thank you your honor and may please the court my name is bo howard i'm here to represent the appellant's in this appeal today with me is my law partner kerry freed and also our associate desmond dennis also in the we have the pleasure of representing the appellant's which are a variety of companies that either own property or have some sort of function with respect to the administration of a luxury residential matter was a bankruptcy that was filed by the debtor was hampton island owners association their violent variety of reasons why the owners association filed the bankruptcy but notably this was one of the only near coastal developments that didn't fail with respect to the payment  in the briefing they were either listed as creditors of the debtor or they were listed parties an interest of one variety or another and the overall dispute involves involves a order compelling production of documents and an order by the court sanctioning the appellant's for the suppose it failure to comply with the order compelling we think that the order was an error for two principal reasons and then a third that i'll be happy to get in the september sixteenth order sanctioning the appellant's in this case does not make specific findings of fact as to which of the  appellant's supposedly did or did not comply with switch specific components of the court's order compelling production so you never raised that before the district court did you lump them all together well your honor it's a good question  first some of the appellant's were represented by schrader wheeler and flint of a firm another set of the appellant's were represented by scroggins williams they both filed different sets of briefings on this issue and the issue that i'm discussing right now was in fact raised not only in the briefing before the court but it was raised during an evidentiary hearing as well during which mr leventhal among others gave testimony about the different and varying levels of compliance of the different  appellants so i we do believe it was raised your honor well back to the joint several liability issue which i think you're getting to the arguments in your brief focused on the tax returns and the fact that some of the entities didn't file tax returns deadline why isn't that enough to hold up thank you your honor that there are varying levels of compliance throughout the eight of these and the in order to understand exactly what they did on february third which was their production line it's important to look at the specific request that was made of them and their requests you this first with a request the same to each of the entities the request was the same to each of the entities and didn't they each produce their ledgers  paper form redacted many entries i for the third know some of them did this some of them didn't have ledger entries to produce and some of them produced what we would call a special report that was printed from the general ledger that included the information that was requested in the specific but now enter no entity produced ledgers in native format is that correct at that point no no entity produced a complete general ledger in native format that is correct now the request didn't ask for letters a native form so what the request asked for was and if you'll bear with me i think the request is the languages is not as direct as you would act because if what the request had been was please produce each entity as general complete general ledger from january one two thousand and six through the president that would have been something that the parties could understand instead what got requested was each leventhal is into t's financial records including any general ledgers for the period after january one two thousand and six to date reflecting whether the entry entity paid fees to a and including and then it goes down through a list of specific you know types of financial information about payments made from the entity to the homeowners association and the way that the appellant's understood this request was that they could simply produce excerpts from their general ledgers to the extent there were any reflecting these payments from the entity to the way homeowners so was there anything in the requests that indicated that what they wanted were information so they could tell when the entries were made on the general ledger there's nothing in a specific request that states that so no absolutely not the other issue about this and i understand that there are some concerns that were raised in the appellee as brief about suppose it met a data once the native format files were produced that demonstrate that some of the entity into these had backed  or fabricated evidence in their general ledger this is absolutely false what is true is that there were entries made in the accounting software in the days two or three days leading up to the production of the general ledger there was an in house accountant for each of these appellants who said and testified in her deposition that it was her job to go through and bring the books up to date to make them correct and to make them accurate and to reclassify anted entries that may have been improperly classified but effectively her testimony was and it was taken by a police council that nobody tells her what to do nobody tells her how to keep her accounting records but she had gotten behind in her job was to bring him up to date the things  that was the money on that it was also brought to the court's attention during the evidentiary hearing by mr leventhal so in terms of the general ledgers the answer is basically the same as with the tax return some of the entit produce them some of the entities didn't have them and some entities produced excerpts from their general general ledgers as they believed the request specified all this done by the production dated february or the other category of documents that was at issue was organizational charts and it's a very similar issue if what you look at is the language of the request the request doesn't say which is ultimately what the issue what the issue became proof your operating agreement it says document showing who or what entity owns each leventhal entity directly or indirectly the percentage of each owner's ownership interest in which leventhal and it goes on and on and on and on and on and so what was produced at the time of the production was organization charts that showed up the chain of ownership and down the chain of ownership ultimately one of them had a mistake on it for a reason that was explained to the court and council but the mistake was clarified during a two thousand and four examination and every entity had effectively produced their organization charges the regulator request was well what we really meant was give us your operating agreement and if that was the case it wasn't specified in the language of the request so when we say that we have a variety of entities that had a variety of different levels of compliance we believe that they all actually complied with the court's order to produce the documents specified in the request for production by february third subsequent to that there was some discussion with counsel about whether or not the production was really what he had anticipated or what he intended and we believe that because we had a motion to compel filed before there was ever a good faith process that took place we had a motion to compel that was filed before there were ever subpoenas served in this case there was never an opportunity for the counsel to get together and really hammer out what needed to be produced what was produced did these documents exist or did they not exist before it got to the court had earlier ordered i mean during the hearing had ordered a motion for rule two thousand and four examination of the appellant's and the appellate objection at that time was not well we object to request number one for reasons x y and z it was we object to sitting  thousand and four examinations at all because we're non parties to this case and we believe that our depositions ought to be taken if they're going to be taken in this piece of related civil litigation that's actually pending in liberty county those are the objections which the court overruled what she actually stated about these other issues the tax returns and all this on that in november the third was when the subpoena is issued the entity produces some of the documents objects to others the parties are required by the local rules to try and work it out if they don't then they come back here and they're asking if they're asking for federal and state tax returns for these years here is why we object and then the court can deal with that i can't read these and say well that doesn't sound legitimate when i don't even know if there are documents responsive to that and then she says we've got to operate a little lower than ten thousand feet and then she concedes that these issues aren't even ripe so she is not the bankruptcy court is not at that point ruling on the specific objections so i'm not sure i read this it seems to me like and i don't have the language in front of you at the moment but i will find it i thought that the bankruptcy court even though it talked a little bit about the subpoenas etc that the bankruptcy court specifically said i'm overruling the objections and and specifically with respect to exhibit a and you know the documents will be produced i thought it actually said the documents are to be believed maybe i am remembering this ro subsequent hearing about a motion to compel that happened on january the fourteenth your honor and at that hearing the court ordered the documents to be produced by february the third now i see that i've run out of my can answer the question the language i was looking at says ordered that the objections are overruled and that the motion is granted to permit examination and production of documents in accordance with the bankruptcy rule two thousand  correct your honor and the way that and then it says if attendance and production of documents can't be obtained voluntarily movements may compel attendance and production of documents as provided in rule two thousand and four c correct your honor and rule two thousand and four  is the rule that allows them to serve a subpoena on these non parties and the issue here is that there can be no compulsion of production of documents without reaching out asserting jurisdiction over these non parties in order to have due process they have the compel was mild so they were served five or six days before the before the court ruled right ok but at the time of the court ruled on january fourteenth that the documents would be compelled and would be produced the court ultimately said you are allowed to make and file objections but i want you to be aware that if any of them are not sustained you're going to be sanctioned for this which cuts off the entire possibility the good faith process that the court had described on november the third so without this process of the court scribes on november the third you serve the subpoenas then they produce the documents and they make their objections and then the counsel's work trying to work it out in good faith and then you bring it to the court's attention without that playing out there was never a right issue for the court to decide so the compel order itself was in error because she was compelling a production of dock of the court was compelling production of documents good morning your honour's may it please the court i'm steve hall i'm with the law firm of baker donaldson and i represent what we've been calling the owners in this case it's a collection of residential owners and i know the court is aware of that  the bankruptcy judge in this case after multiple multiple opportunities to work through these issues issued a final order to the appellants that said two things you can you can have objections but they must be filed and you must produce documents by february third that was a clear order that came out after all of these comments about subpoenas being filed and what was what and what was not what was done and the appellant did not follow the judge's order they specifically and i submit intentionally violated they served objections without filing them because i think they were worried that the objections were frivolous and they would be sanctioned so they serve them and then they failed to produce the documents and argued that they shouldn't have to produce them based upon the objections that they never filed as they were instructed it's as simple as this at the end of the day you get an order you follow that order if you don't follow that order you get sanctioned and that is precisely what happened in this now we asked for the oral arguments in front of your honor's because it is a complicated record it's long but when you get down to it and you really distill through all of this noise that's going on about other things it comes back to what i said before it clear is that let me talk about the three grounds that i think they've they've raised here and let me first talk about the standard of review because i think it's pretty important it's an abuse of discretion here that we would have to have the appellant showing that the judge made a clear error followed an improper improper rule i would submit that none of that has been shown here at all and in fact i would submit that there's one other there's one other legal point that needs to be made here and it comes out of the chunda somma case which is i think a pronouncing that's right chunder sama versus mazda and it's footnote thirty four and essentially what this says is when we're looking at a party's but here it's to an order from the court even if there is a problem with that order even if they think that it may have been improvidently granted they are still required to follow that order and particularly where if what's happened is you can a den of fi what's wrong with the order very easily that they think is improvident and the sanctions are well thought out and measured both of these are clear here we can't figure out anything i can't i put my head to this i can't find anything that is wrong with a bankruptcy judge turning around saying look i've heard your objections already on all of this i've overruled them but i'm going to let you go ahead and respond to the request i'm going to let you make your objections you've got to file him so that i can review them and keep this process moving along you've got a phylum and to the extent you don't file and you've got to produce documents by february third that's about as proper and appropriate as can be and what happened is they just didn't do those types so let me move to the to the three points that they've raised here the first point is that you shouldn't have assessed joint and several liability against all of us and there their argument is not that there's something wrong with joint and several liability inherently the argument is much more of a nuanced factual argument they're claiming that some of these entities actually produced everything that they were supposed to but were lumped in on the sanctions anyway well they have not demonstrated that in this filing the most they can say is they've demonstrated that here in their one party didn't have a tax return another party didn't have a general ledger but that's not what the judge that the judge's order was clear and it was a specific finding as to each of the  was you didn't file the objections that i told you to file if you were going to stand by them and you didn't produce everything on this lengthy list for them to overturn the order they would have to come in with some sort of evidence that says here's where i produced item number one number two number three number four and as the court has noted they would have had to have raised this in the court below what is being argued instead is  convenient but improper argument that just because i didn't have one or i did have one or didn't have one of twenty items i therefore must have responded and produced on everything else and that's not supported in the record it's certainly not clear the second argument that they have raised in this case and the third argument both go to things that i would submit our efforts to raise as an issue items you had a remedy for at the time and chose not to exercise and i'll start with mr levin falls health there's no question that there were points in time where mr leventhal is health was an issue in this but what there is no quit also is no question about is that there was never a request for an extension of time quite the contrary as we've pointed out in our in our moving papers the indication from the appellant's was we're fine we're here we're ready to go mr leventhal was sick he's back to work now he's got a staff he's got a whole team of lawyers so you cannot claim error you certainly cannot claim clear error when you as the litigant didn't ever turn around to the judge and say hey judge can we have some more time they didn't ask us we would have given it had it been asked it's an after the fact effort to undermine the ruling as we see a very similar argument in their in their final claim of error which is the judge forced us to respond to a subpoena which was way too confusing for us to be suppressed ponding to well factually let me start factually because there was i think some incorrect statement of the record what what happened was these subpoenas were proposed in october  the defendants the appellant's would not would not agree that the subpoenas could be issued we went to a hearing to determine whether or not the subpoenas would be issued on november third during that hearing the appellant's raised all manner of objections they were argued but particularly with respect to the tax returns the argument was hey look we don't have to produce the very argument i'm making here we don't have to produce these tax returns unless they show something that relates to the h away and the car can i tell if you have more news that precise and now what's being argued incredibly is that rather than that being a clarification of what the order met there are now arguing that and this is permeated everything in this case they're now arguing that oh no no that was an oral ruling that was somehow countermanded by the subsequent written order that is not at all what happened we went forward then they got another opportunity in january they had again when we brought a motion to compel because they would not cooperate the court held another hearing and in that they argued again about the extent of the subpoenas again at length about the tax return to exactly the same result court said produce them and let me be clear on this they had tax returns some of them maybe didn't why they didn't have them whether it was passed through entities or or things with the i r s i don't know but some of them had it and not one of them produced the tax return and there could have been no confusion what so ever as to what they're supposed to do but let's presume there was confusion as to what's they were supposed to do i actually had almost a two hour conversation with the lawyers on the other side going through every single one of these requests immediately after the january hearing to make sure there was no confusion and there wasn't any but let's say there had been they had a remedy the court said file any objection that you want to you just have to file it they didn't want to file it because they didn't want to get sanctioned for improper objections so what we've come to after all of this is is that sophisticated entities with was sophisticated trial counsel with every opportunity in the world to raise the objections that are being raised now chose not to raise them chose not to raise and it was intentional i believe at the time it was a strategic decision and and the judge was entirely right to follow and do what she did as a matter of fact i will tell you i was extraordinarily impressed with judge mary grace deal throughout this whole process it was complicated there were a lot of different things she was measured from day one she she went through all of the things she was supposed to do methodically we had a daylong hearing on whether or not these sanctions were appropriate and and she limited down considerably what i had requested but i think it was a very well measured very well measured thought out order and before before stepping down i'll just say one more thing if really a lot of the root of their case is an argument that's that's that's derived from the chant asama versus mazda k and i do think that's a good case to look at and compare what happened in that case which is what happened here in the the district court and it's pretty clear judge poe flat was the author and judge it's pretty clear from his opinion that the the sense was the district court had just abrogated its responsibility and what it happened was the plane if it issues but they were going over be so very aggressive discovery requests and mazda had objected and they brought in some extraneous issues mazda has had objected vehemently mazda on its own accord filed the objections multiple times it then contacted the court twenty five times according to the opinion and asked for the court to review its objections the court wouldn't do it and ultimately the court said you go respond i'm not going to review your objections and what that led to was mazda doing a couple of things one was not responding to anything what the court called self help the other one was was continuing to argue and do these types of things but at the end of the day the court entered the most draconian sanction it could instruct the pleadings bastes was entirely right to reverse that decision on the on the facts of that case will be happy well if he says it's got to be all right but but if you compare that to here there was no effort that they didn't follow the order to file the the objections they didn't come in and argue they were heard twice and over ruled on it this is just straight out defiance of a court order and i would submit that it would have been error under rule thirty seven under rule from one of five and it would have been a profound mistake for the district court and for the bankruptcy court not to have awarded these sanctions because if you allow this type of strategic obtuse cation to go forward it kills the process it kills the process it puts the other lawyer in the position that he's got to go fight for things and and the targets on everybody and it just becomes a mess so i think judge mary grace fielded a wonderful job on this i think there was no error whatsoever i think when below and i will say that in the at the final hearing on this case and in her final order she said that she was not impressed with counsel on either side there was over lawyer ing there was aggressive and i hear you and those are fair points but i don't see how that gets you out of sanctions if just because the other side may have also deserve them doesn't certainly although in a case where you are trying to unlock the court's power to inherent authority or its discovery authority to impose sanctions there is always a requirement in bankruptcy court civil litigation wherever we are of good faith going into it and when the two parties neither of them have  court really ought to leave them where they stand and in this case the lawyers the clear error here certainly the use of discretion i should say the clearer it abuse of discretion the most clear one is the court's failure to filed by appellants bankruptcy counsel and during the evidence cherry hearings those were the be the three pieces of evidence in the record it was just explained to the court that liberty capital had tax returns for two thousand and six through two thousand  but didn't produce some because it thought that they were not specifically requested other than liberty capital every single other one of the a palin's either was a single member l l c or something didn't have one they either had failed to file them or they should have filed them and didn't or they weren't supposed to file them so those were entities that hadn't delayed in producing dogmas they simply didn't have documents to produce that might be the tax returns but what about the ledgers and absent documents absolutely the general ledger following parties didn't have any ledgers to produce at the time they or or were the testimony was it an avid letters to produce at the time blue heron hampton island club reflections house turtle lake hampton land holdings the following is produced ledgers that were redacted fulcrum and liberty the following produced a lecture excerpt that we were discussing previously hampton island l l c and all this was a stablish through testimony at the evidentiary hearing as to the organization charts there was no dispute that the organization charts were produced it was just there was some dissatisfaction with the content of the multi million but that was explained so these are the kinds of issues that we're dealing with where maybe one of the parties or maybe two of the parties had documents that they held back because they did not believe that they had been specifically requested in the subpoena but that was a difference of opinion about what that exhibit a meant it wasn't a difference that wasn't a refusal to comply with a court order other parties employee didn't have documents where the property owners told on february third that certain entities don't have tax returns or don't have general ledgers i believe that that information trickled out in the days following and i will say  counsel's credit there was a new lawyer who entered an appearance in the few days leading up to the february third deadline hayden kepner he appears throughout the record subsequently he was trying to get up to speed at the time the record reflects and he did the best that he could to get together the documents and get them for years i see my time is up