Complex Lit Blog

Inherent Power and § 1927 Sanctions Are Punitive as Well as Deterrent and Therefore May Exceed the Amount Required for Deterrence

From Stalley v. Mountain States Health Alliance, 2011 U.S. App. LEXIS 13895 (6th Cir. July 8, 2011) (affirming district court opinion excerpted in our post of February 11, 2010): Stalley contends that the district court did not "explain[] why all of the fees and expenses incurred [by Defendants'] law firm . . . had to be awarded to assu ...

RICO Pattern — Nine-Month Scheme by Employee Lacks Continuity — Sole Victim Is Company — Harmed ESOP Participants Not Cognizable Victims — Good Quote (Anti-Mail Fraud Predicate)

From Whitney, Bradley & Brown, Inc. v. Kammermann, 2011 U.S. App. LEXIS 12841 (4th Cir. June 23, 2011): WBB is a federal government contractor, headquartered in Reston, Virginia, that facilitates business relationships between private enterprise and the Department of Defense. WBB continuously employed Kammermann as a manager from May 20 ...

Supreme Court on Civil Practice 2011

A new article, Supreme Court on Civil Practice 2011, has been posted on the Recent Articles page and can be accessed by clicking on the title. ...

A new article, Supreme Court on Civil Practice 2011, has been posted on the Recent Articles page and can be accessed by clicking on the title.

Improper to Interrupt Deposition to Confer with Deponent — By Answering Question About Conference, Privilege May Be Waived or Vitiated by Crime-Fraud — “Speculation” Objection = Improper Coaching — In Camera Meeting with Witness

From LM Ins. Corp. v. ACEO, Inc., 2011 U.S. Dist. LEXIS 79192 (N.D. Ill. July 21, 2011): [T]he plaintiff took the deposition of Natalie Finke, an employee of the Defendants. At the deposition, Ms. Finke testified that she thought that "an individual broker" received "return" (i.e., kickback) to which he was not entitled, and she "defini ...

RICO Claims Dependent on Allegation that Insurers Charged More than Permitted by State Law Dismissed for Failure to Exhaust Mandatory State Administrative Remedies for Excessive Rate Charges

From Mitchell-Tracey v. United Gen. Title Ins. Co., 2011 U.S. App. LEXIS 15952 (4th Cir. Aug. 2, 2011): Plaintiff-Appellants are Maryland homeowners who purchased title insurance from Defendant-Appellees First American Title Insurance Company and United General Title Insurance Company (collectively, "defendants") when they refinanced th ...

Standard of Review of Sanctions under 28 U.S.C. § 1447(c) — Automatic Stay Does Not Preclude Imposition of Sanctions for Frivolous Removal, Post-Petition, of Action Filed Pre-Petition

From Garrett v. Cook, 2011 U.S. App. LEXIS 14403 (10th Cir. July 14, 2011): The district court awarded fees and costs pursuant to 28 U.S.C. § 1447(c), which reads as follows: (c) A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days afte ...

Failure to Withdraw a Claim or Respond to Discovery Is Not Sanctionable under Rule 11 — Continuing to Litigate after Baselessness Is Clear Is Sanctionable — No Right to Condition Dismissal of Baseless Claim on Stipulation from Adversary

From Dearborn Street Bldg. Assocs., LLC v. Huntington Nat’l Bank, 411 F. App'x 847 (6th Cir. 2011): On September 16, 2009, Dearborn prevailed on its fraudulent transfer claims with respect to defendants D&T and PCI and received a monetary judgment. However, in an opinion dated September 30, 2009, the district court granted Hunting ...

From Dearborn Street Bldg. Assocs., LLC v. Huntington Nat’l Bank, 411 F. App’x 847 (6th Cir. 2011): On September 16, 2009, Dearborn prevailed on its fraudulent transfer claims with respect to defendants D&T and PCI and received a monetary judgment.…

Circuit Split as to Whether Res Judicata Can Be Afforded in District Court to Bankruptcy Court Judgment on Non-Core Claim — Collateral Estoppel OK — Impact of Stern Unresolved — No Collateral Attack Based on Standing

From Matrix IV, Inc. v. Am. Nat’l Bank & Trust Co. of Chi., 2011 U.S. App. LEXIS 15537 (7th Cir. July 28, 2011): A. Origin of the Dispute ***Stylemaster was and Matrix continues to be in the molded-plastics industry. Starting in 1994, Stylemaster bought plastic injection molds from an outside vendor and had them shipped direct ...

F. R. App. 38 — Fact that Complaint May Have Been Frivolous when Filed Does Not Mean Appeal from a Dismissal Is Frivolous — Must be “Totally Lacking in Merit”

From Erchonia Corp. v. Bissoon, 2011 U.S. App. LEXIS 9719 (2d Cir. May 11, 2011): Appellees move this Court for sanctions pursuant to Federal Rule of Appellate Procedure 38 arguing principally that Appellant's appeal was frivolous for the same reasons the underlying lawsuit was frivolous — "Erchonia had . . . virtually no physical ev ...

Bank Owes No Duty of Care to Non-Customers, Including No Duty to Detect Fraudulent Conduct of Its Customers

From Public Serv. Co. of Okla. v. A Plus, Inc., 2011 U.S. Dist. LEXIS 85179 (W.D. Okla. Aug. 2, 2011): PSO brought this action to recover sums it paid to A Plus, Inc. a/k/a Jarvis Furniture a/k/a A Plus Spraying (collectively, "A Plus") pursuant to invoices submitted to PSO by A Plus and/or its owners, defendants Randel R. Stone and Kimb ...

Commercial Litigation and Arbitration

Inherent Power and § 1927 Sanctions Are Punitive as Well as Deterrent and Therefore May Exceed the Amount Required for Deterrence

RICO Pattern — Nine-Month Scheme by Employee Lacks Continuity — Sole Victim Is Company — Harmed ESOP Participants Not Cognizable Victims — Good Quote (Anti-Mail Fraud Predicate)

Supreme Court on Civil Practice 2011

Improper to Interrupt Deposition to Confer with Deponent — By Answering Question About Conference, Privilege May Be Waived or Vitiated by Crime-Fraud — “Speculation” Objection = Improper Coaching — In Camera Meeting with Witness

RICO Claims Dependent on Allegation that Insurers Charged More than Permitted by State Law Dismissed for Failure to Exhaust Mandatory State Administrative Remedies for Excessive Rate Charges

Standard of Review of Sanctions under 28 U.S.C. § 1447(c) — Automatic Stay Does Not Preclude Imposition of Sanctions for Frivolous Removal, Post-Petition, of Action Filed Pre-Petition

Failure to Withdraw a Claim or Respond to Discovery Is Not Sanctionable under Rule 11 — Continuing to Litigate after Baselessness Is Clear Is Sanctionable — No Right to Condition Dismissal of Baseless Claim on Stipulation from Adversary

Circuit Split as to Whether Res Judicata Can Be Afforded in District Court to Bankruptcy Court Judgment on Non-Core Claim — Collateral Estoppel OK — Impact of Stern Unresolved — No Collateral Attack Based on Standing

F. R. App. 38 — Fact that Complaint May Have Been Frivolous when Filed Does Not Mean Appeal from a Dismissal Is Frivolous — Must be “Totally Lacking in Merit”

Bank Owes No Duty of Care to Non-Customers, Including No Duty to Detect Fraudulent Conduct of Its Customers

Recent Posts

Practice of Seeking Leave to Amend after The Case Is Dismissed Is Discouraged

RICO: Release Executed After Alleged RICO Violations Extinguishes RICO Claim — Eighth Circuit Declines to Address Enforceability of A Release “That Is An Integral Part of An Alleged RICO Scheme Or That Immunizes Future RICO Conduct

Pleading — “Civil pleadings are supposed to mark the boundaries for discovery; discovery is not supposed to substitute for definite pleading” (Good Quote) — Shotgun Pleadings (11th Circuit): Four Categories/Types

Rule 37(c)(1) Exclusion of Untimely Expert Report: Failure to Argue Harmlessness Essentially Waives Issue

Rule 37(b) Sanctions — Exclusion of Supplemental Expert Report for Advancing New Opinions — Third Circuit Exclusion Factors — “Importance of Excluded Evidence:” If, As Proponent Argues, There Is Nothing New, Then Exclusion Doesn’t Harm Proponent; If There Is, It Harms Opponent

RICO Pleading: Generic Allegations of Fraud (Failing Even to Set Forth Any False Representation) And Extortion (Failing to Describe Actual Threats) Too Conclusory to State a Claim

RICO Pleading: Statutory Directive That RICO Be Liberally Construed Does Not Extend to More Liberal Pleading Requirements

FRAP 38 Sanctions Imposed Due to the “Striking Legal Emptiness” of Brief/Appeal, “A Legal Nothingburger” — Bad Faith Not Required: An Appeal “May Also Be Frivolous If It Is Filed Out Of Sheer Obstinacy” (Good Quotes)

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