Project Posner

Lead opinion by POSNER

   JUDGE POSNER

   MEMORANDUM

   I have before me the plaintiff's motion for a new trial in this Rule 10b-5 securities fraud case, the defendants' motion to impose sanctions against the plaintiff's counsel under 28 U.S.C. § 1927, and the plaintiff's reply thereto in which he askes for sanctions in respect of the filing of the defendants' motion for sanctions.All three motions are hereby DENIED.

   The plaintiff seeks a new trial on the basis of alleged error in the instructions. As the only grounds given in support of the motion are purely conclusion, I am tempted to deny it out of hand but will instead consider its merits.

   By way of background, I should explain that I decided at the outset of the trial (over which I presided pursuant to designation by Chief Judge Cummings) to give oral rather than written instrauctions to the jury in an effort to communicate more effectively with the jurors. I asked both counsel whether they had any objection to this procedure, and neither objected. At the close of the evidence the parties submitted their proposed instructions and there was an instruction conference. I explained that in instructing the jury I would paraphrase the 2 written instructions on which we had agreed; as I recall (I have not received or reviewed the transcript of the trial), only the defendants' counsel had any objections to any of the instructions; the plaintiff's counsel had none.

   I duly instructed the jury and it retired to deliberate. Shortly afterward, I received a note from the foreman asking whether the jury could have in writing the instructions covering the law they were to apply (as distinct from the instructions on credibility, on how to fill out the verdict forms, and on other procedural rather than substantive questions). I asked counsel for their advice. The plaintiff's counsel wanted the jury to get just the instruction quoting the language of Rule 10b-5, but the defendants' counsel objected property in my view, that the jury would be misled, since some of the elements of the Rule 10b-5 offense, such as scienter, are not stated in the rule itself. I therefore decided to give all the substantive instructions, and it is to the giving of these instructions that the plaintiff's counsel objects in his motion for a new trial. As I recall, however, he did not object to the trial; rather, the defendants' counsel objected, 3 and wanted me to give the jury the complete set of written instructions that I had paraphrased in instructing the jury orally.I overruled this objection, recalled the jury, gave them the written substantive instructions, and cautioned them that they were bound by all the instructions I had given, orally or in writing, and that I was giving them the substantive instructions because they had asked for them.

   I cannot see any basis for the plaintiff's objection to this procedure, even assuming contrary to my recollection that this point was preserved as required by Rule 51 of the Federal Rules of Civil Procedure. If anything, the plaintiff was helped by the fact that the jury did not get written instructions on burden of proof, credibility, etc., which the defendants' counsel rightly thought were more helpful to the defendants than to the plaintiff.

   I should add that although I allowed this case to go to the jury, I did so only because I knew the defendants' case would take only a couple of hours to put on. I was convinced at the close of the plaintiff's case that the defendants were entitled to the directed verdict for which they moved at that point, but I reserved their motion 4 since the trial was so close to being over, and if I had granted it and been reversed on appeal the entire case would have had to be retried. So even if there was an error in the instructions properly preserved by the plaintiff's counsel, it was a harmless error because if the jury had brought in a verdict for the plaintiff I would have granted a motion n.o.v. for the defendants.

   The defendants' motion for sanctions arises out of an earlier motion by the defendants, filed shortly before the trial, to bar the plaintiff from calling the defendants' counsel, Mr. Castator, as an occurrence witness in accordance with the pretrial order, which lists him as a potential witness. The defendants characterize the listing of Castator as a witness as an effort made in bad faith to disrupt the defense by forcing their counsel to withdraw from the case. I tentatively granted the defendants' motion to bar the plaintiff from calling Castator as a witness but told the plaintiff's counsel that he could voir dire Castator at trial if he wished to persuade me to change my tentative ruling. The matter was not pursued at trial.

   I am not persuaded that the plaintiff's counsel was acting in bad faith. 5 In fact Castator might well have been called as an occurrence witness. I granted the defendants' motion because I thought the plaintiff's counsel hd not been diligent enough in ascertaining through discovery or otherwise before trial whether he had a great enough need for Castator's testimony to offset the disruptive effect on the defendants' case of losing their lawyer on the eve of trial. But I have absolutely no reason to think that the plaintiff's counsel was acting frivolously or maliciously or otherwise improperly or in bad faith in wanting to call Mr. Castator as an occurrence witness, since as counsel for the corporate defendant during the period when the events giving rise to the lawsuit took place Castator was in fact a logical adverse witness for the plaintiff to call.

   Although I do not think the defendants' motion for sanctions is well founded, I do not think it frivolous; I shall therefore not award sanctions for their having filed it. Thus, all the pending motions are denied.