Saturday, May 21, 2022
Fifth & Seventh Circuits Uphold Sanctions for Seasoned Attorneys, Rejecting Their Requests for Relief Based on Their Experience--Part Two
Last month, I noted two April 8, 2022 federal Court of Appeal decisions on attorney sanctions where the courts reminded us claims of experience are no excuse for improper behavior. I focused on the Fifth Circuit’s reminder: “When litigating in federal district court, it is often advisable to read the court’s orders.” Scott v. MEI, Inc., 21-10680 (5th Cir. Apr. 8, 2022) (per curiam). This month, I’ll discuss the Seventh Circuit’s order upholding $17,000 of sanctions against a “seasoned litigator” who balked at being required to complete “demeaning” CLE classes. Bovinett v. Homeadvisor, Inc., 20-3221 (7th Cir. Apr. 8 2022).
Like the Fifth Circuit, the Seventh Circuit rejected an appeal of a sanctions order despite counsel’s claims of competence and experience. Bovinett (7th Cir. Apr. 8 2022); see Debra Cassens Weiss, “Seasoned Litigator” Fails to Persuade 7th Circuit that Sanction Was Demeaning and Too Harsh, ABA Journal (Apr. 14, 2022). In a Northern District of Illinois case involving use of an actor’s photo by advertisers, the district court initially dismissed many claims against the out-of-state advertisers for lack of personal jurisdiction. Bovinett at 2. Attorney Mark Barinholtz, representing the actor, then asserted the defendants had several contacts with Chicago, and the court “allowed the parties to take limited discovery about personal jurisdiction.” Id. at 2-3. The court “soon granted [a defendant’s] motion to compel discovery because [the actor’s] responses were vague and evasive.” Id. at 3. For example, Barinholtz “answered every request for admission by stating [the actor] was ‘not in possession of sufficient knowledge or information to admit or deny.’” Id. After the court entered an order compelling discovery, the actor, through Barinholtz, replied “only that [the actor] lacked ‘direct, in person knowledge’ of the subjects.“ Id. In response, the court dismissed much of the complaint and eventually granted the defendants’ motions for sanctions. Id.
The district court found several grounds for sanctions, noting “Barinholtz appeared to have made false assertions to establish personal jurisdiction, [and e]ven if he did not do so in bad faith, . . . Barinholtz inexcusably failed to investigate the jurisdictional facts.” Id. The court “ordered Barinholtz to pay about $17,000 (much less than the defendants’ [$661,000] request) to compensate the defendants for time spent on the motions to compel and for sanctions.” Id. As the Seventh Circuit explained, the district court “also ordered Barinholtz to attend 40 hours of continuing legal education: half ‘on federal civil procedure, including at least one course related to personal jurisdiction,’ and half on “professional conduct, . . . such as those offered in the Illinois State Bar Association’s Basic Skills for Newly Admitted Attorneys.’” Id.
In response, Barinholtz moved for what he styled an extension of time either “to file notice of appeal and/or to request other post-order relief,” and the district court granted the motion in part, extending the time to appeal until October 13, 2020. Id. at 3-4. Barinholtz did not immediately file a notice of appeal, but filed an October 13, 2020 “motion to reconsider in which he focused on the merits of the lawsuit and his already-raised objections to sanctions.” Id. at 4. He again argued that the court had personal jurisdiction and claimed “Rules 11 and 37 did not permit sanctions in this context, [plus] sanctions were ‘unfair’ because the defendants and Bovinett had teamed up to get Barinholtz to pay costs and fees.” Id.
Notably, Barinholtz “also insisted that the defendants deserved sanctions,” based on the alleged “teaming up” against him, “and that requiring him, a seasoned litigator, to attend legal-education courses [was] demeaning.” Id. As the Seventh Circuit explained, he “requested a reduced monetary sanction (or none at all) and fewer hours of continuing education.” Id. The district court denied the motion to reconsider, finding “Barinholtz failed to identify any legal or factual error in the sanctions ruling and instead repeated previously rejected arguments.” Id. The court declined to address what it called “these ‘disheartening’ arguments” again, “and repeated that sanctions were warranted for his ‘egregious’ conduct.” Id. Barinholtz filed a notice of appeal within thirty days of the reconsideration order, but after October 13, 2020.
The Seventh Circuit opened its order by explaining Barinholtz “incurred sanctions for repeatedly asserting baseless claims and disregarding a court order. He moved, unsuccessfully, for reconsideration and then filed a notice of appeal . . . timely only with respect to the denial of the motion to reconsider.” Id. at 1-2. According to the court: “[b]ecause [Barinholtz] timely sought and received an extension of time, his appeal was due October 13. But Barinholtz missed this deadline. And his motion to reconsider had no effect on his time to appeal sanctions. Id. Accordingly, the notice of appeal filed after October 13 was only timely for the denial of the motion for reconsideration. Id.
The court then reviewed “whether the judge unreasonably denied Barinholtz’s motion to reconsider sanctioning him,” finding no abuse of discretion. Id. at 5-6. The Seventh Circuit stressed “Barinholtz lacked a good reason for vacating the sanctions,” “did not cogently explain why his conduct was not sanctionable,” “did not demonstrate any mistake of law or fact in the sanctions order,” and also “provided no excuse or explanation—or apology—for his actions.” Id. at 5. For example, “he did not argue that he complied with the discovery order, that he had a strategic reason for repleading baseless claims (such as preserving them), or that it was reasonable to press claims against [a defendant] after it showed that it had no ties to Illinois.” Id.
According to the court, the trial “judge also did not err in rejecting Barinholtz’s argument that [the actor] ‘flipped’ to the defendants’ side and is now in cahoots with them to get Barinholtz to pay both sides’ costs” because the “parties’ settlement agreement states that they must bear their own costs and fees.” Id. at 6. Instead, the “amount of the sanction is directly tied to the expenses that the defendants incurred in moving to compel discovery and moving for sanctions: motions necessitated by Barinholtz’s conduct.” Id.
Finally, Barinholtz contended the court should have imposed “fewer than 40 hours of continuing legal education” based on his “decades of experience.” Id. However, the court reasoned “the requirement directly addresses the sanctionable conduct: Barinholtz raised baseless allegations about [defendant’s Chicago] involvement, pursued frivolous claims, and dodged valid discovery requests; it is reasonable that he be ordered to refresh his knowledge in civil procedure and professionalism despite his proficiency in certain areas.” Id.
Barinholtz told the ABA Journal in an email that he is reviewing “the procedural and merits-based aspects of the ruling and its impact.” Cassens Weiss, “Seasoned Litigator.” He explained he will probably seek rehearing and stated: “In light of my many years of dedicated practice in the federal courts, 40 hours of vaguely characterized CLE not only appears to be unprecedented—but in any event, is far too harsh and unwarranted in these circumstances.” Id.
I will keep you posted on any updates in this matter, and in the Fifth Circuit’s ruling in Scott. In the meantime, both cases give us all excellent reminders about competent representation and sanctions.