A single error in the date and manner in which a plaintiff purchased avocado oil led to extreme sanctions against Plaintiff’s counsel in a consumer class action case.
Last week, the United States District Court for the Central District of California in Golikov v. Walmart Inc. found that Class counsel acted in subjective bad faith by recklessly raising a frivolous argument and unreasonably multiplying proceedings after failing to correct a single erroneous allegation.
In Golikov, Plaintiff’s Complaint alleged that the plaintiff purchased a product from a brick-and-mortar store instead of truthfully disclosing that the purchase was made on the defendant’s website. The Complaint did not reveal that to make a website purchase, Plaintiff was required to enter into a binding arbitration agreement and waive the right to pursue a class action.
The Court did not agree that Plaintiff’s counsel’s efforts to point to subordinates for the “error” amounted to inadvertence, holding “recklessness can be established when a leading attorney fails to check a subordinate’s work and independently verify the facts and law.” Plaintiff’s counsel also argued that the error was inconsequential because Plaintiff made both in-store and online purchases. The Court was not persuaded stating “Plaintiff’s in-store purchases still do not change the fact that the Complaint and the FAC make a claim that Plaintiff purchased a bottle ... on November 14, 2021 from a … store, when she actually did not do so. Accordingly, the action was based on an argument advanced without factual merit.” (emphasis added.)
Moreover, the Court also concluded that Plaintiff’s counsel failed to correct the error and continued to advance their frivolous position in opposition to both a Motion to Compel Arbitration and a Motion to Decertify the Class, unreasonably multiplying proceedings in violation of the duty to “correct or withdraw litigation positions after it becomes obvious that they are meritless.” In short order: a class was certified, discovery undertaken, the Defendant’s Motion to Compel Arbitration and Stay Proceedings was granted, and the Motion to Decertify the Class and the Motion for Sanctions Pursuant to 28 USC Section 1927 were briefed. The Court ordered Defendants to brief the appropriate attorney’s fees as sanctions for Plaintiff’s counsel’s conduct. Defendants will likely seek significant attorney’s fees as sanctions due to the volume of work that the frivolous allegation created.
Lessons For All
“Inadvertence” is not a free pass when an error is determined to have been made in bad faith and recklessly. All counsel must take caution to review and verify the work of their subordinates. Further, in the Federal Courts, should counsel learn that an allegation of fact is not accurate, or an argument or position is no longer supported or justified, they must work to correct the error and minimize legal proceedings. Rectifying the damages caused by false pleadings is a costly endeavor and should be strategized with care.
Feel free to contact Dan M. Forman or your favorite CDF attorney to discuss strategies to defeat unwarranted claims.
