Commercial Litigation and Arbitration

Sanctions — Fact That Party’s Position on Merits Is Ultimately Vindicated Does Not Relieve It of Sanctions Imposed for Violation of Discovery Orders

Linde v. Arab Bank, PLC, 2013 U.S. Dist. LEXIS 87040 (E.D.N.Y. June 14, 2013):

In recent correspondence, the Bank argues that the claims under the Alien Tort Statute ("ATS"), 28 U.S.C. § 1350, which constitute the greater number of the approximately 6000 claims in these related cases, will likely be dismissed under Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659, 185 L. Ed. 2d 671 (2013), and therefore any attorneys' fees related to ATS claims would be inappropriate.

The Bank's argument is rejected. All of the claims in these cases were consolidated for pretrial purposes and discovery, including the issue of the Bank's assertion of foreign bank secrecy laws, and the parties and the court have treated them together. More importantly, whether or not claims are ultimately successful, a violator of discovery orders is not relieved of the monetary sanctions imposed for those violations. See Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse § 47(B) (4th ed. 2008). The role of a monetary sanction under Rule 37 is to compensate a party for unnecessarily expended attorneys' fees and expenses; it is not to reward the prevailing party in the suit. Therefore, the potential dismissal of the ATS claims is immaterial to the plaintiffs' fee application.

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