eNotes: Liability – October 2022 – Virginia

SIGNIFICANT CASE SUMMARIES

VA CASE SUMMARIES

Philpott v. Virginia DOT
United States District Court for the Western District of Virginia
No. 7:21-CV-00274, 2022 U.S. Dist. LEXIS 145338

Decided: August 15, 2022

Federal Court quashes subpoena for years of social media content.

Background

Plaintiff, William S. Philpott, was a longtime employee of the Virginia Department of Transportation (“VDOT”) before he was terminated. Mr. Philpott alleged that he was terminated and subjected to a hostile work environment due to his race. His theory of the case was that a group of VDOT employees did not want an African American supervisor and conspired to have him fired. Mr. Philpott issued subpoenas to three VDOT employees and one retired former employee, seeking social media content which dated back to January 1, 2014.

VDOT filed a Motion to quash. Judge Ballou construed the Motion to quash as a Motion for protective order and ordered that the non-parties to whom the subpoenas were addressed had to preserve their social media information through the rest of litigation. Judge Ballou also took the Motion under advisement to “permit Plaintiff to establish that the discovery sought . . . is relevant to Plaintiff’s claims of hostile work environment and race discrimination.” Ultimately, Judge Ballou found that the Plaintiff failed to establish a “sufficient connection” between the non-parties and the adverse employment actions at issue in the case so as to warrant production of years’ worth of social media activity, text messages, instant messages, letters and phone records. Judge Ballou then granted the Motion for protective order. Mr. Philpott objected to this decision.

Holding

In construing VDOT’s Motion to quash a protective order, Judge Ballou cited Federal Rule of Civil Procedure 26(b)(2)(C), which allows the Court, on its own Motion, to take a proactive role in the limitation of ongoing discovery. Mr. Philpott argued that the subpoenas were not overbroad and would certainly lead to the discovery of admissible evidence, citing as support for this contention his requests for social media posts made by the non-parties about each other and Mr. Philpott from January 1, 2014 to present, and his requests for social media posts made by the non-parties about racial hate groups made from January 1, 2014 to present. However, the Court ultimately found that Mr. Philpott failed to connect the large amount of information requested in the subpoenas to the claims in his case. Furthermore, even if the above-mentioned requests were not overbroad, Mr. Philpott had also asked for “all posts and other communications posted or otherwise made by you on any Facebook, Twitter, Instagram, Snapchat, TikTok, or other social media account or page, or made by any other party on any Facebook, Twitter, Instagram, Snapchat, or other social media account owned by you, for the period January 1, 2014 until the present.” His previously cited requests would be subsumed by that one.

Even if the Court were to strike that very broad request, Mr. Philpott requested large swaths of irrelevant information because his requests started on January 1, 2014, while the events at issue in the suit occurred in 2019. For these reasons, Judge Ballou’s refusal to allow such a wide-ranging production was neither clearly erroneous nor contrary to law, and Mr. Philpott’s objections were overruled.

Questions about this case can be directed to Kelly Crowe at (571) 464-0434 or kcrowe@tthlaw.com.

AV Auto., LLC v. Gebreyessus
Virginia Supreme Court
No. 210320

Decided: September 15, 2022

Attorney’s fees awarded as sanction must be limited to those fees incurred as a direct result of responding to the sanctionable pleading under Va. Code § 8.01-271.1.

Background

AV Automotive, LLC, AV Imports, LLC, and Geneva Enterprises, Inc. entities who own and manage a group of car dealerships, discovered a fraudulent scheme by several employees to manipulate customer reviews to increase their bonuses under an incentive scheme with Audi of America, Inc. One such perpetrator of this scheme was Betelehem Gebreyessus, among others. Plaintiffs filed suit against the individuals who participated in the scheme, alleging fraud, breach of fiduciary duty, tortious interference with a contractual relationship or business expectancy and business conspiracy. Each count alleged that Plaintiffs had been penalized by Audi of America, Inc. and that Plaintiffs would have to repay the $700,000 in bonuses they paid as a result of the scheme.

However, Audi of America stated that it had not penalized Plaintiffs and had no intention of penalizing Plaintiffs. Plaintiffs accordingly promised Defendant that they would withdraw their claims related to the penalty; they did so four months later. Defendant filed a Motion for sanctions against Plaintiffs pursuant to Virginia Code § 8.01-271.1 for the bad faith filing and prosecution of the lawsuit against her. She asserted that Plaintiffs did not have factual support for asserting the penalty claims against her, as they had never been penalized by Audi of America. The Fairfax County Circuit Court granted Defendant’s Motion for sanctions and awarded her $213,196.95, which were Defendant’s total attorney’s fees against Plaintiffs, but not against Plaintiffs’ counsel.

Holding

A court’s imposition of sanctions will not be reversed on appeal unless the trial court abused its discretion in (1) its decision to award sanctions against a party, or (2) the particular sanction employed. While the Court upheld the award of sanctions against Plaintiffs’ overall, even though Defendant was not paying her own legal fees, the Supreme Court held that the total amount of the sanction was inappropriate. The language of Code § 8.01-271.1 requires that the attorney’s fees awarded as a sanction be sustained as a direct result of the sanctionable conduct. An appropriate sanction must be restricted to fees incurred acting in response to the sanctionable pleading. As the Trial Court failed to even attempt to segregate the fees incurred because of Plaintiffs’ sanctionable conduct, namely the cost of defending the penalty claim, the award was improper and an abuse of discretion.

Questions about this case can be directed to Mackenzie Payne at (571) 47-1906 or mpayne@tthlaw.com.