Complex Lit Blog

Rule 37 Sanctions – Default Judgment: (1) 4-Factor Test for Litigation-Ending Sanctions for Discovery Abuse (Fifth Circuit); (2) Deletion and Manipulation of Source Code As Spoliation; (3) Detailed Consideration of Lesser Sanctions Excused Where It Is Clear Lesser Sanctions Would Have Been Futile—Especially Where the Misconduct Was Egregious And Repeated, And There Has Been A Warning; (4) Giving A Second Or Third Chance Before Imposing Litigation-Ending Sanctions Itself Amounts to a Lesser Sanction; (5) A Default Judgment Is Sometimes The Only Practicable Solution; (6) Where Party Appealing Denial of Rule 60(b) Motion for Reconsideration Failed to Object to the R&R Adopted by the District Court, Appellate Review Is for Plain Error Only

Calsep A/S v. Dabral, 84 F.4th 304 (5th Cir. 2023): One company, alleging that another company stole the code for its software product, filed a lawsuit. During discovery, the alleged thief destroyed electronic evidence. That was a violation of several court orders and the Federal Rules of Civil Procedure. So, the district court sanctioned the spoliator by entering a default judg ...

Section 1927 Sanctions: (1) While Review Is Generally Abuse-of-Discretion, It Is De Novo When Exercise of Discretion Depends on a Purely Legal Issue; (2) 4. Survival on Rule 56 and 52 Motions On The Same Grounds Used Later To Sanction Plaintiffs’ Counsel Shows That They Didn’t Pursue Their Claims Recklessly; (3) Absent a Misrepresentation to the Court, Parties May Rely on Success in Rule 56 and 52 Motions As Indicators That Their Claims Were Objectively Reasonable and Suitable for Trial, Although Court Notes That Survival on Rule 52 and 56 Motions Doesn’t Automatically Preclude § 1927 Sanctions; Court Cannot Impose § 1927 Sanctions For Failing To Sustain Burden Of Proof Where Court Accepted That Quantum Of Evidence As Sufficient On Summary Judgment; Survival on Daubert Motion Precludes § 1927 Sanctions for Continued Reliance on Expert to Proceed to Trial

Obeslo v. Empower Capital Mgmt., 2023 U.S. App. LEXIS 28812 (10th Cir. Oct. 31, 2023):

Obeslo v. Empower Capital Mgmt., 2023 U.S. App. LEXIS 28812 (10th Cir. Oct. 31, 2023): *1 Two law firms that represented Plaintiffs in this litigation, Schlichter Bogard & Denton LLP (“SBD”) and Schneider Wallace Cottrell Konecky LLP (“SWCK”), appeal the…

Inherent Power Sanctions: (1) Court May Enter Dismissal on the Merits Even If It Lacks Subject Matter Jurisdiction — (2) Bad Faith or Willful Abuse of Judicial process Required in Fifth Circuit — (3) Opposing Party Need Not Be Prejudiced — (4) All Aspects of Inherent Power Sanctions Award, Including Invocation of Power, Reviewed for Abuse of Discretion — (5) District Court Must Sufficiently Articulate Reasons for Sanctions Award

Ben. E. Keith Co. v. Dining All., Inc., 2023 U.S. App. LEXIS 24114 (5th Cir. Sept. 12, 2023) < ...

Ben. E. Keith Co. v. Dining All., Inc., 2023 U.S. App. LEXIS 24114 (5th Cir. Sept. 12, 2023) Opinion *1 Although modern business entities may organize in complex ways unknown in the past, the criteria for diversity of citizenship jurisdiction…

Inherent Power Sanctions — (1) Deeming Facts Admitted for Violations of Discovery Orders by Corporate Defendants, Leading to Entry of Judgment Against Them and Associated Individual Defendant — (2) May Issue Both Case-Terminating and Financial Sanctions for Same Discovery Misconduct (Concealing Financial Information) — 9th Circuit Factors for Terminating Sanctions

URS Holdings, Inc. v. Topolewski, 2023 U.S. App. LEXIS 24660, 2023 WL 6058825 (9th Cir. Sept. 18, 202 ...

URS Holdings, Inc. v. Topolewski, 2023 U.S. App. LEXIS 24660, 2023 WL 6058825 (9th Cir. Sept. 18, 2023) (unpublished): MEMORANDUM* *1 Defendant Gary Topolewski and Defendants Morrison Knudsen Corporation, Morrison-Knudsen Company, Inc., Morrison-Knudsen Services, Inc., and Morrison-Knudsen International…

Rule 37 Sanctions: Second Circuit Factors for Entry of a Default Judgment for Discovery Abuse — Meaning of “Possession, Custody Or Control” under Rule 34

Mirlis v. Greer, 2023 U.S. App. LEXIS 22938 (2d Cir. Aug. 30, 2023): *1 Defen ...

Mirlis v. Greer, 2023 U.S. App. LEXIS 22938 (2d Cir. Aug. 30, 2023): *1 Defendant-Appellant Sarah Greer appeals the district court’s judgment awarding damages to Plaintiff-Appellee Eliyahu Mirlis to recover funds Greer received as the result of an alleged fraudulent…

Bankruptcy Court Has Inherent Authority to Impose Substantial Compensatory and Coercive Civil Contempt Sanctions — Burden of Proof/Factors for Civil Contempt

Worms v. Rozhkov (In re Markus), 2023 U.S. App. LEXIS 22989 (2d Cir. Aug. 30, 2023): ...

Worms v. Rozhkov (In re Markus), 2023 U.S. App. LEXIS 22989 (2d Cir. Aug. 30, 2023): *1 In this case, appellant Victor A. Worms, an attorney, represented the debtor Larisa Ivanovna Markus in proceedings before the United States Bankruptcy Court…

Even If Statutory Basis for Injunction Is Later Withdrawn by Supreme Court, That Does Not Excuse Contempt, Which The District Court Has Inherent Power to Sanction (Here, By a $40 Million Fine)

FTC v. Nat'l Urological Grp., Inc., 2023 U.S. App. LEXIS 22823 (11th Cir. Aug. 29, 2023): Hi-Tech Pharmaceuticals, Inc., Jared Wheat, and Stephen Smith appeal the district court's denial of their request for relief from contempt sanctions. Nearly t ...

FTC v. Nat’l Urological Grp., Inc., 2023 U.S. App. LEXIS 22823 (11th Cir. Aug. 29, 2023): Hi-Tech Pharmaceuticals, Inc., Jared Wheat, and Stephen Smith appeal the district court’s denial of their request for relief from contempt sanctions. Nearly twenty years…

Rule 11 Sanctions — Fees Incurred Because of the Violation, Including Fees Incurred in Bringing the Sanctions Motion, Are Recoverable Even If They Are Covered by Insurance — Res Judicata vs Claim-Splitting (The Rule Against Duplicative Litigation): Unlike Res Judicata, Which Requires A Final Judgment, The Rule Against Duplicative Litigation Permits Dismissal of a Duplicative Action While the First Case Remains Pending — A Judicial Determination That A Proposed Amendment to A Complaint Would Be Futile Operates As A Ruling on The Merits

Kezhaya v. City of Belle Plaine, 2023 U.S. App. LEXIS 22431 (8th Cir. Aug. 25, 2023) * ...

Kezhaya v. City of Belle Plaine, 2023 U.S. App. LEXIS 22431 (8th Cir. Aug. 25, 2023) *1 Attorney Matthew Kezhaya appeals an order of the district court* sanctioning him and his co-counsel under Federal Rule of Civil Procedure 11…

12(b)(6): To What Extent May A Court Consider An Expert Report Or Affidavit Annexed To A Complaint In Deciding A Dismissal Motion?

Alix v. McKinsey & Co., 2023 U.S. Dist. LEXIS 145872, at *82-83, 2023 WL 5344892, at *27 (SDNY Aug. 18, 2023): *** Finally, [Defendant] McKinsey contends that a joint declaration from three bankruptcy professionals that Alix appended to ...

FRAP 38 Sanctions: (1) Mistake — A Colorable But Erroneous Argument — Is Not Properly Sanctioned under FRAP 38 — (2) FRAP 38 Particularly Apt When Losing Party in Arbitration Is Using Frivolous Arguments to Delay Collection of Award

Kinsella v. Baker Hughes Oilfield Operations, LLC, 66 F.4th 1099 (7th Cir. 2023) Opinion [*1101] An arbitrator rejected Donald Kinsella's claim that his employer, Baker Hughes, violated the Americans with Di ...

Kinsella v. Baker Hughes Oilfield Operations, LLC, 66 F.4th 1099 (7th Cir. 2023) Opinion [*1101] An arbitrator rejected Donald Kinsella’s claim that his employer, Baker Hughes, violated the Americans with Disabilities Act by failing to accommodate him after he suffered…

Commercial Litigation and Arbitration

Rule 37 Sanctions: Second Circuit Factors for Entry of a Default Judgment for Discovery Abuse — Meaning of “Possession, Custody Or Control” under Rule 34

Bankruptcy Court Has Inherent Authority to Impose Substantial Compensatory and Coercive Civil Contempt Sanctions — Burden of Proof/Factors for Civil Contempt

Even If Statutory Basis for Injunction Is Later Withdrawn by Supreme Court, That Does Not Excuse Contempt, Which The District Court Has Inherent Power to Sanction (Here, By a $40 Million Fine)

12(b)(6): To What Extent May A Court Consider An Expert Report Or Affidavit Annexed To A Complaint In Deciding A Dismissal Motion?

FRAP 38 Sanctions: (1) Mistake — A Colorable But Erroneous Argument — Is Not Properly Sanctioned under FRAP 38 — (2) FRAP 38 Particularly Apt When Losing Party in Arbitration Is Using Frivolous Arguments to Delay Collection of Award

Recent Posts

RICO: Indirect Injury Unrecoverable — Indirect Purchaser Rule Imported from Antitrust

RICO: No Causation Where Harm Flowed Several Steps After the Fraudulent Acts — RICO Causation Same As Antitrust Causation

Sanctions vs. Automatic Stay: Imposition of Sanctions (Here, Inherent Power Sanctions) Is Subject to the Police Power Exception to the Automatic Stay in Bankruptcy

The Word “Include” May Be A Word of Limitation As Opposed to a Word of Enlargement, Depending on the Context

Spoliation/Sanctions: “A Party Does Not Spoliate Evidence When, Without Notice Of The Evidence’s Potential Relevance, It Destroys The Evidence According To Its Policy Or In The Normal Course Of Its Business” (Good Quote)

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