Opinion ID: 6350113
Heading Depth: 3
Heading Rank: 1

Heading: Sanctions Against the Individual Attorneys

Text: Appellants proffer what can be categorized as two arguments about the individual attorneys: (1) there was not an appropriate factual basis for sanctions, and (2) the sanctions award was unjust. Both lack merit. We review a district court’s imposition and amount of sanctions under an abuse of discretion standard. EMW Women’s Surgical Ctr., P.S.C. v. Friedlander, 978 F.3d 418, 447 (6th Cir. 2020) (citations omitted). “A district court abuses its discretion when it relies upon clearly erroneous findings of fact, applies the law improperly, or uses an erroneous legal standard.” Ne. Ohio Coal. for the Homeless v. Husted, 831 F.3d 686, 702 (6th Cir. 2016) (citation omitted). When we review an award of fees and costs, “[s]ubstantial deference ‘is appropriate in view of the district court’s superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters.’” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). Appellants argue that the district court failed to articulate the basis of its Rule 37(d) sanctions against the individual attorneys. But that argument has no support in the record. The district court was clear about both the discovery misconduct and the prejudice it imposed on SY Dawgs. It agreed with the magistrate judge’s report that the docket it highlighted lists the 10 NPF also argues that SY Dawgs never identified Rule 37 in its motion for fees and costs. This is untrue. Def.’s Mot. for Att’y Fees & Costs. R. 212, PageID 5938 (arguing that the court should grant SY Dawgs’s “motions to dismiss and award sanctions thereunder”); Supp. Mem. in Support of Mot. to Dismiss, R. 201 (moving to dismiss pursuant to Rule 37). 11 We agree with SY Dawgs that Appellants forfeited one of their arguments—that “Rule 37 sanctions are authorized only where a party entirely fails to respond to discovery.” See United States v. Montgomery, 998 F.3d 693, 698 (6th Cir. 2021) (citation omitted); see also Jones Bros., Inc. v. Sec’y of Lab., 898 F.3d 669, 677 (6th Cir. 2018). No. 21-3516 NPF Franchising, LLC, et al. v. SY Dawgs, LLC, et al. Page 13 discovery violations that prejudiced SY Dawgs. Mem. Op. re Def.’s Mot. for Fees & Costs, R. 262, PageID 6437–38. The magistrate judge listed, in great detail, Appellants’ discovery violations. Magistrate Report & Recommendation, R.239, PageID 6150–64. And the magistrate judge stressed Appellants’ failure to show up for scheduled depositions, failure to follow the district judge’s briefing schedule, filing of procedurally improper motions, failure to properly respond to subpoenas, failure to certify compliance, and misrepresentation of filings. The magistrate judge also discussed how this allowed Appellants two bites at the apple on some motions and impeded resolution of the case. The district court highlighted additional misconduct, listing the law firm’s (and by necessity, the individual attorneys’) rejection of SY Dawgs’s offer for documents and the unnecessary continuation of a hearing for a second time due to “sudden computer server issues.” Mem. Op. re Def.’s Mot. for Fees & Costs, R. 262, PageID 6427–28. It also noted Appellants’ misrepresentation of compliance with the court’s order to produce documents. Appellants argue that the district court should have precisely articulated the factual basis for sanctions for each individual attorney. But, as stated prior, we do not require such specificity. The district court also agreed with the magistrate judge’s calculations of fees and costs. Mem. Op. re Def.’s Mot. for Fees & Costs, R. 262, PageID 6442–43. And “[w]hen the district court, as it did here, provides clear and concise reasons for its fee award, we give its award substantial deference.” United States ex rel. Tingley v. PNC Fin. Servs. Grp., Inc., 705 F. App’x 342, 348 (6th Cir. 2017) (citing Gonter v. Hunt Valve Co., 510 F.3d 610, 616 (6th Cir. 2007)). The district court found SY Dawgs’s billing rates reasonable and in line with market rates, and it noted that Appellants did not challenge that conclusion. It held NPF, the Buchalter Law Firm, and Buchalter’s individual attorneys jointly and severally liable for attorneys’ fees, expenses, and costs in the amount of $287,248.77 plus interest. While it agreed with imposing only 75% of the fees pre-July 2019 to prevent overcounting, it noted that there should be no reduction from July 2019—when NPF voluntarily dismissed the case—forward, as those fees could all be attributed to the litigation over sanctions. When explaining the calculations, the magistrate judge reviewed the billing rates per entry to ensure their reasonableness, pulled out the entries related to Appellants’ discovery violations, added the total expenses, reduced the amount by 25%, and added prejudgment interest calculated under 28 U.S.C. § 1961’s use of a weekly average one- No. 21-3516 NPF Franchising, LLC, et al. v. SY Dawgs, LLC, et al. Page 14 year constant maturity Treasury yield. Magistrate Report & Recommendation, R.239, PageID 6165–73. So Appellants’ argument that the district court failed to cite specific provisions of the evidentiary record in imposing the sanctions is simply wrong. And Appellants’ argument that the district court included costs and fees not incurred as a direct result of the discovery violations is likewise unfounded.12 The district court did not abuse its discretion in the award and amount of sanctions imposed on the individual attorneys. Appellants argue that the judgment was unjust. In their view, the district court had to make a record articulating whom the sanctions were imposed on and why. Again, however, the district court did just that. And Appellants have provided no support for the proposition that the district court needs to match up every dollar of sanctions to every individual party sanctioned. A rough estimate is enough, and there is “no precise rule for making these determinations.” Hensley, 461 U.S. at 436. Appellants finally contend that their conduct was justified. Conduct is “‘substantially justified’ if it raises an issue about which there is a genuine dispute, or if reasonable people could differ as to the appropriateness of the contested action.” Doe v. Lexington-Fayette Urb. Cnty. Gov’t, 407 F.3d 755, 766 (6th Cir. 2005) (citing Pierce v. Underwood, 487 U.S. 552, 565 (1988)). As the district court and magistrate judge explained, the individual attorneys’ conduct was not zealous advocacy, but an abuse of the judicial process and a waste of resources. Appellants cannot make misrepresentations to the court about producing documents, unreasonably delay resolution of their claims, and engage in other improper uses of the court and then claims that those actions are justified. The district court’s sanction of the individual attorneys under Rule 37(d) was not an abuse of discretion, and we affirm the sanctions against them. 12 Appellants also argue that the district court abused its discretion in looking at an unauthenticated demonstrative exhibit and a post-hearing affidavit in calculating the award. But Appellants did not challenge these exhibits until now, although they had ample time to respond below. See, e.g., Magistrate Report & Recommendation, R.239, PageID 6166 (“This determination [of the sanctions amount] was made more difficult by the fact that NPF continues to insist that it has violated no rule or order and, therefore, owes nothing. This strategy now backfires on NPF and its lawyers.”). They therefore forfeited this argument. See Montgomery, 998 F.3d at 698 (citation omitted). No. 21-3516 NPF Franchising, LLC, et al. v. SY Dawgs, LLC, et al. Page 15