Where Were You When PACER Went Down?

I know most good lawyers like to serve their Rule 11/sanctions motions on a Saturday, but you may need to move it up a day, as PACER goes down nationwide this weekend:

There will be nationwide maintenance on the PACER system Saturday, January 14, 2012. The disruptions will begin at 9 AM ET and continue until 6 PM ET. PACER users may have sessions terminated or experience difficulty logging in to the system. CM/ECF filings will be accepted but viewing docket sheets, or reports will be disrupted. We apologize for the inconvenience. 

Listen, don't be upset -- if opposing counsel receives email notification of your motion while having dinner with her family Friday evening, you can have almost the same intended impact!

Dear John Doe: Welcome to Rule 11!

In the anonymous blogger case pending before Judge Cooke, The Kluginator has filed a little document known in legal circles as a "Rule 11 motion."

Here is the blockbuster opening paragraph:

Defendant and his counsel have misapplied existing law in Defendant’s Counter-Complaint. To begin with, Defendant cannot maintain the Counter-Complaint under the fictitious name “John Doe” and be permitted to use his anonymity as both a sword and a shield. Moreover, Defendant and his counsel have asserted duplicative counts for declaratory relief that fail to state a cause of action upon which relief may be granted and are merely denials of the properly dismissed Count III, rendering the Counter-Complaint moot and therefore seeks an improper advisory opinion from this Court. Further, Defendant’s Counter-Complaint is a clear attempt at forum-shopping and judge shopping. Despite having proper notice of the frivolousness of their positions, Defendant and his counsel have refused to withdraw the Defendant’s Counter-Complaint [D.E. 1]. Accordingly, sanctions should be imposed against Defendant and his counsel pursuant to Fed. R. Civ. P. 11.

Ok, I agree none of that sounds too hot, but on the other hand that's pretty much a day in the life at any given moment in state court.

What am I missing here?

(I sure hope they met and conferred on this one!)

New Math: Joe Klock + Notice of Appearance = Judge Seitz Recusal.

We've been tracking the sanction proceedings before Judge Seitz triggered by counsel's filing of an emergency motion to stay one of the Judge's orders.

Since then Receiver David Mandel filed an order to show cause and motion to disqualify the subject law firm, and on October 5th none other than Joseph P. himself entered an appearance to handle the disqualification motion only.

Joe's notice directly led to Judge Seitz' recusal:

Last night attorney Joseph P. Klock, Jr. entered his appearance in this matter on behalf of the law firm and attorneys of Ivy, Miller & Walker, P.A. Klock's clients are presently subject to a motion to disqualify counsel and may also be called as witnesses in this case. Klock is the former law partner and father of the goddaughter of the undersigned Judge. The undersigned Judge is currently planning a bridal shower for Klock's daughter scheduled for next month.

Mazel tov on the wedding Joe!

(Sorry about that, Judge Cooke.)

Judge Seitz Sends Greetings and Salutations!

And invites a local attorney to federal court!

You know, for civil litigators it's somewhat rare to have actual hearings with our federal judges, so I'm sure this will be quite a treat.

Wait a second:

The Court considers the arguments advanced in the emergency motion to raise serious issues.  Walker has accused this Court of trampling Howard's constitutional rights and abusing its discretion in entering the turnover Order. The factual underpinnings for these accusations are that Howard and Perry had insufficient time to prepare for the August 23, 2011, hearing. To avoid running afoul of Rule 11, Walker should have investigated these factual circumstances before relying on them to accuse the Court of a constitutional affront. Because it appears to the Court that no such investigation occurred, it is

ORDERED THAT

(1) James Howard and Sutton Capital, LLC's Emergency Motion to Stay the Order Granting Receiver's Motion Requiring Turnover and Disgorgement of Investor Funds [DE-64] is DENIED.

(2) Horecia I. Walker shall SHOW CAUSE in writing no later than September 9, 2011, and explain (1) the reasonable inquiry he performed before representing to this Court that James Howard and Mark C. Perry did not have time to prepare for the August23,2011, hearing; and (2) the results of that inquiry.

 Hmm, maybe this is not so good after all?

The BankAtlantic Motion for Rule 11 Sanctions.

This is a very interesting read, particularly in light of recent efforts to return Rule 11 to the mandatory/no safe harbor regime we had in place during the go-go 80s, which many argue was a bust for reasons having little to do with having any judicial sympathy for vexatious litigants.

"All Pending Motions DENIED As Moot" Merely Scrivener's Error!

 Stearns Weaver is on a roll.

In the wake of Judge Ungaro's BankAtlantic order comes this order from Judge Lenard, upholding sanctions awarded to Stearns Weaver for discovery violations in a case that was otherwise dismissed.

I found this part interesting:

Nor did this Court’s Order Dismissing Case moot the pending Motion for Sanctions.  Federal Rule of Civil Procedure 11 motions for sanctions are collateral to the original proceeding and therefore may be considered after the action is no longer pending. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990); Montgomery & Larmoyeux by Montgomery v. Philip Morris, Inc., 19 F. Supp. 2d 1334, 1335 (S.D. Fla. 1998) (Gold, J.) (district court may award attorney’s fees following remand in a separate order). The phrase “all pending motions are DENIED as moot,” as written in the Court’s form Order of Dismissal, is merely a scrivener’s error that should not preclude Defendants from continuing to exercise their prerogative to move for sanctions.

I'm always fascinated by things like this.

I agree Rule 11 sanctions are collateral and can be considered after the action is concluded, but what to do with the form order and the boilerplate language denying all pending motions as moot?

Is it sufficient to dismissively term it a "form Order" and "merely a scrivener's error" or do the words in an Order, form or not, have their unambiguously plain effect?

And how should that analysis inform us when we deal with other boilerplate language in other form documents that purport to have legal consequences?

Finally, if the words "DENIED as moot" are of no legal significance, then why are those words always there in the first place?

I hate scriveners!

Rule 11 Motions -- Please Use Sparingly.

We all know lawyers who love to threaten sanctions.  They write nasty letters, throw around 57.105 and generally try to bully their way through a lawsuit.  These lawyers are especially annoying at depositions, or at hearings where the judge can't or won't control the courtroom.

Sometimes this is client-driven, other times the lawyer is just not very skilled and falls back on threats and bluster -- this is easier than actually drafting a summary judgment motion that will be granted..

Of course, there are also times when such a motion is appropriate and in fact necessary.

Judge Hoeveler just entered an order (isn't it great he's still entering orders?) on a Rule 11 motion in a workplace discrimination case where the "sanctionable" conduct seems to be about fundamentally disputed issues of fact:

In moving for sanctions, Goodyear submits that the plaintiffs factual claims about harassment are patently false and frivolous.  In support of this position, Goodyear provided affidavits by Flores and Galeano, in which they generally deny discriminating against the plaintiffs. In particular, Mr. Flores states that he routinely hired Cubans and 'never harbored any race/national origin animus against Cubans." Further, he states that the plaintiffs were fired for lawful reasons; specifically: (1) Mr. Pardon was fired for violating Goodyear's policy on damaging customers' cars while parking them in the mechanic's service bays; (2) Mr. Carbrera was fired for insubordination, for refusing to stand on the sidewalk with an advertisement placard during part of his shift; and (3 ) Mr. Milo wasn't fired at all, but voluntarily resigned (albeit in the context of a salary dispute) . Mr. Galeano makes similar exculpatory statements concerning the fourth plaintiff, Mr. Girard--who, incidentally, was Mr. Galeano' s former roommate, in addition to being his subordinate at Goodyear. Both Flores and Galeano also submit that it was actually the plaintiffs who instigated the verbal jousting, calling the supervisors (who are of Honduran and Nicaraguan heritage) "arrow throwers," and constantly making fun of Mr. Flores for being "fat. " Goodyear served these affidavits, along with a copy of its Rule 11 motion, upon the plaintiffs and waited twenty-one days before filing the Rule 11 motion with the Court, as required by Rule 11 (c) (2) .

The plaintiffs responded by submitting the plaintiffs' answers to the defendant's interrogatory requests, in which the plaintiffs basically elaborate on the factual allegations included in the complaint about the racial slurs, misconduct, and hostile environment at Goodyear. The written statements made by the plaintiffs in response to discovery requests tend to support their pleadings, and the Court cannot conclude that this lawsuit is frivolous. Although the affidavits by Mr. Flores and Mr. Galeano are probative evidence against the plaintiffs claims, the parties' conflicting accounts of what happened simply demonstrate that there are fact disputes that, if resolved in favor of the plaintiffs, may allow them to prevail. In any event, the defendants have not met their relatively high burden of showing the lawsuit is so baseless in law or fact to justify Rule 11 sanctions.

And this motion was brought why?

Alan Kluger and the Kinoki Foot Pad.

I'm not a fan of sanctions motions.

They're unpleasant, usually directed specifically at opposing counsel, and often are subject to abuse or misuse.

Of course, sometimes they are appropriate and necessary.

Still, the standard for filing one should be "clear and convincing," at minimum -- if you harbor any doubt at all about the action in question, let it go and address the issue on the merits.

Our friend Alan Kluger just had a Rule 11 motion denied by Judge Cohn involving, of all things, foot pads.

(Once again, that's a sentence I never thought I'd write!)

I like Judge Cohn's order, which you can read courtesy of Scribd here, for its simplicity and directness.

Alan undoubtedly knows what he is doing, but you have to wonder about continuing to pursue a Rule 11 motion regarding the reasonableness of the plaintiff's complaint after the Court has already denied a motion to dismiss as to a number of the plaintiff's claims.

How does that advance the litigation?

Indeed, is it possible the defendant has lost something more here than just this particular motion?

The OTHER Motion for Reconsideration of Judge Seitz' Sanctions Order

A few of you have asked me to post the other motion for reconsideration filed on behalf of the lawyers recently sanctioned by Judge Seitz.

Pshaw I say.

I'd rather post the above video of Stevie Ray and Albert King going to town on "Stormy Monday."

Alright alright, all you chronics and cheapos who can't spare the 34 cents to download it directly from Pacer, here is the Scribd link to the aforesaid motion.

I like the tender and circumspect introduction:

Both Counsel and undersigned counsel hold this Court in the highest regard. It is precisely because of the respect Counsel and undersigned counsel have for this Honorable Court that they have chosen to file the instant motion. In light of this Court’s reputation for fairness, and strong desire to “get it right,” Counsel believe this Court will want to reconsider its Order – because neither of the two reasons for which it sanctioned Counsel are supported by the facts set forth in the record.

The Court's sanctions order focused on the "blithe" and "cavalier" way in which plaintiff's counsel -- "almost in passing" belatedly make reference to the disputed releases.

The motion for reconsideration says this is not so:

Weeks earlier, Counsel had addressed the releases in Plaintiffs’ Proposed Supplemental Complaint filed on July 10, 2009 [DE-188]. See Proposed Supplemental Complaint, ¶ 104. In fact, Count X sought reformation of the “various settlement papers” because the Plaintiffs were “mislead into signing a release.” Proposed Supplemental Complaint, ¶ 120. Moreover, the Proposed Supplemental Complaint alleged “[t]he scope of the releases were limited to the
‘Accident’ which, on the face of the documents, do not release criminal conduct.” Id., ¶
118.3

Plaintiff's counsel also take issue with their purported failure to cite relevant controlling 11th Circuit authority on Rule 60(b)(6):

The Court cited two cases in the order denying the Omnibus Motion: Rease v. AT&T Corp., 2009 WL 4897738 (11th Cir. 2009) and U.S. v. Real Property & Residence Located at Route 1, Box 111, Firetower Rd., 920 F.2d 788 (11th Cir. 1991). Counsel could not have cited Rease in the Omnibus Motion because the opinion was issued on December 21, 2009, after the Omnibus Motion and the Motion for Sanctions were fully briefed.

As to the latter Real Property case:

Thus, despite not citing Real Property (Firetower Rd.), Counsel correctly set forth the existing law in the Eleventh Circuit on Rule 60(b)(6), and expressly acknowledged the very issue upon which this Court denied the Omnibus Motion: “Normally ‘newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial,’ for which relief may be granted under Rule 60(b)(2), is not ‘any other reason’ justifying relief under clause (6) of the Rule.” Omnibus Motion at 9.

According to the docket, Judge Seitz held a hearing on the reconsideration motions on March 25.

Sanctioned Rule 11 Lawyers File Motion for Reconsideration.

Rule Reconsideration

It appears there's been an update in the case where Judge Seitz imposed Rule 11 sanctions -- the lawyers have filed a motion for reconsideration.

They basically argue that Judge Seitz made a mistake:

Plaintiffs respectfully clarify an important matter which they hope will demonstrate why this Court should reconsider its prior Order: NORWEGIAN CRUISE LINE LIMITED’s (“NCL”) conviction resulted from criminal law enforcement by the U.S. Coast Guard Investigative Service (“CGIS”), not the civil transportation safety investigation of the National Transportation Safety Board (“NTSB”). The Court’s Order (and the Sanctions Order, D.E. 229) appears founded upon the Plaintiffs’ knowledge of the NTSB’s safety investigation well before both the settlement of the Plaintiffs’ claims and NCL’s conviction. However, the NTSB’s investigation did not lead to NCL’s conviction;1 rather, it was the CGIS’ investigation and the enforcement of U.S. criminal law that resulted in NCL’s conviction.

They then argue that this fundamental mistake led to an erroneous ruling:

Plaintiffs submit that the above Clarification as to which investigation led to NCL’s criminal conviction and, further, the timing of the Plaintiffs learning of the CGIS’ investigation shows neither the Plaintiffs nor the Defendants intended for the releases to settle the criminal liability that resulted from the CGIS’ investigation.

13. Given this Clarification, the Court should reevaluate the Plaintiffs’ preliminary evidentiary allegations, which show: i) the Plaintiffs lacked knowledge of the CGIS criminal investigation when they settled their cases and signed the releases, and ii) there was an actionable misrepresentation by NCL in concealing the CGIS criminal investigation and affirmatively calling the explosion an accident. Based on this reevaluation, the Court should then determine whether to allow amendment or supplementation. This should yield the result of allowing amendment or supplementation. The undisclosed criminal activity was not capable of being released, as it was completely outside the parties’ intention to do so.

Meanwhile, the defense attorneys have submitted bills for $52k in fees and $2k in costs ------ just dealing with the Omnibus Motion -- which is being contested as excessive and unjustified.

Oy.

Judge Seitz Imposes Rule 11 Sanctions.

JudgeSeitzRule11

Sorry, I couldn't think of any way to make that headline funny.