FILED

Case 2:11-cv-03695-RDP-TMP Document 174 Filed 02/02/15 Page 1 of 36

2015 Feb-02 PM 04:09

U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
DRUMMOND COMPANY, INC.,
Plaintiff ,
vs.
TERRENCE P. COLLINGSWORTH,
individually and as agent of Conrad & Scherer,
LLP; and CONRAD & SCHERER, LLP,
Defendants .

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Case No. 2:11-cv-3695-RDP-TMP

OPPOSED
Contains information designated as
Confidential Information under the
Protective Order.

DRUMMOND COMPANY, INC.S RENEWED MOTION FOR SANCTIONS AND

REQUEST FOR AN EVIDENTIARY HEARING 1

William Anthony Davis, III (ASB-5657-D65W)

H. Thomas Wells, III (ASB-4318-H62W)
Benjamin T. Presley (ASB-0136-I71P)
STARNES DAVIS FLORIE LLP
P.O. Box 59812
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099

Sara E. Kropf
LAW OFFICE OF SARA KROPF PLLC
1001 G St. NW, Suite 800
Washington, DC 20001
(202) 627-6900

Attorneys for Drummond Company, Inc.

Drummond raised with the Special Master its intent to file this motion and requested guidance as to
whether it should be filed with the Special Master or the Court. Drummond was advised the motion should be filed
with the Court. Ex. 28 (Jan. 13, 2015 Hrg. Tr.) at 152-155.
Also, since May of 2014, Defendants have designated every single page of every document they have
produced that relates to payments to witnesses including documents reflecting the simple fact of a payment to a
witness as Confidential under the Protective Order (Doc. 127). Drummond views those designations as wholly
inconsistent with the terms of the Protective Order, and is currently challenging such designations before the Special
Master. Because that challenge remains pending, Drummond is publicly filing this redacted brief and
contemporaneously requesting leave to file an unredacted version under seal.

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TABLE OF CONTENTS
TABLE OF AUTHORITIES................................................................................................................... ii
I. BACKGROUND FACTS ....................................................................................................................1
A. Summary ........................................................................................................................2
B.

.............................5

C.
.......................................................18
II. ARGUMENT AND REQUEST FOR RELIEF ......................................................................................23
CERTIFICATE OF SERVICE ...............................................................................................................31

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TABLE OF AUTHORITIES
Cases

Page(s)

ABF Freight Sys., Inc. v. N.L.R.B.,

510 U.S. 317, 114 S. Ct. 835, 127 L. Ed. 2d 152 (1994)...................................................26
Adolph Coors Co. v. Movement Against Racism & the Klan,
777 F.2d 1538 (11th Cir. 1985) .........................................................................................29
Barnes v. Dalton,
158 F.3d 1212 (11th Cir. 1998) .........................................................................................28
Byrne v. Nezhat,
261 F.3d 1075 (11th Cir. 2001), abrogated on other grounds by Bridge v. Phoenix Bond
& Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008) ....................27, 28
Carlucci v. Piper Aircraft Corp., Inc.,
775 F.2d 1440 (11th Cir. 1985) ...........................................................................................1
Chambers v. NASCO, Inc.,
501 U.S. 32, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991).....................................................27
Chilcutt v. U.S.,
4 F.3d 1313 (5th Cir. 1993) ...............................................................................................27
Cox v. American Cast Iron Pipe Co.,
784 F.2d 1546 (11th Cir.), cert. denied, 479 U.S. 883, 107 S.Ct. 274, 93 L.Ed.2d 250
(1986).................................................................................................................................26
David v. Alphin,
No. 3:07-cv-11, 2010 WL 1404722 (W.D.N.C. Mar. 30, 2010) .......................................26
Evon v. Law Offices of Sidney Mickell,
No. CIVS090760JAMGGH, 2010 WL 455476 (E.D. Cal. Feb. 3, 2010) .........................26
Fair Housing of Marin v. Combs,
285 F.3d 899 (9th Cir. 2002) .............................................................................................27
Gratton v. Great American Communications,
178 F.3d 1373 (11th Cir. 1999) .........................................................................................26
In re Amtrak Sunset Limited Train Crash in Bayou Canot, AL on Sept. 22, 1993,
136 F. Supp. 2d 1251 (S.D. Ala.) affd sub nom. In re Amtrak, 29 F. Appx 575 (11th Cir.
2001) ..................................................................................................................................26

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In re Grand Jury Proceedings,

117 F. Supp. 2d 6 (D.D.C. 2000) .......................................................................................29
In re Terry,
128 U.S. 289 (1888)...........................................................................................................28
Jackson v. Murphy,
468 F. Appx 616 (7th Cir. 2012) ......................................................................................27
Malautea v. Suzuki Motor Co., Ltd.,
987 F.2d 1536 (11th Cir. 1993) ...................................................................................26, 27
Martin v. Automobili Lamborghini Exclusive, Inc.,
307 F.3d 1332 (11th Cir. 2002) .........................................................................................28
Olivas v. A Little Havana Check Cash, Inc.,
324 F. Appx 839 (11th Cir. 2009) ....................................................................................28
Videojet Sys. Intl, Inc. v. Eagle Inks, Inc.,
251 F.3d 170 (Fed. Cir. 2000)............................................................................................29
Zocaras v. Castro,
465 F.3d 479 (11th Cir. 2006) .....................................................................................28, 29

Statutes and Rules

Page(s)

18 U.S.C. 401(1) .........................................................................................................................28

Ala. R. Prof. Cond. 3.3...................................................................................................................11
Fed. R. Civ. P. 37.....................................................................................................................26, 29

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If this case is not a paradigm of the abuse that sanctions under Rule 37 are to correct, we
would have great difficulty hypothesizing one that is. Carlucci v. Piper Aircraft Corp., Inc.,
775 F.2d 1440, 1449 (11th Cir. 1985).

The evidentiary record warrants and the integrity of the judicial

process demands severe sanctions. Should the Court require an additional evidentiary record,
Drummond requests an evidentiary hearing at which Defendants be required to show cause why
sanctions should not be entered against them.2
I.

BACKGROUND FACTS

Despite ample opportunity, Defendants have failed to provide a satisfactory explanation for their egregious
conduct.

Drummond remains
convinced that Defendants conduct warrants severe sanctions. Ex. 32 (Feb. 2, 2015 Wells Ltr.).

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A. Summary
In October of 2013, this Court held that the fact of payments to witnesses was properly
within the scope of discovery, and compelled documents and information on this issue to be
produced over Defendants work product objections. In doing so, the Court made abundantly
clear to Defendants just how serious the witness payment issue was:
THE COURT: Okay. Let me just say this. Ive tried to be very clinical in my
approach to these discovery disputes; in other words, just call balls and strikes. I
am concerned about the allegations. I dont feel like I would be doing a service to
either side, particularly the Defendants, unless I said that in this hearing.
Im not presuming any of these allegations are true, but when I look at what was
submitted by [Drummond] yesterday -- and I know you havent -- or day before
yesterday, and I know you havent had a chance to really respond to that, so Ive
not asked you to do that. But I feel like I would not be candid as I should be with
you if I told you that I was anything but very concerned about these assertions. . . .
But I think at some point in the future when these issues become more clear about
whats really happened, I think I may have to assess whether theres something I
need to do beyond just ruling on discovery motions. Make sense?
MR. SMITH: Yes, Your Honor.
Doc. 63 (Oct. 10, 2013 Hrg. Tr.) at 84:4 85:11. That message apparently did not resonate with
Defendants.
On March 7, 2014after Defendants had for months represented to this Court and courts
across the country that all documents reflecting payments to, or requests for payments by,
witnesses had already been produceda third party, the Parker Waichman, LLP, law firm,
produced documents
.3 Because Defendants had never produced these
critical documents and had repeatedly represented they did not exist, Drummond moved for
3

Citations to numerically designated exhibits will be to those attached to the declaration of H. Thomas Wells, III filed
contemporaneously herewith.

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sanctions.

See Doc. 104, generally.

In a sworn declaration opposing that motion, Mr.

Collingsworth represented to this Court that

During the hearing on that motion, this Court raised its concern over this issue,

The Court also directly asked the Defendants to disclose the true scope of witness
payments in Balcero, and Defendants volunteered Mr. Collingsworth to respond to the question:
[MR. WELLS]: So the basis of their defense is these paramilitaries were telling
the truth; and not only that, I reasonably believe that they were telling the truth.
And if he was paying them and it looks like were starting to build a record that
almost everyone has been paid and I think we are going to be able to build a
record that everyone was paid at some point, then that is very, very relevant to
whether or not he reasonably believed
JUDGE PROCTOR: Let me ask that question to Mr. Smith. Mr. Smith, consult
with Mr. Collingsworth and let me know this. Is there a witness that I have
received testimony from south of the Equator that didn't receive a security
payment?
MR. SMITH: Can he answer that?
JUDGE PROCTOR: Sure. Im trying not to put him on trial. Im going through
4

To be clear, Drummond is not seeking sanctions against Mr. Smith for the egregious conduct perpetrated by Mr.
Collingsworth and Conrad & Scherer.

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counsel.
MR. SMITH: I appreciate that, Your Honor.
MR. COLLINGSWORTH: Your Honor, the shortest way to the truth is to ask
me the question. Thank you. Our papers have made it clear and I will say that a
lot of the new ambush allegations that theyve made, each time they make one if
we get a chance to show you the facts, the facts clear up any misunderstanding of
what happened. There were exactly in this case three witnesses whose family
members were moved because they received death threats, and those were
Charris, Helvez [Gelvez], Guartay [Duarte]. Those are the witnesses whose
family members were moved. There was an additional person named Halcon
who was participating in Drummond 1 way out there and I had little to do
with. I never met the guy.
JUDGE PROCTOR: Drummond 1 in front of Judge Bowdre?
MR. COLLINGSWORTH: Thats correct. He was relocated and at some point
we began also helping him with his relocation assistance, but our interrogatory
responses to them made clear we took him off the table, I found him not to be
credible, and he is not a witness. So the three witnesses that I've mentioned,
Charris, Guartay, and Helvez, are the family members of those people who
were relocated.
JUDGE PROCTOR: Are those the only three besides Halcon who received
security payments?
MR. COLLINGSWORTH: Thats correct.
Id. at 30:1-31:19 (emphasis added). At that time, the Court denied Drummonds motion for
sanctions without prejudice, stating that the Court needs an evidentiary record before making a
ruling on that. Id. at 50:19-22.

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B.
As this Court is well aware, Defendants witness payments have become the focal point
of discovery in this case. For more than a year and a half, Drummond has spent enormous
amounts of time and resources trying to uncover the true scope of these payments through
discovery requests to the Defendants, third party depositions, and third party subpoenas for
documents.6

Defendants have obstructed Drummonds efforts at nearly every turn and in

multiple venues, refusing to produce responsive documents or obey this Courts October 15,
2013 Order. Defendants have repeatedly sought sanctions against Drummond in other federal
district courts for subpoenas relating to witness payments they have characterized as
duplicative, harassment and abusive fishing expeditions.

Pursuant to this Courts instruction at the April 21, 2014 hearing, Drummond has attempted to further develop the
testimonial record and was able to complete the depositions of Messrs. Paul Wolf and Richard Gordon. Ex. 2 (Wolf
Dep.); Ex. 3 (Gordon Dep.). Defendants, however, have objected to any further depositions until the pending work
product issues are resolved by the Court.

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In this Court, Defendants have characterized Drummonds allegations of improper

witness payments, and Defendants concealment of these payments, as speculative,
maliciously false, outrageous, and mud-slinging. Doc. 114 at 1, 20. With righteous
indignation, Mr. Collingsworth stood up before this Court and stated that there were exactly
three witnesses in Balcero who received payments: Charris, Duarte, and Gelvez. Doc. 123
(Apr. 21, 2014 Hrg. Tr.) at 30:1-31:19.

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In July 2013, Drummond filed a motion to compel responses to its discovery requests,
setting forth the documentary evidence of Defendants witness payments to Charris, Halcon,
Duarte and Gelvez. See Doc. 43 at 14-20; Doc. 50 at 5-7. In their response to that motion,
Defendants cited Mr. Collingsworths sworn declaration and repeatedly represented to this Court

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that all documents reflecting payments to witnesses had been produced:

In purporting to seek further discovery regarding payments made to witnesses,
Drummond asserts, as if it had discovered a nefarious plot, that it has evidence
Mr. Collingsworth paid witnesses and their families. DR. Mot. 14. First, all of
the evidence Drummond has was produced by Plaintiffs in the Balcero case,
and Plaintiffs produced every responsive document they had. Collingsworth Decl.
4.
[]
Defendants have provided Drummond all responsive documents, and the only
reason Drummond knows about the security payments is because Defendants
provided the documents.
Doc. 46 at 3 & 21.
On October 10, 2013, this Court held a hearing on Drummonds motion to compel, and
the following exchange occurred between this Court and Defendants counsel:
THE COURT: Why wouldnt -- if theres allegations or at least theres colorable
allegations that your client participated in making security payments to witnesses,
and those witnesses, after receiving the payments, changed their testimony in
some form or fashion, why wouldnt that be discoverable in a defamation action
where your client is accused of falsely stating that Drummond engaged in these
criminal violations in three different letters?
MR. SMITH: The question is are the security payments information discoverable?
THE COURT: Yeah, discoverable in the defamation action.
MR. SMITH: Your Honor, we think they are, and we have produced responsive
documents. With exception of one that is on our Privilege Log, we have
produced all responsive documents.
Doc. 63 (Oct. 10, 2013 Hrg. Tr.) at 25:25-26:16 (emphasis added).

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On November 7, 2013 Defendants filed a supplemental brief in opposition to

Drummonds motion to compel. Doc. 68. In that filing, Defendants represented that there were
credible death threats made against many of the witnesses who were about to give depositions in
Balcero, and with respect to three of them, Defendants concluded that their family members
were in immediate danger. Id. at 3 (emphasis added). Citing Mr. Collingsworths sworn
declaration, Defendants also represented they had always been open and clear regarding their
security payments, stating they had disclosed documents establishing they had provided
necessary security to three witnesses, Duarte, Gelvez, and Charris. Id. at 11.

On January 22, 2014, Defendants filed an opposition to Drummonds motion for an

extension of the deadlines in the Courts original Scheduling Order. Doc. 91. In that filing,
Defendants represented to this Court that [o]nly one category of document production remains
pending which relates the financing of litigation against Drummond, and that these extant cost
documents are not going to yield any facts on the truth or falsity of Drummonds participation of
criminal acts in Colombia. Id. at 3.
On April 14, 2014, Defendants filed a vitriolic response to Drummonds motion for
sanctions regarding Defendants fraudulent concealment of witness payment documents (Doc.
104), characterizing Drummonds motion as maliciously false and outrageous. Doc. 114 at
1.

In that filing, Defendants represented they had completed their document search and

supplemental log in full compliance with the Courts discovery Order.

Id. at 2.

Mr.

Collingsworth also testified that he receive[d] the last batch of responsive documents [on] April

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1, 2014, that he was personally involved in reviewing the same, and that those documents were
ready for production. Doc. 114-2 (Apr. 14, 2014 Collingsworth Decl.) 4.

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On September 2, 2014, Drummond and Parker

Waichman entered into a stipulation whereby any disputes over the Parker Waichman subpoenas
would be transferred to this Court to be handled by the Special Master. Ex. 15 (Sept. 2, 2014
Stipulation). In that stipulation, Parker Waichman agreed to produce documents that it withheld
as privileged by October 3, 2014 for in camera review by the Special Master. Id. at 3.

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C.

I want to state before Mr. Prosecutor with all due respect that a lot of interests are
moving with respect to this issue since the only objective of this moment is to link
DRUMMOND to a civil proceeding so that a proceeding be reopened in the
United States, the proceeding that had already been closed. It is merely a
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financial interest. It would be good that the Office of the Prosecutor would look
into the labor unions, NGOs and a large amount of lawyers who are offering
money to these demobilized groups that are in precarious financial conditions so
that they say what they want to hear or say.
Doc. 88-6 at 14-15; Doc. 99 at 5-6.

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In November 2011, Mr. Collingsworth filed a

brief in Balcero opposing Drummonds motion to compel a complete response to an
interrogatory seeking a description of anything of value offered or given by Plaintiffs, or
anyone acting on Plaintiffs behalf including counsel, to any witness. Ex. 20 (Balcero Doc.
255). He argued that this request, as it related to any potential witness, was too broad and
implicated work product concerns, but represented to this Court that all information concerning
offers or payments to actual witnesses had been disclosed. Id. at 9. This Court took this
representation at face value. Ex. 21 (Balcero Doc. 332, Order on Mot. to Compel) at 6 (citing
Mr. Collingsworths representations, and holding, To be sure, Defendants are entitled to know
whether Plaintiffs or their representatives offered anything of value to those individuals listed on
Plaintiffs Rule 26 disclosures, and they presumably have been given that information.).

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The same day the above order was entered, this Court held a hearing regarding security
concerns raised by Drummond due to the fact that Mr. Collingsworth had issued a press release,
which was published on the Llanos Oil website, disclosing the date, time and location of the
letters rogatory testimony of Samario in Colombia.
Court expressed serious misgivings about Mr. Collingsworths relationship with Llanos Oil:
THE COURT: [] First, what is the relationship between Llanos and
Drummond?
MR. COLLINGSWORTH: There is no they are competitors in Drummond
excuse me in Colombia. I believe that Llanos has a claim in the World Court
against the Government of Colombia that relates to a disputed title to some oil
rights that Drummond holds.
THE COURT: Okay.
MR. COLLINGSWORTH: There is no relationship to this case, Your Honor.
[]
THE COURT: [] Mr. Collingsworth, Im going to say one more thing: I
am concerned about this whole business with Llanos. Cant put my finger on
it, but at a minimum I could say this to you: I dont know that your clients
best interests includes that type of an association with a competitor of
Drummond because youre going to open yourself up at a minimum to
questions about your approach to this case and what your interests are. Are
they pro-plaintiff or anti-Drummond; or are they anti-Drummond plus procompetitor of Drummond.
You need to think carefully about continuing that type of thing. Im aware of the
complaint filed before Judge Acker. He and I have had some discussions about
the suitability of consolidating that case. We have, at this point, decided to let
things ride. So I cant erase that from my memory bank. Understand?
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MR. COLLINGSWORTH: Yes, sir. Thank you. Ill discuss it.

THE COURT: All right. I want you to do more than discuss it; I want you to
take under full advisement what Ive said to you.
MR. COLLINGSWORTH: Yes. Thats what I meant, Your Honor.
Ex. 22 (Mar. 8, 2012 Hrg Tr.) at 8:23-9:7; 68:1-24 (emphasis added).

The Court also directed Defendants to provide a comprehensive privilege log

detailing everything responsive to Drummonds requests withheld on a claim of privilege, and
issued the following warning: But please understand this. If theres a fiber, if there is a
molecule out there that you say is privileged, it better be on the Privilege Log or else it will be
waived . . . when you supplement. Doc. 63 at 46:4-9.

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On December 20, 2013, Defendants produced a supplemental privilege log pursuant to

this Courts Order, purporting to include the privileged documents, if any, responsive to most
of Drummonds requests,

II.

ARGUMENT AND REQUEST FOR RELIEF.

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Severe sanctions are not only warranted, they are absolutely necessary to protect the
integrity of the judicial process.

Drummond has spent enormous amounts of time and resources pursuing discovery of
Defendants witness payments. This Court has also been forced to devote a huge amount of its
resources to complex discovery disputes in this case, causing not only Judge Proctor, but also
Magistrate Judge Putnam and Special Master Mike Brown to expend substantial time and effort.
Defendants, meanwhile, have done everything within their power over the last year and half to
obstruct discovery,

Defendants will no doubt ask this Court to overlook their egregious misconduct, citing
inadvertence or mistake or stating we got a new team, its a new day. Ex. 25 (Nov. 18, 2014
Discovery Conference Transcript) at 8:2. This Court should decline to do so. That Defendants
have retained eight new lawyers has nothing to do with this motion. The DefendantsMr.
Collingsworth and Conrad & Schererhave remained the same throughout this litigation and it
is against these Defendants that sanctions are sought.

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17

s explained by the
Supreme Court,

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Defendants conduct is egregious. The consequences should be commensurate with their

conduct.
This Court has broad authority under Rule 37 to control discovery. Cox v. American Cast
Iron Pipe Co., 784 F.2d 1546 (11th Cir.), cert. denied, 479 U.S. 883, 107 S.Ct. 274, 93 L.Ed.2d
250 (1986). Rule 37 sanctions are intended to prevent unfair prejudice to the litigants and
ensure the integrity of the discovery process. Gratton v. Great American Communications, 178
F.3d 1373, 1374 (11th Cir. 1999).

Improperly withholding discoverable documents is

sanctionable conduct under Rule 37. See Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536,
1539 (11th Cir. 1993) (upholding a default judgment sanction after the defendants stubbornly
withheld discoverable information by improperly objecting to interrogatories and by providing
only partial responses to the interrogatories they answered). Defendants not only withheld
documents here, they deliberately altered documents that were produced
David v. Alphin, No. 3:07-cv-11, 2010 WL 1404722, at *7 (W.D.N.C. Mar.
30, 2010) (quoting Evon v. Law Offices of Sidney Mickell, No. CIVS090760JAMGGH, 2010 WL
455476, at *2 (E.D. Cal. Feb. 3, 2010)) (if you make unwarranted redactions, a court may well
award sanctions for non-disclosure of requested evidence up to and including default/dismissal
based on a seeming bad faith hiding of information).
Where, as here, a failure to produce discoverable documents is accompanied by willful
False testimony in a formal proceeding is intolerable. We must neither reward nor condone such a
flagrant affront to the truth-seeking function of adversary proceedings. [] In any proceeding,
whether judicial or administrative, deliberate falsehoods well may affect the dearest concerns of
the parties before a tribunal, United States v. Norris, 300 U.S. 564, 574, 57 S.Ct. 535, 539, 81
L.Ed. 808 (1937), and may put the factfinder and parties to the disadvantage, hindrance, and
delay of ultimately extracting the truth by cross examination, by extraneous investigation or other
collateral means. Ibid. Perjury should be severely sanctioned in appropriate cases.
ABF Freight Sys., Inc. v. N.L.R.B., 510 U.S. 317, 323, 114 S. Ct. 835, 839, 127 L. Ed. 2d 152 (1994). See also In re
Amtrak Sunset Limited' Train Crash in Bayou Canot, AL on Sept. 22, 1993, 136 F. Supp. 2d 1251, 1270 (S.D.
Ala.) affd sub nom. In re Amtrak, 29 F. Appx 575 (11th Cir. 2001) ([A] partys infusion of perjury into the
pretrial proceedings in an effort to gain an advantage over his opponent is recognized by the courts as a fraud on the
court warranting the dismissal of a plaintiffs case or the entry of a default judgment against a defendant.).

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conduct, severe sanctions are appropriate. Defendants have not only intentionally withheld
documents that [they] knew existed, but [they] also knowingly made blatant misrepresentations
to the district court about the existence of those documents. Chilcutt v. U.S., 4 F.3d 1313, 13221323 (5th Cir. 1993) (affirming the district courts sanction of deeming the liability facts of the
plaintiffs case established).

See also Malautea, 987 F.2d at 1542-44 (default judgment

sanction pursuant to Rule 37 was richly deserved where the defendant violated the district
courts discovery orders)18; Fair Housing of Marin v. Combs, 285 F.3d 899, 905 (9th Cir. 2002)
(upholding a default judgment sanction where Combs not only failed to produce the documents
as ordered, but also misrepresented to both counsel and to the district court that the documents
did not exist); Jackson v. Murphy, 468 F. Appx 616, 620 (7th Cir. 2012) (affirming dismissal
sanction where plaintiff both perjured himself and forged a document critical to the prosecution
of his case, and his fraud was uncovered only after a costly and contested hearing).
This Court also possesses the inherent power to sanction the Defendants for their
misconduct. The Supreme Court has recognized this inherent power is appropriately exercised
where a court finds that fraud has been practiced upon it, or that the very temple of justice has
been defiled, or when a party shows bad faith by delaying or disrupting the litigation or by
hampering enforcement of a court order. Chambers v. NASCO, Inc., 501 U.S. 32, 46, 111 S.
Ct. 2123, 2133, 115 L. Ed. 2d 27 (1991) (citations omitted). The key to unlocking the courts
inherent power is bad faith. Byrne v. Nezhat, 261 F.3d 1075, 1123 (11th Cir. 2001), abrogated
on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170

18

In Malateau, the Eleventh Circuit found that the prime example of the defendants resistance to
discovery was their deliberate cover up of damaging evidence regarding General Motors refusal to market the
Samurai in the United States. 987 F.2d at 1540.
he Malateau plaintiff ultimately
discovered the evidence, but only after repeated misrepresentations by the defendants. Id. at 1541. The court noted
that the defendants responses to discovery requests seeking this information were if not completely false, at least
misleading, and that the defendant deliberately withheld this information from the plaintiff. Id.

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L.Ed.2d 1012 (2008). A party . . . demonstrates bad faith by delaying or disrupting the
litigation or hampering enforcement of a court order. Barnes v. Dalton, 158 F.3d 1212, 1214
(11th Cir. 1998) (citation omitted).
False statements in affidavits, depositions, and sworn statements alone do not warrant a
finding of bad faith, but such statements can be evidence of bad faith if there is other evidence
in the record indicating that the statement[s] [were] made for a harassing or frivolous purpose.
Olivas v. A Little Havana Check Cash, Inc., 324 F. Appx 839, 842 (11th Cir. 2009) (quoting
Byrne, 261 F.3d at 1125).

Under these facts, severe sanctions pursuant to this Courts inherent

power are also warranted.19

are nothing less than contempt of court. See 18 U.S.C. 401(1) ([a]
court of the United States shall have power to punish by fine or imprisonment, at its discretion,
such contempt of its authority, and none other, as . . . [m]isbehavior of any person in its presence
or so near thereto as to obstruct the administration of justice); In re Terry, 128 U.S. 289, 303
(1888) (recognizing the historical and inherent authority of courts to punish for contempt which
is essential to the preservation of order in judicial proceedings, the enforcement of orders, and
consequently to the due administration of justice). It is well settled that [m]aking false

19

Zocaras v. Castro, 465 F.3d 479, 492 (11th Cir. 2006) (affirming the dismissal of an action as a sanction pursuant
to the courts inherent power and explaining that the partys misrepresentations raise concerns about the integrity
and credibility of the civil justice system that transcend the interests of the parties that appear before this Court, and
because this willful and deliberate behavior is without justification and in flagrant contempt of the judicial process,
this Court must impose the harsh penalty of dismissal); Martin v. Automobili Lamborghini Exclusive, Inc., 307
F.3d 1332, 1335-36 (11th Cir. 2002) (affirming dismissal of an action and the award of a defendants costs and
attorneys fees as sanctions pursuant to the district courts inherent power where the plaintiff misled the court and
engage[ed] in extensive discovery abuse to obstruct revelation of known falsities in the complaint).

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statements to a court constitutes misbehavior that is punishable as contempt, so long as the

other elements of the contempt statute are satisfied. In re Grand Jury Proceedings, 117 F.
Supp. 2d 6, 27-28 (D.D.C. 2000) (going on to describe the other elements as making a
knowingly false statement that is material to an issue to be determined by the court).

A contempt finding is therefore appropriate.

Drummond
respectfully submits that a default judgment is the only appropriate outcome, as history proves
any lesser sanction will not have any effect on the Defendants. Adolph Coors Co. v. Movement
Against Racism & the Klan, 777 F.2d 1538, 1543 (11th Cir. 1985) (upholding the district courts
sanction of a default judgment, citing defendants bad faith noncompliance and no reasonable
expectation that lesser sanctions under Rule 37 would have had the necessary effect.).
Furthermore, any lesser sanction will not sufficiently deter others from making a mockery of the
judicial process as Defendants have done here. See Zocaras, 465 F.3d at 484 (the harshest of
sanctions are warranted where the grounds are conduct that so violates the judicial process that
imposition of a harsh penalty is appropriate not only to reprimand the offender, but also to deter
future parties from trampling upon the integrity of the court); Videojet Sys. Intl, Inc. v. Eagle
Inks, Inc., 251 F.3d 170 (Fed. Cir. 2000) (upholding default judgment as sanction for discovery
misconduct, finding the integrity of the judicial process is as important to the public interest as

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allowing defendants to present allegedly meritorious defenses).

Drummond therefore requests that this Court hold Mr. Collingsworth in contempt of
court and further requests that this Court sanction the Defendants for their egregious behavior by
entering a default judgment against them on the issue of liability, allowing Drummond a trial by
jury on the issue of damages. Drummond further requests that it be awarded all of its costs and
attorneys fees incurred in this case (or, at the very least, those incurred after entry of this Courts
October 15, 2013 Order).
If this Court is not inclined to enter a default judgment against the Defendants,
Drummond alternatively requests the entry of the following sanctions:
!

Strike Defendants affirmative defenses;

Hold that Defendants have waived any claim of privilege or work-product

protection

Award Drummond its attorneys fees and costs incurred in litigating its original
motion for sanctions and this renewed motion for sanctions;

Award Drummond its attorneys fees and costs incurred in litigating Defendants
motions to quash

Order Defendants to pay the entirety of the Special Masters costs and fees
incurred to date in this case;

Fashion other appropriate sanctions against Defendants in any other manner the
Court deems appropriate.

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Respectfully submitted,
/s/ H. Thomas Wells, III
William Anthony Davis, III (ASB-5657-D65W)
H. Thomas Wells, III (ASB-4318-H62W)
Benjamin T. Presley (ASB-0136-I71P)
STARNES DAVIS FLORIE LLP
P.O. Box 59812
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099

/s/ Sara E. Kropf

Sara E. Kropf
LAW OFFICE OF SARA KROPF PLLC
1001 G St. NW, Suite 800
Washington, DC 20001
(202) 627-6900

Attorneys for Drummond Company, Inc.

CERTIFICATE OF SERVICE
I hereby certify that on February 2, 2015, I electronically filed the foregoing with the
Clerk of the Court using the CM/ECF system which will send notification of such filing to the
following:
Bradley J. Smith, Esq.
Eric D. Bonner, Esq.
Clark, Hair & Smith, P.C.
1000 Urban Center Drive
Suite 125
Birmingham, Alabama 35242
Christopher S. Niewoehner
Kendall Enyard
Savannah E. Marion
STEPTOE & JOHNSON, LLP
115 S. LaSalle Street
Suite 3100
Chicago, IL 60603
Tel: (312) 577-1240
Special Master T. Michael Brown, Esq.
Ms. Carly Miller, Esq.
Bradley Arant Boult Cummings, LLP
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama 35203
mbrown@babc.com

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camiller@babc.com
Kenneth McNeil
SUSMAN GODFREY
1000 Louisiana, Suite 5100
Houston, Texas 77002-5096
kmcneil@SusmanGodfrey.com
Robert Spotswood
William K. Paulk
SPOTSWOOD SANSOM & SANSBURY, LLC
One Federal Place
1819 Fifth Avenue North, Suite 1050
Birmingham, Alabama 35203
rks@spotswoodllc.com
wpaulk@spotswoodllc.com

/s/ H. Thomas Wells, III

H. Thomas Wells, III (ASB-4318-H62W)

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