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Litigation

In sanctions fight, erstwhile SEC official Alex Oh says perception is everything

6 minute read

Did the foibles of Zoom lead to Alex Oh's departure from her short-lived job as the enforcement director of the Securities and Exchange Commission?

Or was it her perception that a plaintiffs lawyer at Cohen Milstein Sellers & Toll was deliberately showing her disrespect, calling the former partner at Paul, Weiss, Rifkind, Wharton & Garrison by her first name and disregarding her objections to his questioning of an Exxon Mobil Corp witness, during an ill-fated deposition in February?

Or should Oh point only to herself for the litigation conduct that preceded her abrupt resignation from the SEC, just a week after she was named to the all-important job of leading the commission's enforcement efforts?

New filings by Oh, Paul Weiss and Cohen Milstein, in response to an April 26 show-cause order from U.S. District Judge Royce Lamberth of Washington, D.C., offer a provocative range of answers to the question of whether a lawyer's purported perception of a proceeding – and, in particular, a remote proceeding – justifies accusations belied by the actual case record. I suspect that's going to be a persistent issue as courts contemplate the future of remote hearings and depositions.

It's been widely reported that Lamberth's April 26 show-cause order – which directed Oh and Paul, Weiss to explain why they should not face Rule 11 sanctions for mischaracterizing the conduct of Cohen Milstein partner Kit Pierson in a court filing – led to Oh's resignation from the SEC. Her resignation letter to SEC chair Gary Gensler said that a development in one of her Paul, Weiss cases would be "an unwelcome distraction" from the enforcement division's work. Oh's letter did not refer specifically to the Exxon case, but, as my Reuters colleague Jenna Greene has reported, the timing of Lamberth's order and Oh's resignation line up. (Oh counsel Geoffrey Klineberg of Kellogg, Hansen, Todd, Figel & Frederick said he and Oh declined to comment.)

The 20-year-old case was brought by Indonesians who allege that Exxon Mobil security forces committed human rights atrocities in the operation of a natural gas facility in Indonesia. Oh, a former federal prosecutor, has been defending Exxon in the litigation since 2007.

In February, Cohen Milstein partner Pierson conducted a remote deposition of Mark Snell, an Exxon in-house lawyer in Singapore who had been designated as a corporate representative. The deposition quickly turned contentious after Snell answered a question by reading from the 85 pages of notes Paul, Weiss had helped prepare for him. According to Lamberth's newly-unsealed opinion describing the deposition, Oh and Pierson each accused the other of unprofessional conduct within the first hour of the proceeding.

After the deposition, Cohen Milstein moved for sanctions, arguing that the judge should allow plaintiffs more time to get answers to questions Snell had evaded – and that Paul, Weiss should bear the cost of its motion and any newly ordered deposition.

Paul, Weiss filed a cross-motion for sanctions against Cohen Milstein, sparing no adjectives to describe Pierson's conduct. The filing called him "agitated," "combative," "unhinged," "indignant," "adversarial" and "aggressive," and accused the Cohen Milstein partner of lashing out at Snell and indulging in "browbeating and disrespectful behavior" toward Oh.

Lamberth disagreed completely. The judge viewed the videotape of the deposition, which focused on Snell, rather than the lawyers. He also listened to the audio, which included the back-and-forth between Oh and Pierson. Lamberth found that the Cohen Milstein lawyer raised his voice only three times to ask Oh not to speak over him. Otherwise, the judge wrote in the newly unsealed opinion, "he maintained a calm demeanor throughout the deposition," even when Oh was accusing him of shouting and being unprofessional.

Cohen Milstein had not asked for Rule 11 sanctions but Lamberth ordered Oh and Paul, Weiss to explain why they shouldn't be sanctioned for their unsupported representations in their motion for sanctions against Pierson.

In their filings on Friday opposing sanctions, both Oh and her former firm apologized for using what Paul, Weiss called "sharp and pointed" language about Pierson. But Oh's declaration and the firm's brief insisted that Oh sincerely believed Pierson was attacking her and the Exxon witness.

The tape of the deposition that Lamberth saw, Oh said, did not capture the lawyers' faces and body language. But during the proceeding, she said, the video feed showed Pierson's "angry" and "irritated" expressions. She also said Pierson's tone, and his insistence on calling her by her first name, seemed intended to intimidate her.

"Perhaps if this had not been a 'Zoom' deposition but a traditional deposition in which counsel sit across from one another in a single room, I would have perceived the events differently," Oh said in the declaration, asserting that the noise-cancelling headphones she wore may have distorted her perception of who was speaking loudly. "But, based on the audio and video as I experienced them that evening, my perceptions were honestly felt."

Cohen Milstein said in a filing on Monday that Oh and Paul, Weiss were now searching for justifications after Lamberth flatly said the record belied their aspersions. The judge, Cohen Milstein said, should reject that last-resort reliance on "perceptions" that neither Oh nor Paul, Weiss previously mentioned.

"Stated bluntly," the Cohen Milstein brief said, "both of the responses continue to characterize the conduct of plaintiffs' counsel in a manner that is essentially the opposite of what occurred."

Cohen Milstein's Agnieszka Fryszman declined to provide a statement. A Paul, Weiss spokeswoman said the firm could not comment on ongoing litigation but called Oh "an exceptional lawyer, who has always been guided by her commitment to integrity, professionalism and her clients." The spokeswoman did not respond to my follow-up email asking if Oh would be welcomed back to Paul, Weiss.

Paul, Weiss may yet avoid sanctions. I don't doubt that Oh perceived Pierson as angry during the deposition. I'm sure the awkwardness was magnified because everyone appeared on a computer screen instead of in real life.

But blaming Zoom because you called opposing counsel "unhinged" in a court filing? Come on.

Opinions expressed here are those of the author. Reuters News, under the Trust Principles, is committed to integrity, independence and freedom from bias.

(Reporting By Alison Frankel)

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