Park v. Kim, 91 F.4th 610 was decided by the Second Circuit earlier this year. The district court dismissed plaintiff’s case under Rule 37 and Rule 41(b) because plaintiff violated court orders. On appeal plaintiff’s brief was found to contain hallucinated caselaw from artificial intelligence programs.

The dismissal was affirmed:

Over the course of the litigation before the District Court, Park continually and willfully failed to respond to and comply with the District Court’s discovery orders. Magistrate Judge Bloom issued numerous discovery orders and provided ample warning to Park and her counsel that timely compliance was expected. For example, at a telephonic conference on August 11, 2021, Judge Bloom granted Kim’s motion to compel, warning Attorney Lee: “[Y]our client can be subject to sanctions, which could be as severe as dismissal of the case, if she fails to comply.” J. App’x at 81-82.^[1] On November 29, 2021, Judge Bloom again warned of the consequences of non-compliance, in no uncertain terms: “Plaintiff shall have one final opportunity to comply with the Court’s discovery Order…. This is a Court Order and plaintiff must comply. This is plaintiff’s last chance.” J. App’x at 7 (emphasis in original). In that same order, Judge Bloom set a briefing schedule for filing a motion to dismiss for non-compliance, should such a motion be necessary. Finally, having still not received the ordered discovery more than seven months after Judge Bloom’s August 2021 order, Kim moved to dismiss based on Park’s failure to comply with court orders and discovery obligations. See J. App’x at 292-93.

In her report and recommendation, Judge Bloom carefully considered all of the requirements of Rule 37 and Rule 41(b), including the availability of lesser sanctions, and concluded that dismissal was appropriate. Judge Chen, the presiding District Judge, reviewed Park’s objections to the report and recommendation in detail, overruled them, adopted the report and recommendation, and issued an order of dismissal on August 24, 2022.

The brief filed by plaintiff made things worse:

The reply brief cited only two court decisions. We were unable to locate the one cited as “Matter of Bourguignon v. Coordinated Behavioral Health Servs., Inc., 114 A.D.3d 947 (3d Dep’t 2014).” Appellant’s Reply Br. at 6. Accordingly, on November 20, 2023, we ordered Park to submit a copy of that decision to the Court by November 27, 2023. On November 29, 2023, Attorney Lee filed a Response with the Court explaining that she was “unable to furnish a copy of the decision.” Response to November 20, 2023, Order of the Court, at 1, Park v. Kim, No. 22-2057-cv (2d Cir. Nov. 29, 2023), ECF No. 172 (hereinafter, “Response”). Although Attorney Lee did not expressly indicate as much in her Response, the reason she could not provide a copy of the case is that it does not exist — and indeed, Attorney Lee refers to the case at one point as “this non-existent case.” Id. at 2.

Attorney Lee’s Response states:

I encountered difficulties in locating a relevant case to establish a minimum wage for an injured worker lacking prior year income records for compensation determination…. Believing that applying the minimum wage to in injured worker in such circumstances under workers’ compensation law was uncontroversial, I invested considerable time searching for a case to support this position but was unsuccessful.

…

Consequently, I utilized the ChatGPT service, to which I am a subscribed and paying member, for assistance in case identification. ChatGPT was previously provided reliable information, such as locating sources for finding an antic furniture key. The case mentioned above was suggested by ChatGPT, I wish to clarify that I did not cite any specific reasoning or decision from this case.

Id. at 1-2 (sic).

All counsel that appear before this Court are bound to exercise professional judgment and responsibility, and to comply with the Federal Rules of Civil Procedure. Among other obligations, Rule 11 provides that by presenting a submission to the court, an attorney “certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances… the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.” Fed. R. Civ. P. 11(b)(2); see also N.Y. R. Pro. Conduct 3.3(a) (McKinney 2023) (“A lawyer shall not knowingly: (1) make a false statement of … law to a tribunal.”). “Rule 11 imposes a duty on attorneys to certify that they have conducted a reasonable inquiry and have determined that any papers filed with the court are well grounded in fact, [and] legally tenable.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). “Under Rule 11, a court may sanction an 615*615attorney for, among other things, misrepresenting facts or making frivolous legal arguments.” Muhammad v. Walmart Stores E., L.P., 732 F.3d 104, 108 (2d Cir. 2013) (per curiam).

At the very least, the duties imposed by Rule 11 require that attorneys read, and thereby confirm the existence and validity of, the legal authorities on which they rely. Indeed, we can think of no other way to ensure that the arguments made based on those authorities are “warranted by existing law,” Fed. R. Civ. P. 11(b)(2), or otherwise “legally tenable.” Cooter & Gell, 496 U.S. at 393, 110 S.Ct. 2447. As a District Judge of this Circuit recently held when presented with non-existent precedent generated by ChatGPT: “A fake opinion is not `existing law’ and citation to a fake opinion does not provide a non-frivolous ground for extending, modifying, or reversing existing law, or for establishing new law. An attempt to persuade a court or oppose an adversary by relying on fake opinions is an abuse of the adversary system.” Mata v. Avianca, Inc., No. 22CV01461(PKC), 678 F.Supp.3d 443, 460-61 (S.D.N.Y. June 22, 2023).

Attorney Lee states that “it is important to recognize that ChatGPT represents a significant technological advancement,” and argues that “[i]t would be prudent for the court to advise legal professionals to exercise caution when utilizing this new technology.” Response at 2. Indeed, several courts have recently proposed or enacted local rules or orders specifically addressing the use of artificial intelligence tools before the court.^[3] But such a rule is not necessary to inform a licensed attorney, who is a member of the bar of this Court, that she must ensure that her submissions to the Court are accurate.

Attorney Lee’s submission of a brief relying on non-existent authority reveals that she failed to determine that the argument she made was “legally tenable.” Cooter & Gell, 496 U.S. at 393, 110 S.Ct. 2447. The brief presents a false statement of law to this Court, and it appears that Attorney Lee made no inquiry, much less the reasonable inquiry required by Rule 11 and long-standing precedent, into the validity of the arguments she presented. We 616*616 therefore REFER Attorney Lee to the Court’s Grievance Panel pursuant to Local Rule 46.2 for further investigation, and for consideration of a referral to the Committee on Admissions and Grievances. See 2d Cir. R. 46.2.

We further ORDER Attorney Lee to provide a copy of this ruling to Plaintiff-Appellant Park — translated into Korean if necessary to permit Park to understand it — within twenty-one days, and to file a certification on the docket in this case attesting that she has done so.

In Pable v. Chicago Transit Authority, 145 F.3d 712, the Seventh Circuit affirmed a grant of Rule 37 sanctions against a plaintiff who deleted text messages from his phone. Before 2015, I had never dealt with an issue involving the imaging of a client’s phone. Since then it has occurred in numerous cases that I have been involved with. My practice is to retain a third party to image the client’s phone.

Pable was employed by the CTA. After he was fired, he brought a whistleblower lawsuit against the CTA, under the National Transit Systems Security Act, 6 U.S.C. §1142. During the discovery process, the district court awarded Rule 37 sanctions, including dismissal of the case under Rule 37(e). Pable’s attorney was also sanctioned. The Seventh Circuit affirmed the decision.

The procedural background:

Pable later sued the CTA and Clever Devices (together “the defendants”) under the National Transit Systems Security Act, 6 U.S.C. § 1142, alleging that he was terminated 718*718 in retaliation for reporting a security vulnerability. The CTA responded by filing a counterclaim under the Computer Fraud and Abuse Act, alleging that Pable had configured a “doomsday” feature on his work computer that allowed him to wipe it remotely.^[1] From there, the parties quickly descended into a protracted discovery battle that produced limited, but notable, evidence.

Most importantly, the parties learned that Pable and Haynes had used Signal to communicate about “what to do next” after the Dayton test. Pable testified that he used the application because it was more secure than text messaging and saved storage space on his phone. The record is silent on whether the CTA knew that Pable and Haynes were using Signal to communicate about their work or whether the CTA approved the use of Signal generally.

Pable’s explanations for the deletion of his Signal messages on November 2 evolved over time. Initially, Pable testified that the pre-November 2 messages vanished because Haynes deleted them from Haynes’s device. The CTA disputed this, providing an affidavit from Signal’s Chief Operating Officer stating that, at that time, one user’s deletion of specific messages did not remove those same messages from another user’s device. Confronted with this affidavit and a request for sanctions, Pable filed his own affidavit to explain that he had specially configured the Signal application on his device to delete threads when other users, like Haynes, deleted the entire thread. He added that he enabled that functionality for security reasons. The CTA, noting that Pable had not mentioned this explanation during his depositions, viewed this as a later-developed justification unworthy of credence.

The Signal saga did not end there. The CTA also learned during discovery that another group of Signal messages were lost. Specifically, Pable and Haynes had continued to communicate via Signal after their November 2, 2018, meeting. But nearly a year later, on October 29, 2019, Pable activated the “disappearing messages” feature in his Signal thread with Haynes. This caused the messages in that conversation to automatically delete twenty-four hours after being read by the recipient.

As the Signal issues unfolded, the CTA requested a forensic image of Pable’s phone to recover, among other information, the missing Signal messages. Pable’s counsel, Timothy Duffy, initially resisted, citing privacy concerns, but eventually agreed after extensive negotiation. On October 31, 2020, Pable produced the first image of his phone. The CTA’s expert, Nathan Binder, determined the image contained only 0.2 GB of user data, lacked messages from third-party applications, and omitted photos, browsing history, and other key categories of information. Duffy initially insisted that the image was complete but later acknowledged that the vendor might have imaged only relevant portions based on search terms. In a fight over whether a second imaging should be conducted, Duffy stated that he had instructed a third-party vendor, Quest Consultants International, to collect data based on agreed search terms and believed that the image was complete in terms of producing relevant information.

719*719 Duffy’s representations unraveled quickly. First, Dan Jerger, a Quest employee, testified that Duffy’s imaging instructions to Quest were limited to certain search terms and date ranges—rather than a full forensic image. Second, after another image was ordered, the CTA’s vendor recovered 25 GB of data—much more than the 0.2 GB earlier produced by Duffy. Remarkably, the CTA noted that the second image included discussions about the Skeleton Key vulnerability and other issues relevant to Pable’s suit. The second image, however, did not include any post-October 29, 2019, Signal messages between Pable and Haynes.

The limited information recovered from the second imaging was discovered through much effort, and the defendants moved for dismissal of the complaint and sanctions accordingly. They argued that Duffy unreasonably multiplied the proceedings through misrepresentations about the completeness of productions and failures to correct the record. They also argued that Pable failed to take reasonable steps to preserve three categories of Electronically Stored Information (ESI), including: (1) Signal messages exchanged with Haynes before November 2, 2018; (2) Signal messages exchanged after October 29, 2019; and (3) data on Pable’s personal cell phone.

The magistrate judge entered a report and recommendation finding in the defendants’ favor on those issues. The district court adopted the recommendation, dismissed Pable’s complaint with prejudice, and imposed a series of monetary sanctions. First, the court awarded the CTA sanctions pursuant to Federal Rule of Civil Procedure 37(e) for Pable and Duffy’s failure to preserve the relevant ESI. The penalty was $75,175.42, equally split between Pable and Duffy. Second, the court ordered Duffy to pay an additional $53,388 under 28 U.S.C. § 1927 for unreasonably and vexatiously multiplying the proceedings. Third, the court ordered Duffy to pay another $21,367 under Rule 37(a)(5) to compensate the CTA for having to file a motion to compel.

The Seventh Circuit held that the sanction of dismissal was appropriate:

When asked by the defendants to dismiss Pable’s action, the magistrate and district judges undertook reasoned analyses. The district court ultimately found that Pable intentionally spoliated two categories of ESI and dismissal was appropriate to remedy the resulting prejudice. There is, to be sure, some uncertainty about exactly how the messages before November 2, 2018, were deleted from Pable’s phone. And, on appeal, Pable seizes upon that uncertainty, arguing that the district court clearly erred in finding that he intentionally spoliated the ESI.

In addressing that argument, we look to the record. Haynes and Pable initially testified that Haynes alone deleted the conversation thread, and Pable testified that he believed that the deletion of the thread on Haynes’ phone caused the messages to be deleted from his phone as well. Although Pable’s explanation is at least plausibly consistent with the affidavit from Signal’s Chief Operating Officer (stating that Signal did not provide the ability for a single user to unilaterally and permanently delete specific messages for all users in a thread), the district court was within its discretion to not credit that explanation. After all, Pable’s explanation changed over time (first claiming that Haynes deleted the messages unilaterally, then adding that Pable had specifically configured the Signal application on his device to make a unilateral deletion possible). This evolution is notable because Pable made no mention of a custom configuration on his own phone when he offered his initial explanation, even though he would have known of that at the time and it would have been relevant to the deposition questions. Further, Pable offered no evidence other than his affidavit that such a configuration of Signal existed or was installed on his phone. Moreover, Pable’s explanation arrived only after he read the affidavit from the Signal COO refuting his prior explanation.

The district court also reasonably found that Pable’s duty to preserve those pre-November 2 messages was triggered prior to their deletion. Pable had reached out to attorneys about his termination days earlier on October 29, 2018. Then, in a follow-up email to one attorney the next day, Pable showed awareness that the CTA’s rationale for terminating him was relevant, writing “I think they are trying to find any reason to terminate me so I cannot take my FMLA and prevent payment of benefits.” And since he and Haynes were being interviewed at the same time, he must have realized that his actions regarding the Dayton test were at issue. These events, a factfinder could reasonably conclude, should have put him on notice that he needed to preserve the messages. Despite that notice, a factfinder could reasonably conclude, Pable deleted (or knowingly allowed Haynes to unilaterally delete) the messages. Although a different factfinder might have reached a different conclusion, the district court did not clearly err^[2] in finding that Pable intentionally destroyed the ESI at issue.

721*721 Pable makes several other arguments about the dismissal sanction. First, he argues that he had a right to an evidentiary hearing because the district court had to resolve disputed facts and assess Pable’s credibility before dismissing his complaint. We review a district court’s decision not to hold a hearing for abuse of discretion. See REXA, Inc., 42 F.4th at 672. In this case, we see none because the court’s decision was based on its evaluation of undisputed, objective evidence: Pable allowed the messages to be deleted, his explanations for how exactly the messages were deleted evolved over time, and he took no reasonable steps to preserve the messages. The court was well within its discretion to conclude that an evidentiary hearing would not have assisted it in reaching a decision. See Kapco Mfg. Co. v. C & O Enters., Inc., 886 F.2d 1485, 1495 (7th Cir. 1989) (“[T]he right to a hearing in these circumstances is obviously limited to cases where a hearing could assist the court in its decision.”); see also REXA, Inc., 42 F.4th at 672-73 (“[A] court does not abuse its discretion by not conducting `an evidentiary hearing that would only address arguments and materials already presented to the court in the parties’ briefings.'” (quoting Royce v. Michael R. Needle P.C., 950 F.3d 481, 487 (7th Cir. 2020))). Moreover, Pable was given the opportunity to provide briefing on any of the arguments that he would have made at a hearing. For this reason too, we cannot say that the district court abused its discretion in imposing the sanction of dismissal without first holding an evidentiary hearing or submitting the credibility question to a jury.^[3]

Skipping a hearing, Pable argues, was also inconsistent with our decisions in Kapco and McIntosh v. Wexford Health Sources, 987 F.3d 662 (7th Cir. 2021). But neither McIntosh nor Kapco do the work Pable suggests they do. Our court ruled against the Kapco appellants on the very issue for which Pable cites to it for support. There, we determined that the sanctions were proper and that due process did not require a hearing where the sanctioned attorney was given notice and an opportunity to respond before sanctions were imposed. Kapco, 886 F.2d at 1495. And McIntosh is entirely inapposite. Our holding in McIntosh—remanding with instructions to the district court to hold an evidentiary hearing before rejecting the magistrate judge’s credibility findings— turned on our reading of the Federal Magistrate Act and its constitutional implications. 987 F.3d at 664-66. McIntosh is limited to that context, and should not be read to imply that litigants subject to sanctions must be afforded an evidentiary hearing before a district court can make credibility findings related to those sanctions.

The Seventh Circuit also affirmed 28 U.S.C. §1927 sanctions against Pable’s attorney.

Duffy argues on appeal that § 1927 sanctions were inappropriate because he did not unreasonably and vexatiously multiply the proceedings. He challenges the district court’s finding that he made misrepresentations, including by stating that the first image was a “complete image” and by later failing to correct that statement during the dispute over the need for a second imaging.

But the record before us supports the conclusion that Duffy’s statements were misrepresentations. To start, he affirmatively represented that the first image was a “complete forensic image,” as reflected in an email exchange between Duffy and counsel for the CTA. Indeed, he concedes as much on appeal, noting that, in meet-and-confer discussions and correspondence, “Duffy first represented the image was `complete’ on October 24, 2020.” He claims that his answer is taken out of context, but the context is clear as shown by the entire email exchange:

[CTA:] Pable will produce a complete and searchable forensic image file of his personal cell phone as it was previously imaged by Pable’s third-party expert during the course of written discovery in this litigation; as Pable has already had the phone imaged, we would ask that the image be produced by the close of business on October 29, 2020.

[Duffy:] The image is a complete forensic image; I cannot make any representations about its searchability, which has nothing to do with the imaging process. 726*726 I am checking on timing and logistics for this, and am just not in a position to confirm the 29th right now.

Duffy also argues that his statements are misrepresentations only if one “literally” interprets them. For example, he agrees that Jerger was not instructed to obtain a “complete image”—because, he continues, Jerger “was never asked to obtain anyimage.” This misses the point. Duffy agreed to image the phone and, on June 12, 2020, told counsel for the CTA that he had “imaged Mr. [Pable’s] cell phone and [was] in the process of running the search terms.” This was a misrepresentation by Duffy’s own admission because Duffy did not image the phone and knew that at the time, as Jerger testified and as Duffy acknowledges on appeal. Further, Duffy did indeed fail to correct his misrepresentations. There is no dispute on this point. Rather than correct the misrepresentations and resulting misunderstandings, he opposed each of the CTA’s efforts to produce a complete forensic image. Under these circumstances, Duffy cannot surmount the high hurdle of demonstrating that the district court abused its discretion in imposing sanctions under § 1927.

Comment: once the lawyer discovered that the client might have deleted messages on his phone he would have been wise to make no representations to the court and to disclose whatever instructions he gave to the data retrieval company. Failing that, there are many attorneys who know about these issues and who could have helped him before he became entombed in this mess. In my experience, search terms are negotiated in advance with the opposing party’s lawyers to avoid problems such as the ones that emerged here.

Ed Clinton, Jr.

http://www.clintonlaw.net

If you read a complaint and develop the conviction that the complaint is frivolous or otherwise supports a sanctions claim, don’t rush to seek sanctions. Seek dismissal first. Then, if successful, seek sanctions. Otherwise the court will deny the sanctions motion without giving it any consideration.

Defendant argues that sanctions are appropriate because “Plaintiff’s complaint is meritless and subject to dismissal under Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure.” Defendant has failed, however, to move for relief under Rules 12(b)(1) or 12(b)(6). In light of Defendant’s failure to move for relief under these Rules or otherwise challenge the viability of Plaintiff’s claims, the Court finds that Defendant’s motion for Rule 11 sanctions is improper and premature. See, e.g., Dobronski v. Alarm Management II L.L.C., 2019 WL 1232690 at *2 (E.D. Mich., Mar. 18, 2019) (a Rule 11 motion for sanctions is not an appropriate substitute for a properly filed motion under Rule 12 or Rule 56); Almeida v. Bennet Auto Supply, Inc., 335 F.R.D. 463, 466 (S.D. Fla. 2020) (where defendant claims that the institution of a lawsuit was improper, a determination as to the propriety of Rule 11 sanctions cannot be made until the conclusion of the case); United Specialty Ins. Co. v. Dorn Homes Inc., 2020 WL 8416010 at *3 (D. Ariz., Jan. 9, 2020) (same); Mouzin Brothers Farms, LLC v. Dowdy, 2022 WL 16841583 at *1 (M.D. Ga., Nov. 9, 2022) (same). Accordingly, the undersigned recommends that Defendant’s motion be denied without prejudice.

Jaiyeola v. Bryan, 22 CV 844 W.D. Michigan, Southern Division.

Ed Clinton, Jr.

http://www.clintonlaw.net

A Michigan district court found that a plaintiff who had spent six years challenging zoning regulations was liable for Rule 11 sanctions.

After conducting a de novo review of the R & R, the objections, and the pertinent portions of the record, the Court finds that Plaintiff’s objections are without merit and that the R & R should be adopted. As stated by the Magistrate Judge, there is “nothing reasonable about Plaintiff’s conduct in this matter” (ECF No. 53 at PageID.603). Over the past six years, Plaintiff has unsuccessfully challenged Marshall Township’s efforts to enforce zoning regulations in both federal and state court. The claims in the present case were not discernable. The Court agrees with the Magistrate Judge’s conclusion that the “imposition of Rule 11 sanctions is both appropriate and necessary to deter Plaintiff and others from wasting this Court’s limited resources and subjecting future litigants to similar behavior” (id.). Plaintiff’s argument fails to demonstrate any factual or legal error in the Magistrate Judge’s analysis.

Plaintiff argues that his claims and pleadings were not frivolous in this case. He contends that the Court permitted him to “e-file” his pleadings, “proving that Plaintiff’s pleadings were not considered `frivolous’ at that time” (ECF No. 54 at PageID.607). He further argues that if the pleadings were frivolous, “why has [he] not been charged with perjury” (id. at PageID.607).

Cousino v. Township of Marshall, 21-cv-679 (W.D. Michigan 2022). The current case has been pending since 2021 so the “six years” the court is referring to must mean other litigation. I’m not sure that is a proper basis for awarding sanctions in the above-captioned case. The court does not mention a false allegation in its opinion.

Ed Clinton, Jr.

http://www.clintonlaw.net