Judge Rules that Quiznos Used 'High-Handed' Interference of Legal Process

…a federal judge ruled during the ongoing trial between Quiznos and over three dozen franchise owners that Quiznos had abused the discovery process. It was found that the attorneys representing the firm had redacted documents and even tried to hinder the release of records without the permission of the court.

http://www.bluemaumau.org
April 13, 2009

Judge Rules that Quiznos Used 'High-Handed' Interference of Legal Process
Don Sniegowski

DENVER—On April 1 a federal judge ruled during the ongoing trial between Quiznos and over three dozen franchise owners that Quiznos had abused the discovery process. It was found that the attorneys representing the firm had redacted documents and even tried to hinder the release of records without the permission of the court.

The franchisees in the case are claiming that the company deliberately overcharges for food, equipment and supplies and receives hidden kickbacks from vendors, despite a franchise agreement that bans such activity. The lead attorneys for the franchise owners are Joseph S. Goode of Kravit Hovel & Krawczyk, SC and Justin Klein of Marks & Klein, LLP.

On the other side, the franchisor is represented by its lead lawyers David LaSpaluto and Len MacPhee of Perkins Coie, and Ric Cohen of Cheng Cohen LLC.

During the discovery process, which occurs early in a case, the attorneys for each side have the opportunity and right to gather documents and information concerning their case from their opponents. The discovery process is the underpinning of the legal adversary system and prevents the parties to the case from being surprised by the other side's information during trial.

Courts treat discovery abuse seriously.

Chicago-based Harris Bank was supposed to release Quiznos' account statements to the franchisees' attorneys. However, Quiznos' attorneys took it upon themselves to alter documents that they did not want their opponents to see. Worse yet, Quiznos' attorneys chose to disregard the judicial process by telling the bank not to release certain original documents. They had the bank provide the franchisee attorneys with a “privilege log” but neglected to list their redactions and deletions.

Colorado District Court Judge Kathleen Tafoya was not pleased. She ordered (see attached pdf file, page 9) that the franchisee legal fees and costs associated with bringing the motion be paid by Quiznos. “This court finds that defendants [Quiznos] violated their agreement with the plaintiffs [franchisees] and the agreement with Harris Bank with respect to what they would do with the subpoenaed documents and that they acted in a high-handed, imperious manner in interference with the discovery process,” the judge stated. “Quiznos' actions were not supported by law,” she emphatically continued.

New York franchisee attorney Paul Steinberg, who is not involved in this case, observes, “What happened here is the attorneys for Quiznos were publicly whacked for going behind the court's back in abusing the discovery process. Long after this case, these attorneys will have a long-term reputation problem in the Denver court. When an attorney's ethics and credibility are called into question, it affects their ability to help their client. Whether the judge is right or wrong isn't the issue. The issue is that such behavior by Quiznos' attorneys ultimately is not good for the company's position.”

Franchisee attorney Joe Goode declares, “I would say that the Harris Bank situation is demonstrative of Quiznos' approach.” He explains, “We have had to fight Quiznos tooth and nail for information. They have been less than forthcoming, and we have had to file motions more than we should to get information.”

Blue MauMau contacted Quiznos attorney David LaSpaluto, a Phoenix-based associate with the law firm Perkins Coie. It was Mr. LaSpaluto that Harris Bank's attorney identified in the court order (pdf, pg. 5) as "removing or redacting any documents from the production which the Bank made." When asked about Judge Tofoya's "high-handed" comment and ruling against Quiznos, LaSpaluto answered, “I don't comment on anything like that, sorry,” and hung up.

http://bluemaumau.org/7163/judge_rules_quiznos_used_lsquohighhandedrsquo_interference_legal_process


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