A federal judge in New York has promised to impose "substantial sanctions" on Howrey & Simon, Washington's seventh largest law firm, for willful misconduct and gross negligence during discovery proceedings in a $600 million antitrust suit against American Telephone & Telegraph Co.
Judge William C. Conner upheld a magistrate's finding that Howrey & Simon, which is representing Litton Systems Inc. in the case, concealed evidence and made false statements to the court and to AT&T's lawyers.
The suit was brought by Litton, which contended that it was driven out of the office telephone equipment business by AT&T and its affiliates. The case went to the jury on Thursday, following six months of trial proceedings.
The court battle has matched two law firms with different styles. AT&T's lawyers -- Dewey, Ballantine, Bushby, Palmer & Wood -- are prim boxers in the legal ring. Howrey & Simon, specialists in antitrust law are tough scrappers.
The incidents for which Howrey & Simon were reprimanded stemmed from a request from Dewey, Ballantine for documents and notes from Litton's internal investigation of possible wrongdoing by its employes. Dewey, Ballantine believed the notes would support AT&T defense that Litton's business failed through mismanagement from within.
Howrey & Simon initially did not turn them over, despite a judge's order to furnish all notes connected with Litton's investigation. At first, they contended that they did not have such notes. Later, they argued that the notes were not relevant to the case. Howrey & Simon acted improperly by continuing to withhold the data, Connor said.
"It is unconceivable," Connor said in a 28-page opinion, that Howrey & Simon partner Francis O'Brien "was unaware of his firm's possession of the notes, so that if he indeed failed to review the notes themselves before [telling AT&T the notes were extraneous] he was guilty of conscious avoidance of knowledge, tantamount to knowing misrepresentation."
Despite the ruling, Connor deferred until after the jury's verdict an AT&T request that the case be dismissed. To act before then would be too extreme, he said. Connor pointed out that if he did that now and the ruling was reversed on appeal, the lengthy trial would have to be repeated.
Connor said he could also impose lesser sanctions, such as assessing costs or what would amount to a fine against Litton and Howrey & Simon after the trial.
This was not the first time that Howrey & simon's tenacity in the discovery process has stirred controversy in the courtroom.
In 1978, the firm refused to turn over some documents while defending a Gulf Oil Corp. subsidiary in New Mexico against charges of monopolizing uranium reserves. Howrey & Simon cited attorney-client privilege.
When the judge in the case learned that the lawyers had been ordered to release similar documents in another case and had also given the papers to a D.C. grand jury, he slapped Howrey & Simon's client with a default judgment. That case is still on appeal.