US appeal court upholds sanctions against Cleary
The US Court of Appeals for the Second Circuit has affirmed sanctions against Cleary Gottlieb Steen & Hamilton for allegedly trying to convince a non-party witness not to attend a deposition, reports the New York Law Journal.The circuit's summary order came less than a week after Cleary appeared before the appeals court to argue for the reversal of the sanctions imposed last August by Southern District of New York Judge Loretta Preska.However, the panel of judges ruled that nothing in the record indicated Preska had ruled incorrectly.
July 02, 2008 at 11:26 AM
3 minute read
The US Court of Appeals for the Second Circuit has affirmed sanctions against Cleary Gottlieb Steen & Hamilton for allegedly trying to convince a non-party witness not to attend a deposition, reports the New York Law Journal.
The circuit's summary order came less than a week after Cleary appeared before the appeals court to argue for the reversal of the sanctions imposed last August by Southern District of New York Judge Loretta Preska.
However, the panel of judges ruled that nothing in the record indicated Preska had ruled incorrectly.
The sanctions arose in a case in which Cleary had represented the Republic of Congo in litigation with Kensington International, an investment fund targeting the nation's sovereign debt.
With the aim of locating Congolese assets, Kensington, represented by Dechert, had sought to depose Medard Mbemba, a French-Congolese businessman who had formerly been a close friend of Congolese president Denis Sassou Nguesso. When Cleary lawyers proved unable to attend the Washington DC deposition and Kensington declined to reschedule, Cleary partner and executive committee member Jean-Pierre Vignaud reached Mbemba directly.
Mbemba later testified that Vignaud appealed to him as a "Congolese patriot" and told him his deposition testimony would only benefit a "vulture fund" out to hurt Congo.
In granting Kensington's motion for sanctions, Preska ruled that Vignaud had clearly been chosen because, although the Paris-based lawyer was not directly involved in the case at hand, he was well known in Congo political circles and could best "make a convincing argument that the deposition was 'us vs them' and force Mbemba to pick a side."
She said Cleary's behaviour amounted to intimidation. The law firm "has shown a willingness to operate in the murky area between zealous advocacy and improper conduct, and here it crossed the line," Preska wrote.
Though Preska did not impose any monetary sanctions, she ordered Cleary to pay Kensington's costs and legal fees in bringing the sanctions motion. She also ordered the firm to circulate a formal reprimand to all of its 950 lawyers.
Cleary's lawyer, Roy Reardon of Simpson Thacher & Bartlett, denied that Vignaud appealed to Mbemba's patriotism and said Cleary had merely encouraged the witness to retain counsel and permissibly explained their side of the case. He said Kensington had brought the sanctions motion for strategic reasons, hoping to embarrass and impugn the integrity of the law firm that is its frequent foe in sovereign debt disputes.
Kensington was represented by Kevin Reed of Quinn Emanuel Urquhart Oliver & Hedges.
In a statement, Cleary expressed disappointment with the appeals court's ruling. "We continue to believe that all of our lawyers acted properly and professionally and regret that the Second Circuit did not reverse the decision for the reasons cited in our briefs," the firm said.
The New York Law Journal is a US sister title of Legal Week. Click here for the full story.
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