Ausherman v Bank of America Corp.
212 F. Supp. 2d 435 (2002)

  • Ausherman and a bunch of other people all sued Bank of America and other banks for fair credit violations.
    • Basically, the complaint was that an unnamed employee of Bank of America (John Doe #1) and another person (John Doe #2) fraudulently obtained credit data about the plaintiffs and gave it to unauthorized people.
    • Ausherman and the rest of the plaintiffs were represented by an attorney named Sweetman.
  • Bank of America was unable to determine which of their employees was accused of stealing information. They sought to discover the factual basis of the claim from Sweetman.
    • Sweetman refused to supply the information, in violation of Federal Rules of Civil Procedure 26(b)(1).
    • Turns out, Ausherman and the other plaintiffs hadn’t known that their information may have been stolen. It was Sweetman who approached them and told them the facts and that they should sue.
    • Sweetman told Bank of America that a former client of his told him that there was an identity theft ring being run out of Bank of America, and this former client provided the names of people whose credit reports had been stolen. While Sweetman claimed that he did not know the name of John Doe #3 (the ringleader), but that the former client would provide the name to him once Bank of America agreed to settle.
  • The judge stepped in and deposed Sweetman himself.
    • Sweetman testified that he did not know who John Doe #3 was and did not have any method of finding out.
      • Basically he lied because he wanted to get a big settlement.
  • Bank of America made a motion to sanction Sweetman.
  • The Trial Court sanctioned Sweetman for failing to provide discovery information and for violating Rule 4.1.
    • Rule 4.1 says that attorneys cannot make false statements of law or material fact to third parties (aka Bank of America).
      • Sweetman unsuccessfully argued that his comments about John Doe #3 were made in the scope of a settlement negotiation and were therefore not covered by Rule 4.1. However, the Trial Court found that settlement negotiations were within the scope of Rule 4.1.
    • The Trial Court referred the matter to the Disciplinary Committee to take further action against Sweetman.