United States v. Schaffer Equipment
11 F.3d 450 (4th Cir. 1993)
The EPA was suing under CERCLA
to recover the costs ($5M) of hazardous waste cleanup from a company that
was dumping hazardous PCBs into the ground. (Schaffer).
The on-site coordinator of
the CERCLA cleanup site (Caron) had misrepresented his credentials.
This was material because
Caron was responsible for making the administrative record that was used
to determine liability.
Nobody argued that Caron's
analysis was wrong, just that he didn't have the academic degrees he
had claimed to have had.
The EPA failed to disclose
this fact to Schaffer or the Court until after discovery and the deadline
for filing summary judgment motions.
EPA attorneys (Snyder and
Hutchins) were aware of Caron's deception, but continued to press the
cases Caron was involved in.
They decided to not
disclose that they doubted Caron's credentials, and just not rely on
Caron's analysis in further proceedings.
The Trial Court dismissed the
case. The EPA appealed.
The Trial Court found that
the EPA had violated Rule 3.3.
They found that there was an effort by an important EPA witness to cover
up a long history of fraud. The EPA's attorneys compounded the problem
by obstructing Shaffer's efforts to uncover Caron's perjury and in
failing themselves to reveal it. In addition, EPA made a motion for
summary judgment based on Caron's tainted analysis.
Rule 3.3 says that a lawyer must disclose to the
court all facts that would otherwise assist a fraudulent act.
The Trial Court found that
Snyder and Hutchins had acted egregiously because they both knew about
Caron's deception and obstructed discovery requests which could have
revealed the deception to Schaffer.
EPA argued that Shaffer had
failed to establish all three elements necessary to show a Rule 3.3 violation:
That the attorneys had
actual knowledge of the misrepresentation.
That Caron's credentials
were a material fact to the case.
That the attorneys' conduct
assisted EPA in a fraudulent act.
The Federal Appellate Court
affirmed the fact that the EPA had violated Rule 3.3, but reversed the Trial Court's decision to
dismiss the case.
The Appellate Court remanded
the case back to the Trial Court to determine a sanction short of
The Appellate Court noted
that dismissal is a legitimate sanction for a Rule 3.3 violation.
However, in this case
dismissal would provide relief beyond the harm caused by the violation
and would frustrate resolution on the merits of the case.
The Appellate Court found
that while all attorneys have a duty of confidentiality to their client
and must advocate their client's position vigorously, they also have a
duty to assure the integrity of the process and guard against the
corruption that justice will be dispensed on an act of deceit.
The EPA's main argument was
that Caron's credentials were not material to the case. But the Court
found that evidence showed that Snyder admitted that the fact was
material in internal memos.
They also violated Rule
3.4(a), by obstructing Schaffers'
access to information via discovery.