By Mike Scarcella

May 19 (Reuters) - U.S. law firm Quinn Emanuel was ordered on Tuesday to fund ethics training and pay sanctions after a federal judge said a group of its lawyers misled the court about evidence it used to defend cancer test company Natera in a false advertising lawsuit by rival Guardant Health.

U.S. District Judge Edward Chen in San Francisco said the law firm must design an eight-hour internal ethics training program for the attorneys involved and pay a nearly $3 million sanction that a court-appointed official recommended in January. Five lawyers at the firm will individually pay a portion of the sanction totaling tens of thousands of dollars.

The lawyers' conduct highlighted "disturbing" broader concerns about litigation culture and ethics, Chen said.

“It is a culture that takes refuge in lawyering finesse and prioritizes winning motions over acting ethically,” the judge wrote. "This kind of lawyering multiplies proceedings, balloons costs, and erodes trust in counsel."

Guardant filed the underlying lawsuit in 2021, claiming Natera made misleading claims about the companies' competing colorectal cancer blood tests. A jury in November awarded Guardant more than $292 million in damages after a trial.

The sanctions stem from how Quinn Emanuel, which employs more than 1,300 attorneys, handled late-breaking evidence related to a medical expert on the eve of trial.

“No less than four partners were involved in propagating misleading statements to the court,” Chen wrote. “At virtually every juncture in this misadventure, these attorneys turned a blind eye to the truth, deliberately failed to exercise diligence, violated their duties of candor to the court, and then attempted to justify it — without basis.”

Quinn Emanuel in a statement on Tuesday said it was "deeply disappointed by the conduct described in the judge’s order." It said the firm and the lawyers involved have apologized to Chen.

"While winning for clients is important, we know that our lawyers must always, first and foremost, abide by their ethical duties," the firm said. It said a member of Quinn Emanuel's executive committee will visit each of the firm's U.S. offices to address the court's concerns about lawyer conduct.

Guardant and Natera did not immediately respond to requests for comment. Natera denied Guardant's claims in the lawsuit, arguing its statements about its blood screening tests qualified as protected speech under the U.S. Constitution’s First Amendment.

Chen said Quinn Emanuel, and not Natera, is responsible for the $2.98 million in compensatory sanctions imposed in an earlier sanctions order. Chen’s ruling on Tuesday also said the law firm must pay an additional $100,000 as a punitive sanction.

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