From Wachovia Bank v. Tien, 2010 U.S. App. LEXIS 26089 (11th Cir. Dec. 22, 2010):

Henry Tien appeals pro se from the partial final judgment in an interpleader action, 28 U.S.C. § 1335, which imposed on him approximately $3.4 million in sanctions. He claims that the district court abused its discretion in exercising its inherent power to impose sanctions for his alleged bad-faith conduct. He further claims that the district court abused its discretion in determining the amount of the sanctions award. Upon review, we affirm. ***

This appeal arises from a complaint for interpleader filed by Wachovia Bank, which alleged that various parties had made conflicting and uncertain claims to the funds in 5 bank accounts that, at the time, totaled more than $90 million. Included among the potential claimants were: (1) American University of the Caribbean ("AUC"), American University of the Caribbean, N.V., and American University of the Caribbean School of Medicine ("AUCSOM"), collectively "the AUC companies"; (2) Medical Education Information Office, Inc. ("MEIO"), which had been incorporated to provide administrative services to the AUC companies; (3) Paul Tien, founder of AUCSOM and MEIO; (4) Yife Tien, one of Paul's sons and the president of MEIO; (5) Henry Tien, Paul's other son and the former financial administrator of MEIO; and (6) Ming Tien, Paul's wife and an administrative assistant for MEIO.

Yife, the AUC companies, and MEIO (collectively "the appellees") asserted a cross-claim, alleging that all of the interpleaded funds were corporate funds belonging to the AUC companies and MEIO. In particular, they alleged that Henry had transferred more than $61 million in funds from Paul's and the AUC companies' accounts into 2 accounts in the name of Southeastern Trust Company, Ltd. ("SETC"), apparently in an effort to retain control over the companies' finances and to "scoop the pool" upon his father's death. Neither Yife nor Paul asserted a personal claim to the interpleaded funds. ***

During discovery, Wachovia learned that SETC had been incorporated in the Turks and Caicos Islands ("TCI") and had been dissolved in 1988. Under TCI law, the TCI government potentially had a claim to SETC's unclaimed assets, so Wachovia amended the complaint to add TCI as a defendant. TCI asserted counterclaims and cross-claims, which it litigated vigorously for two years, until it reached a settlement agreement with the appellees. ***

Shortly before the close of discovery, American University ("American"), an unrelated institution in Washington, D.C., moved to intervene in the interpleader action. American described its ongoing trademark-infringement litigation against the AUC companies in front of the Trademark Trial and Appeal Board, which Henry had been litigating pro se on the AUC companies' behalf, despite the termination of his employment. American asked the court to litigate its trademark claims in the interpleader action in the interest of judicial economy and permitting American to recover its anticipated judgment from the interpleaded funds. Following a response by the appellees, the court denied American's motion. ***

The appellees moved for approximately $3.7 million in sanctions. The district court denied sanctions as to Ming but imposed them on Henry, finding that his bad-faith conduct before and during the litigation had resulted in four years of litigation and millions of dollars in fees and costs. As to the attorney fees, the court found that the litigation had been lengthy, paper-intensive, and complex, and the importance of document review warranted the assignment of multiple attorneys to the task. Henry could have avoided the extensive document review if he had not provided the documents in a state of disarray and concealed his knowledge of the true ownership of the funds. The court also included the fees and costs associated with the trademark case and other related litigation, insofar as those amounts were necessary to the interpleader litigation, such as the expense of opposing American's motion to intervene and investigating Henry's assertion in the interpleader case that he was the owner of the AUC mark.

The court further included the expense of defending and settling TCI's claims, including the $250,000 settlement payment. Specifically, it found that Henry's knowingly false assertions regarding the SETC accounts had led TCI to assert its claims, Henry had placed on the appellees the burden of defending and settling the claims on everyone's behalf, and the settlement had saved all of the parties hundreds of thousands of dollars in additional legal fees. ***

Here, Henry falsified corporate documents, took advantage of his family's trust, and opened secret accounts in a fictitious name, as part of a scheme to embezzle more than $61 million from AUCSOM's and his father's accounts. He knew from the outset the true ownership of the funds, but he asserted his frivolous claim of joint ownership nevertheless, and he pursued it for four years. He was uncooperative throughout discovery, an action in replevin was required to remove hundreds of boxes of corporate documents from his home, he produced the documents in a state of disarray that necessitated extensive document review, and he improperly retained possession of certain corporate assets that he transferred to his own name and used to pay his own legal and personal expenses. His knowingly false assertion that the SETC accounts were connected to the long-defunct TCI entity led to TCI's involvement in the suit, and he left the appellees to defend those claims on his behalf. Although Henry makes the bare assertion that his trial attorneys could have presented evidence that would show he had pursued his claims in good faith, he has never indicated what that evidence might be, and no suggestion of such evidence appears in the record.

***Under the circumstances, the district court reasonably concluded that Henry had acted in bad faith, and its imposition of sanctions was not an abuse of its discretion. ***

Here, the district court reasonably found that the attorney fees incurred, including the staffing decisions, time expenditures, billing rates, and the retention of the London attorney, were appropriate for a case of this magnitude and complexity. Counsel submitted hundreds of pages of detailed bills to verify the necessity of the expenditures, and the court did not clearly err in finding that a 5% deduction from the requested award would account for any inadvertent duplication or inefficiency. The court also reasonably included the TCI settlement amount, which was incurred as a direct result of Henry's bad-faith claims and false sworn statements. It was reasonable, as well, to include fees associated with the trademark and other litigation that were necessary to the interpleader litigation and brought about by Henry's own conduct.