261 F.3d 1075 (11th Cir. 2001), 99-12623, Byrne v Nezhat

Docket Nº:99-12623
Citation:261 F.3d 1075
Party Name:MICHAEL T. BYRNE, Movant-Appellant, DEBRA MANOV, Plaintiff-Appellant, v. CAMRAN NEZHAT, M.D., FARR NEZHAT, M.D., et. al., Defendants-Appellees.
Case Date:August 14, 2001
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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261 F.3d 1075 (11th Cir. 2001)

MICHAEL T. BYRNE, Movant-Appellant,

DEBRA MANOV, Plaintiff-Appellant,

v.

CAMRAN NEZHAT, M.D., FARR NEZHAT, M.D., et. al., Defendants-Appellees.

No. 99-12623

United States Court of Appeals, Eleventh Circuit

August 14, 2001

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Appeals from the United States District Court for the Northern District of Georgia.

Before TJOFLAT, BIRCH and DUBINA, Circuit Judges.

TJOFLAT, Circuit Judge:

Stripped to its essentials, this is a simple medical malpractice case. It was brought, however, as a multi-count RICO prosecution. Suspecting that the claims in the complaint lacked factual bases, the district court took an unusual step and granted the defendants leave to conduct discovery for the purpose of determining whether plaintiff's counsel had violated Rule 11 of the Federal Rules of Civil Procedure. The discovery was to determine whether plaintiff's counsel had conducted an "inquiry reasonable under the circumstances" into the factual support for the claims presented in the complaint. 1 After the court took

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this step, the plaintiff moved the court to recuse pursuant to 28 U.S.C. § 455.2 The court denied the motion.

During the Rule 11 discovery, the court dismissed the plaintiff's claims against one of the defendants for failure to state a claim upon which relief could be granted. After the discovery was completed, the defendants moved the court to sanction the plaintiff and one of her attorneys pursuant to Rule 11, 28 U.S.C. § 1927,3 and the court's inherent power. They contended that, with the exception of the plaintiff's medical malpractice claim, none of the claims presented had a factual basis and the claims had been brought in bad faith for the sole purpose of harassment. The court agreed. In two orders issued sixteen months apart, the court dismissed the remainder of plaintiff's claims, except for the malpractice claim. In addition, it required the plaintiff and her attorney to pay the attorneys' fees and costs incurred in defending the dismissed claims. Two months after the first order issued, the plaintiff renewed her motion for recusal; as before, the court denied the motion.

These consolidated appeals came after the district court issued its second sanctions order. Appellants - plaintiff and one of her attorneys - challenge the denials of the plaintiff's motions for recusal, the dismissal of the plaintiff's claims (except the malpractice claim), and the imposition of monetary sanctions in the form of attorneys' fees and costs.

We organize this opinion as follows. In Part I, we recite the events that led the defendants to seek Rule 11 sanctions early in the case. In Part II, we address the plaintiff's argument that the district court should have recused. In Part III, we consider the propriety of the court's dismissal of all but the plaintiff's malpractice claim as well as the court's imposition of monetary sanctions against the plaintiff and her attorney under Rule 11, 28 U.S.C. § 1927, and the court's inherent power. Finally, in Part IV, we discuss the tools a district court should use in dealing with the types of pleadings filed by the attorneys in this case.

I.

In September 1992, Debbie Manov ("Manov"), a New Jersey resident suffering from endometriosis,4 traveled to the Atlanta Center for Fertility and Endocrinology

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("the Center")5 for corrective laparoscopic surgery. Drs. Farr Nezhat and Camran Nezhat, two of the Center's specialists,6 performed the surgery at Northside Hospital ("Northside"). Prior to the surgery, the doctors told Manov that her appendix might be infected and that, if infected, it should be removed. She agreed. During the surgery, the doctors determined that the appendix was infected and removed it. Following the surgery, Manov developed an infection, which necessitated her readmission to Northside. Drs. Nezhat treated the infection with antibiotics, which Manov claims contributed to her loss of hearing.7

In August 1994, Manov, represented by Atlanta attorney Edward Kellogg, filed a medical malpractice suit in the Superior Court of Fulton County, Georgia. Named as defendants were Drs. Farr and Camran Nezhat and the Center. The alleged malpractice was the removal of a healthy appendix (during the laparoscopic procedure) which, in turn, caused an infection requiring further hospitalization.

Shortly after filing suit, Manov consulted James Neal ("Neal"), a Pennsylvania lawyer practicing out of his residence in Ohio. At the time, Neal and Michael Mixson ("Mixson"), an attorney from Monroe, Georgia, were prosecuting two other medical malpractice cases in Atlanta, both filed in December 1993, on behalf of Mary Mullen ("Mullen"). The first lawsuit, brought against Drs. Farr and Camran Nezhat, Dr. Earl Pennington, the Center, and Northside, was pending in the Fulton County Superior Court.8 The second suit, brought against the members of Northside's board of directors in their individual capacities, was pending in the United States District Court for the Northern District of Georgia.9 Because Mullen's cases are of central importance to the instant case, we relay the history of her cases as follows.

In her superior court complaint, Mullen alleged that on December 18, 1991, the Drs. Nezhat and Pennington negligently performed a bowel resection procedure to alleviate rectal endometriosis. Mullen alleged

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that the procedure was experimental, caused severe physical complications, and that it was performed without her informed consent. Mullen's complaint contained seven counts, each proceeding on a tort law theory predicated on the bowel resection procedure.10 In her district court complaint, framed in one count, Mullen alleged that members of Northside's board were negligent in permitting the doctors to perform an experimental bowel resection without the patient's informed consent.11

By the time Manov spoke to Neal, he had amended the allegations in Mullen's state court suit to add two causes of action, for a total of nine.12 Counts VIII and IX, brought against the Drs. Nezhat and the Center,13 sought compensatory and punitive damages for violations of the Georgia RICO14 statute, O.C.G.A. § 16-14-4. Count VIII alleged that the defendants were operating a "criminal enterprise" and engaging in "a pattern of racketeering activity," and that such racketeering activity had caused Mullen injury. The "acts of racketeering" were, among others, that the Drs. Nezhat (1) made false statements in medical journal articles; (2) failed to obtain valid consent for surgical procedures from Mullen and other patients at the Center, thereby committing aggravated battery on the patients; (3) improperly billed insurance companies for experimental surgeries; and (4) improperly used experimental drugs. Mullen v. Nezhat, 477 S.E. 2d 417, 419 (Ga. Ct. App. 1996). Count IX alleged aggravated battery, and federal mail and wire fraud as acts of

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racketeering. Count IX asserted that the Drs. Nezhat committed aggravated battery by failing to obtain "'valid informed consent . . .by fraudulently misrepresenting the true nature of their experimental surgery, [and] by repetitively performing non-indicated unnecessary surgery' on Mullen and other patients, thereby 'deliberately and maliciously causing bodily harm' amounting to aggravated battery." The mail and wire fraud allegedly occurred when the defendants "engage[ed] in experimental and non-consensual medical treatment by implanting Estradiol pellets into 'hundreds if not thousands of women without their knowledge that this hormonal implant was not approved.'" Id.

Apparently, Manov was impressed with the manner in which Neal was handling Mullen's cases, so she decided that Neal should take over her lawsuit against Drs. Nezhat and the Center. Neal said he would take the case, but would need to associate local counsel. Manov agreed. Neal thereafter searched the records of the Fulton County Superior Court for the names of other attorneys who had sued the Nezhats or the Center. He found one, Michael T. Byrne ("Byrne"), one of the appellants now before us.15 In the spring of 1995, Byrne appeared as Manov's counsel in the state court suit, and Edward Kellogg withdrew.

Unbeknownst to Manov, the continuation of Neal's pro hac vice status in Mullen's state and federal court cases was being challenged on the grounds that he had violated the courts' discovery rules and the Code of Professional Responsibility by engaging in malicious and harassing conduct against the Nezhats and the Center. These challenges began in February 1994, when the defendants in both of Mullen's cases moved the courts to revoke Neal's pro hac vice status. In each case, the court denied the motion, but nonetheless condemned Neal's behavior. The district court's May 11, 1994 order stated that, although Neal's "conduct did not conclusively violate the Code of Professional Responsibility . . . . [his] actions bordered on conduct unbecoming an officer of the Court."16 The superior court's order, issued July 11, 1994, was more explicit. It stated that "Neal's communication with various counsel for Defendants borders on unprofessional, scurrilous, and distasteful conduct. . . . [His] conduct has come as close to the line as one could possibly come to violating the Georgia Code of Professional Responsibility."17 He communicated with defense counsel "in a cavalier and 'half-cocked' manner in an effort to bully the Defendants...

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