We’ve Been Charged with Sanctions – Now What?

No one likes to see the words “Motion for Sanctions”.  Judges don’t like them; most lawyers don’t like to make them; and 100% of lawyers don’t want to be on the receiving end of them.  And I’m not talking about discovery sanctions under Rule 4:15, I’m talking about Virginia Code § 8.01-271.1 whereby a lawyer’s filing or oral motion carries with it a certification by the lawyer that…

(i) he has read the pleading, motion, or other paper,

(ii) to the best of his knowledge, information and belief, formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and

(iii) it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

One serious issue that arises when addressing this standard – both for those attempting to prove sanctions should issue and those who argue they should not – is the issue of privilege.

The attorney-client privilege is one of the oldest common law privileges sanctioned by the courts.  Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).  When it applies, the privilege is absolute and cannot be overcome, “even for the purpose of administering justice.”  Commonwealth v. Edwards, 235 Va. 499, 508-09 (1988). “[C]onfidential communications between an attorney and his or her client made in the course of that relationship and concerning the subject matter of the attorney’s representation are privileged from disclosure.”  N. Va. Real Estate, Inc. v. Martins, 283 Va. 86, 115 (2012) (quoting Walton v. Mid-Atl. Spine Specialists, P.C., 280 Va. 113, 122 (2010)).

Because of the distaste that both the bench and bar have for sanctions motions, there is scant authority on the mechanics of related proceedings. There is no rule devoted to them or set of regulations that controls.  But the Virginia Supreme Court has given trial courts and litigants some guidance on how proceedings are to be conducted.  In addressing a motion for sanctions for alleged violation of Virginia Code § 8.01-271.1, Virginia courts apply an “objective standard of reasonableness in determining whether a litigant and his attorney, after reasonable inquiry, could have formed a reasonable belief that the pleading was well grounded in fact, warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and not interposed for an improper purpose.”  Flippo v. CSC Assocs. III, L.L.C., 262 Va. 48, 65-66 (2001) (emphasis added); see Flora v. Shulmister, 262 Va. 215, 220 (2001).  This standard does not require the court determine whether a litigant and her attorney’s pleading was “actually warranted by existing law” or “well grounded in fact.”  Martins, 283 Va. at 107 (“trial court correctly applied an objective standard of reasonableness in concluding that the facts … could not support a reasonable belief that the plaintiffs’ claims … were well grounded in fact or law, as required by Code § 8.01-271.1.”); Flora, 262 Va. at 220 (citing Gilmore v. Finn, 259 Va. 448, 467 (2000)).  This is so because “‘[t]he wisdom of hindsight should be avoided’ in applying the appropriate objectively reasonable standard of review.”  Gilmore, 259 Va. at 467 (quotation omitted)). In essence, for a Court to make a finding that sanctions (in some form) should issue, the judge must find claims and evidence to have been so one-sided that someone on the losing end could not have been operating in good faith.  It then becomes a question of who – lawyer, client, or both is found to have violated § 8.01-271.1 and subject to sanctions.

But for the litigant who pressed for sanctions against his opponent and opposing counsel, the determination of who bears the blame is not for him to prosecute.  For example, he should not be permitted to address probing discovery to both the opponent and opposing counsel on who knew what and when in disregard of the attorney-client privilege and work product doctrine.  It is for the opponent and opposing counsel to defend themselves by arguing who, as and between them, should suffer the consequence of a meritless claim.

In sum, a trial court must make a preliminary determination of whether a sanction should issue based on the record before it.  Information regarding possible apportionment of the blame, especially including attorney-client privileged communications, is not discoverable by a party seeking to impose sanctions on an opponent or opposing lawyer under § 8.01-271.1 in light of the objective standard of reasonableness.  See Martins, 283 Va. at 114-15.  Discovery of such information only comes into play once a violation of § 8.01-271.1 is found against both the party and her attorney for which they would be jointly and severally liable.  Id.  If that were the case, it might be necessary for the party and her attorney to discover privileged information to seek allocation of fault – but this discovery is not available to the party who prevailed on the sanctions motion.  Id.