Court Opinion

ID: 2682365
Source: CourtListenerOpinion
Date Created: 2014-07-09 16:00:45.688262+00
Date Added: 2024-06-11T13:12:44.550786
License: Public Domain

Case: 13-11554   Date Filed: 07/09/2014     Page: 1 of 17

                                                           [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 13-11554
                         Non-Argument Calendar
                       ________________________

                   D.C. Docket No. 0:06-cv-60146-EGT

CHRISTOPHER JAMES PEER,
                                          Plaintiff-Counter Defendant-Appellee,

ESQ. BARRY G. RODERMAN,
ESQ. SCOTT MARSHALL GREENBAUM,
                                                     Interested Parties-Appellees,

ESQ. RICHARD L. ROSENBAUM,
                                                Consolidated Plaintiff-Appellee,

                                 versus

DANIEL WARFIELD LEWIS,
                                       Defendant-Counter Claimant-Appellant,

JAMES B. CHAPLIN, et al.,
                                                                       Defendants.

                       ________________________

                Appeal from the United States District Court
                    for the Southern District of Florida
                      ________________________

                               (July 9, 2014)
                Case: 13-11554       Date Filed: 07/09/2014       Page: 2 of 17

Before CARNES, Chief Judge, PRYOR and MARTIN, Circuit Judges.

PER CURIAM:

       Daniel Warfield Lewis, proceeding pro se, appeals the order imposing

sanctions against three lawyers who represented Christopher Peer in an underlying

action brought against Lewis under the Fair Credit Reporting Act (FCRA), 15

U.S.C. § 1681. He challenges the amount of the sanctions, which he believes is

too low, and the “Rule 11-type” framework the district court 1 used to impose

sanctions under its inherent power. Asserting that the district court is biased,

Lewis requests that this Court determine the amount of sanctions to be imposed.

                                                I.

       The dispute in this case stems from a municipal election that occurred nearly

a decade ago. Peer and Lewis both ran for Mayor of Fort Lauderdale, Florida in

2006. On January 17 of that year, Lewis sought to have Peer disqualified from the

race by filing an emergency complaint in state court alleging that Peer was not in

compliance with the election’s residency requirements. Lewis maintained that

Peer’s principal residence was not in Ft. Lauderdale but in Wilmington, North

Carolina. Paragraph 19 of Lewis’ complaint stated that the information about

       1
         The parties agreed to have a magistrate judge exercise jurisdiction over this case under
28 U.S.C. § 636(c), so in this opinion the term “district court” refers to Magistrate Judge Edwin
Torres.
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Peer’s residence came from a TransUnion credit report. 2 At the time the action

was filed, Lewis’ lawyer was Robert Malove, and Peer was represented by Richard

Rosenbaum.

       After a February 1, 2006 hearing in which the state court dismissed the

complaint because there had not been effective service of process, Lewis’ counsel,

Malove, told Peer and Peer’s counsel, Rosenbaum, that Paragraph 19 of Lewis’

complaint was inaccurate. Malove admitted that he had obtained that address from

a Westlaw People Finder report, not from a credit report as they had alleged in the

complaint.3 Malove therefore deleted Paragraph 19’s reference to a credit report

and served the amended complaint on Peer. The very next day, Peer got a copy of

his credit report which showed that Lewis had never accessed it. He faxed a copy

of the report to his lawyer, Rosenbaum.

       Although Peer and Rosenbaum had a copy of the credit report which showed

that Lewis had never accessed Peer’s credit information, Rosenbaum filed on

Peer’s behalf a lawsuit in federal court alleging that Lewis had violated the Fair

Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. In the complaint, Peer

alleged that Lewis had violated the FCRA by getting a copy of his credit report and

       2
       Paragraph 19 of the complaint asserted that “an October 15, 2005 credit report by
TransUnion . . . reported that Defendant’s [Peer’s] current address is ‘18 Charter Drive,
Wilmington, North Carolina 28403.’”
       3
         The Westlaw People Finder report itself listed TransUnion as the source for the North
Carolina address.
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publishing information from it. Peer filed the lawsuit less than two weeks before

the mayoral election.

        In late February 2006, after the election which neither Lewis nor Peer won,

Lewis filed a pro se counterclaim against Peer for abuse of process and for filing a

lawsuit for improper purposes in violation of 15 U.S.C. § 1681n(c). Very little

discovery or other activity occurred between February and June 2006. On June 13,

2006, Lewis retained counsel. And on June 19, 2006, Rosenbaum sought to

withdraw from his representation of Peer, citing a breakdown in the attorney-client

relationship; the motion was granted on June 21, 2006. Peer retained Barry

Roderman and Scott Greenbaum as substitute counsel in mid-July 2006. Lewis

deposed Peer on July 25, 2006. Immediately before the deposition, Peer’s counsel,

Roderman, gave Lewis’ counsel a copy of Peer’s February 2006 credit report,

which showed that Lewis had never accessed it. Thus, Roderman and his co-

counsel Greenbaum were aware that Peer’s FCRA claim was frivolous at least by

July 2006. Lewis moved for summary judgment on the FCRA claim in August

2006.

        That motion was still pending when, on October 10, 2006, Lewis filed a

motion for sanctions against Roderman and Greenbaum under Federal Rule of

Civil Procedure 11. The very next day, Roderman sought leave to withdraw as

counsel. His motion to withdraw was granted on October 31, 2006, which left

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Greenbaum as Peer’s only counsel of record. Greenbaum did not fare well in that

role. On June 26, 2007, the district court struck Peer’s complaint and answer to

Lewis’ counterclaim “as a sanction for [Peer’s] willful, repeated, and un-ending

violations of [the district court’s] discovery orders and discovery rules.” In the

same order, the court set a status conference to determine “whether [Greenbaum]

should be disqualified from any further role in this case.” Greenbaum did not

show up to that status conference, and on July 20, 2007, the district court

disqualified him. He has since been disbarred from the practice of law by the

Florida Bar. Lewis also moved for sanctions against Rosenbaum, Peer’s original

counsel, in July 2007.

      In the meantime, Lewis’ counterclaim for abuse of process proceeded to trial

on the issue of damages only. The jury awarded Lewis nearly $800,000 in

compensatory and punitive damages, but the district court reduced the award to

$12,500 in compensatory damages and $112,500 in punitive damages. The court

later entered judgment on Lewis’ second counterclaim (a statutory cause of action

for filing a lawsuit for improper purposes), and awarded him $174,996.52 in

attorney’s fees and costs in that judgment.

      However, the district court denied Lewis’ motions for sanctions against

Rosenbaum, Roderman, and Greenbaum. The court concluded that Rosenbaum’s

conduct did not warrant sanctions under Rule 11, 28 U.S.C. § 1927, or the court’s

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inherent power because the court could not find, based on the record, that

Rosenbaum had knowingly acted in bad faith. It failed to address the merits of the

sanctions motion against Roderman and Greenbaum. Lewis appealed the order,

and this Court affirmed in part, reversed in part, and remanded. See Peer v. Lewis,

606 F.3d 1306 (11th Cir. 2010).

        We affirmed the judgment of the district court with respect to Rosenbaum’s

conduct under Rule 11 and § 1927 because (1) Lewis’ motion for Rule 11

sanctions against Rosenbaum was untimely and (2) Rosenbaum had not run afoul

of § 1927, which prohibits attorneys from engaging in dilatory tactics. Id. at 1312–

14. But we reversed the district court’s refusal to sanction Rosenbaum under its

inherent power, concluding that the court had clearly erred in holding that there

was insufficient evidence to show that Rosenbaum had acted in bad faith. Id. at

1316. To the contrary, the evidence overwhelmingly showed that Rosenbaum

acted in bad faith by knowingly pursuing a frivolous claim. Id. Nonetheless,

recognizing that district courts have broad discretion about whether to impose

sanctions, and, if so, in what amount, we remanded the case to the district court for

it to make the sanctions determination in light of our conclusions on appeal. Id.

We also instructed the district court to consider in the first instance whether

Roderman and Greenbaum should have been sanctioned under Rule 11. Id. at

1313.

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      On remand, the district court held an evidentiary hearing and later issued an

order in which it made the following rulings: As to Rosenbaum, the court imposed

a monetary penalty of $1,000 for the fees and costs that Lewis had incurred before

June 22, 2006 (the date on which Rosenbaum withdrew). The court explained that,

although it could not impose Rule 11 sanctions due to the untimeliness of Lewis’

motion, it could impose “Rule 11-type sanctions through the Court’s inherent

power.” It settled on the sum of $1,000 because Rosenbaum, while blameworthy,

had actually done very little work on the case. As for Roderman and Greenbaum,

the district court imposed sanctions under Rule 11 for $500 and $5,000,

respectively. Roderman received a lower monetary penalty because his filings

“were on balance minor and inconsequential.” Greenbaum received a higher

penalty because he remained in the case as Peer’s counsel of record for longer and

engaged in more sanctionable conduct. The district court closed its order by

articulating a hope that this long and unnecessary case would finally be put to rest.

      That hope proved illusory. Lewis, acting pro se, timely filed this appeal of

the district court’s sanctions order. He contends that the district court abused its

discretion in applying “Rule 11-type sanctions” against Rosenbaum and that the

monetary amounts it imposed were inadequate. He also contends that the district

court is biased against him and that this Court should take matters into its own

hands to determine appropriate sanctions. None of the sanctioned attorneys cross-

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appealed. In fact, Roderman was the only sanctioned attorney who even filed a

response brief, but his brief was stricken by this Court for failing to conform to

rules. Rosenbaum filed a motion requesting to be heard at oral argument, but did

not provide an explanation as to why he failed to timely file a response brief.

                                          II.

      We review a district court’s award of sanctions under Rule 11, § 1927, or its

inherent power only for an abuse of discretion. Amlong & Amlong, P.A. v.

Denny’s, Inc., 500 F.3d 1230, 1237 (11th Cir. 2007). We also “review for abuse of

discretion the district court’s imposition of sanctions in a certain amount.” Martin

v. Automobili Lamborghini Exclusive, Inc., 307 F.3d 1332, 1336 (11th Cir. 2002).

A district court abuses its discretion if it makes a “clear error of judgment” or

applies “the wrong legal standard.” Amlong, 500 F.3d at 1238.

                                          A.

      We first address the type and amount of sanctions the district court imposed

against Rosenbaum. Lewis contends that the district court abused its discretion by

using its inherent power to impose a “Rule-11 type” sanction against Rosenbaum.

He argues that the district court should have imposed a greater sanction against

Rosenbaum under its inherent power, instead of using the “more limited” Rule 11

framework. This argument is groundless.

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      Federal courts possess potent inherent powers that they may use to “fashion

an appropriate sanction for conduct which abuses the judicial process.” Chambers

v. NASCO, Inc., 501 U.S. 32, 44–45, 111 S.Ct. 2123, 2132–33 (1991). And the

“inherent power of a court can be invoked even if procedural rules exist which

sanction the same conduct,” id. at 49, 111 S.Ct. at 2135, “for these rules are not

substitutes for the inherent power,” In re Mroz, 65 F.3d 1567, 1575 (11th Cir.

1995). Whereas rule-based sanctions can reach only “certain individuals or

conduct, the inherent power extends to a full range of litigation abuses” and serves

to fill the gaps left by rule-based sanctions. Chambers, 501 U.S. at 46, 111 S.Ct. at

2134. In this case, the district court used its inherent powers to fill a gap left by

Rule 11’s timeliness requirement. In Lewis’ first appeal, we affirmed the district

court’s denial of his Rule 11 motion against Rosenbaum on the ground that it was

untimely. Peer, 606 F.3d at 1313. We also held, however, that there was

“overwhelming evidence that Rosenbaum knowingly pursued a frivolous claim,

and thus acted in bad faith.” Id. at 1316. Faced with Rosenbaum’s bad faith, the

district court was justified in using its inherent power to sanction him. After all,

the “key to unlocking a court’s inherent power is a finding of bad faith.” Barnes v.

Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998).

      Nor was it an abuse of discretion for the district court to impose “Rule 11-

type sanctions.” Rule 11 subjects to sanctions any lawyer who files a pleading,

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motion, or other paper that is frivolous or lacks evidentiary support. See Fed. R.

Civ. P. 11(b)(2)–(3). Because we concluded in Peer that the complaint Rosenbaum

filed was “objectively frivolous at the time of filing,” and that he knew it was

frivolous when he filed it, 606 F.3d at 1312, Rule 11 sanctions were substantively

appropriate, although untimely. There is no case in this Circuit barring a district

court from using a “Rule 11-type analysis” when imposing sanctions under its

inherent power in these circumstances. Moreover, the district court explicitly

stated that in doing so it was following our suggestion in Peer that Rule 11

sanctions would have been appropriate if timely sought.

      Having decided that the district court’s imposition of sanctions against

Rosenbaum was proper, we turn now to the amount of the monetary penalty the

court imposed. The district court ordered Rosenbaum to pay only $1,000. Lewis

argues that the district court abused its discretion by cutting off Rosenbaum’s

liability as of June 22, 2006, which was the date he withdrew as Peer’s counsel,

and because the amount of the sanction is inadequate to compensate Lewis or deter

similar conduct in the future. We disagree on both points.

      Rule 11 provides for a range of penalties, including payment by the

offending attorney of “part or all of the reasonable attorney’s fees and other

expenses directly resulting from the violation.” Fed. R. Civ. P. 11(c)(4). As the

language of the Rule suggests, it “permit[s] an award only of those expenses

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directly caused by the [sanctionable] filing.” Cooter & Gell v. Hartmarx Corp., 496

U.S. 384, 406, 110 S.Ct. 2447, 2461 (1990) (emphasis added). In reviewing a

district court’s imposition of sanctions under its inherent power, we have held that

a district court is well within its discretion to “fashion[] a sanction which is a direct

response to the harm that the bad faith conduct of the attorney causes.” Barnes,

158 F.3d at 1215 (upholding award to defendant of the cost of his expert witness

fees because the plaintiffs’ claims required defendant to hire an expert). Thus,

whether we analyze the sanctions from a Rule 11 or an inherent power standpoint,

the district court did not abuse its discretion in cutting off Rosenbaum’s liability as

of the date of his withdrawal from the case.

      The entirety of Rosenbaum’s involvement amounted to thirteen pages of

filings, which prompted a mere thirteen pages of responsive filings from Lewis.

As a result, the direct effect on Lewis of Rosenbaum’s frivolous filings was

relatively minor. It is also worth noting that Lewis initially chose to proceed pro se

–– he prepared his initial pleading, which contained his answer, affirmative

defenses, and counterclaims, on his own. It was not until June 13, 2006 that Lewis

retained counsel, and Rosenbaum withdrew from his representation of Peer just

eight days after that. Lewis’ attorney made only one filing while Rosenbaum was

counsel of record for Peer, and that was just a short response in opposition to

Rosenbaum’s motion to withdraw. In light of those facts, the district court did not

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abuse its discretion in cutting off Rosenbaum’s liability as of the date that he

withdrew. In doing so, the district court fashioned a sanction “which [was] a direct

response to the harm that the bad faith conduct of the attorney cause[d].” Barnes,

158 F.3d at 1215.

       Nor did the district court abuse its discretion by setting the amount of the

sanction at only $1,000. Technically, courts determine the amount of attorney’s

fees to be charged by calculating the “lodestar,” which is the number of hours

reasonably spent working on the case multiplied by a reasonable hourly rate. See

Dillard v. City of Greensboro, 213 F.3d 1347, 1353 (11th Cir. 2000). In this case,

however, calculating the lodestar would have been difficult in light of the fact that

Lewis was acting as a pro se litigant for the majority of Rosenbaum’s involvement

and his attorney made only one filing while Rosenbaum was Peer’s counsel of

record. Circuit precedent indicates that a pro se litigant cannot recover attorney’s

fees under Rule 11. See Massengale v. Ray, 267 F.3d 1298, 1302–03 (11th Cir.

2001). So the district court arrived at an amount of $1,000 by generally employing

its expertise on cost- and fee-related matters and by taking into account the fact

that Lewis must have incurred some cost in responding to the complaint and filing

his counterclaim. 4 The district court also considered the need to deter Rosenbaum

       4
          The court specifically noted that, if it had calculated the amount of the sanction more
precisely, tying it directly to Lewis’ costs and fees, then it would have been a lower dollar
amount.
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and other attorneys from engaging in similarly frivolous behavior in the future.

See Baker v. Alderman, 158 F.3d 516, 528 (11th Cir. 1998) (noting that

“deterrence remains the touchstone of . . . Rule 11”). In doing so, the district court

did not abuse its discretion.

       Lewis complains that the amount of the sanction was inadequate because it

did not cover any of his compensatory damages. Apparently, Lewis would like for

us to force Rosenbaum to pay the nearly $300,000 in damages he won on the

underlying counterclaims against Peer.5 Lewis is wrong. He has conflated the

award he is entitled to under those judgments with the punitive sanctions the court

appropriately imposed against Peer’s attorneys. The $125,000 judgment on Lewis’

abuse of process counterclaim and the nearly $175,000 in fees and costs awarded

on his second counterclaim are payable by Peer, not Peer’s attorneys. A court

employs its inherent power to sanction an attorney to punish and deter untoward

conduct, not to compensate a litigant for his underlying injury. See Martin, 307

F.3d at 1337 (explaining that a sanction imposed under a court’s inherent power

should punish and deter). Accordingly, it would not be appropriate to transform

the judgment payable by Peer on the merits of Lewis’ counterclaim into a sanction

against Peer’s attorney. See Donaldson v. Clark, 786 F.2d 1570, 1575 (11th Cir.

       5
         Lewis makes the same argument with respect to the amount of sanctions imposed
against Greenbaum and Roderman. Because the issue is the same regardless of the identity of
the lawyer, this analysis applies to Lewis’ arguments about Greenbaum and Roderman as well.
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1986) (“The amount of sanctions to be awarded under Rule 11 can never be an

integral part of the merits of the case and scope of relief.”), vacated on other

grounds by Donaldson v. Clark, 819 F.2d 1551, 1554 (11th Cir. 1987) (en banc).

                                          B.

      We next address the district court’s imposition of sanctions against

Roderman and Greenbaum, Peer’s later-appearing attorneys. As we have

discussed, Greenbaum was the last lawyer standing on Peer’s side of the conflict.

Roderman withdrew from the litigation on October 31, 2006 (after Lewis filed his

Rule 11 motion against Roderman and Greenbaum), but Greenbaum remained

Peer’s counsel of record until he was disqualified by the court on July 20, 2007.

The district court imposed Rule 11 sanctions against both of them –– $5,000

against Greenbaum and $500 against Roderman. We will review Lewis’

challenges to the sanctions awards against each of them separately, although most

of the analysis is applicable to both.

      Lewis contends that $5,000 is not enough to deter Greenbaum or others from

engaging in similar bad-faith conduct in the future. Inconsistently, he also notes

that the district court “could not expect Greenbaum to pay any sanctions” because

Greenbaum has been disbarred, his whereabouts are unknown, and he failed to pay

the $4,923.25 in other sanctions that the court awarded Lewis for Greenbaum’s

improper termination of a deposition. In reality, none of those reasons counsels in

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favor of increasing Greenbaum’s sanctions. Lewis is correct that the central

purpose of Rule 11 is deterrence. See Cooter & Gell, 496 U.S. at 393, 110 S.Ct. at

2454. But Greenbaum himself need not be deterred from advocating frivolous

claims because the Florida Bar has already prevented him from practicing law at

all. Nor does the fact that Greenbaum cannot be located and has not paid the

sanction imposed in connection with the deposition support Lewis’ argument for

increasing the amount Greenbaum should pay in Rule 11 sanctions for pursuing a

frivolous claim.

      We also do not believe that the district court abused its discretion in setting

the sanction against Greenbaum at $5,000. We have upheld a district court’s

imposition, pursuant to its inherent power, of fines in the amount of $500 against

attorneys who engaged in willful misconduct, observing that the fines “justly

punished the . . . attorneys and, hopefully, will deter other litigants from engaging

in similar activity.” Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1546

(11th Cir. 1993). And the Supreme Court has held that a “district court is better

situated than a court of appeals to marshal the pertinent facts and apply the fact-

dependent legal standard mandated by Rule 11.” Cooter & Gell, 496 U.S. at 402,

110 S.Ct. at 2459.

      Finally, Lewis has failed to convince us that the district court’s setting the

sanction against Roderman at $500 was an abuse of discretion. As the district

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court explained, Roderman received a lesser sanction because he withdrew from

the case nearly nine months before Greenbaum was disqualified and did not

contribute much in the way of filings. The district court did not fully explain how

it calculated the sanction amount, but it is not necessary for this amount to reflect

Lewis’ attorney’s fees, as Lewis’ argument seems to assume. See Riccard v.

Prudential Ins. Co., 307 F.3d 1277, 1295 (11th Cir. 2002) (“Although the sanctions

most commonly imposed are costs and attorney’s fees, the selection of the type of

sanction to be imposed lies with the district court’s sound exercise of discretion.”).

The district court did not abuse its discretion in imposing a sanction of $500

against Roderman.

                                          C.

      Lewis’ final argument is that the magistrate judge was biased against him

and that this Court should therefore determine what sanctions are appropriate. We

disagree.

      As we have discussed, we generally leave sanctions determinations to the

district courts. See Collins v. Walden, 834 F.2d 961, 966 (11th Cir. 1987) (“It is

the District Court Judge who sits at this bottleneck and who most accurately

perceives the harms which rightful litigants suffer because of Rule 11 violations.

No one is better situated to perceive the measure of the sanction necessary to

achieve the goals which the rule contemplates.”). Bias sufficient to disqualify a

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judge must stem from extrajudicial sources, except when a judge’s remarks in the

judicial context demonstrate a pervasive bias or prejudice. In re Walker, 532 F.3d

1304, 1310–11 (11th Cir. 2008). Adverse rulings are properly the subject of

appeal, and do not provide a party with a basis for holding that the court’s

impartiality is in doubt. See Byrne v. Nezhat, 261 F.3d 1075, 1103 (11th Cir.

2001), abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553

U.S. 639, 128 S.Ct. 2131 (2008).

      There is no indication in this case that the judge was in any way biased

against Lewis. The judge’s recognition that Rosenbaum was a well-respected

criminal defense attorney does not demonstrate a bias. Nor do any of the judge’s

offhand comments about political litigation or the motives of political litigants

reveal the sort of bias that would affect his ability to adjudicate the case. Lewis’s

arguments to the contrary are baseless.

      AFFIRMED. 6

      6
          Rosenbaum’s motion requesting oral argument is denied.
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