DISCUSSION

I LEGAL STANDARD

Preliminarily, Langone fails to specify the procedural basis for his present motion. Although
characterized as objections to the magistrate judge’s report and recommendation, Langone
admittedly “does not believe he can object in good faith to the manner in which the fees were
calculated.” Obj. at 1. Because the magistrate judge confined his recommendation to the amount
of attorneys’ fees and costs properly awarded, Langone’s motion is not an objection to a magistrate’s
report and recommendation. Cf Rajaratnam v. Moyer, 47 F.3d 922, 925, n. 8 (7" Cir. 1995) (de
novo review does not require a new hearing, but simply means the court must give “fresh
consideration to those issues to which specific objections have been made”); Oliveros v. Pyle-
National, Inc., No. 90 C 6745, 1992 WL 177044 (N.D. ILL. July 16, 1992) (objections to magistrate
judge’s report and recommendation must be specific to proposed findings and recommendations).

Langone’s purported objections are in reality a motion to reconsider and vacate this court’s
order of January 30, 2004 insofar as sanctions against him are concerned. Once again, Langone
insists uncertainty remains about the scope of this court’s referral order and seeks clarification as to
whether “the Magistrate had authority to determine whether sanctions were appropriate.” Obj. at 2.
In doing so, Langone requests the court to recommit the issue of the propriety of Rule 37(b)
sanctions for violation of a Rule 26(c) protective order to the magistrate judge. Contrary to
Langone’s insistence, this court unambiguously referred only the issue of appropriate sanctions to
the magistrate judge, not whether sanctions were warranted under Rule 37(b). See Whitehead, 2004

WL 316413 at * 5, 10.


circumvent this court’s orders only serve to highlight his temerity. Accordingly, this court’s award
of sanctions pursuant to Rule 37(b) stands.

Langone’s baseless assertion that due process was not accorded fails as a matter of law.
Kapco Manufacturing Co., Inc. v. C & O Enterprises, Inc., 886 F.2d 1485, 1495 (7" Cir. 1989). He
cannot deny that he was given notice and an opportunity to respond to defendants’ sanctions motion.
Defendants specifically notified Langone that they were seeking sanctions against him. See Def.
Mot. to Strike, Dismiss, and for Sanctions at * 2 (“Plaintiff's counsel should be sanctioned under
Fed. R. Civ. P. 37 for his misconduct and ordered to pay defendants’ costs and attorneys’ fees in
defending this action”). This court ordered Langone to respond. Minute Order, 12/16/03, Docket
No. 25, Langone filed a 14-page response. See Pl’s Opp. Mot. Strike, Dismiss and Sanctions. In
the context of this record, Langone’s motion for clarification was denied because it was clearly
frivolous. Minute Order, 4/13/04, Docket No. 48. Until now, Langone never suggested the necessity
of ahearing. Moreover, his proposed hearing is ofno consequence. Alison Harrington’s testimony
about the parties’ course of dealing is not relevant; the Beene protective order unambiguously
prohibited Langone’s use of Gateway’s confidential information. This court has repeatedly
considered Langone’s arguments; no other process is due. See Kapco Manufacturing Co., Inc., 886
F.2d at 1495.

Nor is this court required to rest solely on Rule 37(b) to sanction Langone for his misconduct.
It is well-settled that a court has inherent authority to sanction for an attorney’s bad faith conduct.
Chambers v. NASCO, Inc., 501 U.S. 32, 42 (1991). Inherent authority is “governed not by rule or
statute but by the contro! necessarily vested in courts to manage their own affairs so as to achieve

the orderly and expeditious disposition of cases.” Jd. Sanctions such as shifting attorneys’ fees may


is appropriate for “any reason justifying relief from the operation of the judgment,” where there is
a substantial danger that the underlying judgment was unjust. Jd. See also Zakutansky v. Bionetics
Corp., No. 92 C 2002, 1992 WL 390898, at *1 (N.D. Ill. 1992) (motions for reconsideration rarely
appropriate: where the court patently misunderstood party, rendered decision outside presented
adversarial issues, or learned of a controlling legal or factual change after decision).

One procedural wrinkle remains. In February 2004, Langone timely filed a notice of appeal.
Jurisdiction, therefore, is problematic. See Brown v. U.S., 976 F.2d 1104, 1110-11 (7 Cir. 1992).
Motions to reconsider filed during the pendency of appeal are to be reviewed promptly, and either
denied or, ifthe court is inclined to grant relief, to so indicate to effectuate a speedy remand. Jd. See
also Textile Banking Co., Inc. v. Rentschler, 657 F.2d 844, 850, n. 2 (7" Cir. 1981).

I. Propriety of Rule 37(b) Sanctions

Preliminarily, the court notes Langone’s repeated misrepresentations regarding the brief he
filed in opposition to defendants’ motion to strike and dismiss and for sanctions. Contrary to his
current position, Langone’s brief only argued the propriety of dismissing Whitehead’s amended
complaint as a sanction under Rule 37(b). As explained, the amended complaint was not dismissed
as a Rule 37(b) sanction, but because it failed to state a RICO claim in the absence of the allegations
stricken under Rule 12(f). However, Rule 37(b) was the basis of the sanctions award against
Langone. See Whitehead, 2004 WL 316413 at * 5, 10. Langone’s reiterated argument that
violations of Rule 26(c) protective orders cannot be sanctioned pursuant to Rule 37(b) remains
unpersuasive. He once again relies on Lipscher, et al. v. LRP Publications, Inc., 266 F.3d 1305 (11"
Cir. 2001), As Langone previously conceded, there is authority to the contrary. Compare Lipsher,

266 F.3d at 1323 (Rule 37(b) sanctions may not be awarded for violations of Rule 26(c) protective


Defendants’ motion to dismiss explicitly requested sanctions and the sanctions issue was
fully briefed by the parties before this court concluded sanctions should be imposed. In briefing the
sanctions motion, Langone admitted violating the Beene protective order entered by Judge Bucklo.
He attempted to justify his misconduct on two bases. He argued that a purported agreement with
Gateway’s counsel allowed him to use Gateway’s confidential information. Pl’s Resp. Mot. Strike,
Dismiss and Sanctions at 1-3. He also argued that the Beene protective order unreasonably protected
non-confidential information. Jd. at 9, 12. Both excuses were rejected, and this court determined
Rule 37(b) sanctions appropriate. See Whitehead, 2004 WL 316413 at * 4-5. The purported
agreement between Langone and Gateway’s counsel was not only contradicted by Gateway’s
counsel, but irrelevant under the unambiguous Beene protective order. Jd. at *4. Moreover,
irrespective of its validity, Langone was required to comply with the Beene protective order until and
unless Judge Bucklo modified the protective order. Id. at * 5.

Langone alternatively requests this court to reconsider its sanction of his outright violation
of the Beene protective order pursuant to Rule 37(b). This court construes Langone’s motion as a
motion for reconsideration pursuant to Fed. R. Civ. P. 60(b) because it was served more than ten
days after entry ofjudgment. Relief under Rule 60(b) is an extraordinary remedy that is granted only
in exceptional circumstances. Provident Sav. Bank v. Popovich, 71 F.3d 696, 698 (7" Cir. 1995).
A motion for reconsideration brought under Rule 60(b) is not at the disposal of parties who want to
“rehash” old arguments. Arenson v. Whitehall Convalescent and Nursing Home, Inc., 161 F.R.D.
355, 357 (N.D. Ill. 1995) (citing In re Oil Spill by Amoco Cadiz, 794 F Supp. 261, 267 (N.D. Til.
1992)). Relief from this court’s sanctions order may be granted if Langone demonstrates “mistake,

inadvertence, surprise, or excusable neglect.” Fed. R. Civ. P. 60(b). Alternatively, reconsideration


he unilaterally incorporated the information into Whitehead’s amended complaint in flagrant
violation of Judge Bucklo’s order. American Nat’l Bank and Trust Co. of Chicago, 2002 WL
1067696 at *3 (parties must comply with the protective order’s terms or subject themselves to
possible sanctions); DEV Industries, Inc. v. Rockwell Graphic Systems, Inc., No. 91 C 7197, 1992
WL 100908 at * 2 (N.D. Ill. 1992) Gudge enforced a protective order issued by another judge of this
court in strikingly similar circumstances). Invalidity is no excuse. See Krynicki v. Lopacich, 983
F.2d 74, 78 (7" Cir, 1992) (“litigants .. . [must] obey invalid [confidentiality] orders while they are
outstanding”). Second, Langone’s First Amendment rights have not been violated, Langone
voluntarily restricted those rights by agreeing to the Beene protective order. Jepson v. Makita, 30
F.3d 854, 860-61 (7" Cir. 1994) (parties do not have a constitutionally protected right to disseminate
information obtained in discovery subject to protective order),

Langone’s final two arguments are equally frivolous. In briefing the motion to dismiss and
for sanctions, Langone admitted he violated the terms of the Beene protective order. His primary
justification for doing so ~ the purported course of dealing between the parties — was not only
contradicted by the affidavit of Gateway’s counsel, but irrelevant in light of the unambiguous terms
of the Beene protective order prohibiting use of Gateway’s confidential information. American Nat'l
Trust Co. of Chicago v. Kentucky Fried Chicken of Southern California, Inc., 308 U.App.3d 106,
119, 719 N.E.2d 201, 210 (Ill. App. Ct. 1999) (contractual terms must be accorded “their plain,
ordinary, popular and natural meaning” and in the absence of an ambiguity, “the intention of the
parties ... must be ascertained by the language utilized in the contract itself, not by the construction

placed upon it by the parties’). Langone’s conduct was flagrant, and his repeated attempts to


Minute Ordee Form (06/97)

United States District Court, Northern District of Illinois

Serscect tas | _SwanneB. Conlon | ut

CASE NUMBER 03 C 5684 DATE 6/28/2004
CASE WHITEHEAD vs, GATEWAY CHEVROLET, OLDSMOBILE, INC.
TITLE

[In the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented. ]

DOCKET ENTRY:

ql) Oo Filed motion of [ use listing in “Motion” box above.]

(2) o Brief in support of motion due

(3) Qa Answer brief to motion due. Reply to answer brief due.

(4) a Ruling/Hearing on set for at

(8) im Status hearing[held/continued to] [set for/re-set for] on _ set for _ at.

(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on set for at

(7) im Trial[set for/re-set for] on at

(8) im [Bench/Jury trial] [Hearing] held/continued to at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

QUFRCP4(m) ClLocal Rule 41.1 CUFRCP41(a)(1) O FRCP41(a)(2).

ao 4 [Other docket entry] Christopher V. Langone’s objections to the magistrate judge’s report and
recommendation [54-1] are overruled, The court adopts the report and recommendation regarding
sanctions pursuant to Rule 37(b) [53-1]. An award of $15,202.00 in sanctions is imposed against
Christopher V. Langone. ENTER MEMORANDUM OPINION AND ORDER.

a) @ {For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required, umber of polices

wo | Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices

Mail AO 450 form.

J | Copy to Magistrate Judge Keys. Lunad 1alusia sn
cB emus OG :OlHY 62 NOT 4002 a setiee
initials = a
Leauge ini



be imposed under the court’s inherent authority. Jd. at 44-5. See also U.S. for Use and Benefit of
Treat Bros. Co. v. Fidelity and Deposit of Maryland, 986 F.2d 1110, 1119 (7" Cir. 1993). In
addition to Rule 37(b), Langone’s flagrant violation of the Beene protective order without
justification is sanctionable under this court’s inherent authority.
CONCLUSION
Langone’s objections to the magistrate judge’s report and recommendation, construed as a
motion for reconsideration, is denied. The court adopts the magistrate judge’s report and

recommendation and imposes Rule 37(b) sanctions against Langone in the amount of $15,202.00.

June 28, 2004 ENTER:

Steere! (3. CoS

SuzannéB. Conlon
United States District Judge

10


orders) with Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 784 (9" Cir. 1983) (Rule
37(b) sanctions may be awarded for violations of the terms of a protective discovery order). See also
Pl’s Opp. Mot. Strike, Dismiss and Sanctions at 6 (discussing circuit split). The Seventh Circuit has
not considered this issue. Absent controlling authority, this court followed its prior decisions.
American Nat'l Bank and Trust Co. of Chicago v, AXA Client Solutions, LLC, Case No. 00 C 6786,
2002 WL 1067696 (N.D. Ill. 2002) (Rule 37(b) sanctions of attorney’s fees and expenses awarded
based on violation of agreed protective order). Other decisions support this court’s ruling. See, e.g.,
Blum v. Schlegel, Case No. 91 CV 6338, 1996 WL 925921, at * 5 (W.D.N.Y. May 9, 1996);
Poliquin v. Garden Way, Inc., 154 F.R.D. 29, 31 (D. Me. April 7, 1994). This issue has received
ample attention, and will not be revisited.

Langone advances four new arguments as to the purported injustice of the award of Rule
37(b) sanctions against him: (1) his conduct was justified because the Beene protective order was
invalid; (2) his conduct was protected by the First Amendment; (3) he was not afforded due process;
and (4) his conduct was not inherently egregious. Langone misses the mark. First, his argument that
the Beene protective order is invalid has no basis in fact or law. No support for the invalidity of the
Beene protective order exists in the record. Langone never argued — and does not argue now — that
Judge Bucklo entered the Beene protective order without examination. The restrictive coverage of
the Beene protective order, i.e., its protection of only 57 deal jackets, supports an inference of
validity. Langone was under no obligation to sign the Beene protective order; he chose not to
challenge its propriety before Judge Bucklo. Moreover, even after agreeing to the order, Langone
could have sought modification of the order to use Gateway’s confidential information in

Whitehead’s amended complaint. Again, he chose not to exercise available legal remedies. Instead,


order. Opp. Sanctions at 1.! To do so, Langone seized upon the phrase “defendants’ request for
sanctions pursuant to Rule 37(b)” in this court’s referral order to argue that this court intended the
magistrate to determine whether “Rule 37(b) sanctions can be . . . imposed for violating a
confidentiality order” in light of Langone’s citation to an Eleventh Circuit case in footnote 6 of his
original memorandum in opposition to the motion to dismiss and for sanctions. Jd. In any event,
Langone did not wait for a decision. Instead, just six days later, he filed with this court a motion for
clarification of the scope of the referral order. This court denied the motion. Minute Order, 4/1 3/04,
Docket No. 48. Thereafter, the magistrate judge also rejected Langone’s argument, explaining that
“Langone’s efforts are in vain. That ship has already sailed.” Keys Minute Order, 5/6/04, Docket
No. 53. The magistrate judge confined his recommendations to an award of attorneys’ fees in the
amount of $15,202.00. Langone’s objections do not challenge the amount of monetary sanctions
recommended by the magistrate judge. Obj. at 1 (“Langone does not believe he can object in good
faith to the manner in which the fees were calculated”). Instead, he once again challenges the
propriety of any sanctions; his present “objections” are virtually identical to his original response
brief to the magistrate judge as to sanctions. Compare Langone Resp. Sanctions, at 2-13 with

Langone Obj. at 2-12.

' Specifically, Langone argued “[i]n court on March 31, 2003, the [magistrate judge]
suggested that the scope of this referral was simply to assess Defendants’ legal expenses,
reasoning that sanctions have already been imposed by Judge Conlon. This is not counsel’s
understanding.” Jd.



and title forgery, victimizing her and other consumers. Whitehead’s allegations were based on
confidential information obtained by Langone from Gateway as plaintiffs counsel in Isaiah Beene
v. Gateway Chevrolet, Oldsmobile, Inc., Case No. 02 C 830 (hereinafter, “Beene litigation”). This
information was subject to an agreed protective order entered by Judge Bucklo, which Langone
signed, in the Beene litigation. Def. Mot. to Strike, Dismiss and Sanctions, Ex. A. The protective
order applied solely to 57 of Gateway’s customer files, i.e., so-called deal jackets (hereinafter,
“Beene protective order”), Id. Langone admittedly violated the Beene protective order by using
Gateway’s confidential documents outside the Beene litigation. Accordingly, this court struck all
portions of Whitehead’s amended complaint referring to information subject to the Beene protective
order, pursuant Fed. R. Civ. P. 12(f). Because the amended complaint failed to state a RICO claim
in the absence of the stricken allegations, defendants’ motion to dismiss pursuant to Rule 12(b)(6)
was also granted. This court sanctioned Langone pursuant to Rule 37(b) for his flagrant violation of
the Beene protective order, and referred “[t]he issue of appropriate sanctions pursuant to Rule 37(b)
for violation of the Beene protective order... to the assigned magistrate judge for a report and
recommendation.” Whitehead, 2004 WL 316413 at * 5, 10.

Final judgment was entered for defendants on January 30, 2004. Twenty-eight days later,
Whitehead filed a notice of appeal. Docket No. 41, 2/27/04. Meanwhile, the magistrate judge
ordered defendants to file their brief regarding appropriate sanctions, including “itemization of fees
charged to clients for drafting, filing and pursuing defendants’ motion to strike and dismiss
plaintiff's first amended complaint, and for sanctions.” Keys Minute Order, 2/12/04, Docket No.
39, Thereafter, defendants filed their brief. After two extensions of time, Langone filed his

response. Langone challenged the magistrate judge’s understanding of the scope of the referral


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
JUN 2 9 2004

ANGELIA M. WHITEHEAD, )
)

Plaintiff, ) No. 03 C 5684
)

v. ) Suzanne B. Conlon, Judge

)
GATEWAY CHEVROLET, OLDSMOBILE, )
etal., )
)
Defendant. )

MEMORANDUM OPINION AND ORDER

Angelia M. Whitehead sued Gateway Chevrolet, Oldsmobile, Inc. and three individual
defendants in connection with her purchase of a 1996 Mercury Mystique. Whitehead alleged
violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c)
and common law fraud. Thereafter, Whitehead’s amended complaint was dismissed and her attorney
—Christopher V. Langone—was sanctioned pursuant to Fed. R. Civ. P.37(b). Whitehead v. Gateway
Chevrolet, et al., No. 03 C 5684, 2004 WL 316413 (N.D. Il. Feb. 2, 2004). The court referred the
matter to a magistrate judge for a report and recommendation on the appropriate sanctions to be
imposed on Langone. Langone has filed purported objections to the magistrate judge’s report and
recommendation that defendants be awarded $15,202.

BACKGROUND

The following background information is taken from relevant court orders, the parties’ briefs,

and this court’s decision in Whitehead, 2004 WL 316413 at *1, 3-5. Whitehead’s RICO claim

alleged that Gateway committed numerous acts of mail fraud, wire fraud, financial institution fraud

: 54