Month: November 2016

New Jersey Court Refuses To Shift Fees Even Though Plaintiff’s Case Was Thin

Plaintiff brought a discrimination case against his employer after he failed a drug test and was terminated. Plaintiff brought claims under 42 USC 1981 and the New Jersey Law Against Discrimination. Defendant obtained summary judgment and then sought legal fees pursuant to 42 USC 1988 and 28 USC 1927. The court denied the fee-shifting request, even though plaintiff’s case was “thin.” The court complained that the defendant did not seek sanctions before summary judgment was granted:

Even though defendant complained to plaintiff’s counsel and to the magistrate judge about its perceived shortcomings of plaintiff’s case and counsel’s involvement, it does not appear that defendant filed any formal motions for sanctions before the magistrate judge or this Court. Federal Civil Procedure Rules 11 and 37 exist to rectify all of defendant’s concerns — at the time the concerning actions are occurring — that defendant has raised in its after-the-fact motion.

The Court acknowledges that plaintiff’s case was thin, and that plaintiff’s counsel would not have disserved his client if he advised plaintiff to voluntarily relinquish his claims prior to summary judgment.[3] The Court also acknowledges the time and expense suffered by defendant as a result of plaintiff’s ultimately unmeritorious claims against it. But the Court cannot find that the circumstances of plaintiff’s claims and counsel’s actions rise to the level that warrants the imposition of sanctions against plaintiff or his counsel.

Source: Acevedo v. FLUOR ENTERPRISES, INC., Dist. Court, D. New Jersey 2016 – Google Scholar

Rule 11 Sanctions Awarded Where Plaintiff Litigated Baseless Claims Through Summary Judgment

In this case, Judge Aspen affirmed a decision by Magistrate Rowland to award sanctions to the defendants in false arrest Section 1983 case. The court reasoned (as did the Magistrate) that the plaintiff did not identify any evidence that the arrest lacked probable cause. Therefore, there was no basis to proceed.

The court explained its reasoning in these two paragraphs:

There was ample evidence supporting Detective Peluso’s probable cause determination, including the criminal complaints submitted by RTC industries, which were corroborated by a month-long investigation and review of video surveillance footage and other documentary evidence supporting the theft allegations. (See Summ. J. Order at 3-4, 12-13.) At the time Plaintiff filed his complaint in this matter, and through the course of discovery, Plaintiff has put forth no evidence that Detective Peluso believed or had reason to believe that the criminal complaint was false, or that the other evidence gathered during his pre-arrest investigation was not credible. (Id. at 13.) Further, as we have explained, after Detective Peluso had probable cause for an arrest, he had no constitutional obligation to continue the investigation. (Id.) What is more, Plaintiff has conceded that he took the property that precipitated the criminal complaint (he claims he was justified in doing so, although he did not inform Detective Peluso of this fact), which only further undermines any reasonable belief that Detective Peluso’s arrest was based on false information that Plaintiff took the items from RTC. (SeeDempsey Decl. (Dkt. No. 114-1) ¶ 9.) While Plaintiff points out that he was ultimately acquitted of the criminal charges against him, none of the facts or evidence he points to make his decision to continue to litigate his false arrest claim reasonable.

Because we agree with Judge Rowland that Plaintiff had no evidence to support his false arrest claim, and instead continued to posit irrelevant facts and arguments in support of his claims, we adopt the Report and find sanctions are appropriate. See Johnson, 170 F.3d at 740 (affirming sanctions award under Rule 11(b)(3) where an attorney’s “[f]ailure to withdraw or amend a counterclaim that [he] knew lacked any factual basis demonstrates that [he] never performed a reasonable inquiry into [the] counterclaim before presenting it to the court at trial”).

In sum, Rule 11 sanctions were awarded for plaintiff’s failure to drop a case that lacked evidentiary support.

Edward X. Clinton, Jr.

Source: Dempsey v. Nathan, Dist. Court, ND Illinois 2016 – Google Scholar

Court Admonishes Plaintiff’s Counsel For Filing Sloppy, Poorly Researched Pleadings But Declines to Sanction

This is a case where the plaintiff’s counsel’s conduct in filing a sloppy complaint and then in failing to cure the deficiencies of the complaint in an amended filing earned plaintiff’s counsel an admonishment from the District Court. Notably, the court declined to sanction plaintiff’s counsel. The court explains:

Defendants argue that Plaintiff’s counsel, Mr. Kober, behaved “unreasonably and vexatiously” in responding to their pre-motion conference request. In Defendants’ initial letter, Defendants pointed out many of the pleading deficiencies in the initial complaint. Plaintiff then sought this Court’s leave to file an amended complaint, which this Court granted. February 16, 2016 Order [Dkt. No. 14]. At that time, the Court remarked that permitting amendment was the proper course “particularly. . . given the woefully deficient allegations contained in the Complaint at this juncture.” Id. Plaintiff filed an Amended Complaint, which, as the above analysis makes clear, failed to meaningfully address many of the basic pleading deficiencies Defendants have identified. Defendants were then forced to bring the instant motion, in response to which Plaintiff finally conceded that several of the claims lacked any merit.

The Court is certainly troubled by the above conduct. A neutral reading of the filings in this case shows that the Amended Complaint, for whatever reason, contained claims which had no clear basis in law, even after that fact was pointed out to him. Further, counsel’s labored explanation that he only felt obligated to amend certain issues in his complaint, while saving any legal research into other potentially faulty claims for a later motion to dismiss undermines the obligation of lawyers to have a good faith belief in their claims prior to bringing them.

Nevertheless, at this stage, the Court declines to issue monetary sanctions under 28 U.S.C. § 1927 or Federal Rule of Civil Procedure 11. Counsel’s explanation of his thought process in proceeding as he did, disturbing as it is, assuages the Court that he did not, at the least, act in bad faith or with a vexatious motive of multiplying the proceedings. The Court does take this opportunity to formally admonish him for the above-described conduct in this case. Mr. Kober’s inability to adequately research the claims prior to asserting them in the Amended Complaint unquestionably caused Defendants the burden of having to oppose those claims with a formal motion. It also caused this Court to expend judicial resources in the administration of claims that, after several attempts by the Defendants and the Court to sift through them, even Mr. Kober now concedes lack merit. The Court hopes that this admonishment is a sufficient sanction under Rule 11 at this stage, and counsel will be guided accordingly in future filings.

In sum, plaintiff’s counsel can thank the district court for its mercy.

Source: Sapp v. PREMIER EDUCATION GROUP, LP, Dist. Court, D. New Jersey 2016 – Google Scholar

District Court Denies Rule 11 Sanctions for Failed Attempt to Remove Case to Federal Court

In this case, the plaintiff sued Ford in the state court. Ford removed the case, but the district judge decided to remand the case to the state court. Plaintiff sought sanctions, but sanctions were denied on the ground that Ford had an objectively reasonable basis to remove the case.

Comment: removal of a case to federal court can be tricky and sometimes it does not work. This court correctly understood that sanctions should only be awarded when there is an egregious and wrongful act, not when there was a reasonable argument in favor of removal.

Source: Bristol v. Ford Motor Company, Dist. Court, ED Missouri 2016 – Google Scholar

Edward X. Clinton, Jr.