Oregon labor lawyer, firm face over $40,000 in sanctions for misleading court in ‘bad faith,’ judge finds

A veteran labor law partner and his firm, which represented Bend’s St. Charles Medical Center, face a more than $40,000 sanction for filing a complaint and motion “in bad faith,” a federal judge ruled.

U.S. District Judge Michael J. McShane said the emergency motion filed on behalf of St. Charles Health System Inc., seeking a court order to prevent the workers’ union from striking, lacked any mention of the fact that longstanding case law only allows the National Labor Relations Board to issue an injunction to prevent an unfair labor practice.

McShane called it “an unusual if not glaring omission,” by attorney Mark Hutcheson and his firm Davis Wright Tremaine and ordered them to pay $40,625.52 in fees to the union.

“The Court finds that Hutcheson knowingly failed to disclose controlling authority directly adverse to the position advocated,” the judge wrote. “It is not credible to believe this was merely an inadvertent omission.’’

The judge ruled that the emergency motion on behalf of the hospital wasn’t filed to “advance a valid legal argument,” but instead “to gain a valuable negotiating chip” to try to stave off a rapidly approaching strike.

The hospital’s motion for a federal temporary restraining order against the Oregon Federation of Nurses & Health Professionals was filed in U.S. District Court in Eugene in February and denied by McShane on March 2. The union represents about 156 medical technicians and therapists at the hospital. They cited concerns about pay, cost of living adjustments and “issues of disrespect,” and spent more than a week on the picket line before agreeing to end the strike on March 12 and resume contract talks.

The union’s lawyer, Catherine A. Highet, argued that St. Charles’ lawyers intentionally misled the court about its authority, noting that only the National Labor Relations Board can ask courts to remedy unfair labor practices.

“It is a cornerstone of modern American labor law that Congress intentionally removed the courts from labor disputes because Congress believed the courts had a history of abusing the injunctive power,” she wrote.

The union’s lawyer also pointed out that Hutcheson has been practicing for more than 50 years, has extensive experience with collective bargaining law and has been named among “The Nation’s 100 Most Powerful Employment Attorneys.”

The judge, during his eight years on the federal bench, said he’s not familiar with the National Labor Relations Act, and that’s because the law provides that only the National Labor Relations Board issue such relief.

“As the Court now understands, any attorney with any experience involving labor disputes like the one at issue here would certainly understand that the law did not allow for a district court to issue an injunction under these circumstances,” McShane wrote.

He cited the American Bar Association’s Model Rules of Professional Conduct, which prohibits a lawyer from “knowingly failing to disclose controlling authority directly adverse to the position advocated.” The rule is important to assure that judges don’t become victims of “lawyers hiding the legal ball,” according to the bar association.

Hutcheson wrote to the court that he accepted full responsibility for not addressing “the jurisdictional questions” that arise under the National Labor Relations Act.

“In the very limited period of time in which we had to put our pleadings together, we focused on perceived harm instead of jurisdictional issues,” he wrote.

He and his firm acknowledged that in hindsight they could have done more to alert the court of binding, contrary precedent, but argued they shouldn’t face sanctions because they were arguing for an “extension” of existing case law and didn’t find any case that was completely similar to the facts in the hospital’s case.

“Under this extreme and once-in-a-century pandemic situation, we believed that even though a court might well decline to grant the relief we were requesting on jurisdictional or other grounds, we were entitled to try to seek such relief on our client’s behalf,” Hutcheson wrote.

McShane called the argument “meritless.”

“That time was of the essence, however, is the reason that plaintiff’s intentional omission of jurisdictional issues is so concerning,” the judge wrote. “Had the defense not cobbled together a quick brief, the Court was prepared to issue a completely illegal order based on the law as presented by the hospital; law the court later learned to be a fiction.’’

Jodi Barschow, the union president, called the ruling a victory for the St. Charles hospital workers.

“This victory proves that our experiences with St. Charles leadership were legitimate and that bad behavior by employers will no longer be tolerated,” she said in a statement.

— Maxine Bernstein

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