Filed: Jul. 09, 2014
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Summary: Case: 13-11554 Date Filed: 07/09/2014 Page: 1 of 17 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 13-11554 Non-Argument Calendar _ D.C. Docket No. 0:06-cv-60146-EGT CHRISTOPHER JAMES PEER, Plaintiff-Counter Defendant-Appellee, ESQ. BARRY G. RODERMAN, ESQ. SCOTT MARSHALL GREENBAUM, Interested Parties-Appellees, ESQ. RICHARD L. ROSENBAUM, Consolidated Plaintiff-Appellee, versus DANIEL WARFIELD LEWIS, Defendant-Counter Claimant-Appellant, JAMES B. CHAPLIN, et
Summary: Case: 13-11554 Date Filed: 07/09/2014 Page: 1 of 17 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 13-11554 Non-Argument Calendar _ D.C. Docket No. 0:06-cv-60146-EGT CHRISTOPHER JAMES PEER, Plaintiff-Counter Defendant-Appellee, ESQ. BARRY G. RODERMAN, ESQ. SCOTT MARSHALL GREENBAUM, Interested Parties-Appellees, ESQ. RICHARD L. ROSENBAUM, Consolidated Plaintiff-Appellee, versus DANIEL WARFIELD LEWIS, Defendant-Counter Claimant-Appellant, JAMES B. CHAPLIN, et ..
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Case: 13-11554 Date Filed: 07/09/2014 Page: 1 of 17
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-11554
Non-Argument Calendar
________________________
D.C. Docket No. 0:06-cv-60146-EGT
CHRISTOPHER JAMES PEER,
Plaintiff-Counter Defendant-Appellee,
ESQ. BARRY G. RODERMAN,
ESQ. SCOTT MARSHALL GREENBAUM,
Interested Parties-Appellees,
ESQ. RICHARD L. ROSENBAUM,
Consolidated Plaintiff-Appellee,
versus
DANIEL WARFIELD LEWIS,
Defendant-Counter Claimant-Appellant,
JAMES B. CHAPLIN, et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 9, 2014)
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Before CARNES, Chief Judge, PRYOR and MARTIN, Circuit Judges.
PER CURIAM:
Daniel Warfield Lewis, proceeding pro se, appeals the order imposing
sanctions against three lawyers who represented Christopher Peer in an underlying
action brought against Lewis under the Fair Credit Reporting Act (FCRA), 15
U.S.C. § 1681. He challenges the amount of the sanctions, which he believes is
too low, and the “Rule 11-type” framework the district court 1 used to impose
sanctions under its inherent power. Asserting that the district court is biased,
Lewis requests that this Court determine the amount of sanctions to be imposed.
I.
The dispute in this case stems from a municipal election that occurred nearly
a decade ago. Peer and Lewis both ran for Mayor of Fort Lauderdale, Florida in
2006. On January 17 of that year, Lewis sought to have Peer disqualified from the
race by filing an emergency complaint in state court alleging that Peer was not in
compliance with the election’s residency requirements. Lewis maintained that
Peer’s principal residence was not in Ft. Lauderdale but in Wilmington, North
Carolina. Paragraph 19 of Lewis’ complaint stated that the information about
1
The parties agreed to have a magistrate judge exercise jurisdiction over this case under
28 U.S.C. § 636(c), so in this opinion the term “district court” refers to Magistrate Judge Edwin
Torres.
2
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Peer’s residence came from a TransUnion credit report. 2 At the time the action
was filed, Lewis’ lawyer was Robert Malove, and Peer was represented by Richard
Rosenbaum.
After a February 1, 2006 hearing in which the state court dismissed the
complaint because there had not been effective service of process, Lewis’ counsel,
Malove, told Peer and Peer’s counsel, Rosenbaum, that Paragraph 19 of Lewis’
complaint was inaccurate. Malove admitted that he had obtained that address from
a Westlaw People Finder report, not from a credit report as they had alleged in the
complaint.3 Malove therefore deleted Paragraph 19’s reference to a credit report
and served the amended complaint on Peer. The very next day, Peer got a copy of
his credit report which showed that Lewis had never accessed it. He faxed a copy
of the report to his lawyer, Rosenbaum.
Although Peer and Rosenbaum had a copy of the credit report which showed
that Lewis had never accessed Peer’s credit information, Rosenbaum filed on
Peer’s behalf a lawsuit in federal court alleging that Lewis had violated the Fair
Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. In the complaint, Peer
alleged that Lewis had violated the FCRA by getting a copy of his credit report and
2
Paragraph 19 of the complaint asserted that “an October 15, 2005 credit report by
TransUnion . . . reported that Defendant’s [Peer’s] current address is ‘18 Charter Drive,
Wilmington, North Carolina 28403.’”
3
The Westlaw People Finder report itself listed TransUnion as the source for the North
Carolina address.
3
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publishing information from it. Peer filed the lawsuit less than two weeks before
the mayoral election.
In late February 2006, after the election which neither Lewis nor Peer won,
Lewis filed a pro se counterclaim against Peer for abuse of process and for filing a
lawsuit for improper purposes in violation of 15 U.S.C. § 1681n(c). Very little
discovery or other activity occurred between February and June 2006. On June 13,
2006, Lewis retained counsel. And on June 19, 2006, Rosenbaum sought to
withdraw from his representation of Peer, citing a breakdown in the attorney-client
relationship; the motion was granted on June 21, 2006. Peer retained Barry
Roderman and Scott Greenbaum as substitute counsel in mid-July 2006. Lewis
deposed Peer on July 25, 2006. Immediately before the deposition, Peer’s counsel,
Roderman, gave Lewis’ counsel a copy of Peer’s February 2006 credit report,
which showed that Lewis had never accessed it. Thus, Roderman and his co-
counsel Greenbaum were aware that Peer’s FCRA claim was frivolous at least by
July 2006. Lewis moved for summary judgment on the FCRA claim in August
2006.
That motion was still pending when, on October 10, 2006, Lewis filed a
motion for sanctions against Roderman and Greenbaum under Federal Rule of
Civil Procedure 11. The very next day, Roderman sought leave to withdraw as
counsel. His motion to withdraw was granted on October 31, 2006, which left
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Greenbaum as Peer’s only counsel of record. Greenbaum did not fare well in that
role. On June 26, 2007, the district court struck Peer’s complaint and answer to
Lewis’ counterclaim “as a sanction for [Peer’s] willful, repeated, and un-ending
violations of [the district court’s] discovery orders and discovery rules.” In the
same order, the court set a status conference to determine “whether [Greenbaum]
should be disqualified from any further role in this case.” Greenbaum did not
show up to that status conference, and on July 20, 2007, the district court
disqualified him. He has since been disbarred from the practice of law by the
Florida Bar. Lewis also moved for sanctions against Rosenbaum, Peer’s original
counsel, in July 2007.
In the meantime, Lewis’ counterclaim for abuse of process proceeded to trial
on the issue of damages only. The jury awarded Lewis nearly $800,000 in
compensatory and punitive damages, but the district court reduced the award to
$12,500 in compensatory damages and $112,500 in punitive damages. The court
later entered judgment on Lewis’ second counterclaim (a statutory cause of action
for filing a lawsuit for improper purposes), and awarded him $174,996.52 in
attorney’s fees and costs in that judgment.
However, the district court denied Lewis’ motions for sanctions against
Rosenbaum, Roderman, and Greenbaum. The court concluded that Rosenbaum’s
conduct did not warrant sanctions under Rule 11, 28 U.S.C. § 1927, or the court’s
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inherent power because the court could not find, based on the record, that
Rosenbaum had knowingly acted in bad faith. It failed to address the merits of the
sanctions motion against Roderman and Greenbaum. Lewis appealed the order,
and this Court affirmed in part, reversed in part, and remanded. See Peer v. Lewis,
606 F.3d 1306 (11th Cir. 2010).
We affirmed the judgment of the district court with respect to Rosenbaum’s
conduct under Rule 11 and § 1927 because (1) Lewis’ motion for Rule 11
sanctions against Rosenbaum was untimely and (2) Rosenbaum had not run afoul
of § 1927, which prohibits attorneys from engaging in dilatory tactics. Id. at 1312–
14. But we reversed the district court’s refusal to sanction Rosenbaum under its
inherent power, concluding that the court had clearly erred in holding that there
was insufficient evidence to show that Rosenbaum had acted in bad faith.
Id. at
1316. To the contrary, the evidence overwhelmingly showed that Rosenbaum
acted in bad faith by knowingly pursuing a frivolous claim.
Id. Nonetheless,
recognizing that district courts have broad discretion about whether to impose
sanctions, and, if so, in what amount, we remanded the case to the district court for
it to make the sanctions determination in light of our conclusions on appeal.
Id.
We also instructed the district court to consider in the first instance whether
Roderman and Greenbaum should have been sanctioned under Rule 11.
Id. at
1313.
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On remand, the district court held an evidentiary hearing and later issued an
order in which it made the following rulings: As to Rosenbaum, the court imposed
a monetary penalty of $1,000 for the fees and costs that Lewis had incurred before
June 22, 2006 (the date on which Rosenbaum withdrew). The court explained that,
although it could not impose Rule 11 sanctions due to the untimeliness of Lewis’
motion, it could impose “Rule 11-type sanctions through the Court’s inherent
power.” It settled on the sum of $1,000 because Rosenbaum, while blameworthy,
had actually done very little work on the case. As for Roderman and Greenbaum,
the district court imposed sanctions under Rule 11 for $500 and $5,000,
respectively. Roderman received a lower monetary penalty because his filings
“were on balance minor and inconsequential.” Greenbaum received a higher
penalty because he remained in the case as Peer’s counsel of record for longer and
engaged in more sanctionable conduct. The district court closed its order by
articulating a hope that this long and unnecessary case would finally be put to rest.
That hope proved illusory. Lewis, acting pro se, timely filed this appeal of
the district court’s sanctions order. He contends that the district court abused its
discretion in applying “Rule 11-type sanctions” against Rosenbaum and that the
monetary amounts it imposed were inadequate. He also contends that the district
court is biased against him and that this Court should take matters into its own
hands to determine appropriate sanctions. None of the sanctioned attorneys cross-
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appealed. In fact, Roderman was the only sanctioned attorney who even filed a
response brief, but his brief was stricken by this Court for failing to conform to
rules. Rosenbaum filed a motion requesting to be heard at oral argument, but did
not provide an explanation as to why he failed to timely file a response brief.
II.
We review a district court’s award of sanctions under Rule 11, § 1927, or its
inherent power only for an abuse of discretion. Amlong & Amlong, P.A. v.
Denny’s, Inc., 500 F.3d 1230, 1237 (11th Cir. 2007). We also “review for abuse of
discretion the district court’s imposition of sanctions in a certain amount.” Martin
v. Automobili Lamborghini Exclusive, Inc.,
307 F.3d 1332, 1336 (11th Cir. 2002).
A district court abuses its discretion if it makes a “clear error of judgment” or
applies “the wrong legal standard.”
Amlong, 500 F.3d at 1238.
A.
We first address the type and amount of sanctions the district court imposed
against Rosenbaum. Lewis contends that the district court abused its discretion by
using its inherent power to impose a “Rule-11 type” sanction against Rosenbaum.
He argues that the district court should have imposed a greater sanction against
Rosenbaum under its inherent power, instead of using the “more limited” Rule 11
framework. This argument is groundless.
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Federal courts possess potent inherent powers that they may use to “fashion
an appropriate sanction for conduct which abuses the judicial process.” Chambers
v. NASCO, Inc., 501 U.S. 32, 44–45,
111 S. Ct. 2123, 2132–33 (1991). And the
“inherent power of a court can be invoked even if procedural rules exist which
sanction the same conduct,”
id. at 49, 111 S.Ct. at 2135, “for these rules are not
substitutes for the inherent power,” In re Mroz,
65 F.3d 1567, 1575 (11th Cir.
1995). Whereas rule-based sanctions can reach only “certain individuals or
conduct, the inherent power extends to a full range of litigation abuses” and serves
to fill the gaps left by rule-based sanctions.
Chambers, 501 U.S. at 46, 111 S.Ct. at
2134. In this case, the district court used its inherent powers to fill a gap left by
Rule 11’s timeliness requirement. In Lewis’ first appeal, we affirmed the district
court’s denial of his Rule 11 motion against Rosenbaum on the ground that it was
untimely.
Peer, 606 F.3d at 1313. We also held, however, that there was
“overwhelming evidence that Rosenbaum knowingly pursued a frivolous claim,
and thus acted in bad faith.”
Id. at 1316. Faced with Rosenbaum’s bad faith, the
district court was justified in using its inherent power to sanction him. After all,
the “key to unlocking a court’s inherent power is a finding of bad faith.” Barnes v.
Dalton,
158 F.3d 1212, 1214 (11th Cir. 1998).
Nor was it an abuse of discretion for the district court to impose “Rule 11-
type sanctions.” Rule 11 subjects to sanctions any lawyer who files a pleading,
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motion, or other paper that is frivolous or lacks evidentiary support. See Fed. R.
Civ. P. 11(b)(2)–(3). Because we concluded in Peer that the complaint Rosenbaum
filed was “objectively frivolous at the time of filing,” and that he knew it was
frivolous when he filed it, 606 F.3d at 1312, Rule 11 sanctions were substantively
appropriate, although untimely. There is no case in this Circuit barring a district
court from using a “Rule 11-type analysis” when imposing sanctions under its
inherent power in these circumstances. Moreover, the district court explicitly
stated that in doing so it was following our suggestion in Peer that Rule 11
sanctions would have been appropriate if timely sought.
Having decided that the district court’s imposition of sanctions against
Rosenbaum was proper, we turn now to the amount of the monetary penalty the
court imposed. The district court ordered Rosenbaum to pay only $1,000. Lewis
argues that the district court abused its discretion by cutting off Rosenbaum’s
liability as of June 22, 2006, which was the date he withdrew as Peer’s counsel,
and because the amount of the sanction is inadequate to compensate Lewis or deter
similar conduct in the future. We disagree on both points.
Rule 11 provides for a range of penalties, including payment by the
offending attorney of “part or all of the reasonable attorney’s fees and other
expenses directly resulting from the violation.” Fed. R. Civ. P. 11(c)(4). As the
language of the Rule suggests, it “permit[s] an award only of those expenses
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directly caused by the [sanctionable] filing.” Cooter & Gell v. Hartmarx Corp., 496
U.S. 384, 406,
110 S. Ct. 2447, 2461 (1990) (emphasis added). In reviewing a
district court’s imposition of sanctions under its inherent power, we have held that
a district court is well within its discretion to “fashion[] a sanction which is a direct
response to the harm that the bad faith conduct of the attorney causes.”
Barnes,
158 F.3d at 1215 (upholding award to defendant of the cost of his expert witness
fees because the plaintiffs’ claims required defendant to hire an expert). Thus,
whether we analyze the sanctions from a Rule 11 or an inherent power standpoint,
the district court did not abuse its discretion in cutting off Rosenbaum’s liability as
of the date of his withdrawal from the case.
The entirety of Rosenbaum’s involvement amounted to thirteen pages of
filings, which prompted a mere thirteen pages of responsive filings from Lewis.
As a result, the direct effect on Lewis of Rosenbaum’s frivolous filings was
relatively minor. It is also worth noting that Lewis initially chose to proceed pro se
–– he prepared his initial pleading, which contained his answer, affirmative
defenses, and counterclaims, on his own. It was not until June 13, 2006 that Lewis
retained counsel, and Rosenbaum withdrew from his representation of Peer just
eight days after that. Lewis’ attorney made only one filing while Rosenbaum was
counsel of record for Peer, and that was just a short response in opposition to
Rosenbaum’s motion to withdraw. In light of those facts, the district court did not
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abuse its discretion in cutting off Rosenbaum’s liability as of the date that he
withdrew. In doing so, the district court fashioned a sanction “which [was] a direct
response to the harm that the bad faith conduct of the attorney cause[d].” Barnes,
158 F.3d at 1215.
Nor did the district court abuse its discretion by setting the amount of the
sanction at only $1,000. Technically, courts determine the amount of attorney’s
fees to be charged by calculating the “lodestar,” which is the number of hours
reasonably spent working on the case multiplied by a reasonable hourly rate. See
Dillard v. City of Greensboro, 213 F.3d 1347, 1353 (11th Cir. 2000). In this case,
however, calculating the lodestar would have been difficult in light of the fact that
Lewis was acting as a pro se litigant for the majority of Rosenbaum’s involvement
and his attorney made only one filing while Rosenbaum was Peer’s counsel of
record. Circuit precedent indicates that a pro se litigant cannot recover attorney’s
fees under Rule 11. See Massengale v. Ray,
267 F.3d 1298, 1302–03 (11th Cir.
2001). So the district court arrived at an amount of $1,000 by generally employing
its expertise on cost- and fee-related matters and by taking into account the fact
that Lewis must have incurred some cost in responding to the complaint and filing
his counterclaim. 4 The district court also considered the need to deter Rosenbaum
4
The court specifically noted that, if it had calculated the amount of the sanction more
precisely, tying it directly to Lewis’ costs and fees, then it would have been a lower dollar
amount.
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and other attorneys from engaging in similarly frivolous behavior in the future.
See Baker v. Alderman, 158 F.3d 516, 528 (11th Cir. 1998) (noting that
“deterrence remains the touchstone of . . . Rule 11”). In doing so, the district court
did not abuse its discretion.
Lewis complains that the amount of the sanction was inadequate because it
did not cover any of his compensatory damages. Apparently, Lewis would like for
us to force Rosenbaum to pay the nearly $300,000 in damages he won on the
underlying counterclaims against Peer.5 Lewis is wrong. He has conflated the
award he is entitled to under those judgments with the punitive sanctions the court
appropriately imposed against Peer’s attorneys. The $125,000 judgment on Lewis’
abuse of process counterclaim and the nearly $175,000 in fees and costs awarded
on his second counterclaim are payable by Peer, not Peer’s attorneys. A court
employs its inherent power to sanction an attorney to punish and deter untoward
conduct, not to compensate a litigant for his underlying injury. See Martin, 307
F.3d at 1337 (explaining that a sanction imposed under a court’s inherent power
should punish and deter). Accordingly, it would not be appropriate to transform
the judgment payable by Peer on the merits of Lewis’ counterclaim into a sanction
against Peer’s attorney. See Donaldson v. Clark,
786 F.2d 1570, 1575 (11th Cir.
5
Lewis makes the same argument with respect to the amount of sanctions imposed
against Greenbaum and Roderman. Because the issue is the same regardless of the identity of
the lawyer, this analysis applies to Lewis’ arguments about Greenbaum and Roderman as well.
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1986) (“The amount of sanctions to be awarded under Rule 11 can never be an
integral part of the merits of the case and scope of relief.”), vacated on other
grounds by Donaldson v. Clark, 819 F.2d 1551, 1554 (11th Cir. 1987) (en banc).
B.
We next address the district court’s imposition of sanctions against
Roderman and Greenbaum, Peer’s later-appearing attorneys. As we have
discussed, Greenbaum was the last lawyer standing on Peer’s side of the conflict.
Roderman withdrew from the litigation on October 31, 2006 (after Lewis filed his
Rule 11 motion against Roderman and Greenbaum), but Greenbaum remained
Peer’s counsel of record until he was disqualified by the court on July 20, 2007.
The district court imposed Rule 11 sanctions against both of them –– $5,000
against Greenbaum and $500 against Roderman. We will review Lewis’
challenges to the sanctions awards against each of them separately, although most
of the analysis is applicable to both.
Lewis contends that $5,000 is not enough to deter Greenbaum or others from
engaging in similar bad-faith conduct in the future. Inconsistently, he also notes
that the district court “could not expect Greenbaum to pay any sanctions” because
Greenbaum has been disbarred, his whereabouts are unknown, and he failed to pay
the $4,923.25 in other sanctions that the court awarded Lewis for Greenbaum’s
improper termination of a deposition. In reality, none of those reasons counsels in
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favor of increasing Greenbaum’s sanctions. Lewis is correct that the central
purpose of Rule 11 is deterrence. See Cooter & Gell, 496 U.S. at 393, 110 S.Ct. at
2454. But Greenbaum himself need not be deterred from advocating frivolous
claims because the Florida Bar has already prevented him from practicing law at
all. Nor does the fact that Greenbaum cannot be located and has not paid the
sanction imposed in connection with the deposition support Lewis’ argument for
increasing the amount Greenbaum should pay in Rule 11 sanctions for pursuing a
frivolous claim.
We also do not believe that the district court abused its discretion in setting
the sanction against Greenbaum at $5,000. We have upheld a district court’s
imposition, pursuant to its inherent power, of fines in the amount of $500 against
attorneys who engaged in willful misconduct, observing that the fines “justly
punished the . . . attorneys and, hopefully, will deter other litigants from engaging
in similar activity.” Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1546
(11th Cir. 1993). And the Supreme Court has held that a “district court is better
situated than a court of appeals to marshal the pertinent facts and apply the fact-
dependent legal standard mandated by Rule 11.” Cooter &
Gell, 496 U.S. at 402,
110 S.Ct. at 2459.
Finally, Lewis has failed to convince us that the district court’s setting the
sanction against Roderman at $500 was an abuse of discretion. As the district
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court explained, Roderman received a lesser sanction because he withdrew from
the case nearly nine months before Greenbaum was disqualified and did not
contribute much in the way of filings. The district court did not fully explain how
it calculated the sanction amount, but it is not necessary for this amount to reflect
Lewis’ attorney’s fees, as Lewis’ argument seems to assume. See Riccard v.
Prudential Ins. Co., 307 F.3d 1277, 1295 (11th Cir. 2002) (“Although the sanctions
most commonly imposed are costs and attorney’s fees, the selection of the type of
sanction to be imposed lies with the district court’s sound exercise of discretion.”).
The district court did not abuse its discretion in imposing a sanction of $500
against Roderman.
C.
Lewis’ final argument is that the magistrate judge was biased against him
and that this Court should therefore determine what sanctions are appropriate. We
disagree.
As we have discussed, we generally leave sanctions determinations to the
district courts. See Collins v. Walden, 834 F.2d 961, 966 (11th Cir. 1987) (“It is
the District Court Judge who sits at this bottleneck and who most accurately
perceives the harms which rightful litigants suffer because of Rule 11 violations.
No one is better situated to perceive the measure of the sanction necessary to
achieve the goals which the rule contemplates.”). Bias sufficient to disqualify a
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judge must stem from extrajudicial sources, except when a judge’s remarks in the
judicial context demonstrate a pervasive bias or prejudice. In re Walker, 532 F.3d
1304, 1310–11 (11th Cir. 2008). Adverse rulings are properly the subject of
appeal, and do not provide a party with a basis for holding that the court’s
impartiality is in doubt. See Byrne v. Nezhat,
261 F.3d 1075, 1103 (11th Cir.
2001), abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co.,
553
U.S. 639,
128 S. Ct. 2131 (2008).
There is no indication in this case that the judge was in any way biased
against Lewis. The judge’s recognition that Rosenbaum was a well-respected
criminal defense attorney does not demonstrate a bias. Nor do any of the judge’s
offhand comments about political litigation or the motives of political litigants
reveal the sort of bias that would affect his ability to adjudicate the case. Lewis’s
arguments to the contrary are baseless.
AFFIRMED. 6
6
Rosenbaum’s motion requesting oral argument is denied.
17
