In May I posted here about U.S. District Judge Mills’ Order in the Maggette v. BL wrongful death case. The case involved the crash of a charter bus on its way to a Harrah’s property in Tunica. BL is owned by Harrah’s Gaming. Harrah’s owns numerous casino properties all over the world.

On Thursday Judge Mills issued an order sanctioning Harrah’s by ruling that the bus company involved in the accident was Harrah’s agent as a matter of law. Here are some of the hi-lites from Judge Mills order:

BL likely believed that this court would never be in a position to discover the true facts, such as the fact that backup copies of the data in question were routinely sent to secure databases, just as the Magistrate Judge had openly suspected in her November 2009 order. Now that its bluff has very unexpectedly been called and the absurdity of its protestations has been revealed, BL seeks for this court to decline to impose the sanction which it specifically warned it would. [p. 8–9].

This court is not naive. It is aware that litigants are frequently successful in concealing information from courts, largely because the power to conceal one’s own documents is far greater than a court’s power to uncover them. It seems very likely that, for every case in which conduct of this nature is uncovered, there are dozens in which the deception is successful. It is simply too expensive in judicial resources for courts with heavy dockets to uncover this sort of misconduct. [p. 29]. 

Willful ignorance of this court’s orders is clearly no defense, and the fact that BL sought to use it as a defense heightens the court’s suspicion that the actual misconduct of senior BL representatives may have been of a much more serious nature. [p. 15] 

If an IT expert as learned as the special master is unable to clarify the mystery of Harmon’s missing e-mails, then this court will certainly be unable to do so. It does not require an expert, however, to realize that there is a great deal of smoke in this case emanating from multiple offices in Harrah’s corporate legal department, and this court will be excused if it suspects the existence of a fire. To state the obvious, documents do not alter or delete themselves, and when the special master informs the court that documents in this case – and this case alone – were inexplicably accessed and altered or deleted, the court finds it impossible not to harbor great suspicions regarding what information those documents might have contained. [p. 19]

Testimony at the hearing revealed that the special master managed, at separate locations, to discover, in five and seven minutes respectively, information whose existence BL had denied for almost five years. [p.23]

You can download the full Order here.

 My Take:

BL/ Harrah’s got off easy. They cheated and the result is that they are deemed to be the principal of the bus company in this case. They can still win on liability by defending the conduct of the bus driver.

If BL/ Harrah’s believes that it would have lost on the agency issue if the hidden documents were voluntarily produced, then this ruling does not serve as any much punishment.

If Courts want to discourage these types of shenanigans, then they have to lower the boom when they catch violators. A ruling where the result may not be worse that if the shenanigans had not taken place is not much of a deterrent.  

  • Anderson

    No $$ sanctions? Judge Mills might as well hang out a sign: “my court is a joke.”. Disappointing.

  • The view up here among lawyers is that this ruling was devastating to Harrah’s– apparently, the bus wreck is all but indefensible. You also are missing the part where he says he’s going to apply Ark law and there are no damages caps.
    Throughout the part of the hearing I attended, Harrah’s was saying that a dispositive sanction about joint venture meant it was doomed.
    It was not a slap on the wrist. It’s a zap that will cost Harrah’s way into the millions.

  • Philip Thomas

    I stand by my opinion.
    I am assuming that Harrah’s thought that production of the concealed documents would cause Harrah’s to lose on the agency issue. Harrah’s got caught concealing the documents. The result: Harrah’s lost on the agency issue.
    In my opinion, when a party conceals evidence the down-side should be much worse than what the result would be if the evidence was produced. Otherwise, there is little disincentive for concealing evidence. I don’t see how Harrah’s is worse off here. The fact that a bunch of people died on a bus to their casino does not make Harrah’s worse off. It explains why they concealed evidence.
    If I am the Harrah’s executive who was responsible for withholding the evidence I am telling my bosses that it was a free roll. We got caught, but the result is the same as if we had not done it. So it didn’t hurt to try. And as Judge Mills said, cheaters in discovery rarely get caught. So it was worth a try.
    If Harrah’s is worse off than if it had produced the documents, then it is stupid. Why would you withold documents that don’t sink you? Most companies love to produce documents that don’t hurt their case.
    Application of Arkansas law was not part of the sanction. The accident occured in Arkansas, so applying Arkansas law was appropriate.

  • Neil

    It does seem almost as if that weak of a punishment is inviting more of that sort of behavior in the future.

  • Jason

    My understanding from reading the docket is that the sanctions ordered by Judge Mills were in addition to a number of prior monetary sanctions issued by the magistrate judge against Harrah’s in this case. It appears from Judge Alexander’s orders that Harrah’s has basically been paying all of plaintiffs’ attorneys fees for the past year or so, with pretty generous calcualations of those fees on her part.