By David Forster, LAW WEEK COLORADO
A federal appeals court has overturned a sanction against a Colorado attorney, but sent the case back to trial court with directions to try again.
A U.S. district court judge slapped attorney John Olsen and his client each with a $25,000 fine because of their conduct in a case.
Olsen, of Olsen & Brown, which has offices in Niwot and New York City, was representing Melissa Mellott in a discrimination lawsuit against her former employer, MSN Communications.
In its ruling Tuesday, the 10th Circuit Court of Appeals says Mellott’s “misconduct in the litigation is an extraordinary tale of breathtaking proportions. In a thorough order, the district court chronicled how the plaintiff falsified documents, lied about compensation she received from other companies after leaving the defendant’s employment (and used another person’s Social Security Number in connection with such work), and created a multi-layered, detailed fantasy to explain her failures to appear in court as ordered. Mr. Olsen backed his client up, even in the face of mounting and flagrant inconsistencies.”
Mellott dropped her case after MSN moved to dismiss her lawsuit. MSN then filed a motion for sanctions against Mellott and Olsen.
The trial court anchored its sanction against Olsen under Rule 11 of the Federal Rules of Civil Procedure. The appeals court disagreed.
“Although we sympathize with the district court’s frustration with Mr. Olsen’s conduct,” the appeals court wrote, Rule 11 was the wrong avenue for imposing sanctions, in part because it can’t be used after a case is dismissed.
The appeals court reviewed other options, suggesting the trial court may want to consider sanctioning Olsen under what’s called the court’s inherent power, which can “take account of the court’s inconvenience and the waste of judicial resources.”