Tuesday, August 2, 2011

Civil Death Penalty Sanctions in Texas [striking of pleadings & dismissal for bad litigation conduct]

Texas is famous (or infamous, depending on viewpoint) for the use of the death penalty. But the term is also used in civil litigation -- to refer to sanctions that essentially terminate a lawsuit or -- as in the case from which the snippets below are taken -- strike a counterclaim. That's also why there is "death-penalty case law" from the Texas Supreme Court, even though that court does not hear appeals in criminal cases, much less capital cases.    

DEATH PENALTY SANCTIONS: When are they proper; when not?

Standard of Review on Appeal

A trial court’s sanctions order under Texas Rule of Civil Procedure 215.2(b) is reviewed for abuse of discretion. Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004). The test for an abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action, but whether the court acted without reference to any guiding rules or legal principles. Cire, 134 S.W.3d at 838; K-Mart Corp. v. Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000). The trial court’s discretion in imposing sanctions is limited by the standards set out in the applicable Rules of Civil Procedure and TransAmerican Natural Gas Corp. v. Powell, 811 S.W. 2d 913 (Tex. 1991).

Basis for imposition of discovery sanctions

Rule 215.2 of the Texas Rules of Civil Procedure authorizes a trial court to sanction a party for failure to comply with a discovery order or request. Tex.R.Civ.P. 215.2. A list of possible sanctions is found in Rule 215.2(b). Pertinent to this case, an order striking pleadings is one of the sanctions available to the court. Tex.R.Civ.P. 215.2(b)(5). The Texas Supreme Court defines “death penalty sanctions” as “sanctions that terminate a party’s right to present the merits of its claims.” State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 647 (Tex. 2001). Such sanctions include striking a party’s pleadings, dismissing its action, or rendering a default judgment against a party for abusing the discovery process. Id. Death penalty sanctions must be reserved for circumstances in which a party has so abused the rules of procedure, despite imposition of lesser sanctions, that the party’s position can be presumed to lack merit and it would be unjust to permit the party to present the substance of that position before the court. TransAmerican, 811 S.W.2d at 918.

The proportionality criterion   

A trial court may not impose sanctions that are more severe than necessary to satisfy legitimate purposes. Cire, 134 S.W.3d at 839. Further, Rule 215.2(b) explicitly requires that any sanction under this rule be “just.” Tex.R.Civ.P. 215.2(b). The Supreme Court’s decision in TransAmerican set out a two-part test for determining whether a particular sanction is just. Spohn Hospital v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003); TransAmerican, 811 S.W.2d at 917.

First, there must be a direct relationship between the offensive conduct and the sanction imposed. TransAmerican, 811 S.W.2d at 917. A just sanction must be directed against the abuse and toward remedying the prejudice caused to the innocent party, and the sanction should be visited upon the offender. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. The trial court should make some attempt to determine whether fault for discovery abuse lies with the party, its counsel, or both. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917.

Second, just sanctions must not be excessive. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. In assessing the second standard, the sanction should be no more severe than necessary to satisfy its legitimate purposes, which include securing compliance with discovery rules, deterring other litigants from similar misconduct, and punishing violators. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. The court must consider less stringent sanctions and whether such lesser sanctions will fully promote compliance, deterrence, and discourage further abuse. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. Death penalty sanctions may be imposed in exceptional cases where they are clearly justified and it is apparent that no lesser sanctions would promote compliance with the rules. Spohn Hospital, 104 S.W.3d at 882.

Discovery sanctions that are so severe as to inhibit presentation of the merits of the case should be reserved to address a party’s flagrant bad faith or counsel’s callous disregard for the responsibilities of discovery under the rules. Spohn Hospital, 104 S.W.3d at 883.

SOURCE: El Paso Court of Appeals - 08-09-00239-CV - 7/29/11

Here, the associate judge entered the sanctions order without consideration of either part of the TransAmerican test. We are particularly troubled by the associate judge’s failure to consider lesser sanctions. Further, the record does not reflect that the associate judge held a compliance hearing to determine if [ litigant ] had complied with the order nor does the record show that the judge made a finding of non-compliance. We conclude that the associate judge abused his discretion by entering the sanctions order.

The referring court subsequently “enforced” the sanctions order by striking [ litigant’s ] counter-petition which had been filed after the entry of the sanctions order and even though the sanctions order did not expressly apply to any future pleadings. The record does not reflect that the referring court held a compliance hearing or considered either part of the TransAmerican test before striking [ litigant's ] counter-petition. Instead it appears that the referring court simply applied the sanctions order to [ litigant's] counter-petition. For these reasons, we conclude that the referring court abused its discretion by applying the sanctions order to [ litigant's ] counter-petition. Further, the court’s error probably caused the rendition of an improper judgment because it inhibited [sanctioned litigant's] ability to present his case. See Tex.R.App.P. 44.1(a). We sustain Issue Three.

SOURCE: El Paso Court of Appeals - 08-09-00239-CV - 7/29/11

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