This is a case that was removed from the state court to the federal court. The plaintiff filed a motion to remand the case and the court, sua sponte, ordered defense counsel to show cause as to why he should not be sanctioned. The magistrate was concerned that some of the representations made by counsel were not true. Ultimately the trial court allowed the Defendant to amend its notice of removal. The court also sanctioned defense counsel under Rule 11. The magistrate then sanctioned the attorney for one of the defendants:
On January 18, 2017, the magistrate judge held a hearing on the order to show cause. Following this hearing and an in camera inspection of documents in connection with the drafting of the initial notice of removal, including U&E’s efforts to obtain jurisdictional facts related to the LLC members, the magistrate judge issued a long, detailed order. See Nogess v. Poydras Ctr., LLC, No. CV 16-15227, 2017 WL 396307 (E.D. La. Jan. 30, 2017). The court granted Velocity’s motion to amend the notice of removal. Id. at *11. The court found that U&E failed to conduct a reasonable inquiry prior to filing the initial notice of removal and its failure merited Rule 11 sanctions. Id. at *12-14. The court also found that Ungarino misrepresented material facts at the December 21 hearing and that Ungarino’s ex parte communications with the district judge’s chambers were improper. Id. at *15-17. Accordingly, the court concluded that Ungarino’s conduct violated one or more of the Louisiana Rules of Professional Conduct and referred the matter to the Eastern District of Louisiana’s Lawyers’ Disciplinary Enforcement Committee for further investigation, proceedings, and discipline, if warranted. Id. at *17.
The District Court denied the appeal and the lawyer moved to certify an interlocutory appeal. The district court entered a final judgment on the sanctions award under Rule 54(b).
The Court of appeals dismissed the appeal because the requirements of Rule 54(b) were not met. Rule 54(b) allows the court to enter a partial judgment on some, but not all, of the claims for relief. Because the sanctions motion was not a “claim for relief” the district court could not enter a Rule 54(b) judgment. The appeal was dismissed. The court also rejected an appeal under the collateral order doctrine.
The result here is significant because the lawyer who was the subject of the sanctions motion and award must wait until the end of the entire case to appeal the sanctions award. That could mean several years of waiting for the end of the case with a sanctions award hanging in the balance.