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 In fact, in the unpublished opinion in Swanson’s previous appeal, we concluded that Rule 38 sanctions were appropriate because (1) Swanson’s arguments were frivolous, and (2) he had been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 See Herriman v. Comm’r of Internal Revenue Serv., 521 F. App’x 912, 914 (11th Cir. 2013) (unpublished).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.

Rule 59(e) Motion to Vacate Sanctions Judgment Fails


A defendant to a foreclosure lawsuit in federal court was sanctioned pursuant to Rule 37. The lender then won summary judgment and the court entered judgment in its favor. The Defendant appealed the foreclosure judgment. After judgment was entered, the court entered a second judgment on the fees and costs incurred by the plaintiff. The Defendant then filed a Rule 59(e) motion to vacate the award of attorney fees and costs. The key point to remember is that it is proper for a federal court to enter a second judgment for attorney fees or sanctions or costs after the initial judgment has become final. There is no rule against the court entering two judgments. Should this occur to you, simply file a second notice of appeal challenging the fee or cost award.

The Defendant argued that Rule 54(d) allowed for only one judgment for fees and that Rule 37 does not allow proceedings after the judgment was entered. The court rejected both arguments. The explanation:

In her motion, Ms. Wellington argues that the Court erred in filing two attorney fee awards and contends that Rule 54(d) allows for only one post-judgment fee award. Doc. 223 at 3. This argument fails for several reasons.

First, Rule 54(d)(2) governs attorney’s fees and nontaxable expenses to the prevailing party. FED. R. CIV. P. 54(d)(2)(A)-(D) (describing the procedure to claim attorney’s fees). In this case, MTGLQ was the prevailing party and sought fees pursuant to the promissory note and mortgage agreement between the parties. Doc. 209. The Court granted MTGLQ’s motion and awarded attorney’s fees on October 7, 2020. Docs. 220, 221. The attorney’s fees awarded by the Court’s October 7, 2020 judgment are separate from the attorney’s fees previously awarded as a sanction by the Court on January 18, 2019. Doc. 145. On January 18, 2019, the Court awarded attorney’s fees to MTGLQ—and later enforced the award in the October 30, 2020 judgment—as a sanction pursuant to Rule 37. Rule 54 is not applicable to Rule 37 sanctions. Rule 54 states “[s]ubparagraphs (A)-(D) do not apply to claims for fees and expenses as sanctions for violating these rules or as sanctions under 28 U.S.C. § 1927.” FED. R. CIV. P. 54(d)(2)(E). Because Rule 54 does not apply to the attorney’s fee awarded as sanctions pursuant to Rule 37, there are not two judgments for attorney’s fees under Rule 54, as Ms. Wellington contends.

Second, the Court appropriately awarded and enforced attorney’s fees as a sanction under Rule 37. Rule 37 governs the failure to make disclosures or cooperate in discovery, and sanctions for violations of discovery orders. FED. R. CIV. P. 37. Rule 37 requires the Court to order sanctions if a motion for discovery is denied. FED. R. CIV. P. 37(a)(5)(B) (“If the motion is denied, the court . . . must, after giving an opportunity to be heard, require the movant, . . . to pay the party or deponent who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney’s fees.”). Ms. Wellington filed a motion to compel that the Court denied. See Docs. 107, 114. The Court then awarded MTGLQ its reasonable expenses incurred in opposing the motion, including attorney’s fees. Doc. 145. Ms. Wellington’s failure to pay the sanction prompted MTGLQ’s motion to enforce and the Court’s October 30, 2020 judgment granting that motion. Docs. 208, 222.

Ms. Wellington does not cite any legal authority for the proposition that orders for sanctions made pursuant to Rule 37 cannot be later enforced by a judgment. Rule 37(b)(2) provides that if a party “fails to obey an order to provide or permit discovery, including an order under . . . 37(a), the court where the action is pending may issue further just orders.” Here, the “further just order” came in the form of a judgment enforcing the sanctions imposed on Ms. Wellington under Rule 37(a).

Further, while Ms. Wellington is correct that Rule 37 itself contains no provision for any post-judgment proceedings (Doc. 223 at 3), the Court retains jurisdiction to rule on collateral matters such as discovery sanctions. “Although filing [a] notice of appeal generally divests the district court of jurisdiction over the issues on appeal . . . the district court retains jurisdiction over collateral matters not involved in the appeal.” Lancaster v. Indep. Sch. Dist. No. 5, 149 F.3d 1228, 1237 (10th Cir. 1998)(citations and quotation omitted). “Attorney’s fees awards are collateral matters over which the district court retains jurisdiction.” Id. As the Tenth Circuit Court of Appeals explains:

While the cases typically discuss attorney’s fees awards in the context of statutory grants of attorney’s fees to the prevailing party . . ., we see no basis to distinguish those cases from one like the present case in which fee awards are granted as sanctions. In either context, the award is collateral to the merits of the underlying action. Accordingly, we conclude the district court had jurisdiction to grant the Rule 37 motion.

Id. Thus, the Court had authority to decide MTGLQ’s post-judgment motion to enforce the order awarding attorney’s fees pursuant to Rule 37.

Conclusion: the litigant would have been better off simply filing a separate appeal of the fee judgment.

Citation: MTGLQ Investors, LP v. Wellington, No. 1:17-cv-00487 (D. New Mexico, February 3, 2021).

Irrational Behavior Dooms ADA Lawsuit


In Holt v. Houston Methodist Sugar Land Hospital, No. H-19-5464 (S.D. Texas Houston Division), December 31, 2020, the court dismissed an Americans With Disabilities Act discrimination case because the pro se plaintiff had developed a pattern of refusing to comply with discovery and court orders.

The explanation:

“Plaintiff has repeatedly failed to comply with Orders issued by the Magistrate Judge, including orders to appear for conferences. When ordered on October 3, 2019, not to file additional documents until the Court ruled on Defendant’s 2019 Motion to Dismiss, Plaintiff filed four additional documents on October 9, 2019. Plaintiff failed to appear as ordered for conferences on May 8, 2020, and on July 27, 2020.

Plaintiff also refused to participate in discovery. She failed to respond to written discovery and failed to appear for her deposition on June 24, 2020. Her only explanation for her refusal to comply with her discovery obligations was that she believed the Court had ruled in her favor on the ADA claims and that depositions occur at the beginning of a case. Even after the Magistrate Judge ordered her to comply [Doc. # 125], Plaintiff again refused to respond to written discovery and failed without explanation to appear for her deposition on September 24, 2020.

Between the February 28, 2020, Memorandum and Order ruling on Defendant’s 2019 Motion to Dismiss and December 29, 2020, when Plaintiff filed her “Motion to Deny Defendant Motion to Dismiss,” Plaintiff intentionally refused to participate in the prosecution of this lawsuit. Plaintiff’s refusal persisted notwithstanding at least four orders [Docs. # 119, # 123, # 125, and # 128] for her to participate in discovery, respond to an issue raised by Defendant, or appear for a conference. Plaintiff’s refusal to comply with court orders and participate in discovery persisted notwithstanding at least two orders [Docs. # 125 and # 128] warning her that failure to participate in discovery could result in dismissal of this lawsuit.

In her “Motion to Deny Defendant Motion to Dismiss,” Plaintiff notes that in the Magistrate Judge’s Order [Doc. # 100] entered October 3, 2019, Plaintiff was precluded from calling or appearing at Defendant’s place of business, at defense counsel’s office, or at the Court unless there was a hearing scheduled. This in no way explains or excuses Plaintiff’s failure to comply with Court orders, including the Order [Doc. # 125] requiring Plaintiff to appear for her deposition, or to respond to Defendant’s written discovery requests. Moreover, Plaintiff’s explanation for refusing to appear for her June 24, 2020 deposition was not that she believed her appearance at counsel’s office was precluded by the Magistrate Judge’s October 3, 2019 Order. Instead, Plaintiff stated that she would not appear for her deposition because oral depositions occur at the beginning of a case and she would “not be starting this case over.”

Plaintiff also cites the statement in the October 3, 2019 Order that discovery deadlines were vacated and a new scheduling conference would be held after the Court ruled on the 2019 Motion to Dismiss. It is clear, however, that the referenced scheduling conference occurred on May 8, 2020, but Plaintiff chose not to attend.

Plaintiff relies also on the statement in the October 3, 2019 Order that neither party could file anything in the case until the Court ruled on the 2019 Motion to Dismiss. The Court ruled on the 2019 Motion to Dismiss in its Memorandum and Order [Doc. # 112] issued February 28, 2020. After that date, there was no prohibition on Plaintiff filing additional matters. Yet after that date, until December 29, 2020, Plaintiff willfully refused to file anything, to participate in discovery, or to appear at conferences held by the Magistrate Judge.

In this case, there is a clear record of Plaintiff intentionally and steadfastly refusing to participate in discovery, to appear for conferences with the Magistrate Judge, and to prosecute her lawsuit in any way for a 10-month period. This intentional delay was caused by Plaintiff’s own conduct. As a result, the Court finds without reservation that sanctions are warranted.

The Court finds that there is no lesser sanction that would induce Plaintiff to comply with Court orders and with her discovery obligations. Plaintiff is pro se and filed this lawsuit in February 2019 challenging the termination of her employment in 2017. There is nothing in the record to suggest that Plaintiff has funds to pay a monetary sanction. Court orders and repeated warnings that failure to comply could result in dismissal of this lawsuit have not persuaded Plaintiff to fulfill her discovery obligations.

Although the Court recognizes that dismissal is a severe sanction, Plaintiff’s conduct in this case has been intentional and persistent. The case was filed almost two years ago. Yet, because of Plaintiff’s refusal to prosecute her lawsuit and comply with Court orders and discovery obligations, basic discovery has not begun. Indeed, to date Plaintiff has not responded to Defendant’s written discovery requests or appeared for her deposition. Dismissal of this case, after repeated warnings, is warranted.”

Comment: courts will tolerate a great many faults by pro se litigants, but, eventually, everyone has to comply with the rules.

11th Circuit Holds That District Courts Have Jurisdiction Over Sanctions Motion Even If They Do not Have Subject Matter Jurisdiction


The title of this post is a bit complex. I apologize for that. But the topic is important. Sometimes, a party brings a case to federal court and the court later determines that it lacks subject matter jurisdiction. The case is then dismissed for lack of jurisdiction. What happens, however, when there is a sanctions motion pursuant to 28 U.S.C. §1927? Joining other circuits that have considered the issue, the 11th Circuit held that the district courts do indeed have jurisdiction to decide sanctions motions. This is important as it gives the court the power to discipline conduct and award sanctions even if there was no jurisdiction over the entire case. Obviously, I think the opinion is correct and well-reasoned.

The reasoning:

In the world of jurisdiction, there’s an important distinction between the underlying case or controversy and certain “collateral” matters. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). The former includes the merits of the dispute as well as many procedural questions. The latter includes a limited set of issues “collateral to the merits” of the case. Willy v. Coastal Corp., 503 U.S. 131, 137, 112 S.Ct. 1076, 117 L.Ed.2d 280 (1992). Think things like “the imposition of costs, attorney’s fees, and contempt sanctions.” Cooter & Gell, 496 U.S. at 396, 110 S.Ct. 2447.

Although we call these issues “collateral,” that doesn’t make them any less important. Many involve the power to enforce compliance with the rules and standards that keep the judiciary running smoothly. See Willy, 503 U.S. at 137, 139, 112 S.Ct. 1076. Without them, “abuses of the judicial system” would go unchecked, “burdening courts and individuals alike with needless expense and delay.” Cooter & Gell, 496 U.S. at 397-98, 110 S.Ct. 2447. And that’s not just a matter of procedure. Because justice delayed is justice denied, these powers ensure that justice is done.

The distinction between the underlying case and collateral issues is important when it comes to jurisdiction because it affects a court’s power to decide an issue. Once a court loses jurisdiction over a case, it may no longer decide issues arising out of that case. See, e.g., Capron v. Van Noorden, 6 U.S. (2 Cranch) 126, 127, 2 L.Ed. 229 (1804). But it can still decide certain “collateral” issues related to the case. See Cooter & Gell, 496 U.S. at 395, 110 S.Ct. 2447.

Here, all agree that the district court lacked subject-matter jurisdiction over the case. So the question for us is whether Irish’s motion for sanctions under the district court’s inherent powers or § 1927 was a part of the underlying case (which would mean that the court lacked the power to rule on the motion) or a “collateral” issue (which would mean that it had the power to do so).

Fortunately, we don’t approach this question on a blank slate. The Supreme Court has told us that sanctions under Federal Rule of Civil Procedure 11 are a “collateral” issue and thus a court may decide a Rule 11 sanctions motion even if it lacks jurisdiction over the underlying case. See Willy, 503 U.S. at 137-39, 112 S.Ct. 1076. The decision reasoned that exercising jurisdiction in this context was both constitutionally permissible and practically important.

On the first point, the Court explained that ruling on a Rule 11 motion “implicates no constitutional concern because it does not signify a district court’s assessment of the . . . legal merits” of the case. Id. at 138, 112 S.Ct. 1076 (cleaned up). Instead, it concerns “a collateral issue: whether the attorney has abused the judicial process.” Id. (cleaned up). And because a district court does not have to decide the merits to rule on a Rule 11 motion, it does not improperly consider the “`case or controversy’ over which it lacks jurisdiction.” Id.

On the second point, the Court reasoned that exercising jurisdiction over a Rule 11 motion is practically important because “[t]he interest in having rules of 1310*1310procedure obeyed” outlives the merits of a case. Id. at 139, 112 S.Ct. 1076. This makes sense. The need to deter those who might violate the rules does not rise or fall with any particular case. It is an ever-present need of all courts. Simply put, district courts need the power to rule on these issues to ensure “the maintenance of orderly procedure.” Id. at 137, 112 S.Ct. 1076.

Both these points apply equally to sanctions under a court’s inherent powers or § 1927. These sanctions, like Rule 11 sanctions, do not require a court to rule on the merits of the underlying case. Our analysis in the next Part makes this clear. And the purpose of the sanctions outlasts the end of the case. Otherwise, parties who abuse the judicial procedures could get off scot-free anytime it turned out that the district court lacked subject-matter jurisdiction.

For good reason, then, all of our sister circuits to have faced this question have recognized jurisdiction in this context. See, e.g., Ratliff v. Stewart, 508 F.3d 225, 231 n.7 (5th Cir. 2007)Red Carpet Studios Div. of Source Advantage, Ltd. v. Sater, 465 F.3d 642, 645 (6th Cir. 2006)In re Jaritz Indus., 151 F.3d 93, 96-97 (3d Cir. 1998)see also Fidrych v. Marriott Int’l, Inc., 952 F.3d 124, 137-38 (4th Cir. 2020)Zerger & Mauer LLP v. City of Greenwood, 751 F.3d 928, 931 (8th Cir. 2014).

Today, we join them and hold that a district court may address a sanctions motion based on its inherent powers or § 1927 even if it lacks jurisdiction over the underlying case.

Hyde v. Irish, 962 F.3d 1306 (11th Cir. 2020).

Comment: the court affirmed the denial of the sanctions motion.