6 F.4th 267
2d Cir.2021Background
- Liebowitz and the Liebowitz Law Firm (LLF) filed a copyright suit alleging a photograph was registered when it was not; LLF later registered the photograph after filing.
- The district court ordered mediation, pre-mediation discovery, attendance by principal counsel, and timely proof of service; Liebowitz and LLF failed to comply.
- Liebowitz repeatedly told the court (including under oath) that the mediator had permitted the plaintiff to appear telephonically and permitted an associate to attend in his stead; the mediator and opposing counsel contradicted this.
- At an evidentiary hearing the district court credited the mediator and opposing counsel, discredited Liebowitz, and found by clear and convincing evidence that Liebowitz lied and, separately, that he brought and maintained the suit in bad faith by failing to verify registration and stonewalling discovery.
- The district court imposed $83,517.49 in attorney’s fees, a $20,000 additional monetary sanction, and nonmonetary sanctions (e.g., serving the sanctions order on clients, filing it on dockets, and requiring deposit copies for copyright complaints for one year).
- The Second Circuit affirmed, holding the factual findings were not clearly erroneous and the monetary and nonmonetary sanctions were within the district court’s discretion.
Issues
| Issue | Plaintiff's Argument (Liebowitz) | Defendant's Argument (Bandshell / Court) | Held |
|---|---|---|---|
| Whether the district court clearly erred in finding Liebowitz lied about mediator permission and acted in bad faith | Liebowitz said he had oral permission and acted in good faith; his testimony should be credited | Mediator and opposing counsel contradicted him; record and demeanor supported district court findings | No clear error; credibility determinations and findings of bad faith affirmed |
| Whether attorney’s-fee sanctions based on time by pro bono counsel and including fees for litigating the sanctions motion were permissible | Fees based on pro bono work or sanctions-litigation are improper or excessive | §1927 and inherent power permit awarding reasonable value of opposing counsel’s work even if pro bono; fees for sanctions-litigation may be included | Affirmed: fees reasonably based on value of work, including sanctions-litigation fees, were permissible |
| Whether the $20,000 monetary sanction for filing a complaint with a false registration was punitive (thus requiring criminal procedural protections) | The $20,000 is punitive; criminal-process protections were required | The sanction was compensatory/deterrent and permissible under Rule 16(f); modest amount and aimed at deterrence | Court upheld the sanction under Rule 16(f); did not require criminal procedures |
| Whether nonmonetary sanctions (nationwide docketing of order; deposit-file requirement) were overbroad | Nationwide and deposit-file requirements unduly burdensome and beyond district court authority | Misconduct was repeated and systemic; nationwide and disclosure requirements tailored to deter and protect courts/parties | Affirmed: nonmonetary sanctions were not an abuse of discretion given Liebowitz’s pattern of misconduct |
Key Cases Cited
- Lau v. Meddaugh, 229 F.3d 121 (2d Cir. 2000) (district courts must protect public and judicial resources from serial abusers)
- ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 579 F.3d 143 (2d Cir. 2009) (sanctions review requires more exacting appellate scrutiny)
- Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d 323 (2d Cir. 1999) (defining "without color" and bad-faith standards for sanctions)
- Wolters Kluwer Fin. Servs., Inc. v. Scivantage, 564 F.3d 110 (2d Cir. 2009) (discussing need for enhanced procedures and standards for sanctions)
- Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017) (fees awarded under inherent power must be compensatory and tied to the misconduct)
- Mackler Prods., Inc. v. Cohen, 146 F.3d 126 (2d Cir. 1998) (Mackler I) (punitive monetary sanctions implicate criminal-process protections)
- Mackler Prods., Inc. v. Cohen, 225 F.3d 136 (2d Cir. 2000) (Mackler II) (reiterating limits on punitive sanctions absent criminal safeguards)
- Enmon v. Prospect Capital Corp., 675 F.3d 138 (2d Cir. 2012) (upholding awards of fees for sanctions litigation under §1927/inherent power)