Source: https://caselaw.findlaw.com/us-2nd-circuit/1316756.html
Timestamp: 2020-01-19 16:44:47
Document Index: 330235956

Matched Legal Cases: ['§\u20022000', '§\u20021927', '§\u20021927', '§\u20021927', '§\u20021927', '§\u20021927', '§\u20021927']

Emmelyn Logan-Baldwin, Esq., Real Party in Interest-Appellant, v. MOBIL CORPORATION | FindLaw
Emmelyn Logan-Baldwin, Esq., Real Party in Interest-Appellant, v. MOBIL CORPORATION
Elizabeth KELLER, Plaintiff-Appellant, Emmelyn Logan-Baldwin, Esq., Real Party in Interest-Appellant, v. MOBIL CORPORATION, Mobil Oil Corporation, Mobil Chemical Co., a Division of Mobil Oil Corporation; and Rose Freeman, Individually and as Purchasing Agent (Supervisor), Mobil Chemical Company, a Division of Mobil Oil Corporation, Defendants-Appellees.
Nos. 1229, 1709 to 1711, Dockets 93-7225, 93-7275, 94-7319 and 94-7989.
Before: FEINBERG, WALKER and CABRANES, Circuit Judges. Emmelyn Logan-Baldwin, Rochester, NY, pro se, and for plaintiff-appellant. Gary H. Glaser, New York City (Winston & Strawn, William A. Carmell, of counsel), for defendants-appellees.
Plaintiff Elizabeth Keller appeals from the dismissal with prejudice by the United States District Court for the Western District of New York (Michael A. Telesca, Ch.J.) of her complaint against defendants-appellees Mobil Corporation, Mobil Oil Corporation, Mobil Chemical Co. and Rose Freeman (collectively referred to hereafter as “Mobil”) following termination of her employment by Mobil Chemical Co. The district court's dismissal was based on Keller's “repudiation” of a settlement agreement and the district court's finding that Keller's “persistent refusal to settle this matter has worked a hardship upon the defendant.” Keller's counsel, Emmelyn Logan-Baldwin, also has filed an appeal from a $10,000 sanction imposed upon her in March 1993 and reiterated by the district court in a decision of February 1994. For reasons set forth below, we vacate both the dismissal and the sanction and remand the case to the district court.
In her complaint filed in May 1990, Keller alleged that she had been terminated from her position as Buyer/Contract Administrator at appellee Mobil for discriminatory reasons prohibited by Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and other federal statutes. The requested relief included reinstatement and back pay. Eventually, the parties agreed to discuss bases for a settlement and sought the assistance of the court in that endeavor. Settlement discussions led to a conference in the chambers of Judge Telesca on July 16, 1992. While the parties had already been embroiled in their dispute for over two years prior to that conference, the July 1992 conference is the starting point for discussion of the issues presented on appeal.
On February 19, 1993, the district court held a hearing on Keller's motion for reconsideration, at which time Logan-Baldwin described the differences, as she saw them, between the terms of the July 1992 settlement and the terms of the October 1992 draft. Although Logan-Baldwin did indicate to the judge her concerns about whether Keller would have to exhaust administrative remedies before coming back to the judge and whether the judge's review would be de novo, Judge Telesca found no apparent difference between the parties' understandings regarding the court's retention of jurisdiction. The judge did acknowledge that there was a difference in understanding as to the terms of the confidentiality agreement. Judge Telesca asked Mobil if it would agree to a clause binding the parties for only four years rather than the lifetime term proposed by Mobil, and Mobil acceded. Judge Telesca also proposed a clause whereby the parties, during the four years, would be “free to acknowledge that there was a lawsuit in existence and that it is settled, but are not free to discuss the terms.” The parties agreed to this proposal.
In a decision of March 5, 1993, the court then denied Keller's motion to reconsider its earlier decision. Once again Judge Telesca ordered the parties to execute the October 1992 draft, with changes in the confidentiality clause as indicated at the February 19, 1993 hearing. Additionally, pursuant to 28 U.S.C. § 1927, Judge Telesca imposed a sanction on Logan-Baldwin, finding that she had “willfully and unreasonably obstructed and delayed a settlement which was reached after lengthy negotiations and significant recourse to the offices of th[e] Court.” He ordered Logan-Baldwin to pay Mobil $10,000 (purportedly Mobil's legal expenses since July 1992, discounted for negotiations that would have occurred regardless of Logan-Baldwin's conduct). When Keller failed to execute the agreement in compliance with his March 5 order, Judge Telesca dismissed her complaint with prejudice by order of March 25, 1993.
The CAMP settlement was composed of two parts. The first part was an agreement jointly to move the district court to rescind its dismissal with prejudice of Keller's complaint as well as its sanction against Logan-Baldwin. (This part is referred to hereafter as “the joint motion.”) The second part was an agreement as to the substance of Keller's relief. The document memorializing the latter agreement was to be held in escrow pending the district court's granting of the joint motion. (The second part of the CAMP settlement is referred to hereafter as “the agreement in escrow.”)
Although the district court had declined to withdraw its sanction order, Mobil offered to waive payment if Keller would consummate the agreement in escrow. Keller, through Logan-Baldwin, rejected this offer. Then, on March 18, 1994, Logan-Baldwin filed an appeal pro se and on behalf of Keller. Although the sanction order originally imposed in March 1993 and reiterated by the district court in February 1994 pertained to Logan-Baldwin exclusively, the March 18, 1994 notice of appeal purported to appeal from “so much of the [February 17, 1994] decision and order ․ that imposes, reaffirms and/or reasserts any sanction and/or penalty and/or judgment of misconduct against Elizabeth Keller and/or Emmelyn Logan-Baldwin․” (emphasis supplied). Mobil again offered to consummate the agreement in escrow with Keller, this time without waiving the right to payment of the $10,000. This offer would have permitted Logan-Baldwin to appeal the sanction order separately. There was no reply to this offer.
Logan-Baldwin argues that a district court must vacate any judgment in the interest of facilitating settlement pending appeal. That argument is based on a misreading of our decision in Nestle Co. v. Chester's Market, Inc., 756 F.2d 280 (2d Cir.1985), and subsequent cases including, significantly, the Supreme Court's recent decision in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994). While our decision in Nestle emphasized the importance of encouraging parties to settle disputes, the district court in this case was correct in concluding that we have not endorsed use of settlement as a means of “manipulat[ing] the judicial system” for the personal benefit of counsel. Cf. Manufacturers Hanover Trust Co. v. Yanakas, 11 F.3d 381, 385 (2d Cir.1993) (“[W]hen the proposed [judicial economy] can be realized only at the cost of increasing the vulnerability of the judicial system to manipulation, we view the investment as unsound.”).
Therefore, there is no question that despite the parties' agreement to ask for the withdrawal of the sanction order as a condition to settlement, the district court had the power to preserve a sanction already imposed on Logan-Baldwin pursuant to 28 U.S.C. § 1927. However, the question is whether, under the circumstances of this case, it erred in doing so.
Our decisions addressing this provision have emphasized the requirement that an attorney's acts be vexatious in order to be sanctionable. We have made it clear, for instance, that actions are sanctionable under § 1927 only if they are “so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose such as delay.” Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir.1986), cert. denied sub nom. Suffolk County v. Graseck, 480 U.S. 918, 107 S.Ct. 1373, 94 L.Ed.2d 689 (1987); see also United States v. International Bhd. of Teamsters, 948 F.2d 1338, 1345 (2d Cir.1991) (“Bad faith is the touchstone of an award under this statute.”); Kamen v. American Tel. & Tel., 791 F.2d 1006, 1010 (2d Cir.1986). But cf. Cruz v. Savage, 896 F.2d 626, 632 (1st Cir.1990) ( “Behavior is ‘vexatious' when it is harassing or annoying, regardless of whether it is intended to be so.”). In Hudson Motors Partnership v. Crest Leasing Enterprises, 845 F.Supp. 969, 978 (E.D.N.Y.1994), Judge Glasser examined the types of acts that, under the “bad faith” test, would justify sanctions under § 1927. These include: “resubmitting a motion that had previously been denied”; “bringing a motion based on ‘facts' the opposite of which were previously found by the court”; “making several insupportable bias recusal motions and repeated motions to reargue”; “continually engaging in obfuscation of the issues, hyperbolism and groundless presumptions in addition to insinuating that the court was biased”; and “waiting until the eve of trial before making a jury demand.” Id. (internal citations and quotation marks omitted).
We now turn to the allegedly sanctionable acts at issue. Preliminarily, we note our sympathy with Judge Telesca's frustration at the delay caused by Logan-Baldwin's excruciating attention to detail, as reflected in the record, and her at times exasperating conduct. Nevertheless, based on the particular circumstances of this case as revealed in the record before us, we conclude that the sanction on Logan-Baldwin under § 1927 was not justified.
The Court: On [Keller's forthcoming] review in June of 1993, based on glaucoma in one eye and the possibility it would spread over to the other eye, if [the plan administrator] did not find her to be disabled she would have the right to waive-they waived venue. Mobil waived venue and would bring the matter here for me to determine.
That was the continuing jurisdiction idea-
The Court:-that I would determine whether or not the action of the plan administrator-whoever made the determination-was wrong under the circumstances.
Moreover, Logan-Baldwin's insistence on particular language for the confidentiality clause rested on a defensible foundation. That is, as to the confidentiality clause Logan-Baldwin could argue in good faith that there was no meeting of the minds until the February 19, 1993 hearing, at which Mobil acceded to a four-year term with the right to acknowledge the existence of a settlement during that term. Whether or not the details of the confidentiality clause should have assumed such significance in the parties' settlement, Logan-Baldwin represented that they were material as far as Keller was concerned, and there was no persuasive reason to doubt this. After all, the four-year term insisted on by Logan-Baldwin in this negotiation-which was the main sticking point on this issue-followed the precedent of the settlement of an earlier legal dispute between Keller and Mobil. As frustrating as Logan-Baldwin's manner of conducting negotiations may have been, we do not believe that it rose to a level of bad faith warranting a sanction under § 1927.
Finally, we believe that the district court on remand should address whether Logan-Baldwin complied with relevant provisions of the New York Code of Professional Responsibility in her representation of Keller following imposition of the sanction upon her in the March 5, 1993 order and especially following reiteration of the sanction in the February 17, 1994 order. Our concern is whether Logan-Baldwin had a conflict of interest. We express no view on this collateral issue and our statement of it is not meant to reflect upon Keller in any way. It may be that the question should simply be called to the attention of an appropriate committee of a bar association or examined pursuant to Rule 83.3 of the Local Rules of the United States District Court for the Western District of New York, but we leave that to the district court. However the court disposes of this last matter, it should not affect the granting of judgment based upon the agreement in escrow. Cf. Kline v. Wolf, 702 F.2d 400, 405 (2d Cir.1983) (“We have no doubt that a court would be justified in directing the entry, with the defendant's consent, of a judgment which gave a plaintiff all the relief he had requested․”) (citation omitted).
1. In this court, Keller in turn seeks sanctions against Mobil under Fed.R.Civ.P. 11. The request is denied.