Case Summaries

Sanctions

[09/03] U.S. Sec. & Exch. Comm'n v. Hyatt
District court's order of contempt and award of attorney's fees against nonparties for their failure to adequately respond to two subpoenas duces tecum served on them by the Securities and Exchange Commission in connection with litigation between the SEC and another party is vacated where: 1) Rule 45(e) does not require the court to first order compliance before imposing the sanction of contempt, although Rule 45(c) requires an intervening court order if the recipient of the subpoena objects in writing to the production of documents or things, and here, the nonparties did not serve a written objection; and 2) SEC's notice and motion for a rule to show cause did not provide sufficient notice that the district court would decide the contempt issue at the initial hearing as the notice sought only the issuance of a show-cause order and asked the court to set a hearing at which the merits of the contempt issue would later be adjudicated.

[09/03] Fed. Trade Comm'n v. Leshin
In the Federal Trade Commission's suit against defendants for providing debt consolidation services in violation of the Federal Trade Commission Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act, district court's judgment holding defendants in contempt for violating a stipulated injunction and ordering defendants to disgorge all fees collected in violation of the injunction is affirmed where: 1) district court did not abuse its discretion by holding the defendants in contempt; 2) district court did not err by holding the counseling center in contempt, by holding defendants individually liable, or by holding the contempt defendants jointly and severally liable; 3) district court did not abuse its discretion by ordering disgorgement as the sanction for contempt or in calculating the amount to be disgorged; 4) district court issued civil contempt sanctions and did not violate the contempt defendants' right to due process; and 5) the provision of the final order of disgorgement that allows the Commission to convert unpaid balance into a money judgment is not ripe for review.

[08/31] People v. Pacheco
In a prosecution of defendant for welfare fraud in violation of Welfare and Institutions Code section 10980(c)(2), trial court's order placing defendant on formal probation for a period of three years subject to various conditions and imposition of various fees and fines are modified and remanded where: 1) defendant's claims are not forfeited or waived on appeal; 2) there is no evidence of defendant's ability to pay the $100 in attorney fees, the $259.50 criminal justice administration fee, and the $64 per month probation supervision fee; 3) the order to pay attorney fees and the imposition of the monthly probation supervision fee are improper conditions of probation; 4) trial court's judgment is modified to reflect that the $20 court security fee is deleted as a condition of probation and is instead a separate order; and 5) trial court's judgment is modified to delete an unidentified $30 fee that the court did not impose.

[08/27] Ellerbee v. County of Los Angeles
In plaintiff's suit against the County of Los Angeles and a sheriff for negligence, claiming that the sheriff breached an unspecified statutory duty of care by failing to promptly serve a writ of execution on Sony BMG and MTV, arising from the death of plaintiff's son, for which an entertainer known as "Too Short" was responsible, trial court's judgment in favor of the plaintiff is affirmed in part and reversed in part where: 1) no mandatory statutory duty was alleged or violated, and the trial court erred when it denied the county's motion for judgment on the pleadings and allowed the action to proceed to trial on a theory of common law negligence; 2) the county and its attorney have not shown that the trial court abused its discretion with regard to making an award of sanctions, and have made no effort to demonstrate any abuse of discretion as to the amount of sanctions; and 3) plaintiff's motion to dismiss the appeal and to impose sanctions is denied.

[08/26] Florida Bar v. Liberman
Following the conviction of an attorney for first degree felony of trafficking in the drug "Ecstasy," a referee's recommendation that the court accept the attorney's unconditional guilty plea and consent judgment for discipline, suspending him from the Florida Bar for three years is disapproved as, given the gravity of the offense, disbarment effective, nunc pro tunc, July 3, 2006 is the appropriate sanction in light of the criteria previously enunciated in Florida Bar v. Pahules, 233 So. 2d 130, (Fla> 1970).

[08/26] Florida Bar v. Hall
In an attorney's disciplinary proceedings, arising from forgery and fraudulent recording of a lease agreement and agreement for sale between the attorney and property owners, a referee's recommendation of a ninety-day suspension is approved in part and disapproved in part where: 1) referee's finding of fact, recommendations of guilt, and award of costs are affirmed; 2) referee's reliance on Standard 7.0 is disapproved and instead Standard 5.0 should be applied; and 3) referee's recommendation of a ninety-day suspension is unsupported, as after considering the factual findings, the totality of misconduct, case law, and the Standards, disbarment is the appropriate sanction.

[08/25] Southern New England Tel. Co. v. Global Naps Inc.
In an action by a telephone company seeking payment for services rendered pursuant to its federal tariff, summary judgment for plaintiff, a civil contempt order entered against defendant, and a default judgment entered against defendants for failure to comply with discovery orders are affirmed where: 1) the Telecommunications Act did not divest the federal courts of subject matter jurisdiction over claims seeking the enforcement of a federally filed tariff whenever adjudication of the claims required the interpretation of an interconnection agreement between telecommunications carriers; and 2) the district court did not abuse its discretion in imposing the discovery sanctions it did.

[08/24] Jones v. Illinois Cent. R.R. Co.
In plaintiff's negligence action against defendant-railroad company arising from a collision between plaintiff's husband's vehicle and a train owned by defendant, district court's grant of plaintiff's motion for sanctions and denial of of her post-trial motions under Federal Rule of Civil Procedure 60 is affirmed where: 1) plaintiff cannot now demand a new trial as she had ample reason and opportunity to seek corrective action in the form of a mistrial before the jury returned its verdict in favor of defendant; 2) district court did not abuse its discretion in denying post-trial discovery and an evidentiary hearing based on plaintiff's insufficient showing that defense counsel ultimately withheld material information or bribed a witness; and 3) although the district court erred in invoking Rule 11, its entry of sanctions against defense counsel under Federal Rule of Civil Procedure 26, 28 U.S.C. section 1927 was not an abuse of its authority.

[08/18] Ario v. The Underwriting Members of Syndicate 53 at Lloyds for the 1998 Year of Account
In the Insurance Commissioner's motion (as liquidator on behalf of primary insurers) to confirm in part, and to vacate in part, the award of the liquidation proceedings, arising from a dispute between primary insurers and reinsurers involving their reinsurance treaties, district court's judgment is reversed in part, affirmed in part and remanded where: 1) removal was proper under 9 U.S.C. section 205; 2) the FAA provides the applicable vacatur standards and not those of the PUAA; 3) district court's confirmation of the arbitration award is affirmed; and 4) district court's denial of the motion to remand is affirmed, but its decision to grant Rule 11 sanctions for the motion to remand is reversed as the motion to remand was not patently lacking in merit.

[08/10] Estate of Manuel
In an executor's suit against a will contestant, seeking an award of costs of proof in the amount of all of her legal fees incurred after the date of the denial of the requests for admission, trial court's grant of the motion ordering defendant and her counsel to pay the executor the full amount of her legal fees is reversed and remanded as, the text of Code of Civ. Proc. section 2033.420(a), is unambiguous that costs of proof may be imposed only against a party, not the party's counsel.

[07/29] Tucker v. Pacific Bell Mobile Serv.
In plaintiffs' proposed class action, claiming that defendant cell phone providers violated the Unfair Competition Law by selling "bucket plans" without informing consumers how the length of each telephone call would be calculated, trial court's partial grant of defendants' motion for sanctions against plaintiffs and plaintiffs' counsel for certain conduct during a deposition is affirmed for the most part, but the portion of the court's order that awards monetary sanctions related to anticipated costs of a future deposition is reversed and remanded as the court did not have the authority to award sanctions for further deposing the plaintiff at issue because defendants had not "incurred" those expenses within the meaning of section 2023.030(a).

[07/22] Merritt v. Int'l Ass'n of Machinists & Aerospace Workers
In a labor suit brought by Northwest Airlines Quality Service Agents (QSAs) against a labor organization and others, claiming that between 2000 and 2006 defendants breached their duty of fair representation relating to the negotiation and administration of contracts on behalf of QSA employees and in handling their dues-objector status requests, district court's grant of defendants' motion for summary judgment and an order issuing Rule 11 sanctions against the plaintiffs' counsel for failing to adequately investigate the law and facts before filing their complaint are affirmed where: 1) the mere fact that the plaintiffs were a minority group within their union organization and were adversely affected by the actions of the union does not establish that the union acted with hostile or discriminatory intent; 2) plaintiffs have failed to submit any evidence that the defendant improperly handled the dues-objector status requests; and 3) Rule 11 sanctions were properly imposed.

[07/22] FM Indus., Inc. v. Citicorp Credit Serv., Inc.
In a suit for copyright infringement, related to a computer software designed to help lawyers to collect debts and lenders to monitor how its lawyers are doing, judgment of the district court is affirmed for the most part where: 1) the district judge properly dismissed the complaint for lack of prosecution; 2) judgment ordering plaintiff to pay defendants' legal fees under 28 U.S.C. section 1927 for vexatiously multiplying the proceedings was proper; but 3) district judge's award of fees against a copyright specialist who assisted defendant's counsel is reversed, as personal responsibility is essential to an award of sanctions under section 1927.

[07/08] Florida Bar v. Shankman
In a complaint filed by the Florida Bar against an attorney in connection with his representation of a seventeen year old client, the referee's recommendations as to guilt and discipline are approved in part and disapproved in part where: 1) referee's finding that the attorney's fee was excessive is disapproved; 2) referee's finding that the attorney failed both to provide competent representation to the client and to fully explain certain matters reasonably necessary for the client to make informed decisions is supported by competent, substantial evidence; 3) referee's finding of violation of conflict of interest and conduct prejudicial to the administration of justice is approved; 4) the referee erred as a matter of law when he required the Bar to establish dishonesty, misrepresentation, fraud, or deceit in order to prove intent; and 5) referee's recommendation of a 90-day suspension is rejected and instead a six-month suspension is found to be the appropriate sanction.

[07/02] Golden v. Helen Sigman & Assoc., Ltd.
In plaintiff's multi-count federal lawsuit against various defendants in connection with his divorce and child custody proceedings, district court's judgment abstaining with respect to plaintiff's copyright infringement claim, dismissal of the remaining claims, and sanctions for not paying attorneys' fees and expenses are affirmed where: 1) absolute immunity and the Rooker-Feldman doctrine bar plaintiff's section 1983 claim against the child's representative; and 2) district court's award of attorneys' fees accurately reflects the data contained in the billing records.

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