Commercial Litigation and Arbitration

Second Circuit Recognizes that Initial Complaint May Warrant Sanctions under 28 U.S.C. § 1927

From Gollomp v. Spitzer, 568 F.3d 355 (2d Cir. 2009):

As discussed above, the District Court made three findings of "conduct constituting or akin to bad faith," In re 60 E. 80th St. Equities, 218 F.3d at 115: (1) the "incredible" assertion by plaintiff's counsel that they had "researched all legal arguments and made no legal argument that lacked merit," despite prior warnings not to bring claims against New York State that were barred by the Eleventh Amendment...; (2) the "unfathomable" misrepresentation by plaintiff's counsel to Magistrate Judge Treece regarding counsel's disciplinary record...; and (3) plaintiff's counsel's persistence in asserting specious claims despite "ample opportunity . . . to withdraw the[m]".... The record before us ably supports all three of the District Court's findings of conduct that amounted to bad faith.

First, the record demonstrates that several courts had already instructed plaintiff's counsel that similar claims against New York State were barred by the Eleventh Amendment. *** Nonetheless, plaintiffs persisted in bringing claims against the State of New York that were unquestionably barred by Eleventh Amendment sovereign immunity.

We take judicial notice that plaintiff's counsel has filed other lawsuits in the Northern District of New York containing claims that were clearly barred by the Eleventh Amendment. ***

Second, the record supports the District Court's finding that it was "unfathomable" for plaintiff's counsel to misrepresent his disciplinary record to Magistrate Judge Treece during the November 8, 2006 teleconference. ***

Third, the record demonstrates that plaintiff's counsel persisted in alleging legally unfounded claims despite "ample opportunity in this case to withdraw the[m]." ***

In addition to the three findings made by the District Court, our own review of the record reveals additional support for a determination of "bad faith." Since plaintiff's counsel became involved in this litigation, courts have commented that they have brought claims that are incomprehensible — legally or otherwise. As the New York Court of Claims observed in May 2005 — before this litigation moved into federal court — the claims pursued by plaintiff's counsel were nothing more than a recounting of "acts or omissions of the [State] Defendants relative to a laundry list of State and Federal statutes, at some unspecified time and place," such that the Court could not "tell the nature of the Claim, and by what conduct the State is alleged to have caused this Claimant any injury." .... The initial complaint filed in the instant action was equally incomprehensible. For example, we are at a loss to discern — as any defending party would be — what plaintiff meant by allegations that the various defendants collectively "engaged in the unconstitutional delegation of authority by allowing the judicial arm of state government to assume what constitutes legislative power in the form of revamping duly adopted laws, rules and regulations and in the process contravening applicable Home Rule requirements," causing plaintiff "$2,500,000" in damages.... Even less clear is how "Defendants," who included the New York state judiciary, the former Attorney General, and various departments and agencies, "individually and collectively acted in such a manner as to create a hostile environment, including a hostile home environment in which Gollomp and his family reside . . . caus[ing] Gollomp and his family to incur expenses and to suffer physically from anger, frustration, suspicion and concern." .... The State defendants have had to rebut these and similarly vague claims for years.

We also note that plaintiff's counsel have been repeatedly admonished for the extreme length of their pleadings. *** Although the District Court did not cite the pleadings in this case as a reason for awarding sanctions, we observe that the initial complaint in this case--weighing in at 61 pages and containing 493 numbered paragraphs and 22 causes of action--was similarly prolix. Although the second and third iterations of the complaint were shorter, there is simply no justification for ignoring prior instructions to submit pleadings containing "short and plain statement[s] of the claim[s] showing that the pleader is entitled to relief," Fed R. Civ. P. 8(a)(2).

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