Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-14-01446/USCOURTS-ca7-14-01446-0/pdf.json

Parties Involved:
Larry Dominick
Appellant
Merced Rojas
Appellee
Town of Cicero
Appellant

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 14-1446

MERCED ROJAS,

Plaintiff-Appellee,

v.

TOWN OF CICERO, ILLINOIS, and LARRY DOMINICK,

Defendants-Appellants.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 08 C 5913 — Thomas M. Durkin, Judge.

____________________

ARGUED DECEMBER 10, 2014 — DECIDED JANUARY 5, 2015

____________________

Before EASTERBROOK, SYKES, and HAMILTON, Circuit Judges.

EASTERBROOK, Circuit Judge. Merced Rojas contended in 

this suit under 42 U.S.C. §1983 that the Town of Cicero violated the First Amendment by firing him because he supported a political opponent of Larry Dominick, the Town’s 

president. After an eight-day trial, a jury found in Rojas’s 

favor and awarded him $650,000 in damages.

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The victory was short-lived. District Judge Holderman 

granted defendants’ motion for a new trial, concluding that 

Dana L. Kurtz, Rojas’s lawyer, had engaged in serious misconduct during the trial. 2011 U.S. Dist. LEXIS 147867 (N.D. 

Ill. Dec. 22, 2011). Judge Holderman found that Kurtz made 

statements designed to mislead the jury, elicited hearsay responses that she knew would prejudice the defendants even 

though the judge was bound to strike the testimony (which 

he did), argued with the judge in a way that informed the 

jury about evidence that the court had excluded, and undermined the credibility of an important defense witness by 

asking him questions that presented him in a bad light, even 

though Kurtz lacked a good-faith basis for believing the 

questions proper.

Before the second trial could occur, the case was reassigned to District Judge Durkin. With his encouragement, 

the parties settled. The resolution provides Rojas with 

$212,500 as compensation for the discharge and Kurtz with 

fees of $287,500. (The settlement states that the amounts are 

confidential, but counsel for both sides have consented to 

their disclosure.) Both amounts are significantly less than 

Rojas and Kurtz would have received, had the jury’s verdict 

stood. Judge Durkin estimated that Kurtz would have obtained an award under 42 U.S.C. §1988 at least as high as the 

$650,000 in damages, if not higher.

The settlement did not resolve the defendants’ motions 

for sanctions under 28 U.S.C. §1927 and Fed. R. Civ. P. 

26(g)(3). Section 1927 authorizes sanctions against lawyers 

who needlessly multiply the proceedings, as Kurtz had done 

by improper conduct that led to many post-verdict motions 

and the need to prepare for a second trial. The motion under 

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No. 14-1446 3

Rule 26(g)(3) was based on conduct different from Kurtz’s 

behavior in court. After Judge Holderman set aside the jury’s verdict, defense counsel learned that Rojas had filed a 

bankruptcy petition six months after this suit began. Kurtz 

did not reveal this during discovery. (Apparently Rojas kept 

it a secret from Kurtz for a while, but after she learned of the 

bankruptcy she still did not tell defendants.) The bankruptcy 

petition could have affected whether Rojas is a proper plaintiff. Perhaps the legal claim passed to the trustee in bankruptcy for the benefit of his creditors—and the fact that Rojas valued the suit on his schedule of assets at much less than 

he asked the jury to award (indeed, much less than he demanded in settlement) could have provided the defense with 

a talking point at the trial or retrial.

Judge Durkin denied the motion for sanctions. Section 

1927 gives a judge discretion whether to award sanctions, 

and Judge Durkin exercised that discretion against an 

award. He thought that both Rojas and Kurtz had lost a lot 

of money (about $400,000 apiece) when the settlement replaced the jury’s verdict. That is sanction enough, he concluded. As for concealing the bankruptcy, the judge wrote 

that a “district court in its discretion may impose sanctions 

for discovery violations” and that the same considerations 

that led to a denial of relief under §1927 also justify a discretionary denial under Rule 26.

The denial of the §1927 motion was not an abuse of discretion. Judge Durkin thought that Kurtz was out of pocket 

as a result of her misconduct, and this seems likely, though 

she may not have lost as much as the judge supposed. The 

right comparison is not between the verdict and the settlement, but between that settlement and what the verdict (and 

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corresponding fees) would have been in the absence of misconduct. If a zealous advocate who stayed within ethical 

bounds would have produced a verdict of, say, $300,000, 

then both Rojas and Kurtz lost much less than Judge Durkin 

supposed. If, indeed, a properly conducted trial would have 

led to a verdict under $212,500, or to a verdict for the defense, then Kurtz has gained from her misconduct. But the 

fact that defendants were willing to pay $500,000 (compensation plus fees) to avoid a second trial implies that Rojas had 

good chances of a substantial recovery at a properly conducted proceeding. And we recognize that the Town’s option to obtain a second trial was itself costly to Kurtz; the 

Town would not have asked for this relief if it expected Rojas and Kurtz to do better the second time. Evaluating a 

counterfactual—what verdict Rojas would have received 

had the trial been conducted properly—is a daunting task, 

and any answer is contestable. Since the district court would 

have had discretion to find that Judge Holderman’s opinion, 

which impugned Kurtz’s reputation, was a sufficient response even if she did not suffer a monetary loss, we think it 

best to respect the court’s conclusion under §1927.

Rule 26(g)(3) is a different matter. Judge Durkin believed 

that it, like §1927, affords a district court the discretion to let 

a delict pass without sanctions. It does not. Lawyers must 

certify that they have fulfilled their discovery obligations. 

Rule 26(g)(3) provides (emphasis added): “If a certification

violates this rule without substantial justification, the court, 

on motion or on its own, must impose an appropriate sanction on the signer, the party on whose behalf the signer was 

acting, or both. The sanction may include an order to pay the 

reasonable expenses, including attorney’s fees, caused by the 

violation.” Rule 26(g)(3) gives the judge discretion over the 

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No. 14-1446 5

nature of the sanction but not whether to impose one. Kurtz 

has not contested Judge Durkin’s conclusion that her conduct violates Rule 26(g)(1), so some sanction is mandatory.

Defendants maintain that only money (measured by their 

attorneys’ fees) will do. That is not what the Rule says, however. The sanction “may” include attorneys’ fees, but that is 

not essential. All that is required is a sanction “appropriate” 

under the circumstances.

Identifying the “appropriate” sanction is a task for the 

district court. It could be money, but it also could be a formal 

(and public) reprimand or censure. The discovery problem is 

unrelated to the reason Judge Holderman granted a new trial, and to the reputational effect of Judge Holderman’s opinion, so Judge Durkin’s reasons for not sanctioning Kurtz under §1927 do not carry over to Rule 26(g)(3).

Judge Durkin also should consider Kurtz’s disciplinary 

history, which is substantial. See, e.g., Gross v. Cicero, 619 

F.3d 697, 701–02 (7th Cir. 2010) (striking the statement of 

facts from Kurtz’s brief for failing to cite the record); Gross v. 

Cicero, 528 F.3d 498, 500–01 (7th Cir. 2008) (fining Kurtz because she failed to file an opening brief for more than 17 

months after filing the notice of appeal); Matula v. Des 

Plaines, 2013 U.S. Dist. LEXIS 146017 (N.D. Ill. Oct. 8, 2013) 

(fining plaintiff’s counsel—Kurtz and one other lawyer—

$100 for missing the deadline for delivering a paper copy of 

the complaint to the assigned district judge); Lujano v. Cicero, 

2011 U.S. Dist. LEXIS 148913 (N.D. Ill. Dec. 23, 2011) (imposing sanctions on Kurtz’s client for delaying the production of 

certain documents for several years); AG Equipment Co. v. 

AIG Life Insurance Co., 2008 U.S. Dist. LEXIS 99915 (N.D. Okla. 

Dec. 10, 2008) (fining Kurtz $250 for discovery abuses); Gross 

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v. Cicero, 2005 U.S. Dist. LEXIS 23088 at *6–7 (N.D. Ill. Sept. 20, 

2005) (prohibiting Kurtz’s client from introducing expert testimony as a sanction for her delay during discovery); Crohan 

v. Orland Park, 2004 U.S. Dist. LEXIS 5006 at *4, 6–8 (N.D. Ill. 

Mar. 24, 2004) (same) (“circumstances in this case indicate 

that Plaintiff’s counsel has engaged in gamesmanship”).

Kurtz’s unwillingness to conform her conduct to requirements laid down by judicial orders or rules of procedure is 

unlikely to change unless courts respond firmly.

The decision is affirmed with respect to the motion under 

§1927 and vacated with respect to the motion under Rule 

26(g)(3). The case is remanded for proceedings consistent 

with this opinion.

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