Archive for the ‘Sanctions’ Category

Lawyering Under the Lights (And Thoughts on the Rakofsky Dismissal)

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OK, the Rakofsky v. Internet decision is in, and the motions to dismiss were all granted. The motion for sanctions was denied. (Your familiarity with the facts will be assumed.) You can read a variety of opinions on the subject here: Simple JusticeTechdirt, Popehat, Lawyernomics, Philly Law Blog, My Shingle.

But I’m not writing to rehash the opinion (Here, if you want to read it). I’m writing instead because of the bizarre scenario that occurred where I wore three different hats. And to give my thoughts on standing my ground in this fight.

First I was a blogger that mentioned Rakofsky in a post about attorney advertising.

Then I was a defamation defendant telling him to go shit in a hat after he sued me for stating my opinion, along with a gazillion others.

And then I was local counsel for 35 defendants (16 authors). Almost all of them were highly opinionated attorneys, had law blogs, and knew perfectly well how to stand on their own two feet in the well of the courtroom. (Client list) There wasn’t a flinching fawn anywhere in this group.

I took the gig as local counsel because I assumed it would be easy. The case clearly had no merit, would need a simple motion to dismiss, and  **poof** it would be gone. I figured six months, tops, and First Amendment guru Marc Randazza was going to do all the heavy lifting as our pro hac vice counsel while I worried about local procedure on my home court.

Now lawyers working either on contingency or for a flat fee make those kinds of calls all the time, balancing the time they think they will invest in a matter against the value gained. But this took two years, confounding all expectations, and required a lot of extra time with some pretty sharp minds looking on. While I’ve had high profile cases before — including one that hit 60 Minutes some years back — I didn’t have blogging lawyers as clients and a profusion of popcorn eating armchair pundits looking on and reading the filings.

Most readers only know me through this blog, not by watching the actual practice of law. I have a separate website for my law practice (which I still hate), and I do that on purpose.  The contents over here are opinion and news, and the contents over there are a digital brochure for lawyering. I rarely link to the website, or even mention it, and it’s seldom visited relative to this blog’s traffic. People here don’t watch me practice law.

But everything was now different as I became a crazy cocktail of blogger, defendant and lawyer — shaken (not stirred) together. And folks were watching.

Given that blogger/defendant/lawyer brew , it puts me in a good position to shed some light on why this took two years, as some have criticized New York’s judiciary system for the delay. This is the short version of the procedural morass — including plaintiffs’ counsel quitting and our first judge retiring:

I know that this seems like a lot, but it really is the short version.  It should have been simple, but it wasn’t. That sucks for those involved, but really, what were the odds that the plaintiffs’ lawyer would quit and then the judge would retire? Those were both biggies.

Is it possible the case could go on further with an appeal? I suppose it is, but as pointed out elsewhere, the judge was quite charitable toward Rakofsky by not sanctioning him, perhaps believing he’d been punished enough with the scathing online commentary, albeit much of it brought on by his own conduct.

But appellate judges might not be as dismissive as the trial court was of his having held himself out as a New York lawyer and putting a New York law office on his letterhead when he’s not admitted here. Leaving aside the cost of an appeal, there is much to lose by having appellate judges look at the conduct that many were already criticizing.

I gave up long ago trying to make predictions about this case, so I won’t make any here about whether it’s truly over. In fact, I try not to make predictions on any of my cases since the vagaries of life and litigation tend to upset the prediction applecart.

But assuming it is over, since that is what logic tells me, we move to the ultimate question: Was it worth being part of the defense team?

first-amendment-719591The answer has to be yes. The clients I have are like-minded individuals that cherish the First Amendment and are willing to fight for it. They could have easily ponied up the $5,000 that Rakofsky wanted early on to make the case go away, but they elected to fight. These are the types of people you want in your foxhole.

The message should go out loud and clear to all that consider bringing a frivolous suit against us. We make our living within the justice system, many of us by battling in the courtroom well. We have a pretty good grasp of how the courts work and the bounds of our freedom to speak and to write that are immortalized in the Bill of Rights.

We think it’s important to shine a light on ethical issues that we see with respect to attorney conduct that we believe crosses red lines, in the grand hope that such light becomes a disinfectant for the legal community. We do not want to see the cops’ Blue Code of Silence or the medical community’s White Coat of Silence darken our profession.

We will not cower or wilt under fear of empty threats or vacuous suits. Those that attempt such intimidation will find hardened and opinionated citizens who don’t care to relinquish our rights to speak freely. We know how to stand on the ramparts to fight for those rights, and we know how to win.  Representing such resolute individuals, despite the procedural shambles that ensued, has been my honor.

Was it worth doing? You’re damn right it was.

Lance Armstrong and Fraud on the Court

Having now confessed to Oprah about doping in order to win seven Tour de France titles, Lance Armstrong is obviously in a heap of legal troubles. Most of those seem to involve his perjury (criminal), defamation of others when he called them liars for calling him a cheat (civil), and a slew of contractual issues regarding his sponsors.

Sports Illustrated gives a decent wrap-up of his legal woes, athletically, criminally and civilly.

But there is another aspect many might miss — by bringing defamation claims against others when they called him a cheat, and knowing that his lawsuits were bogus, he committed frauds on the courts themselves.

The operative case here is Chambers v. NASCO from the US Supreme Court. This decision observes that, independent of any particular statute or rule, a court has an “inherent power” to sanction for fraud or bad-faith conduct. This includes  conduct undertaken “vexatiously, wantonly, or for oppressive reasons.”

That’s a pretty big catch-all provision. I suspect there will be a couple of pissed off judges out there who will have no problem using this rule (or similar state rules) to haul Armstrong before the court. And I expect that this won’t take all that long to happen.

Sanctions in New York for Frivolous Suit

In this decision in today’s New York Law Journal (free reg.), Justice Catherine Bartlett, sitting in Orange County, does an exploration of sanctions in New York, and the availability of legal fee recoupment for a frivolous case. Tort “reform” critics like to complain that frivolous suits are a reason that restrictions should be put on suits, such as a loser pays type of system, though this obviously impacts legitimate suits as well.

But here we see the system in action: In Seeley v. Emerald Point the plaintiff was clobbered from behind with a shovel while in the parking lot of the Emerald Point bar.  But one of the defendants was an individual that the plaintiff simply couldn’t tie to the assault, no matter how hard he tried. As summarized by the court:

Plaintiff settled his claim as against Emerald Point and pursues an action against the remaining defendants, one of which is Sean Frey, who plaintiff alleges assisted in his assault. At no time has plaintiff been able to identify Mr. Frey as his attacker, and no witness testified or came forward demonstrating that Mr. Frey was in any way connected with the attack on Mr. Seeley. In fact, Mr. Frey claims that while he was present at the bar that evening, he had no involvement whatsoever in any assault. Mr. Frey testified that he was not employed or in any way connected with Emerald Point other than as a patron.

The Court didn’t just toss the suit against Mr. Frey, but when on to excoriate the suit against him, and discussed the two standards for punitive sanctions in New York; one is a Rule of Court (for frivolous conduct) and the other legislatively derived (for frivolous suits).  This is a long block quote, which generally sucks in a blog posting. But  for practitioners (and policy makers), this is how it works in New York (I’ve reformatted/removed the citations to make it more readable):

Turning to the issue of costs and sanctions, the Court notes that conduct is frivolous and can be sanctioned under 22 NYCRR 130-1.1 if it is “completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law” or it is “undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another” (see Stow v Stow, Matter of Gordon v Marrone, Tyree Bros. Envtl. Servs. v Ferguson Propeller, all in the 2nd Dept.). “Making claims of colorable merit can constitute frivolous conduct within the meaning of 22 NYCRR 130-1.1 if ‘undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another’.” Specifically, Section 130-1.1 of the Rules of the Chief Administrator of the Courts states in pertinent part:

(a) The court, in its discretion, may award to any party in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney’s fees, resulting from frivolous conduct as defined in this Part.

(c) For the purposes of this Part, conduct is frivolous if:

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; In determining whether the conduct undertaken was frivolous, the court shall consider, among other issues, (1) the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct; and (2) whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party.

As expressed in Park Health Center v Country Wide Ins. Co., (N.Y.City Civ.Ct.,2003):

“In determining whether the conduct undertaken was frivolous, the court shall consider, among other issues, the circumstances under which the conduct took place, including the time available for investigating the legal and factual basis for the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party.” ( Id.) [22 NYCRR 130-1.1(c)].

While the factors listed above are precatory in determining sanctionable conduct, “what remedy [to impose] is dictated by considerations of fairness and equity.” (Levy v. Carol Management Corp. 1st Dept.). Moreover, “[s]anctions are retributive in that they punish past conduct. They are also goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the bar at large. The goals include preventing the waste of judicial resources, and deterring vexatious litigation and dilatory or malicious litigation tactics. citation omitted” (Levy,). The measure of sanctions should be proportionate to the amount sought in the lawsuit, the culpability of the party’s conduct and prejudice to the adversary. ( See Vicom v. Silverwood, 4th Dept.).

In the instant case, it is clear from the submissions that the evidence demonstrated that Mr. Frey had no connection with the assault on plaintiff. Mr. Seeley never identified his attacker, and the evidence, which is unrefuted, demonstrates that Frey was not employed by Emerald Point nor did he participate in any assault. Plaintiffs were given multiple opportunities to discontinue the action against Frey, even in light of the compelling evidence demonstrating his non-participation. Plaintiffs failed to do so, and such conduct can be construed as nothing less than frivolous conduct. Plaintiffs’ counsel’s conduct in this matter demonstrates a repeated disregard for proper procedure and the law, and as such, plaintiffs’ conduct is frivolous.

CPLR 8303-a calls for the award of “costs and reasonable attorney’s fees not exceeding ten thousand dollars” against a party, his attorney, or both, who are found to have brought a frivolous action in bad faith or as a means of “harass[ing]” the successful adversary. A similar alternate imposition of costs and financial sanctions is available under the Rules of the Chief Administrator of the Courts for frivolous conduct in pursuit of such litigation (22 NYCRR Subpart 130-1). Once there is a finding of frivolousness, sanction is mandatory ( Grasso v. Mathew, 164 A.D.2d 476, 564 N.Y.S.2d 576, lv. denied), especially in the wake of frivolous defamation litigation (Mitchell v. Herald Co., 137 A.D.2d 213, 529 N.Y.S.2d 602, appeal dismissed). Nyitray v New York Athletic Club in City of New York, 1st Dept., 2000).

The Court hereby directs that a hearing shall be held on September 8, 2011 at 9:30 a.m. at Orange County Government Center, Courtroom #4 for the purposes of taking testimony to ascertain the time and expenses of defendant Frey in defending this action and reasonable attorney’s fees.

It would be nice, of course, to one day find a decision where a judge sanctions a defendant for frivolous defenses. Perhaps that day will come.

NYC Transit Authority Gets Bench Slapped By Brooklyn Judge


Justice Robert Miller is not happy with the New York City Transit Authority. And when Justice Miller, one of the trial judges of Brooklyn’s Supreme Court, is not happy, that means a good bench-slapping.

As exquisitely detailed in this January 5 decision in Williams v. New York Transit Authority, the TA failed repeatedly over the course of three years to provide discovery from an Event Recorder Box (the train’s “black box”). The result is $15, 450 in costs and sanctions.

The suit concerns a 2005 accident when subway passenger Ronald Williams fell asleep on a train that subsequently entered a subway yard after the last public stop. He thereafter fell from a subway car and was struck and killed by a train.

Plaintiff’s counsel was asking, not unreasonably, for the accident reports and Event Recorder Box to get more details on what happened and why. After three years of trying to get that information, including a prior sanction against the Transit Authority for failing to properly respond ($250 that went unpaid), the court had had enough.

The decision catalogs conduct that appeared to supersede mere ineptitude on the part of the Transit Authority, which tried to assert that its conduct was not “wilful or malicious” nor that they have engaged in “a pattern of dilatory and obstructive conduct.” The court found, based on the overwhelming evidence, that the arguments weren’t made in good faith, writing that “If the actions were not wilful, they were inept and evinced a total disregard for the NYCTA’s discovery obligations…”

For those that like to see why our litigation system takes as long as it does, or is as expensive as it is, here is one more quote from the decision to add to the mix:

A review of the testimony establishes that if the NYCTA had exercised due diligence or any diligence, this entire discovery dispute could have been avoided and the vast expedition of time by the parties and the Court would have been saved.

Our municipal corporations have often been given more leeway by the courts than private litigators, as a panel of judges recently wrote in excoriating the City’s Corporation Counsel. (“[A]s a rule, our courts give far more leeway to the city than we typically do to other defendants in civil actions.”)

Perhaps, after so many years of problems, the courts are finally prepared to hold municipal parties to the same standards as the private parties.

And in case you were wondering what the court believes is a fair hourly fee for those of us that work on contingency and don’t generally track our hours, Justice Miller finds $350/hour for a partner and $250/hour for an associate.