The U.S. Court of Appeals for the Second Circuit upheld a district court’s decision to terminate a case and impose attorney fees and costs as sanctions for the plaintiff’s fabrication and spoliation of evidence, where the district court made a factual determination that the plaintiff had acted in bad faith. The appeals court vacated the lower court’s judgment imposing sanctions on the plaintiff’s counsel, finding that the trial court applied the incorrect legal standard when it did not make a finding of bad faith on the part of the counsel before imposing the sanction.

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In Rossbach v. Montefiore Medical Center, No. 21-2084, 2023 WL 5519148 (2d Cir. Aug. 28, 2023), the plaintiff sued her previous employer for sexual harassment and retaliatory discharge. She alleged that her former supervisor sexually harassed her and that her employer fired her when she objected to his conduct. The plaintiff’s principal evidence of her sexual harassment claims was an image of a series of three text messages that plaintiff alleged her supervisor sent to her. The plaintiff testified at deposition that she received the messages on her iPhone 5 but that, due to screen cracks and “ink bleed” on that phone, she was unable to take a screenshot, and instead had to take a photo of the screen using her new phone, an iPhone X. The defendants later engaged a forensic expert who concluded the document was a forgery based on inconsistencies in the plaintiff’s testimony as well as nonconformity with iPhone 5 text message characteristics.

After briefing and an evidentiary hearing, the district court granted the defendants’ motion to dismiss and motion for sanctions. The sanctions were meant to address the plaintiff’s fabricated evidence and for spoliation of evidence based on the plaintiff’s failure to provide the passcode to her iPhone 5, and included an award of attorneys’ fees and costs, in addition to the dismissal of the case. The district court also imposed sanctions of attorneys’ fees and costs against the plaintiff’s counsel.

On appeal, the Second Circuit rejected the plaintiff’s argument that the district court abused its discretion by failing to consider lesser sanctions prior to dismissing the case, finding that the court expressly considered lesser sanctions but found that they were insufficient to remedy the impact of the plaintiff’s misconduct. The Court also rejected the plaintiff’s argument that the evidence did not support the district court’s conclusion that she acted in bad faith, finding that the district court had resolved the factual dispute between the parties regarding the plaintiff’s conduct and had found that she acted in bad faith when she fabricated evidence and attempted to mislead the district court. The appeals court did agree with plaintiff’s counsel that the district court erred in the imposition of sanctions against them; the district court incorrectly applied a lesser standard of negligence or recklessness, when an explicit finding of bad faith was required to sanction an attorney’s misconduct in his or her representational capacity. The Court of

On appeal, the Second Circuit rejected the plaintiff’s argument that the district court abused its discretion by failing to consider lesser sanctions prior to dismissing the case, finding that the court expressly considered lesser sanctions but found that they were insufficient to remedy the impact of the plaintiff’s misconduct. The Court also rejected the plaintiff’s argument that the evidence did not support the district court’s conclusion that she acted in bad faith, finding that the district court had resolved the factual dispute between the parties regarding the plaintiff’s conduct and had found that she acted in bad faith when she fabricated evidence and attempted to mislead the district court. The appeals court did agree with plaintiff’s counsel that the district court erred in the imposition of sanctions against them; the district court incorrectly applied a lesser standard of negligence or recklessness, when an explicit finding of bad faith was required to sanction an attorney’s misconduct in his or her representational capacity. 

The Court of Appeals vacated and remanded the sanction against plaintiff’s counsel for application of the correct legal standard.