Mitchell v. Lyons Prof’l Servs., Inc.

10-5100-cv
Mitchell v. Lyons Prof’l Servs., Inc.
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
August Term, 2012 3
4
(Submitted: February 1, 2012 Decided: February 28, 2013) 5
Docket No. 10-5100-cv 6
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KEESHA MITCHELL, THERESA CAMPBELL, SEANNETTE CAMPBELL, and 8 TANISHA SELBY, 9
10 Plaintiffs-Appellants, 11
v. 12
LYONS PROFESSIONAL SERVICES, INC., 13
14 Defendant-Appellee, 15
16 RICHARD TRIM and TERRY TATUM, 17
18 Defendants, 19
20 CHRISTOPHER M. LYONS and GARRISON PROFESSIONAL SERVICES, INC., 21
22 Interested Parties-Appellees.*
23
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B e f o r e: WINTER, RAGGI, and CHIN, Circuit Judges. 25
Appeal from the denial of plaintiffs-appellants’ motion to 26
execute a monetary judgment entered as a sanction for attorney 27
misconduct in the United States District Court for the Eastern 28
District of New York (Brian Cogan, Judge). We vacate and remand. 29
* The Clerk of the Court is instructed to conform the caption in
accordance herewith.
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Mitchell L. Perry, Rawlins Law Firm, New 1 York, New York, for Appellants. 2
3 Brooke L. Anthony, Law Offices of 4 Raymond A. Giusto, P.C., West Bay Shore, 5 New York, for Appellees. 6
7
WINTER, Circuit Judge: 8
Keesha Mitchell, Theresa Campbell, Seannette Campbell, and 9
Tanisha Selby appeal the denial of their motion for a writ of 10
execution against Christopher M. Lyons and Garrison Professional 11
Services, Inc. ("Garrison Services"). See Fed. R. Civ. P. 69(a) 12
and N.Y. C.P.L.R. § 5225(b). The motion was based on default 13
judgments appellants had earlier obtained against defendant Lyons 14
Professional Services, Inc. ("Lyons"). 1 The district court 15
denied this motion as a sanction for appellants’ counsel's 16
repeated failures to comply with the court’s orders. We hold 17
that although the district court had more than an adequate basis 18
to sanction counsel and accorded the required procedural 19
safeguards, further findings are needed to support a sanction 20
that falls entirely on the clients rather than principally on the 21
lawyer. 22
BACKGROUND 23
The underlying action is against appellants’ former employer 24
Lyons and two supervisory personnel, Trim and Tatum, for 25
employment discrimination under federal, state, and local law. 26
1 The district court permitted appellants to proceed against Lyons and
Garrison Services by motion rather than by filing a separate proceeding. We
express no view regarding the propriety of that decision.
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The complaint alleged incidents of sexual harassment and sexual 1
assault by Trim and Tatum, with vicarious liability attributable 2
to Lyons. Appellants obtained default judgments against Lyons 3
and Trim, who both failed to appear, and dismissed the case 4
against Tatum. At a damages inquest, the district court awarded 5
$266,590, consisting of back pay, damages for emotional harm, and 6
punitive damages. On May 10, 2010, appellants filed an execution 7
motion under Federal Rule of Civil Procedure 69(a) and N.Y. 8
C.P.L.R. § 5225(b) against Lyons; Trim; 2 Lyons’s alleged 9
successor in interest, Garrison; and Lyons’s sole owner, 10
Christopher Lyons. 11
During the proceedings leading up to this motion, 12
appellants’ counsel, Gary Rawlins, engaged in repeated acts that 13
sometimes individually, but certainly collectively, amounted to 14
willful disregard of court orders. 15
We summarize those relevant acts. Rawlins three times 16
sought and obtained adjournments of the Initial Status Conference 17
because he was unable to proceed. On one of these occasions he 18
was on vacation. On another, he notified the court of the 19
proposed adjournment only one day before the Conference was 20
scheduled, in violation of Judge Cogan’s rule requiring 48 hours’ 21
notice. 22
Twice Rawlins was ordered to provide notice of the Initial 23
Status Conference to Tatum, Lyons, and Trim and to file proof of 24
2 Appellants later settled the action against Trim.
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service of this notice with the court within one week. Twice 1
Rawlins failed to do so. After the court entered an Order to 2
Show Cause for why he should not be sanctioned for this failure, 3
Rawlins responded that he had served notice on Tatum (without 4
filing proof of the service) but had mistakenly overlooked the 5
court’s requirement to also serve notice on Lyons and Trim. The 6
court declined to impose sanctions. 7
In the proceedings to execute the money judgment, Rawlins 8
continually failed both to comply with court orders and to 9
communicate in advance with the court in an effort to reduce the 10
disruptive effects of his noncompliance. Rawlins again violated 11
the 48-hour rule when he requested an adjournment of a damages 12
inquest the day before it was scheduled. At one point during 13
discovery proceedings, he could not proceed with a scheduled 14
hearing on the execution motion. Following both sides’ failure 15
to appear at the discovery hearing, the district court issued a 16
detailed scheduling order with several warnings. These included 17
a statement that Rawlins’s nonappearance was “the latest in a 18
series of failures by plaintiffs' counsel to effectively 19
communicate with the Court and to demonstrate basic familiarity 20
with the requirements of federal practice” and a warning that 21
“[t]he Court believes that it would be acting within its 22
discretion to simply deny plaintiffs’ [execution] motion based on 23
counsel’s failure to appear, particularly in light of the history 24
of prior miscues.” Minute Entry & Order at 1, Mitchell v. Lyons 25
Prof’l Servs., Inc., No. 09 Civ. 1587 (BMC) (E.D.N.Y. Sept. 27, 26
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2010). Nevertheless, the district court allowed the execution 1
action to continue with specific scheduling dates and 2
requirements in the scheduling order. 3
The order set a hearing for November 8, required Rawlins to 4
prepare certain materials, and stated specifically that “failure 5
to comply with these procedures will result in denial of [the 6
execution] motion without further accommodations.” Id. at 2. 7
Nevertheless, Rawlins appeared at the November 8 hearing without 8
having prepared the required materials. Despite the language in 9
the scheduling order warning of dismissal for failure to comply 10
with the court’s procedures, the court instead sanctioned Rawlins 11
$500 and rescheduled the hearing for November 15, one week later. 12
Rawlins then failed to appear timely for the rescheduled 13
hearing, even though the original scheduling order regarding the 14
hearing stated expressly that “failure to appear on time will 15
result in denial of [the execution] motion.” Id. at 2-3. After 16
fruitlessly waiting for him and without any notice that he would 17
ever appear, the district court dismissed the execution motion. 18
Subsequently, appellants and Rawlins moved for 19
reconsideration of the sanction. The court gave Rawlins an 20
opportunity to explain or justify his transgressions and why the 21
sanction of dismissal should not be imposed. Appellants as 22
individuals also made submissions to the district court, arguing 23
that their motion should not be dismissed. After considering the 24
submissions, the district court found Rawlins’s account of his 25
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misconduct -- mistaken scheduling notes -- to be “not . . . 1
compelling” in light of his chronic failures and denied the 2
motion for reconsideration. This appeal followed. 3
DISCUSSION 4
Every district court “has the inherent power to supervise 5
and control its own proceedings and to sanction counsel or a 6
litigant for . . . disobeying the court’s orders.” Mickle v. 7
Morin, 297 F.3d 114, 125 (2d Cir. 2002); see also Lewis v. 8
Rawson, 564 F.3d 569, 575 (2d Cir. 2009) (noting that the 9
district court’s power to dismiss an action, while codified in 10
the Federal Rules of Civil Procedure and elsewhere, is inherent). 11
We review a district court’s decision to impose sanctions for 12
failure to comply with its orders for abuse of discretion. See 13
Lucas v. Miles, 84 F.3d 532, 534-35 (2d Cir. 1996); see also 14
Lewis, 564 F.3d at 575 (reviewing dismissal for failure to 15
prosecute). Dismissing an action, which effectively occurred 16
here, is the harshest of sanctions and must be proceeded by 17
particular procedural prerequisites. Specifically, notice of the 18
sanctionable conduct, the standard by which it will be assessed, 19
and an opportunity to be heard must be given. See Mickle, 297 20
F.3d at 126 (reversing sanction of dismissal for attorney 21
misconduct due to lack of notice and opportunity to be heard); 22
cf. Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302-03 (2d 23
Cir. 2009) (recognizing that, in context of Federal Rule of Civil 24
Procedure 37(b) and (d) sanctions, a warning that noncompliance 25
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with court order will result in dismissal may suffice). 1
Moreover, the sanction of dismissal with prejudice -- the 2
effective result of the denial of appellants’ motion for a writ 3
of execution -- must be supported by “clear evidence” of 4
misconduct and “a high degree of specificity in the factual 5
findings.” Mickle, 297 F.3d at 125-26 (quoting Oliveri v. 6
Thompson, 803 F.2d 1265, 1272 (2d Cir. 1986)) (internal quotation 7
marks omitted). 8
Further, mindful that the sanction of dismissal with 9
prejudice has harsh consequences for clients, who may be 10
blameless, it should be used only in “extreme situations,” see 11
Lewis, 564 F.3d at 575–76 (internal quotation marks omitted); cf. 12
Bobal v. Rensselaer Polytechnic Inst., 916 F.2d 759, 764 (2d Cir. 13
1990) (reviewing Federal Rule of Civil Procedure 37(d) sanction 14
order), and even then only upon a finding “of willfulness, bad 15
faith, or reasonably serious fault,” Commercial Cleaning Servs., 16
L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374, 386–87 (2d Cir. 17
2001); Lucas, 84 F.3d at 535 (adopting five-factor fault standard 18
based on (1) duration of noncompliance; (2) “whether plaintiff 19
was on notice that failure to comply would result in dismissal”; 20
(3) likely prejudice to defendant from delay resulting from 21
noncompliance; (4) “balancing of the court’s interest in managing 22
its docket with plaintiff’s interest in receiving fair chance to 23
be heard”; and (5) whether the district court adequately 24
considered the adequacy of lesser sanctions). 25
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Applying these principles, we find no defect in the 1
procedural safeguards afforded. The district court’s detailed 2
scheduling order clearly stated that future noncompliance and 3
tardiness would be met with dismissal of the execution motion and 4
gave appellants and Rawlins the opportunity to respond. It 5
explicitly stated that “failure to comply with [the scheduling 6
order’s] procedures will result in denial of [the execution] 7
motion without further accommodations.” Minute Entry & Order at 8
2, Mitchell v. Lyons Prof’l Servs., Inc., No. 09 Civ. 1587 (BMC) 9
(E.D.N.Y. Sept. 27, 2010). The order further warned Rawlins that 10
“failure to appear on time will result in denial of [the 11
execution] motion.” Id. at 2-3. This language indisputably gave 12
notice to Rawlins that the execution motion would be dismissed 13
for future transgressions. 14
Once the execution motion was denied, appellants had another 15
opportunity to be heard in connection with their motion for 16
reconsideration, that, when coupled with the clear notice of 17
impending sanctions, satisfies the procedural safeguards outlined 18
in Mickle. An opportunity to be heard before a dismissal takes 19
effect is not required when the notice of impending dismissal is 20
clearly communicated, in the context of a scheduling order or by 21
other means. Mickle’s requirements are met so long as the 22
opportunity to be heard occurs before or at the time of dismissal 23
or, as in this case, at a separate motion for reconsideration. 24
Cf. Link v. Wabash R.R. Co., 370 U.S. 626, 632 (1962) (noting 25
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that a Rule 60(b) motion provides an “escape hatch” with respect 1
to counsel’s opportunity to be heard, which can render even a 2
lack of notice prior to sanction dismissal “of less 3
consequence”). 4
Finally, because dismissal of the action is particularly 5
harsh, the dismissal must be accompanied by “a high degree of 6
specificity in the factual findings.” Mickle, 297 F.3d at 125-26 7
(internal quotation marks omitted). When dismissing appellants’ 8
case in open court, the district court did not specifically 9
elaborate on the reasons for dismissal. Nevertheless, given the 10
specificity in the court’s prior scheduling order and its 11
reference in open court to Rawlins’s repeated failures to comply 12
with court orders, the court’s reasons for refusing to enforce 13
appellants’ execution motion were self-evident, thereby providing 14
them with an opportunity to respond in an informed manner to the 15
reasons for the sanction. See id. 16
A consideration of the five Lucas factors also supports a 17
finding of “reasonably serious fault,” Commercial Cleaning 18
Servs., 271 F.3d at 386, justifying the sanction imposed. The 19
first four factors weigh in favor of dismissal: (1) instances of 20
noncompliance occurred throughout the entire 18 months of the 21
district court proceedings; (2) notice was given by the court two 22
months before the motion was dismissed that future misconduct 23
would result in dismissal; (3) further delays would continue to 24
waste the time and resources of adversary parties; and (4) the 25
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court has a clear need to manage its docket, which Rawlins 1
seriously disrupted. Conduct such as occurred here can impose 2
serious costs on adversaries, on parties to other matters before 3
the court who may find their scheduling disrupted or decisions 4
delayed, and on the efficiency with which the district court 5
addresses its business. 6
We take issue with the district court only with regard to 7
the final Lucas factor, whether alternative sanctions not 8
involving the serious harm to counsel’s clients were adequately 9
considered. The district court first threatened a lesser $500 10
sanction against Rawlins, to no avail. However, on the present 11
record, we cannot determine, and the district court has made no 12
findings as to, whether the delays leading to dismissal were 13
solely a result of Rawlins’s actions and not those of his 14
clients. We have held that “the more the delay was occasioned by 15
the lawyer’s disregard of his obligation toward his client, the 16
more this . . . argues in favor of a less drastic sanction 17
imposed directly on the lawyer.” Dodson v. Runyon, 86 F.3d 37, 18
40 (2d Cir. 1996). It is true that a client is typically bound 19
by the acts of his lawyer, see Link, 370 U.S. at 633–34 & n.10, 20
but as we noted in Dodson, “[t]his principle, however, does not 21
relieve the district court of the obligation to consider the 22
relevant factors before dismissing an action –- especially the 23
suitability of lesser sanctions,” 86 F.3d at 40. 24
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A wide panoply of sanctions was, and is, at the district 1
court’s disposal. These options include monetary sanctions on 2
counsel and the assessment of costs and counsel fees generated by 3
the delinquency. A suspension from practice may be imposed for a 4
failure to pay such sanctions. See In re Flannery, 186 F.3d 143, 5
146 (2d Cir. 1999) (per curiam). The district court’s 6
disciplinary and contempt powers would support sanctions beyond 7
costs and fees, such as mandated disclosure by counsel of his 8
sanctionable conduct to the bar, to future clients, and to courts 9
in which Rawlins may appear. See Chambers v. NASCO, Inc., 501 10
U.S. 32, 44–45 (1991); Gallop v. Cheney, 667 F.3d 226, 230 (2d 11
Cir. 2012) (per curiam) (requiring attorney to provide notice of 12
his sanctions to any federal court within the Second Circuit for 13
a period of one year); Dodson, 86 F.3d at 41 (citing Shea v. 14
Donohoe Constr. Co., Inc., 795 F.2d 1071, 1078 (D.C. Cir. 1986) 15
(noting that sanctions may include communication of attorney’s 16
actions to clients and the bar association)). While a district 17
court need not exhaust these alternative possibilities, we do not 18
know on the record before us whether these alternatives were ever 19
considered or the grounds on which they were rejected. In this 20
case appellants are “unsophisticated,” Minute Entry & Order at 2, 21
Mitchell v. Lyons Prof’l Servs., Inc., No. 09 Civ. 1587 (BMC) 22
(E.D.N.Y. Sept. 27, 2010), and the sanctionable conduct may have 23
been due entirely to counsel’s personal irresponsibility and 24
afforded no strategic advantage to appellants. See Dodson, 86 25
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F.3d at 40. We also note that appellants had secured a judgment 1
and only execution of the judgment remained. We therefore remand 2
to allow the district court to give explicit consideration to the 3
full range of other available sanctions, after according a 4
hearing to the parties and Rawlins on the issue, and only then, 5
if necessary, effectively to dismiss the action. 6
CONCLUSION 7
For the foregoing reasons, the district court’s final order 8
denying appellants’ writ of execution is VACATED and the case is 9
REMANDED for further proceedings consistent with this opinion. 10
Appellants’ attorney is directed to furnish a copy of this 11
opinion to his clients. 12
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