Sanctions — Experts — Misstatement of Fact in Expert Report as Potentially Outside Rule 11

Plaintiff’s expert in Vidalia Dock & Storage Co. v. Donald Engine Serv., 2008 U.S. Dist. LEXIS 32026 (W.D. La. April 17, 2008), made a misstatement of fact, asserting that the plaintiff owned a vessel (M/V CARLA J) that was owned by someone else. Plaintiff’s counsel and plaintiff were evidently aware of the error but did not correct it. The Court questioned whether this conduct was fairly within the scope of Rule 11:

With respect to the M/V CARLA J, this Court has questions regarding whether Rule 11 sanctions may be assessed against counsel for VDSC in connection with the ownership allegations concerning this vessel. The offending conduct with respect to this vessel is the production of VDSC’s expert report, authored by J. Stuart Woods, in which Mr. Woods represents VDSC owns the M/V CARLA J. However, counsel for VDSC did not sign the report. Neither party has briefed the issue of whether Rule 11 sanctions may be imposed against an attorney for misstatements of fact in a party’s expert report when the attorney did not sign the report, and this Court’s own research on the issue found no case on point. Thus, although the Court notes the practice of permitting an expert to misstate facts in an expert report and failing to correct such misstatement of fact may constitute, at best, poor lawyers, it appears, without knowing from where Woods obtained his information, counsel for VDSC did not commit a Rule 11 violation in connection with the issuance of this report.

Because the Court imposed Rule 11 sanctions for other reasons, this holding was not critical, but there are a few points worth noting about it: (i) “signing” is no longer the test under Rule 11 — it is “presenting” an offending paper to the court; (ii) production of an expert report to the other side probably is not “presenting” it to the court, as discovery papers are not allowed to be filed under Rule 5(d), and there is no other indication in the opinion that the report was presented to the court, other than in connection with the sanctions motion (which isn’t enough); (iii) 28 U.S.C. § 1927 sanctions are available for unreasonable and vexatious litigation conduct, and inherent power sanctions are available for bad faith litigation abuse, regardless of “present[ation]” of any offending paper to the Court; and (iv) to the extent that the provenance of the misstatement is pertinent, the cases are clear that communications between counsel and expert are fair game, and they should be to the extent that the expert is relying on counsel for facts included in his or her opinion.

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