Court Opinion

ID: 6330343
Source: CourtListenerOpinion
Date Created: 2022-04-13 00:00:40.679078+00
Date Added: 2024-06-11T09:22:59.877648
License: Public Domain

Case: 21-10680     Document: 00516272858          Page: 1    Date Filed: 04/08/2022

              United States Court of Appeals
                   for the Fifth Circuit
                                                                       United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                           April 8, 2022
                                   No. 21-10680                          Lyle W. Cayce
                                                                              Clerk

   Matthew R. Scott,

                                                            Plaintiff—Appellant,

                                       versus

   MEI, Incorporated; MEI Group, doing business as MEI Auto
   Group; MEI Auto Finance, Incorporated; MEI Auto
   Rental, L.P.; MEI Auto Repair, L.L.C.; MEI Auto Sales,
   L.P.,

                                                          Defendants—Appellees.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                            USDC No. 4:20-CV-502

   Before Davis, Smith, and Engelhardt, Circuit Judges.
   Per Curiam:*
          When litigating in federal district court, it is often advisable to read
   the court’s orders. They are not merely “the breath of an unfee’d lawyer,”

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-10680        Document: 00516272858           Page: 2     Date Filed: 04/08/2022

                                       No. 21-10680

   and an attorney who treats them as such does so at his own peril. 1 Should an
   attorney misstep, the best course of action is to take responsibility for the
   mistake and try to move forward. Appellant Scott, counsel for the plaintiff in
   the case underlying this appeal, 2 failed to read a court order closely and
   waffled on taking responsibility for the resulting mistake. He argues that the
   district court abused its discretion by imposing a minor sanction on him. We
   disagree and AFFIRM.
                                             I
          Scott’s client, Luna, sued Defendants-Appellants (collectively
   “MEI”) in Texas state court. She asserted six Title VII claims in her
   amended complaint. The district court set April 14, 2021 as the deadline for
   motions for leave to further amend the pleadings. Within the deadline, Luna
   moved to amend and add two Family and Medical Leave Act (“FMLA”)
   claims. The district court granted the motion, ordering that Luna was
   “granted leave to file by December 4, 2020, her second amended
   complaint.” The district court, therefore, expected Scott to file the second
   amended complaint. But Scott did not read the order closely and assumed that
   the second amended complaint was filed.
          After Luna’s deposition, Scott thought it necessary to seek leave to
   file a third amended complaint, dropping three of the six Title VII claims he
   believed no longer viable. He had time to do so because the deposition
   occurred on April 13, 2021 and the deadline for amendment was April 14.

          1
              William Shakespeare, King Lear act 1, sc. 4.
          2
             See Luna v. MEI Grp., No. 4:20-CV-502-A, 2021 WL 2887869, at *1 (N.D. Tex.
   June 2, 2021). The parties have settled the underlying claims, so we have severed and
   dismissed Luna accordingly. Luna v. MEI, Inc., No. 21-10680 (5th Cir. Mar. 29, 2022).
   Thus, the only dispute remaining before us is whether the district court abused its
   discretion by imposing a sanction on Scott.

                                            2
Case: 21-10680      Document: 00516272858          Page: 3   Date Filed: 04/08/2022

                                    No. 21-10680

   But, citing an inability to confer with Luna, Scott did not seek leave to amend
   until April 20, after the deadline had passed. MEI opposed the motion. Scott
   erroneously believed that the second amended complaint was filed, so from
   his point of view the only proposed change was dropping three Title VII
   claims. MEI rightly understood that because the second amended complaint
   was never filed, the first amended complaint—which contained no FMLA
   claims—remained the operative pleading. Thus, Scott’s tardy amendment
   would add new claims to the litigation after Luna’s deposition, substantial
   discovery, and the filing of a motion for summary judgment.
            The district court denied leave to amend. After recounting the
   procedural history, it expressed disbelief at Scott’s conduct and concern that
   Scott’s proffered reason for the new amendment—to drop claims—was
   pretextual since the proposed amendment would add claims. That kind of
   parlous behavior would, the court reasoned, constitute misrepresentation
   and conduct unbecoming a member of the bar. Pursuant to the court’s local
   rules, the court directed Scott to show cause “why he should not be
   sanctioned . . . for conduct unbecoming a member of the bar, failure to comply
   with the court’s order setting schedule, and inability to conduct litigation
   properly.” The court also ordered MEI to file an appropriate response and
   “include therein a statement of fees and expenses incurred” in responding
   to Scott’s untimely motion for leave to amend and the resultant show cause
   order.
            Scott filed a lengthy response explaining that he had mistakenly
   believed that the second amended complaint was filed, and that all
   subsequent errors arose from that misunderstanding. Because he had made
   an honest mistake, he pressed, his conduct was not an attempt to mislead the
   court or otherwise act in a manner unbecoming. The district court was
   “satisfied that Scott underst[ood] the seriousness of the situation and what

                                          3
Case: 21-10680        Document: 00516272858             Page: 4      Date Filed: 04/08/2022

                                        No. 21-10680

   the court expects.” 3 It ordered Scott to pay MEI $1250 as reimbursement for
   “reasonable attorney’s fees incurred in responding” to the untimely motion
   for leave to amend and to the show cause order. Scott appealed.
                                              II
           We review the district court’s imposition of sanctions for abuse of
   discretion. In re Ray, 951 F.3d 650, 654 (5th Cir. 2020). A “district court
   abuses its discretion when its ruling is based on an erroneous view of the law
   or on a clearly erroneous assessment of the evidence.” In re Mole, 822 F.3d
   798, 801 (5th Cir. 2016) (quotation omitted). Scott raises four arguments that
   the district court abused its discretion. All are paper-thin.
           Scott first argues that the district court’s sanction had no legal or
   factual basis, and that its explanation was cursory. Not so. To begin, “the
   degree and extent to which a specific explanation must be contained in the
   record will vary accordingly with the particular circumstances of the case,
   including the severity of the violation, the significance of the sanctions, and
   the effect of the award.” Thomas v. Cap. Sec. Servs., Inc., 836 F.2d 866, 883
   (5th Cir. 1988) (en banc) (discussing Rule 11 sanctions). Here, the violation
   and sanction are both minor. Scott failed to comply with the court’s
   scheduling order and was required to pay MEI $1250 as reimbursement for
   the costs it incurred by responding to the situation. Further, the district court
   provided ample reasoning to support its sanction.
           On the law, the court cited Local Rule 83.8(b) as the basis for its show
   cause order and the sanction. It provides that a court may, “after giving
   opportunity to show cause to the contrary, . . . take any appropriate
   disciplinary action” against an attorney for, inter alia, failing to comply with

           3
            The district court issued an order stating its findings regarding the show cause
   order and a Final Judgment as to Sanctions on the same day.

                                              4
Case: 21-10680        Document: 00516272858             Page: 5      Date Filed: 04/08/2022

                                         No. 21-10680

   court orders. N.D. Tex. Civ. R. 83.8(b). 4 This entire debacle was the
   result of Scott’s failure to follow a court order, so the district court was well
   within its legal authority to take disciplinary action.
           The district court likewise explained why the record supported
   imposing a sanction. In its show cause order, the court both detailed its
   reasoning for issuing the order and ordered MEI to provide an accounting of
   the costs it had incurred and would incur in responding to Scott’s untimely
   motion and the show cause order. Scott does not dispute that his motion was
   untimely or that MEI incurred additional costs due to his mistake. After
   receiving Scott’s and MEI’s responses to the show cause order, the court
   considered MEI’s accounting, found it wanting, and set the sanction at a
   modest $1250. The district court, therefore, not only provided ample basis
   for imposing the sanction, but also carefully considered the appropriate
   amount of the sanction in light of MEI’s showing.
           Second, Scott argues that the district court’s statement that “no
   further action should be taken” was “an admission by the district court that
   its initial reaction was incorrect.” Thus, Scott reasons, the sanction was
   improper. That reading of the court’s order is strained, at best. The court
   never based its sanction on its initial suspicion that something sinister was
   afoot. Instead, it expressly based the sanction on reimbursing MEI for the
   costs of litigating Scott’s failure to follow the scheduling order. Even if true,
   this argument is irrelevant.
           Third, Scott argues that it is illegitimate for a court to order counsel
   to reimburse another party for a response to a court order or a party’s motion.

           4
            Because the district court invoked local rules to penalize Scott, rather than its
   inherent power, there is no requirement that it find bad faith. In re Goode, 821 F.3d 553,
   558–59 (5th Cir. 2016).

                                               5
Case: 21-10680      Document: 00516272858          Page: 6   Date Filed: 04/08/2022

                                    No. 21-10680

   That argument is frivolous. Scott cites no authority supporting his hunch that
   a sanction in these circumstances is illegitimate. Indeed, the Federal Rules of
   Civil Procedure provide otherwise, 5 and the plain text of the Northern
   District of Texas’s local rules authorizes “any appropriate disciplinary
   action.” N.D. Tex. Civ. R. 83.8(b) (emphasis added).
           Finally, Scott argues that the district court’s conclusion that no
   further action needed to be taken necessarily precludes the $1250 sanction as
   action taken. Scott explains neither why that is true nor why it matters. In
   essence, Scott argues that because the statement “no further action should
   be taken” appears in the paragraph preceding the court’s discussion of
   MEI’s accounting and imposition of the reimbursement sanction, the
   sanction is erroneous. He cites no authority for that proposition, and we
   reject it.
           The district court had ample factual and legal bases to impose the
   minor sanction disputed here. It clearly stated its reasons for doing so, and
   we cannot conclude that it ruled “based on an erroneous view of the law or
   on a clearly erroneous assessment of the evidence.” In re Mole, 822 F.3d at
   801.
                                         III
           Scott made a mistake. The district court imposed a reasonable
   sanction to reimburse MEI for the expense of dealing with that mistake. Law,
   fact, and logic itself support that course of action. Thus, we AFFIRM.

           5
            See Fed. R. Civ. P. 11 advisory committee’s note to 1993 amendment
   (approving of awarding attorney’s fees from one party to another via sanction).

                                         6