Category: Court’s Inherent Authority

Court Sanctions Attorney For Filing Frivolous FDCPA Claim

A lawyer filed a claim under the Fair Debt Collection Practices Act, 15 U.S.C. Section 1692 (FDCPA) alleging that a debt collection letter from a law firm was misleading. The problem with this allegation is that the law firm defendant faithfully used the “safe harbor” language approved by the Second Circuit. The Defendant moved for judgment on the pleadings and the court granted the motion.  The court declined to sanction the plaintiff. However, the court awarded Rule 11 sanctions, on its own motion, against the plaintiff’s attorney.

The court reasoned that any competent lawyer practicing in the area of debt collection would know that the case,  Avila v.Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016), provided a safe harbor for the debt collector. If the debt collector followed the language of Avila, he or she could not be held to have violated the FDCPA, at least in the Second Circuit. The court concluded that the lawyer for the plaintiff, Igor Litvak, should not have brought the claim or should have dropped it once he became aware of the safe harbor. The court explained:

Here, Timoshenko’s claim is patently frivolous in light of the Avila safe harbor, for all of the reasons discussed above. Moreover, the evidence suggests that Litvak, her attorney, knew this to be the case. As described in Defendant’s brief (and undisputed by Litvak), Defendant’s counsel spoke with Litvak on August 9, 2017 and advised him that the Collection Letter did not violate the FDCPA because the language at issue conforms to the safe-harbor language endorsed by the Second Circuit in Avila. See ECF No. 8-1 at 12. Any competent attorney would know Avilaforecloses Timoshenko’s claim, and once made aware of that case (assuming, generously, that he did not already know about it), Litvak should have advised his client to voluntarily dismiss this action. Instead, he responded with the same frivolous argument that the Court dispensed with above, pointing to Carlin and Balke and vowing to press on. But the patina of legality afforded by reference to plainly inapposite case law does little to cloak what looks to the Court suspiciously like a shakedown. Defendant likely could have settled this case for significantly less than the legal expenses it has incurred in filing its answer and motion, and no doubt Litvak knew as much when he decided to defend an indefensible position.

In view of the above, the Court will issue an order requiring Litvak to show cause why he should not be sanctioned for violating Rule 11(b)(2).[2] Litvak is advised that the Court will also be considering whether to order him to pay Defendant’s attorneys’ fees and costs pursuant to 28 U.S.C. § 1927. Defendant is welcome (though not required) to weigh in on the § 1927 issue, but no legal expenses incurred in briefing the issue will be included in any eventual award.

via TIMOSHENKO v. MULLOOLY, JEFFREY, ROONEY & FLYNN, LLP, Dist. Court, ED New York 2018 – Google Scholar

Sanction Award for Fabricated Evidence Is Affirmed by the Fifth Circuit


The sanctions were awarded based on the court’s inherent power. The ruling affirming the sanctions award is quoted here:

Plaintiff-Appellant Jon Deutsch and his attorney, Omar Rosales, appeal from a sanctions order against Rosales in the form of an award of attorney’s fees to opposing counsel. The district court concluded that Rosales engaged in bad faith by (1) making numerous false and abusive statements, (2) fabricating evidence and lying about doing so in filings and a show cause hearing, and (3) filing a groundless police report and protective order against defense counsel. The court imposed sanctions under its inherent power, awarding defense counsel $175,673.78 in fees and costs.

The standard of review for inherent power sanctions is abuse of discretion. “We review the facts underlying the district court’s decision to sanction for clear error and `its underlying conclusions of law de novo.‘” The court may award attorney’s fees as a sanction under its inherent power. To do so, “[the] court must make a specific finding that the attorney acted in `bad faith.'” But the court “must comply with the mandates of due process,” both in assessing bad faith and in determining the amount of fees to award.

Much of Rosales’s argument stems from his mischaracterization of the sanctions as Rule 11 sanctions. But the defendants’ motion for sanctions and the sanctions order itself expressly invokes the court’s inherent power. This is one instance when Rule 11 is not “up to the task,”[7] because the conduct at issue involved not only improper filings, but also falsifying evidence and using a state court tribunal to delay the litigation.

Rosales never challenges any of the magistrate judge’s factual findings regarding his conduct and his bad faith. Nor could he. Rosales’s bad faith is apparent from the record. Further, there is no serious doubt that Rosales was given due process; that is, notice and opportunity to be heard. The defendants’ briefing described the allegedly sanctionable conduct, as did the magistrate judge’s show cause order. The magistrate judge held a hearing at which Rosales had the opportunity to present evidence.

Rosales’s contentions are frivolous and involve serious misstatements of the law and facts. He mounts numerous attacks on the magistrate judge assigned to the cases and the district judge assigned to some of them. Rosales’s insistence on placing the blame for his conduct anywhere but on himself—to the point of impugning the integrity of the courts—underscores the appropriateness of these inherent power sanctions. We agree with the magistrate judge that it is regrettable that someone who purports to enforce the rights of disabled persons engages in such reprehensible conduct. We are baffled by Rosales’s claims that his actions, including falsifying evidence, were somehow justified. Not only did Rosales make many inappropriate remarks, he perpetuated a fraud on the court. The award of inherent power sanctions was not an abuse of discretion.

The judgment of the district court awarding sanctions is AFFIRMED. The motions carried with the case are dismissed as moot.

via Deutsch v. PHIL’S ICEHOUSE, INCORPORATED, Court of Appeals, 5th Circuit 2018 – Google Scholar 

Footnotes were omitted.


Federal District Court Affirms Bankruptcy Sanctions For Using Inadmissible Evidence In Brief

This is an appeal from a trial in the bankruptcy court. Under bankruptcy rules, the losing party can appeal the decision to the federal district court. Here, the debtor failed to disclose an expert before trial in the bankruptcy court. The expert’s opinion was excluded. The debtor, however, in post-trial briefs, included references to the evidence that had been barred. The court sanctioned the lawyers under its inherent power, finding that they acted in bad faith and had violated a court order excluding the evidence. On appeal, the district court agreed and affirmed the sanction award.

It appears from the opinion that the Bankruptcy court considered the inclusion of excluded evidence in a post-trial submission to be sneaky and underhanded.

Source: IN RE BLACK, Dist. Court, ED Louisiana 2017 – Google Scholar