Filing Complaint Without Authorization of Client Leads to Rule 11 Sanctions

In Edwards v. Wells Fargo Bank, 19-cv-14409 D. New Jersey January 5, 2003, the Court awarded Rule 11 sanctions against plaintiff’s counsel for failing to obtain the authorization of his client before filing the case. At a hearing the lawyer conceded that he lacked authorization to file the case. It is difficult for me to comprehend the court’s rulings. The pertinent parts of the ruling are quoted below:

WHEREAS, the Court held a hearing on the Order to Show Cause on July 7, 2021, with both Thomas and Edwards in attendance, (ECF No. 29), and where Thomas conceded on the Record that Edwards had not hired him to bring this case and that in fact Thomas had never met Edwards prior to the Order to Show Cause hearing on July 7, 2021, (ECF No. 38 at 23:22-23); and

WHEREAS, the Court noticed Thomas at both the hearing and in the Order issued on July 8, 2021 that the Court was contemplating sanctions under Rule 11 of the Federal Rules of Civil Procedure and the Rules of Professional Conduct and gave Thomas a second chance to Show Cause to the Court; and

WHEREAS, Thomas received two extensions and nearly two months of time to prepare his second response to the July 8, 2021 Order to Show Cause (ECF Nos. 30, 31, 32, 33, 34, 36, 37); and

WHEREAS, the Court found Thomas’ explanations as to why this case was brought under Edwards’ name were insufficient, (ECF No. 39); and

WHEREAS, the Court found that Thomas was not authorized by Edwards to bring this action, (ECF No. 39 at 34-35); and…

WHEREAS, the Court found that Thomas filed and pursued this lawsuit for improper purposes, violating Federal Rule of Civil Procedure 11(b)(1), (among other violations) (ECF No. 39 at 20-21)[2] (“the Court is unable to conceive of any proper basis Thomas could have had for filing this Complaint”) (emphasis in original); and

WHEREAS, with the Court finding a violation of Rule 11(b)(1), the case was brought improperly ab initio, without Edwards’ knowledge or consent;

Spoliation Claim Fails Where The Evidence Was Lost Before Suit Was Filed

In Ansley v. Wetzel, 21 cv 528 M.D. Pennsylvania, the plaintiff filed suit against prison guards for violations of his civil rights. Plaintiff sought to obtain video evidence of the incident but the video was lost. He moved for sanctions under 37, but his motion was denied because the tapes of the incident were lost prior to suit being filed.

The Defendants argued that there was no spoliation because they had no reason to retain the tapes because there was no use of force. The District court agreed with their argument:

Defendants submitted the declarations of Captain Jeffrey Madden and Captain Robert Bookheimer wherein they explain when video footage is retained at state correctional institutions. (Doc. 91-2 at 10-11, Madden Declaration ¶¶ 3-4; Doc. 91-2 at 12-13, Bookheimer Declaration ¶ 3). Captain Madden explained that video footage is typically recorded over when a camera’s memory capacity has been met, unless the video involved a planned or unplanned use of force. (Doc. 91-2 at 10-11, Madden Decl. ¶¶ 3-4). Captain Bookheimer further declared that video footage of an inmate’s escort to the RHU is generally not retained, unless in the event of an extraordinary occurrence report or other event deemed necessary by the Facility Manager. (Doc. 91-2 at 12-13, Bookheimer Decl. ¶ 3). The video footage at issue was not retained because the incidents did not involve either a planned or unplanned use of force, and there is no evidence that Ansley’s escort to the RHU involved an event triggering retention of the video.

“When a party argues that spoliation occurred before the complaint was filed, the court must conduct a fact-sensitive inquiry to determine at what point the spoliating party reasonably should have anticipated the litigation.” Bistrian, 448 F. Supp. 3d at 468. Ansley states that defendants should have been aware of impending litigation based on two grievances he filed on October 9, 2020, related to a “rape plot” fabricated by defendants. (Doc. 89 at 10; Doc. 89-1 at 38). However, the filing of these grievances does not support a pre-litigation duty to preserve recordings. Such an obligation arises when a party reasonably should have anticipated litigation concerning the grieved incidents. Bistrian, 448 F. Supp. 3d at 468 (“A party `is under a duty to preserve what it knows, or reasonably should know, will likely be requested in reasonably foreseeable litigation.”). Based on the filing of grievances related to a rape plot, defendants could not have reasonably anticipated litigation concerning the escort to the RHU on June 25, 2020, an incident involving masturbation on January 10, 2021, and the escort to the psychiatric observation cell on March 18, 2021. Because defendants could not reasonably foresee litigation and appreciate that the video footage at issue should be preserved for possible use in that litigation, they were not under a duty to preserve the video footage.

Conclusion: there as no duty to preserve evidence under Rule 37(e) before the lawsuit was brought.

Ed Clinton, Jr.

Failing to File Separate Motion for Sanctions Fatal to Sanctions Claim

The Rule 11 safe harbor provision requires a party seeking sanctions to file a separate motion for sanctions. Here, the party seeking sanctions combined the request for sanctions with a motion to dismiss. Result: sanctions denied. In Hison v. Lloyd, No. 22-10943 (E.D. Mich. 2023), the court ruled as follows:

“The Court denies Defendants’ request for sanctions under Fed. R. Civ. P. 11 because Defendants failed to strictly comply with Rule 11’s “safe-harbor provision” which states as follows:

A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets.

Fed. R. Civ. P. 11(c)(2) (emphasis added). Thus, Rule 11 expressly requires that a “motion for sanctions must be made separately from any other motion.” Fed. R. Civ. P. 11(c)(2). Here, however, Defendants combined their motion seeking Rule 11 sanctions with their Motion to Dismiss. As such, Defendants failed to strictly comply with Rule 11’s safe-harbor provision and that failure “precludes imposing sanctions on [Defendant]’s motion.” Penn, LLC v. Prosper Business Dev. Corp.,773 F.3d 764,767 (6th Cir. 2014).”

Comment: failing to follow the rule gives the district court an easy way to avoid spending time on a sanctions motion.

No Rule 11 Sanctions Where Lawyers Had Reasonable Basis To Make Alter Ego Claim

In Jingdong Logistics United States Company v. Ready Acquisition, Inc, Case No. 5:22-cv-01018-ODW (SHKx), Central District of California, plaintiff alleged that Ready Acquisition was the alter ego of its two owners. The owners alleged that the allegations were baseless and sought Rule 11 sanctions. The court denied sanctions by reasoning that there was an adequate factual and legal basis for the alter ego claim.

Here, the Court finds that the alter ego allegations in Jingdong’s Complaint were neither factually nor legally baseless “at the time that the position [was] adopted,” that is, at the time Jingdong filed its Complaint. Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 1538 (9th Cir. 1986). In reaching this conclusion, the Court “avoid[s] using the wisdom of hindsight,” limiting its inquiry to whether a reasonable basis for alter ego allegations existed at the time the Complaint was filed, regardless of what Jingdong learned or discovered after it filed the Complaint. Id. at 1537 (quoting Fed. R. Civ. P. 11 advisory committee’s note to 1983 amendment).

Prior to filing the Complaint, Jingdong’s attorneys investigated Ready Acquisition by sending a field agent to Ready Acquisition’s registered principal office address and to Lawrance’s personal address. (See Decl. Sijiu Ren ISO Opp’n (“Ren Decl.”) ¶¶ 3-5, ECF No. 22-1.) In so doing, Jingdong discovered that (1) Ready Acquisition’s office was occupied by new tenants, and that (2) packages addressed to Ready Acquisition were located on the front porch of Lawrance’s residence. (Id.; Decl. Greg Lawrance ISO Reply (“Lawrance Decl.”) ¶¶ 6-7, ECF No. 28.) Jingdong’s attorneys conducted additional research and determined that Ready Acquisition’s business status in the State of New Hampshire was “Not In Good Standing.” (Ren Decl. Ex. A (“Business Information Inquiry”), ECF No. 22-2; Ren Decl. ¶ 6.) These discoveries provided Jingdong’s counsel with a reasonable factual basis for including alter ego allegations against Lawrance and Gunter in Jingdong’s Complaint.

Lawrance and Gunter argue otherwise, pointing to facts and developments that occurred after Jingdong filed its Complaint, (Mot. 6-8), but these facts are not relevant to whether the Court should sanction Jingdong for allegations made in the Complaint. Fed. R. Civ. P. 11(b); Golden Eagle, 801 F.2d at 1538.

Lawrance and Gunter further argue that Jingdong is withholding $400,000 of Ready Acquisition’s inventory and thus contributing to the very insolvency Jingdong alleges supports alter ego liability. (Reply 5.) This argument is not well taken because there is no actual evidence of a causal link between Jingdong’s withholding of inventory and Ready Acquisition’s purported insolvency; and in any case, this attack on one component of Jingdong’s alter ego theory, even if successful, would not render the alter ego theory factually or legally baseless.

The court also held that the legal theory did not merit sanctions either.

Comment: Plaintiff did an extensive investigation of the facts before it brought the alter ego claim. That investigation and the facts that were discovered was a sufficient basis to bring an alter ego claim.

File A Dispositive Motion Before Seeking Rule 11 Sanctions

If you read a complaint and develop the conviction that the complaint is frivolous or otherwise supports a sanctions claim, don’t rush to seek sanctions. Seek dismissal first. Then, if successful, seek sanctions. Otherwise the court will deny the sanctions motion without giving it any consideration.

Defendant argues that sanctions are appropriate because “Plaintiff’s complaint is meritless and subject to dismissal under Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure.” Defendant has failed, however, to move for relief under Rules 12(b)(1) or 12(b)(6). In light of Defendant’s failure to move for relief under these Rules or otherwise challenge the viability of Plaintiff’s claims, the Court finds that Defendant’s motion for Rule 11 sanctions is improper and premature. See, e.g.Dobronski v. Alarm Management II L.L.C., 2019 WL 1232690 at *2 (E.D. Mich., Mar. 18, 2019) (a Rule 11 motion for sanctions is not an appropriate substitute for a properly filed motion under Rule 12 or Rule 56); Almeida v. Bennet Auto Supply, Inc., 335 F.R.D. 463, 466 (S.D. Fla. 2020) (where defendant claims that the institution of a lawsuit was improper, a determination as to the propriety of Rule 11 sanctions cannot be made until the conclusion of the case); United Specialty Ins. Co. v. Dorn Homes Inc., 2020 WL 8416010 at *3 (D. Ariz., Jan. 9, 2020) (same); Mouzin Brothers Farms, LLC v. Dowdy, 2022 WL 16841583 at *1 (M.D. Ga., Nov. 9, 2022) (same). Accordingly, the undersigned recommends that Defendant’s motion be denied without prejudice.

Jaiyeola v. Bryan, 22 CV 844 W.D. Michigan, Southern Division.

Ed Clinton, Jr.

That Will Cost You $50,000.

Trump v. Clinton is a purported RICO lawsuit filed by Trump attorneys against Hillary Clinton (who lost the 2016 Presidential Election) and a number of other defendants. It was dismissed with prejudice two months ago. One of the defendants, Charles Dolan, filed a motion for Rule 11 sanctions. The district court granted the motion with some stern words for Trump’s lawyers. Dolan was a mere volunteer for the Clinton campaign and did not have the roles that the complaint, and the amended complaint, alleged that he had.

The Court found that the allegations that Mr. Dolan was involved in a conspiracy to harm Donald Trump or his campaign were false and reckless. The court noted that the lawyers for Dolan sent a detailed warning letter to the attorneys for Trump explaining the various flaws with the Complaint. Instead of taking the letter seriously, the lawyers made a few cosmetic changes and filed an Amended Complaint. The court’s discussion of the Rule 11 warning letter is instructive:

The Warning Letter. 

On May 31, 2022, counsel for Mr. Dolan wrote the attorneys for Mr. Trump. They warned:

1.         That Mr. Dolan had no role in any conspiracy related to the Steele dossier.

2.         That Mr. Dolan was not a source for the allegations of sexual activity.

3.         That Mr. Dolan had not been in contact with any defendant other than Igor Danchenko, and that Mr. Dolan’s contacts with Mr. Danchenko involved business interests and help for a conference in Moscow.

4.         That Mr. Dolan had never been chairman of the DNC.

5.         That Ms. Clinton was on record through a spokesperson as stating she had no recollection of Mr. Dolan.

(DE 268-1).

The court then noted that the Amended Complaint did not make material changes to the allegations against Dolan. Dolan moved for sanctions. The explanation for the decision to grant sanctions is well-written.

Rule 11 sanctions are properly assessed (1) when a party files a pleading that has no reasonable factual basis; (2) when the party files a pleading that is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; or (3) when the party files a pleading in bad faith for an improper purpose. Massengale v. Ray, 267 F.3d 1298, 1301 (11th Cir. 2001) (citing Worldwide Primates, Inc. v. McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996)).

Here, all three are true. In Section A of this Order, I explain why the Amended Complaint lacked a reasonable factual basis as to the allegations against Defendant Dolan. Then, in Section B, I explain why Plaintiff’s legal arguments contained no reasonable chance of success. I have already done so, at great length and in great detail, in my Order granting Defendants’ Motion to Dismiss. But I reiterate those fatal flaws here as relevant to the distinct Rule 11 inquiry. Finally, in Section C, I find that Plaintiff filed his pleadings for an improper purpose.

The order contains a lengthy discussion of the merits of the legal theories in the Complaint as additional bases for sanctions. The court ordered the lawyers for Trump to deposit $50,000 with the Court and pay Mr. Dolan’s legal fees in connection with the motion.

Comment: this is an example where the lawyer failed to conduct due diligence before making claims that were either false or baseless. Even after receiving a Rule 11 warning letter, the lawyers (at least according to the Court) failed to take any measures to correct the problems with the Complaint. Rule 11 requires due diligence and no lawyer should ever sign a pleading without doing that hard work. Don’t sign because the boss tells you to sign. Don’t sign to curry favor. Sign if the allegations are true and well-researched. In the end of the opinion, the Court indicated that other sanctions might be forthcoming.

Note: my apologies for the formatting issues that made the original post impossible to read.

Ed Clinton, Jr.

Six Years Of Frivolous Litigation Equals Rule 11 Sanctions

A Michigan district court found that a plaintiff who had spent six years challenging zoning regulations was liable for Rule 11 sanctions.

After conducting a de novo review of the R & R, the objections, and the pertinent portions of the record, the Court finds that Plaintiff’s objections are without merit and that the R & R should be adopted. As stated by the Magistrate Judge, there is “nothing reasonable about Plaintiff’s conduct in this matter” (ECF No. 53 at PageID.603). Over the past six years, Plaintiff has unsuccessfully challenged Marshall Township’s efforts to enforce zoning regulations in both federal and state court. The claims in the present case were not discernable. The Court agrees with the Magistrate Judge’s conclusion that the “imposition of Rule 11 sanctions is both appropriate and necessary to deter Plaintiff and others from wasting this Court’s limited resources and subjecting future litigants to similar behavior” (id.). Plaintiff’s argument fails to demonstrate any factual or legal error in the Magistrate Judge’s analysis.

Plaintiff argues that his claims and pleadings were not frivolous in this case. He contends that the Court permitted him to “e-file” his pleadings, “proving that Plaintiff’s pleadings were not considered `frivolous’ at that time” (ECF No. 54 at PageID.607). He further argues that if the pleadings were frivolous, “why has [he] not been charged with perjury” (id. at PageID.607).

Cousino v. Township of Marshall, 21-cv-679 (W.D. Michigan 2022). The current case has been pending since 2021 so the “six years” the court is referring to must mean other litigation. I’m not sure that is a proper basis for awarding sanctions in the above-captioned case. The court does not mention a false allegation in its opinion.

Ed Clinton, Jr.

Trump v. Clinton – A Fertile Ground For Sanctions Motions

The Southern District of Florida recently dismissed Trump v. Clinton 2:22-cv-14102 (Middlebrooks, J.) which alleged a smorgasbord of grievances against various defendants who plaintiff claimed had attempted to rid the 2016 Presidential Election against him. Defendant Charles Halliday, Jr. filed the first of an expected dozen or so Rule 11 motions against the lawyers for the former President. The motion alleges sloppy work by Trump’s lawyers.

“Defendant Charles Halliday Dolan, Jr has been dragged into this lawsuit via speculation, rumor and innuendo.Large and small matters are falsely and cavalierly presented in Plaintiff’s pleadings; any one of these false statements is grounds for sanction.

The original complaint falsely presented Mr. Dolan as a former Chairman of the DNC. Complaint, ¶96.Undersigned counsel sent a Rule 11 letter to Plaintiff’s counsel noting, among other things, that statement was false.See Exhibit A. The Amended Complaint now describes

Mr. Dolan as the former Chairman of a “national democratic political organization.” Amended Complaint, ¶96. Thatdoes not fix the problem, as Mr. Dolan was never the Chairman of any such organization. Mr. Dolan’s resume is available online and could have been easily checked.

The new, Amended Complaint further complicates its prior error by now identifying Mr. Dolan for the first timeas a citizen and resident of New York, Amended Complaint, ¶20. This is a new allegation that is not true at all, andagain could have been easily checked. Mr. Dolan lives and has lived for most of his adult life in Virginia. Mr. Dolan already submitted a declaration identifying himself as an Arlington, Virginia resident.Mr. Dolan is alleged to be the ultimate source of a rumor that Mr. Trump engaged in salacious sexual activity at a Moscow hotel.This is also not true, and there is no basis for this rumor….

There was no factual basis to allege that Mr. Dolan was ever Chairman of the DNC, or former Chairman of any national democratic political organization, and no basis to allege he has ever been a resident of New York. There apparently was not a scintilla of due diligence on the part of the plaintiff’s attorneys. These false statements alone merit sanction, especially since undersigned counsel warned Plaintiff’s counsel of a potential Rule 11 motion via letter. These false facts are indicative of a lack of reasonable diligence generally.”

Comment: I take no position on whether the motion has merit, but will keep readers updated on the results of this (and other expected sanctions motions) in this case.

Ed Clinton, Jr.

Failure to Answer Discovery Leads To Default Judgment

A district court in Florida has utilized Rule 37 to enter judgment in favor of an insurance company against a defendant accused of engaging in wrongful billing practices. Government Employees Insurance Co. v. DeJesus, No. 20-21558 (S.D. Florida 2022). The defendant’s refusal to appear for his deposition was the deciding factor in the grant of the Rule 37 sanctions motion. The court explained in part that:

“The Defendants initially agreed to appear for a deposition on October 14, 2021. However, on October 8, 2021, Defendants’ counsel, Christian Carrazana, Esq., informed Plaintiffs of his intent to file a motion to withdraw as counsel for Defendants. Plaintiffs indicated that they would consent, but informed Mr. Carrazana that they intended to proceed with the Defendants’ depositions on October 14, 2021, should the motion to withdraw not be decided by then. Mr. Carrazana did not move to withdraw until November 30, 2021, and the Defendants did not appear at their October 14, 2021, depositions. Thereafter, Plaintiffs requested a discovery hearing seeking Rule 37 sanctions and an order compelling Defendants to appear for their depositions. See [D.E. 164 and 165].

The Court held a discovery hearing on December 2, 2021, and entered an Order compelling Defendants to appear for depositions to be held on December 20, 2021. [D.E 186]. The Order also warned Defendants that additional violations of the Court’s directives could subject them more severe sanctions:

Defendants’ failure to comply with this Order may result in further sanctions under Rule 37(b) of the Federal Rules, which can include further monetary sanctions, fines, or even entry of default judgment against Defendants on all claims and for all damages sought in the pending complaint. Defendants’ failure to comply may also result in their being found in contempt of court, which finding may result in the entry of any Order necessary for the enforcement of the Court’s jurisdiction to coerce compliance.

Id. at ¶ 5. The Court also granted Mr. Carrazana’s motion to withdraw that same day, ordering Defendants to retain new counsel by December 16, 2021,[2] and explaining that “[f]ailure to retain substitute counsel for the corporate entity Defendant, or failure to file the notice of intention to defend the case on a pro se basis by the individual Defendant, may be deemed a waiver of the right to defend the action and result in entry of default judgment(s).” [D.E. 187].

Contrary to the Court’s Orders, Defendants never retained new counsel, and Mr. Collazo never informed the Court of his intention to proceed with his defense on a pro se basis. Further, as prescribed by the December 2, 2021, Order, Plaintiff’s’ counsel shared with Mr. Carranza the link to Defendants’ virtual depositions taking place on December 20, 2021, but Defendants did not appear, nor did they provide any justification to Plaintiff for their absence. [D.E. 195-1, ¶¶ 5-7].

Defendants’ willful and unjustified disregard for this Court’s Orders makes the sanction of default judgment appropriate here. Not only have Defendants failed to pursue their defense in this action, but they have also failed to comply with this Court’s instructions on repeated occasions and without any explanation.”

Sixth Circuit Affirms Sanctions Award Against Lawyers

In NPF Franchising, LLC v. Sy Dawgs, LLC 37 F.4th 369 (6th Cir. 2022), the Sixth Circuit affirmed a Rule 37 sanctions award against the lawyers for NPF Franchising. The fees were awarded against NPF and the individual lawyers because the lawyers failed to comply with discovery obligations in the case, a dispute between an franchisor and a franchisee. I have quoted from the relevant portions of the opinion below.

“This case began in February 2018 with NPF’s complaint against SY Dawgs for breach of their franchise agreement and non-competition and non-disclosure agreement. About a week later, NPF amended its complaint. After the district court denied NPF’s motion for a preliminary injunction, NPF amended the complaint for a second time. SY Dawgs then moved for attorneys’ fees, costs, and expenses, pursuant to a contractual fee-shifting provision.[1] SY Dawgs argued that it was entitled to monetary compensation because NPF was the “unsuccessful party” on its claim for injunctive relief. The district court denied the motion without prejudice as premature.

374*374 Around this time, in August 2018, NPF failed to appear at a status conference. At that conference, the district court noted that despite SY Dawgs having issued multiple subpoenas and responded to NPF’s discovery requests, NPF had thus far refused to respond to SY Dawgs’s discovery requests, with the discovery deadline two months away. SY Dawgs again moved for costs and fees, this time over NPF’s non-attendance at the status conference. At the next status conference, on September 4, 2018, new counsel, the Buchalter Law Firm, appeared for NPF and vowed to produce all outstanding discovery. The district court granted motions to appear pro hac vice on behalf of NPF filed by Buchalter Law Firm attorneys Tracy Warren and Kathryn Fox around this time.

Later in September, SY Dawgs again moved to compel discovery and for sanctions. It stated that NPF had provided no interrogatory answers or documents in response to the requests that it served on June 20, 2018. SY Dawgs also noted that NPF refused to designate a representative for corporate representative depositions. The parties then had a status conference in early October, where NPF represented to the district court that it had turned over all the requested discovery. Relying on this representation, the district court denied SY Dawgs’s motion for costs and fees but also expressed willingness to revisit the issue later. The district court also granted SY Dawgs’s motion to compel discovery “inasmuch as [NPF]’s counsel has represented to Court and counsel that all requested information has been disclosed.”

SY Dawgs moved for discovery sanctions yet again on October 25, 2018. It stated that NPF had failed to appear for a properly noticed deposition or produce any documents related to a subpoena. SY Dawgs also accused NPF of misrepresenting to the district court that it had produced all documents, given that it had later produced several hundred more documents. The district court then granted a motion by NPF to extend discovery, held another status conference at which it noted that SY Dawgs’s motion for sanctions was fully briefed, and asked the parties to confer and prepare a list of documents still needed. Soon after, it extended discovery again, this time until March 1, 2019.

The new discovery deadline brought yet another motion from SY Dawgs to compel discovery, filed at the end of December. In addition to alleging that NPF had provided insufficient or incomplete responses to several of SY Dawgs’s requests, SY Dawgs argued that NPF had provided no documents responsive to the 45 other requests. That same day, Buchalter Law Firm attorneys Rick Waltman and J. Patrick Allen were admitted pro hac vice to represent NPF. And NPF made its own motion to compel discovery and sanction SY Dawgs. It alleged that SY Dawgs had failed to supplement its prior discovery responses and that doing so was a “willful and concerted effort to avoid the discovery process.” The district court denied both parties’ motions for discovery sanctions, but it left the sanctions issue open for revisitation after litigation concluded. And, yet again, the court granted SY Dawgs’s motion to compel discovery. It also instructed NPF to respond to the discovery requests within 14 days or, in the alternative, certify to the district court that there is nothing responsive left to produce.

The 14-day deadline passed with no such certification from NPF. In February 2019, SY Dawgs renewed its motion for sanctions. It stated that “NPF and its pro hac vice-admitted counsel” had a “pattern of ignoring discovery obligations” and “flagrantly” ignoring both court orders compelling discovery. Def.’s Renewed Mot. for Sanctions, R. 161, PageID 3606. The district 375*375 court granted the motion, ordering NPF to file an affidavit certifying that it had fully complied with the discovery request and also ordering NPF’s counsel to file a “similar certification of compliance by counsel.” The district court warned that “[f]ailure to comply with this Order will result in sanctions, up to and including dismissal of Plaintiff’s action.” And it warned yet again that “any monetary sanctions for Plaintiff’s repeated discovery intransigence will be addressed at the conclusion of this action.”

Despite that admonition, NPF never complied. So, SY Dawgs moved for the ultimate sanction—to dismiss the case under Federal Rule of Civil Procedure 37. In the meantime, NPF moved for an interlocutory appeal of the sanctions order before our court. But NPF later voluntarily dismissed the appeal, and SY Dawgs renewed its motion to dismiss. NPF also sought a writ of mandamus from our circuit, stating that it would be “irreparably harmed” by “fully respond[ing] to all of Respondents’ discovery requests.” Pet. for Writ of Mandamus, R. 180, PageID 4054.[2] Yet no protective order regarding these documents was sought by NPF from the district court, nor did the franchisor ever produce a privilege log. We denied the petition for mandamus. Finally, NPF moved for default judgment, stating that SY Dawgs was misrepresenting its efforts to cooperate with the court’s orders and communicate.

After this last flurry of motions, NPF moved to voluntarily dismiss the case with prejudice in July 2019. The district court granted its request. But just before the dismissal, SY Dawgs moved again for attorneys’ fees and costs.”

The District Court sanctioned four individual lawyers, their law firm and the client.

Because Rule 37 does not allow sanctions against a law firm, that portion of the sanctions award was reversed. However, the sanctions were upheld against the individual lawyers.

The lawyers argued on appeal that they had not received sufficient notice of the sanctions and had not had an opportunity to respond. The Sixth Circuit rejected both arguments. The lawyers argued that their position was “substantially justified” but the court did not accept that argument either.

Comment: In my opinion, this is a case where emotions got the better of the lawyers for NPF. No matter how you may feel about a case or the position of the other side, you must comply with court orders to answer discovery requests. If you work for a firm that appears to be headed down this path, consult ethics counsel before engaging in this behavior. It is unfortunate that the junior lawyers did not engage counsel to defend themselves. Their defense might have been different than the defense offered by their more senior colleagues.

If you have a question about ethics or discovery obligations and you do not know what to do, please call us. We can often help resolve messy situations if we have time to give advice.

Ed Clinton, Jr.

The Clinton Law Firm, LLC

Chicago, Illinois 60602