The opening line of this decision says it all: “When litigating in federal district court, it is often advisable to read the court’s orders.” Id. at *1.
The attorney in this case originally filed a Title VII action. The attorney then timely moved to add two Family and Medical Leave Act (FMLA) claims. The judge granted the motion and gave leave to file a second amended complaint by a certain date. “But [the attorney] did not read the order closely and assumed that the second amended complaint was filed.” Id. (emphasis in original).
After the plaintiff’s deposition, the attorney sought to drop some of the Title VII claims, in what he believed was a third amended complaint. The defendants objected, arguing that because the second amended complaint was never filed, adding the FMLA claims, which were not in the operative [first] complaint, was untimely. The trial court agreed and denied leave to amend. Id. The judge also “expressed disbelief at [the attorney’s] conduct and concern that [his] proffered reason for the new amendment—to drop claims—was pretexual since the proposed amendment would add claims.” Id. (emphasis in original).
The judge then ordered the attorney to show cause why he should not be sanctioned. The attorney’s “lengthy response” explained that he mistakenly thought that the second amended complaint was filed and that the later filings all followed from that honest mistake. Accepting that the attorney “underst[ood] the seriousness of the situation,” the judge nonetheless ordered him to pay his opponent’s costs of responding to the untimely motion. Id. at *2.
On appeal of that sanctions order, the attorney raised a series of arguments, which the Fifth Circuit dismissed as wrong, irrelevant, without authority, or frivolous. Id. at *2–3. The court of appeals concluded that the “attorney made a mistake” and that the district court “imposed a reasonable sanction to reimburse [the defendants] for the expense of dealing with that mistake.” Id. at *3.
In one regard, the attorney was fortunate. As I have pointed out in prior columns, any appeal of trial-level sanctions is fraught with the danger that the appellate court will impose additional sanctions for a frivolous appeal. There are reasons, beyond mere dollars, why sanctions need to be appealed—the effect on reputation; requirements to report; and, in the worst case, court referral of (or intention to refer) the matter to the attorney’s state bar. An attorney should carefully consider all the possible ramifications, however, before reflexively appealing a sanctions order.
In another case involving sanctions for a frivolous appeal, the plaintiff, Pop Top, originally sued for patent infringement. Defendant Kobo repeatedly informed Pop Top that its infringement claim was factually wrong and warned that Kobo would seek attorney fees if the suit was not withdrawn. Ignoring these warnings, Pop Top proceeded with its suit and ultimately lost at summary judgment. The district court found that Pop Top had violated the local rule by failing to disclose the infringement theories upon which it ultimately relied and had “blatantly misconstrue[d] Kobo’s position.” Id. at *2. Pop Top appealed, and the Federal Circuit affirmed without opinion. See Pop Top Corp. v. Rakuten Kobo Inc., 2022 WL 1397867 (Fed. Cir. May 4, 2022). Kobo then moved for sanctions for both bringing a frivolous appeal and misconduct in arguing the appeal.
The Federal Circuit imposed sanctions on both bases. The district court had ruled that Pop Top offered no evidence on its claim of infringement. “Because it utterly fail[ed] to identify any [such] evidence . . . , Pop Top had no reasonable basis to appeal . . . [,] and its appeal was frivolous as filed.” Pop Top, 2022 WL 2751662, at *2.
On the question of frivolous as argued, the court pointed out that, “[a]s it did below, Pop Top ‘blatantly misconstrued’ Kobo’s position,” concluding, “Pop Top’s misrepresentation of Kobo’s position warrants sanctions.” Id. The court pointed out that it had previously recognized that an appeal is “frivolous as argued where appellant ‘manufactured arguments in support of reversal by distorting the record.’” Id. (quoting State Indus. v. Mor-Flo Indus., 948 F.2d 1573, 1579 (Fed. Cir. 1991)). The court, after reducing Kobo’s attorney fees claim, awarded it over $107,000.
The plaintiff and its counsel obviously adopted a very aggressive litigation strategy. When that failed completely at the district court, they should have abandoned their claim rather than charging ahead with an appeal. The result was that both were sanctioned, as the court held that they were jointly and severally liable.
This case demonstrates the sometimes-devastating effects of failing to understand and follow the procedures for bringing an appeal.
The attorney here represented a model in a claim for unauthorized use of his photos. The initial complaint was dismissed for lack of personal jurisdiction over the defendant media company. The attorney filed an amended complaint, alleging a plot by the media company and its involvement in the initial photo shoot within the court’s jurisdiction. Id. at *1. After limited discovery on jurisdiction revealed that the media company did not become involved until months after the photo shoot, the judge dismissed the amended complaint “based on evidence that [the attorney’s] relevant allegations were untrue.” Id.
After the counsel withdrew, the media company and the other defendant settled with the plaintiff. The defendants then moved for sanctions against the counsel. The judge found that “in addition to repleading baseless claims, [the attorney] persisted in suing [the media company] after [the media company] furnished evidence showing no relevant ties to Illinois. Worse, [the attorney] appeared to have made false assertions to establish personal jurisdiction” and “flouted the order to respond to discovery requests.” Id. at *2. The trial judge imposed monetary sanctions and ordered the attorney to attend 40 hours of continuing legal education (CLE).
The attorney sought to appeal the sanctions but in the process created a procedural death trap. He first timely moved for an extension to file a notice of appeal, or move for reconsideration, which the trial court granted. On the extension deadline, the attorney did not file an appeal but rather filed a motion to reconsider the merits of the underlying ruling. In addition to asserting that there was personal jurisdiction, he claimed that the sanctions were unfair because following his withdrawal his former client and the defendants “had teamed up to get [him] to pay costs and fees.” He also claimed that “requiring him, a seasoned litigator, to attend legal-education courses is demeaning.” Id. The trial judge denied reconsideration, stating that the attorney’s arguments were “disheartening” and repeating that “the sanctions were warranted for his ‘egregious’ conduct.” Id.
On appeal, the court ruled that the appeal of the sanctions was untimely because the motion for reconsideration did not toll the time to appeal them. The court of appeals did consider the appeal of reconsideration, but only for abuse of discretion. The court found that the district court judge did not abuse his discretion in denying reconsideration of “a litigant’s already-rejected contentions,” noting that, “[i]n any case, each of his arguments are frivolous. Id. at *3. The court of appeals affirmed the decision below, including the CLE requirement, stating that “it is reasonable that [counsel] be ordered to refresh his knowledge in civil procedure and professionalism” where he “raised baseless allegations about [the media company’s] involvement, pursued frivolous claims, and dodged valid discovery requests.” Id. at *4.
Given the court of appeals’ comments, it is doubtful that the attorney would have succeeded in his appeal of the sanctions on the merits. However, by failing to understand and follow the appellate rules, he doomed his chances from the beginning.