Two “Prestigious” Law Firms Sanctioned for Asserting Frivolous Claims

Superior Court Judge Ellen Koblitz noted that, ”Paul Weiss and Lowenstein Sandler argue[d] that since they are both such important, well-regarded law firms, the mere finding that they engaged in frivolous litigation is deterrence enough.  They argue[d] that this court’s finding of frivolous litigation has been widely publicized and besmirches their reputation, which will cost them untold, unspecified damages. A monetary sanction, however, is clearly appropriate here.”

Lack of Mitigating and Aggravating Factors

Judge Koblitz noted that the firms did not show remorse for their misconduct. She noted that both have said they plan to appeal her sanctions ruling and neither has acknowledged any wrongdoing.

“Without remorse, or any acknowledgement of wrongdoing, how can [the firms] reassure the court that the behavior will not reoccur,” Judge Kobler asked. “How will they recognize frivolous litigation and avoid it next time?”

Judge Kobler noted that Lowenstein has established an internal system to prevent the filing of future frivolous litigation, but she called that system “salutory.”  She also stated that Paul Weiss has not taken any action to prevent frivolous misconduct in the future.

“[Paul Weiss lawyers] claim never to have been found to have engaged in frivolous litigation in the one hundred year history of the firm,” the judge wrote. “They argue that it will not happen again because it did not happen before. Of course, firms change lawyers and practices. Without recognizing and addressing a problem, it is hard to be sure that it will not resurface. A sufficient monetary sanction is necessary to impress upon counsel the need to make greater efforts to avoid frivolous litigation in the future.”

Judge Kobler also found that there were no aggravating factors because no history of frivolous litigation had been brought to her attention.

In reality, the firms are believed to have made a profit on asserting the frivolous claims even after the sanctions.  The firms hid behind attorney-client privilege and did not open up their billing records for review. But, the judge noted that the firms were likely to have billed their billionaire client in the tens of millions of dollars during the course of the litigation.

Review the entire opinion here – Court Opinion – Attorney Sanction – August 20, 2010