Judge: Attorney 'recklessly' raised settlement talks before jury

A leading labor attorney was sanctioned by a federal judge over client settlement discussions he raised in front of a jury last year that caused a mistrial in a trade secrets dispute between two competing food distribution companies.

U.S. District Judge Maame Ewusi-Mensah Frimpong on Tuesday also denied CDF Labor Law LLP partner Dan M. Forman’s motion to reconsider two in limine rulings, which related to his plaintiff’s expert analysis of damage calculations that the previous trial judge had excluded.

The amount of fines Forman will have to pay his opposing defense counsel, Lesowitz Gebelin LLP partners Scott M. Lesowitz and Steven Gebelin, will be determined at the end of a retrial that is scheduled to begin Feb. 26, Frimpong ruled.

Lesowitz had sought a fine of at least $149,787, but the judge said that total was unreasonable.

“At minimum, Mr. Forman’s conduct was reckless. As an experienced attorney, Mr. Forman should have known better than to make reference to settlement when the opposing party had objected on the basis of [Federal Rule of Evidence] 408 prior to the court’s ruling on admissibility,” Frimpong’s sanctions order stated.

The rule states “evidence of an offer-to compromise a claim is not receivable in evidence as an admission of, as the case may be, the validity or invalidity of the claim.”

“That Mr. Forman believed FRE 408 was inapplicable is no defense, as he should have resolved the objection prior to asking such a question,” the judge wrote.

She further ruled Lesowitz’s requested sanctions were not reasonable. “The court exercises its discretion to defer determination of the amount of fees to be awarded. The court notes, however, that it is not inclined to award sanctions for the entire 197.8 hours requested as some of it appears unjustified.”

In a phone interview Thursday, Lesowitz said he and Gebelin were “happy” with Frimpong’s rulings. “We both think that the judge gave well reasoned orders and they were well thought out.”

Forman did not respond to inquiries about the ruling by press deadline Thursday.

In an opposition reply to Lesowitz’s sanction motion, Forman argued the court abused its discretion when the mistrial was “abruptly” ordered. “The question was not a settlement communication pursuant to FRE 408, was not proffered to elicit a response for a prohibited use, and was not subject to a motion in limine,” Forman wrote.

The underlying case follows a dispute between Individual FoodService and two of its former employees. The plaintiff company claimed the defendants — while in its employ — used trade secrets and breached several contract and loyalty laws when they formed a competing food service business, Legacy Wholesale Group LLC. Perrin Bernard Supowitz LLC v. Pablo Morales et al., 2:22-CV-02120 (C.D. Cal., filed Aug. 29, 2022).

On July 11, 2023, the case was tried before a jury and U.S. District Judge Otis D. Wright II in Los Angeles. On the trial’s second day, Forman examined one of the defendants and asked her about prior potential settlement discussions she had with Individual FoodService’s CEO.

Lesowitz immediately objected and moved for mistrial. Wright granted the motion, stating, “the jury had been truly tainted” and recused himself from the case.

Lesowitz said he was “shocked that an experienced attorney so blatantly asked about settlement discussions … and that he didn’t first, out of the presence of the jury, bring this up with the judge.”

Lesowitz said his defendant clients initiated settlement discussions with Individual FoodService’s CEO first, which “gives the strong impression our clients thought they were in a bad situation … and once a jury hears that, how do you undo that?”