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.

Commercial Litigation and Arbitration

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.
Commercial Litigation and Arbitration
« Back to Complex Lit Blog

Sanctions — Error to Award Attorneys’ Fees for Cost of Replying to Submission That Was Invited by Court — Motion for Sanctions against Client Does Not Afford Notice That Counsel May Be Sanctioned

Download PDF

Mantell v. Chassman, 2013 U.S. App. LEXIS 3717 (2d Cir. Feb. 20, 2013):

A. The October 2011 Sanction

Rule 37(a)(5) provides that, if (1) a district court grants a Rule 37(a) motion to compel discovery or disclosure, or (2) disclosure or the requested discovery is provided after the motion was filed, the "court must, after giving an opportunity to be heard, require the . . . [opposing] attorney . . . to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees." Fed. R. Civ. P. 37(a)(5)(A). However, a court must not order payment if: (1) "the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action"; (2) "the opposing party's nondisclosure, response, or objection was substantially justified"; or (3) "other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(a)(5)(A)(i)-(iii).

Mantell is mistaken that a sanction under Rule 37(a)(5) requires a violation of a court order. Rather, a court must order a sanction under Rule 37(a)(5) if it is forced to grant a motion to compel discovery or the requested discovery is provided after such a motion was filed. See Fed. R. Civ. P. 37(a)(5). Here, following the November 8, 2010 letter of plaintiff's attorney Stanley K. Shapiro ("Shapiro") requesting the court to compel discovery pursuant to Rule 37, both situations occurred: (1) the magistrate judge ordered disclosure of documents 8-29 and 41-45; and (2) Mantell disclosed documents 31-35 and 37-40 did not exist. We also note that Mantell's assertion that his clients did not contact him until December 2011 does not excuse his failure to inform Shapiro or the magistrate judge in a timely fashion that he required additional time to respond to Shapiro's discovery requests. By waiting until January 2011 to alert Shapiro and the magistrate judge that he was unable to confer with his clients during the relevant period, Mantell forced needless motion practice, wasting time and resources.

However, Mantell is correct that the district court improperly calculated attorneys' fees by including the attorneys' fees related to Shapiro's June 2011 reply to Mantell's objections to the declaration of fees and costs (a total of 5.5 hours, or $2,475). As Mantell points out, the magistrate judge invited him to file objections to Shapiro's January 2011 declaration of attorney's fees and costs, but then sanctioned Mantell for doing so by awarding fees associated with Shapiro's June 2011 reply. Moreover, the sanctions the district court imposed against Mantell were for the reasonable attorneys' fees and costs associated with the November 8, 2010, November 22, 2010, December 16, 2010, and January 13, 2011 letters. Thus, because the sanction award did not cover future filings, the court erred by including fees for Shapiro's June 2011 reply. ***

B. The March 2012 Sanction

In its December 20, 2011 Memorandum and Order, the district court imposed sanctions on Mantell pursuant to Rule 37(d) and § 1927 for (1) scheduling his clients' depositions in bad faith, and (2) filing a frivolous motion for reconsideration in July 2011. Since Rule 37(d) provides sanctions for a "Party's Failure to Attend Its Own Deposition," it can be safely assumed that when the district court sanctioned Mantell for the frivolous motion for reconsideration, it did so pursuant to § 1927 and not Rule 37(d). The district court affirmed the imposition of sanctions against Mantell when it denied his motion for reconsideration of the December 2011 Order in March 2012.

First, insofar as the district court imposed sanctions under § 1927, Mantell lacked proper notice that he was facing such sanctions, as: (1) Shapiro, in his November 2011 motion, sought sanctions pursuant to Rule 37; and (2) the district court did not warn Mantell that it was considering imposing § 1927 sanctions prior to imposing sanctions in its December 2011 order. Although the court had previously sanctioned Mantell under § 1927 (the October 2011 sanction), he was not on notice that he was facing such sanctions based on Shapiro's November 2011 motion. See Schlaifer Nance & Co., 194 F.3d at 334.

Nor was Mantell on notice that he faced sanctions for scheduling his clients' depositions. Although Shapiro moved for sanctions against Mantell's clients for failing to attend their depositions, he did not move for sanctions against Mantell for scheduling those depositions. Although the district court, in its March 2012 reconsideration order, stated that Shapiro had requested sanctions against Mantell with respect to "misrepresentations and omissions regarding the scheduling [of] plaintiffs' depositions," the court cited a section of Shapiro's November 2011 motion related to his request for sanctions against the plaintiffs, not Mantell.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

Inherent Power Sanctions — Extrajudicial Misconduct: Sanctions Power Extends to Conduct Intended to Sabotage Court’s Ability to Adjudicate the Case Before It, Here, By Commencing State Court Actions Seeking to Enjoin the Federal Plaintiffs from Proceeding with Their Federal Litigation — Sanctions Fee Awards: The Factors Used For Calculating A Fee Award To A Prevailing Party Do Not Govern — Under Goodyear, the Relevant Inquiry Is Whether There Is A Sufficient Causal Link Between The Sanctioned Misconduct And The Fees Awarded

RICO: Members of Association-in-Fact Enterprise Must Act with a Common Purpose—Mere Allegation That Various Defendants Agreed at Different Times to Engage in Various Fraudulent Schemes Does Not Plausibly Support the Essential Inference, That They Acted with s Sufficiently Common Purpose

RICO Causation: (1) State’s Misrepresentation to Federal Government That It Was Providing Plaintiffs with Mandated Special Education Did Not Cause Plaintiffs’ Injury Because The Failure to Provide The Education Was Not Caused by the Fraud on the Federal Government — (2) The Three Factors for Assessing RICO Causation — (3) Limits of the Second Circuit’s Decision in Alix v. McKinsey That Causation Can Be Established Where A Fraud On The Judiciary “Or Other Governmental Entity” Resulted In A Resource Going To Someone Less Deserving

Rule 41(b): Five Factors to Be Weighed in Deciding Whether Dismissal Is Appropriate (Second Circuit) — Is A Finding of Bad Faith or Fault Required if Dismissal Is Without Prejudice? — Undecided If Truly Without Prejudice But It Is Required If the Without Prejudice Dismissal Will Act as a Dismissal on the Merits (Here, Because of the Statute of Limitations) — Failure To Consider A Lesser Sanction Than Dismissal Is Generally An Abuse Of Discretion

Spoliation Sanctions/Mootness: Stipulation Resolving “All Pending Discovery Disputes,” Which Are Enumerated, Does Not Moot Subsequent Sanctions Motion for ESI Spoliation — Postjudgment Sanctions Order Is Appealable When District Court Has Finally Disposed of Both Liability and Amount

Rule 37 Default Judgment Sanction: (1) Default Judgment Appropriate Only As a Last Resort, When Less Drastic Sanctions Would Not Ensure Compliance with the Court’s Orders — (2) Default Judgment Sanction Requires Willful or Bad Faith Failure to Obey Discovery Order — (3) Fugitive Defendant’s Failure to Appear at Court-Ordered, Remote Deposition Despite Court Warning That Sanctions Could Follow Disobedience Warrants Default Judgment — (4) District Court Afforded Wide Discretion in Interpreting Its Own Orders — (5) Filing a Notice of Appeal from a Non-Appealable Order (Here, a Discovery Order) Does Not Deprive the District Court of Jurisdiction over the Case

RICO and Injunctions: (1) State Court Actions Designed to Perpetuate and Monetize a RICO Violation Are Enjoinable under RICO, Even Though They Are Not Themselves Alleged to Be Predicate Acts [Note: Noerr Pennington Applies in RICO Actions] — (2) Although Civil RICO’s Text and Legislative History Fail to Reveal Any Intent to Override the Provisions of the Federal Arbitration Act, Arbitrations Are Enjoinable Under the “Effective Vindication” Doctrine Where They Operate As a Prospective Waiver of a Party’s Right to Pursue Statutory RICO Remedies — (3) Arbitration Findings May Be Given Collateral Estoppel Effect in a Civil RICO Action — (4) Injunction of Non-Corrupt State Court Litigations That Furthers a RICO Violation Are Enjoinable Under the Anti-Injunction Act’s “Expressly Authorized” Exception — (5) “The Irreparable Harm Requirement Is The Single Most Important Prerequisite For The Issuance Of A Preliminary Injunction” (Good Quote) — (6) When Injunction Is Based on “Serious Questions on the Merits” Rather Than “Likelihood of Success,” Court May Rely on Unverified Pleadings and Attached Exhibits to Assess the Merits, Unless the Opponent Has Raised Substantial Questions (Here, the Opponent Failed to Request an Evidentiary Hearing) — (7) Whether Amended Pleading Moots An Appeal Turns on Whether It Materially Changes the Substantive Basis for the Appeal — (8) Meaning of “In That” (“Used To Introduce A Statement That Explains Or Gives More Specific Information” About A Prior Statement)

RICO: Fraudulent Concealment Must Prevent Discovery of the Injury to Toll Statute of Limitations

Rule 37 Default Judgment Sanction: (1) Abuse of Discretion Review = Legal Conclusions De Novo. Factual Findings for Clear Error — (2) Client May Be Sanctioned for Misconduct of Its Counsel, Though Here Client Was Directly Involved in Bad Faith Misbehavior — (3) Is There A Difference, Under Rule 11 As Opposed to Rule 37, Concerning Whether A Client Can Be Sanctioned for Its Counsel’s Misconduct? — (4) While Sanctions of Last Resort (Dismissal/Default) Are Apt Only If Lesser Sanctions Wouldn’t Ensure Compliance, Rule 37 Doesn’t Require the Vain Gesture of First Imposing Lessert Sanctions When It Is Clear They Would be Ineffective — (5) Court’s Reconsideration of Non-Final Orders Is Governed by Rule 54(b), And Court’s Discretion under That Rule Is Governed by the Law-of-the-Case-Doctrine

RICO: (1) Special Pleading Requirements? — (2) Although Enterprise Must Be More Than a Summation of the Predicate Acts, The Predicate Acts Can Demonstrate the Existence of the Enterprise — (3) Requirement That Association-in-Fact Exist For Purposes Other Than Just to Commit Predicate Acts Merely Requires Continuity — (4) To State an Association-in-Fact Enterprise Consisting of One Natural Person and Collection of Legal Fictions Requires Factual Detail As to How They Acted Together — (5) “A § 1962(c) Enterprise Must Be More Than An Association of Individuals Or Entities Conducting the Normal Affairs of a Defendant Corporation” (Good Quote)

Archives
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.

New York Office

© 2024 Joseph Hage Aaronson LLC  
Disclaimer | Attorney Advertising Notice | Legal Notice