Cal Fire Ordered to Pay Unprecedented $30 Million

Today’s burning question: What is rarer than a fire department being a plaintiff in a lawsuit? 

Answer: A plaintiff in a lawsuit being ordered to pay a defendant $30 million!!!! And note: the actual award in this case may be even larger than $30 million because it is hard to follow exactly what costs have been included in the award (see the discussion below).

How could this happen? How did this happen? How can a plaintiff who was seeking money from a defendant be ordered to pay a defendant considerably more that the original amount that the plaintiff was seeking?

Get your reading glasses and a cup of your favorite beverage. It is going to be a long one!!!!

Cal Fire and several other plaintiffs filed suit against Sierra Pacific Industries (SPI) and several other defendants for damages arising out of the 65,000 acre Moonlight Fire in Plumas County in September, 2007. The plaintiffs alleged that one of SPI’s contractors negligently started the fire when a bulldozer hit a rock creating a spark. Cal Fire alleged somewhere around $8.1 million in documented costs in fighting the fire.

After years of discovery and pretrial maneuvering, the court dismissed Cal Fire’s case based on its “failure during the lengthy pretrial hearing to make a prima facie showing that any of [the plaintiffs] could sustain their burden of proof against Defendant”.

As the next phase of the case got underway it was learned that attorneys for Cal Fire had failed to produce certain documents that the court characterized as “critical”. Thereafter the court concluded that Cal Fire’s attorneys had engaged in “pervasive discovery abuses”, granted SPI’s request for “terminating sanctions” – essentially ending Cal Fire’s case, and awarded SPI its costs of defense.

The 58 page order (supplemented by a 26 page order) was issued on Tuesday by Judge Leslie C. Nichols. In ruling Judge Nichols found:

“Cal Fire’s gross violations of the discovery rules, and its related violation of this Court’s orders with respect to such a large bank of documents, even if ‘inadvertent,’ is not inconsistent with its other gross violations of the discovery rules, some of which, as discussed below, this Court finds were purposeful and calculated to enhance its chances of success on the merits.”

Judge Nichols also took issue with questionable testimony used by Cal Fire’s lead investigator.

“in the context of assessing the Defendants’ motion for sanctions under section 2023, it is this Court’s responsibility to review whether Cal Fire abused the legal process through the false testimony of its lead investigator on the Moonlight Fire, Joshua White. This Court finds that Cal Fire, through White, repeatedly did so.”

“In order to show Cal Fire’s obfuscation and bad faith denials of the truth during discovery, the Court has gone to great lengths to explicate significant portions of the investigators’ work on marking, photographing, measuring, and sketching a single point of origin, using a process that investigator White readily conceded in the earlier Cal Fire case was the “foundation” of any origin and cause report. The Court’s effort on this front was necessary in order to properly show just how incredible the investigators’ testimony was on the most central issues in this case -indeed, on the very basis upon which this action was brought. The fact that Defendants’ counsel were forced to depose these investigators under conditions where the investigators continually attempted to steamroll the truth by simply denying or expressing ignorance of the obvious greatly increased the expense of this litigation. Had they testified truthfully from the start, as required, Defendants would have likely spent nothing, or very little, as the case most likely could not have advanced.

“Unfortunately, Cal Fire’s lead counsel, officers of this Court who should be “operating under a heightened standard of neutrality” greatly exacerbated the problem by failing to intercede and put a stop to what their witnesses were doing under oath.

Here are a few of the case’s sectional headings to provide a sense for where the court was headed:

·      Cal Fire Falsified the Ryan Bauer Interview, and Incorporated that False Interview In Its Interrogatory Responses

·      Cal Fire Included False Red Rock Interviews In Interrogatory Responses

·      There Is No Justification for Joshua White’s Spoliation of His Notes

·      Cal Fire Included False Origin and Cause Reports for the Lyman Fire and Others In Its Interrogatory Responses

·      Cal Fire Witnesses Provided Evasive, Misleading and/or Dishonest Deposition Testimony

·      Cal Fire Provided Evasive, Misleading and/or Dishonest Discovery Responses

·      Cal Fire’s Spoliation of Evidence

·      Cal Fire’s Belated WiFTER Document Production and Related Abuses

Summing up, Judge Nichols concluded:

Cal Fire and its counsel engaged in a stratagem of obfuscation that infected virtually every aspect of discovery in this case. That pattern and practice of disregard began during the discovery process and continued after this Court entered judgment. The repeated and egregious violations of the discovery laws not only impaired Defendants’ rights, but have “threatened the integrity of the judicial process.”

The court award was explained as follows:

·      Attorneys fees in the amount of “$14,240,628, plus the expert fees incurred in the amount of $3,010,326, plus the expert expenses incurred in the amount of$29,351, plus additional expert costs in the amount of $303,631for a complete total of $17,583,936 .”

·      Separately, but not in addition to the amount set forth above, the total fees billed in connection with the state action, in the total amount of $9,969,265, plus the expert fees incurred in the amount of $3,010,326, plus the expert expenses incurred in the amount of $29,351, plus additional expert costs in the amount of $303,631, for a complete total of$13,312,573.

·      Separately, but not in addition to the amounts set forth above, the total fees billed since July 3, 2010, in connection with the state action, in the total amount of $9,559,948.

·      Separately, but not in addition to the amount set forth above, the total fees billed since November 16, 2010, in connection with the state action, in the total amount of $8,737,422.

·      Separately, but not in addition to the amounts set forth above, the total attorneys’ fees, expert fees, and expert expenses billed in connection with metallurgy issues, in the total amount of $1,675,65.1

·      Separately, but not in addition to the amounts set forth above, the total attorneys’ fees billed in connection with WiFITER issues, in the total amount of $912,844.

·      Separately, but not in addition to the amounts set forth above, the total attorneys’ fees billed in connection with 14 C.C.R. § 938.8 issues, in the total amount of $288,319.

·      In addition to the foregoing, Sierra Pacific also is entitled to the fees most recently incurred in connection with briefing on its Motion for Fee Expenses, and/or Sanctions and related issues, which was not set forth in the December 13′ declaration of William Warne. Counsel has provided the Court with evidence substantiating fees in the amount of $650,634. This sum shall be awarded in addition to the amounts set forth above.

As if the above were not enough, the judge added a 1.2 multiplier meaning that all amounts above must be multiplied by 1.2.

Here is a copy of the court order.  2014-02-04_Moonlight_Fire

Here is a copy of the other order. 2014-02-04_Order_Moonlight_Fire

I can’t help but wonder how Judge Nichols would handle sanctions in the North Kingstown Firefighters case…

BTW… I count $52.7 million x 1.2 = $63.2 million… but there may be some duplication in the numbers.