Court Order Imposing $9 Million Sanction Paints Sordid Tale of Ethically-Challenged Lawyering

middle districtThe lure of easy money, as the late Glen Frey once sang, has a very strong appeal. It routinely inspires less-than-ethical behavior from those who pursue it. Lawyers are certainly no exception, as a recent investigation and resulting federal court sanctions order reflects. The October 18, 2017 opinion, weighing in at 148 pages, is a meticulously detailed indictment of two attorneys’ abusive pursuit of easy money from the never-ending Florida tobacco litigation.

The sordid tale’s roots trace back to the disastrous 2006 Florida Supreme Court decision, Engle v. Liggett Group. This per curiam (i.e. unsigned) opinion decertified a class of 700,000 smokers. It also held that a generic conclusion reached by the initial Engle jury—that cigarettes are defectively designed and unreasonably dangerous—would have preclusive effect in all future, individual lawsuits filed by the decertified class of Florida smokers.

In other words, plaintiffs wouldn’t have to prove negligence or that smoking tobacco causes certain diseases; all they had to show was they fit the Engle class-member profile and cigarette use more likely than not caused their injury.

One of the lead plaintiffs’ lawyers in Engle was Jacksonville, Florida attorney Norwood S. Wilner. After the Florida high court decertified the class, Mr. Wilner, along with another Florida attorney, Charlie Farah, filed individual personal-injury and wrongful-death suits on behalf of approximately 3,700 individuals in state and federal court.

The defendants removed the state suits to the U.S. District Court for the Middle District of Florida, Jacksonville District. Those suits so overwhelmed the three active judges in the district that a fourth judge, from the District of Massachusetts, was brought in to assist.

Over the course of six years, and in the face of active resistance from Wilner and Farah, this group of four judges (with the assistance of a court-appointed Special Master) uncovered that over one-third of the attorneys’ claims—1,250—were entirely without merit.

Their jointly authored opinion invoked the court’s inherent sanction authority, as well as Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927, to punish Wilner and Farah personally for “conscious disregard of their professional obligations to properly investigate … claims, obtain authorizations to file from clients, and—most importantly—communicate honestly with this Court.” Their conduct, the court added, “evinced an intent to obscure the fact that they had filed hundreds of complaints on behalf of people whose status they did not know.”

The judges calculated each frivolous claim cost the public $6,983.42. When multiplied by 1,250, that equals $8,729,275. To that amount the court added the Special Master’s investigative costs of $435,129.12. The total monetary sanction was $9,164,404.12, an amount the court ordered deducted from the $45 million in attorneys’ fees and costs it holds in escrow from the global settlement of federal Engle suits. The court also referred Wilner and Farah to the Florida Bar Association for an ethics investigation.

The amount of detail in the sanctions opinion, both factual and legal, is breathtaking. The four judges, “fatigued from managing the federal Engle docket since 2008,” could have ended their misconduct inquiry after the parties announced a global settlement.

But to let this pass, the court concluded, “would be inconsistent with our duty to ensure that lawyers who practice before this Court do so ethically and responsibly.” If the behavior the court discovered went unsanctioned, the judges asked, “what deterrent would there be for other lawyers in future cases from taking the same approach?”

The behavior of Wilner and Farah can be summed up in a phrase the court used: file first, ask questions later.

After decertifying the Engle class in 2006, the Florida Supreme Court gave plaintiffs one year to file individual suits. Wilner and Farah claimed they tried to contact all their clients prior to filing but asserted in their own defense “we were overwhelmed” and “errors were inevitable.” When the court asked Wilner in one of many hearings whether he had obtained signed authorizations from all 3,700 clients, his reply was “probably not.”

Most egregiously, for 588 of their personal-injury claims, Wilner and Farah could not possibly have received authorization—those “clients” had died before suits were filed on their behalf.  In fact, 95% had passed away more than a year before their names ever appeared on legal complaints.

But that’s not all! Wilner and Farah had also filed wrongful-death actions for 66 individuals who were still alive. In August 2011, the court ordered Wilner and Farah to send questionnaires to 2,600 plaintiffs. 572 individuals failed to respond, and yet, the attorneys did not voluntarily drop those claims. Scores of other plaintiffs were found to be ineligible to file suit for various reasons, including lack of residency, expired statute of limitations, non-smoker status, or failure to authorize the lawsuit.

The court expressed particular shock with one instance where a “client” hadn’t authorized suit. During the trial of a post-Engle suit in a Middle District of Florida court, the defendants alerted the judge that a juror was also a plaintiff in a suit filed by Wilner and Farah. The juror was shocked by the discovery and informed the judge that she had resisted the attorneys’ recruitment efforts and never provided her authorization.

In Re: Engle Cases exposes the rotten core of America’s class- and mass-tort litigation system. Wilner and Farah treated their “clients” as commodities. Each additional plaintiff enhanced the lawyers’ settlement leverage and increased their potential fees. The two seemed oblivious to the fact that their “actions delayed, perhaps by years, plaintiffs with meritorious cases from having their claims heard.” That collateral harm similarly plagues class- and mass-actions involving asbestos, silica, lead, or other substances.

We’d like to believe, as the In Re: Engle Cases court wrote, that the actions of Wilner and Farah are an exception, a “rare occasion.” But the system within which they work permits, if not encourages, mass recruitment of plaintiffs, sometimes by faceless intermediaries, and the stockpiling of legal claims. And a single person who claims to have been misled by a statement on a product label can file suit on behalf of thousands of other consumers who may, or may not, have been equally tricked into a purchase.

So long as success in civil litigation is predicated on amassing large quantities of claims, courts should both refrain from creating incentives for abuse and actively police their dockets. Judges must carefully consider the ramifications of their rulings—something the Florida Supreme Court seemingly failed to do in 2006 when deciding Engle. They should also find inspiration in the courage and integrity with which the four Middle District of Florida judges acted in investigating (largely on their own initiative) and punishing the rampant post-Engle misconduct they uncovered.

Also published by Forbes.com on WLF’s contributor page.

One thought on “Court Order Imposing $9 Million Sanction Paints Sordid Tale of Ethically-Challenged Lawyering

  1. Pingback: Florida law firm sanctioned; many clients had not authorized it to sue - Overlawyered

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