Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-01257/USCOURTS-cand-3_13-cv-01257-12/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1332 Diversity-(Citizenship)

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SETH LONG,

Plaintiff,

v.

GRACO CHILDREN'S PRODUCTS INC., 

et al.,

Defendants.

Case No. 13-cv-01257-JD 

ORDER RE OSC AND REFERRAL TO 

COMMITTEE ON PROFESSIONAL 

CONDUCT

Re: Dkt. No. 130

This case is a consumer class action for deceptive practices and other claims arising out of 

the sale of defective car seats for infants and children. On July 7, 2015, the Court issued an Order 

to Show Cause (“OSC”) why sanctions should not be imposed on defendants Graco Children’s 

Products Inc. and Newell Rubbermaid Inc. (collectively “Graco”) and their counsel, Yakov 

Wiegmann and Joseph Krasovec of the law firm Schiff Harding LLP, for arguments made in their 

motion to dismiss this case. The gravamen of the Court’s concern is that Graco and its lawyers 

played fast and loose with the facts in seeking to dismiss this case. They devoted a substantial 

portion of their motion to dismiss to arguing that the claims for damages in the complaint -- on 

behalf of the named plaintiff and the putative class -- were moot because Graco offered full 

purchase price refunds to purchasers of the car seats in a national product recall campaign. Dkt. 

No. 104. Specifically, Graco and its lawyers argued, under headings such as “All Claims for 

Monetary Relief Are Mooted by the Recall,” that purchasers were offered “full relief . . . including 

a full refund of their purchase price upon return of the product.” Id. at 10 (emphases in original). 

They stated that the “highest loss any putative class member could have experienced would consist 

of the full price of the seat the customer purchased and any expenses he or she incurred in 

attempting to clean and/or repair a QT buckle” and that “[u]nder the recall ... relief is offered now, 

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United States District Court

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without delay, without uncertainty, and without a reduction of consumers’ recoveries in the form 

of plaintiff’s attorneys’ fees.” Id. at 10-11. The whole theme of the dismissal argument made to 

the Court was that “the recall provides all compensatory and injunctive relief Plaintiff purports to 

demand, and that relief is being provided now, without the need for a class trial.” Id. at 14. 

Graco’s counsel pressed these same points at oral argument on the motion. 

The Court denied the motion and found that Graco and its counsel failed to support these 

representations with facts. As the Court stated in the order denying dismissal, “[n]one of the recall 

documents say anything at all about a refund of any sort, let alone offer a full refund as a standard 

part of the recall program.” Dkt. No. 120 at 6. The Court also found that Graco’s representation

that it offered full refunds in the recall was simply “not true” in light of the documents Graco itself 

proffered. Id. Several months after entry of the order denying dismissal, plaintiff filed a motion 

for class certification that contained excerpts of a deposition of a Graco employee that casts even 

more doubt on the truthfulness and accuracy of Graco’s full refund representations. Dkt. No. 129. 

This new evidence, combined with the Court’s prior findings about Graco’s questionable 

representations, led to the OSC. 

The Court has serious concerns about the litigation tactics Graco and its lawyers have 

pursued. The thrust of the motion to dismiss was that the Court should dismiss this case with 

prejudice because everyone in the putative class could easily get a full purchase price refund. That 

proposition, however, is without evidentiary support, and the record presented to the Court so far 

strongly indicates that it is, at best, a gross and unwarranted exaggeration. In response to the OSC, 

Graco says that it never expressly misrepresented that full refunds were the primary remedy 

offered or that all consumers automatically got one. Dkt. No. 131. It is true that Graco and 

counsel were artful enough in the dismissal motion to mention other forms of relief such as a 

replacement buckle in proximity to the full refund representations. See, e.g., Dkt. No. 104 at 10. 

But that is precisely the conduct that concerns the Court. It is clear from the record that Graco 

greatly exaggerated the availability and practice of offering full refunds to purchasers in the recall 

drive to persuade the Court to terminate this litigation. The fact that Graco strategically laced its 

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United States District Court

Northern District of California

arguments with threads of truth does not justify or excuse the substantial and misleading 

overstatements about the refunds. 

Our District’s Local Rules set the standards expected of counsel authorized to practice 

before its courts. Civil Local Rule 11-4(a) requires attorneys to practice with the honesty, care, 

and decorum required for the fair and efficient administration of justice. The rule adopts the State 

Bar Act, the Rules of Professional Conduct of the State Bar of California and applicable court 

decisions as the standards of professional conduct in this district. Under the State Bar Act, an 

attorney may only use arguments and methods that “are consistent with truth, and [may] never 

seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law.” 

Cal. Bus. & Prof. Code § 6068(d). And under the Rules of Professional Conduct, “[i]n presenting 

a matter to a tribunal, a member: (A) Shall employ, for the purpose of maintaining the causes 

confided to the member such means only as are consistent with truth; (B) Shall not seek to mislead 

the judge, judicial officer, or jury by an artifice of false statement of fact or law; (C) Shall not 

intentionally misquote to a tribunal the language of a book, statute, or decision ...” Cal. Rules of 

Professional Conduct, Rule 5–200. 

These basic requirements of candor and honesty leave no room for playing games with the 

facts. They do not permit a lawyer to mention a technically true fact and then blow it out of all 

proportion to mislead the Court. 

The Court has broad discretion under 28 U.S.C. § 1927, Federal Rule of Civil Procedure 

11, and its own inherent powers to impose sanctions for conduct inconsistent with the professional 

standards and expectations required of all attorneys and their clients. Moser v. Bret Harte Union 

High School, 366 F.Supp.2d 944, 949-52 (E.D. Cal 2005). Sanctions for the tactics discussed here 

would be soundly within the Court’s discretion. See Bell v. California, No. C 01-0870 SBA, 2003 

WL 23784808, at *13 (N.D. Cal. Aug. 26, 2003) (finding bad faith where counsel was not 

“forthright” and “took pains to ensure that the statements that they made were not false, but their 

statements were singularly misleading.”). However, the Court will not impose monetary or other 

sanctions at this time. The Court saw through the misrepresentations early in the case and denied 

the motion to dismiss on that basis. As a result, injury to plaintiffs, and to the integrity and 

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fairness of the judicial process, were largely avoided. Consequently, the Court dissolves the OSC 

without formal sanctions, but advises all parties and counsel that it will watch the developments in 

this case with a sharp eye for any other misconduct. 

This does not mean that Court will simply overlook the troubling conduct here. The Court 

finds that the appropriate next step is to refer this matter to the District’s Standing Committee on 

Professional Conduct for further consideration and recommendation. Civil Local Rule 11-6(a)(1). 

This Court makes the referral. 

IT IS SO ORDERED.

Dated: August 13, 2015

________________________

JAMES DONATO

United States District Judge

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