Author: eclinton

Joel Brodsky Sanctioned By District Court


The case is Twyman v. S&M Auto Brokers, 16 C 4162. The case is a standard odometer rollback case. The district court sanctioned Joel Brodsky in the amount of $50,000 for his conduct in the case.

This is an odometer rollback case that landed in federal court due to a little known federal statute that federalized the crime of manipulating a car’s odometer in order to protect purchasers from potential shady practices committed by used car sellers. This small Federal Odometer Act case began in April of 2016 and burgeoned into an 18-month battle between defense counsel, Joel Brodsky, and Plaintiff’s counsel over the purchase of a $35,000 used SUV from S&M Auto Brokers (“S&M”). The Plaintiff, Donald Twyman alleged that S&M failed to inform him that the Infiniti SUV had been in a serious accident, had been rebuilt, and the odometer had been rolled back. After the car drove poorly, Twyman brought it to a local Infiniti dealer who reviewed the warranty claim history that showed a discrepancy in the odometer readings and that the car had been in an accident. Twyman filed suit alleging a violation of the FOA and that S&M committed fraud and violated the Illinois Consumer Fraud and Deceptive Business Practices Act when it failed to disclose that the SUV had been damaged in an accident.

Throughout the course of the litigation, the Court has observed first-hand Brodsky’s unprofessional, contemptuous, and antagonistic behavior directed at opposing counsel. These have included false accusations and inappropriate diatribes in pleadings, where he repeatedly accused opposing counsel of lying, extortion, attempting to create a false record, and repeatedly requested sanctions without any good-faith basis. (See, e.g., Dkt. Nos. 67, 106, 138, 151, 155.) Brodsky also sent numerous vitriolic emails to opposing counsel during the course of the litigation, including asking opposing counsel “How do you even call yourself a lawyer? You are an embarrassment to the profession,” and accusing him of being an extortionist and manufacturing the case. (See, e.g., Dkt. 166-1). This pattern of behavior continued at a deposition of one of Defendants’ experts. There, Brodsky was confrontational and antagonistic and made numerous speaking objections, improperly instructed the witness not to answer, in addition to cursing several times on the record (Dkt. 160 at 58:19, 73:21), making several inappropriate ad hominem attacks against opposing counsel, including calling him a liar (id. at 71:21-22), and accusing counsel of engaging in a criminal enterprise (id. at 122:6-19).

Ironically, in many of his diatribes, Brodsky has accused opposing counsel of over-litigating what he often referred to as a “small-claims” case, yet Brodsky filed a number of baseless or unnecessary motions himself prolonging the litigation and the costs of litigation. These include a motion opposing plaintiff’s ministerial motion to correct a typo in his expert’s report (Dkt. 62); a motion in limine seeking the Court initial review of whether Defendant’s expert reports were sufficient (Dkt. 96); a frivolous motion to strike Plaintiff’s Rule 56 statement; and a baseless motion to seal a recording of the deposition referenced above in order for it not to be accessed on the public record. (Dkt. 162).

Of special concern for the Court, however, are allegations Brodsky leveled at Donald Szczesniak, Plaintiff’s expert witness. In his reply in support of his motion in limine regarding expert witnesses (Dkt. 102), Brodsky leveled charges against Szczesniak for allegedly fabricating an expert report in an unrelated matter involving Diane Weinberger. Two and a half weeks later, Brodsky filed another motion regarding Szczesniak, this time asserting that Szczesniak had damaged Weinberger’s fence. (Dkt. 108.) That motion also raised a number of alleged unrelated civil judgments against Szczesniak, relating to his auto repair business. (Id. at 3.) The motion also accused Szczesniak of sending Brodsky an anonymous facsimile transmission of a newspaper article in an “attempt to intimidate the Defendants [sic] attorney from further searching into his background.” (Id.) This motion sought an order of “indirect criminal contempt” against Szczesniak and sought to have the Court make an immediate referral to the United States Attorney for a criminal investigation to be launched against Szczesniak. (Id. at 4.) The Court summarily rejected Brodsky’s motion and reminded him that there were proper ways to challenge an expert, none of which were followed, and that if he believed that criminal activity occurred, he himself could call the USA and make a complaint. (Dkt. 110.) Nonplussed by the Court’s refusal to act as his bully, Brodsky filed a motion seeking sanctions against Szczesniak and against Plaintiff for retaining him. (Dkt. 121.) Brodsky’s motion for sanctions again accused Szczesniak of attempting to intimidate Weinberger by threatening her and purportedly damaging her fence. Rather than file a motion seeking to bar the expert testimony pursuant to the Court’s gatekeeping function in Daubert, Brodsky instead simply sought an order barring Szczesniak from testifying due to his alleged improper and even illegal behavior. (Id. at 4.)

Plaintiff responded to Brodsky’s motion for sanctions, asserting that Brodsky’s accusations were false and attached affidavits from Szczesniak, his wife, and son Luke who all attested that Szczesniak was home sick at the alleged time Weinberger’s fence was damaged. Plaintiff’s response also pointed out inconsistencies in the story Weinberger told the police as compared to the affidavit she completed for Brodsky, including Szczesniak’s alleged location on the night of the incident and the timing of the incident. (Dkt. 137 at 3.) In fact, there is no evidence that Szczesniak was ever questioned by police in the matter, let alone arrested. Plaintiff also denied Brodsky’s allegation that Szczesniak anonymously faxed him an article, pointing out that Brodsky’s affidavit was not grounded in facts, and submitted sworn testimony that Szczesniak was taking his elderly mother to the doctor at the time the fax was sent. (Id. at 5.)

In the face of evidence contradicting his motion for sanctions, Brodsky again doubled-down. In his reply, he called Szczesniak a liar and accused Szczesniak of submitting a false declaration and committing perjury. (Dkt. 138 at 2.) To use his own words against him, “in what can only be described as strange and bizarre” Brodsky asserts that “an examination of the LexisNexis public records search that was done on Donald Szczesniak, states that while he does have a wife named Jennifer, a mother named Ruth Ann, and a son named Zachery, there is no son named Luke.” (Id.) Brodsky went on to insinuate Szczesniak had fabricated the affidavit filed by Luke and that he indeed had fabricated Luke. Brodsky then went on to accuse Plaintiff’s counsel of bringing the lawsuit “to extort money, based entirely on false evidence, and an expert who is [sic] tampers with witnesses and presents false declarations and/or engages in false lawsuit . . . is no small matter.” Meanwhile, Szczesniak, a proposed witness in the matter, sought representation based on the allegations against him that went to the heart of his work — testifying as an expert in odometer fixing cases. Szczesniak appeared in Court with his retained personal attorney and sought leave to file a response to the accusations against him. Rather than back down, Brodsky opposed his efforts to file a response and increased his level of accusations against the witness, this time alleging that the instant case was “not the first case in which Szczesniak has fabricated persons and events in affidavits filed with the Court, nor is it the first time he has been accused of witness intimidation. It appears to be a habit.” (Dkt. 142 at 1.) The Court permitted Szczesniak to file a response to defend his reputation and Brodsky filed another reply, again accusing Szczesniak of damaging Weinberger’s property and fabricating his expert report, along with other allegations of impropriety regarding unrelated cases. (Dkt. 150.)

Following this flurry of serious allegations, the Court held a status on April 6, 2017. At that status hearing, the Court again reminded the parties that it was considering sanctions based on the conduct of counsel and noted that the filings were the most acerbic and nasty accusatory filings the Court had ever seen. Despite these warnings, Brodsky continued to impugn Szczesniak and claim that the case was fabricated in open court. The Court ordered counsel to bring their clients to the next status, which was held six days later. At that status, the Court informed the parties of the need for a sanctions hearing regarding Brodsky’s accusations and asked the parties whether they were aware of the protracted proceedings and why they were taking so long to deal with such a minor dispute. Brodsky’s client informed the Court that he was unaware of the ethical issues and had never been conveyed an offer to settle the suit — something he was willing to do long ago. (Dkt. 165.) Following the April 12, hearing Plaintiff filed a motion for sanctions. After retaining counsel, Brodsky filed a motion to withdraw his filings involving accusations against Szczesniak. (Dkt. 172.) He also withdrew from representing S&M. Shortly before the hearing, Brodsky filed a short response and the sanctions hearing was held on July 7, 2017. In his response, he denied that any of the filings were submitted for an improper purpose and highlighted his efforts to “address issues raised by the Court.” (Dkt. 208.)

At the hearing, which lasted several hours, the Court heard testimony from Peter Lubin, lead counsel for Twyman, and also testimony from Szczesniak. Lubin testified regarding his good-faith basis for filing the lawsuit, discussed Szczesniak’s integrity and qualifications, denied being in a criminal enterprise (a rant that Brodsky repeated throughout his filings), and discussed the emotional distress he suffered from Brodsky’s poor treatment. Szczesniak testified about the importance of his reputation to his work as an expert witness, denied damaging Weinberger’s fence, denied sending Brodsky an anonymous fax, and confirmed that he has a son named Luke. Szczesniak also averred that Brodsky’s filings had damaged his employment and put undue stress on his family. Brodsky declined to testify but gave a statement where he said he let his frustrations get the better of him and that he “went too far in this case.” Brodsky also apologized to the Court “for anything that [he] did that caused this Court concern or stress” and apologized to Lubin for “going too far in this case” and also to Szczesniak. Brodsky did not submit any evidence contradicting Lubin’s or Szczesniak’s testimony nor did he provide any explanation for his behavior throughout the case, including the allegations against Lubin and Szczesniak. Although not reflected on the transcript, throughout the hearing, Brodsky was occupied with his cellular phone and made several audible exasperated sighs during the course of the hearing as the testimony was being presented.

Outside of the events leading up to the sanctions hearing, the Court warned Brodsky several times that his behavior could result in sanctions. (See, e.g., Dkt. 118; Dkt. 165 (informing the parties that the Court has reviewed the docket and the need for a sanctions hearing because “Mr. Brodsky has been overly aggressive in this case, that he’s not following the rules of professional conduct, and he is filing a lot of motions to exacerbate the discovery process. And so it’s going to be a [sanctions hearing] primarily to determine whether sanctions should be applied to him” and noting the seriousness of the accusations Brodsky made against Szczesniak but noting that the Court has “no problem levying the appropriate sanction against a lawyer who misrepresents or lies to the Court in such a manner as to hijack a litigation”); Dkt. 216 at 9-10 (warning the parties that settlement of the matter, including attorneys’ fees would not moot the Court’s desire to consider sanctioning counsel, because the “Court always has jurisdiction over protecting the integrity of the proceedings before her” and that the Court intended to “protect the integrity of this courtroom”).)

Due to the repeated violations of this Court’s orders to refrain from the aggressive, unprofessional and vitriolic behavior, the Court grants the motion for sanctions [194] and imposes the following sanctions: 1) Brodsky shall pay a fine of $50,000 to the Clerk of the Court; 2) Brodsky shall attend an ethics course approved by the Attorney Registration and Disciplinary Commission and provide the Court with verification of completion of the course; 3) Brodsky shall attend an anger management course and provide the court with verification of the successful completion of the course; and 4) the Court shall refer Brodsky to the Executive Committee for consideration of being barred or suspended from practicing in the Northern District of Illinois for his failure to abide by Court rules.

 

Plaintiff’s Flooding Lawsuit Goes Down the Drain Because Of Discovery Violations


The case is captioned Justice v. Cabot Oil and Gas, 17-cv-2986 S.D. West Virginia. One of the plaintiffs, James Grimes alleged that Cabot Oil caused flooding on his property by failing to “reasonably divert water from its natural course.” According to Grimes, this caused damage to his property.

After Grimes failed to participate in discovery, Cabot Oil moved to dismiss as a sanction under Rule 37. The court granted the motion. The explanation:

Cabot summarizes in the motion the relevant and undisputed facts that led to the pending motion’s filing. (ECF No. 60 at 1-2.) In short, since Grimes filed his Complaint on April 13, 2017, he has failed to respond to Cabot’s written discovery requests, failed to submit to a deposition, failed to respond to Cabot’s motion to compel, failed to comply with Magistrate Judge Tinsley’s discovery order, and has otherwise failed to participate in this litigation at all. (See id.) It is apparent that Rule 37 sanctions are appropriate in this situation.

First, Grimes has acted in bad faith by blatantly disregarding this litigation since he filed the Complaint well over fifteen months ago. Grimes never responded to initial discovery requests, and his counsel similarly refused to respond to multiple correspondence from Cabot’s counsel inquiring as to the whereabouts of his responses. (See id.) While the failure to participate in initial discovery could be rectified through later involvement, bad faith became even more apparent here through Grimes’ noncompliance with a very specific discovery order entered by Magistrate Judge Tinsley. Cabot suggests that Grimes “moved away . . . since at least January 25, 2018,” (id. at 4), but the discovery order was entered on December 18, 2017, (ECF No. 17). That order was electronically transmitted to Grimes’ counsel upon entry, so Grimes clearly had notice of the court order with which he still has not complied. Simply put, Grimes’ actions—or lack thereof—since the litigation’s commencement serve as a distinct example of bad faith.

Second, the Court agrees with Cabot that it has suffered prejudice because of Grimes’ misconduct. As Cabot notes, Grimes has “deprived Cabot of any knowledge regarding [his] claims,” (ECF No. 60 at 4), and with summary judgment motions due on August 2, 2018, Cabot has been unable to develop any evidence to rebut those claims. Grimes supposedly no longer owns the property that he claims was flooded. (Id.) Thus, Cabot’s experts have been unable to examine the alleged damage suffered. (Id. (“Likewise, counsel for Mr. Grimes did not take Cabot’s experts to the location where the mobile home was previously located and, accordingly, Cabot’s experts do not even know the location of the alleged flooding.”).) The ability to inspect the property and develop expert opinions related to the cause of the supposed damage is essential to Cabot’s defense. In short, the inability to defend itself due to Grimes’ noncompliance with Magistrate Judge Tinsley’s order indicates that Cabot has already suffered great prejudice.

Third, “stalling and ignoring the direct orders of the court with impunity . . . must obviously be deterred.” Mut. Fed. Savs. & Loan Ass’n, 872 F.2d at 93. This applies not only to future litigants who will appear before this Court but also to those who are involved in the instant action. Cabot filed a motion to compel against all Plaintiffs in this matter after almost two months passed from the date when Cabot served its initial discovery requests. (See ECF Nos. 12, 13, 14.) It took Magistrate Judge Tinsley’s order for the other Plaintiffs in this case to respond to those requests. (See ECF No. 20.) While the Court is unaware of additional misconduct by those Plaintiffs, they should be aware of the consequences that may arise from noncompliance with this Court’s orders.

Lastly, no less drastic sanctions than dismissal will be effective in this situation. Cabot has been left with no information regarding Grimes’ claims, and the dispositive motions deadline is looming. Grimes has shown no interest in participating in this action or even communicating with his attorney even though his counsel has not moved to withdraw representation. There is no indication before the Court that Grimes has any intention of obeying Magistrate Judge Tinsley’s order in the future or further pursuing his claims against Cabot. Accordingly, Grimes forfeited his right to prosecute this case, and dismissal of his claims appears to be the only appropriate sanction under Rule 37.

Comment: the plaintiff must participate in the litigation. If the plaintiff does not comply with discovery, plaintiff essentially forfeits the lawsuit.

Ed Clinton, Jr.

 

Plaintiff files Amended Complaint to remove some claims – Sanctions Motion Is Denied


via Bernard v. ILLINOIS CENTRAL RAILROAD COMPANY, Dist. Court, WD Tennessee 2018 – Google Scholar

This is a wrongful termination case where the plaintiff initially filed time-barred EEOC claims. The claims were time-barred because they were not filed within 90 days of the issuance of the right to sue letter.

After the Defendant moved to dismiss those claims, the plaintiff promptly filed an amended complaint removing those claims. Therefore, Rule 11 and Section 1927 sanctions were denied:

The filings reveal that Illinois Central and Bernard conferred numerous times regarding the issues surrounding Bernard’s initial complaint. There is no indication that Bernard’s conduct was objectively unreasonable such that sanctions would be appropriate under either Rule 11 or 28 U.S.C. § 1927. Based on the parties’ discussions and Bernard’s January 3, 2018, supplementation of his Complaint with the Right to Sue letter, Illinois Central should have been aware that Bernard was not intending to pursue any claims except those arising from the 2015 EEOC Charge. It further appears that counsel were conferring during and around the holidays and various days of inclement weather which impacted business. And, it appears during this time that there was some dispute as to which attorney would be appearing on behalf of Bernard. While counsel for Bernard could have been more prompt in amending his pleadings or more clear in responding to Illinois Central’s concerns, the court declines to find that such conduct was objectively unreasonable given the circumstances.

Lawyers Sue Client For Legal Fees And Seek Rule 37 Sanctions


Center for Individual Rights v. Chevaldina (S.D. Florida)

The Plaintiff is a law firm that represented Chevaldina in a copyright case. Plaintiff sued Chevaldina for legal fees after the copyright case was settled by another law firm. Plaintiff claimed that Chevaldina did not prosecute its claim for a legal fee award from the court. The law firm was suing for the failure of the plaintiff to pursue a claim for legal fees.

The law firm sought discovery from Chevaldina, but she did not produce documents. The law firm then filed a motion for a default judgment under Rule 37, which allows the court to enter a default judgment against a party that fails to participate in discovery.

Because Chevaldina was pro se, the court declined to award sanctions. It reasoned that Chevaldina did not fully understand her obligations to produce documents and denied the default judgment.

In conclusion, the court gave a pro se litigant a break in this case.

Defamation Claim Dismissed – But Plaintiff’s Lawyers Escape Sanctions


This is a fairly typical situation in litigation. The plaintiff, Redmonds Enterprise, Inc. sued CSX Transportation, Inc. for defamation and other related tort claims. The case grew out of a vandalism incident at a CSX rail yard. Redmonds alleged that a CSX employee sent an email that defamed Redmonds by blaming Redmonds for the vandalism.  During discovery, it became apparent that the author of the email, Rick Omer, was not a CSX employee and there was apparently no evidence that he existed at all.  Furthermore, there was no evidence that anyone at CSX sent a defamatory email to anyone about Redmonds. The court granted summary judgment in favor of CSX and dismissed the case.

CSX moved for sanctions pursuant to Rule 11 and Section 1927. The district judge denied the sanctions motion. This is the key paragraph of the opinion:

While it is a close question, it is not clear that sanctions are warranted under either Rule 11 or § 1927, although the dilatory conduct of Redmonds’ non-local counsel, Mr. Jenkins, was irresponsible, to say the least. CSX argues that sanctions should be imposed because Redmonds refused to dismiss the case after the Orner email was not uncovered during discovery. But, there is no evidence to suggest Redmonds did not have a colorable basis for filing its complaint initially. Redmonds had experienced a decline in business, and had been told this decline was attributable to a defamatory email from a CSX employee. Refusal to dismiss the complaint after discovery is not a basis for Rule 11 sanctions. See Brubaker, 943 F.2d at 1381Simpson, 900 F.2d at 36-37. After conducting discovery, Redmonds moved to amend its complaint to reflect new evidence uncovered during discovery. Although untimely and ultimately unsuccessful, filing this motion was not entirely baseless, nor an unreasonable multiplication of this proceeding under § 1927. The conduct of Redmonds’ counsel was not as “unreasonable[] and vexatious[]” as the attorney in Salvin, who continued proceedings after his own client’s deposition revealed that there was no basis to her claims, and indeed supported his opposition to the motion for summary judgment with an affidavit in which his client contradicted her own deposition testimony. See Salvin v. American Nat. Ins. Co.,281 Fed.Appx. 222, 225-26 (4th Cir. 2016).[5] The delay in seeking leave to amend after it became clear the Orner email could not be found was irresponsible and, as explained above, was sufficient reason to deny the motion to amend. But the court cannot say it amounted to the bad faith that is required to support sanctions under § 1927. The motion for sanctions will be denied.

This is a very typical situation in a plaintiff’s case. The plaintiff believes he or she was wronged but the lawyer is unable to prove the allegations. The lawyer had a good faith basis for filing the case but the case was ultimately dismissed for a lack of proof.

Redmonds Enterprise, Inc. v. CSX Transportation D. Maryland

Defend Trade Secrets Act – Wikipedia


The Defend Trade Secrets Act, 18 USC § 1836, was enacted in 2016. It is important because it provides federal jurisdiction for disputes over trade secrets. This allows the plaintiff (usually a company claiming that its trade secrets were stolen by the defendant) to bring its claims in federal court.

The elements for a successful claim under the DTSA are:  (1) the existence of a trade secret that relates to a product or service used in, or intended for use in, interstate or foreign commerce; (2) the acquisition of the trade secret, or the use or disclosure of the trade secret without consent; and (3) the person acquiring, using, or disclosing the trade secret knew or had reason to know that the trade secret was acquired by improper means.” Arctic Energy Servs., LLC v. Neal, No. 18-cv-00108-PAB-KLM, 2018 WL 1010939, at *2 (D. Colo. Feb. 22, 2018) (citing 18 U.S.C. §1836(b)(1); 18 U.S.C. § 1839. The DTSA defines “trade secret” broadly to include “all forms and types of financial, business, scientific, technical, economic, or engineering information” so long as “the owner thereof has taken reasonable measures to keep such information secret” and “the information derives independent economic value, actual or potential, from not being generally known to,” or ascertainable by, another person. 18 U.S.C. § 1839(3). See Lowenbro Inspection v. Sommerfield, 18 CV 01943 (D. Colo. August 2018).

via Defend Trade Secrets Act – Wikipedia

Failure to Observe 21-day Safe Harbor Dooms Sanctions Motion to Defeat


A defendant who obtained dismissal of the claims against her on the ground that the diversity amount was not met. The plaintiff sued the Defendant for failing to return his dog to him. (The dog eventually ended up in a shelter in Canada).

Because the defendant did not serve her Rule 11 Sanctions motion and give the plaintiff 21 days to drop her from the case, the sanctions motion was denied.

via Barringer v. Whitworth, Dist. Court, ED Michigan 2018 – Google Scholar