Commercial Litigation and Arbitration

Rule 11 Sanctions: No Failure to Mitigate Fees Shown Where Warning Letters Ignored — Time Spent Reviewing Social Media Posts OK — Inability to Pay May Be Offset by Deterrence — No R. 11 Fees for Time Spent on Appeal

Horen v. Board of Educ. of City of Toledo Public Sch. Dist., 2016 WL 11599934 (6th Cir. Mar. 25, 2016):

*1 Glenn Horen, proceeding pro se, appeals the district court’s imposition of Federal Rule of Civil Procedure 11 sanctions against him following the dismissal of his lawsuit filed under the Individuals with Disabilities Education Act and other federal and state laws, individually and as next friend of his daughter D.H. This case has been referred to a panel of the court that, upon examination, unanimously agrees that oral argument is not needed. See Fed. R. App. P. 34(a).


This case involves the alleged failure of the Toledo Public Schools to provide educational services to D.H. and is part of a lengthy and ongoing legal dispute between the school district and the parents involving D.H.’s education. In an amended district court complaint, filed against the school district and its special education director, Thom Billau, Horen appealed an administrative decision by a state level review officer regarding the 2007-2008 school year and raised various other federal and state law claims.


The defendants filed a motion for partial dismissal of the amended complaint and moved for Rule 11 sanctions on the ground that the claims addressed in their motion failed as a matter of law for reasons stated in previous court decisions. The district court granted the motion for partial dismissal and denied the motion for sanctions without prejudice to renewal at the end of the proceeding.


The case went forward on Horen’s remaining claims, which included his administrative appeal regarding the 2007-2008 school year, claims against the school district under the Americans with Disabilities Act (ADA) and § 504 of the Rehabilitation Act, and claims of fraud and defamation against Billau. Horen filed a motion for partial summary judgment, accompanied by a CD with over 5000 pages of documents. Without citing a particular statute or cause of action, Horen asserted that relief was warranted because the school district improperly and unilaterally withdrew D.H. from school in 2006. The defendants opposed the motion and again requested sanctions under Rule 11, arguing that Horen failed to satisfy the summary judgment standard because he presented unsupported factual allegations rather than legal claims; that the court had already decided that D.H.’s non-attendance was the fault of the parents, not the school district; and that the submission of more than 5000 pages of evidence, when only forty or so pages were cited in his brief, was unreasonably burdensome. They also moved for summary judgment.


The district court affirmed the administrative decision regarding the 2007-2008 school year and concluded that the parents, not the school district, were responsible for the failure to provide D.H. with the education to which she was entitled; that Horen’s claims under the ADA and § 504 were unexhausted, untimely, barred by res judicata, and without merit; and that the complaint failed to state a claim for fraud or defamation against Billau. Horen v. Bd. of Educ. of City of Toledo Pub. Sch. Dist., 948 F. Supp. 2d 793, 804-17 (N.D. Ohio 2013). The district court deferred ruling on the defendants’ request for sanctions pending appellate review. Id. at 817. After we affirmed the district court’s judgment, the defendants renewed their motion and request for sanctions, seeking attorney fees and costs in connection with the claims addressed in their motion for partial dismissal and with Horen’s motion for partial summary judgment.


*2 The district court granted the motion for sanctions, reasoning that the doctrine of res judicata “barred this suit from the outset,” and directed Horen to “reimburse the defendants for the amounts they reasonably expended for attorneys’ fees and litigation costs, including those relating to the appeal and the instant motion for sanctions.” The defendants filed a statement of attorney fees and costs, and, over Horen’s objections, the district court imposed sanctions in the requested amount of $32,894.79.


Horen appeals the district court’s Rule 11 sanctions order. We review all aspects of a district court’s Rule 11 determination for an abuse of discretion. See Runfola & Assocs., Inc. v. Spectrum Reporting II, Inc., 88 F.3d 368, 372 (6th Cir. 1996). A district court abuses its discretion only if it bases its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence. See Cooter & Gell v. Harmax Corp., 496 U.S. 384, 405 (1990).


Horen raises numerous arguments regarding the district court’s purported errors. His principal argument is that the district court was wrong to note in its sanctions order that principles of res judicata “barred this suit from the outset,” because, Horen argues, “res judicata was not the stated basis for the district court’s decision to dismiss the claims and/or grant summary judgment.” Horen Br. at 7. He argues that he therefore lacked adequate notice regarding the “specific conduct that is said to constitute a Rule 11 violation.” Horen Br. at 9 (citing Indah v. U.S. Sec. & Exch. Comm’n, 661 F.3d 914, 928 (6th Cir. 2011)).


But Horen did not lack notice regarding the specific conduct that gave rise to the district court’s Rule 11 order. In Toledo Public Schools’ first motion for sanctions, attached to its partial motion to dismiss, Toledo Public Schools specifically argued that Horen should be sanctioned for attempting to bring “the same or similar claims against Defendants ... [that] this Court disposed of ... as a matter of law[.]” R. 11 at 3 (Page ID 237). Later, in a second motion for sanctions incorporated in its brief opposing Horen’s partial motion for summary judgment, Toledo Public Schools argued that Horen had submitted “a baseless motion” premised upon factual allegations that ignored what the district court had already concluded “countless times” in earlier iterations of the litigation: that “D.H. has not attended [Toledo Public Schools] since 2006 because her parents removed her and have refused to send her back.” R. 32 at 3, 13 (Page ID 365, 375). The district court denied Horen’s motion for summary judgment and granted judgment to Toledo Public Schools on several of Horen’s claims because Toledo Public Schools had “accurately laid out the sequence of decisions in which hearing officers and courts have found, as a matter of fact in dispute, that the parents kept DH from attending school during the 2006-07 term and thereafter.” R. 47 at 22 (Page ID 583). The district court concluded that Horen’s claims were barred as a matter of “claim preclusion” or “res judicata.” R. 47 at 22, 25, 27 (Page ID 583, 586, 588).


After this court affirmed the district court’s decision, Toledo Public Schools renewed its motion for sanctions “for the reasons stated” in its previous motions for sanctions—namely, that Horen had brought “claims he knew had no legal basis” and that he had submitted a “frivolous” motion for summary judgment. R. 54 at 2-3 (Page ID 611-12). The district court granted the motion because Horen’s claims had already been adjudicated and Horen had “long been on notice of the risk of sanctions if fruitless efforts to pursue groundless litigation persisted.” R. 58 at 2 (Page ID 636). It is obvious from the record that Toledo Public Schools and the district court provided Horen with advance notice of the specific conduct for which he was sanctioned under Rule 11. See Indah, 661 F.3d 926-28. His argument here that he lacked such notice is itself frivolous.


*3 Horen argues that the district court erred when it allegedly included in the sanctions award various attorney’s fees relating to Horen’s claims under the Individuals with Disabilities Education Act (IDEA), which were not “presented for an improper purpose.” But Horen misrepresents the district court’s order. The district court merely granted Toledo Public Schools’ request for sanctions in the amount of its attorney’s fees related to two district court filings: Toledo Public Schools’ partial motion to dismiss Horen’s complaint and its response to Horen’s partial motion for summary judgment. Toledo Public Schools’ motion to dismiss addressed Horen’s claims for relief under the Rehabilitation Act, 29 U.S.C. § 794(a), and the Civil Rights Act of 1871, 42 U.S.C. § 1983, as well as Horen’s state-law claims for fraud and defamation; it did not address Horen’s IDEA claims. And Toledo Public Schools’ response to Horen’s motion for summary judgment included a request for sanctions, not because Horen’s IDEA claims were frivolous, but because his motion for summary judgment restated factual allegations that had already been rejected in the district court, included thousands of pages of irrelevant documents, and “contained no legal argument[.]” R. 32 at 17 (Page ID 375). The district court did not award attorney’s fees because of a deficiency in Horen’s IDEA claims.


Horen argues that the district court improperly acted sua sponte in ordering Rule 11 sanctions without finding that Horen acted in bad faith. But the district court did not order sanctions sua sponte. It specifically “granted” Toledo Public Schools’ “motion for sanctions” and later “granted” the district’s “petition for an award of fees and expenses in the amount of $32,792.” R. 58 at 3 (Page ID 637); R. 67 at 6 (Page ID 761). Thus, the district court’s order was on Toledo Public Schools’ motion for sanctions, not on the district court’s own initiative. And under those circumstances, the district court need not make a finding of bad faith to award sanctions. See Runfola, 88 F.3d at 375.

Horen argues that the Rule 11 sanctions award was improper because Toledo Public Schools failed to mitigate its legal expenses in this case. Specifically, Horen asserts that Toledo Public Schools could have abstained from filing a motion to dismiss Horen’s claims or could have offered to settle Horen’s case. But the district court properly noted that this argument is “without merit[,]” not only because Toledo Public Schools sent Horen warning letters regarding its intention to file for Rule 11 sanctions unless Horen withdrew his frivolous filings, but also because “[g]iven [Horen’s] response to the Rule 11 warnings, any contact and conversation would, in all likelihood, have been entirely pointless. The only result would have been an expenditure of more money to pay [Toledo Public Schools’] lawyers.” R. 67 at 3 n.2 (Page ID 758).


Horen further argues that the district court’s award of fees was “based on flawed billings containing improper and unreasonable expenditures[.]” He focuses particularly on the fact that Toledo Public Schools submitted “redacted billings” to the district court in support of its petition for fees. Toledo Public Schools reasonably responds that it redacted its billing sheets to include only those items for which it sought compensation: items related to its partial motion to dismiss or to its response to Horen’s motion for summary judgment. The district court did not err in basing its award on billing sheets that reflected only those expenses that were related to Toledo Public Schools’ motions for Rule 11 sanctions. And although Horen argues here that an award of attorney’s fees for review of the Horen family’s social-media postings was inappropriate, he has not shown any convincing reason why the district court clearly erred in determining that those costs, in connection with Horen’s motion for summary judgment, were “foreseeable and reasonable[.]” R. 67 at 4 (Page ID 759).


Horen also argues that the fees awarded by the district court are excessive because Horen lacks the ability to pay them. But Horen’s financial wherewithal is not the only factor the district court must consider in determining the amount of a Rule 11 sanctions award. District courts are also obliged to award an amount “sufficient to deter future misconduct[.]” Rentz v. Dynasty Apparel Indus., 556 F.3d 389, 402 (6th Cir. 2009). If the “offended party’s actual expenditures appear reasonable, a district court may determine in its discretion that a smaller amount should be awarded” after considering the offending party’s ability to pay and determining that “a fraction of the actual and reasonable fees requested is sufficient to deter future violations[.]” Jackson v. Law Firm of O’Hara, Ruberg, Osborne & Taylor, 875 F.2d 1224, 1230 (6th Cir. 1989) (emphasis added). Only a total “failure to consider ability to pay is ... an abuse of discretion.” Id.


*4 Here, the district court, after concluding that the legal bills submitted by Toledo Public Schools were “entirely reasonable[,]” went on to consider Horen’s ability to pay, noting that Horen had submitted an affidavit stating that his family “had only $55,439 during the past three years.” R. 67 at 4 (Page ID 759). But the district court found as a matter of fact that, given Horen’s history of repeatedly filing meritless claims arising from the allegations at issue in this case, “the only potentially effective way to deter future ... litigation is to make [Horen] legally responsible” for paying the full amount requested by Toledo Public Schools. Id. at 5 (Page ID 760). That determination was not an abuse of discretion.


Finally, Horen correctly argues that the district court erred when it awarded attorney’s fees related to Horen’s unsuccessful appeal on the merits to the Sixth Circuit. Rule 11 does not permit sanctions awards “for any activities outside the context of district court proceedings.” Cooter & Gell, 496 U.S. at 406. Toledo Public Schools concedes that the district court awarded $7,691.00 in fees related to Horen’s appeal. On remand, the district court should reduce the amount of the award insofar as it includes fees related to proceedings in this court.


For these reasons, we VACATE the district court’s grant of sanctions and REMAND the case for further consideration in accordance with this order.


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