A federal appeals court ordered an attorney to pay damages after he filed a brief that contained virtually the same text as his trial court summary judgment brief. In Conboy v. U.S. Small Business Administration, the appellants asked the court to reverse their loss on summary judgment. But the court not only affirmed their loss, it granted the appellee’s motion for damages pursuant to Federal Rule of Appellate Procedure 38 for filing a frivolous appeal. According to ABA Litigation Section leaders, this decision highlights the standards attorneys must meet when litigating appeals.
In Conboy, the plaintiffs had borrowed money to renovate a building and open a bar. When they defaulted on their loans, they sued their creditors for various causes of action, including violations of the Fair Debt Collection Practices Act (the Act) and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (the Law). The defendant creditors moved for summary judgment, arguing among other things that neither the Act nor the Law applied to commercial loans like theirs. They also moved for sanctions under Federal Rule of Civil Procedure 11, arguing that the debtors’ claims were meritless since the creditors had notified them that the statutes clearly did not apply to their loans.
The U.S. District Court for the Middle District of Pennsylvania granted the creditors’ summary judgment motion, citing the commercial nature of the loans. But it denied the sanctions motion, holding it found “no extraordinary circumstances warranting the imposition of sanctions…”
The debtors appealed, submitting a brief that virtually repeated their argument in opposition to summary judgment. The brief was not completely identical: it replaced the word “plaintiffs” with “appellants,” and “defendant” with “appellee.” It also changed the tense of some sentences, like changing from “summary judgment must be denied” to “should have been denied.” But most of the other text stayed the same. The creditors opposed the appeal and moved for compensatory damages under Federal Rule of Appellate Procedure 38 on the grounds that the debtors’ appeal was frivolous.
The U.S. Court of Appeals for the Third Circuit affirmed the trial court’s dismissal and granted the creditors’ Rule 38 motion. Rule 38 authorizes compensatory damages to reimburse appellees who “must defend judgments against frivolous appeals,” the court said. It noted that an appellate brief must explain why the appeals court should arrive at a different conclusion than the district court. But rather than doing so, the debtors recycled “meritless arguments,” the court explained.
The Third Circuit illustrated how it was apparent the text of the debtors’ brief was written for the district court. For example, the brief never explained how the lower court erred. It also used the present tense to describe the status of the case before the lower court. And it noted that the debtors’ brief in opposition to Rule 38 sanctions was nearly identical to their trial court brief opposing Rule 11 sanctions. As emphasis, the court appended a “redline” comparison of the debtors’ district court and appellate briefs to show the overlap.
The Third Circuit noted that it often errs on the side of leniency because “even the best lawyers make mistakes from time to time.” But it held that “the copy-and-paste jobs before us reflect a dereliction of duty, not an honest mistake.”
The Third Circuit declined to order the debtors themselves to pay Rule 38 damages, reasoning it is the attorney’s duty to determine whether an appeal is meritorious. Accordingly, the court ordered the debtors’ counsel to pay the creditors’ damages arising from their defense of the appeal.
Litigation Section leaders note that Conboy emphasizes appellate briefing principles. The recycled Conboy brief failed to meet applicable standards not just because it contained copied language, but because it did not respond to the trial court’s decision and advanced frivolous arguments. For example, if an appeal is based on a factual finding, “you need to make a showing of clear error,” says John H. Barkett, Miami, FL, co-chair of the Section’s Ethics & Professionalism Committee. And if it is based on a legal issue, “you need to explain why the district court was wrong or why there should be a change in the law,” neither of which the Conboy debtors did.
Section Leaders explain that Conboy does not mean lawyers may not reuse work from trial briefs in their appellate papers. For instance, once the law in an area is settled, “the courts and parties know what the relevant standards are” and “cutting and pasting could be acceptable on appeal,” states Judge Nancy F. Atlas, Houston, TX, co-chair of the Section’s Access to Justice Committee. Certain long-standing search and seizure doctrines are examples she suggests where “boilerplate” may be acceptable.
Additionally, “nothing in Conboy says that you can’t re-use research,” says Michael S. LeBoff, Newport Beach, CA, cochair of the Section’s Professional Liability Litigation Committee.
In fact, re-used language may make appeals more affordable for some litigants. “To a degree,” decisions like Conboy may “hurt clients who are not well off,” observes Leboff.
