CHICAGO (CN) – “Even Draco got it right every once in awhile,” Judge Evans said of a 7th Circuit decision dismissing Banco del Atlantico’s racketeering case as a sanction for coaching witnesses to give uncooperative, evasive, vague or “unenlightening” answers to basic deposition questions such as, “Are you a witness as a representative of HSBC Mexico today?” more
Magistrate Judge V. Sue Shields called the depositions “a fiasco” and said most of the plaintiffs’ objections were probably “an intentional effort to obfuscate and to impede the defendants’ legitimate efforts at obtaining discovery in this case.”
The case stemmed from a 12-year dispute between Banco del Atlantico and Woods Industries, a manufacturer of electrical products, over a $7 million loan that the bank and HSBC Mexico claimed the company’s owners had obtained by lying about their collateral, including an industrial plant that they sold under the radar. Plaintiffs called the alleged fraud scheme “prolonged, elaborate and sophisticated,” and claimed it violated federal racketeering laws.
After the case had been pending for nearly 10 years – in Texas and Indiana courts – the first depositions were taken over whether the plaintiffs had violated a procedural rule.
The district court ended up dismissing the case over the bungled depositions.
Judge Evans noted that while dismissal was a “Draconian remedy,” some cases call for Draconian measures. “(T)oday, when district courts have several hundred cases on their dockets, there are times when the ‘draconian’ remedy is apropos. And that time was reached in this case.”