Court Opinion

ID: 9909497
Source: CourtListenerOpinion
Date Created: 2023-12-13 17:00:45.133838+00
Date Added: 2024-06-11T12:49:30.048623
License: Public Domain

USCA11 Case: 22-13404   Document: 48-1    Date Filed: 12/13/2023   Page: 1 of 15

                                                 [DO NOT PUBLISH]
                                 In the
                 United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                               No. 22-13404
                         Non-Argument Calendar
                         ____________________

        SCOTT MEIDE,
                                                    Plaintiﬀ-Appellant,
        versus
        PULSE EVOLUTION CORPORATION,
        JOHN TEXTOR,
        GREGORY CENTINEO,
        JULIE NATALE,
        DANA TEJEDA, et al.,

                                                Defendants-Appellees.

                         ____________________
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        2                       Opinion of the Court                22-13404

                   Appeal from the United States District Court
                        for the Middle District of Florida
                   D.C. Docket No. 3:18-cv-01037-MMH-MCR
                            ____________________

        Before LAGOA, BRASHER, and HULL, Circuit Judges.
        PER CURIAM:
                Plaintiff Scott Meide, proceeding pro se, appeals the district
        court’s orders imposing sanctions under the Private Securities
        Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4(c)(1). The
        sanctions were attorneys’ fees in different amounts in favor of three
        separate groups of defendants. On appeal, Meide contends that the
        district court abused its discretion in awarding attorneys’ fees as
        sanctions and in calculating the amount of fees as sanctions. After
        careful review, we affirm.
                        I.     FACTUAL BACKGROUND
        A.     Initial Complaint, Dismissal, and Amended Complaint
               On August 27, 2018, plaintiff Meide, proceeding pro se, sued
        these 12 defendants: (1) Laura Anthony and Michael Pollaccia
        a/k/a Michael Anthony (“Anthonys”); (2) Gregory Centineo,
        Agnes King, John King, and Julie Natale (“Centineo Defendants”);
        (3) Jordan Fiksenbaum, Frank Patterson, John Textor, Evolution
        AI Corporation, and Pulse Evolution Corporation (“Pulse
        Defendants”); and (4) Dana Tejeda. Meide’s 36-page complaint
        alleged seven counts, including a federal securities fraud claim
        against all the defendants.
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        22-13404               Opinion of the Court                         3

               All the defendants moved to dismiss. As relevant here, the
        Centineo and Pulse Defendants asserted that (1) Meide purchased
        securities from the defendants in his capacity as a representative of
        the Jacksonville Injury Center (“JIC”), (2) JIC owns the securities,
        and (3) therefore, Meide lacked standing to assert his claims. The
        Pulse Defendants submitted three security agreements showing
        that the company JIC purchased shares of Evolution AI
        Corporation and Pulse Evolution Corporation.
               On July 24, 2019, the district court held a hearing on the
        motions to dismiss. The district court determined that (1) Meide’s
        complaint was a shotgun pleading because it contained conclusory,
        vague, and immaterial facts, and (2) Meide’s securities fraud claim
        lacked the particularity required by Federal Rule of Civil Procedure
        9(b) and the PSLRA’s heightened pleading standards. The district
        court also noted that, if JIC was the proper plaintiff, Meide needed
        to obtain counsel because JIC was a corporate entity that “must be
        represented by legal counsel.”
               In a separate written order, the district court stayed
        discovery and dismissed the complaint but granted Meide leave to
        amend his complaint. The district court warned Meide that, under
        15 U.S.C. § 78u-4(c)(1), it was required to impose sanctions if he did
        not correct the deficiencies in his complaint.
             On September 24, 2019, Meide filed a 31-page amended
        complaint against the same defendants except for Michael
        Anthony.
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        4                       Opinion of the Court                  22-13404

              On October 4, 2019, the district court sua sponte struck the
        amended complaint because Meide (1) did not “utilize numbered
        paragraphs, each limited as far as practicable to a single set of
        circumstances,” and (2) failed to specify which facts supported each
        claim. (Quotation marks omitted). The district court warned
        Meide that he had “one final opportunity to properly state his
        claims.”
                On October 22, 2019, Meide filed a motion to recuse the
        district court judge, which the district court denied on November
        18, 2019.
        B.     Second Amended Complaint and Motions for Leave to
               Amend and to Substitute
               On November 1, 2019, Meide filed his 37-page second
        amended complaint against all the defendants except Michael
        Anthony. Meide’s second amended complaint alleged six counts
        against the defendants: (1) a federal securities fraud claim (“Count
        I”), and (2) state law claims for breach of good faith and fair dealing,
        breach of fiduciary duty, fraud, civil conspiracy, and “Right of
        Rescission” (“Counts II-VI”).
               In response, the remaining defendants except Tejada moved
        to dismiss, asserting that Meide’s complaint failed to comply with
        the pleading requirements of Rule 9(b) and the PSLRA. Meide
        responded to these motions but did not identify any allegations in
        his complaint that satisfied these requirements.
              On June 11, 2020, William McLean entered a notice of
        appearance as Meide’s counsel. On June 29, 2020, Meide, through
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        22-13404               Opinion of the Court                          5

        counsel, filed (1) a motion to substitute JIC as the proper plaintiff
        and real party in interest, (2) a motion for leave to amend his
        complaint, and (3) a copy of his 39-page proposed third amended
        complaint.
        C.     Dismissal of Second Amended Complaint
               On September 4, 2020, the district court dismissed Meide’s
        second amended complaint, finding that he still failed to plead his
        Count I securities fraud claim with particularity, as required by the
        PSLRA. Thus, the district court (1) dismissed Meide’s Count I
        securities fraud claim with prejudice and (2) dismissed his state law
        claims in Counts II-VI without prejudice so that Meide could refile
        these claims in state court.
                Next, the district court denied Meide’s counseled motion for
        leave to amend because (1) the motion to amend did not comply
        with the district court’s local rules, (2) Meide’s proposed third
        amended complaint was a shotgun pleading, and (3) Meide failed
        to show good cause for his delay in requesting leave to amend. The
        district court denied as moot Meide’s motion to substitute because
        (1) the motion was untimely, and (2) even if JIC was substituted as
        the plaintiff, Meide’s complaint still failed to properly state a claim
        for securities fraud.
              On September 8, 2020, the district court entered judgment
        against plaintiff Meide but reserved jurisdiction to determine
        whether sanctions were appropriate. Meide did not file a notice of
        appeal at this time.
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        6                      Opinion of the Court                 22-13404

               The district court referred the parties to mediation,
        presumably to give them an opportunity to resolve the case before
        Meide refiled his state law claims in state court and before the
        parties submitted further briefing on sanctions.
        D.     Sanctions
              On December 10, 2020, the parties attended mediation but
        reached an impasse.
               Following mediation, all of the defendants except Tejada
        moved for sanctions against Meide. The Anthonys also moved for
        sanctions against McLean, Meide’s counsel, for filing the June 2020
        motions for leave to amend and to substitute.
                On September 29, 2021, the district court granted the
        Anthonys’ motion for sanctions against Meide and McLean. The
        district court determined that Meide’s claims against the Anthonys
        were frivolous because (1) Meide’s initial complaint did not “set
        forth any relevant factual allegations regarding these two
        [d]efendants,” and (2) Meide failed to correct the deficiencies in his
        complaint, even after the district court explained the pleading
        requirements for securities fraud claims at the July 24, 2019
        hearing. The district court also determined that (1) Meide named
        the Anthonys as defendants “for the improper purpose of
        harassment,” and (2) McLean failed to conduct a reasonable
        investigation before filing the June 2020 motions for leave to
        amend and to substitute.
             In the same order, the district court granted in part the
        motions for sanctions filed by the Centineo and Pulse Defendants.
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        22-13404               Opinion of the Court                        7

        The district court determined that (1) Meide reasonably could have
        believed the claims in his initial complaint were not frivolous, but
        (2) Meide’s amended securities fraud claims against those
        individual defendants were frivolous and were brought “for the
        improper purpose of harass[ment].” The district court observed
        that (1) Meide continued to assert securities fraud claims in his own
        name without explaining why JIC was not the proper plaintiff, and
        (2) he made no attempt in his responses to the defendants’ motions
        to dismiss to identify which allegations in his second amended
        complaint satisfied the pleading standards for securities fraud
        claims. The district court also noted that the PSLRA contained a
        mandatory sanctions provision, and it directed the parties to file
        supplemental motions regarding the appropriate amount of
        sanctions.
                The Anthonys, Centineo Defendants, and Pulse Defendants
        filed supplemental motions for attorneys’ fees. In their motion, the
        Centineo Defendants argued that Meide could not rebut the
        PSLRA’s presumption in favor of awarding attorneys’ fees as
        sanctions because (1) the burden of paying attorneys’ fees was not
        unreasonable, and (2) Meide’s violations of Federal Rule of Civil
        Procedure 11(b) were not de minimis.
               Meide responded to the supplemental motions, but he did
        not argue that the proposed sanctions would pose an unreasonable
        burden or that his violations of Rule 11 were de minimis. Instead,
        Meide argued that some of the attorneys’ fees requested by the
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        8                        Opinion of the Court                    22-13404

        defendants did not have a direct causal link to his sanctionable
        conduct.
                On August 23, 2022, the magistrate judge issued a Report
        and Recommendation (“R&R”) recommending that the
        defendants be awarded attorneys’ fees as sanctions. As to the
        Anthonys, the magistrate judge determined that these defendants
        were entitled to attorneys’ fees for the entire action.1 As to the
        Pulse and Centineo Defendants, the magistrate judge determined
        that they were entitled to attorneys’ fees for work completed after
        the filing of the first amended complaint because (1) Meide’s Rule
        11 violations were “substantial,” (2) Meide failed to rebut the
        PSLRA’s presumption in favor of awarding attorneys’ fees as
        sanctions, and (3) the requested attorneys’ fees were reasonable.
               The magistrate judge warned that if a party did not object to
        the R&R within fourteen days, that party would waive the right to
        challenge on appeal any unobjected-to factual and legal
        conclusions. Meide did not file any objections to the R&R.

        1 The magistrate judge recommended that the Anthonys’ motion for sanctions

        be denied in two respects: (1) the hourly rate for one of the Anthonys’
        attorneys was excessive and should be lowered from $700 to $500; and
        (2) $1,098.58 in costs should be disallowed because the Anthonys “d[id] not
        state the legal basis for the costs.”
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        22-13404                  Opinion of the Court                              9

              On September 14, 2022, the district court adopted the R&R
        and granted the defendants’ motions for sanctions.2 On September
        15, 2022, the district court entered these four judgments for
        attorneys’ fees: (1) a $12,620.00 judgment in favor of the Anthonys
        against Meide; (2) a $11,019.50 judgment in favor of the Anthonys
        against Meide and attorney McLean, jointly and severally; (3) a
        $43,215.00 judgment in favor of the Centineo Defendants against
        Meide; and (4) a $68,387.00 judgment in favor of the Pulse
        Defendants against Meide.
               This appeal followed.
                                  II.     DISCUSSION
        A.     October 11, 2022 Notice of Appeal
               Meide filed his notice of appeal on October 11, 2022. His
        appeal is not timely as to the district court’s July 24, 2019 order
        staying discovery, its November 22, 2019 denial of his motion to
        recuse, or its September 4, 2020 dismissal of his complaint. See Fed.
        R. App. P. 4(a)(1)(A) (providing that an appellant in a civil case must
        ﬁle a notice of appeal within 30 days after the entry of judgment).
        Thus, to the extent Meide challenges these orders on appeal, we
        lack jurisdiction to review them. See Green v. Drug Enf ’t Admin., 606
        F.3d 1296, 1300–02 (11th Cir. 2010) (observing that, in civil cases,

        2 The district court made a minor modification to the R&R, finding that $12.50

        in paralegal fees should be assessed against Meide and McLean jointly and
        severally, not Meide individually.
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        10                      Opinion of the Court                  22-13404

        the timely ﬁling of a notice of appeal is a mandatory prerequisite
        to the exercise of appellate jurisdiction).
                Generally, a sanction order is not ﬁnal unless the award of
        attorneys’ fees is reduced to a speciﬁc sum. Santini v. Cleveland
        Clinic Fla., 232 F.3d 823, 825 n.1 (11th Cir. 2000). Therefore, Meide’s
        October 11, 2022 notice of appeal is timely as to (1) the district
        court’s September 29, 2021 order awarding sanctions, (2) its
        September 14, 2022 order reducing the award of attorneys’ fees to
        speciﬁc sums, and (3) its September 15, 2022 judgments awarding
        those speciﬁc attorneys’ fees as sanctions. See id.; Fed. R. App.
        P. 4(a)(1)(A). We address each order in turn.
        B.     September 29, 2021 Sanctions Order
                As to the September 29, 2021 order, Meide’s brief on appeal
        merely asserts that no sanctions were warranted and that his claims
        against the Anthonys were not frivolous. Meide’s brief, however,
        does not contain any supporting arguments explaining why
        sanctions were inappropriate or why his claims were not frivolous.
        Therefore, Meide has abandoned this issue on appeal. See Sapuppo
        v. Allstate Floridian Ins., Co., 739 F.3d 678, 681 (11th Cir. 2014) (“We
        have long held that an appellant abandons a claim when he either
        makes only passing references to it or raises it in a perfunctory
        manner without supporting arguments and authority.”); Timson v.
        Sampson, 518 F.3d 870, 874 (11th Cir. 2008) (“While we read briefs
        ﬁled by pro se litigants liberally, issues not briefed on appeal by a
        pro se litigant are deemed abandoned.” (citation omitted)).
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        22-13404                Opinion of the Court                         11

              This leaves the September 14, 2022 order and September 15,
        2022 judgments that reduced the September 29, 2021 sanctions
        order to speciﬁc sums of attorneys’ fees. We ﬁrst set forth the
        standards of review and general legal principles and then explain
        why the sanctions award was appropriate here.
        C.     Standards of Review
                We review a district court’s award of Rule 11 sanctions for
        abuse of discretion. Massengale v. Ray, 267 F.3d 1298, 1301 (11th
        Cir. 2001). A district court’s award of sanctions under the PSLRA
        is reviewed under the same standard. See Thompson v. RelationServe
        Media, Inc., 610 F.3d 628, 636 (11th Cir. 2010). We also review the
        amount of sanctions awarded by the district court for abuse of
        discretion. See Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182,
        1195–97 (11th Cir. 2002).
                Further, under our Rule 3-1, a plaintiff who fails to object to
        a factual or legal conclusion in a magistrate judge’s R&R after being
        informed of the time period for objections and the consequences
        of not objecting waives his right to challenge the unobjected-to
        determination on appeal. 11th Cir. R. 3-1. In the absence of a
        proper objection, however, this Court may review an issue in a
        civil appeal “for plain error if necessary in the interests of justice.”
        Id.
               Once this Court determines that reviewing an unobjected-
        to error in a R&R is necessary in the interests of justice, then it
        applies the heightened civil plain-error standard. Roy v. Ivy, 53
        F.4th 1338, 1351 (11th Cir. 2022). Under the civil plain error
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        12                     Opinion of the Court                  22-13404

        standard, this Court “will consider an issue not raised in the district
        court if it involves a pure question of law, and if refusal to consider
        it would result in a miscarriage of justice.” Id. (quotation marks
        omitted).
        D.     PSLRA Sanctions
               The PSLRA “mandate[s] [the] imposition of sanctions for
        frivolous litigation.” Merrill Lynch, Pierce, Fenner & Smith Inc. v.
        Dabit, 547 U.S. 71, 81, 126 S. Ct. 1503, 1511 (2006). The PSLRA
        requires the district court to make findings as to each party and
        attorney’s compliance with Rule 11(b). 15 U.S.C. § 78u-4(c)(1). If
        a court finds that a party or attorney has violated any requirement
        of Rule 11(b), then the court shall impose sanctions in accordance
        with Rule 11. Id. § 78u-4(c)(3).
              In turn, Rule 11(b) requires an attorney or pro se party
        presenting a pleading to certify:
               (1) [the pleading] is not being presented for any
               improper purpose, such as to harass, cause
               unnecessary delay, or needlessly increase the cost of
               litigation;
               (2) the claims, defenses, and other legal contentions
               are warranted by existing law or by a nonfrivolous
               argument for extending, modifying, or reversing
               existing law or for establishing new law; [and]
               (3) the factual contentions have evidentiary support
               or, if specifically so identified, will likely have
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        22-13404               Opinion of the Court                        13

              evidentiary support after a reasonable opportunity
              for further investigation or discovery . . . .
        Fed. R. Civ. P. 11(b)(1)–(3). This Court has instructed that Rule 11
        sanctions are properly assessed when a party files a pleading that
        (1) “has no reasonable factual basis,” (2) “is based on a legal theory
        that has no reasonable chance of success and that cannot be
        advanced as a reasonable argument to change existing law,” or
        (3) is made “in bad faith for an improper purpose.” Massengale, 267
        F.3d at 1301 (quotation marks omitted).
               If a complaint substantially fails to comply with Rule 11(b),
        the presumptive sanction is attorneys’ fees and expenses. 15 U.S.C.
        § 78u-4(c)(3)(A)(i), (ii). This presumption may be rebutted, but
        only upon proof by the party against whom sanctions are to be
        imposed that (i) the award of attorneys’ fees and other expenses
        will impose an unreasonable burden on that party and would be
        unjust, and the failure to make such an award would not impose a
        greater burden on the party in whose favor sanctions are to be
        imposed, or (ii) the violation of Rule 11(b) was de minimis. Id.
        § 78u-4(c)(3)(B)(i), (ii).
               Even if a party rebuts the presumption of attorneys’ fees, the
        court is still required to award sanctions that it deems appropriate
        under Rule 11. Id. § 78u-4(c)(3)(C).
        E.    Analysis
               As an initial matter, Meide in his pro se brief does not argue
        that the district court erred in imposing sanctions on McLean,
        Meide’s former counsel. Attorney McLean has not ﬁled his own
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        14                     Opinion of the Court                  22-13404

        brief. Therefore, the only issue on appeal is whether the district
        court abused its discretion in calculating the amount of attorneys’
        fees as sanctions against Meide.
               Here, at the time of the R&R, Meide was represented by
        counsel. Although the R&R sufficiently informed Meide and his
        counsel of the time period for objecting and the consequences for
        failing to object, Meide and his counsel did not challenge the
        magistrate judge’s recommendation that the defendants be
        awarded sanctions under Rule 11 and the PSLRA. Accordingly, we
        may review Meide’s argument—that the district court abused its
        discretion in calculating the amount of sanctions—for plain error
        only. See 11th Cir. R. 3-1.
                Further, Meide does not raise any supporting arguments
        explaining why the district court erred in awarding attorneys’ fees
        (or even identify which of the four judgments he is challenging on
        appeal). He thus has abandoned any claim related to the district
        court’s September 14, 2022 order and September 15, 2022
        judgments awarding attorneys’ fees as sanctions. See Roy, 53 F.4th
        at 1351 (explaining that a pro se appellant forfeits an issue when he
        fails to present a substantive argument on appeal).
               In any event, there was no abuse of discretion here. First, a
        review of the record supports the district court’s finding that
        Meide’s Rule 11(b) violations were substantial. Among other
        things, Meide (1) failed to assert any relevant allegations against the
        Anthonys in his initial complaint, (2) failed to correct the
        deficiencies in his complaint, even after the district court explained
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        22-13404              Opinion of the Court                       15

        the heightened pleading requirements of Rule 9(b) and the PSLRA
        to Meide at the July 24, 2019 hearing, and (3) continued to assert
        securities fraud claims in his own name without explaining why JIC
        was not the proper plaintiff. These Rule 11(b) violations were
        substantial and triggered the PSLRA’s presumption in favor of
        awarding attorneys’ fees as sanctions. See 15 U.S.C. § 78u-
        4(c)(3)(A)(i), (ii).
               Second, Meide did not meet his burden to rebut the PSLRA’s
        presumptive award of attorneys’ fees. Indeed, Meide did not offer
        any argument in the district court or in this Court that the burden
        of these sanctions was unreasonable or that his Rule 11(b)
        violations were de minimis. See id. § 78u-4(c)(3)(B)(i), (ii). Meide
        also does not contend on appeal that the amount of attorneys’ fees
        awarded to the defendants was unreasonable. Under these
        circumstances, we conclude that the district court did not abuse its
        discretion in awarding reasonable attorneys’ fees as sanctions.
                              III.   CONCLUSION
               For all these reasons, we AFFIRM the district court’s
        sanctions award against Meide. We DISMISS his appeal to the
        extent that he challenges the final judgment dismissing his second
        amended complaint.
              AFFIRMED IN PART AND DISMISSED IN PART.