2009 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 6-24-2009 

# L ai v . D i s t V C Ethic s C omm P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 07-1121

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a no va . e du/thir dc ir c uit_2009

Thi s de c i sion i s br ou ght t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. It h as be e n a c c ept e d for inclusion in 2009 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. F or mor e inform at ion, p le as e c on t a ct Be n j amin . C a rl s on@l a

w . vi l l a no va . e du . Re c omme nde d C it at ion " L ai v . Di s t V C Ethic s C omm" (2009). 2009 D e cisio n s . P ape r 1148. http://d i git alc ommon s .l a

w . vi l l a no va . e du/thir dc ir c uit_2009/1148T he H onor abl e J ane A . R es t ani , C hi ef J udge fort he U ni t ed St at es C our tof * I nt ernat i onal T r ade, s i t t i ng bydes i gnat i on. 1 NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N o. 07- 1121

_____________ KAT HAR I NE L AI v. DI S T RI CT V- C E T HI CS CO M M I T T E E ; RO BE RT WAS S E RMAN; WAS S E RMAN, J UR I S T A & S T OL Z ; BR UC E WI S OT S KY; RAVI N GREENBE RG; J ULI AN W I LS EY; F RANZBL AU D RATCH

B ruce W i s ot s ky ; R avi n G r eenbe r g; J ul i an W i l s ey ; Fr anzbl au D r at ch, A p p e llan ts O n A p p ea l from the U n it ed S tat es D istri ct C o u rt fort he D i s t r i ctC our tof N ew J er s ey D i s t r i ctC our tN o. 06- cv- 02661 D istric t Ju d g e : T h e H o n o ra b le W ill iam J. M a rtin i Subm i t t ed Pur s uantt o T hi r d C i r cui tL . A . R . 34. 1( a)

J une 24, 2009 B e f o re : B A R R Y , S M IT H , C i r cui tJudges a n d R E S T A N I, Judge * ( Fi l ed: J une 24, 2009)2 OP I NI ON S M IT H , C i r cui tJudge. B ruce W i s ot s ky( “W i s ot s ky ”) , R avi n G r eenbe r g, P. C . ( “R avi n”) , J ul i an W i l s ey ( “W i l s ey ”) , and Fr anzbl au D r at ch, P. C . ( “Fr anzbl au”, col l ect i vel y“A ppel l ant s ”) appea l a n o rd e r f

ro m th e D istric t C o u rt o f N e w Je rse yg ra n tin g th e ir R u le 1 1 m o tio n a s to s a n c t i o n s b u td e n y i n g i ta s t o f e e s . F o rt h e r e a s o n s t h a tf o l l o w, we wi l l a f

f i r m. T h is case arises o u t of

K athe ri n e L ai’s (“L ai”) pro se b a n k ru p tc yf ilin g in 2 0 0 1 . T h e B a n k ru p tcy C o u rt a p p o in ted R a v in a s T ru ste e ’s c o u n se l, an d W iso tsk yp rim a rily w or ked on the fi l e fort he l aw fi r m . A s par tof the bankrupt cypr ocee di ngs , R avi n fi l ed an adver s arypr ocee di ng agai ns ta companyow ned byL ai . A ft era cont ent i ous s er i es of m ot i ons , L ai fi l ed a c om pl ai nti n t he Super i orC our tof N ew J er s eyagai ns tR avi n and W i s ot s kyr el at ed t o t hei ri nvol vement i n herbankrupt cycl ai m . R avi n r et ai ned Fr anzbl au fori t s defe ns e, and W i l s eyw or ked on the ca s e forFr anzbl au. T he s t at e ca s e w as r emoved t o t he B ankrupt cyC our ti n M ay2002, and the C our tdi s m i s s ed the compl ai nt and enj oi ned Lai fr om fi l i ng fur t hercl ai m s r el at ed t o t he bankrupt cypr ocee di ng w i t hout C our tper m i s s i on. N onethel es s , L ai fi l ed a f eder al act i on al l egi ng di s cr i m i nat i on by R aven a nd W i s ot s ky . A ppel l ant s fi l ed a mot i on t o di s m i s s and a mot i on fort he im p o sitio n o f

R u le 1 1 sa n c tio n s. T h e D istric t C o u rt g ra n ted b o th m o tio n s, b u t o p ted to im p o se a n o n -m o n e tar ysa n c tio n . A p p e llan ts a p p e a led th e D istric t C o u rt’s d e n ial o f th e irA s w e w rite f o r th e b e n e f

it o f th e p a rties a lo n e , w h o a re f a m ili a r w ith th e f

a c ts 1 and pr ocedur al hi s t or yof thi s cas e, w e conf i ne ourdi s cus s i on t o t he l egal i s s ues pr es ent ed a n d in c lu d e o n ly th o s e f a c ts n e c e s s a ry to o u r d is p o s itio n . T he D i s t r i ctC our thad j ur i s di ct i on under28 U . S. C . § 1331, and thi s C our thas 2 ju ri s d ic tio n u n d e r 2 8 U .S .C . § 1 2 9 1 . 3 requestfor at t orneyfees. 1 W e r evi ew a di s t r i ctcour t ’ s deci s i on t o gr antordenya r eques tforat t or neyfee s for an abus e of di s cr et i on. Si m m er m an v. C or i no , 2 7 F . 3 d 5 8 , 6 1 (3d C ir . 1 9 9 4 ). “[ W ]e 2 eval uat e the court ’ s fac tual det er m i nat i ons , l egal concl us i ons , and choi ce of an ‘appropri at e sanct i on ’ w i t h sub st anti al defe rence, con si deri ng . . . on l yw hethert ho se det er m i nat i ons ar e contr aryt o r eas on orw i t houta r eas onabl e bas i s i n l aw and fa ct . ” I d. at 62 ( quot i ng C oot er& G el lv. H ar tm ar x C or p. , 4 9 6 U . S . 3 8 4 , 4 0 5 (19 9 0 )). In th is c a se , w e d o n o t b e liev e th a t th e D istric t C o u rt a b u se d its d isc re tio n w h e n it deni ed A ppel l ant s ’ r eques tform onet arys anct i ons . A ft ers t at i ng t hati t“di s cern[ed] no m er i t ” i n and found “ no val i d s uppor t ” forL ai ’ s cl ai m s , t he D i s t r i ctC our ti m pos ed an appr opr i at e s anct i on on L ai . I tdi r ect ed thats he maynotfi l e anotherl aw s ui tor p ro c e e d in g f

o r a n yre a so n re late d to th e b a n k ru p tcy pr o c e e d in g a g a in st A p p e llan ts w i t houtt he C our t ’ s per m i s s i on. Fur t her m or e, des pi t e i t s deni al of the fe es r eques t , t he D i s t r i ctC our ts t at ed that“a r eques tforfee s and otherm onet arys anct i ons w oul d be appr opr i at e i f Pl ai nt i ff f ai l s t o compl yw i t h t he O r der s of thi s C our t . ” B eca us e w e bel i eve t hatt he D i s t r i ctC our tpr ovi ded a s uffi ci ents anct i on w hi l e l eavi ng open the pos s i bi l i t yfor addi t i onal s anct i ons i f Lai vi ol at es t he t er m s of the C our t ’ s or der , w e do notfi nd t hatt he4

D istri ct C o u rtab u sed it s d iscreti o n . W e w il l aff irm the D istri ct C o u rt ’s ord er.