Sakon v. AndreoSakon v. Andreo
Leonard Orland, administrator of the estate of Sue L. Wise, appeals from so much of an order of the United States District Court for the District of Connecticut, Alfred V. Covello, Judge, as denied his motion for reconsideration of an earlier order awarding defendants attorneys’ fees and expenses, to be paid by the estate of Wise, the late attorney for plaintiffs, on account of Wise‘s failure to file an amended complaint within the time allowed by
I. BACKGROUND
In November 1994, plaintiffs, represented by Wise, commenced the present action alleging violations of federal antitrust laws and state laws. Defendants moved pursuant to
Wise opposed the motion and moved to vacate the order striking the complaint, arguing that her failure to file the amended complaint was the result of, inter alia, “excusable neglect” within the meaning of
In a Ruling on Defendants’ Motion for Involuntary Dismissal dated March 17, 1996 (“March 17 Ruling“), the district court denied defendants’ motions to dismiss the action, and it vacated its June 13 order striking the complaint because it found that the delay in the prosecution of plaintiffs’ claims would not seriously prejudicе defendants and that Wise‘s neglect was excusable. However, citing
Plaintiff John Alаn Sakon moved pro se for reconsideration of the March 17 Ruling on the ground that Rule 54(d) did not authorize an award of attorneys’ fees and expenses in these circumstances. In opposition, defendants argued that the award could be sustained under
Thereafter, Orland moved for reconsideration of the order imposing the sanction, as well as for clarification as to whether the award was imposed only on Wise‘s estate or on the plaintiffs as well, noting that “it would clearly be unjust to impose costs on the plaintiffs personally, since costs were imposed because of the conduct of counsel only.” Motion for Reconsideration or Clarification dated May 14, 1996, at 1. In a June 11, 1996 order endorsed on the motion, the district court clarified that the sanctions were imposed only on counsel, not on plaintiffs; it denied the motion for reconsideration. This appeal followed.
II. DISCUSSION
Sanctions may be authorized by any of a number of rules or statutory provisions, or may be permissible on the basis of the court‘s inherent power. Because the various sources of the court‘s authority are governed by differing standards, see, e.g., In re Ames Department Stores, Inc., 76 F.3d 66, 70 (2d Cir.1996), it is imperative that the court explain its sanctions order “with care, specificity, and attention to the sources of its power,” MacDraw, Inc. v. CIT Group Equipment Financing, Inc., 73 F.3d 1253, 1262 (2d Cir.1996). Thus, although the district court‘s award of sanctions is reviewed under an abuse-of-discretion standard, see, e.g., United States v. Merritt Meridian Construction Corp., 95 F.3d 153, 171 (2d Cir.1996); MacDraw, Inc. v. CIT Group Equipment Financing, Inc., 73 F.3d at 1257, such an award either without reference to any statute, rule, decision, or other authority, or with reference only to a source that is inapplicable will rarely be upheld, see, e.g., Satcorp International Group v. China National Silk Import & Export Corp., 101 F.3d 3, 5 (2d Cir.1996) (per curiam) (vacating on other grounds and noting that the court‘s failure to cite any authority for its imposition of sanctions “by itself might well be sufficient to warrant a remand“); MacDraw, Inc. v. CIT Group Equipment Financing, Inc., 73 F.3d at 1260 (“because the specific grounds proffered by the district court do not support the imposition оf sanctions, we find the sanctions improper“); see also In re Sutter, 543 F.2d 1030, 1032 n. 1 (2d Cir.1976) (affirming despite lack of clarity as to whether court assessed costs pursuant to local rule for delay of proceedings or fined counsel for contempt).
We have several difficulties with the imposition of sanctions in the present case. First, the only legal provision on which the district court relied was inapplicable. In addition, the award of sanctions was procedurally flawed and was undermined by the court‘s factual findings.
In awarding costs here, the district court cited
Second, even had there been such a judgment,
Nor, for two reasons, may we conclude here that the sanctions order can be upheld under any other рrovision. First, before the court imposes “any kind of sanctions,” it must afford the person to be sanctioned due process, including notice that sanctions may be imposed. In re Ames Department Stores, 76 F.3d at 70 (emphasis in original). “Like other sanctions, attorney‘s fees certainly should not be assessed lightly or without fair notice and an opportunity for a hearing on the record.” Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980). An attorney whom the court proposes to sanction “must receive specific notice of the conduct alleged to be sanctionable and the standard by which that conduct will be assessed, and an opportunity to be heard on that matter,” and “must be fоrewarned of the authority under which sanctions are being considered, and given a chance to defend himself against specific charges.” Ted Lapidus, S.A. v. Vann, 112 F.3d 91, 97 (2d Cir.1997); see also Satcorp International Group v. China National Silk Import & Export Corp., 101 F.3d at 6 (“[Sanctioned attorney] was given no indication of the fact that he might be fined or found in contempt. There was neither a hearing, nor oral argument, on the Rule 37 motion. His fine cannot stand.“).
We see no indication in this record that Wise received such notice. The two motions pending before the district court were defendants’ motion to dismiss the action and plaintiffs’ motion to set aside the order striking the original complaint. It does not appear that defеndants requested monetary sanctions as an alternative to dismissal. Thus, defendants’ motion itself gave Wise no notice of the possibility that she might be ordered to pay an award of attorneys’ fees and expenses. Further, there is no indication in the record that the court alerted the parties that it wаs considering such an alternative sua sponte. The district court‘s decision to adopt that alternative was rendered after Wise‘s death, as was the court‘s clarifying order that the sanctions were imposed against the attorney rather than the plaintiffs. Because Wise was not given notice and opportunity to be heard on the matter, the award against her estate cannot stand.
Second, even had proper notice been given, the sanction appears to be unsupportable, given the district court‘s explicit findings that Wise‘s failure did not unduly prejudice defendants and was the result of “excusable neglect.” We note that although defendants contended in the district court, in opposing Orland‘s motion for reconsideration, that the imposition of sanctions could be sustained under
We note also that defendants’ additional argument to the district court that the award of fees could be sustained under
On this appeal, defendants have instead cited as possible bases for sanctions
CONCLUSION
For the foregoing reasons, the award of sanctions against Wise, or her estate, cannot be sustained. In light of the finding already made by the district court that Wise‘s neglect was excusable, and in light of the fact that her death makes it impossible for the court to provide the requisite opportunity to be heard, the order imposing sanctions is reversed.
Each side shall bear its own costs on this appeal.