Rule 37 Sanctions Granted For Failure to Produce


In Tucker v. BMW of North America, LLC, No. C20-5050 (Western District of Washington, Tacoma) the court granted plaintiff’s motion for rule 37 sanctions against BMW. The court held that BMW had unilaterally narrowed the scope of discovery and had not complied with orders to produce documents. This is a minor sanction as the Defendant lost no right to defend itself in the litigation.

“Rule 37(b) allows for sanctions for not obeying a discovery order. Fed. R. Civ. P. 37(b)(2). It is well established in the Ninth Circuit that this rule “provides a wide range of sanctions for a party’s failure to comply with court discovery orders.” United States v. Sumitomo Marine & Fire Ins. Co., 617 F.2d 1365, 1369 (9th Cir. 1980). While Defendant did engage in some discovery, it unilaterally narrowed the scope of discovery and the Court’s order. Defendant failed to comply with the Court’s November 1 order, which has resulted in Plaintiff having to move to extend the time to complete discovery twice, Dkts. 71, 84, the instant motion for sanctions, Dkt. 86, and a stipulated extension of the trial date, Dkt. 94. Sanctions are therefore warranted, though not to the extent of Plaintiff’s request.

Defendant is hereby ORDERED to pay the fees and costs Plaintiff’s counsel incurred in bringing the motions for extension of time and this motion for contempt and sanctions. If necessary, Plaintiff shall submit a motion for such fees within 14 days of this order. Alternatively, and preferably, the parties shall notify the Court that the sanction has been paid.”

A Nasty Letter Isn’t A Sanctions Motion


Rule 11 has a safe harbor that allows the opposing party to withdraw an offending pleading within 21 days after he is served with the motion for sanctions. Many sanctions motions are denied because the party seeking sanctions writes a letter to the opponent, but does not actually serve a motion for sanctions. This court discussed this common problem and denied the motion for sanctions.

“Rule 11(b) provides that by presenting a pleading to a court, an attorney certifies that, after conducting a reasonable inquiry, evidentiary support exists for the factual allegations pled in the complaint. Fed. R. Civ. P. 11(b)(3). If a party believes that it has been served with a complaint for which no reasonable inquiry had been conducted, or for which no evidentiary support existed, then he may move for sanctions pursuant to Rule 11(c). Fed. R. Civ. P. 11(c)(1). The movant may not, however, file the motion for sanctions with the court unless the motion has been served on the non-moving party at least twenty-one (21) days prior to filing, and the non-moving party has not withdrawn or otherwise corrected the challenged writing within the twenty-one-day period. Fed. R. Civ. P. 11(c)(2). Compliance with the “21-day safe harbor” rule is a condition precedent to sanctions. RMC Publ’ns, Inc. v. Doe, No. 3:07-cv-3170-JFA, 2008 WL 11472127, at *3 (D.S.C. Feb. 5, 2008) (citing Brickwood Contractors, Inc. v. Datanet Eng., Inc., 369 F.3d 385, 393 (4th Cir. 2004)).

There is no dispute that Defendant failed to serve the motion for sanctions and memorandum prior to filing it with the Court. Instead, Defendant sent a letter to Plaintiff’s counsel on December 15, 2021, discussing the purported flaws in Plaintiff’s claims and demanding that she dismiss her claims with prejudice or Defendant “intends to file . . . a Rule 11 motion for sanctions…”. (Doc. No. 10-6, pp. 1, 6). Defendant argues that this letter satisfied the Rule 11 the safe harbor requirements. The Court disagrees. The Fourth Circuit has stated:

The requirements of the rule are straightforward: The party seeking sanctions must serve the Rule 11 motion on the opposing party at least twenty-one days before filing the motion with the district court, and sanctions may be sought only if the challenged pleading is not withdrawn or corrected within twenty-one days after service of the motion.

Brickwood, 369 F.3d at 389 (emphasis added); see also Hamlin v. TD Bank, No. 1:13-CV-00200-MR-DSC, 2014 WL 3101942, at *3, n.2 (W.D.N.C. July 4, 2014) (“The motion for sanctions must be served on the offending party at least twenty-one days before filing and must describe in detail the alleged offending conduct. Therefore, counsel’s letter threatening to file a motion for Rule 11 sanctions in the event that the motion to dismiss was granted was not sufficient to trigger the safe harbor provision of Rule 11(c)(2).”).”

McFee v. Carolina Pad, LLC, 3:21-cv-633-GCM (W.D. North Carolina February 15, 2022).

So the procedure is simple: prepare a motion for sanctions and serve it on the other party and wait 21 days before filing it with the court.

Ed Clinton, Jr.

Failure To Serve Initial Disclosures Did Not Merit Rule 37 Sanctions


The federal rules of civil procedure require each party to make initial disclosures. In Doe v. Coomes, No. 21-cv-67 (N.D. Oklahoma January 18, 2022), the plaintiff failed to serve initial disclosures. The defendant moved for Rule 37 sanctions. The motion was denied because the failure to serve timely disclosures was “harmless.”

However, Rule 37 calls for use-exclusion or other sanctions only if the failure to disclose harmed the receiving party. Examples of a harmless violation of the initial disclosure duty include “the failure to list as a trial witness a person so listed by another party.” Fed. R. Civ. P. 37, 1993 Advisory Committee Notes. As noted, Plaintiff has not identified individuals or documents other than those in Defendants’ disclosures. There has been no identified harm as contemplated under the rule.

Defendants argue that, nonetheless, the allegations in Plaintiff’s Complaint are “inherently prejudicial to the reputation of both CareATC as a company and Jeff Coomes as an individual.” (Doc. 20 at 4). However, they offer little basis to find that any alleged reputational harm might have been spared, had Plaintiff submitted her initial disclosures earlier. Contrary to Defendants’ assertion that the allegations have been “allowed to sit stagnant,” the Court ruled on all motions to dismiss within a matter of weeks after the end of the period for briefing those motions. Id.; see also Doc. 18. The Court shortly thereafter entered a Scheduling Order, under which the time period for discovery remains open until January 24, 2022. (SeeDoc. 19). Finally, as noted, Plaintiff’s initial disclosures identify the same individuals and documents Defendants have already identified

Rule 38 Sanctions Awarded For Frivolous Tax Appeal


The 11th Circuit awarded Rule 38 sanctions against a pro se litigant who argued, against a mountain of legal authority, that his wages were not taxable income. Swanson v. Commissioner of Internal Revenue, No. 21-11576 (11th Circuit October 5, 2021).

Federal Rule of Appellate Procedure 38 allows a court of appeals, after a separately filed motion and reasonable opportunity to respond, to award damages and single or double costs to an appellee if the court determines that the appeal is frivolous. Fed. R. App. P. 38. Although we generally prefer that the government establish its costs and attorney’s fees by affidavit, we have previously granted the government’s motion for lump sum sanctions in the interest of judicial economy. See, e.g., King v. United States, 789 F.2d 883, 884-85 (11th Cir. 1986)see also Stubbs, 797 F.2d at 938-39. We explained that “this procedure is [in the appellant’s] interest since he would be liable for the additional costs and attorney’s fees incurred during any proceedings on remand.” King, 789 F.2d at 884-85.

Additionally, we have previously warned appellants seeking to argue that their wages are not taxable income “that they may be expected to have sanctions imposed against them if they continue to raise these sorts of frivolous contentions.” Hyslep v. United States, 765 F.2d 1083, 1084-85 (11th Cir. 1985). In fact, in the unpublished opinion in Swanson’s previous appeal, we concluded that Rule 38 sanctions were appropriate because (1) Swanson’s arguments were frivolous, and (2) he had been warned about their frivolity through our precedent and the district court’s express statement that his position was frivolous. Swanson, 799 F. App’x at 671-72. Accordingly, we granted the government’s motion and awarded a lump sum of $8,000 in sanctions. Id. at 672. Further, we have previously granted the government’s motion for lump sum sanctions of $8,000 in another frivolous tax appeal. See Herriman v. Comm’r of Internal Revenue Serv., 521 F. App’x 912, 914 (11th Cir. 2013) (unpublished).

As discussed above, Swanson’s arguments in this appeal have already been held to be frivolous. As to whether his pursuit of this appeal warrants sanctions, Swanson was previously sanctioned for raising similar frivolous arguments. See Swanson, 799 F. App’x at 671-72. Similarly, the Tax Court expressly warned him that his position was frivolous when denying his motion for summary judgment. In light of these warnings, particularly his previous appeal, Rule 38 sanctions are appropriate.

Thus, we GRANT the government’s motion for sanctions and award $8,000 in sanctions. Accordingly, we DENY all pending motions and petitions as moot.

Sanctions Awarded For Cut and Paste Brief


A litigant lost on summary judgment in the District Court. His lawyers appealed but they did not do a proper appellate brief. Instead, they just re-filed the brief they had filed in the district court with little edition. The result: Rule 38 damages awarded to the opposing party by the Third Circuit.

“Conboy and Gilsenan’s opening brief begins with a proper introductory 157*157sentence arguing that the District Court should not have granted summary judgment. Opening Br. at 1. But it quickly goes awry in the next paragraph: “The district court has subject-matter jurisdiction over this case….” Id. One could readily assume that the sentence included a typographical error, using “has” instead of “had.” But just two sentences later, the brief declares: “Venue is appropriately laid in the District Court of New Jersey….” Id. This second use of the present tense, denoting the wrong trial court, presages what comes after, which belies the notion of an honest mistake.

In the first sentence of his legal argument, counsel describes the summary judgment standard. Id. at 6. Two pages later, he argues that “summary judgment should be denied….” Id. at 8. In the next section of his argument, counsel again writes as if the case remains in the District Court, claiming “there is no reason to grant summary judgment based on jurisdictional reasons for either party.” Id. at 13. Apart from these unusual (and inappropriate) references to the case pending in the District Court, counsel’s fifteen pages of “argument” do not mention how the District Court erred. This left us with the suspicion that something was amiss with counsel’s brief.

Unfortunately, our suspicions were confirmed. Counsel for Conboy and Gilsenan simply took the summary judgment section of his District Court brief and copied and pasted it into his appellate brief, with minor changes such as swapping “Defendant” for “Appellee.” Compare Appendix A hereto, with Appendix B. This is not proper appellate advocacy.

Unsurprisingly, the lack of appellate argument reflects the correctness of the District Court’s summary judgment. The Court properly granted judgment on the UTPCPL and FDCPA claims because those statutes apply to consumer debts, not commercial ones like the debt at issue. In re Smith, 866 F.2d 576, 583 (3d Cir. 1989) (73 PA. CONS. STAT. § 201-9.2, the UTPCPL section on private actions, applies “only [to] those persons who purchase or lease goods or services primarily for consumer use rather than for commercial use”); Staub v. Harris, 626 F.2d 275, 278 (3d Cir. 1980) (the FDCPA “was intended to apply only to debts contracted by consumers for personal, family or household purposes” (citation and internal quotation marks omitted)). Conboy and Gilsenan did not identify evidence supporting their claims against Seda Cog, their unjust enrichment claim against CBE, or their FCRA claim against the SBA. Nor did they point to evidence of any contract with CBE. In addition, the unconditional loan guarantees preempted the contract claim against the SBA, and the defamation claim against the SBA failed because of sovereign immunity. See Brumfield v. Sanders, 232 F.3d 376, 382 (3d Cir. 2000) (“[D]efamation suits against the United States are prohibited.”). Finally, although we have not explicitly addressed whether the United States has waived sovereign immunity as to unjust enrichment claims, we need not resolve that issue here because Conboy and Gilsenan cited no record evidence creating a factual dispute material to their unjust enrichment claim against the SBA. See Kabakjian v. United States, 267 F.3d 208, 213 (3d Cir. 2001) (“We may affirm a judgment on any ground apparent from the record.”).

158*158 Regrettably, counsel’s response to CBE’s motion for damages under Rule 38 of the Federal Rules of Appellate Procedure is yet another copy-and-paste job. Counsel copied Conboy and Gilsenan’s previous opposition to sanctions in the District Court under Civil Rules 11 and 37—with only insignificant alterations and additions. Compare Appendix C hereto, with Appendix A at 10-12. Contrary to counsel’s assertion, the Rule 38 motion did not duplicate the sanctions motions, and we will grant it even though the District Court’s denial of sanctions was well within its discretion.

Rule 38 authorizes compensatory damages—not sanctions or punishment —to reimburse appellees who must defend judgments against frivolous appeals, “and to preserve the appellate court calendar for cases worthy of consideration.” Kerchner v. Obama, 612 F.3d 204, 209 (3d Cir. 2010) (quoting Huck v. Dawson,106 F.3d 45, 52 (3d Cir. 1997)); Beam, 383 F.3d at 108. We “employ[] an objective standard to determine whether or not an appeal is frivolous” on the merits, without considering appellants’ “good or bad faith.” Kerchner, 612 F.3d at 209 (quoting Hilmon Co. (V.I.) v. Hyatt Int’l, 899 F.2d 250, 253 (3d Cir. 1990)). “Here, despite many cues from … the District Court that [their] cause was wholly meritless,” see Beam, 383 F.3d at 109, Conboy and Gilsenan’s counsel filed a copy-and-paste appeal without bothering to explain what the District Court did wrong. It is hard to imagine a clearer case for Rule 38 damages.

We may impose these damages on clients, but here we will place responsibility for payment on the lawyer. See id. “[A]ttorneys have an affirmative obligation to research the law and to determine if a claim on appeal is utterly without merit and may be deemed frivolous.” Hilmon, 899 F.2d at 254. “[B]ecause it would be unfair to charge a damage award against [parties who have] relied upon [their] counsel’s expertise in deciding whether to appeal, we have routinely imposed Rule 38 damages upon counsel when a frivolous appeal stems from counsel’s professional error.” Beam, 383 F.3d at 109. In this case, Conboy and Gilsenan’s attorney is to blame for recycling meritless arguments without engaging the District Court’s analysis.

* * *

It’s not easy to become a lawyer. The practice of law is challenging, and even the best lawyers make mistakes from time to time. So we err on the side of leniency toward the bar in close cases. But the copy-and-paste jobs before us reflect a dereliction of duty, not an honest mistake. We will therefore affirm the District Court’s summary judgment and grant CBE’s motion for Rule 38 sanctions after counsel for CBE files an appropriate fee petition and counsel for Appellants has a chance to respond.”

Conboy v. United States Small Business Administration, 992 F.3d 153 (3rd Cir. 2021).

Evidence of Pre-Suit Investigation Defeats Sanctions Claim


Rule 11 sanctions motions are most often filed after a defendant wins the case on summary judgment. The Defendant will then argue that the plaintiff’s claims were objectively unreasonable or that the plaintiff failed to conduct a pre-suit investigation. In Dominguez v. Barracuda Tackle, LLC, No. 8:20-cv-1538 KKM-AEP, a patent infringement lawsuit, the court granted summary judgment to the Defendant but denied Rule 11 sanctions on the ground that plaintiff had conducted a pre-suit investigation. The court’s opinion contains a thoughtful, if pithy, explanation for the denial of sanctions.

Defendants’ objections raise two principal assertions regarding the motion for sanctions: (1) Plaintiffs’ counsel did not perform a pre-suit investigation and (2) Plaintiffs’ legal claims were clearly unreasonable. Upon a de novo review, the Court agrees with the well-reasoned explanation of the Magistrate Judge on those points. First, the Court finds that the declaration of Yunior Dominguez is evidence of a pre-suit investigation. While the declaration was not signed by Plaintiffs’ counsel, it still shows that Plaintiffs and counsel explored the validity of claims prior to suit. Second, the Court agrees with the Magistrate Judge that a reasonable juror could conclude that the two bait nets at issue perform substantially the same function with substantially the same result. While ultimately this is not enough to create a triable issue of fact in the light of the claims construction, it was “not so quixotic as to warrant sanctions.” Rodick v. City of Schenectady, 1 F.3d 1341, 1351 (2d Cir. 1993). Indeed, if all suits that did not create a triable issue of fact were sanctionable, one doubts if the legal profession would continue to be a profitable enterprise. Although the Defendants assert that Plaintiffs filed this suit for the improper purpose of extracting a nuisance-value settlement from Defendants, at bottom, they offer no evidence of this malintent apart from the losing disposition of the claims. The Court declines to impose sanctions on this basis.

Edward X. Clinton, Jr. www.clintonlaw.net

Federal Judge Sanctions Lin Wood, Sidney Powell and other lawyers


In King v. Whitmer, No. 20-13134, Judge Linda Parker issued a 110 page opinion sanctioned several lawyers who filed the complaint and the amended complaint under Rule 11, the Court’s inherent authority and 28 U.S.C. §1927. This opinion is very significant and it may cause changes in the way election law is practiced in the future. The Court found that the allegations in the Complaint lacked a good faith basis in law and fact and that the lawyers vexatiously multiplied the proceedings. The court used every possible ground to support the sanctions award and made credibility findings.

A link to the opinion is here: https://www.michigan.gov/documents/ag/172_opinion__order_King_733786_7.pdf

At the time these lawsuits were brought, they appeared to me to be reckless and risky. It is one thing to allege that a voter was disenfranchised. It is another thing all together to allege that the entire election was a fraud.

11th Circuit Affirms Dismissal of “Shotgun” Pleading


Barmapov v. Amuial, 986 F.3d 1321 (11th Circ. 2021) affirms the dismissal of a shotgun pleading. A shotgun pleading is a poorly organized pleading usually filed by a pro se litigant. Here, the shotgun pleading was filed by an attorney, not a pro se litigant. The court described the pleading in this way:

Barmapov filed his initial complaint in the district court in March 2018, and he filed an amended complaint five months later. The amended complaint was 116 pages and 624 numbered paragraphs long, and it included 20 causes of action, under both federal and state law, against 23 named defendants and 20 John Doe defendants. The district court dismissed it because it was “in an improper shotgun format.” Barmapov had “lumped together” many of his allegations against the 23 named defendants, rendering his complaint “unclear and confusing as to which [d]efendant [was] being charged with which conduct.” The district court also described the complaint as “devoid of specific allegations” such that it was not clear what each defendant “specifically did to be liable as to each stated count.” Finally, the court criticized the complaint for incorporating about 350 paragraphs into each of the 20 counts, even though the “paragraphs [were] not all properly directed at the [d]efendants subject to [each] count, nor [were] they pertinent to each claim.” The court granted Barmapov leave to file a second amended complaint.

In his second amended complaint, Barmapov reduced the number of named defendants 1324*1324 to 16 and the length of the complaint to 92 pages and 440 numbered paragraphs. He also removed all federal causes of action. The 19 counts against the defendants included allegations of fraud, breach of fiduciary duty, and civil conspiracy —all presumably under Florida law.

The district court concluded that Barmapov’s second amended complaint “still fail[ed] to provide a short and plain statement justifying relief and … allegations that [were] simple, concise, and direct.

The court was unimpressed with the second amended complaint and dismissed the case with prejudice. The 11th Circuit affirmed with a published opinion.

But the second amended complaint undoubtedly falls into the second category of shotgun pleadings. It is rife with immaterial factual allegations, including five pages and 24 paragraphs of irrelevant details about the alleged criminal backgrounds of some of the defendants. To make matters worse, the complaint then incorporates these paragraphs into 13 of the 19 counts, including counts against defendants who had no part in this background history. Other examples of inconsequential details include Barmapov’s business background; the relationships among Yossi, Guy, and Avrham Amuial, Terry Rafih, and John Obeid; Barmapov’s history with Reuben Sastiel; the experiences of Barmapov’s grandson working for the Amuials; and the contentious business meetings between Barmapov, the Amuials, and Sastiel. In addition, the second amended complaint indiscriminately incorporates and repeats 249 numbered paragraphs of factual allegations—spanning 50 pages—into nine of the 19 counts, without any effort to connect or separate which of those 249 factual allegations relate to a particular count. As a result, these nine counts include factual allegations that are immaterial to the underlying causes of action. See Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1359 n.9 (11th Cir. 1997) (describing a complaint in which four counts incorporated all 43 numbered paragraphs of factual allegations, many of which appeared to relate to only one or two counts, as “an all-too-typical shotgun pleading”); see also Weiland, 792 F.3d at 1322 n.12 (identifying Chudasama as an example of one of the second category of shotgun pleadings).

If these problems were not enough to make Barmapov’s second amended complaint a shotgun pleading, the complaint also includes numerous vague and conclusory allegations. It alleges that Yossi Amuial “sabotage[d]” Barmapov’s efforts to apply for financing, but it provides no explanation as to how this sabotage occurred. It also briefly states that four of the defendants “worked together to forge Barmapov’s signature” on important paperwork. Later, it states that six of the defendants “worked in concert to forge Barmapov’s signature” on documents related to a financing agreement and that one of these defendants then fraudulently notarized Barmapov’s signature. But the complaint never explains how these alleged forgeries relate to any of the 19 causes of action. Finally, at the end of his narrative account, Barmapov asserts that “Yossi, Guy, Avrham and Reuben … expelled him as a member” of the joint venture 1326*1326 because he refused to contribute more money. But he offers no explanation as to how he could have been expelled when, by his own account, there was only one other member of the joint venture.

Because Barmapov’s second amended complaint is “replete with conclusory, vague, and immaterial” allegations, a defendant who reads the complaint would be hard-pressed to understand “the grounds upon which each claim [against him] rests.” Weiland, 792 F.3d at 1322-23. Take, for example, the first four counts, which allege that the Amuials and Reuben Sastiel were Barmapov’s business partners and that they breached their fiduciary duties. The complaint neither quotes nor provides any specific details about the operating agreement for the purported joint venture between Barmapov and these defendants. And its brief explanations of this business arrangement are nonsensical. The complaint states that only one of these four defendants—Sastiel—signed the operating agreement, but it asserts without explanation that the other three still owed fiduciary duties under the agreement. It calls Yossi a “member,” a “manager,” and an “agent” of the joint venture. It refers to Guy as a “member,” a “de facto manager,” and an “agent and employee.” Finally, it states that Avrham is a “member,” an “agent,” and a “de facto principal,” in addition to being Barmapov’s personal “confidant and business advisor.” If Barmapov himself cannot offer a coherent explanation for how the joint venture was structured, we cannot expect the defendants to do it for him by digging through 50 pages and 249 numbered paragraphs of scattershot factual allegations.

Comment: Ultimately, the dismissal of this complaint is the responsibility of the client’s lawyers who allowed a disorganized pleading to be filed with the court.

Poor Preparation of Rule 30(b)(6) Witness Merits Sanctions


In Westover v. Provident Mutual Life and Accident Ins. Co., No. C20-5931 (W.D. Washington, March 31, 2021), Provident Mutual designated a 30(b)(6) witness to testify. A 30(b)(6) witness is a company representative who is to testify on certain topics relevant to the litigation. Here, the witness testified but was unprepared on certain topics. The District Court awarded Rule 37 sanctions, but the sanctions were that the deponent was to sit for a second session, presumably after he studied the topics. The reasoning:

Sanctions are warranted here for Provident’s dilatory discovery production in relation to the Rule 30(b)(6) deposition, but not in the form that Plaintiffs request. Provident’s conduct is not so severe as to warrant monetary sanctions or warrant barring Provident from using the recently produced documents in opposition to Plaintiffs’ partial motion for summary judgment. Furthermore, it appears that the late-produced documents have not precluded Plaintiffs from filing a partial motion for summary judgment regarding the scope of ERISA preemption in accordance with the parties’ agreed schedule. See Dkt. 38.

It is concerning to the Court that Provident did not produce or make available all documents as requested in the Notice of Deposition. Therefore, the Court orders sanctions against Provident in requiring that Provident make its Rule 30(b)(6) witness available for a second deposition concerning the untimely produced documents and that Provident bear the cost of the second deposition.[2] The parties may stipulate to an extended briefing schedule on Plaintiffs’ partial motion for summary judgment and Provident’s motion to dismiss Plaintiffs’ state law claims, if the second Rule 30(b)(6) deposition is necessary to resolve the pending motions. Such a deposition may resolve Plaintiffs’ recently-filed second motion for sanctions, see Dkt. 48, and the parties should advise the Court if that is the case.

Remember that Federal Judges Have Broad Discretion


The order is quite short, but it has important significance for those preparing for trial in federal court. The case is Elliot v. Illinois Central Railroad 2:19-cv-02807 (W.D. Tennessee, April 5, 2021). The lawsuit arose out of a collision between a train and a truck. The plaintiff missed the deadline to disclose an expert. Plaintiff made an untimely disclosure. The Defendant moved pursuant to Rule 37(c)(1). The court declined to strike the untimely opinion. The court allowed the disclosure of the opinions and noted that Defendant’s expert can dispute the opinions.

In sum, even if your disclosure is untimely, the court has discretion to allow you to proceed. Obviously, moving quickly to cure the problem is a must.