NPF Franchising, LLC v. SY Dawgs, LLC, 37 F.4th 369

NPF Franchising sued franchisee SY Dawgs (operating Scrap Yard Dawgs) alleging breach of franchise and non‑competition/non‑disclosure agreements; discovery produced protracted disputes over ~2.5 years.
NPF and its pro hac vice Buchalter counsel repeatedly failed to produce documents, missed depositions, misrepresented discovery compliance, and did not furnish a privilege log or seek protective orders.
The district court ordered certifications of compliance; NPF did not comply, moved to voluntarily dismiss, and SY Dawgs moved for attorneys’ fees and discovery sanctions.
A magistrate judge recommended awarding sanctions/fees under Fed. R. Civ. P. 37; the district court entered judgment making NPF, the Buchalter Law Firm, and four individual Buchalter attorneys jointly and severally liable for substantial fees.
On appeal the Sixth Circuit affirmed sanctions against the individual attorneys but held Rule 37 does not authorize sanctions against a non‑party law firm; it vacated the Rule 37 sanction as to the Buchalter firm and remanded to permit consideration of inherent‑authority sanctions against the firm.

Issue	SY Dawgs' Argument	Appellants' Argument	Held
1. Procedural due process for sanctions	Notice and opportunity were given via motions, orders, hearings	Insufficient notice that individual attorneys and law firm faced sanctions; inadequate opportunity to be heard	No due process violation: parties and counsel received notice and multiple opportunities to brief and be heard
2. Rule 37 liability for individual attorneys	Rule 37 allows fees against party and attorney who advised misconduct	Sanctions lacked individualized factual findings and were unjust	Affirmed as to individual attorneys: ample factual record of discovery abuses and prejudicial conduct; sanction amount reviewed for abuse of discretion and upheld
3. Rule 37 liability for law firm (Buchalter)	Firm is liable jointly and severally under Rule 37	Rule 37 does not authorize sanctions against a non‑party law firm	Reversed as to Buchalter under Rule 37: Rule 37 text limits liability to party or the party’s attorney, not a law firm; remanded to consider inherent‑authority sanctions
4. Reassignment on remand	Reassignment needed because of hostility/bias	District judges are not biased; rulings alone insufficient	Denied: no evidence of bias; reassignment would cause undue waste

Pavelic & LeFlore v. Marvel Entm't Group, 493 U.S. 120 (1989) (interpreting Rule 11 to limit sanctions to the individual signer; text constrains against sanctioning firms absent explicit authorization)
BDT Prods., Inc. v. Lexmark Int'l, Inc., 602 F.3d 742 (6th Cir. 2010) (28 U.S.C. § 1927 sanctions apply to individual attorneys, not law firms)
Hensley v. Eckerhart, 461 U.S. 424 (1983) (standards for reasonableness of attorney‑fee awards and deference to district court calculations)
Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240 (1975) (court’s inherent authority to sanction bad‑faith litigation conduct)
Walker v. Armco Steel Corp., 446 U.S. 740 (1980) (context for interpreting discovery‑related rules and sanctions)
Liteky v. United States, 510 U.S. 540 (1994) (standards for judicial bias and when recusal/reassignment is warranted)