Martin v. Brown

title, imprisoned under this or not more years,

than five or both. (with emphasis and brack- U.S.C. by Coyle, supplied Appellant’s

eted numbers 19):

Brief at

Whoever, any required by document published, to be or [ERISA]

title I of the any

kept part employ- of the records of as plan employee pen- or

ee welfare benefit plan, or certified to the admin-

sion benefit plan, any any such makes

istrator of false fact, representation

statement or know- false, conceals,

ing knowingly it to or up, any

covers or fails to disclose fact [1] required by

the disclosure of which is such

title or ^[2] necessary verify, explain, clarify accuracy or check and com-

pleteness any report required by such title published

to be or information re- certified,

quired such title to be shall be title, imprisoned

fined under this years,

more than five or both.

Leon M. MARTIN BROWN, individual; Kyle

Harold Ed Pennsylvania

Energy, Corpora

tion; Kyle Energy Kyle Energy Cor

poration, Pennsylvania Corporation.

Rebecca E. Bender*

(* 12(a), Pursuant Rule

F.R.A.P.), Appellant.

No. 94-3248. Appeals,

United States Court of

Third Circuit.

Argued Oct. 1994. Aug.

Decided (argued),

Rebecca E. Bender Rebecca E. Associates, P.A., MN, Minneapolis, Bender & appellant. for STAPLETON, PRESENT: ROSENN, HUTCHINSON and Circuit Judges.

OPINION OF THE COURT HUTCHINSON, Judge. Circuit

I. Introduction Appellant, (“Bender”), Rebecca E. Bender defendants, an represented who Brown, Kyle Energy, .Harold E. Inc. and Kyle Energy Kyle Energy Corporation,1 action, appeals in this orders of the United States District Court for the Western Dis- Pennsylvania trict sanctioning her for re- fusing discovery with a order and refiling for two motions the court reserved denying for trial preju- after them without discovery dice.2 required pay Bender and Brown to plus each $500 (“Martin”) plaintiff costs Leon M. Martin discovery incurred connection with the request. liability Bender’s and Brown’s for joint these costs was and several. The sanc- refiling tion for rеquired the two motions individually pay Bender an additional memorandum, accompanying $500. the district court imposing stated that it was these sanctions under Rule Rule (West 1994) § 1927 U.S.C.A. and the court’s power. inherent order, however, represented April 1. Bender all three defendants. For tions. The did not however, simplicity, the sake of we will refer include the docket numbers of ten in limine solely to Brown. Brown, F.Supp. motions. See Martin v. (W.D.Pa.1994). n. 1 appeals April 2. The orders Bender are dated April They impose the same sanc- inspection property of the real permit for bank- shortly filed thereafter Brown Florida District of any Middle ruptcy in the it was irrelevant to because she believed Martin’s case Bankruptcy Court. liability might Brown have to Martin stay automatic stayed under the Brown was claim damages might owe after the RICO he 362,11 § U.S.C.A. 362 Bankruptcy Code had been dismissed. (West district court en- Supp.1995), and the January counsel sent Martin’s On dismissing Martin’s case an order tered informing her to Bender of Martin’s telex Bender prejudice. against Brown without inspecting bankruptcy, continuing insistence on these in the represent Brown does not pending. day is still responded which the next properties. inspection and by denying request case, of this the circumstances Under inspections of jurisdiction reiterating her contention that over have hold that the despite the fact appeal any of property Bender’s had no relevance to the real underlying action dismissed district court Then, surviving in Febru- Martin’s claims. Appendix Appellant’s prejudice.” “without 1993, a to Martin’s ary Bender sent letter that the man- also hold (“App.”) at 664. We justify attorney asking clarify him to or imposed judge the district court ner in which properties. inspection of these deprived Bender of the es- these sanctions 1993, in limine In Bender filed ten March viz, process, fair due procedural sentials They to the discov- were unrelated motions. to heard. Be- opportunity notice and a motion to dis- ery dispute. She also filed appeal on disposition of this of our cause unnecessary for us grounds, security arguing it is procedural the federal claim miss im- of the sanctions propriety to decide gas Martin claimed the interests wells vacate will therefore posed on Bender. We fraudulently for sale were not Brown offered imposing sanctions court’s orders the district by federal law. Alter- securities as defined it the case to for and remand on Bender natively, certify to this issue Bender moved opin- consistent with proceedings further appeal believing an interlocu- for immediate ion. tory expeditiously could dis- determination only remaining federal pose of Martin’s and Facts II. the Case Statement of 1292(b) (West 28 U.S.C.A. claim. See retained Bend- In November Brown 1993). time Brown had This was the third ongoing case in in an er as defense counsel lack-of-a-security question.4 One raised the federal claimed Brown violated which Martin motions Bender had filed of the ten in limine laws, and the Racketeer Influenced securities attempt relitigate the yet a fourth to was (“RICO”),3 Act Corrupt Organizations ten in security In another of Bеnder’s issue. fraud and common law engaged state motions, raised for the sec- she also limine selling offering to of contract breach proper- as a de- gas well of limitations interests numerous ond time the statute sell ties. fense.5 district court On December 31, 1993, dispute over with the On March disposing of several of Mar- an order

issued unresolved, inspection of Brown’s real estate included discovery The order tin’s motions. a Rule 37 motion to sanction Martin filed permission to provision granting Martin a comply with the refusal to Brown for her property Brown owned. inspect certain real April In 1992 order. December stated, shall defendants part “[t]he This response Martin thereaf- filed a plaintiff inspec- arrangements make with April reply. a In an order entered ter filed property] on or before Feb- tion the real [of keep 30, 1993, court decided the district 1,1993.” App. at 106. The real estate ruary under for sanctions Rule 37 motion Martin’s personal residence included Brown’s covered advisement, “subject рarties’ and at- to the Bender refused he owned. and laundromat decided in October issue was also first count on 5. The dismissed the RICO 3. The district court Bender’s association before October with the case. decided in October 1990 issue was first 4. The again both times in December and then prejudice. tried, discovery faith,

torneys’ compliance good directives had to resolve their supporting in the memorandum its set forth” dispute. App. order. at 593. The memorandum criti- 16, 1994, On March Bender sent a letter parties for their conduct in

cized both discov- directly judge presiding to the over the case. ery, warned them that sanctions would be it, ten of the in limine noncompliance for future "with she enclosed all spirit discovery letter or rules and presented motions she had in March them cautioned about use “unneces- including for the fifth time the securities sary verbiage,” “superfluous language” and and, also, issue the statute of limitations de- filing of unwarranted motions and exces- court, April fense that the district in its sively long papers. Apр. at 587. order, explicitly directed her not April Also on the district court resubmit until trial. Martin also refiled sev- denied Bender’s motion to dismiss on the motions, including eral of his the Rule 37 security certify issue refused for motion for sanctions for Brown’s failure to interlocutory appeal. Concurrently, it also inspection afford of his real estate. rejected Bender’s in limine motion concern- issue, ing security reasoning that it was 8,1994, April On the district court entered part disguised relitigate “in motion to again another It parties order. directed the issue,” 588, App. ‘securities’ at and once more to meet in an to effort resolve Martin’s out- denied the statute of limitations as issue standing discovery requests and Brown’s ten repetitive, again prejudice but without to in limine motions. The court also noted that right to it at trial. Brown’s raise The court Bender had failed to file with the clerk the warned, however: “Counsel is instructed not 16, motions forwarded with her March 1994 any attempts to relitigate make further to 15, letter. The April order scheduled an prior App. this issue to trial on the merits.” hearing 1994 for unresolved matters. In its at 589. order, April the district court echoed order, April After the counsel on warning parties its to the and their counsel each side seemed to have made an effort to that sanctions could be for conduct outstanding discovery resolve the issues. that “is in violation of the Rules of Civil July original Sometime around Martin’s Procedure the Rules of Professional and/or counsel, Rodgers (“Rodgers”), Thomas E. App. Conduct.” at 647. hospitalized. was Thereafter Martin was represented by lawyer named David H. appear Bender personally did not at the (“Cullis”). Cullis Bender contends that Cul- April hearing. yet She had to refile her unfamiliarity lis’s with her discussions with in limine motions with the clerk of the dis- Rodgers inspection problem.6 revived the court, trict but Brown’s local counsel was In January the district court dis- present argue and tried to their merits. The prejudice missed remaining Bender’s questioned district court him pointedly about in limine motions and Martin’s motion for persistent refiling Bender’s of motions de- resurfaсing sanctions. With the of the dis- prejudice trial, pending nied without as well pute concerning inspection of Brown’s real permit as her refusal inspection to of all the estate, the district court once more directed real estate in included the court’s December parties negotiate outstanding to matters Bender, 1992 order. It ordered on or motions, and to resubmit formal on or before 20, 1994, April before to file with the clerk 1, 1994, April judicial any for resolution of previously the motions that she mailed to the pre-trial dispute. matters then in The dis- judge with her March append trict court instructed 1994 letter counsel to to before any such they motions certification that April would consider them. On Cullis, argues problems 6. partners: Bender that a number of and P.C.’s letterhead lists two entry this case resulted from the The of new counsel. Rodgers Rodgers Patricia A. and Cullis. and record, however, suggests may that Cullis Cullis, address, Rodgers & P.C. have the same previous relationship have had some to the case phone and facsimile number listed on their re- prior or to counsel. The record shows the fol- Furthermore, spective letterheads. Cullis re- lowing: Rodgers’s letterhead indicates that he sponded correspondence Rodgers to sent to be- practitioner. practiced was a sole Cullis in a fore his illness forced him out of the case. Cullis, Rodgers Rodgers firm named P.C. Finality A. motions.7 Strict all ten in limine again filed Bender its court entered day the district On jurisdiction generally Our imposing sanc- order April initial to the review of final decisions of the limited and, April and Brown tions on Bender courts. United States v. district Bertoli adding by April 20 order revised the Cir.1993); F.2d see also 28 motions. of the in limine numbers docket § 1291.9 1291 states: “The U.S.C.A. Section portions those appeals from jurisdiction appeals ... shall have courts sanctioning her for “willful orders both appeals from all final decisions of the disregard of the court’s orders flagrant” courts of the United States ... ex district advocating mo “resurrecting and defendants’ may cept where a direct review be had security5 regarding ‘lack of a in limine tions “A Supreme Court.” 28 U.S.C.A. defense’”; of limitations and the ‘statute disposes final decision is one which 654-55, permit to App. and “for refusal subject, gives whole all the relief was property in inspection of real meaningful ” contemplated, provides com with reasonable orders.... compliance court’s [the] pleteness, giving judgment effect to the raising persistence Id. at 652-53. For her nothing to be done in the cause and leaves decided, had questions the district court superintend, ministerially, save to the execu trial, the court indicated it wished to defer Paiewonsky As tion of the decree.” Isidor personally. For pay ordered Bender $500 sociates, Sharp Properties, Inc. v. inspecting from certain prohibiting Martin (3d Cir.1993) (internal F.2d brack Bender and properties, the court ordered and, ets, jointly emphasis pay quotation, and citations omit Brown each to $500 ted). had incurred severally, costs Martin inspection.

attempting arrange an dismissing ‍​‌​​‌‌‌​‌​​​‌‌‌‌​​‌‌‌‌‌‌​‌‌​​​‌​‌​‌‌​‌​‌​‌​‌‌​‌​‍the The district court’s order litigation underlying Bender’s sanctions III. Jurisdiction states: subject juris- matter The district court had dispute underlying between diction over IT ORDERED the action is dismissed IS § 78a Brown under 15 U.S.C.A. Martin and prejudice mark without and the Clerk shall (West Supp.1995) and 28 U.S.C.A. seq. et com- the case closed. The Court retains (West 1993). con- §§ and 1343 1341 jurisdiction vaeate this Order and plete to April court’s tends that the district orders upon that reopen the action cause shown to 25, over 20 and 1994 are “final decisions” stay litiga- or further has been lifted jurisdiction appellate under 28

which we have necessary. tion is 1993). (West Although § no 1291 U.S.C.A. Reading, City v. App. at 664. In Borelli contention,8 appellee present to refute her (3d Cir.1976) curiam), 950, (per F.2d obligation to consider we have a threshold “[generally, that an order which See, we held e.g., v. appellate jurisdiction. Hoots our (3d prejudice is Pa., 972, complaint dismisses F.2d Commonwealth of Cir.1981). appealable because the defi- neither final nor Thus, 718, (3d Cir.1988). play "[w]e must only claims that she filed these ten 7. Bender proper only role of our accustomed and оrdered not because the district court limine motions (albeit Thus, temporarily) adjudicator, any but also that sanc- neutral do so. she contends her to adversary appellant to the in order imposed upon We not the role of her are unfair. need tions appeal." at 726. Id. this test the assertions made because of our resolution of decide this issue situations, note, however, appointed we have amici grounds. In limited procedural We case on system. adversarial achieve the benefits of the Bender to that when the district court directed Trucking, Riggins 757 F.2d See Eash v. motions she file with the clerk the ten in limine (3d Cir.1985). We believe that action is 559 n. 1 1994 letter to the had enclosed in her March unnecessary in this case. judge, only with its ordered Bender to procedure. rules of appeals 9.Although authorizes section 1292 orders, ap- specified none are present certain non-final Appeals often (West 1993 & plicable 28 U.S.C.A. 1292 problem appellee. here. procedural there is no bеcause Hedco, Inc., Machines, Supp.1994). v. 838 F.2d See Snow Inc. plaintiff rationale eieney may stay pro- be corrected with behind the automatic affecting See, Lai, cause of action.” In that e.g., out Raymark vision. Industries v. cases, case, recognized subsequent (3d and in we Cir.1992) (automatic 973 F.2d exist, exceptions e.g., party when the stay provides breathing spell “a for the debt- his intention to “cannot amend or declares efforts”) (inter- stops or which all collection complaint.” Id. at 952. The stand on his omitted). Furthermore, quote nal in Bhatla dispositive inquiry is whether the district (3d Capital Corp., v. 990 F.2d U.S. See, finally court’s order resolved the case. Cir.1993), we held that a dismissal without e.g., Presbytery Presbyte Orthodox of N.J. of prejudice bankrupt- based on the defendants’ Florio, rian Church v. 40 F.3d 1461 & cy filing parties was not final because the Branch, Cir.1994); n. 6 Newark were “free to seek relief from the automatic Harrison, N.J., N.A.A.C.P. v. stay pursue against their claims those (3d Cir.1990). defendants,” and because the case had “the Florida, Inc., In Trent v. Dial Medical pоtential piecemeal appeals.” to lead to Al- (3d Cir.1994), 33 F.3d 217 we addressed the dormant, dead, though this case is if not jurisdiction effect on our a dis- Brown, regard to Martin’s claims our stay pursuant trict court’s and dismissal analysis finality under section 1291’s strict Colorado River abstention.10 We stated that requires case, rule us to look at the entire prejudice dismissals without have “[e]ven including in allegedly Bender’s conduct appealable they been held to be final and if complying with the district court’s orders. end the suit so far as the District Court was Thus, say we are unable to the district concerned, although may ... such dismissals prejudice finally court’s dismissal without has party not constitute final orders until the and, therefore, determined the entire case seeking relief renounces intention to re- jurisdiction conclude our must be based (internal litigation.” quota- instate Id. at 220 on the collateral order doctrine. omitted). tion, citation and brackets In reli- Hosp. ance on Moses H. Cone Memorial v. B. The Collateral Order Doctrine Merсury Corp., Constr. 460 U.S. 103 S.Ct. (1983), doctrine, 74 L.Ed.2d 765 we held that the The collateral order as first inquiry purpose was whether the and effect annunciated in Cohen Indus. Beneficial stay jurisdic- order was to surrender Corp., Loan 69 S.Ct. tion of federal suit to a the state court. Id. (1949), L.Ed. 1528 relaxes the strict standard Cone, (quoting at 221 Moses H. 460 U.S. at finality by permitting of ap us to entertain 11). 10 n. at n. 103 S.Ct. 933 peals from that certain orders would not appealable otherwise final decisions. See argues similarly that the dis — Jones, —, —, Johnson v. U.S. 115 effectively trict court’s dismissal ended this (1995) S.Ct. 132 L.Ed.2d 238 client, Brown, bankruptcy case. Her is in (“[I]n [Cohen], this that Court held certain longer represents and she no him. While so-called collateral orders amount to ‘final may Martin assert his claims Brown decisions,’ immediately appealable under ... court, bankruptcy precluded in the he is from though 28 U.S.C. even the district recommencing them in the district court may court have entered those orders before bankruptcy pending. while the is Martin will before) ended.”); (perhaps long the ease has subsequently also be foreclosed from assert (“The Bertoli, flexibility 994 F.2d at 1010 ing bankruptcy his claims unless the court by given permits appeal Cohen ... of some discharge. Accepting denies Brown a Bend district court that not however, orders do terminate argument, require er’s would us to case, part the entire or even a discrete bankruptcy hold that the invocation of the it.”). recog The collateral order doctrine stay always code’s automatic would result by that disposition triggering appellate a final nizes the benefits achieved the final re view. That outweighed result would be inconsistent with decision rule can sometimes be (1976). 10. See Colorado River Water Conservation Dist. v. L.Ed.2d 483 States, United 47 96 S.Ct.

1259 — Distributors, Johnson, Maico-Fahrzeugfabrik, at Inc. v. by U.S. other concerns. (3d Cir.1981), (“sometimes although F.2d 944 we ulti- —, 658 2154 interloc 115 S.Ct. mately found the Rule 37 sanctions there important coun utory review has appellate immediately appealable, were benefits”). involved case the tervailing The law on conclusively we noted that sanction order the is and its order doctrine extensive collateral question disputed determined the of sanc- permits appellate re requirements clear. It and (1) tions thus satisfied the first element. finally a that: resolve view of orders Maico, 947; Eastern 658 F.2d at see (2) also disputed important raise an question; Kemm, Note, Interlocutory R. Ap- Lawrence case; the merits of issue from the distinct peals Attorney Sanctions: In Search a (3) effectively ap and unreviewable on are Standard, (1991) 923 Ind.L.Rev. See, judgment. Digital peal e.g., a final from (“[Tjhere — has little discussion or been dis- Direct, Desktop Equipment Corp. v. agreement represents that a sanction order a U.S. —, —, 1995- S.Ct. ”) (collecting ‘conclusive determination.’ (1994); Proper 128 L.Ed.2d Praxis cases). Bank, ties, S.L.A., Sav. Inc. v. Colonial (3d Cir.1991). Proper F.2d Praxis concluding on We have no trouble the ties, requirements these three we described record before that the district court’s or us (2) (1) prong; as: the “conclusiveness” sanctioning its final ders Bender were word (3) “importance/separateness” prоng; liability professional on her misconduct. “unreviewability” prong. Proper Praxis There is no that court indication intended ties, Failure F.2d at 54-58. to meet to revisit issue and two of the sanctions finding appellate prong precludes one by April paid were ordered to be Bertoli, jurisdiction. 994 F.2d at 1012. Although liability Bender’s has been conclu determined, sively question there remains Prong 1. The “Conclusiveness” regard to of Bender’s liabili with the amount ty expenses on the sanction for the requirement that district “The by her caused failure to ‘conclusively order determine’ the court’s discovery court’s order because sanction question likely means that review — yet quantified. has not The court been order Johnson, harm.” needed to avoid that stated “defendant Brown at-, U.S. 115 S.Ct. at 2155. An order “is Bender, jointly severally, are DIRECT when no further consideration is conclusive ED PAY TO to the Clerk Court Bertoli, by contemplated the district court.” expenses reasonable travel and standard (citations omitted). F.2d at hourly by plaintiffs for fees incurred prong excludes rеview conclusiveness from “ Welsch, MAI, services Mr. John tentative, ‘any which is informal or decision inspect he was defendants’ extent unable County incomplete.’” Swint v. Chambers — filing properties, days within Com’n, U.S. —, —, 115 S.Ct. plaintiffs itemizing of a verified statement (1995) 1208, Cohen, (quoting L.Ed.2d 60 131 expenses App. at 653. said and fees.” Mar 1225, citing at 69 S.Ct. at U.S. filed with tin never a verified statement Coopers Lybrand Livesay, & v. Thus, of this district court. ‍​‌​​‌‌‌​‌​​​‌‌‌‌​​‌‌‌‌‌‌​‌‌​​​‌​‌​‌‌​‌​‌​‌​‌‌​‌​‍the amount sanc 2454, 2458, 57 L.Ed.2d 351 98 S.Ct. unquantified. tion remains (1978)). Eavenson, Auchmuty Generally, In is not final until it & Greenwald v. an order (3d Holtzman, Cir.1985), Napier is to amount. 775 F.2d reduced a determinate applicability Thirty of v. or Federal we the collater- More addressed Unidentified Officers, 855 F.2d appeals attorney Agents, Employees al to sanc- or order doctrine (3d Cir.1988); Apex also tions. that there “no see We concluded could be Sales, Kleinfeld, 21 dispute” prong the conclusiveness was Fountain Inc. v. F.3d that (3d Cir.1994); States v. sanctions chal- United “[t]he satisfied because order (3d Cir.1987); lenged finally conclusively Sleight, 808 F.2d ... deter- Eavenson, Unit mines 775 Becton Dickinson & Co. v. District the sanctions issue.” Auto., Imрlement Similarly, Aerospace Agric. F.2d in Maico ed at 538. Eastern AFL-CIO, Am., only thing 799 F.2d 61- 249-255. missing Workers Because the is (3d Cir.1986). quantification appraiser covering The need for an invoice from the this time, duplicative expen quantification arises from “concerns limited lost we believe is judicial essentially diture of time and resources.” a ministerial “mathematical” Sleight, at 1015. It is not 808 F.2d calculation that can be based on Welsch’s bill See, exceptions, e.g., Thus, however. In re Seid distinguish- for this time. this case is Cir.1994). (3d man, excep 37 F.3d 911 One able from those in which we have refused to amount, in applies tion to orders which the appeals unquantified entertain from orders determined, insignificant in when is the over holding attorneys liable for reasonable attor- dispute unlikely all context of the and itself ney’s particular fees over the course a Thus, subject appeal. to a be the later we dispute. Corp., See In re Jeannette 832 F.2d recently Apex: stated in (3d Cir.1987). 43, 45 We conclude that the conclusively district court’s orders determine rеcognize

[W]e have continued to that question. the sanctions order final if it does not is even reduce the damages to a certain if sum “the order sufficiently disposes of the factual and le- “Importance/Separateness” Prong

gal issues and unresolved issues [if] Turning separate to whether the matter is sufficiently are ‘ministerial’ that there action, from the merits of the it has been said appeal.” would be no likelihood of further prong that this “means that review now is Apex, (quoting Polychrome 27 F.3d at 936 likely less to force the court to 1522, 1544 Corp. Krigger, Int’l 5 F.3d n. 52 (or approximately very consider the same (3d Cir.1993)) (second original). alteration in similar) once, matter than more and also case, discovery In this the sole ex likely delay seems less to trial proceed court pense Martin incurred was the cost of retain (for, ings if truly collateral, the matter is ing single appraiser inspect real estate proceedings might those continue while the property. The determination of this — Johnson, appeal рending).” U.S. at likely straightforward amount is to be and —, requirement S.Ct. 2155. This mechanical, unlikely and it is also to result separateness principle from “derives Furthermore, appeal. a later Bender insists piecemeal there should not be steps review of money, profes her concern is not the but her judgment they toward final in which will Corino, sional reputation. Simmerman v. merge.” Properties, Praxis 947 F.2d at 56- Cir.1994), recognized (internal omitted). quotation marks At impact goes sanctions, torney especially discovery sanc beyond the dollar amount and acts “as a tions, are, however, often too intertwined symbolic quality statement about and with underlying litigation the merits of the integrity attorney’s of an work —a statement permit immediate review under the collateral may tangible which have upon effect Eavenson, order doctrine. See 775 F.2d at attorney’s career.” In the overall context of 6; Maico, 538 n. Eastern 658 F.2d at 947. case, the dollar amounts of the sanctions potential Thus, Maico, liability and the Eastern we stated thаt unquantified insignificant sanction are “sanctions discovery for violation of orders comparison stigmatic usually their effect. Fur are interlocutory considered and not thermore, nothing immediately Maico, there is appealable.” the record to Eastern (citations explain delay omitted). filing Martin’s in the statement 658 F.2d at 947 In ap- appears highly unlikely and it now plying separateness prong, concluded, that it will the we Though ever be filed. question the record leaves order to “[i]n the whether address desired, much requested by plaintiffs to be the district court’s order the documents were recovery relevant, truly limited Martin to of whatever we would have to consider the from, paid by charges amount is due against Martin to the defendants and reach day Welsch for the time Welseh lost on a on some conclusion as to importance the relative up inspect Thus, which he showed Brown’s real of the discovered material.” Id. estate App. discovery activity and was not able to do so. at See held that “the at issue here underlying completely prong, citing Coopers collateral to the it to the second is not & Lybrand, 2457; action.” Id. 437 U.S. at at S.Ct. Chasser, Lauro Lines S.R.L. Maico, circumstances of Eastern how- 109 S.Ct. 104 L.Ed.2d 548 ever, significantly from those before us differ (1989)). importance Whether is reviewed as Maico, in Bender’s case. In Eastern the part prong, of the second or the third howev party challenging agreed the sanction issue er, “simply cannot be answered without a the sanction order could not “be ade- judgment about the value of the interests quately without understood examination of through rigorous that would be lost applica case,” discovery history in the entire the judgment requirement.” tion of a final Id. inevitably ques- in which “would enmesh us above, imposition attorney As noted the tions of which relevance could be decided may impose significant burdens on underlying dispute.” to the reference reputation opportunities the and career contrast, Id. at 951. In in Bender’s ease we attorney. the sаnctioned We believe such alleged can district review the court’s failure harm, potential compliance absent with the procedural with the mandates of protections constitutional process, of due cou process. due This review will not “enmesh” pled opportunity with the lack of later underlying litigation. us in the merits of the review, appellate effective is sufficient to Eavenson, Here, as in there is little importance meet requirement the of the col danger delay. that our review will cause Digital Equip lateral order doctrine. See bankruptcy, in Brown is Martin’s case —ment, —, U.S. at at S.Ct. against him has been dismissed and Bender (“Where statutory rights and constitutional represent bankruptcy. does not Brown the concerned, are hardly irretrievable loss can knowledge, underlying our To the best of the trivial....”) (internal quotations be litigation bankruptcy continues court. . omitted) brackets Thus, Bender’s sanction is “collateral to and separate only from the merits not because “Unreviewability” Prоng 3. The by principal case cannot be affected unreviewability prong theOn appeal, outcome of the sanction but also be requirements, Cohen we consider whether appeal cause the sanction cannot affected “effectively the district court’s orders will be principal outcome of the Law case.” if do not unreviewable” we review them now. Kemm, supra, R. rence 25 Ind.L.Rev. at 924. Bertoli, 994 F.2d at 1012. To meet Thus, we conclude that the sanctions requirement, “an order must be such that separate Bender are from the under effect, will, postponed review be review lying meaning merits within the of Cohen.11 (internal quotation denied.” Id. marks however, prong, This sub- contains two omitted). ellipses purposes For of the collat parts. appeal The claim on must ‍​‌​​‌‌‌​‌​​​‌‌‌‌​​‌‌‌‌‌‌​‌‌​​​‌​‌​‌‌​‌​‌​‌​‌‌​‌​‍be one that doctrine, unreviewability eral order “means important is “too to be denied review.” Co- immediately may that failure to well review hen, 337 U.S. at at 1226. S.Ct. Johnson, significant harm.” cause -U.S. Therefore, we must also consider whether -, (citing at 2155 15A S.Ct. C. poses important. the issue Bender is This Miller, Wright, Cooper, E. A. & Federal question merged is sometimes in discussion pp. Practice and Procedure prong third the Cohen doctrine (1992)). adequacy subsequent because the review Maico, importance question. affects we concluded See Eastern - -, jurisdiction Digital Equipment, U.S. at that we lacked under doctrine, (applying importance part, at 2001 S.Ct. re- the collateral because quirement part prong, satisfy as of the third but was unable to the third re noting properly applied quirement. that other held that the orders would cases have We counsel, finding separateness dependent imposed upon 11. Our der whether counsel has Eavenson, presently Eavenson, the facts before us. As in withdrawn from the case or not." adopt "[w]e do not now a rule that would allow (emphasis original). 775 F.2d at 539 appellate any immediate or- review of sanction 1262 Assoc., Pennsylvania Inc. v. appeal from final See Fabulous fully on

“be reviewable Commission, Utility Public 896 F.2d to the order will still judgment: parties the (3d Cir.1990) (constitutional court, issues sub and retain the same 783 the be before Machines, review); ject they plenary to Snow Inc. challenging the order as have interest (3d Hedco, Inc., Maico, 838 F.2d 725 Cir. v. 658 F.2d. at 947. today.” Eastern Foods, 1988); Baye Inc. v. see also Gillette longer in the no involved under- As Bender is GmbH, rnwald-Fruchteverwertung, case, analogous. lying Eastern Maico is Cir.1992) (3d (applying plenary F.2d more regard, In Bender is in a situation legal to issues that arise in a sanc review in Eaven- to sanctioned similar context). There, tions we stated: son. longer connect- appellant is no [ ] Because Discussion V. case, he has an ed with the merits of challenging the sanc- interest in immediate A. by parties to is not shared tion which Bender contends that the district party. to a or counsel the suit opportunity court denied her notice and an to Bender, Eavenson, like 775 F.2d at 538-39. when it her for failure to be heard sanctioned again and unlike attorney in Eavenson discovery. The Due Process Maico, longer attorney in is no Eastern requires of the Fifth Amendment Clause Therefore, participant proceedings. in the provide oppor notice federal court to adequate unlikely have an Bender is tunity to be heard sanctions are im before review if we do not opportunity effective posed litigant attorney.12 Eash v. on a appeal of the sanctions consider her Riggins Trucking, her now. on (3d Cir.1985) (in Hunt, banc); Landon v. Cir.1991) curiam). (3d (per F.2d sum, orders we hold that the sanction “conclusively determine the precise encompassing all rule No disputed important “resolve an is question,” captures requirements procedural due separate completely sue from the merits of process. process that is due varies with action,” “effectively and are unreviewable particular disputes, the nature of and evalua judgment.” final appeal from a See Gulf requirements fairly tion of its should balance Aerospace Corp. Mayacamas v. stream competing of the sanctioned intеrests 271, 276, 108 1138, 1136, Corp., S.Ct. judicial system’s person against the need for (1988) (citations omitted). 99 L.Ed.2d 296 Corino, judicial efficient administration. See Thus, jurisdiction under we have (“The procedur form precise 27 F.3d at 64 doctrine’s flexible con the collateral order will, course, protection required vary al cept finality. Accordingly, now we will case.”); Eash, with the circumstances of the appeal. turn of Bender’s to the merits (“The F.2d at 570 form which those procedural protections must take is deter Review IV. Standard of by an of all the circum mined evaluation competing imposing review orders sanc stances and an accommodation We interests.”). See, Nevertheless, the fundamental tions for abuse of discretion. Chambers NASCO, Inc., 32, 55, requirements process and an of due U.S. S.Ct. —notice (1991); opportunity respond be afforded 115 L.Ed.2d 27 Arab Af —must Eash, 168, 171 imposed. Epstein, 10 before sanction is See rican Int’l Bank v. F.3d Cir.1993). (citation omitted); (3d Jones v. procedure the dis 757 F.2d at 570 When the Corp., F.2d imposing Pittsburgh raises National trict court uses Cir.1990) Eash, (citing 757 F.2d at process right issues of fair notice and the due 570-71). sanctions, heard, however, partieu- plenary. regard With to be our review is We the district court must first address 12. Because we conclude that the district court believe remand, procedural process, due failed to afford Bender after Bender is afford- these matters on unnecessary inappropriate we believe it is safeguards required by procedural ed the for us to decide on this record her contention that Clause. Due Process engaged in no she sanctionable misconduct. grounds prior notice of the for the sanction her own larized commitment is immaterial. Although generally required. only requested Martin’s motion under consideration is dis- evidence, See, Carino, 64; Jones, preclusion missal or Bender had e.g., 27 F.3d at adequate fair notice and an opportunity to F.2d at 1357.13 respond request to Martin’s for Rule 37 sanc- argument process Bender’s due has two Corino, imposition. tions before their See argues prongs. She that the district court F.3d at 64. prior give fаiled to her sufficient notice of the however, argument, Bender’s possibility of sanctions and also failed to re- imposing that the district court’s order the specifically late her conduct to the various broad, overly sanctions was is more trou justify theories it used to the sanctions. She bling. justify Rule 37 cannot the sanc $500 required contends that the court her to de- imposed tion the district court on Bender for every weapon under fend her actions the discovery.15 her refusal to allow Absent con judicial imposing arsenal has available for tempt, only monetary sanctions Rule 37 attorney. expenses” authorizes are “reasonable result argument Bender’s that the district ing comply discovery. from the failure to wholly provide court failed to her is notice (1995); Fed.R.Civ.P. 37 Newton v. A.C. cf. memorandum, somewhat overstated. In its S., Inc., (3d & 918 F.2d Cir. court it the district stated the sanctions 1990).16 explain The district court failed to imposed on Bender for failure to afford dis Although the basis for the sanction amount. covery imposed 37.14 were under Rule Mar imposition discovery of the related costs requesting tin’s motion Rule for 37 sanctions 37, imposition are allowable under Rule noneompliance discovery with the court’s or justi the unauthorized fine leaves the court’s obviously der referred to Rule 37. It was ambiguous fication for these sanctions and response. served on Bender and she filed a requires thus us to look elsewhere provided The district court also her sufficient opinion grounds court’s to determine the opportunity hearing to be heard. It held a discovery both these sanctions and the refil deciding ing only before the issues Martin’s Rule 37 sanction. The other reference to rely motion grounds raised. Bender’s on the for sanctions election is made There, position local counsel to state her because of district court’s introduction. the dis- Recently, upheld Although imposition punitive 13. of sanc 15. Rule 37 authorizes both bankruptcy compensatory damages, requires tions under the court’s inherent sanc power type requiring "partic any mоnetary damages specifi- tion amount of to be Fellheimer, cally expenses by ularized notice.” man, Eichen & Braver related to incurred the viola- Inc., Technologies, Roadway Express, Piper, P.C. v. Charter 57 F.3d tions. See Inc. v. (3d Cir.1995). case, however, 752, 763-64, 2455, 2462-63, In that U.S. 100 S.Ct. (1980); Co., attorney plainly sanctioned was that he L.Ed.2d 488 Hamilton v. Ford Motor on notice ("The (D.C.Cir.1980) facing involving principal was sanctions for conduct sub 636 F.2d 37(b) jective purpose punitive, compensa- bad faith. is not Rule Services, tory.”). Duplication Media Ltd. But see (1st Software, v. HDG respect, 14. In this the district court said: S., Cir.1991). sanctions in Newton v. A.C. & 1. Plaintiff's Revised Motion for Sanctions Cir.1990), 918 F.2d 1121 and Media (Document 434) Pursuant to Rule 37 No. is 16(f), Duplication were under Rule PART, GRANTEDIN PARTAND DENIED IN 37(b)(2). party Rule The latter is directed to a or c) plaintiff's request ... as follows: to sanction 16(f) agents. expressly party its Rule refers to “a defendants their counsel for refusal to attorney." and/or [its] or permit meaningful inspection property of real compliance with this orders of De- court's 37(b)(2) part: states in Rule January cember 1992 and GRANTED, require party failing obey and dеfendant Harold ‍​‌​​‌‌‌​‌​​​‌‌‌‌​​‌‌‌‌‌‌​‌‌​​​‌​‌​‌‌​‌​‌​‌​‌‌​‌​‍E. Brown the court shall attorney advising party Rebecca E. Bender are DIRECT- the order or the pay expenses, including ED TO PAYto the Clerk the reasonable [the] Court the sum both fees, failure, attorney's $500.00 caused unless EACH for their willful refusal to orders; they with the court's are the court finds that the failure was substantial- [and jointly severally ly justified both or that other circumstances make liable for the result- ing plaintiff]. expenses unjust. costs to the an award of (1995). App. at 651-53. Fed.R.Civ.P. 37 1264 imposition of remand. Rule 11 authorizes elaboration that

triet states without court signer any pleading, 37, upon the of sanctions Rule Rule 28 under imposed sanctions presented for paper motion or other that was powers.17 inherent § 1927 and its U.S.C.A. purpose, e.g., “to harass or to improper is unfair scatter-gun approach This unnecessary delay cause or needless increase deciding our task of It also makes Bender. Landon, litigation.” 938 the cost See consistently acted the district court whether based on F.2d at 452. Rule “ sanctions are impossible of discretion with a sound exercise objective of reasonableness ‘an standard Jones, us. the record now before on ” circumstances.’ Id. at 453 n. 3 under the 1358; Mydas Foster v. Asso F.2d at accord Pensiero, Lingle, (quoting Mary Ann Inc. v. (1st ciates, Cir. 943 F.2d (3d Cir.1988)). Bad faith is 847 F.2d 1991); v. Int’l Brotherhood United States Id.; Jones, required. 899 F.2d at 1358. Cir.1991). Teamsters, 1338, 1346 F.2d 11(c)(1) provides can Rule that sanctions be Jones, a similar supra, In we addressed or on the court’s initiated either motion problem and held: initiative, acting initiative. on its own When did not differ- the district court Because however, the district court should first enter 11 and [section 1927] entiate between Rule describing specific the conduct that an order sanctions, we are not in a imposing sanctions and direct it believes will warrant whether the district position even to know person it seeks to sanction show cause applied the correct standard insofar court im- why particular sanctions should not be consequence, In as Rule 11 is concerned. 11(c)(1)(B); posed. Rule see also Rule See impоsing ap- order sanctions on the entire 11(c)(3)(“When sanctions, imposing the court pellant vacated. must be to con- shall describe the conduct determined explain stitute a violation of this rule and failure F.2d at 1358. The district court’s imposed.”). If for the sanction basis grounds general to Bender’s to relate its un- court wishes to sanction Bender district (and alone) requires her conduct us conduct 11, it should issue and serve on her der Rule sanctioning her and to to vacate its order and, considering an order to show cause after proceedings in this ease for further remand file, may explain any response its ratio- she opportu- court will have an which district specific conduct that nale and describe the conduct, nity to on Bender’s as well elaborate im- supports particular Rule sanction mind, identify legal as her state of posed.18 imposed against basis for each sanction Bender. Likewise, if the court desires base 1927,19 any sanction on section it should refer

B. to that statute in the order to show cause and any Though specific we will not decide conduct to its violation. We relate raises, note, however, think it unlike Rule the other issues Bender section Ethyl briefly requires bad faith. Gaiardo v. may appropriate be to comment (3d Cir.1987). Corp., likely up to come on the 835 F.2d some issues that are minimum, 1) including, at a reproduce text the relevant ticularized notice 17. We the full portion April April the fact that Rule 11 sanctions are under consid- 20 and 25 orders: eration, 2) why are under the reasons imposed for the contin- Penalties will now be consideration, 3) the form of sanctions under shenanigans parties and their coun- ued ”). consideration. sel, repeatedly warned that the who have been action the author- court would take such under 19.Section 1927 states: Procedure, ity of the Federal Rules of Civil especially Any attorney person Rules 11 and 28 U.S.C. F.R.C.P. or other admitted to power any § to correct abus- and its inherent court of the United States conduct cases judicial process. multiplies аny Territory es or thereof who so unreasonably App. proceedings any and vex- at 651. case satisfy atiously may required by the court to costs, expenses, personally and at- specific requirements the excess also has notice 18. Rule 11 reasonably torneys’ incurred because of echoing the Fifth fees the Due Process Clause of Corino, ("The at 64 such conduct. Amendment. See F.3d par- party sought 28 U.S.C.A. 1927. to be sanctioned is entitled to addition, considering parties the conduct of the like Rule autho- section attorney. only imposition of costs and ex- other rizes particular that result from the mis- penses Conclusion VI. Eash, sanctions. conduct the court limits costs at 1927 also these 560. Section above, For reasons stated we will va- expenses to those that could be taxed to and April cate district court’s orders of losing party a under 28 U.S.C.A. 25, April they impose and 1994 insofar as 1994). (West Id. refusing discovery sanctions on Bender for refiling addressing

and for motions issues already decided. The case will be remanded Usually, power inherent that court proceedings to the district for further attorneys a court retains to sanction district opinion. Foods, consistent with this Bender shall requires faith. also bad Gillette her (“[A] bear own costs. may attorney’s F.2d at 813 court assess faith, party a has acted in bad fees when STAPLETON, Judge, dissenting: Circuit vexatiously, wantonly, oppressive or for rea sons.”) (internal omitted); quotations Lon respectfully I dissent I because believe we (“[A] don, prerequisite 938 F.2d at jurisdiction. are without of the district court’s inherent the exercise correctly The court concludes that the dis- finding a of faith power to sanction is bad having stay- trict order court’s effect of conduct.”); Republic Philippines but see v. of ing pending of case resolution the bank- 65, Westinghouse Corp., Electric 74 ruptcy proceeding is not a final order. It (3d Cir.1994) (sanctions imposed n. 11 under correctly attorney also that an concludes who authority always the court’s inherent do not longer represents party may no a under faith).20 require shоwing a of bad We have appeal some circumstances a sanction order previously suggested care in the use of inher under the collateral order doctrine. Howev- powers impose to sanctions. Fell ent See er, concluding I believe errs heimer, Eichen, Braverman, 57 F.3d at 1224 appealed from order here meets the “conelu- (“ very potency,’ ... ‘Because of their prong of siveness” the collateral order doc- federal courts must be careful to exercise trine. powers their inherent ‘with restraint and dis provisions The first of the two of the order cretion.’”) Chambers, (quoting at U.S. imposing provides sanctions on Bender as 2132); Republic Philip at S.Ct. of follows: pines, Generally, 43 F.3d at 74. a court’s request to sanction defen- [Plaintiff’s power should be reserved for inherent those dants their counsel for refusal to and/or party eases which the conduct of a or an permit meaningful inspection prop- of real attorney egregious and no is other basis for erty compliance with this court’s orders Foods, 977 sanctions exists. See Gillette January of December 1992 and F.2d at 813. GRANTED, and defendant Harold attorney E. summary, if the district court on re- E. Brown and Rebecca Bender PAY pursue mand wishes to sanctions are DIRECTED TO to the Clerk Bender, general- for their it should do more than state Court the sum of EACH $500.00 ly grounds authorizing them. It willful refusal to with the court’s various orders; additionally aspect should relate each sanction to some defendant Brown Bender, jointly severally, explain Bender’s conduct and how that con- are authority PAY to the Clerk of duct comes within the it relies on to DIRECTED TO expenses and impose Any imposed against it. Court the reasonable travel hourly by plaintiffs imposed solely be- standard fees incurred should also Welsch, MAI, Mr. improper cause of her own conduct without for the services of John determine, on remand will be in a to 20. Bender out district correctly points position the term bad in its order court never used faith acted in bad instance, the first whether Bender suggests that there is no evidence thаt could faith. finding of bad faith. The district court support just inspect claims that would come was unable to obstruction the extent he days permitting and cost from the harassment properties, within defendants’ separate appeals from of a verified state- succession filing plaintiffs rulings litigation to which a itemizing expenses and fees.... the various ment said rise, may give entry initiation from its App. at 659-60. Biard, judgment.” Cauwenberghe Van acknowledges that “the amount The court 521-22 n. 486 U.S. S.Ct. unquantified” and remains of this sanction (1988) (quota 1949 n. 100 L.Ed.2d 517 that, is not final until it generally, “an order omitted); States, tions see Catlin v. United (Maj. to a determinate amount” is reduced 233-34, 633-34, 65 S.Ct. 1259). however, relies, on a venera- op. It (1945) (“The 89 L.Ed. 911 foundation of general as exception rule known ble merely policy this is not in technical con doctrine, Forgay see v. Forgay-Conrad ceptions ‘finality.’ It is one How.) (6 Conrad, 12 L.Ed. 404 47 U.S. litigation.”). piecemeal (1848),1 in applicable to cases which which is (alteration Apex, original). at in 27 F.3d nothing from leaves to do appealed the order Apex The сourt cites but a “ministerial act.” present purposes, important Most for Sales, Kleinfeld, v. Fountain Inc. Apex understanding in noted this Cir.1994) authority as for its conclu- importance finality in is “reflected our sion that this is such case. holding eases that a district court order awarding attorneys ‘reasonable’ fees is not Apex, In court held that an order quantified in appealable until the fees are liability ordering an ac establishing prevent appeals on order two wheth- —one counting, quantifying the amount of but not attorneys er fees should be awarded and a money paid plaintiff the defen to be on the amount of the award.” Id. In second dant, made clear was not a final order. We view, my a determination of “reasonable in that the word “ministerial” the context of expenses” travel and reasonable2 fees for the Forgay-Conrad refers to “me doctrine expert professional services of a “to the ex- calculations, acts, chanical” like mathematical inspect tent he was unable defendants’ dispute. Only about which there can be no properties” potential holds no less for dis- remaining done is “minis when the act to be agreement appeal and a second than does the appellate an court terial” this sense can typical determination of the amount of rea- proceed with assurance that there will “be no litigation expense sonable and reasonable appeal.” Apex, 27 likelihood of further [a] following unquantified an counsel fees award omitted). (quotation F.3d at 936 We expenses Accordingly, of such and fees. I do importance stressed the of the considerations appeal not see how we can hear this insisting quantification of dam behind on hearing unquan- appeals hereafter also from Supreme ages, quoting from the Court’s deci tified counsel fee awards. Biard, Cauwenberghe sion Van (1988): 100 L.Ed.2d 517 S.Ct. ruling My concern about the court’s jurisdiction only part “Permitting piecemeal appeals would un- is based on the cоn- independence Apex. siderations we stressed in Piecemeal dermine the of the district appellate inefficiency judge, special role that indi- review is the federal as well as today’s ruling plays judicial system. judiciary can ill afford. But vidual our addition, distinct, [finality] gives equally grave, con- rule is in accordance rise to a An final or it is not policy avoiding cern. order is either with sensible itself, Forgay appealed court's order refers to "stan- 1. In the case the order 2. While the district physical fees,” transfer of from directed the immediate hourly dard fees” rather than "reasonable property plaintiff, to the as well as an account- obviously intended as an indicia of the former is losing party regarded ing. ing as was thus fac- suggest does not to me that the the latter and injury irreparable immediate and this fact disagreement potential is less than that inher- regarded by numerous courts as essen- has been ent in a lodestar determination. to the reached. See 9 James W. Moore tial result al., 110.11, ¶ et Moore’sFederal Practice (2d 1995). ed. final, if there is but a limited final and it is juris- appeals have

period in which courts it. This makes it crucial

diction to review party and its counsel be able to know

that a certainty an order is final. In the when certainty, counsel must ei- of such

absence protective appeals or run

ther flood us with appeal rights will be uninten-

the risk that

tionally foregone.3 When the ministerial ex-

ception beyond the realm of is extended ‍​‌​​‌‌‌​‌​​​‌‌‌‌​​‌‌‌‌‌‌​‌‌​​​‌​‌​‌‌​‌​‌​‌​‌‌​‌​‍calculations, uncertainty will nec-

mathematic

essarily generated in an area where cer-

tainty operation to the is essential efficient justice system.

I insist that the amount of the sanc- would against Ms. Bender be estab-

tions assessed permitted appel-

lished before she is to seek nothing of those sanctions.4 I see

late review requiring great lost so and a deal to be gained.

STELWAGON MANUFACTURING

COMPANY, Appellee,

v. SYSTEMS,

TARMAC ROOFING

INC., Appellant.

No. 94-2004. Appeals,

United States Court of

Third Circuit. May

Argued 1995. Aug.

Decided 1995. Rehearing Sept. Petition for

Sur al., 1, 110.11, ¶ persuaded by suggestion supra am the court’s 3. See 9 Moore et note Nor I appealable 98-99. be that the district court's order is symbiotic cause it constitutes “a statement about significant 4. The court considers it that Martin quality integrity of" Ms. Bender’s work. apparently yet applied to have the sanc- has tion rejected suggestion We in Eastern Maico such quantified may not do so hereafter. Ms. Distributors, Maico-Fahrzeugfabrik, Inc. however, Bender, apply is free to to the court for G.m.b.H., Cir.1981). requiring quantification an order or the deletion portion relating of the order to Martin's of the expenses.

Case Details

Case Name: Martin v. Brown

Court Name: Court of Appeals for the Third Circuit

Date Published: Aug 23, 1995

Citation: 63 F.3d 1252

Docket Number: 94-3248

Court Abbreviation: 3rd Cir.