Court Opinion

ID: 68394
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:32:52+00
Date Added: 2024-06-11T09:39:06.177227
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS
                                                                 FILED
                        FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                          ________________________ ELEVENTH CIRCUIT
                                                            AUGUST 25, 2009
                                 No. 09-11221              THOMAS K. KAHN
                             Non-Argument Calendar             CLERK
                           ________________________

                       D. C. Docket No. 07-80829-CV-KLR

DONALD HAMM,
ELLIOT COOK,
RONALD SIMMS,
MARK WAGNER,
MARTHA HARRIS,
TIMOTHY BRIDGES,
DAVID BERMUDEZ,
EDWARD GEIGER, III,
CURTIS CORTIJO,
CHARLES DEPOTTER,
ROBERT ELLISON,
PHILLIP PENDELL,
CHARLES MCNABB,
JAMES MACDONALD,
individually and on behalf persons similarly
situated,
SHAVITZ LAW GROUP, P.A.,

                                                          Plaintiffs-Appellants,

ALL PLAINTIFFS, JOE MAHAR, et al.,

                                                                     Plaintiffs,

                                      versus
TBC CORPORATION,
a Delaware corporation,
TIRE KINGDOM, INC.,
a Florida corporation,

                                                               Defendants-Appellees.

                            ________________________

                    Appeal from the United States District Court
                        for the Southern District of Florida
                          _________________________
                                 (August 25, 2009)

Before BLACK, BARKETT and KRAVITCH, Circuit Judges.

PER CURIAM:

      This case stems from a lawsuit brought by six named plaintiffs, on behalf of

themselves and others similarly situated, against TBC Corporation and Tire

Kingdom, Inc. (collectively “Tire Kingdom”). During the case, the district court

sanctioned Shavitz Law Group (“SLG”), counsel for the current and putative opt-in

plaintiffs, for impermissibly soliciting clients. SLG appeals this imposition of

sanctions, arguing that they are disproportionately broad and excessive. We

disagree and therefore affirm the district court’s sanctions order.

                                       I. Facts

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      This case was brought by six employees of Tire Kingdom as a proposed

collective action, seeking overtime compensation allegedly owed to the plaintiffs

under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et. seq. Forty-six

other plaintiffs opted-in the suit. A few months after the case was filed, Tire

Kingdom filed a motion seeking court-imposed sanctions against SLG for direct

solicitation of putative class members, in violation of Southern District of Florida

Local Rule 11.1.C and Florida Rule of Professional Conduct 4-7.4(a). In the

motion, Tire Kingdom alleged that SLG impermissibly solicited at least three then

current Tire Kingdom employees – Christopher Johnson, Nicholas Kilgore, and

Shane Cook – in an attempt to convince them to join the pending lawsuit and have

SLG represent them.

       SLG conceded that the firm’s administrative assistant, Tayara Oliveira,

contacted Kilgore and Cook; the firm denied, however, that Oliveira solicited them

as clients. Instead, the firm maintained that Oliveria contacted Kilgore and Cook

in order to conduct a due diligence investigation, as required by Rule 11 of the

Federal Rules of Civil Procedure, before having its client, Matthew Bitner, opt into

the lawsuit. The firm did not explain whether or why it contacted Johnson.

      The district court heard oral argument on Tire Kingdom’s sanctions motion

and then referred the matter to a magistrate judge for an evidentiary hearing.

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Kilgore, Cook, Johnson, and Christopher Blum, Kilgore and Cook’s manager at the

time of the solicitation calls, testified for Tire Kingdom. Kilgore and Cook, both

employees of a Tire Kingdom subsidiary located in Kansas City, Missouri, testified

that they received telephone calls on December 15, 2007 from a woman identifying

herself as an employee of a law firm. She told Kilgore and Cook that she received

their telephone numbers from Bitner and wanted to know if they would be

interested in joining a lawsuit against Tire Kingdom. Johnson testified that he

received a similar call on December 7, 2007, during which time he was an

employee of a Tire Kingdom subsidiary in Shawnee Mission, Missouri, and that

once he told the caller that he was not interested in joining the lawsuit, she asked if

he knew anyone else who had lost wages. Telephone records confirmed that

Kilgore, Cook, and Johnson received telephone calls from SLG on the dates in

question. Johnson testified that he did not know Bitner and that the caller did not

ask any questions about Bitner. Blum testified that he received a telephone call

from Kilgore on December 15, 2007, stating that Bitner was suing Tire Kingdom.

Blum stated that other employees in his store informed him that they had received

calls regarding the same issue that was reported by Kilgore.

      Oliveira and Gregg Shavitz, the firm’s sole partner, testified for SLG.

Shavitz testified that employees received extensive training and that administrative

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assistants were frequently reminded not to solicit. Shavitz, however, admitted that

the firm did not have a written policy on solicitation and that Oliveira was not

given a script to work from when calling Johnson, Kilgore, or Cook. Oliveira

testified that she received a typed list of names and telephone numbers, which

included those of Cook and Kilgore, from Bitner. She admitted calling Cook and

Kilgore on December 15, 2007, but stated that she only did so to get information

about SLG’s clients’ claims, and not to entice them to join the case as plaintiffs.

      Following the hearing, the magistrate judge issued a report and

recommendation, finding that SLG solicited Kilgore, Cook, and Johnson to join the

lawsuit against Tire Kingdom. The magistrate judge found Kilgore, Cook, and

Johnson credible and concluded that SLG’s motive for the solicitations was

pecuniary gain. The magistrate judge also found that SLG failed to train Oliveira

regarding solicitation of clients.

      The magistrate judge recommended the following sanctions against SLG:

      1) that Shavitz Law Group be barred from representing any
      individual, including any current opt-in plaintiff, who did not work
      with any of the named plaintiffs in this action . . . ;
      2) that Shavitz Law Group be barred from collecting any fees or costs
      for work performed in representing any individual, including any
      current opt-in plaintiff, who did not work with any of the named
      plaintiffs in this action . . . ;
      3) that Shavitz Law Group be ordered to formulate and implement a
      formal written policy on solicitation to inform and govern the conduct
      of all SLG attorney and non-attorney staff;

                                           5
4) that a copy of this Report and Recommendation and any Order adopting it be
forwarded to the Florida Bar for possible future action; and
       5) that Shavitz Law Group be ordered to reimburse Defendants for all
       reasonable fees and costs incurred in bringing and prosecuting
       Defendants’ Motion for Sanctions.

      SLG filed objections to the magistrate judge’s proposed sanctions 1, 2, and

5. The district court rejected SLG’s objections and adopted the report and

recommendation in its entirety.

      SLG appeals, arguing that the district court’s sanctions are

disproportionately broad and excessive in light of the brevity of the calls, the lack

of evidence that the firm ratified Oliveira’s solicitation of clients, and the First

Amendment issues at stake.

                                     II. Discussion

A. Standard of Review

      A court’s decision to impose sanctions is reviewed for an abuse of

discretion. Harris v. Chapman, 97 F.3d 499, 506 (11th Cir. 1996).

B. Sanctions 1 and 2

      In its briefs to this court, SLG does not purport to challenge the magistrate

judge’s findings of fact, but rather only argues that sanctions 1 and 2 are

disproportionately harsh and broad because the solicitation was conducted by a

non-attorney and there is no evidence of attorney knowledge or ratification of the

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solicitation. Also, SLG argues that the calls were of short duration and there is no

evidence that individuals were solicited to join the lawsuit. SLG also asserts that

sanction 1 is disproportionately harsh in light of SLG’s First Amendment interests.

In sum, SLG concedes that imposition of some sanctions was appropriate, but

argues that sanctions 1, 2, and 5 are too far-reaching. SLG contends that a more

appropriate sanction would permit the representation and collection of fees from

plaintiffs that might opt-in in the future.1

       “[A] federal court has the power to control admission to its bar and to

discipline attorneys who appear before it.” Chambers v. NASCO, Inc., 501 U.S.

32, 43 (1991). A court’s decision as to “whether a party or lawyer’s actions merit

imposition of sanctions is heavily dependent on the court’s firsthand knowledge,

experience, and observation.” Harris, 97 F.3d at 506. The Rules Regulating the

Florida Bar (“Florida Rules”) contain an anti-solicitation provision which

mandates that “a lawyer shall not solicit professional employment from a

       1
          SLG also argues that five current opt-in plaintiffs that were not co-workers of the
named plaintiffs should be exempted from the order. In its objection to the magistrate judge’s
report and recommendation, however, SLG expressly stated that it “do[es] not object to all
recommendations.” It went on to explain that it “agreed to withdraw from representation of all
[current] opt-in plaintiffs except for those who worked with the named plaintiffs.” Thus, SLG
has waived the right to challenge the portion of the district court’s order that prohibits the
representation of any current opt-in plaintiffs that were not co-workers of the named plaintiffs
because SLG invited the alleged error. See Birmingham Steel Corp. v. Tenn. Valley Auth., 353
F.3d 1331, 1341 n.5 (11th Cir. 2003) (invited error precludes review). We therefore limit our
review to the sanctions prohibiting representation and collection of fees for future opt-in
plaintiffs.

                                                7
prospective client with whom the lawyer has no family or prior professional

relationship, in person or otherwise, when a significant motive for the lawyer’s

doing so is the lawyer’s pecuniary gain.” R. Reg. Fla. Bar 4-7.4(a). The Southern

District of Florida Local Rules (“Local Rules”) subject attorneys to discipline for

violating the Local Rules or Florida Rules. S.D. Fla. L. R. 11.1.C. Such

disciplinary measures may include disbarment, monetary sanctions, or “any other

sanction the Court may deem appropriate.” S.D. Fla. R. I.B.

      First, it is appropriate to discuss the scope of the sanctions imposed. SLG

interprets the district court’s order as a categorical prohibition from SLG ever

representing any plaintiff in any case against any defendant, unless the plaintiff is

one of the six named plaintiffs in the instant case or was first a co-worker of one

of the named plaintiffs. Although the language in the district court’s order is

imprecise, we find SLG’s interpretation of the sanctions unreasonable. The district

court expressly identified the purposes of the sanctions as “ensuring that counsel

acts ethically in this litigation and . . . sanctioning The Shavitz Law Group for

unethically soliciting clients.” Hamm v. TBC Corp., 597 F. Supp. 2d 1338, 1340

(S.D. Fla. 2009) (emphasis added). There is no evidence indicating the district

court intended for these sanctions to apply to future cases, or that the misconduct in

this case would impact suits against defendants other than Tire Kingdom. We thus

                                           8
conclude that the district court’s sanctions order only limits SLG’s ability to

represent opt-in plaintiffs in the instant case.

       Once this misconception is removed, we conclude that sanctions 1 and 2 are

not disproportionately broad or excessive. The named plaintiffs in this action are

from Florida, Georgia, North Carolina, and Pennsylvania. There was no evidence

before the magistrate judge as to how the opt-in plaintiffs, which included

individuals from Texas, Louisiana, Alabama, Ohio, Maryland, Missouri,

Massachusetts, and Illinois, learned about the suit and selected SLG as counsel.

Under these circumstances, it was impossible for the magistrate judge to know

which, if any, of these clients had also been solicited by SLG. Thus, the magistrate

judge recommended narrowly tailored sanctions to permit SLG to continue to

represent the named plaintiffs and co-workers of the named plaintiffs (presumably

because they most likely learned about SLG and the lawsuit from the named

plaintiffs), but prohibited SLG from representing opt-in plaintiffs from other

stores. These were reasonable and limited sanctions that balanced the danger that

current and future opt-in clients were impermissibly solicited against SLG’s

interest in representing lawfully-obtained clients.2

       2
          The magistrate judge expressly found that SLG failed to train Oliveira and that the firm
solicited the clients for the purpose of pecuniary gain. We find it irrelevant that SLG claims that
the solicitation was by a non-attorney, there was no evidence of attorney knowledge or
ratification, and there were only three instances of solicitation. SLG’s interpretation of the facts,

                                                  9
       We similarly conclude that SLG’s First Amendment argument is meritless.

SLG argues that the sanctions in this case are too broad because under Gulf Oil Co.

v. Bernard, 452 U.S. 89 (1981), sanctions must be tailored to specific findings,

rather than the “mere possibility of abuses.” SLG argues that because the sanctions

prohibit the representation of opt-in plaintiffs that may not have been solicited, the

sanctions are impermissibly broad and abridge SLG’s ability to represent

legitimately-obtained clients.

       We conclude that the district court’s order does not violate Gulf Oil. That

case dealt with a broad sanction – a “complete ban on all communications

concerning the class action between parties or their counsel and any actual or

potential class member who was not a formal party, without the prior approval of

the court.” Id. at 94-95. The lower court in Gulf Oil did not hear any evidence,

make any findings of fact, and did not write an explanatory opinion to justify this

sweeping ban. Id. at 93-96. The Supreme Court found it troubling that there was

no record for appellate review, and concluded that in light of the litigants’ and

attorneys’ First Amendment interests, “an order limiting communications between

parties and potential class members should be based on a clear record and specific

findings that reflect a weighing of the need for a limitation and the potential

even if correct, does not necessitate the conclusion that the district court abused its discretion.

                                                  10
interference with the rights of the parties.” Id. at 101.

      In the instant case, an evidentiary hearing was held, the report and

recommendation contained detailed factual findings, and the magistrate judge

discussed the Gulf Oil opinion when determining the appropriate form of

sanctions. Under these circumstances, the district court did not abuse its discretion

by prohibiting SLG from representing or collecting fees from opt-in plaintiffs,

other than those that were co-workers of the named plaintiffs.

C. Sanction 5

      Finally, SLG challenges the portion of the district court’s order requiring

SLG to pay all reasonable fees and costs incurred by Tire Kingdom in bringing and

prosecuting its motion for sanctions. SLG provides no reasoning in support of this

position, aside from re-stating its arguments about the lack of attorney ratification

and that “such an over-broad remedy is severe.” Federal Rule of Civil Procedure

11(c)(2) expressly permits a court to “award to the prevailing party [in a motion for

sanctions] the reasonable expenses, including attorney’s fees, incurred for the

motion.” Fed. R. Civ. P. 11(c)(2). Under the facts of this case, we do not consider

the district court’s imposition of this modest and statutorily-authorized sanction to

amount to an abuse of discretion.

                                           11
                                  III. Conclusion

      For the reasons set forth, we conclude that the district court did not abuse its

discretion in imposing the aforementioned sanctions against SLG.

      AFFIRMED.

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