Opinion
03 Civ. 4578 (LAP).
August 23, 2007
OPINION ORDER
Civil litigation is not always civil. In the instant motion, plaintiff Kensington International Limited ("Kensington"), represented by Dechert LLP ("Dechert") and Quinn Emanuel Urquhart Oliver Hedges LLP, claims that the attorneys for defendant Republic of Congo ("Congo"), Cleary Gottlieb Steen Hamilton LLP ("Cleary"), here represented by Simpson Thatcher Bartlett LLP, in bad faith attempted to dissuade a non-party witness from attending a post-judgment deposition. Kensington asks the Court to sanction Cleary through formal reprimand and reimbursement of costs spent on bringing this motion. For the reasons that follow, the Court finds that Cleary did act in bad faith, and thus the motion for sanctions is GRANTED.
BACKGROUND
Unless otherwise stated, the Court finds the following facts to be relevant and true based on its review of the oral testimony received on March 23, 2007 and April 18, 2007, the exhibits properly received into evidence at those hearings, and the sworn written affidavits and declarations submitted to the Court.Kensington is a financial institution in the business of, among other things, investing in debt and equity instruments issued by domestic and foreign entities. (Compl. ¶ 3.) Congo is a sovereign nation located in Africa. (Id. ¶ 4.) Cleary is an international law firm with offices in several cities including New York, Washington, and Paris.
In the underlying case, Kensington sought recognition and enforcement of a final money judgment rendered against Congo by the High Court of Justice, Queen's Bench Division, Commercial Court in London. Further to that end, on September 30, 2004, the Court granted Kensington's motion against Congo for partial summary judgment, entered a money judgment of $56,911,991.47, and certified the judgment as final pursuant to Rule 54(b). Thereafter, Kensington began taking discovery in aid of execution of the judgment. Among those subpoenaed in this process was non-party witness Méedard Mbemba, a citizen of France and Congo with residences in France and the Ivory Coast and an office in Washington, D.C. (Mbemba Dep. 12:6-14:3.) Mbemba, through his company, African Partners, was involved in various business dealings with the Congolese government and its officials and agencies, including aspects of the shipping and oil and gas industries. (Id. 14:16-15:10, 21:1-24:4; Mbemba Tr. 6:7-7:17.) Kensington hoped Mbemba possessed knowledge of the whereabouts of Congo's assets and served on him a subpoena which noticed a deposition for December 23, 2004 in Washington, D.C. (Siegel Decl., Ex. 1.)
Mbemba's native language is French. Though he does not speak English, his son, Frank Mbemba, does. Frank Mbemba accepted service of the subpoena on December 6, 2004. (Siegel Decl. ¶ 4.) At some point thereafter, Mbemba consulted with a friend who was an attorney about his obligations under the subpoena; the friend informed him that he was required to testify and suggested an attorney in the United States who could accompany him. (See Mbemba Tr. 9:14-12:21.) After considering the cost of counsel, Mbemba decided he would attend alone. (Id. 12:13-12:16.) His son communicated with Arnon Siegel, an attorney at Dechert, to coordinate a date and place for the deposition. (Siegel Decl. ¶ 5.)
Some early scheduling conflicts due to Mbemba's health notwithstanding, on January 28, 2005, Frank Mbemba called Siegel and told him his father was with him in Washington and would appear for deposition on Friday, February 4, 2005. (Id. ¶ 7.) Mbemba was scheduled to be in Washington until Saturday, February 5 and would not return for several months. (Id.) Siegel informed an attorney at Cleary, Boaz Morag, of the scheduled deposition (and of the fact that Mbemba was not represented by counsel). (Id. ¶¶ 8-9.) Morag replied by email and by phone that neither he nor any other Cleary attorney familiar with the case could attend the deposition on February 4, complained of the short notice, and asked that it be rescheduled; Siegel refused, claiming there was no other suitable time during Mbemba's limited stay in Washington. (Id. ¶ 10; Morag Aff. ¶¶ 11-19.) Though Morag proposed that the deposition be held at a later date in France, no agreement was reached on that score, and Siegel informed Morag the deposition would occur as scheduled. (Siegel Decl. ¶ 11, Ex. 4.) As early as Monday, January 31, 2005, Morag informed Siegel of his intention to have the Court intervene to postpone the deposition, but no application was ever made. (Id. ¶ 10.)
On Monday, January 31, and again on Wednesday, February 2, 2005, Morag contacted Jean-Pierre Vignaud, a partner in Cleary's Paris office, to update him on the status of the Mbemba deposition. (Vignaud Aff. ¶ 4.) Vignaud is a member of Cleary's ten-member worldwide executive committee and, though he had no prior substantive role in the instant case, he is the relationship partner for Congo and has, and is known for having, extensive connections with Congo's political leadership. (See Vignaud Tr. 22:12-16; 58:11-59:4; 24:22-25:1.) At Morag's request, Vignaud contacted Mbemba on February 3. First, he emailed Mbemba at the address listed on the African Partner's website. The message, in translation, stated:
Dear Sir:
Our firm represents the interests of the Republic of Congo in a number of legal proceedings involving certain creditors, particularly in the United States. My colleagues in our New York office have just learned that you agreed to . . . give a deposition concerning your knowledge of commercial or financial transactions of the Republic of Congo and assets belonging to the Republic in the United States and outside the United States.
I wish to call your attention to the very particular nature of depositions in US procedural law. These depositions are given under oath, and it is extremely rare to agree to submit to this procedure without preparation or the assistance of an attorney who is completely familiar with the case. My colleague, Boaz Morag of our New York office will be at a hearing the whole day on Friday and therefore will not be able to assist you on that occasion. Under these circumstances, giving a deposition without the assistance of an attorney who is familiar with the case seems to us to present very serious risks and inconveniences that I will leave to you to assess. In any event, I suggest you urgently contact Boaz Morag . . . or myself at the number below.
(Vignaud Decl. ¶ 5.) He also placed two calls to the Washington D.C. contact number on the African Partner's website, leaving one voice mail message. (Id. ¶ 5; Vignaud Tr. 65:20-66:7.)
On Thursday, February 4, 2005, sometime before 4 p.m. EST, Mbemba called Vignaud at his office in France (10pm C.E.T.) (Vignaud Decl. ¶ 7.) The call was forwarded to Vignaud's home or cell phone. (Id.) Mbemba recalled at his deposition the following about the conversation:
A: [Vignaud] said we have learned that you are going to go and meet with a lawyer for Kensington in order to give a deposition, and I'm talking now to you in your capacity as Congolese patriot and I want you to understand that these steps are going to affect the stability of Congo. . . .
A: I told him I did not know the matter. I said that if my deposition is going against the interests of my country, then I am against giving the deposition, I'm saying no out of patriotism. And [Vignaud] said yes it is dangerous for your country. So, I said I do not know the United States and I do not know customs there and lawyers. I do not have a lawyer so he said well, this is one more reason you should not go. So, he asked that my son take the initiative to cancel this appointment. So, I said you are a lawyer. If you are trying to defend the interests of Congo, tell your colleagues that I will not go. . . .
Q: Did you understand Mr. Vignaud to be telling you not to go to this deposition?
A: Yes, that's what he said, not to come.
(Mbemba Dep. 41:18-44:4.) Mbemba recalled at his deposition that Vignaud said "I want to inform you that your deposition can hurt the Congo," specifically that
these are people who buy loans at percent of their value and who are very dangerous. Then they hire lawyers and they can destabilize the economies of countries, and I'm warning you so that you'll know and not participate in this kind of a game because it is a bad thing for your country. I [Mbemba] said bad for the government or for the population or for certain persons? He [Vignaud] said bad for the population. I said, sir, Mr. Vignaud, I don't have the honor of knowing you and I'm telling you that I will not go to this lawsuit. Not because this is what you are telling me to do, but out of patriotism.
(Mbemba Dep. 104:20-105:15.) When asked whether he felt Vignaud was trying to persuade him not to attend, Mbemba replied, "It is not an impression, he told me as such not to go." (Mbemba Dep. 105:22-106:3.)
Mbemba testified that he knew Vignaud to be someone with "privileged connections to . . . the authorities in Congo." (Mbemba Tr. 67:2-4.) When asked if he felt threatened by Vignaud's statements, Mbemba replied, "So, when somebody tells you that something is bad for your country and that I feel obliged to warn you, yes, it sounds like a threat." (Mbemba Dep. 105:15-21.) It was Mbemba's state of mind, even before he spoke with Vignaud, that testifying against Congo in a matter over Congo's debt was "dangerous." (Mbemba Tr. 65:25-66:2.)
In fact, Mbemba testified that he did receive threats following his deposition testimony, including a voice message threatening bodily harm and a call from a special advisor to Congo's President that "notified me that the presidential family was very upset at me and advised m[e] to stay away from Congo, it was in my best interest." (Mbemba Tr. 63:9-12.)
Following the call to Mbemba, Vignaud called Morag to tell him to notify Dechert that Mbemba was not testifying. (Vignaud Decl. ¶ 8.) Morag informed Vignaud that he thought it would be better if Mbemba called Dechert directly and asked Vignaud to convey as much to Mbemba. (Id.) Vignaud called Mbemba, this time at the Watergate Hotel where Mbemba was staying.
In this, the second conversation, Vignaud asked Mbemba if he would communicate his intention directly to Dechert through his son. (Id. ¶ 9.) Mbemba said he did not want to get his son further involved and asked that Cleary contact Dechert; Vignaud agreed to have an email sent to Dechert. (Id.) Mbemba recalls he asked Vignaud, "What kind of danger am I in if I don't go? I mean, what will happen? Nothing, he said, nothing." (Mbemba Tr. 107:1-3.)
At the deposition, counsel clarified that, according to Mbemba, Vignaud said the word "nothing." (Mbemba Tr. 107:4-6.)
So I asked who else was invited to this meeting. He told me they have a lot of powers, they invited a lot of people to come, but nobody's going to go. So I told him okay, Mr. Vignaud, please send your email. I will not go to the meeting and Saturday I will leave."
(Id. 107:6-12.) In neither of the conversations did Vignaud mention the need or the possibility of rescheduling the deposition. (Vignaud Tr. 74:15-76:17).
At 4 p.m. on Thursday, Morag sent the following email to Siegel:
M. Mbemba contacted our firm this afternoon and asked us to relay to you his intention not to appear tomorrow. He stated that he had been unaware of the precise nature of the proceeding tomorrow and now that he understands that he will be asked questions under oath on a number of subjects, he stated that he feels uncomfortable appearing without having consulted with a lawyer, which he has not apparently done. He said that he travels to the United States often and there should be another occasion to schedule the deposition.
(Siegel Decl. Ex 5; Morag Aff. Ex. I.) Upon receiving the email, Siegel contacted Frank Mbemba who confirmed that his father would not appear for his deposition. (Siegel Decl. ¶ 13.) Siegel informed Frank that the subpoena required his father by law to appear at the deposition. (Id.) Frank then spoke with Mbemba and convinced him to testify at the deposition for two reasons. First, because the law required him to testify. (Mbemba Tr. 73:9-11). Second, Mbemba testified Frank said "Dad, you know very well that you are not protecting the Congolese people. You are protecting a group of individuals that you know and that I know, and you'll be protecting them. You want to be in politics, you have to be transparent everywhere." (Mbemba Dep. 107:15-20; Mbemba Tr. 73:12-74:8.) Frank Mbemba called Siegel back and told him that his father had changed his mind and would attend the deposition (Siegel Decl. ¶ 14), and Siegel so informed Morag by email that the deposition would go forward as planned (id. ¶ 15, Ex. 6).
The following morning, Friday, February 3, Vignaud — having received the Siegel email from Morag — attempted to call Mbemba several times and spoke with him once, just before Mbemba was to leave for his deposition. (Vignaud Tr. 83:9-84:2.) Mbemba recounts the conversation:
['W]e have just learned that you are going for the deposition in spite of what we discussed. It's incredible that somebody would go make a deposition without a lawyer. ['] At that moment I remembered — I remembered at that moment that Congo has been using Vignaud as a lawyer for the last 20 or 30 years. We lost lots of lawsuits. We could have paid all this public debt instead of paying Mr. Vignaud. I said to Mr. Vignaud thank you very much but do you know how old I am? — and I tell him how old I was — therefore, I am old enough to be able to make my own decisions. And then I hung up on him. . . .
(Mbemba Dep. 44:18-45:10.) Mbemba went to the deposition. Vignaud attempted to reach Mbemba at the Watergate two more times after Mbemba had already left. (Vignaud Decl. ¶ 11; Mbemba Dep. 104:2-5.)
Needless to say, Vignaud's account of the substance of the phone calls differs considerably. While he denies much of what transpired, his admissions are far more telling and, in all but the most technical sense, seem to contradict his denials. To the extent his denials contradict Mbemba's testimony, the Court credits Mbemba's testimony as it finds it is more consistent and believable; Mbemba had little to gain from testifying falsely, either at his deposition or when he voluntarily appeared in court. See infra n. 6.
The Court has already incorporated several aspects of Vignaud's version of events in the above description, namely, that Mbemba returned Vignaud's phone call to initiate the first conversation (Vignaud Decl. ¶ 12(a)); that Vignaud did not say that he could not get in touch with Siegel, but rather that he encouraged Mbemba to call himself (id. ¶ 12(f)); and that Vignaud called Mbemba at the Watergate at the number that Mbemba left for him (id. ¶ 12(g)).
Vignaud denies that it was he who "spoke of . . . `patriotism' to the Congo" and denies that he told Mbemba that it was "dangerous" for the Congo or would "hurt" the Congo if Mbemba testified. (Vignaud Decl. ¶ 12(b)). He denies threatening Mbemba in any way. (Id. ¶ 12(e). He denies ever telling Mbemba not to sit for deposition. (Id.) And he denies that any phone conversation ended with Mbemba's hanging up. (Id. ¶ 12(i)). He admits, however, that he described the litigation as "the Congo . . . fighting to conserve its assets from foreign vulture creditors," (id. ¶ 12(b)), and that he intended to include Kensington in this description, (Vignaud Tr. 80:1-3). Indeed, while he claims "I did not dissuade [Mbemba] from attending the deposition," he admits "[I] expressed my view that testifying under oath at a deposition in the United States for a non-native English speaker without proper representation was unwise and that, if representatives of the Congo were unable to attend such a deposition, it would put the Congo at a disadvantage in its litigation to protect its sovereign assets from creditors." (Vignaud Decl. ¶ 13.) Vignaud never fully explained how the presence of "representatives of the Congo" at the deposition could in any way serve to protect Mbemba or advance Congo's litigation interests. (See Vignaud Tr. 67-71.) In fact he admitted he never offered to have Cleary (or another firm) represent or otherwise counsel Mbemba, (id. 67:12-19), and further that he only offered his "free advice" to protect the interests of his client, the Congo, (id. 74:11-13). Indeed, at several times during his testimony in Court, Vignaud candidly admitted that the interests of the Congo animated his conversations with Mbemba. (See Vignaud Tr. 70:16-19 ("The interests of the Congo is to [e]nsure that when the witness goes, first of all, that the Congo be present at the deposition and that the witness understand what the deposition is about."); id. 78:18-79:2 ("Q: Is it your job as Congo's lawyer to protect Congo's interest and avoid situations in which Congo is at a disadvantage in the litigation? A: Yes. Q: So you did not want that deposition to go forward, did you? A: No. It is not to go forward. I thought it was not in the interests of the Congo that the deposition be taken without, No. 1, [the] witness understanding exactly what it is about and, second, the Congo being adequately represented at the deposition."; id. 87:8-12 ("Q: So just to be clear, you were not looking to protect Mr. Mbemba's interest in your conversations with him, right? A: Right. Q: You were looking to protect the interests of the Congo? A: Yes.").)
ANALYSIS
A. Applicable Law
The parties do not dispute the law applicable to this case. The Supreme Court has held that federal courts have the "inherent power" to impose sanctions when a party or its counsel acts "in bad faith, vexatiously, wantonly, or for oppressive reasons."Chambers Vignaud Nasco, Inc., 501 U.S. 32, 45-46 (1991). A court in the Second Circuit may impose sanctions if it finds, with a high degree of specificity in its factual findings, that there is clear evidence that the challenged actions are entirely without color and are taken for reasons of harassment or delay or for other improper purposes. Schaffer Nance Co. v. Estate of Andy Warhol, 194 F.3d 323, 334 (2d Cir. 1999); Milltex Indus. Corp. v. Jacquard Lace Co. Ltd., 55 F.3d 34, 38 (2d Cir. 1995); Olivieri v. Thompson, 803 F.2d 1265, 1272 (2d Cir. 1986). Lest sanctions lose their deterrent value, a court should exercise its inherent power against counsel and parties where it finds parties clearly acted in bad faith or conducted themselves dishonestly. See Cine Forty-Second St. Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d 1062, 1064 (2d Cir. 1979); Metropolitan Opera Ass'n, Inc. v. Local 100, Hotel Employees and Rest. Employees Intern. Union, 212 F.R.D. 178, 231 (S.D.N.Y. 2003). Assuming the necessary factual predicate, courts may sanction parties, attorneys, or law firms and available sanctions include the ability to dismiss actions, assess attorneys' fees, impose monetary penalties, or fashion other appropriate sanctions "for conduct which abuses the judicial process." Chambers, 501 U.S. at 45; id at 42 (noting the Court's inherent powers are broader than that provided for in Rule 11);cf. Fed.R.Civ.P. 11(c).
B. The Court's Factual Findings Demonstrate Cleary's Attorneys Acted in Bad Faith
The Court finds that sanctions are appropriate here. It so holds because it finds that the evidence clearly demonstrates Cleary's attorneys acted without legal justification and in fact acted to delay or obstruct the post-judgment discovery process in this case. Specifically, the Court finds there exists a mass of evidence that supports a finding that Cleary's actions were taken with the purpose of preventing Mbemba's deposition on Friday, February 3, 2005, namely, (1) Cleary's interest in, but failure to seek, a protective order, (2) the selection of Vignaud as the attorney to contact Mbemba, (3) Vignaud's communications to Mbemba (as recalled by Mbemba and evidenced by the record), (4) Cleary's misleading follow-up email informing Dechert that Mbemba would not attend the deposition, (5) Vignaud's urgency in contacting Mbemba, particularly on the morning of the deposition, (6) Vignaud's admissions, and (7) Vignaud's evasiveness on certain matters in court. This same evidence belies Cleary's argument that its intentions were innocent and that it merely sought to explain to Mbemba the nature of depositions and the practice of attending with an attorney present.
(1) Cleary declines to seek a protective order and elects to act on its own
The sequence of events relevant to this motion begins with Cleary in a jam: it wanted Morag to attend Mbemba's deposition but, because of the late notice from Mbemba as to his availability and Dechert's refusal to reschedule, he could not. Morag's initial impulse to seek a protective order to prevent the deposition was the proper one and evidences Cleary's intention to postpone the deposition. Perhaps Cleary decided that there were no legitimate grounds to seek a protective order; perhaps it feared a court would inquire as to whether Cleary had a sufficient interest in attending the deposition of a non-party witness to warrant delay of the deposition; or perhaps it never had any intention of going to court. But in any event, the record is clear that, in forgoing the legal means at its disposal for postponing or defining the terms of the deposition, Cleary made a choice to achieve its goals through illegitimate means: contacting Mbemba directly and persuading him to avoid the deposition.
(2) Cleary selects Vignaud to contact, and influence, Mbemba
Had Cleary done as it claimed and only informed Mbemba of the nature of depositions and the prudence of obtaining counsel — even if its motives were not entirely altruistic — the Court would not find Cleary acted solely in bad faith. But a review of the findings of fact shows Cleary did much more than disinterestedly inform Mbemba of American legal custom.
Cleary's story begins to falter with the selection of Vignaud as the attorney to contact Mbemba. The Court does not believe that Vignaud — Cleary's relationship partner for Congo and a member of Cleary's 10-lawyer worldwide executive committee — was the only attorney at Cleary's disposal who could speak French and relay the nature of a deposition. In fact, Vignaud revealed that he himself was not an ideal candidate to convey the latter as he admitted several times in court that he was not comfortable speaking on matters of American law. (Vignaud Tr. 67:2-3 ("I don't know exactly what kind of assistance is permitted under New York law, but I thought that there was a need."); id. 82:12-17 "Q: Did Mr. Morag tell you why it was better for Mr. Mbemba to deliver that message as opposed to Cleary? A: I think that — I don't remember exactly the reason. . . . It was probably a question of rules of communication or some uses among counsel. I don't know exactly.") id. 85:15-17 ([Q:] You knew that it would not be illegal for Mr. Mbemba not to attend the deposition, didn't you? A: I would not make a judgment on that.").) Nor was Vignaud particularly involved in this case. (Id. 58-59 (admitting that he only received periodic updates in the Kensington case).)
Vignaud confirmed that Cleary's New York office has at least 15 attorneys who speak French (Vignaud Tr. 20:15-23); presumably, they understand the nature of depositions as well.
The evidence adduced at the hearing, however, compels the conclusion that Vignaud was selected in the hope that he could assert influence over Mbemba. As a well known figure in Congo, he could make a convincing argument that the deposition was "us vs. them" and force Mbemba to pick a side. A Cleary associate in New York who speaks conversational French could not, with adequate gusto, inspire Mbemba to join the fight against the "vulture creditors" threatening Congo's stability. Nor could anyone but Vignaud even create the impression that acquiescence in his demands might yield a benefit; disobedience, a penalty. See infra n. 6. In a case where innuendo was needed in place of explicit commands, Vignaud appears to have been the only man for the job.
(3) Vignaud's communications with Mbemba demonstrate bad faith
Vignaud delivered on the promise of his influence. His first act, the February 3 email from to Mbemba, standing alone, would probably not suffice to show bad faith. It does, however, begin a theme for the remainder of the communications with Mbemba: the blurring of the line between Congo's interest and Mbemba's. For instance, given that Vignaud later testified Cleary had no intention of representing Mbemba at the deposition, it is unclear what he meant by "assist" when he wrote "[m]y colleague, Boaz Morag of our New York office will be at a hearing the whole day on Friday and therefore will not be able to assist you." (Decl. of Jean-Pierre Vignaud ¶ 5.) As discussed below, Cleary never availed itself of the opportunity to explain what assistance it was going to offer Mbemba.
The Court credits Mbemba's deposition testimony as verified by portions of his oral testimony in court and the record. With only one basic exception, the Court believes Mbemba testified truthfully and to the best of his recollection and had little motive to lie. Mbemba, through his testimony firmly establishes that Cleary acted in bad faith in trying to persuade him not to attend the deposition. His testimony shows that Vignaud appealed to him in his "capacity as Congolese patriot" and told him that the litigation and his deposition testimony was going to "affect the stability of Congo," would "hurt the Congo," could "destabilize" Congo's economy, and was "bad for [Congo's] population." Vignaud told Mbemba that Kensington was "very dangerous" and Vignaud would later add that he told Mbemba that creditors like Kensington were "foreign vulture creditors." Vignaud told Mbemba that "I am warning you so that you'll know and not participate in this kind of a game because it is a bad thing for your country," which Mbemba took as a threat. Vignaud told Mbemba not to attend the deposition, that a lot of people were "invited" but none was going to attend, and that "nothing" would happen if he elected not to testify. Vignaud never mentioned rescheduling the deposition — a topic that would have made sense if Vignaud's true motive was only to assure that Mbemba was represented. Instead, Vignaud urged Mbemba to decline to testify out of patriotism — a reason Mbemba acquiesced in and that Vignaud would not expect to change before his next visit to the United States.
Late in Mbemba's testimony in court, on redirect, he raised for the first time that "Mr. Vignaud told me that if I didn't testify clearly I would get my reward from the president, the president [of Congo]. . . ." (Mbemba Tr. 71:13-15.) Later, he modified his testimony, "I didn't use the word `reward.' When you use French, what you mean is gratefulness. The president will be grateful to you." (Id. 76:17-19.) But his failure to raise this damning evidence in his deposition, or on direct, suggests this testimony was not an accurate version of events. Nevertheless, more believable aspects of Mbemba's testimony demonstrate his state of mind — at least in part reinforced by his conversations with Vignaud — that there were personal risks associated with testifying and possible gains from avoiding testimony. (See, e.g., Mbemba Tr. 33:12-16 ("Mr. Vignaud [and I], we didn't talk about the assets of Congo. We talked about the principle of testifying and the risks that it entailed or not testifying and the risks that it entailed; and, if not testifying, what the advantages or drawbacks."); id. 67:2:-4 ("I understand that [Vignaud] had privileged connections to Congo, with the authorities in Congo, the family, the Congolese family, maybe not the president himself, but I know the way it works in Congo. . . . Listen, if Mr. Vignaud says, If you don't testify I will notify the President of the Republic of Congo, thinking in hindsight, if you testify then the president will draw the consequences himself."); id. 39:17:23 (stating that he believed that the President of the Congo felt all Congolese who were in contact with the creditors were in the opposition); id. 65:25-66:2 (testifying, it was his state of mind that "to come and testify in a case of debt over Congo, there were many people who were asked to do so, but they didn't come. It is dangerous to come and testify."); id. 63:8-12 (testifying that he was contacted after his deposition by a special adviser to the president who said that the presidential family was very upset with him and advised him to stay away from Congo).)
This testimony, which the Court finds to be true and accurate, by itself establishes that Cleary acted in bad faith to persuade Mbemba to avoid the deposition. Clearly, the conversation went far afield from the simple admonition that it would be wise for Mbemba to get a lawyer to represent him and turned instead to other reasons calculated to persuade Mbemba that he need not and should not attend.
Mbemba's recollection of how he arrived at his ultimate decision to testify bolsters his account of Vignaud's communications. Mbemba recalled that his son told him he should testify because the law so required and convinced him that he was, in fact, not "protecting" the Congolese people but those in power. His son pleaded that, as an aspiring politician, Mbemba should be transparent. (See Mbemba Dep. 43:10-16; Mbemba Tr. 73:4-74:8) Cleary argues that Mbemba's political ambition at the time somehow undermines his credibility. Quite the contrary, the Court credits Mbemba's recollection of this conversation as reliable evidence of Mbemba's impressions after speaking with Vignaud; Vignaud left him with the understanding that refusing to testify was permitted by law and that doing so would protect Congo's efforts to conceal the location of its assets.
(4) Morag's follow-up email was designed to mislead Dechert and conceal the actual contents of Vignaud's communications with Mbemba
Having successfully persuaded Mbemba not to attend the deposition, Cleary then attempted to have Mbemba call Dechert himself to cancel. Doing so might possibly insulate Cleary from Mbemba's ultimate decision not to attend, but Mbemba refused. The resulting communique demonstrates Cleary's attempt to obscure what actually transpired between Vignaud and Mbemba and suggests the law firm had something to hide. Morag wrote the email to make Cleary seem the passive recipient of Mbemba's decision ("Mbemba contacted our firm this afternoon . . ."), omitted those aspects of the conversation damaging to Cleary (e.g., no mention of Mbemba's references to his own patriotism or Vignaud's reference to "foreign vulture creditors"), and misrepresented that rescheduling was discussed in the conversations between Mbemba and Vignaud (it was not). Indeed, neither Vignaud, nor his efforts to contact Mbemba, nor the contents of those communications, nor Mbemba's stated reason for refusing to testify was mentioned in the email.
When one imagines what a complete and accurate email would look like — even based on Vignaud's version of events — the ridiculous result demonstrates the impropriety of Vignaud's communications with Mbemba. "Dear Sir, Having had one of the most powerful partners at our firm call and email Mr. Mbemba from France, and having informed him that this was a case against `foreign vulture creditors' and that if the deposition went forward without Cleary present, `it would put the Congo at a disadvantage in its litigation to protect its sovereign assets from creditors,' Mr. Mbemba informed us that, as he is a patriot, he would not participate in the deposition since it is `against the interests of the Congo.'" (See Vignaud Decl. ¶¶ 12-13.)
(5) Vignaud's urgency in contacting Mbemba is telling
Vignaud's several attempts to contact Mbemba, particularly on the morning of the deposition, show an urgency uncharacteristic of an attorney who disinterestedly seeks to inform a witness of the dangers of being deposed without counsel. As Vignaud saw it, Mbemba's choice to testify on February 4 was a problem for Congo, not a problem for Mbemba, and that is reflected in the numerous overseas telephone calls. When Vignaud first wrote Mbemba, he said participating in the deposition without counsel carried serious risks "that I will leave to you to assess;" the frantic calls on the morning of the deposition illustrate Vignaud was not interested in leaving the ultimate decision to Mbemba.
(6) Vignaud's admissions confirm he was acting on behalf of Congo to prevent the deposition
Vignaud's own testimony does little to exonerate him or Cleary. Vignaud in several instances admits that (1) he was at all times acting in the interests of Congo (not for Mbemba), and (2) that the interests of the Congo included (a) Mbemba's understanding that this was an action to collect on Congo's debt and that success in the suit would affect Congo's interests and (b) Congo's being represented at the deposition. This admission, though somewhat opaque, betrays Vignaud's true motives for contacting Mbemba and further demonstrates his actions were taken in bad faith.
A phone call to Mbemba made in good faith would have had as its aim Mbemba's interests, not Congo's. The reason why nonparty witnesses elect to consult with attorneys prior to depositions is to protect themselves, not one of the parties to the litigation. Vignaud's admissions make plain that he was at all times acting solely in Congo's interest and he testified Congo's interest did not include having Mbemba represented at the deposition, thus undercutting Cleary's proffered reason for the communications in the first place.
Next, the reason why Vignaud felt it was in Congo's interest to inform Mbemba of the nature of the suit also evidences his true motives. Vignaud hoped that, once Mbemba found out that the suit was one where (in Vignaud's words) Congo was fighting off "foreign vulture creditors," the politically involved Congolese businessman would refuse to testify. And indeed, initially, Mbemba did refuse, perhaps out of "patriotism" or perhaps out of a perceived risk in testifying against Congo's interest or perhaps in hope of potential gain from refusing to testify against Congo's interest but, in any event, in furtherance of Congo's "second" interest — no deposition was to occur without Morag's being present.
(7) Vignaud's evasiveness damaged his credibility and undercut Cleary's proffered motive
Three times in Vignaud's testimony, when his credibility and motives were on the line, his answers served to raise the Court's suspicion that he was not being forthright in his answers.
First, in his declaration, Vignaud candidly offered that he referred to Kensington and creditors similarly situated as "foreign vulture creditors." But in his testimony in court, first he did not recall making such a statement (Vignaud Tr. 79:13-25), and then, after conceding it was in his sworn declaration, was reluctant to admit that the phrase had negative connotations (id. 80:1-18). Needless to say, the phrase is negative, and Vignaud's effort to dampen the impact of his words after the fact hurt his credibility.
Second, Vignaud testified to his knowledge of the Cayman Islands company Olearius. Vignaud admitted to knowing that Olearius was a special purpose vehicle that Cleary established to purchase Congo oil as part of a $210 million oil-backed loan to Société Nationale Des Pétroles Du Congo ("SNPC") (a party in this case). (Id. 47:4-48:17.) When asked whether Olearius "was created to insert an independent entity between SNPC and oil traders so as to prevent creditors of Congo and SNPC from seizing the oil," Vignaud retreated from his knowledge on the matter and became evasive. (Id. 47:4-48:17.) Tellingly, when asked what was his involvement in the Olearius matter, Vignaud replied "I was not involved" — despite being the relationship partner for Congo. (Id. 51:10-11.) When asked whether he was ever involved in litigation in the Cayman Islands over the propriety of Olearius, Vignaud replied "No, I was not," (id. 51:25-52:4,) that is, until counsel produced an affidavit he submitted in the litigation that stated that Vignaud was the partner in charge of the matter, (id. 52-54.) He then recalled that he knew the Cayman Island litigation sought to determine whether Olearius was an insubstantial sham entity for purposes of piercing the corporate veil. (See id. 55:13-21.) Notwithstanding the seriousness of such an allegation, Vignaud professes not to remember "having conducted a thorough analysis of this transaction at that time," (Id. 55:25-56:1), which, as the relationship partner for Congo, the Court finds decidedly hard to believe. Vignaud's dissembling here further damaged his credibility and showed a willingness to obscure the truth when his efforts to protect Congo's assets are questioned.
In fact, the Cayman Islands Court found that plaintiffs there had made a prima facie showing that "Olearius is indeed in receipt of the funds which originate from the Republic of Congo and that they simply do as they are told by persons who are party to the forward purchase agreement and have no independent mind of their own." (Affirmation of Robert A. Cohen, May 4, 2007, Ex. A at 12.)
Finally, and most deleterious to Vignaud and Cleary, is the fact that Cleary had ample opportunity in three sworn declarations and Vignaud's lengthy oral testimony to articulate adequately for the Court why it was so important to Congo to have its counsel present at Mbemba's deposition. It squandered that opportunity. Vignaud's evasiveness in answering the simple question of what "assistance" Morag might possibly offer Mbemba (even while not representing him) or what interest Congo had in informing Mbemba of the specifics of the deposition is particularly telling. (See id. 66-71.) The Court can but conclude that Cleary feared Mbemba might reveal damaging information or offer evidence of illegal conduct and thus attempted, in bad faith, to influence Mbemba's testimony or, better still, to avoid the deposition altogether.
C. Sanctions are Warranted
Sanctions serve three purposes: (1) to prevent a party from benefitting from its own improper conduct, (2) to provide specific deterrents, and (3) to provide general deterrence.Metropolitan Opera Ass'n, 212 F.R.D. at 220. Here, Cleary did not benefit from its own improper conduct. But Cleary is an ideal candidate for specific deterrence. It has shown a willingness to operate in the murky area between zealous advocacy and improper conduct, and here it crossed the line. Cleary, through two of its attorneys, sought to interfere with the legitimate post-judgment discovery process in this case by attempting in bad faith in furtherance of its own interests to dissuade Mbemba from attending the properly noticed deposition. This conduct is inconsistent with counsel's obligations under the Federal Rules of Civil Procedure and recognized ethical strictures. See, e.g., Harlan v. Lewis, 982 F.2d 1255, 1259 (8th Cir. 1993) (upholding the district court's imposition of sanctions where it found that defense counsel attempted to dissuade a non-party witness from giving testimony); ABA Model Rules of Prof'l Conduct R. 3.4(f) (prohibiting a lawyer from "requesting a person other than a client to refrain from voluntarily giving relevant information to another party"); id. at R. 3.4 Cmt. 1 ("Fair competition in the adversary system is secured by prohibitions against destruction or concealment of evidence, improperly influencing witnesses, obstructive tactics in discovery procedure, and the like."); Restatement (Third) of the Law Governing Lawyers § 116(3) (2000) (stating a "lawyer may not unlawfully induce or assist a prospective witness to evade or ignore process obliging the witness to appear to testify"). This case is far from over, and sanctions are necessary to remind Cleary that it has obligations beyond representing its client. Accordingly, Cleary is hereby sanctioned pursuant to the Court's inherent authority. Cleary is directed to pay to Kensington the reasonable costs and attorney's fees incurred by Kensington in connection with this motion. This sanction is imposed as a formal reprimand and should be circulated to all attorneys at Cleary. Sanctions here will also serve as a general deterrent to other law firms and perhaps as an entreaty as well: civil litigation can be high stakes, zealously litigated, aggressively fought, and civil.
CONCLUSION
For the foregoing reasons, Kensington's motion for sanctions is GRANTED. By separate order, this case is referred to Magistrate Judge Douglas F. Eaton for an inquest to determine the reasonable costs and attorneys fees Kensington incurred in bringing this motion.SO ORDERED: