Cooter & Gell v. Hartmarx Corporation

PETITIONER: Cooter & Gell
RESPONDENT: Hartmarx Corporation
LOCATION: Oregon Department of Human Resources

DOCKET NO.: 89-275
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 496 US 384 (1990)
ARGUED: Feb 20, 1990
DECIDED: Jun 11, 1990

Richard Joseph Favretto - on behalf of the Respondent
Stephen Allan Saltzburg - on behalf of the Petitioner

Facts of the case


Media for Cooter & Gell v. Hartmarx Corporation

Audio Transcription for Oral Argument - February 20, 1990 in Cooter & Gell v. Hartmarx Corporation

William H. Rehnquist:

We'll hear argument next in No. 89-275, Cooter & Gell v. Hartmarx Corporation.

Mr. Saltzburg, you may proceed whenever you're ready.

Stephen Allan Saltzburg:

Mr. Chief Justice, and may it please the Court:

Unlike the first case before you this morning, this one does not involve the Constitution.

It involves rules of procedure for civil cases in the United States district courts and the rules governing appeals in the United States courts of appeals.

And lawyers arguing about such rules face the unique task of arguing to you about what you probably meant, must have meant, when you considered rules submitted to you by the advisory committee, the standing committee, the judicial conference, and you approved them for submission to the Congress and they were in fact effective upon the completion of the rules enabling act process.

Although not rising to the level of constitutional issues, we submit that the three questions before you this morning may have an enormous impact on the availability of legal services to clients throughout this country who bring to lawyers every day cases and ask them to carry those cases to court and the lawyers are confronted with the responsibility of doing justice to the clients and meeting their duties to the court, particularly duties imposed now by the current state of Federal Rules of Civil Procedure 11.

The briefs of the parties in this case, as well as the briefs of the amici curiae, have addressed the facts at some length and I choose not to do that this morning unless the Court wishes.

I would like to spend a moment or two on the facts because they lay the groundwork for the three issues that I would like to address.

Briefly, the facts are as follows.

The litigation that resulted in sanctions began as a suit on a contract brought by a subsidiary of the Hartmarx Company against a client of Petitioner... Petitioner's law firm Cooter & Gell.

This suit was met with a counterclaim, a Robinson-Patman counterclaim, and thus began the litigation that ended up in this Court with the sanctions issue.

As the investigation into the counterclaim took place and facts were gathered, Petitioner discovered what it believed to be serious antitrust violations, broad Robinson-Patman violations in a number of cities around the United States.

And allegations by its client, a clothing company, distributor of men's clothing that had done business at various locations since 1969 in Washington, D.C., that Hartmarx Company and two of its principle subsidiaries had engaged not only in Robinson-Patman violations, but it engaged in price fixing that was supported by an exclusive dealer arrangement.

William H. Rehnquist:

Is it clear that both the attorneys and the client here brought forth these allegations?

Stephen Allan Saltzburg:

Mr. Chief Justice, what's clear is... is the following.

That the Petitioner represented to the district court that its investigation was based upon allegations made by its client.

And if I might elaborate, the... the... on that little bit because the record in this case is not the record that I would like to have before you, and I--

William H. Rehnquist:

But I take it it is the record you're going to deal with.

Stephen Allan Saltzburg:

--It is the record we must deal with and... and the reason for that is Rule 11 had just taken effect in its revised form in August of 1983.

The complaint in this case, the class action complaint which gave rise to sanctions, was filed barely three months thereafter and this was one of the early sanctions cases.

When the complaint was filed in this case, it was met with a Rule 12(b)(6) motion to dismiss and almost immediately thereafter a request for sanctions.

Almost immediately after the request for sanctions was filed, Mr. Chief Justice... gets to the point about who made the allegations... request was made by the defendant in the case to depose one of the principals, the leading shareholder and the president of the client company.

Petitioner opposed the deposition at that time, which was focused only on Rule 11, because the district court hadn't addressed the 12(b)(6) motion, hadn't considered the merits, and enormous clients... enormous questions of attorney/client privilege and the difficulty of dealing with privilege questions and Rule 11 issues at a time when this case was in its infancy and there was the previously filed Robinson-Patman claim pending.

And they opposed the deposition and the district court ordered that the deposition take place.

And it did.

During the course of that deposition, which is in the Joint Appendix before this Court, this Court can see that counsel essentially instructed its... the principal of its client not to answer any questions with respect to what the client said to the law firm.

Instead, Petitioner offered to make available any member or the law firm to explain the origins of the complaint, the information that was relied upon, anything else, without waiving the attorney/client privilege.

Well, if I might jump ahead in the law for a moment, if we had the benefit of all the cases, if we had... had had in 1984... in 1983 the benefit of all the cases decided in the next four or five years, one could say, well, didn't they know that procedures would be developed whereby in camera you could go before the district court and make certain representations that wouldn't be disclosed, that there wouldn't be a waiver of privilege.

And there are ways to deal with attorney/client privilege problems that might have enabled the deposition to take place, information to be provided to the judge, without waiver of the privilege and the answer is yes.