I. BACKGROUND

Simply put, Plaintiff seeks the imposition of sanctions and a finding of contempt against defense counsel, Kelley Drye, for violating the Protective Order Governing the Production of Discovery Material (“Protective Order,” Doc. 44) entered on July 10, 2017.[1] It is without dispute that Kelley Drye violated the Protective Order by improperly disclosing documents designated by Plaintiff as “Confidential” and “Highly Confidential.” It is also undisputed that certain employees of Defendant “used information derived from the confidential litigation material for reasons other than their responsibilities in connection with this case.” (Doc. 188 at 1). The issue before the Court is whether the R&R, which proposes an award of attorneys’ fees and costs as a sanction, but not a finding of contempt and disqualification, should be adopted.

Plaintiff agrees with most of the Magistrate Judge's findings of fact and concurs with the recommendation to award it attorneys’ fees and costs. However, Plaintiff does not believe the recommended relief goes far enough to prevent future violations, and takes exception to the following: (1) the failure to address Kelley Drye's disclosure of the highly confidential April 9, 2018 production of call detail records to Defendant as a continued violation of the Protective Order;[2] (2) a finding that Kelley Drye eventually confessed; (3) concluding that Kelley Drye currently complies with the Protective Order; (4) categorizing the Motion as mudslinging;[3] (5) finding that Kelley Drye is unlikely to repeat its conduct; and (6) concluding that Kelley Drye did not violate the Florida Rules of Professional Conduct. (Doc. 611 at 2–14). Thus, Plaintiff requests that this Court: (1) disqualify Kelley Drye from the case; (2) hold Kelley Drye in civil contempt; and (3) refer Kelley Drye to the United States Attorney's Office to decide whether to file criminal contempt charges. (Id. at 14). Kelley Drye does not object to the R&R and argues Plaintiff's Objections constitute “unjustified demands for disproportionate punishment[.]” (Doc. 612 at 2).

II. LEGAL STANDARD

*2 When a party objects to a magistrate judge's findings, the district court must “make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1). In doing so, the court must consider the record and factual issues independent of the magistrate judge's report, as de novo review is essential to the constitutionality of § 636. Ernest S. ex rel. Jeffrey S. v. State Bd. of Educ., 896 F.2d 507, 512–13 (11th Cir. 1990). The court will not consider “[f]rivolous, conclusive, or general objections[.]” Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1988) (citation omitted). It “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1).

III. DISCUSSION

At the outset, the undersigned recognizes the contentiousness with which this action has been litigated and appreciates the long history the Magistrate Judge shares with the parties. The undersigned does not share the same history, having been newly assigned the case. Thus, it is through this lens, unclouded by prior behavior, that counsels’ conduct is judged in this case.

After an independent de novo review of the record, including the Protective Order, the R&R, Plaintiff's Objections, and Defendant's Response in Opposition, the Court accepts the following factual findings determined by the Magistrate:

(Doc. 609 at 9–14) (emphasis added).

As Judge Smith noted,

(Id. at 20–21) (emphasis added). These facts establish Kelley Drye:

(Id. at 14–15).

The Court also accepts the Magistrate Judge's legal conclusion that the facts support a finding of contempt, as well as his conclusion that the conduct is sufficiently redressable by sanctions. (Id. at 34). However, for the following reasons, the Court does not believe the recommended sanctions go far enough to curb the offending conduct.

Kelley Drye's attorneys, Ms. McElmury, a junior associate, Mr. Kelly, a partner, and Ms. James, a senior associate, are not members of the Florida Bar, nor are they licensed to practice in the United States District Court for the Middle District of Florida. They appeared in this case after having been admitted pro hac vice. (See Doc. 20 at 1). As such, they are “deemed to be familiar with and governed by the Code of Professional Responsibility and other ethical limitations or requirements then governing the professional behavior of members of The Florida Bar.” (Id. at 2) (emphasis added) (citing M.D. Fla. R. 2.02(c)). At a minimum, the failure to adhere to these ethical standards would support a contempt sanction. Although this Court chooses to sanction Kelley Drye—and the offending attorneys—without such a finding, it will nonetheless address Plaintiff's exceptions to the R&R.

A. The Confession

The parties do not dispute that Kelley Drye ultimately confessed to its wrongdoing, albeit reluctantly and belatedly. Plaintiff argues, instead, that the confession consisted of “half-truths and carefully worded constructs geared toward ... ‘avoid[ing] the sword entirely.’ ” (Doc. 611 at 5) (citation omitted). While Plaintiff may be engaging in a game of semantics, the Court does not necessarily disagree with its characterization. Regardless, the confession does not absolve Kelley Drye of the consequences of its misconduct.[5]

The May 7, 2018 e-mail—that no less than three attorneys from Kelley Drye drafted and sent to Plaintiff—was at best, misleading, and at worse, false. The following portion of the e-mail is particularly troubling: “If Local Access would identify what information within its CDRs it considers ‘Highly Confidential,’ we may be willing to consider stripping that information from the CDRs prior to transmitting them to Peerless for review.” (Doc. 229-11 at 2) (emphasis added). This assertion is especially concerning, given that counsel was well-aware when it drafted and sent the e-mail that the information had already been transmitted to Peerless. Quite simply, this is dishonest and as Plaintiff aptly asserts, “contains a misrepresentation by omission.” (Doc. 611 at 20). This material fact is not lost on the Court. And counsels’ failed attempt to cover their proverbial rear-ends cannot be countenanced. As the Magistrate Judge found, Kelley Drye sent the e-mail to mitigate, not investigate. (Doc. 609 at 24). Such conduct is unprofessional, unethical, and unbecoming of attorneys practicing not only in federal court, but any court.

*7 The Court does not suffer fools lightly. Kelley Drye's attempt to minimize its actions by shifting the blame onto Plaintiff for improperly designating litigation material[6] is unavailing, lacks penitence, and smacks of desperation. (See Doc. 264 at 5–9, 14–15). To the point, the process to determine confidentiality disputes was agreed to by the parties and painstakingly detailed in the Protective Order. (See Doc. 44, ¶ 11). If Kelley Drye had an issue with the designations, there was a time to bring that matter to the Court's attention. That time has long since lapsed.

B. Compliance with the Protective Order

The Court now turns to issues involving Kelley Drye's compliance with the Protective Order.

As it relates to Confidential Litigation Material, the Protective Order directs:

(Id. ¶ 13). And when discussing the treatment of Highly Confidential Litigation Material, the Protective Order mandates:

(Id. ¶ 16).

The parties do not dispute that the Protective Order is valid and lawful. (See Doc. 230 at 9; Doc. 265 at 13). Kelley Drye also admits the Protective Order is clear and unambiguous about the parties’ duties when disclosing Confidential and Highly Confidential Litigation Material. (Doc. 265 at 13). In addition, Kelley Drye concedes Defendant used Confidential Litigation Material improperly for commercial uses, violating the Protective Order. The only remaining question is whether Kelley Drye could comply with the Protective Order, and to this question Kelley Drye answers in the affirmative. (Id.).

The Magistrate Judge concluded that Kelley Drye is currently in compliance with the Protective Order. However, this Court is not satisfied that every person authorized to receive Confidential or Highly Confidential Litigation Materials under the Protective Order has: (1) seen the Protective Order; and (2) signed written acknowledgements to abide by its terms. Indeed, it remains unclear whether Kelley Drye made all reasonable efforts to comply, as the record is devoid of any evidence that a single Peerless employee signed an acknowledgment of the Protective Order. (See Doc. 567 at 162:4–164:4). And while this Court agrees with the Magistrate Judge that failing to do so may only constitute negligence by Kelley Drye, it still violates the Protective Order.

*8 On the other hand, Kelley Drye's failure to immediately notify Local Access of the unauthorized disclosure was not the result of negligence, but rather constituted willful misconduct. When an unauthorized disclosure of Confidential or Highly Confidential litigation material occurs, the Protective Order directs:

(Doc. 44, ¶ 18) (emphasis added).

At the very latest, on April 12, 2018, Kelley Drye knew it had violated the Protective Order when it received an inquiry from Local Access. Yet, inexplicably, Kelley Drye failed to immediately disclose the unauthorized breach, and instead waited over a month to disclose its actions to Local Access. In doing so, Kelley Drye failed to make every reasonable effort to prevent further disclosure of the Confidential and Highly Confidential material by Peerless. As Judge Smith remarked:

(Doc. 609 at 22).

C. Likelihood of Repetitive Conduct

Plaintiff objects to the Magistrate Judge's conclusion that Kelley Drye is unlikely to repeat its conduct. This objection is premised on Plaintiff's belief that requiring Kelley Drye to pay attorneys’ fees and costs as its only sanction for violating the Protective Order will do little to deter the offending conduct. (See Doc. 611 at 13–14). While this Court agrees that the recommended sanction falls short, it cannot conclude that Judge Smith was wrong when he stated, “given the uncomfortable gauntlet it just ran, I trust [Kelley Drye] has no wish to violate the Protective Order again.” (Doc. 609 at 30).

D. Florida Rules of Professional Conduct

*9 “A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system, and a public citizen having special responsibility for the quality of justice.” R. Regulating Fla. Bar 4. Local Rule 2.02(c) requires all attorneys practicing in the Middle District of Florida to follow the ethical limitations and requirements governing the behavior of members of The Florida Bar. This means attorneys practicing before the Court are bound by the Florida Rules of Professional Conduct.

Plaintiff argues that Kelley Drye violated the following Rules Regulating the Florida Bar: (1) Rule 4-3.3, requiring all attorneys, at all times, to demonstrate candor toward the tribunal; (2) Rule 4-3.4, requiring attorneys to demonstrate fairness to the opposing party and counsel, and in particular Rule 4-3.4(c), prohibiting a lawyer from “knowingly disobey[ing] an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists”; (3) Rule 4-8.4(d), prohibiting a lawyer from “engag[ing] in conduct in connection with the practice of law that is prejudicial to the administration of justice”; and (4) Rule 4-4.1, prohibiting a lawyer, while representing a client, from knowingly “(a) mak[ing] a false statement of material fact or law to a third person; or (b) fail[ing] to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by rule 4-1.6.” The Magistrate Judge concluded there was insufficient proof to establish a violation of the Rules:

(Doc. 609 at 34). While the Magistrate Judge was understandably reluctant to find a violation of the rules for professional conduct he concluded was negligent, he failed to consider Kelley Drye's intentional conduct. In particular, the Magistrate Judge failed to determine whether Kelley Drye's willful conduct, namely, drafting and sending the May 7, 2018 e-mail to “cover up” its own wrongdoing, violated the Rules of Professional Conduct. There can be little question that it did. As the Magistrate Judge pointed out:

(Id. at 24) (emphasis added).

Accordingly, the Court finds that Kelley Drye violated the Rules by engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. See generally R. Regulating Fla. Bar 4-3.4, 4-4.1, 4-4.4, and 4-8.4. Further, the conduct was prejudicial to the administration of justice, given the several months long delay required to investigate and litigate this issue.

E. Appropriate Sanctions

*10 Having addressed Local Access's objections to the Magistrate Judge's specific factual findings, the Court will now turn its attention to the issue of sanctions. Courts have the authority to protect the administration of justice and to “impose reasonable and appropriate sanctions upon errant lawyers practicing before it.” Kleiner v. First Nat'l Bank of Atlanta, 751 F.2d 1193, 1209 (11th Cir. 1985) (citations omitted). “Disobedience of a court order unequivocally merits punishment save in instances in which compliance would necessarily result in an irrevocable and permanent surrender of a constitutional right.” Id. at 1208 (citations and internal quotation marks omitted).

Local Access seeks these sanctions against Kelley Drye: (1) a finding of civil contempt; (2) referral to the United States Attorney's Office for criminal contempt; (3) and disqualification. Each will be addressed in turn.

Courts possess the inherent power to hold a party in contempt if it violates court orders. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980). To prove civil contempt, the evidence must show: “(1) the allegedly violated order was valid and lawful; (2) the order was clear and unambiguous; and (3) the alleged violator had the ability to comply with the order.” Riccard v. Prudential Ins. Co., 307 F.3d 1277, 1296 (11th Cir. 2002) (citation omitted). The violation must be clear and convincing, as it is a “willful disregard of the authority of the court[.]” Id. (citation omitted). A civil contempt sanction is “remedial, and for the benefit of the complainant. But if it is for criminal contempt[,] the sentence is punitive, to vindicate the authority of the court.” Int'l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827–28 (1994) (citation omitted). Civil sanctions ensure parties abide by court orders and provide the opportunity to purge contempt by simply complying with the order. Id. at 829.

The party seeking contempt bears the burden of proof, but once proven, the burden shifts to the alleged contemnor. Combs v. Ryan's Coal Co., 785 F.2d 970, 984 (11th Cir. 1986) (citation omitted). The alleged contemnor must show it made “in good faith all reasonable efforts to comply.” Id. (citation omitted). Even if the alleged contemnor made “substantial, diligent or [ ] good faith” efforts, “the fact that [it] did not make all reasonable efforts establishes that [it] did not sufficiently rebut the ... prima facie showing of contempt.” Id. (citations and internal quotation marks omitted). This is a strict standard. The Supreme Court has clearly stated “the absence of willfulness is not a defense to a charge of civil contempt.” FTC v. Leshin, 618 F.3d 1221, 1232 (11th Cir. 2010) (citing McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949)). So, too, the Eleventh Circuit has determined “that substantial, diligent, or good faith efforts are not enough; the only issue is compliance.” Id. (citations omitted).

The Magistrate Judge acknowledges that “a finding of civil contempt is supportable[.]” (Doc. 609 at 27). This Court agrees. However, a court “should exercise its discretion to hold a party in contempt only when doing so would vindicate the purpose of the underlying order.” Mercer v. Mitchell, 908 F.2d 763, 770 (11th Cir. 1990). And while, arguably, that purpose is met here, this Court nonetheless chooses to exercise its discretion through sanctions, instead of civil contempt.

Criminal contempt, rightfully so, sets the bar much higher. A party can establish criminal contempt when it puts forth evidence the alleged contemnor “is aware of a clear and definite court order and willfully disobeys the order.” United States v. Baldwin, 770 F.2d 1550, 1557 (11th Cir. 1985) (citation omitted). “An essential element of [criminal contempt] is an intent, either specific or general, to commit it. By definition, contempt is a willful disregard or disobedience of a public authority.” Id. at 1558 (citations and internal quotation marks omitted). The party alleging contempt must prove “a deliberate or intended violation, as distinguished from an accidental, inadvertent, or negligent violation of an order.” Id. (citation omitted). Reckless disregard will also suffice. United States v. KS & W Offshore Eng'g, Inc., 932 F.2d 906, 909 (11th Cir. 1991) (per curiam) (citation omitted). Kelley Drye's intentional violation of the requirement to “immediately” report violations of the Protective Order, arguably, support a finding of criminal contempt. However, given the totality of the circumstances, and the fact that Kelley Drye did eventually report the violation, the Court concludes that a finding of criminal contempt is not absolute. Therefore, it will not take such drastic measures.

*11 The Eleventh Circuit has formulated a two-part test for the disqualification of counsel. Kleiner, 751 F.2d at 1210. First, “there must be at least a reasonable possibility that some specifically identifiable impropriety did in fact occur.” United States v. Hobson, 672 F.2d 825, 828 (11th Cir. 1982) (per curiam) (citation omitted). Kelley Drye's violation of the Protective Order satisfies this requirement. But since Local Access's Motion to disqualify is based on an ethical violation and not merely the violation of the Protective Order, the Court must clearly identify the rule and find that counsel violated the rule in order to disqualify the attorney. See Schlumberger Techs., Inc. v. Wiley, 113 F.3d 1553, 1561 (11th Cir. 1997). As stated previously, by drafting and sending the May 7, 2018 email, Kelley Drye violated the rules of professional conduct by engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. See R. Regulating Fla. Bar 4-3.4, 4-4.1, 4-4.4, and 4-8.4. This finding alone, however, is not enough to warrant disqualification. The second part of the test requires the court to “find that the likelihood of public suspicion or obloquy outweighs the social interests which will be served by a lawyer's continued participation in a particular case.” Hobson, 672 F.2d at 828 (citation omitted). In evaluating this factor, the Court must weigh the degree to which retaining Kelley Drye as counsel erodes public trust in the judiciary against Peerless's interest in retaining Kelley Drye as its counsel of choice. See Kleiner, 751 F.2d at 1210.

“[A] party is presumptively entitled to counsel of [its] choice[.]” In re BellSouth Corp., 334 F.3d 941, 961 (11th Cir. 2003) (citations omitted). Thus, the right to chosen counsel may only be overridden “if ‘compelling reasons’ exist.” Id. (citations omitted). Depending on the circumstances, ethical violations and conduct impeding the orderly administration of justice may be compelling enough to justify disqualification. See generally Schlumberger, 113 F.3d at 1560–61; Kleiner, 751 F.2d at 1209–11. However, as the Magistrate Judge aptly noted, “[d]isqualification is a harsh sanction, often working substantial hardship on the client, especially in cases where extensive discovery and trial preparation have been completed.” (Doc. 609 at 33). Therefore, even where, as here, Kelley Drye's conduct violated ethical rules and impeded the orderly administration of justice, other sanctions should be considered before disqualification is employed. Such sanctions include the assessment of attorneys’ fees and costs or monetary penalties paid to the clerk of court. See Kleiner, 751 F.2d at 1209.

Given the Magistrate Judge's history with the parties, the Court accords great weight to his determination that Kelley Drye's conduct is redressable by sanctions other than disqualification. And after considering the totality of the record, this Court agrees. However, this Court is not satisfied that assessing attorneys’ fees and costs is sufficient to address Kelley Drye's conduct. The recommended sanction is weak, and much like requiring a middle schooler to write “I will not talk in class” one hundred times on the chalkboard, it serves as merely an irritant rather than a deterrent to future bad behavior. Accordingly, for the reasons set forth in this Order, the Court concludes that the actions of Kelley Drye warrant the imposition of sanctions beyond those outlined in the R&R.

Therefore, it is ORDERED and ADJUDGED as follows:

DONE AND ORDERED in Orlando, Florida on June 29, 2020.

The Protective Order identifies categories of persons who may be given access to confidential and highly confidential information. It provides that confidential information may be disclosed to “those directors, officers, and employees of [a] corporate entity [party] who require the Confidential Litigation Material to perform his or her responsibilities in connection with the Civil Action, and who have executed Attachment A, but only to the extent required to perform his or her responsibilities in connection with the Civil Action.” (Doc. 44, ¶ 13(e)). Highly confidential information may be disclosed to outside counsel and retained experts, but not to the parties themselves. (Id. ¶ 14(c)–(d)).

Plaintiff failed to mention anything about the April production in its Motion, which is likely why Judge Smith did not address it in his R&R, and why this Court will not discuss the merits of it here.

This is not a finding of fact, but rather a conclusive opinion about the actions between these two parties. It does not affect the outcome of the Motion; in fact, Judge Smith recommends an award of attorneys’ fees to Plaintiff. Thus, this Court will not address it.

“This misuse of Confidential information was made possible by the actions of Kelley Drye in stripping the Confidential designation from the information (itself a violation of the Protective Order) and transmitting it to Peerless ... without assuring adherence to the provisions of the Protective Order designed to safeguard that information.” (Doc. 609 at 25).

However, some showing of contrition would certainly mitigate the consequence.

In its Response in Opposition to the Motion, Kelley Drye accuses Plaintiff of, among other things, engaging in “scorched earth litigation tactics[,]” “personally harassing [Kelley Drye] in a calculated effort to undermine Peerless” “employ[ing] underhanded tactics to shore up sanctions motions, baselessly accus[ing] Kelley Drye attorneys of lying,” “harass[ment,] and discriminat[ion.]” (See Doc. 264 at 2, 15–16, 20). These allegations do nothing to diminish Kelley Drye's wrongdoing in the matter now before the Court.

Such payment must be paid to the Clerk by a certified bank check, cashier's check, money order, or cash. Personal checks are not accepted. Checks or money orders must be made payable to “Clerk, United States District Court.” If paying with cash, the exact amount must be tendered. The Clerk accepts neither credit nor debit cards nor electronic billing nor debit accounts.

Although Kelley Drye has not employed Ms. McElmury since September 14, 2018, (Doc. 353, ¶ 2), and she has been terminated from this case, (Doc. 354), she is still responsible for her actions while appearing before this tribunal.