Fourth Circuit Affirms Bailey Glasser’s $828K Default Judgment Win, Sanctioning Defendants Who “Sandbagged” Discovery

June 29, 2023:  The United States Fourth Circuit Court of Appeals has affirmed Bailey Glasser, LLP’s $828,000 default judgment win against a group of telemarketing defendants who concealed their joint enterprise from discovery and disobeyed orders of a lower court compelling full disclosures. The Bailey Glasser team led by partner Sharon Iskra requested the sanction against the companies and their officers who persistently “sandbagged” discovery necessary to their client’s case.

The lawsuit was originally filed in 2019 in the U.S. District Court for the Northern District of West Virginia, after Bailey Glasser’s client, Diana Mey, received a flood of unwanted telemarketing phone calls concerning debt relief. The suit alleged violations of the Telephone Consumer Protection Act (TCPA) and West Virginia Consumer Credit and Protection Act (WVCCPA) for illegally contacting Ms. Mey despite her registration on the national “Do Not Call” phone list and her repeated requests that the calls stop.

During the three years of ensuing litigation, Bailey Glasser’s team uncovered that Defendants not only evaded discovery concerning their joint enterprise, but had actively concealed over 15 shared companies. Some of those companies had been formed while discovery was in progress, even though Defendants filed sworn affidavits that their responses were complete. After Bailey Glasser exposed those violations and Defendants’ longstanding pattern of discovery abuse, District Judge John P. Bailey agreed that Defendants acted in bad faith, warranting severe sanctions and deterrence from future misconduct. Because Defendants intentionally and prejudicially interfered with discovery necessary to prove Ms. Mey’s case, Judge Bailey granted Sharon Iskra’s request for one of the most stringent sanctions available: default judgment for the full amount of statutory penalties available under telemarketing laws pled in her Complaint.  

On appeal, the U.S. Court of Appeals for the Fourth Circuit affirmed this decision in its entirety. In the scathing 39-page precedential opinion, the court noted the “[a]ppellants’ relentless sandbagging and failure to disclose discoverable materials, including the existence of business entities founded during the course of this case, demonstrate a continued pattern of discovery abuse that we simply cannot chalk up to inadvertence or mistake… To find otherwise would be to send the … message that the court may be pushed, ignored and defied to the outermost limits,” the panel said.

“Severe discovery abuses warrant severe sanctions. We are glad to see the Federal Rules of Civil Procedure still have teeth and that the district judges’ decisions to enforce them are upheld,” said Sharon Iskra. “We are especially pleased to have a published opinion that resonates to curtail future discovery abuses that cause delays and prejudice to litigants everywhere.”   

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ADDITIONAL MEDIA

June 23, 2023: 'Sandbagging' Sinks Disbarred Atty's Appeal Of Sanctions, Law360