Opinion ID: 215414
Heading Depth: 2
Heading Rank: 3

Heading: Proof of Culpable Mental State

Text: Although Peters violated the Confidentiality Order, an attorney's violation of a court order does not, by itself, necessarily constitute sanctionable misconduct. To be sanctionable, the attorney's violation must be accompanied by a culpable state of mind. See, e.g., ABA Standards for Imposing Lawyer Sanctions, R. 6.21-6.24 (1986, amended 1992)(outlining range of sanctions for violating a court order or rule, depending on the lawyer's mental state and other factors); In re Ryan, 189 A.D.2d 96, 104, 594 N.Y.S.2d 168 (1st Dep't 1993) (stating that venal intent is element of DR 1-102(A)(4)); In re Cohn, 194 A.D.2d 987, 990-91, 600 N.Y.S.2d 501 (3d Dep't 1993)(stating that venal intent is apparent element of DR 1-102(A)(4) and holding that, although venal intent was lacking, the same specifications ... supported charges of conduct prejudicial to the administration of justice involving misstatements in official documents misleading to judicial and other governmental agencies). For the following reasons, we find that, on the present record, there is insufficient evidence that Peters acted with a culpable state of mind when she violated the Confidentiality Order. First, the record created by Judge Baer does not make clear the degree of Peters's familiarity with the Confidentiality Order during the relevant time period. The record contains evidence, presented by Peters, that: other attorneys in Peters's firm had taken the lead in negotiating that order; the order had been issued by the district court on April 12, 2007; Peters had left the country the following day and did not have a copy of the order during her time abroad; she had not reviewed the order prior to her departure (although she had discussed it briefly with others); and she had relied on the advice of other attorneys in her firm as to the order's requirements. See App. at A792, A907, A923-24; see also A840 (Brackett research email dated Apr. 19, 2007) (I think that we can construe the Massachusetts Action as a continuation of the previous matter.). Zachary Carter and Jonathan Herman, two of the attorneys upon whom Peters claims to have relied, see id. at A769, A811, testified that they had not read the Confidentiality Order during the relevant time period, see id. at A727, A731, A733, A811. However, Herman, who had been assigned by the firm to supervise Peters's conduct of the litigation, see id. at 731, 804, had asked Carter on April 24, apparently on Peters's behalf, whether use of transcript pages from the New York action in an exhibit to an anticipated Massachusetts filing would violate any existing court order of [Judge] Baer, id. at A846. In response, Carter advised that, although there was an outstanding motion requesting the return of transcript pages, republishing them in the exhibit would be fair game. Id. According to Carter's testimony, however, he was not familiar with the Confidentiality Order at the time he gave that advice, as the only orders that [he] had been ... exposed to[] were those that had been issued from April 16 through the time he gave that advice. Id. at A731. The record does not indicate whether Peters knew, or should have known, the limited nature of Carter's advice. As for Marc Reiner, Deidre Sheridan, and Brackett, the Dorsey attorneys who Peters alleged were the most familiar with the Confidentiality Order, see id. at A792, A907, A923-24; cf. id. at A697 (Reiner testifying that he had read the order carefully), their testimony and declarations do not cover the issue of Peters's familiarity with the Confidentiality Order, see id. at A239-43, A244-50, A680-706, A708-16, A819-24, although they were presumably the most knowledgeable about that point, aside from Peters herself. In fact, Sheridan never testified at all. Although Reiner's testimony, and an email, indicate that he had informed Peters of Judge Baer's April 16 instruction that her firm should seek new discovery in the Massachusetts action, see id. at A686, A835, he did not mention the Confidentiality Order in relation to that instruction. Judge Baer and the Grievance Committee rejected Peters's assertion that she had acted in good faith as demonstrated by her reliance on Brackett's research on whether the Massachusetts and New York cases were the same litigation within the meaning of the Confidentiality Order. See In re Peters, 543 F.Supp.2d at 334; App. at A839-41. However, a rejection of that evidence requires a finding as to her familiarity with the Confidentiality Order, i.e., whether she knew, or should have known, that the Confidentiality Order barred the filing in Massachusetts of material covered by that order. Furthermore, if the Grievance Committee concludes, on remand, that Peters did not know that the Massachusetts filing was barred by the Confidentiality Order, but should have known, a finding as to the degree of her culpability is necessary since mere negligence might not warrant severe, or any, disciplinary measures. See ABA Standards for Imposing Lawyer Sanctions, R. 6.23-6.24 (stating that reprimand or admonition is generally appropriate for negligent failure to comply with court order or rule). On the other hand, it is possible that Peters would warrant discipline for violating the Confidentiality Order even if she was not familiar with its termsif, for example, her failure to familiarize herself with the order was in bad faith. However, such a conclusion would require detailed factual findings. Second, we disagree with the Grievance Committee's conclusion that Peters's good faith defense is undermined by provisions of the Confidentiality Order that provide[] a mechanism for seeking guidance from the Court on its scope, In re Peters, 543 F.Supp.2d at 334 (citing Confidentiality Order ¶¶ 9, 10, 13), and by the asserted fact that her own client did not agree with her use of the transcripts in the Massachusetts action, id. (citing Wolters Kluwer, 525 F.Supp.2d at 514 n. 254). Paragraph 9 of the Confidentiality Order permits any person to seek judicial modification or amendment of [the] [o]rder; paragraph 10 requires that notice be given to a party if disclosure is sought of that party's Protected Material; and paragraph 13 provides that the obligations created by the order would survive the termination of the lawsuit unless ... modified by the respective Court in each action and that the district court would retain jurisdiction to enforce, amend, or modify the order. None of those provisions contain an explicit mechanism for seeking guidance on the scope of the Confidentiality Order. While such guidance could be sought, with or without reference to any provision of the Confidentiality Order, no provision mandates that a party seek guidance as to the meaning of a term or provision of the order or suggests that failure to seek guidance is necessarily unreasonable or in bad faith. The record also does not contain clear evidence that Peters's client disagreed with her use of the New York transcripts in Massachusetts. At one point, the relevant witness, in-house counsel for the client, testified that he had instructed Peters to make an argument to the district court about the use of New York depositions in the Massachusetts action. See App. at A460-61. However, in response to a question about whether he understood that the district court had made a further ruling on these issues, he testified that there had been additional communications on that, without describing that ruling or those communications. See id. at A461. That witness also testified that he had authorized Peters to request the Massachusetts court to order the defendants to again produce the documents that Judge Baer had ordered be returned to him, see id. at A464, and that he had been consulted prior to the filing of New York transcripts in the Massachusetts action, had been advised that the Confidentiality Order did not cover the anticipated filing, and, apparently, had not objected, see A518-19. [11] Third, in finding that Peters had violated the Confidentiality Order in bad faith, the Grievance Committee adopted Judge Baer's conclusion that Peters used the transcripts [in the Massachusetts action] in a bad-faith effort for the improper purpose of gaining advantage (and expedient relief) in a new court after she had `judge-shopped,' and after she had gained extensive discovery without providing any discovery of her own, and in an effort to have [the Massachusetts] Court eviscerate the Confidentiality Order that this Court had entered to govern discovery produced in this litigation. In re Peters, 543 F.Supp.2d at 334 (first alteration in original) (citing Wolters Kluwer, 525 F.Supp.2d at 548). This conclusion, however, links the Confidentiality Order allegation to several other allegations made in the defendants' sanction motion, without separate analysis of those other allegations. Additionally, part of Judge Baer's conclusion was rendered questionable by this Court's opinion in the appeal from Judge Baer's reprimand order. In that appeal, this Court reversed the district court's reprimand against Peters's law firm for voluntarily dismissing the Wolters Kluwer litigation, stating that the firm was entitled to file a valid Rule 41 notice of voluntary dismissal for any reason, and rejecting Judge Baer's conclusion that the dismissal was an improper attempt to judge-shop, or that the filing of the Rule 41 notice itself was sanctionable. Wolters Kluwer, 564 F.3d at 114-15; see also id. at 115 (It follows that Dorsey was entitled to file a valid Rule 41 notice of voluntary dismissal for any reason, and the fact that it did so to flee the jurisdiction or the judge does not make the filing sanctionable.). Furthermore, the record shows that there were legitimate reasons supporting dismissal, as both the client's in-house counsel and certain Dorsey attorneys, Peters included, had become aware of a possible lack of personal jurisdiction in New York; indeed, the defendants had filed a motion to dismiss on that basis. See App. at A648, A832 (email exchange between Peters and opposing counsel discussing the issue). Additionally, there does not appear to be a dispute that Peters initially had opposed dismissal under Rule 41 and had instead attempted, unsuccessfully, to have the district court rule on her motion to have the case transferred to Massachusetts. [12] See, e.g., id. at A202 (Peters Decl. ¶ 132), A239-41 (Reiner Decl. ¶¶ 2-6), A680-81 (Reiner testimony), A833-34 (emails, between Peters and other attorneys, discussing issue). For the forgoing reasons, we also vacate the portion of the Grievance Committee's order sanctioning Peters based on the Confidentiality Order allegation. On remand, however, the Grievance Committee is free to make a new determination, based on detailed factual findings, of whether Peters acted with a culpable state of mind when she violated the Confidentiality Order and, if so, to discipline her accordingly.