Judge makes 'rare' move to oust indicted 'Kraken' lawyer from Dominion defamation lawsuit for 'intentional, dangerous, and relentless misconduct'

Left: Patrick Byrne, the former CEO of Overstock (AP Photo/J. Scott Applewhite, File). Right: Stefanie Lambert (Todd McInturf/Detroit News via AP).

A U.S. magistrate judge agreed Tuesday an indicted “ Kraken ” lawyer likely entered Dominion Voting Systems’ defamation lawsuit as ex-Overstock CEO Patrick Byrne’s attorney for the “improper purposes” of accessing and leaking up to three million documents from discovery, that she “violated” the D.C. Rules of Professional Conduct, lacked candor with the court, and, as a result, was “immediately disqualified” from the case even though that is a “rare sanction.”

Stefanie Lambert instantly sparked controversy in March when she entered an appearance to represent Byrne, after his lawyer at the time notified Dominion of a significant discovery breach, in which “ username-and-password access ” to the “entire repository” of Dominion discovery documents was handed to a 2020 election-denying sheriff , a non-party to the case.

Those documents were then posted on the internet and formed the basis of Barry County Sheriff Dar Leaf’s March 17 letter to Rep. Jim Jordan, R-Ohio, discussing a criminal probe of Dominion employees — a continuation of never successful “Kraken” efforts to prove that the 2020 election was stolen from Donald Trump.

Leaf said — via an X account that was created in March — that he was investigating “conspiracy crimes, wire services fraud, honest services fraud, and perjury charges,” connected to Dominion CEO John Poulos’ “sworn testimony before the Michigan Legislature that its voting systems could not be accessed or connected to by outside networks and sources, and that it was a ‘US based company.'”

Barry County Sheriff Dar Leaf (Fox 17)

Speaking of felony allegations, Lambert currently faces two such cases in her home state of Michigan, most recently a May computer crime case accusing her and one of her clients, ousted Adams Township Clerk Stephanie Scott of Hillsdale County, of allowing an “unauthorized computer examiner access to voter data, including non-public voter information, concerning the 2020 General Election,” in service of promoting “baseless conspiracies” about the 2020 election outcome.

Prior to that, Lambert was charged in Oakland County for an alleged conspiracy to gain unauthorized access to and willfully damage voting machines, a case where Lambert in March “filed a pro se motion in that case […] and attached Dominion’s Litigation Documents as an exhibit.”

The two cases factored into Lambert’s participation in the Dominion lawsuit, and U.S. Magistrate Judge Moxila A. Upadhyaya also mentioned the pending criminal matters in her lengthy disqualification ruling, noting that Lambert in March referred to Scott in court only as an “assistant” who had access to the Dominion documents and “failed to advise the Court that Ms. Scott was not just an assistant to Ms. Lambert, but is also the former Clerk of Adams Township, Michigan and Lambert’s co-defendant in her pending felony criminal case in Hillsdale County, Michigan.”

After Lambert appeared in court in March following the discovery breach at issue, she was arrested by U.S. Marshals , spent the night in jail, and was thereafter allowed to drive back home. Lambert had failed to appear for a March 7 court date in her first criminal case, prompting a state judge to issue a bench warrant.

Dominion, for its part, filed an emergency motion to disqualify Lambert from representing Byrne in the case.

In defense of their actions, Lambert and Byrne had said discovery included emails written in “Serbian and foreign languages” that they claimed were “evidence of criminal violations,” namely, “top level Dominion employees directing and tasking foreign nationals to remotely access voting machines utilized in the United States during the November 3, 2020 election.”

Patrick Byrne, former CEO of The America Project and former Overstock.com CEO, left, and Joe Flynn, President, The America Project, attend a conference on conspiracy theories about voting machines and discredited claims about the 2020 presidential election at a hotel in West Palm Beach, Fla., Saturday, Sept. 10, 2022. (AP Photo/Jim Rassol)

Dominion responded to the reporting evidence of crimes to law enforcement justification by dismissing the “xenophobic conclusion is that any email from non-US-based Dominion personnel is conclusive evidence of criminal activity.”

The second pending criminal case was cited by Lambert to move a May disqualification hearing back further.

After the charges, Lambert sent an email to Dominion lawyers telling them, “As you know, the MI AG has fashioned bogus charges requiring my appearance in court on Monday.”

Dominion attorney Davida Brook responded that “we are not aware of any bogus charges” and demanded that Lambert provide both proof of the court appearance and other dates to have the hearing.

“I am no longer available this week. I have a hearing scheduled on a client matter on the 15th,” Lambert replied. “I will not be able to travel to DC due to these conflicts on Monday and Wednesday.”

Uphadaya pushed back the proceedings but said the May hearing would not be postponed again, and that Byrne had to appear in person. Just hours after that hearing, Dominion said, Byrne “used X to further disseminate the impermissibly leaked documents” with a repost.

“Yes, it does seem like they made many important concessions today,” Byrne commented. “Methinks their lawyers are more familiar with civil practice than criminal law.”

Since that time, the magistrate repeatedly warned Lambert and Byrne that they were “expressly prohibited” from sharing discovery “anywhere outside this case,” this after Dominion called attention to an apparent effort to work around the protective order and aid the defense of ex-Mesa County clerk Tina Peters, who was convicted just this week in Colorado of tampering with Dominion voting machines to try and prove that the 2020 election was stolen from Trump.

Peters is an ally of MyPillow CEO Mike Lindell , whose company is also being sued by Dominion.

In July, Dominion said there appeared to be a “highly-orchestrated scheme” to “disseminate” discovery through the criminal case of Peters, saying that Lambert, local counsel in the failed 2020 Michigan “Kraken” election conspiracy lawsuit who was initially sanctioned and then unsanctioned for her participation in that case, had been issued a subpoena that could give her “virtually unfettered, unilateral discretion to produce all of the documents produced by Dominion in this matter—and anything else she deems ‘relevant to the defense'” of Peters.

Dominion said that it learned Peters attorney John Case was also working with Lambert on Byrne’s defense in the Dominion case and that he had “reviewed” discovery material.

In light of the above, the magistrate judge wrote Tuesday that Lambert and Byrne “unilaterally decided to disclose thousands, if not millions, of Dominion’s Litigation Documents to third parties and then promote the public dissemination of the documents through those third parties,” in violation of court orders and without justification.

“None of the justifications Lambert has offered for her conduct, which as noted above is largely undisputed, excuse her actions as Byrne’s counsel of record,” the judge said, writing that she “failed to substantiate any of her conclusory allegations that Dominion’s Litigation Documents contain evidence of national security crimes.”

“She has not, for example, pinpointed certain documents and made an argument that they meet the elements of any particular crime. Nor has Lambert explained why, when faced with these documents supposedly reflecting serious crimes of national importance, she chose to disclose them to a single county sheriff in Michigan as opposed to a national law enforcement agency such as the Federal Bureau of Investigation or Department of Justice,” the ruling said. “To the contrary, Lambert continues to advance these allegations despite being unable to point to any court authority that substantiates them.”

Not only are discovery documents “widely available to the public,” these “actions have led to serious threats to Dominion and its employees,” Upadhyaya wrote, describing doxxings of an employee in Belgrade and an employee in Colorado.

“This is not a case of an inadvertent breach or good faith disclosure; it is unfathomable for Lambert to believe she could do whatever she wanted with Dominion’s Litigation Documents. Lambert’s actions were intentional and clearly meant to inflict the harm that has resulted,” the judge said. “Moreover, there is no dispute that the dissemination of the documents has led to individuals, including Dominion’s CEO and employees, facing severe threats.”

Lambert, the judge added, made “many misrepresentations and misstatements to the Court” and engaged in a “deeply concerning pattern that does not appear to have any sign of stopping.”

Upadhyaya, detailing the incidents in bullet points, analyzed that Lambert violated rules of professional conduct by knowingly disobeying court orders, making misrepresentations to the court, and interfering with the administration of justice in a “severe” way.

While acknowledging that there’s “no question that disqualification is a rare sanction,” the magistrate said this is “one of those rare cases where the circumstances of Lambert’s misconduct are ‘truly egregious’ such that her continued involvement would ‘infect future proceedings.'”

Writing that the “exponential harm” caused “cannot be undone,” Upadhyaya saw disqualification as the only option for an attorney who “has repeatedly shown that she has no regard for orders or her obligations as an attorney before this Court.”

“Lambert’s blatant disregard for this Court and her obligations is unending; her actions have already severely infected this proceeding. There is no doubt that they would continue to do so if she were permitted to remain counsel in this case. This Court cannot allow such intentional, dangerous, and relentless misconduct to continue,” the magistrate wrote. “Lambert is immediately disqualified from serving as counsel in this case.”

When Law&Crime reached out to Lambert for comment on the ruling, she responded: “We are filing an appeal.”

Read the ruling here .

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