Author: Preeya Sonia
Case Citation: Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017).
Employee/Personnel/Employer Implicated: Company
eLesson Learned: Defendant caused discovery in this case to last several years by withholding testing information for its product and giving slow and unrevealing responses to Plaintiffs’ repeated requests for information. However, due to Defendant revealing this information in another case, Plaintiffs were made aware of the existence of this testing information. Defendants should not have withheld this information and caused discovery to span over several years. Defendants should have turned over the information requested by Plaintiffs.
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In this case, Plaintiffs repeatedly requested internal test results for the G159 tire made by Defendant. Defendant’s responses were slow and when it did respond, gave generic, unrevealing information. Defendant withheld the rest results for its G159 tire, causing discovery to last several years. Finally, the Plaintiffs, exhausted with their efforts, settled the case. However, months after the settlement, Plaintiffs’ lawyer came across an article about another case in which the Defendant revealed the very information that Plaintiffs had sought for years. The test results revealed that the G159 tire got unusually hot at speeds between 55 and 65 mph. This information would have been significant in Plaintiffs’ lawsuit claiming the tires caused their motorhome to flip over on the highway.

After Defendant conceded to withholding this information, the District Court exercised its inherent power to sanction litigation misconduct. The District Court calculated that Plaintiffs had spent $2.7 million in legal fees and costs since the first time Defendant acted with bad faith discovery behavior. The court stated that because Defendant’s behavior rose to “truly egregious level,” it could award Plaintiffs with all the attorneys’ fees incurred. The Ninth Circuit affirmed.

The Supreme Court disagreed. It noted that federal courts possess inherent powers, one of them being to sanction a bad faith party to legal fees and costs to the other side. However, this sanction must be compensatory, rather than punitive. Thus, the fee can only redress the loss sustained, and cannot incur additional punishment for bad behavior. The court can only shift the amount of attorneys’ fees incurred because of the misconduct at issue.

Here, the District Court awarded the Plaintiffs with an amount that extended beyond the legal fees and costs incurred because of Defendant’s withholding of the internal test results of the G159. The District Court went beyond its inherent authority to sanction for misconduct in discovery and awarded Plaintiffs with an amount that included fees incurred in developing claims against other defendants and proving their own medical damages. Thus, the Supreme Court reversed and remanded the case.

Preeya Sonia is a third-year law student at Seton Hall University School of Law and resides in Newark, NJ.

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