Category: False Statement

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.

Plaintiff Receives Stern Warning But Sanctions Are Denied


The case of Cody v. Charter Communications, LLC, No. 17-cv-7118-KMK (S.D. NY July 6, 2020) presents a common occurrence where a plaintiff brings a lawsuit (here a Title VII lawsuit against her former employer) but fails to disclose the lawsuit to her bankruptcy trustee or to the district court. (I have seen this happen several times in my career. Most people don’t understand that a lawsuit is an asset of a bankruptcy. These concepts, which are clear to lawyers, are not clear to the average person.)

Here, defendants sought sanctions pursuant to 28 U.S.C. Section 1927 and the dismissal of the action. The court allowed the plaintiff to substitute the bankruptcy trustee as plaintiff and denied the requests for sanctions with a stern warning to the plaintiff. The court was reluctant to dismiss the action because that would have harmed the bankruptcy creditors of the plaintiff.

The reasoning:

Defendant contends that Plaintiff and her counsel have effectively lied under oath because of her misrepresentations in her Bankruptcy Action, because her statements in her deposition and in her Affidavit contradict each other, and because Plaintiff and her counsel demonstrate a continued failure to correct the misrepresentations by failing to amend her Bankruptcy Petition and/or address the tension between her Affidavit and her deposition testimony. (See Def.’s Mem. in Supp. of Mot. for Sanctions 9-16.) Defendant seeks dismissal of this Action and payment of attorneys’ fees in the first instance, but otherwise, wishes the Court to preclude Plaintiff from personally recovering from this Action. (See id. at 16-17.)

Notably, the Second Circuit has clarified that Federal Rule of Civil Procedure 11 sanctions “may be imposed on both counsel and client, while § 1927 applies only to counsel. . . . Rule 11 requires only a showing of objective unreasonableness on the part of the attorney or client signing the papers, but § 1927 requires more: subjective bad faith by counsel.” United States v. Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am., AFL-CIO, 948 F.2d 1338, 1346 (2d Cir. 1991). Other than referring to Federal Rule 11 in one footnote in its briefing, Defendant does not appear to actually move under this Rule or proffer any arguments pursuant to it. (See Def.’s Mem. in Supp. of Mot. for Sanctions 12 n.4; Not. of Mot for Sanctions.) Accordingly, the Court must look for “a clear demonstration of bad faith in order to justify sanctions,” Int’l Bhd. of Teamsters, 948 F.2d at 1347 (citation omitted), and even if sanctions are required, they should be imposed to deter counsel’s purported misconduct, not necessarily the client’s, see id.

To begin, as discussed above, the Court sees no reason to dismiss this entire Action, even as a sanction for purported misconduct by Plaintiff’s counsel. Dismissal of the Action hurts Plaintiff’s creditors more than anyone else. It is true that in August 2019, Plaintiff testified at her deposition that she was under the impression that she would personally recover any damages obtained from this Action, (Chapman Aff. in Supp. of Mot. for Judgment on the Pleadings Ex. 1 (“Pl.’s Dep. Tr.”) 303 (Dkt. No. 62-1)), that she reviewed all her bankruptcy paperwork with her bankruptcy counsel and ensured that everything was true and accurate, (see id. at 26), and that she signed her Bankruptcy Petition after doing so, (id. at 317-18). It is also true that, in the course of the instant Motion practice, Plaintiff, through her counsel, has submitted an Affidavit, dated January 4, 2020, stating that her bankruptcy counsel had advised her that she did not need to review a “bunch of” “minor” “legal stuff” in her Bankruptcy Petition, and that, as a result, she “inadvertently overlooked the question regarding `pending law[]suits’.” (Pl.’s Aff. in Opp’n to Mot. for Judgment on the Pleadings ¶ 4.) Plaintiff further affirms that, at her appearance in bankruptcy court in June 2019, she was informed by her bankruptcy counsel that she only needed to disclose the existence of this Action if she was “asked the question,” which Plaintiff claims Trustee never did. (Id. ¶¶ 5-7.) Plaintiff claims that her omission of this Action from her Bankruptcy Petition was inadvertent and she simply relied on “inaccurate information” from her bankruptcy counsel because she did not “have a lot of experience in or understand the legal system,” or, at least, not enough to realize that she should have voluntarily provided this information at her appearance in bankruptcy court. (Id. ¶ 10.)

Obvious tension exists between Plaintiff’s sworn testimony that she carefully reviewed every aspect of her Bankruptcy Petition for accuracy before filing it, (see Pl.’s Dep. Tr. 26, 317-18), and that Plaintiff simply cursorily reviewed her paperwork at the advice of her bankruptcy counsel, (see Pl.’s Aff. in Opp’n to Mot. for Judgment on the Pleadings ¶ 4). But inconsistency does not necessarily prove that Plaintiff’s counsel has submitted an Affidavit that he “kn[ows] to be false.” (Def.’s Mem. in Supp. of Mot. for Sanctions 12.) Nor does it constitute an “action[]. . . so completely without merit as to require the conclusion that [it] must have been undertaken for some improper purpose such as delay.” In re Khan, 488 B.R. 515, 529 (Bankr. E.D.N.Y. 2013) (citations and quotation marks omitted), aff’d sub nom. Dahiya v. Kramer, 2014 WL 1278131 (E.D.N.Y. Mar. 27, 2014), aff’d sub nom. In re Khan, 593 F. App’x 83 (2d Cir. 2015). It is, of course, possible that Plaintiff gave the answer she thought she was obligated to give in a deposition and, following motion practice on the instant issues, it became necessary for Plaintiff and her counsel to reveal to the Court that Plaintiff actually did not review her bankruptcy materials as diligently as she should have. Although this may constitute a serious error that Plaintiff’s counsel should avoid in the future, the Court is not convinced that Defendant has presented a “clear showing” that Plaintiff’s counsel acted in bad faith or “completely without merit.” Id. at 529 (citations and quotation marks omitted). Defendant’s cited cases are largely inapplicable because they refer to different sanctioning mechanisms and standards and/or describe far more egregiously deceitful or dilatory behavior. See, e.g., Cine Forty-Second St. Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d 1062, 1067-68 (2d Cir. 1979) (imposing sanctions under Federal Rule 37 where the plaintiff’s counsel simply refused to engage in discovery requests and had “frozen [the] litigation in the discovery phase for nearly four years”); Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC, No. 16-CV-1318, 2017 WL 3671036, at *2, *31-32 (S.D.N.Y. July 18, 2017) (concluding that Rule 11 sanctions were warranted where counsel argued that his client did not have “sufficient contact with the United States or the State of New York” to come within the jurisdiction of the court but, inter alia, failed to reveal that the client’s website listed a New York address as an “authorized dealer” and that his own attorney’s fees were paid by check from a New York representative of his client), adopted by 2017 WL 4712639 (S.D.N.Y. Sept. 28, 2017); Jimenez v. City of New York, 166 F. Supp. 3d 426, 431 (S.D.N.Y. 2016) (upholding decision to sanction the plaintiff’s counsel under Federal Rule 56(h) where counsel had “attempted to suppress[]various medical records,” and had submitted an affidavit that was “more than just objectively unreasonable, [but also] absolutely fanciful”), aff’d in relevant part by 666 F. App’x 39 (2d Cir. 2016). Therefore, the Court sees no need to further sanction Plaintiff’s counsel under § 1927 at this point in the litigation.

The Court warns Plaintiff that when she provides statements under penalty of perjury, whether through testimony, forms, affidavits, or any other judicial filing, she will be held liable for those words. Even though laypeople may feel intimidated by legal proceedings, they must still diligently review the accuracy of all their judicial submissions. But, to the extent Defendant seeks sanctions beyond barring Plaintiff from prosecuting and benefiting from this Action, the Court denies Defendant’s Motion for Sanctions without prejudice. Defendant may of course seek to file a motion for sanctions again if any misconduct continues. However, given that Trustee is now prosecuting this Action and Plaintiff has been warned about the importance of being fully transparent and forthcoming in all her legal proceedings, the Court anticipates that this will not be the case.

Should you have a question about federal procedure or your rights, do not hesitate to contact us. We can often be of help.

http://www.clintonlaw.net

Eleventh Circuit Affirms Rule 11 Sanctions For False Allegations in Complaint


This is an unpublished opinion, Estrada v. FTS USA, LLC, No. 18-15336 (11th Cir. April 20, 2020), the Eleventh Circuit affirmed a $60,000 Rule 11 sanctions award against lawyers who included a false allegation in their complaint.

The explanation follows:

The district court imposed sanctions under Rule 11(b)(3) because it found that Mr. Zidell and his firm filed a Fair Labor Standards Act (“FLSA”) complaint making the objectively frivolous allegation that FTS had “never” paid their client, Orlando Estrada, “any” overtime wages as required by the Act. The district court found this allegation demonstrably false because (1) FTS’s weekly time records—signed by Mr. Estrada—showed that FTS had paid him overtime wages during the months in question, and (2) Mr. Estrada acknowledged in his deposition that he had been paid the overtime wages documented in his earnings statements. The district court explained that Mr. Zidell and his firm did not conduct a reasonable investigation into Mr. Estrada’s claims and neglected to withdraw or modify the allegation in question when given the opportunity….

Continuing to lean on the language of the complaint, Mr. Zidell and his firm contend that satisfying the pleading requirements to state an FLSA claim under Federal Rule of Civil Procedure 8 render sanctions inappropriate here. This argument fails to advance Mr. Zidell and his firm’s position. The factual allegations required under Rule 8 “are subject to Rule 11’s command—under pain of sanctions—that `the allegations and other factual contentions have, or are likely to have following discovery, evidentiary support.'” Lowery v. Ala. Power Co., 483 F.3d 1184, 1216 (11th Cir. 2007) (quoting FED. R. CIV. P. 11(b)). Therefore, alleging facts sufficient under Rule 8 does not shield the pleading from Rule 11 scrutiny when the allegations are objectively frivolous. Said another way, the magistrate court sanctioned Mr. Zidell and his firm not because the wording of the complaint failed to state a claim, but instead because the allegation as worded objectively lacked evidentiary support.

Second, Mr. Zidell and his firm assert that their factual claim was not objectively frivolous because Mr. Estrada was also alleging that he was not paid “all” of the overtime wages to which he was entitled. This argument, however, ignores the fact that the unsupported factual allegation—that FTS “never” paid Mr. Estrada “any” overtime wages—was never withdrawn, and FTS was forced to defend against it. The assertion by Mr. Zidell and his firm that their case for Mr. Estrada “just . . . did not pan out,” see Appellant’s Br. at 32, does not show an abuse of discretion.

The court affirmed an award of $60,000 in sanctions, which was about 1/2 of the requested amount. A dissenting judge would remand for a full hearing on the reasonableness of the fee request.

Should you have an issue under Rule 11, do not hesitate to contact me.

Ed Clinton, Jr.

http://www.clintonlaw.net

Rule 11 Motion Denied As Premature


The facts in D’Ottavio v. Slack Technologies, 18-cv-9082 (D. New Jersey April 15, 2019) are disputed. The plaintiff sued alleging that the Defendant’s website sent him unsolicited text messages. Defendant denied these allegations and filed a counterclaim which alleged that plaintiff deliberately caused the text messages to be sent to himself. Plaintiff denied the allegations in the counterclaim. Defendant then moved for Rule 11 sanctions arguing that the denials violated Rule 11 and were without factual basis.

Because no discovery had been taken and the facts were in dispute, the court denied the Rule 11 sanctions motion. The reasoingin:

Plaintiff’s counsel objects to Slack’s arguments. Counsel relates that on July 26, 2018, the parties participated in a Rule 16 initial conference before the Magistrate Judge, and at that conference, Slack’s counsel advised the Magistrate Judge that it wished to take a forensic examination of Plaintiff’s electronic devices to back up its claims that Plaintiff used these devices to repeatedly send himself text messages using Slack’s messaging platform. The Magistrate Judge then ordered the parties to confer as to a forensic examination protocol. The parties submitted a stipulation agreeing to the protocol which was then so-ordered by the magistrate judge on August 13, 2018. The Court then ordered that Slack was to conduct the forensic examination of Plaintiff’s computers and cell phones by no later than September 10, 2018. To date, however, counsel states that Slack has not taken a forensic examination of Plaintiff’s electronic devices.

Plaintiff’s counsel argues that Slack’s motion for sanctions must be denied because it lacks any proof that Plaintiff actually did what Slack says he did. Counsel argues that Slack is seeking sanctions against counsel and Plaintiff for filing an answer that has not been found to be false or frivolous. Counsel contends that Slack could have obtained the forensic examination it demanded, but instead when Plaintiff filed a denial to the counterclaims, Slack tried to bully Plaintiff into withdrawing his response by threatening him and his counsel with sanctions….

…

In support of its motion for sanctions, Slack takes the position that its proof as to Plaintiff’s conduct — and the conduct of Plaintiff’s counsel — is unrebutted and unrebuttable. The Court cannot credit Slack’s position at this stage in the case.

Slack has asserted counterclaims against Plaintiff alleging that Plaintiff fraudulently manufactured his TCPA claim by sending thousands of text messages to himself. Plaintiff has filed an answer to Slack’s counterclaims denying that allegation. Slack’s claims are pending, still in dispute, and they will proceed to discovery. Slack may view Plaintiff’s denials to be disingenuous and unsupported by the facts, but the procedural posture of the case precludes the Court from applying what is essentially a summary judgment standard to Slack’s motion for sanctions, which, if Slack’s position were credited, would ultimately result in a judgment in Slack’s favor prior to discovery.[5]

Consequently, the Court will deny without prejudice Slack’s motion for sanctions, reserving Slack’s right to reassert its motion at the appropriate time after discovery on its counterclaims.

In sum, the sanctions motion was premature. Should defendant prove that the answer to the counterclaim contained false denials, defendant can reassert the sanctions motion.

Edward X. Clinton, Jr.

 

Lawyer Burned For False Statements In Client’s Affidavit


This is a case where a lawyer was sanctioned pursuant to Rule 11 for false statements in his client’s affidavit. The affidavit was introduced in an effort to fight a change of venue motion. The court, after hearing, concluded that the client’s false statement was the fault of his lawyer and awarded sanctions.  In SyncPoint Imaging, LLC v. Nintendo of America, Inc. 15-cv-00247 pending in the Eastern District of Texas, the parties apparently became embroiled in a venue dispute. Plaintiff was represented by Joseph Pia. The client representative was Karl Hansen.

The court found that in resisting Nintendo’s venue motion, the plaintiff included false statements in an affidavit. The court entered a rule to show cause and held a hearing on the rule. The interesting issue is that the court absolved the client, who signed the false affidavit, from liability. The court reasoned that the client did not understand what he signed. The reasoning:

Here, representations about the alleged SyncPoint consultants were made in Paragraph 61 of Hansen’s declaration, which was submitted in response to Nintendo’s venue motion. Nintendo’s venue motion was brought under 28 U.S.C. § 1404(a). Since “the availability of compulsory process to secure the attendance of witnesses” is a key factor in a § 1404(a) analysis, see In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008), the discussion of four potential witnesses — the SyncPoint consultants — in Paragraph 61 is a critical factual allegation.

Paragraph 61 is also a factual allegation that indisputably lacks evidentiary support. Two of the four nominal consultants had already declined to be involved with SyncPoint by the time the declaration was signed. Of the two remaining consultants, one had at most visited the SyncPoint office. Even if Dr. Thomas, Buechele, Vance, and Bland all agreed to visit SyncPoint’s office, Hansen’s email to Dr. Thomas indicates that the only “business” the alleged consultants were asked to conduct was picking up mail and making sure the server was still running. The declaration clearly implies that these four consultants conducted the business of SyncPoint and should thus be considered as potential witnesses. The email to Dr. Thomas is particularly concerning, as it makes clear that Hansen’s request was made solely to support venue, not to conduct SyncPoint’s business.

The Court finds that this email is necessarily the fault of Hansen’s attorney — Pia — not Hansen. Hansen’s email reflects what his lawyers must have told him to provide, since Hansen candidly admitted at the September 5, 2018 show cause hearing that he “didn’t know what matters in a venue.” Hr’g Tr. 21:16-23, [Dkt. No. 369].

Similarly, Paragraph 61 is also attributable to counsel. Pia admitted that he did not review Hansen’s declaration and never verified whether Dr. Thomas, Buechele, Vance, or Bland were truly SyncPoint consultants. This is especially troubling given that Pia had sufficient time to conduct a prefiling investigation into relatively straightforward factual contentions. In the month Pia took respond to Nintendo’s venue motion, Pia never investigated these venue facts. In fact, nearly three years later, the alleged consultants are still not known to Pia. While Pia advised the Court that he relied on a contract attorney to draft SyncPoint’s response to Nintendo’s venue motion, there has been no showing that the contract attorney was responsible for the misrepresentations in Paragraph 61, which was, in any event, made under Pia’s signature.[2] Thus, there is simply no excuse for Pia’s failure to make a reasonable inquiry into these critical factual representations. Pia violated Rule 11.

As to Hansen, however, the Court finds that he is not jointly responsible for the false allegations in this matter. Rule 11(c)(1) authorizes the Court to impose sanctions on Pia, as the violating attorney, and on Hansen, as the party potentially responsible for the violation. A client is responsible for a Rule 11 violation if the client “know[s] that the filing and signing [of a pleading, motion, or other paper] is wrongful.” In re Motion for Sanctions Against Meyers, No. 4:12-MC-015-A, 2014 WL 1494099, at *8 (N.D. Tex. Apr. 16, 2014), supplemented, No. 4:12-MC-015-A, 2014 WL 1910621 (N.D. Tex. May 9, 2014) (citing Calloway v. Marvel Entm’t Grp., a Div. of Cadence Indus. Corp., 854 F.2d 1452, 1475 (2d Cir.1988) rev’d in part sub nom Pavelic & LeFlore v. Marvel Entm’t Grp., 493 U.S. 120 (1989)). In appropriate instances, the Fifth Circuit has held both the attorney and client jointly and severally liable. See Jennings v. Joshua Indep. School Dist., 948 F.2d 194, 196 (5th Cir. 1991). Here, Hansen’s testimony makes clear that he was not aware of the importance of Paragraph 61 and the need for precision in its wording. Therefore, sanctions against Hansen are inappropriate.

The court concluded that plaintiff’s attorney, Joseph Pia, was responsible for the erroneous statements in the affidavit.

Because Pia violated Rule 11(b)(3), the Court now examines what sanctions are appropriate. See Jennings, 948 F.2d at 197 (citing Business Guides, Inc. v. Chromatic Commc’ns Ent., Inc., 498 U.S. 533, 541-47 (1991)). Sanctions may be imposed either on motion or sua sponte. On its own, the Court may order an attorney, law firm, or party to show cause why such conduct specifically described in the order has not violated Rule 11(b). Fed. R. Civ. P. 11(c)(3).[3] If the Court determines that Rule 11(b) has been violated, the Court may impose an appropriate sanction on the attorney, law firm, or party responsible for the violation. Fed. R. Civ. P. 11(c)(1). The central purpose of court-imposed sanctions is to “deter baseless filings in district court.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990).

…

Here, Pia’s admitted lack of diligence in investigating critical factual contentions represented to this Court is simply inexcusable. This matter has already concluded pursuant to the dismissal order, see [Dkt. No. 279]; [Dkt. No. 283], and there was no Rule 11 motion for sanctions. The Court is thus limited to imposing a nonmonetary sanction or a monetary penalty payable to the court. This Memorandum Opinion and Order shall serve as a public reprimand to Joseph G. Pia and an Order to him to submit a $1,000 fine payable to the Clerk of this Court within 30 days.

Comment: this decision is unusual because it puts the blame for a false statement in an affidavit squarely on the shoulders of the lawyer, not the client who signed the affidavit. This decision is an important reminder to be careful and prudent in practicing law. Don’t let a client say something that is not true – to the best of your ability.

Ed Clinton, Jr.

The Clinton Law Firm, LLC

A link to the decision is posted here. SyncPoint Imaging, LLC v. Nintendo of America, Inc.

Court Awards 9,000,000 for filing and refusing to drop hundreds of frivolous lawsuits


This is a decision awarding in excess of $9,000,000 in sanctions against two law firms that filed 1250 frivolous “Engle Progeny” product liability actions. Engle Progeny cases are injury lawsuits against tobacco companies. The sanctions were awarded pursuant to Rule 11 and 28 U.S.C. Section 1927.

The first award was of Rule 11 sanctions for 588 complaints filed for litigants who were deceased. The explanation:

The complaints filed in the 588 Actions were objectively frivolous. As the Eleventh Circuit observed, “any lawyer worth his salt knows [that] a dead person cannot maintain a personal injury claim.” In re Engle Cases, 767 F.3d at 1086-87. The complaints listing the 588 Pre-Deceased Plaintiffs alleged only a personal injury action— using the present or future tense in referring to the “Smoking Plaintiffs,” and asserting that they “have and will suffer” as a result of their disease. (E.g., Edwin Moody et al. v. R.J. Reynolds Tobacco Co., Case No. 3:08-cv-155-J-32HTS, Doc. 2, Complaint at ¶ 1.10). Nowhere did the complaints suggest that the smoker had died, and nowhere did they assert an alternative wrongful death or survival action. To the contrary, the concluding allegation in each complaint stated that each plaintiff’s injuries “are permanent and continuing and as such will be suffered into the future.” (E.g., id. at ¶ 11.1). These allegations were demonstrably false.

The complaints in the 588 Actions were also frivolous because Counsel lacked authorization to file or maintain them. “Perhaps the most basic factual contentions implicit in a complaint are that the plaintiff consents to the filing of suit and prays for the relief requested.” In re Deep Vein Thrombosis, No. MDL-04-1606 VRW, 2008 WL 2568269, at *1 (N.D. Cal. Jun. 24, 2008). The dead plaintiffs obviously could not have authorized Counsel to bring lawsuits on their behalf. Nor did Counsel have authorization from the Pre-Deceased Plaintiffs’ estates or their survivors because Counsel pled the complaints as personal injury actions on behalf of the Pre-Deceased Plaintiffs themselves. Therefore, “the most basic factual contention implicit” in the 588 personal injury complaints, i.e., that the plaintiff authorized and prayed for the relief requested, was untrue.

The court also awarded Section 1927 Sanctions for claims from nonsmokers and plaintiffs who did not live in Florida.

In the cases discussed below, the Court determines that Counsel multiplied the proceedings unreasonably and vexatiously by maintaining frivolous complaints in bad faith. Between 2011 and 2013, the Court learned that Counsel had filed dozens of Frivolous Actions (in addition to the 588 Actions). Counsel brought these Frivolous Actions without authorization or on behalf of non-smokers, people who never lived in Florida, and plaintiffs with previously adjudicated claims. The fatal defects in these actions surfaced not through voluntary disclosures from Counsel, but through alerts from Defendants, the hard work of the Temporary Special Master, and from the returned Court Questionnaires. Before the Court Questionnaire process, Counsel vigorously opposed any suggestion that someone should interview or question the plaintiffs. Counsel’s intransigence forced the Court to order Wilner to mail the Court Questionnaires to 2,661 plaintiffs and to have the Temporary Special Master review the results. The questionnaire process was time-consuming but necessary. It accomplished what Counsel would not: the identification of hundreds of frivolous cases, and the segregation of viable from non-viable claims.

In some of these cases, Counsel knew or must have known that a fundamental defect existed. As to others, Counsel acted with reckless indifference. Counsel insisted on maintaining cases without having bothered to obtain the plaintiff’s authorization, without having any basis for asserting that the plaintiff was even a smoker, and without knowing whether the alleged smoker ever lived in Florida (as required by Engle III). Moreover, Counsel’s resistance to the questionnaires and false assurances appeared calculated to prevent the discovery of such frivolous cases. At the very least, counsel’s behavior “grossly deviate[d] from reasonable conduct.” Amlong, 500 F.3d at 1240.

Counsel’s actions demonstrated a pattern of obfuscation and deception, which frustrated the Court’s efforts to rid the Engle Docket of frivolous cases and to promptly and fairly resolve the cases that had merit. Counsel’s maintenance of frivolous suits forced the Court to expend valuable resources—in terms of time, money, and manpower—to cope with the swollen Engle Docket. It also delayed the resolution of meritorious claims. As a result, sanctions are appropriate for the “excess costs” and “expenses . . . incurred because of [counsel’s] conduct.” 28 U.S.C. § 1927.

The court awarded a total of $9,164,404.12 against the two law firms that maintained the frivolous lawsuits.

Source: IN RE ENGLE CASES, Dist. Court, MD Florida 2017 – Google Scholar

Federal Courts Can Award Sanctions Sua Sponte


This very short opinion informs a lawyer that he may be sanctioned under Rule 11 because he allegedly made a false statement of fact to a district judge. The opinion does not contain any findings of fact, but it suggests that the attorney retain counsel for the sanctions hearing.

Source: SEDILLO ELECTRIC v. COLORADO CASUALTY INSURANCE COMPANY, Dist. Court, D. New Mexico 2017 – Google Scholar