In Interpreter Services Inc. v. BTB Technologies Inc., 2011 WL 6935343 (D.S.D. Dec. 29, 2011), the court imposed sanctions against the plaintiff’s attorneys pursuant to Federal Rule of Civil Procedure 26(g) and the court’s inherent authority. At issue were three pages produced as part of the defendant’s Rule 26(a) initial disclosures. The three pages contained additional e-mails that had not actually been sent. The defendant denied that they were authentic, denied that the defendant had produced them, and denied that the events described in them took place. Despite substantial evidence questioning the authenticity of these e-mails, plaintiff’s counsel supplemented its Rule 26(a) disclosures to add the fabricated e-mails to the record.
In ruling on the defendant’s motion for sanctions, the court reviewed the standards for imposing sanctions under Federal Rules of Civil Procedure 11 and 26(g), the court’s inherent authority to impose sanctions, and 28 U.S.C § 1927. After determining that there must be clear and convincing evidence before awarding the potentially “severe and punitive nature of Rule 11 sanctions,” the court opted not to impose sanctions under Rule 11. In contrast to Rule 11 sanctions which are discretionary, Rule 26(g) requires courts to assess sanctions where an attorney makes an improper certification that a discovery request or objection is complete and correct without having made a reasonable inquiry. The court imposed sanctions under Rule 26(g) after finding that the plaintiff’s attorneys knew or should have known at the time they supplemented their initial disclosures that the e-mails were not authentic and that plaintiff’s conduct “clearly added unnecessary delay and expense to the litigation.”
Because it could not determine with reasonable certainty who had created the inauthentic e-mails, the court declined to dismiss plaintiff’s case but noted that if it could have made such a determination, dismissal would “unquestionably be warranted.” Instead, the court found that the plaintiff’s attorney as well as the plaintiff’s owner were jointly liable for the defendants’ attorneys’ fees and expenses associated with addressing the fabricated e-mails from the date that the plaintiff sought to supplement its initial disclosures to add the fabricated e-mails to the record.