WV Supreme Court takes up sanctions on 2 utility companies - Beckley, Bluefield & Lewisburg News, Weather, Sports

WV Supreme Court takes up sanctions on 2 utility companies

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West Virginia Supreme Court justices recently heard oral arguments in a case questioning a lower court's sanctions on a party for producing hundreds of thousands of pages worth of documents shortly before trial.

Ohio Power Co. and American Electric Service Power Corp. said the lower court should not have imposed sanctions upon them because they were not in violation of a court order and they did not have a "pattern of wrongdoing" throughout the litigation

However, Pullman Power LLC and Structural Group Inc. said sanctions were appropriate because they could not review the deluge of documents in a meaningful way before trial.

The case stems back to a March 4, 2006, fire in a smoke stack at the Mitchell power plant, which killed Pullman employee Gerald W. Talbert and injured employees David Early and Timothy Wells. The three men were working on the chimney stack when the fire occurred.  

Early, Wells and Tiffani D. Talbert, acting as administratrix of Gerald Talbert's estate, filed a civil action in Marshall County Circuit Court.

The circuit judge entered a scheduling order setting the deadline for discovery submission for Jan. 14, 2011.

However, in March 2011, attorneys for Ohio Power Company and American Electric Service Corporation realized other electronically-stored information existed.

Court documents state that five weeks before trial, AEP's counsel advised Pullman's counsel that it discovered the additional 750,000 to 1.5 million pages of electronic information.

AEP's newly appointed counsel informed Pullman that a former attorney had the documents stored on a hard drive but had not reviewed it for discovery.

Counsel also said AEP and the former attorney had these documents for several years, court documents state.

A week before trial, AEP's counsel turned over 100,000 pages of documents, and five days before trial produced another 180,000 pages promising it would produce two additional products of "similar size and scope."

Earley, Wells and Talbert later settled before trial but petitioners intended to go to trial on the crossclaims, documents state.

Pullman's attorneys filed a motion for sanctions against their co-defendants, and AEP and Ohio Power filed their opposing motions.

The lower court later found AEP's production of these documents shortly before trial "constituted noncompliance with the West Virginia Rules of Civil Procedure" and violated the prior deadlines.

The court also ruled Pullman was unable to review the documents "in any meaningful way before trial" and their rights to defend their cross-claims were "severely and unduly prejudiced."

Thus, the court dismissed with prejudice the crossclaims against Pullman.

Parties appeared in the state Supreme Court for the Jan. 23 oral argument hearing.

Representing Ohio Power Company and American Electric Service Power Corporation was Michael P. Leahey, who argued sanctions should not have been imposed.

Leahey said parties did not violate a court order because they did not "engage in a pattern of wrongdoing throughout the litigation," and there was no evidence that the documents were relevant to the claims.

Justice Robin Davis said she commended Leahey's firm for coming forward and producing the documents.

"Relevance is not an issue," she added. "I don't know how much more clearly this court can make the fact that when a trial court has scheduling orders and discovery orders, we expect the lawyers that practice in West Virginia to comply with those orders."

He also argued that cases require an evidentiary hearing to determine whether there was bad faith, willfulness or prejudice. He added other steps should have been taken first such as holding an evidentiary hearing, granting a continuance, before dismissing.

"We didn't get there because no one knew. There was no evidence in the record as to what the documents were and whether the non-production was willful. No one knows why (the former attorney) did what he did. There is no evidence that any documents would have changed the outcome in the case."

Respondents' attorney Thomas P. Mannion, meanwhile, argued the late disclosure was in violation of the circuit court's order.  

Mannion also said the court held an evidentiary hearing