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

Inherent Power Sanctions — Untimeliness as Laches — Laches Properly Applied to Deny Sanctions Motion — Note Waived Defenses to Laches

Download PDF

Murtagh v. Cohen (In re Baker), 2024 U.S. App. LEXIS 9922 (9th Cir. Apr. 24, 2024) (unpublished):

MEMORANDUM*

*

 

 This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

 

 

*1 James Murtagh, M.D., appeals the district court’s affirmance of the bankruptcy court’s application of laches to deny his motion for sanctions against Attorney D. David Steele. “We independently review the bankruptcy court’s decision without deference to the district court.” Cossu v. Jefferson Pilot Sec. Corp. (In re Cossu), 410 F.3d 591, 595 (9th Cir. 2005). We review for an abuse of discretion both the bankruptcy court’s exercise of its inherent sanctioning authority and its application of laches. See Hale v. U.S. Trustee, 509 F.3d 1139, 1148–49 (9th Cir. 2007) (inherent authority); Beaty v. Selinger (In re Beaty), 306 F.3d 914, 921 (9th Cir. 2002) (laches). An abuse of discretion occurs when a court makes a clearly erroneous factual determination, a material legal error, or otherwise reaches an ultimate determination outside the wide boundaries established by the governing law and material facts. See, e.g., Fellowship of Christian Athletes v. San Jose Unified Sch. Dist. Bd. of Educ., 82 F.4th 664, 680 (9th Cir. 2023); United States v. Washington, 98 F.3d 1159, 1163 (9th Cir. 1996) (“[A] reviewing court may not reverse unless it has a ‘definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon weighing of the relevant factors.’ ” (quoting Kayes v. Pacific Lumber Co., 51 F.3d 1449, 1464 (9th Cir. 1995))).

 

Laches may apply where a party has actual or inquiry notice as to a potential claim or right, unreasonably delays in asserting that right, and causes prejudice to the opposing party through such delay. See Kling v. Hallmark Cards, Inc., 225 F.3d 1030, 1036 (9th Cir. 2000) (“[A]ny delay is to be measured from the time that the plaintiff knew or should have known about the potential claim at issue.”). The bankruptcy court determined Dr. Murtagh was on actual or inquiry notice of the material facts behind his November 2021 motion for sanctions potentially as early as 2015 and no later than 2018. This conclusion was based on several items, including: an email Murtagh sent to Steele; a letter Murtagh’s attorney sent to Steele’s client Robert Leppo; attorney Baruch C. Cohen’s withdrawal as counsel after the disclosure of wrongdoing by Debtor Clark Baker; and Murtagh’s failure to identify any materials supporting a later date for commencement of the laches period despite having been granted ample discovery. The bankruptcy court also found actual prejudice based on testimony describing a witness’s inability to recollect aged facts or locate notes.

 

We find no clear error in the bankruptcy court’s well-supported findings, no legal error in its analysis of the laches doctrine, and no abuse of its broad discretion in applying laches to deny the motion for sanctions. We affirm.1

 

1

 

 Murtagh asserts no arguments in his briefs regarding unclean hands as a bar to the application of laches. He also makes no argument as to appellee Baruch C. Cohen. As such, we treat arguments as to unclean hands or Cohen as waived. See Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) (“[O]n appeal, arguments not raised by a party in its opening brief are deemed waived.”).

 

 

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

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)

RICO: (1) Fee Award May Exceed Amount Recovered — Strict Proportionality Not Required — (2) Nonmonetary Benefits and Injunctive Relief Recovered Also Relevant Factors — (3) Loss on Some Claims Need Not Result in Lowered Fees, Especially When Both Arise Out of The Same Nucleus of Operative Facts

RICO: Indirect Purchasers (Car Buyers/Renters) Lack Standing to Sue Manufacturers for RICO Violations Even Though Intermediaries (Auto Dealer Direct Purchasers) Lack Any Damages

RICO: Statutory Requirement that RICO Be Liberally Construed Does Not Establish a More Liberal Pleading Standard for RICO Claims — “To Be Sure, Adequately Pleading a RICO Claim Can Be Challenging” (Good Quote) — Court May Dismiss Action Pursuant to Rule 41(b) Absent A Motion

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