In an opinion Tuesday, Judge Seibel lambasted, but ultimately did not sanction, attorneys in an insurance dispute who made evasive and false assertions in a Rule 56.1 statement submitted in opposition to summary judgment.  She found the statements lacked a “factual basis,” and were a “sham,” and added that the attorneys’ conduct “was entirely unbecoming of members of our profession.”  She nonetheless concluded “in light of the high standard for bad faith, and the caution with which courts should approach the question of bad faith,” not to award sanctions, for two reasons:

First, the problem here, which could have been avoided in large part had [the other side] not put so many facts into a single paragraph of its 56.1 statement, has not been the subject of judicial discussion. If a lawyer has an inclination to weasel, compound facts in a 56.1 statement provide room for him to do so. And while it should be obvious that when faced with a compound paragraph, one may not represent that one needs discovery to respond at all when in fact one needs discovery only to respond to a portion, the Court was unable to locate authority for that proposition. That may be because it is so obvious, but the Court is reluctant to tar a lawyer with a finding of bad faith in the absence of authority that what he did is improper.

Second, it is not my impression that [counsel] acted in subjective bad faith – that is, “ha[d] actual knowledge that a pleading or argument that [they were] advancing is frivolous.” But what we have here strikes the Court as inexcusably hypertechnical nit-picking, a misplaced belief that stubbornly refusing to give an inch is the best way to represent a client, and a misguided, scorched-earth attitude that led counsel to cross the line from appropriately zealous advocacy into unreasonable conduct. But I do not believe that counsel subjectively understood that their conduct was improper and proceeded anyway in order to harass the other side. I think they thought, and perhaps still think, that their conduct was justified and appropriate. For that reason, they need to review this matter with a lawyer who specializes in legal ethics. They also ought to consider that such conduct is not only inimical to their own credibility, but is also ineffective, and therefore disserves their clients in the long run.