Category: Pleading Issues

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

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

11th Circuit Holds Lawyers Are Debt Collectors

Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F. 3d 1211 – Court of Appeals, 11th Circuit 2012 – Google Scholar.

This is a case under the Fair Debt Collection Practices Act. The lawyers represented a lender and sent a letter to the plaintiffs seeking to collect a debt and threatening to file a foreclosure action if the debt was not paid.

Plaintiffs sued alleging that the lawyers’ letter was deceptive and misleading in that it misstated some provisions of Georgia law. The lawyers moved to dismiss on the ground that they were not debt collectors.

The district court agreed, but the Court of Appeals held that the lawyers were debt collectors. Because the law firm regularly collected debts, it qualified as a debt collector under the statute and could be held liable.

“So a party can qualify as a “debt collector” either by using an “instrumentality of interstate commerce or the mails” in operating a business that has the principal purpose of collecting debts or by “regularly” attempting to collect debts.

The complaint contains enough factual content to allow a reasonable inference that the Ellis law firm is a “debt collector” because it regularly attempts to collect debts. The complaint alleges that the law firm is “engaged in the business of collecting debts owed to others incurred for personal, family[,] or household purposes.” It also alleges that in the year before the complaint was filed the firm had sent to more than 500 people “dunning notice[s]” containing “the same or substantially similar language” to that found in the letter and documents attached to the complaint in this case. That’s enough to constitute regular debt collection within the meaning of § 1692a(6).”

Comment: this case is not novel or unique. The lawyers here appeared to make a few minor errors in attempting to collect a valid debt, only to find they were on the wrong end of a FDCPA lawsuit.

5th Circuit Reverses Sanction Of Dismissal Because Court Failed to Consider Lesser Sanctions

Webb v. MORELLA, Court of Appeals, 5th Circuit 2012 – Google Scholar.

The plaintiffs filed a civil rights lawsuit against their lawyer, who was also apparently a government official. The defendant, Morella, moved to dismiss and filed a motion for Rule 11 sanctions. Plaintiffs failed to timely respond. The district court granted the motion to dismiss and granted the sanctions motion. The Fifth Circuit held that the dismissal sanction was too harsh because lesser sanctions were not considered. The delay by plaintiffs was “short,” only six weeks and the case had been pending for only three months.

Edward X. Clinton, Jr.

Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 – Supreme Court 2007 – Google Scholar

Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 – Supreme Court 2007 – Google Scholar.

This is the first in a series of two extremely important cases discussing the standards necessary to adequately plead a claim for relief under Federal Rule of Civil Procedure 8(a)(2) which requires “a short and plain statement of the claim showing that the pleader is entitled to relief and the grounds upon which it rests.”

In the Bell Atlantic case, the plaintiff sued under Section 1 of the Sherman Act, which prohibits any agreement in restraint of trade such as a price-fixing agreement.

The Supreme Court’s holding is important: “In applying these general standards to a § 1 claim, we hold that stating such a claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.[4] And, of course, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and “that a recovery is very remote and unlikely.”

Comment: this is the first in a line of two Supreme Court decisions setting forth new and slightly more onerous pleading requirements for plaintiffs.  Under Bell Atlantic, the plaintiff must include more detail in the complaint – enough to set forth a plausible claim for relief.

Heightened Pleading Standards Under Twombly Case Do Not Apply To Affirmative Defenses

Weddle v. BAYER AG CORPORATION, Dist. Court, SD California 2012 – Google Scholar.


This is a decision of a district court in Southern California.  The court holds that the heightened pleading standards set forth in Bell Atlantic Corporation v. Twombly, 550 U.S. 554 (2007) do not apply to affirmative defenses.

An affirmative defense is a defense raised in the answer of a defendant.  The defendant first answers (denies or admits) the allegations in the complaint.  Then the defendant may add affirmative defenses that defeat plaintiff’s claim.  A classic affirmative defense is that the statute of limitations has expired.  Thus, even if what plaintiff said in his complaint was true, plaintiff would still lose because he filed his case after the deadline ran.

The court noted that Rule 8(c), which governs affirmative defenses, requires only the the defendant “affirmatively state” any affirmative defense.  In the court’s view, the purpose of an affirmative defense is to place the plaintiff on notice of the defense.  It is not designed to lay out the defendant’s position in detail.

Comment: there will certainly be more discussions of this issue in the future.  I will try to flag these issues and discuss them in this blog.

Edward X. Clinton, Jr.