Opinion
Case No. CIV-02-1606-F.
December 27, 2004
SUPPLEMENTAL ORDER WITH RESPECT TO SANCTIONS
I. Introduction and procedural history.
This order supplements the court's January 8, 2004 order with respect to plaintiffs' motion for sanctions. The motion was filed on September 16, 2003 (docket entry no. 93). Defendant responded to the motion on October 6, 2003.
As was contemplated in the January 8, 2004 order, a status conference with respect to the motion for sanctions was held on February 20, 2004. A schedule for completion of discovery relating to the motion for sanctions was established at that status conference. An additional status and scheduling conference was held on May 5, 2004. At that conference, a schedule for the submission of supplemental briefs was established. A deadline for any requests for an evidentiary hearing with respect to the motion for sanctions was also established (docket entry no. 127). The briefing has been completed; no evidentiary hearing has been requested.
The 19-page summary of the facts set forth in the January 8 order will not be repeated here. However, as will be seen, additional facts have come to light. Those facts, as well as other factual matters discussed in the January 8 order, will be discussed as necessary in this order. Suffice it to say, at this point, that it is now more clear than ever that the defendant's intentional violations of the July 22, 2003 order compelling discovery were intended to, and did, undermine the plaintiffs' ability to prove their case, both as to liability and as to the degree of defendant's culpability for punitive damages purposes. As will be discussed, defendant's violations also put defendant in a position to affirmatively mislead the jury at the trial of this case.
In other subsequent development, perhaps worthy of note but not directly relevant to the present motion, the judgment on the merits, entered on September 2, 2003, has been affirmed by the Court of Appeals. Markham v. National States Insurance Co., 2004 WL 2862318 (10th Cir. 2004).
Several purposes were served by the January 8 order and the proceedings which unfolded after that order was entered. First, by way of the original motion for sanctions, the January 8 order and the supplemental brief filed by the plaintiffs, the defendant was clearly placed on notice as to the nature of the violations asserted by the plaintiffs and as to the violations preliminarily found by the court in the January 8 order. Secondly, the defendant was afforded an opportunity, with the benefit of the court's January 8 order and the plaintiffs' supplemental brief, to supplement its opposition to the imposition of sanctions with confidence that the factual and legal dimensions of the dispute were clearly established. Now that the supplemental discovery has been completed and the supplemental briefs have been submitted, those objectives have been accomplished.
Some preliminary treatment of the procedural context is appropriate. Although sanctions imposed under Fed.R.Civ.P. 37 (and, for that matter, under Rule 16) "serve a predominately punitive purpose," Olcott v. Delaware Flood Co., 76 F.3d 1538, 1555 (10th Cir. 1996), the imposition of a compensatory sanction (as is contemplated in this case) is clearly a civil matter and need not be treated as a contempt proceeding. Law v. National Collegiate Athletic Association, 134 F.3d 1438, at 1440-43 (10th Cir. 1998). Otherwise stated, a sanction is civil if it is remedial and is imposed for the benefit of the complaining party.Federal Trade Commission v. Kuykendall, 371 F.3d 745, 752-53 (10th Cir. 2004). If the sanction which is contemplated and imposed is a compensatory civil sanction (even if imposed "in a contempt action," Kuykendall at 751), the matter is not triable to a jury. Kuykendall at 751. If we treat the present matter as in the nature of a contempt proceeding (albeit civil contempt), the proof of the sanctionable conduct should satisfy a "clear and convincing evidence" standard of proof but the amount of the compensatory sanction is to be determined by a preponderance of the evidence. Kuykendall at 754.
In contrast, a retroactive daily penalty, not susceptible of avoidance by compliance with the court's order, is in the nature of a criminal contempt. Law v. National Collegiate Athletic Association, 134 F.3d 1025, 1029-30 (10th Cir. 1998).
In imposing a compensatory civil sanction, the district court must make findings of fact sufficient to facilitate meaningful appellate review. Kuykendall at 756. In the matter at hand, the court accomplished that in the January 8 order, although those findings will, as appropriate, be supplemented in this order.
Of course, none of this may take place unless the party upon whom sanctions may be imposed is "given reasonable notice and an opportunity to be heard." Kuykendall at 754. As has been seen, this matter has proceeded step-wise, and at a measured pace, so as to afford defendant ample notice of the basis upon which it may be sanctioned as well as an opportunity to be heard on the issues thus raised.
In reckoning the amount of sanctions, the district court must "set forth clear reasons for its findings so [the Court of Appeals] has an adequate basis for review." Kuykendall at 763. In determining the measure of remedial relief, the court must bear in mind that "[t]he most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created." Kuykendall at 765, quoting from Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 265 (1946).
II. Analysis and findings.
As the court noted in its January 8 order, the court was, at that time and on the basis of the record then before it, unable to confidently determine the extent of the harm which resulted from defendant's misconduct. January 8 order, at 24. After noting that the harm, if any, consisted of the impairment of the plaintiffs' ability to marshal the strongest case possible within the confines of the time and resources available, id. at 24-25, the court declined to speculate as to whether the defendants' violations prevented plaintiffs from putting on a more compelling case in support of their punitive damages claim. Id. at 25. Consequently, the court concluded that further proceedings were necessary and that plaintiffs would be afforded an opportunity to present, and defendant would be afforded a like opportunity to rebut, evidence tending to support plaintiffs' claim that they were harmed by defendant's violations. Id. at 25-26.The discovery process contemplated by the January 8 order ( see January 8 order, at 26-27) has now been completed and the parties' supplemental briefs have been filed. As has been noted, neither the plaintiffs nor the defendant requested an evidentiary hearing. Accordingly, the court now considers the factual record relevant to the pending motion to be complete, and the court makes the following additional findings to supplement those set forth in the January 8 order. (Some of the factual matters set forth below were known at the time the January 8 order was entered and, indeed, were alluded to in that order. They are repeated here only as necessary to put the findings which are based upon matters discovered subsequent to the January 8 order in an appropriate factual context.)
As is discussed in greater detail below, defendant's violations of the order compelling discovery had two effects at the trial of this case. First, plaintiffs were deprived of the opportunity to present the strongest possible case. Secondly, and of at least equal importance, defendant, by virtue of its violations, was in a position to attempt to mitigate plaintiffs' case for punitive damages by presenting highly misleading testimony and making highly misleading arguments to the jury.
This factual analysis begins with the relevant portions of the proceedings at trial.
During the punitive damages phase of the trial, defendant's representative, William Morrison, testified as follows in a passage which aptly illustrates the fact that a smidgeon of truth can be as deceptive as an outright lie, especially where the smidgeon is palmed off with knowledge that the opposing party has been deprived of the ability to effectively respond:
Q. Were you ever aware of any lawsuits or jury verdicts against — let me back up. Are you aware of any jury verdicts against National States with respect to their rescission practices?
A. No, I'm not.
MR. O'DONNELL: That's all I have, thank you.
THE COURT: Redirect.
MR. ENGEL: Thank you, Your Honor.
REDIRECT EXAMINATION
BY MR. ENGEL:
Q. Mr. Morrison, you are talking to the ladies and gentlemen on the jury here about the jury verdicts in the other litigation that National States was involved in, right?
A. I believe the question related to life insurance.
Tr. p. 552. So far as is shown by the present record, this passage from Mr. Morrison's testimony, while literally true, was highly misleading and, as will be seen, set the stage for even more serious distortions as this phase of the trial came to an end.
In closing argument at the end of the punitive damages phase of the trial, defendant told the jury that:
Defendant is, of course, bound by the acts of its counsel.Gripe v. City of Enid, 312 F.3d 1184, 1189 (10th Cir. 2002). This is especially so where, as here, the conduct of counsel is so closely intertwined with the client's intentional litigation-related misconduct. Indeed, given the manner in which defendant conducted itself after the order compelling discovery was entered and before the start of the August, 2003 trial (as discussed at pp. 7-18 of the January 8 order), defendant's trial counsel may not have been aware, at trial, of the facts now known to all parties.
What I will tell you is that the evidence has been that National States has not been to trial before and this verdict will get their attention.
Tr. p. 561. A few seconds later, National States told the jury that:
You've heard that they've never had a jury verdict awarded against them for their claims practices.
Tr. p. 562.
It is noteworthy that the foregoing two statements made by National States to the jury during closing argument were not limited to life insurance cases. We now turn to the information which has come to light as a result of the discovery process which was established in the January 8 order.
It should be borne in mind that if defendant had not violated the order compelling discovery, it would have been required to identify all life insurance policies it had rescinded in the preceding five years and would have been required to disclose all lawsuits filed against it during the same period. Information produced by defendant in April, 2004, more than seven months after trial, shows that, during the five year period, defendant had been sued in no less than 32 life insurance cases (including 27 rescission cases), and that, in those cases, defendant had settled the claims for more than $120,000 less than the cumulative face amounts of the policies. See plaintiffs' ex. 2 to plaintiffs' June 21, 2004 supplemental brief.
On the subject of defendant's trial experience, Mr. Morrison's experience alone encompasses "maybe 12 or 15" actual trials, most of which were jury trials. Morrison 6/17/04 depo., at 5 (plaintiffs' ex. 1 to plaintiffs' supplemental brief). In most of these cases, the jury returned a verdict against defendant. Id. at 8. Some of the verdicts included punitive damages. Id. The highest punitive damage award Mr. Morrison could recall was approximately $300,000 to $400,000. Id. at 9. These cases involved health insurance products. Id. at 6, 12.
At the time Mr. Morrison gave his June, 2004 deposition (and, it is safe to assume, at the time he testified at the jury trial in this case), he was aware that most, if not all, of the life insurance cases against defendant involved "the rescission of a life insurance policy." Id. at 15. In fact, Mr. Morrison acknowledged in his June, 2004 deposition that, at the time he testified at the trial of this case, he "knew that we had received some lawsuits, and as I said before, all the lawsuits on the life insurance were — pertained to rescissions." Id. at 26. He also acknowledged that he would have been aware, when this case was tried, that defendant had been sued in life insurance rescission cases in every year that he had been with the company. Id.
This portion of Mr. Morrison's June, 2004 testimony is also noteworthy for the fact that he admitted having seen reports every year disclosing pending lawsuits against defendant. Id. at 28. This acknowledgment, while certainly unremarkable, standing alone, as a description of the scope of the knowledge of a corporate executive, stands out in stark contrast to the representations which were made to the court before and during the August, 2003 trial, as discussed at pages 13-17 of the January 8 order.
Finally, on the subject of litigation, Mr. Morrison acknowledged at his June, 2004 deposition that, when he testified in August, 2003, he was well aware that none of the 32 life insurance cases had even gone to a jury ( id. at 31) and that, if he had been asked at trial, he would have confirmed that defendant had indeed been sued in the life insurance cases. Id. at 32-33.
Obviously, it was only because of its calculated disregard of the order compelling discovery that defendant was in a position to tell the jury categorically that "National States has not been to trial before" and that "they've never had a jury verdict awarded against them for their claims practices." Tr. at 561, 562. Thus, the harm caused by defendant's violations of the order compelling discovery manifested itself in terms of both (i) the damage to the plaintiffs' case for punitive damages ( i.e., the case that was not, but could have been, presented by plaintiffs) and (ii) the benefit reaped by defendant because its violations put it in a position to present, with impunity, highly deceptive testimony and arguments in mitigation of punitive damages (i.e., the case that was, but should not have been, presented by defendant). Otherwise stated, defendant's violations of the order compelling discovery provided defendant with two ill-gotten opportunities at trial. The first opportunity was the opportunity to undermine the plaintiffs' ability to present a strong case on the issue of the amount of punitive damages. The second opportunity — equally ill-gotten — was the defendant's opportunity to affirmatively deceive the jury with highly misleading testimony and palpably false arguments. Defendant's supplemental brief is addressed almost entirely to the former point; it pays little attention to the latter. With the benefit of the discovery and briefing that has taken place since the January 8 order was entered, it is now clear that, in the punitive damages phase of the trial, defendant's exploitation of the second opportunity had at least as much impact as did its exploitation of the first opportunity.
Defendant argues at length, citing State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408 (2003) and BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996) that most or all of the information it wrongfully withheld would have been inadmissible in any event because of the limitations placed byBMW and Campbell upon the introduction of evidence of out-of-state wrongdoing in support a claim for punitive damages. See, e.g. defendant's supplemental brief at 15-18. This argument misses the mark for several reasons.
First, evidence of defendant's treatment of its insureds, outside of Oklahoma as well as within Oklahoma, was admissible with respect to liability issues, wholly aside from any matters relating to punitive damages. See Vining v. Enterprise Financial Group, Inc., 148 F.3d 1206 (10th Cir. 1998) andMarkham v. National States Insurance Co., 2004 WL 2962318, at *6 (10th Cir. 2004). The fact that plaintiffs prevailed on the issue of liability detracts not at all from the seriousness of defendant's violations.
Secondly, even on the issue of punitive damages, nothing inCampbell or BMW gives a litigant license to violate a discovery order for the manifest purpose and with the obvious result of creating a safe harbor for prejudicial deception of the jury. Thus, although the misleading testimony and false arguments presented to the jury by the defendant at the trial of this case would not have provided a basis for changing the jury instructions to permit the jury to consider the defendant's out-of-state conduct as the basis for an award of punitive damages, defendant was not, by Campbell and BMW, or by any other cases, immunized from rebuttal of its deceptive arguments, even if the likely effect of that rebuttal would have been to bolster or add sting to plaintiffs' case for punitive damages. The short of the matter is that defendant placed no geographic limitations on its deception at trial; plaintiffs would have been under no geographic limitations by way of rebuttal. Evidence which may be otherwise inadmissible often becomes admissible when necessary in order to prevent or cure deception or distortion. See, e.g., Harris v. New York, 401 U.S. 222 (1971) andOregon v. Hass, 420 U.S. 714 (1975). See also, United States v. Morales-Quinones, 812 F.2d 604, 610 (10th Cir. 1987) (discussing doctrine of curative admissibility).
Third, even on the issue of punitive damages, and taking theCampbell and BMW cases on their own terms, the sheer magnitude of a defendant's misconduct, within or without the relevant jurisdiction, "maybe relevant to the determination of the degree of reprehensibility of the defendant's conduct."BMW, 517 U.S. at 574, n. 21.
Finally, defendant's arguments betray one consistent misconception. This court is not, on the present motion, making an award of punitive damages in the first instance. The issue here is sanctions, not punitive damages, although the court's evaluation of the appropriate sanction is informed in part by its evaluation of the harm done to plaintiffs' punitive damages case by defendant's violations of the order compelling discovery. For that reason, many of defendant's arguments, advanced as though the court were addressing them in mid-trial, are misplaced.
The court's January 8 order was, by its own terms, a preliminary order. The factual record was not complete, and the parties had not, at that point, had a full opportunity to prosecute and defend the sanctions motion. Accordingly, the January 8 order contemplated further proceedings which have now been had. The record is complete. The court's consideration of the additional facts which have now been brought to light fortify the court's conclusion that the misconduct which was described at length in the January 8 order was conscious and calculated and not the result of neglect or slothful indifference (a condition which infects many litigants when faced with unwelcome discovery obligations). Consequently, before proceeding further, the court must emphatically reject the defendant's repeated references, in its supplemental brief, to its professed "inability" to comply with the order compelling discovery. Supplemental brief, at 17, 19 and 20. That suggestion is thoroughly undermined by the record.
Accordingly, the court turns to the final question contemplated by the January 8 order, viz., the determination of the amount of the monetary sanction to be imposed. In the January 8 order, the court declined to speculate as to the practical effect of defendant's violations. January 8 order, at 25. Instead, the court afforded the plaintiffs an opportunity to present, and the defendant an opportunity to rebut, any evidence tending to support their claim that they were harmed by defendant's violations. Id. at 25-26.
Now that the record is complete, and on the basis of the court's careful analysis of the record and its observation of the dynamics of the August, 2003 trial, the court finds that the plaintiffs' ability to marshal their case in support of punitive damages, and to forestall or rebut the misleading testimony and false arguments advanced by the defendant, was substantially impaired by the defendant's violations of the order compelling discovery, with the consequence that the defendant's misconduct had the ultimate effect of significantly depressing the jury's award of punitive damages. However, that finding, alone, clearly does not end the matter. Before reaching a conclusion as to the amount of the sanction to be imposed, the court will return to the factors articulated, in a dismissal context, in Ehrenhaus v. Reynolds, 965 F.2d 916 (10th Cir. 1992). These factors were preliminarily discussed in the January 8 order. See id. at 22-23. In that order, the court, recognizing that a dispositive sanction is not at issue here, concluded that the first threeEhrenhaus factors are the relevant ones. Id. at 23. Those factors are (1) the degree of actual prejudice to the complaining party, (2) the amount of interference with the judicial process, and (3) the culpability of the offending party. In the January 8 order, the court discussed the second and third Ehrenhaus factors, resolving them against the defendant in a discussion which need not be repeated here. Id. However, the court declined to address the first Ehrenhaus factor without the benefit of further proceedings which have now been completed.
It is now clear that the first Ehrenhaus factor, the degree of actual prejudice to the complaining party, cuts strongly in favor of the imposition of a compensatory sanction with an eye to the likely effect of defendants' violations on plaintiffs' case for punitive damages. As is discussed above, defendant's violations of the order compelling discovery enabled defendant to make a highly deceptive presentation to the jury without fear of effective rebuttal. At the heart of defendant's defense to punitive damages was its contention, in essence, that it is not a multiple offender. This was a very effective and understandable approach, given the fact that (i) defendant had withheld the evidence with which plaintiffs might respond to such a contention, and (ii) "first offender" status would put defendant in a very favorable posture when viewed in light of the factors set forth in the second stage instruction which guided the jury in fixing the amount of punitive damages to be awarded. Indeed, defendant's presentation of itself as a litigant which had "never had a jury verdict awarded against [it]" and which indeed "has not been to trial before," tr. pp. 561 and 562, played directly into at least the first three factors set forth in second stage instruction no. 1 (docket entry no. 83), to-wit: (1) the seriousness of the hazard to the public arising from defendant's misconduct; (2) the profitability of the misconduct to defendant; and (3) how long the conduct lasted and whether it is likely to continue.
The factors set forth in the second stage jury instruction in this case, adopted substantially verbatim from the relevant Oklahoma Uniform Jury Instruction were in turn based, at least in substantial part, on the factors endorsed by the Supreme Court inPacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, at 21-22 (1991).
As the Supreme Court noted in BMW, at n. 21, 517 U.S. at 574, evidence of other transactions may be relevant to the determination of the degree of reprehensibility of the defendant's conduct. It is noteworthy that, on this point, the Court, in BMW, cited its 1993 opinion in TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, at 462, n. 28 (1993) where the Court turned aside TXO's complaint about "admission of evidence of its alleged wrongdoing in other parts of the country. . . ."
Thus, the status of the matter during the punitive damages phrase of the trial of this case was that defendant, by virtue of its violations of the order compelling discovery, was in a position to make a highly misleading presentation to the jury on the basis of factors which would be both very appealing to the jury as a factual matter and very relevant to the jury's decision as a legal matter.
Consequently, in the second stage of the trial, plaintiffs were deprived of both the sword they should have had (namely, the facts which they would have had in hand if defendant had complied with the order compelling discovery) and the shield necessary to defend against defendant's distorted presentation. In the statutory punitive damages category which governed the submission of punitive damages in this case, 23 O.S. 2001 § 9.1[ 23-9.1], the award of punitive damages was limited to $500,000. See 12 O.S. 2001 § 9.1[12-9.1](C)(2) and supplemental instruction no. 1, docket entry no. 83. Having awarded $75,000 in compensatory damages, the jury was moved to award, even on the basis of a showing which had been substantially deflated by defendant's misconduct, $150,000 in punitive damages. It would be entirely plausible to assume that if plaintiffs had had the opportunity to present their entire compelling case for punitive damages, the jury would have awarded the full $500,000. In assessing the "degree of actual prejudice to the complaining party," Ehrenhaus at 921, and bearing in mind that there is good reason here to resolve doubts against defendant, Kuykendall at 765, the court could quite naturally conclude that a fair and just compensatory sanction would be a sanction in the amount of $350,000, which would bring the total punitive damages award to the level which the jury might well have concluded was appropriate had plaintiffs not been hobbled in their presentation of their punitive damages case. Although the temptation to do exactly that is great, and although failing to do so may indeed improperly resolve doubts against the plaintiffs, the court declines to impose a sanction in an amount which would effectively run the punitive damages award to the limit. Instead, mindful that the process upon which it has embarked is not without its speculative elements, and mindful also that any court should proceed with caution when undertaking to measure a compensatory sanction in part by what it believes a jury would have done under the circumstances, the court fixes the amount of the sanction to be imposed upon the defendant at $50,000, an amount which the court is firmly convinced represents the smallest increment by which the punitive damages verdict in this case would have been influenced if the jury had not been subjected to the distortion and deception which defendant practiced as a result of its violations of the order compelling discovery.
Although reckoning what a punitive damages award (or, in this case, an incremental punitive damages award) might have been is not without a speculative element, several jurisdictions recognize that recovery of replicated punitive damages is appropriate. See, e.g., Jacobsen v. Oliver, 201 F.Supp.2d 93 (D.D.C. 2002); Elliot v. Videan, 791 P.2d 639 (Ariz. 1989); andHaberer v. Rice, 511 N.W.2d 279 (S.D. 1994). Contra:Ferguson v. Lieff, Cabraser, Heimann Bernstein, 69 P.3d 965 (Cal.App. 2003); Summerville v. Lipsig, 704 N.Y.S.2d 598 (2000).
As has been seen, the court has applied the Tenth Circuit'sEhrenhaus factors in determining the sanction to be imposed in this case. It should be noted, however, that the Ehrenhaus factors are not entirely congruent with the situation at hand because the court, in Ehrenhaus, was considering the test appropriate for imposition of a dispositive sanction (in that case, dismissal) rather than a purely financial sanction. For that reason, in reaching its conclusion as to the sanction to be imposed, the court is also informed, by analogy, by the factors which might be considered in determining the amount of a sanction to be imposed as a result of spoliation of evidence, an offense highly analogous to the defendant's conduct in the case at bar.
A sanction for spoliation should be designed to: (1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position he or she would have been in absent the wrongful destruction of evidence by the opposing party. See 7 Moore's Federal Practice, § 37.121 (Matthew Bender 3d ed. 2003), citing West v. Goodyear Tire Rubber Co., 167 F.3d 776 (2nd Cir. 1999). By that standard, a $50,000 sanction is arguably far below the mark in this case. As to deterrence, the court does not have any sense that this defendant is likely to be fazed by the jury's compensatory award, the jury's award of punitive damages, or the court's imposition of a modest sanction (or the combination of the three). To the contrary, the totality of the court's contact with the defendant and its personnel, both in court and by way of record materials, leaves the court with a firm impression that this case amounts, in defendant's estimation, to not much more than an inconvenience to be endured. The second factor, risk allocation, has been discussed above, as has the third factor, restoration. In sum, the court is not aware of any test for determination of the amount of a compensatory sanction which would counsel the imposition of anything less than the sanction the court has determined to be appropriate in this case.
III. Conclusion
The court finds, by clear and convincing evidence, that the defendant violated the order compelling discovery as set forth in the January 8 order and as is further described in this order. The court further finds, by clear and convincing evidence, that an essentially compensatory sanction should be imposed for the purpose of rectifying, at least in part, the effects of defendant's intentional subversion of the adversary process in this case.
Accordingly, pursuant to Rule 37(b)(2), Fed.R.Civ.P. and the court's inherent power, as discussed at page 21 of the court's January 8, 2004 order, a sanction in the amount of $50,000 is hereby assessed against the defendant, National States Insurance Company, for the reasons set forth above and in the January 8 order. So much of this sum as may remain unpaid and unsuperseded 30 days after entry of this order shall, upon appropriate motion, be reduced to judgment. No showing having been made that defendant's violations of the order compelling discovery were substantially justified or that other circumstances make an award of expenses unjust, the court shall, upon motion (filed within 15 days after the date hereof and complying with LCvR54.2), enter its order requiring the defendant to pay to the plaintiffs the reasonable expenses, including attorney's fees, incurred in connection with the motion for sanctions. The parties are encouraged to confer with a view to resolving the amount of the award of fees and expenses.
See generally, Cauthron, Proving Attorney's Fees in Federal Court, 61 O.B.J. 2813 (1990).