintiff Bank asked the court to prevent Abbott's manager Sharon Bottock from testifying at trial because of defense counsel's interruptions at her deposition. Defense counsel responded that it was “standard procedure” for both parties to use questions and comments to clarify technical subjects and to help ensure a clear record. She also offered examples of depositions in which she had previously used this procedure. The district judge responded that he had “read some of them” and that “sometimes [she did] an admirable job of asking a better question.” Defense counsel explained that “the reason we did it a lot was to move things along,” as it was her “job to sort of facilitate that.” After reviewing the cited portions of the Bottock deposition, the trial judge stated that he “didn't see anything remotely improper” and that he “wasn't really critical of anything in [that] portion” since counsel “did exactly what she said she did yesterday afternoon.” She was “trying to assist with the exhibit numbers and all and just trying to move things along.” While she “had a form objection in there,” he concluded that “it was one of the few that [had] some basis in fact.” The district court denied the Bank's request to prohibit Bottock from testifying at trial.

The depositions came up again on the sixth day of trial after plaintiff's counsel asked an expert witness: “Here's page 327 from [the deposition transcript of J.M.K.'s mother]. Isn't she saying that every time she used a bottle she boiled it first?” Defense counsel objected to the question as not “clear from the context of [that page] what it is [the mother was] talking about.” The court asked: “And so what is the nature of that objection?” Defense counsel replied that the question was “confusing,” and the judge responded, “it may be confusing to you, but [opposing counsel] didn't ask the question to you, he asked it of the witness.” When defense counsel added that it “might be confusing to the witness,” the judge responded that she had suggested “an answer to the witness which is exactly the problem [he] had with [her] depositions.” After the expert witness indicated that he too was confused by the question, the trial judge stated that defense counsel had suggested “an evasive answer for the witness by making [a] speaking objection.” The court said it intended to file an “opinion saying that's not a proper objection” and warned that if counsel made another speaking objection, there would “be heck to pay for it.”

Three days after the jury found in favor of Abbott, the district court issued an order to show cause on January 21, 2014. The order referred to form objections, witness coaching, and excessive interruptions of depositions; it also required counsel to identify a good faith basis for each of her objections during the Bottock and Barrett–Reis depositions. She was also required to certify that “she personally reviewed the depositions in question and that she did not receive any assistance in preparing her responses.” Defense counsel responded to the order as directed, offering her basis for each objection raised while defending the depositions. She also submitted a brief questioning the authority of the court to impose Rule 30(d)(2) sanctions on its own motion and arguing that sanctions were inappropriate long after discovery had been completed without any complaint by opposing counsel. Plaintiff's co...