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Standard of Review of Magistrate Judge Decisions — What Type of Sanction Is Dispositive?

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From Colida v. Nokia, Inc., 2008 U.S. Dist. LEXIS 75450 (S.D.N.Y. Sept. 26, 2008):

Generally, a district court reviews the recommendations of a magistrate judge for clear error on the face of the record.

If specific objections are made to a recommendation on a dispositive motion, however, a district court reviews that recommendation de novo. Fed. R. Civ. P. 72(b) advisory committee's note. See also Nelson v. Smith, 618 F. Supp. 1186, 1189 (S.D.N.Y. 1985). Objections must be more than perfunctory to prompt \de novo review. See Edwards v. Fischer, 414 F. Supp. 2d 342, 346-47 (S.D.N.Y. 2006). ***

Defendant objects specifically to the scope of the Report's recommended sanctions. Whether the Court reviews the scope of these sanctions de novo in light of Defendant's objection would normally turn on whether Defendant's motion for sanctions is dispositive or non-dispositive. ***

[Footnote 4:] Whether motions for sanctions are dispositive or non-dispositive is currently a contested point of law within the Second Circuit. In Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990), the Second Circuit stated that although monetary sanctions for noncompliance with discovery orders were non-dispositive, other types of sanctions might be dispositive, requiring de novo review.

District courts in the Second Circuit have generally read Hoar as standing for the proposition that whether any particular motion for sanctions is dispositive or non-dispositive depends on whether the sanctions imposed actually dispose of a claim. See McAllan v. Von Essen, 517 F. Supp. 2d 672, 678 (S.D.N.Y. 2007) (stating that orders concerning Rule 11 sanctions are considered nondispositive in the Second Circuit); Weeks Stevedoring Co., Inc. v. Raymond Int'l Builders, Inc., 174 F.R.D. 301, 303-04 (S.D.N.Y. 1997) (stating that "imposition of sanctions is reviewable under the 'clearly erroneous or contrary to law' standard unless the sanction itself can be dispositive of a claim").

Neither the Second Circuit itself nor district courts within the Second Circuit have fully addressed the question of how significantly a sanction must impact a claim for the motion to be considered dispositive.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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