Schoenberg v. Shapolsky Publishers, Inc.

• Decision Date: 06 August 1992
• Docket Number: D,No. 1541,1541
• Citation: 971 F.2d 926
• Parties: , 1992 Copr.L.Dec. P 26,964, 23 Fed.R.Serv.3d 986, 23 U.S.P.Q.2d 1831 Harris O. SCHOENBERG, Plaintiff-Appellee, v. SHAPOLSKY PUBLISHERS, INCORPORATED, Ian Shapolsky and Steimatzky Publishing of North America, Inc., Defendants, Samuel A. Abady, Esq., Appellant. ocket 91-9311.
• Court: U.S. Court of Appeals — Second Circuit

Page 926

971 F.2d 926

119 A.L.R.Fed. 723, 1992 Copr.L.Dec. P 26,964,

23 Fed.R.Serv.3d 986, 23 U.S.P.Q.2d 1831

Harris O. SCHOENBERG, Plaintiff-Appellee, v. SHAPOLSKY PUBLISHERS, INCORPORATED, Ian Shapolsky and Steimatzky Publishing of North America, Inc., Defendants, Samuel A. Abady, Esq., Appellant.

No. 1541, Docket 91-9311.

United States Court of Appeals, Second Circuit.

Argued May 19, 1992.

Decided Aug. 6, 1992.

Samuel A. Abady, New York City, (Henry L. Saurborn, Jr., Kurzman Karelsen & Frank, New York City, of counsel), for appellant.

Bernard Malina, New York City, (Malina & Wolson, New York City, of counsel), for plaintiff-appellee.

Before: PRATT, ALTIMARI and FRIEDMAN, ^* Circuit Judges.

ALTIMARI, Circuit Judge:

Non-party appellant Samuel A. Abady, the former attorney for defendants Shapolsky Publishers, Inc. et al. ("the Publishers"), appeals from the December 10, 1991 order of the United States Court for the Southern District of New York (Edelstein, J.), which held him in contempt for willful violation of the district court's discovery order. See Fed.R.Civ.P. 37. In addition to holding Abady in contempt, the December 10 order awarded attorneys' fees and costs to plaintiff pursuant to, alternatively, Rule 37 or 28 U.S.C. 1927 (1988).

On appeal, Abady challenges the contempt citation contending that the district court was without subject matter jurisdiction to impose sanctions. Abady further argues that the contempt order was imposed in violation of his constitutional right For the reasons set forth below, we vacate the district court's order and remand the case for proceedings in accordance with this opinion.

                to due process.   Abady also maintains that coercive sanctions are inappropriate here because he is unable to comply with the district court's order due to his termination as defendants' counsel.   Finally, Abady asserts that the conduct underlying the contempt order was an appropriate, non-sanctionable legal strategy
                

BACKGROUND

The underlying action which gave rise to the present appeal is the contentious litigation between plaintiff-appellee Harris O. Schoenberg, the author of "A Mandate for Terror: The United Nations and the PLO", and defendants Shapolsky Publishers ("Shapolsky"), its president, Ian Shapolsky, and Steimatzky Publishing of North America, Inc. ("Steimatzky"), concerning the allegedly unauthorized publication of Schoenberg's manuscript. On January 18, 1991, Schoenberg commenced this action against the Publishers in the United States District Court for the Southern District of New York (Edelstein, J.), alleging copyright infringement, breach of contract, and inducing breach of contract.

According to the complaint, Schoenberg entered into a written agreement with Steimatzky on January 5, 1985, for the publication of Schoenberg's work. Pursuant to this agreement, Schoenberg retained ownership of the copyright and granted Steimatzky a license to publish the manuscript subject to the terms of the contract. The contract obligated Steimatzky to publish the work within six months of receipt of the final draft of the manuscript, to promote and market the work in book form, to license editions of the work in languages other than English, and to license excerpts of the work in periodical publications. In 1986, Shapolsky became the successor to the business of defendant Steimatzky, and assumed certain assets and liabilities of Steimatzky, including its contract with Schoenberg.

Schoenberg's complaint alleges that both Steimatzky and Shapolsky breached the contract because they failed to: (1) publish Schoenberg's manuscript until 1989, despite the submission of a final draft in 1985; (2) list the work in their promotional catalog until May 1989 or promote the work generally; (3) respond to inquiries from other publishers regarding purchase of foreign rights to the work; and (4) render any quarterly royalty statements or make any of the royalty payments due thereunder. The complaint maintains that these actions by defendants constitute a breach of the contract, which terminated the rights of defendants to publish the work. Consequently, Schoenberg alleges that subsequent publication of the work resulted in an infringement of his copyright, thereby giving rise to an action under the Federal Copyright Act of 1976, 17 U.S.C. § 101 et seq. ("the Copyright Act"). Because there is no diversity of citizenship between the parties, this is the only basis upon which the district court could exercise jurisdiction.

Schoenberg served defendants with his first document request and first set of interrogatories on February 8, 1991. On March 13, the Publishers answered the first set of interrogatories, and their counsel, appellant Abady, sent plaintiff a letter in which he represented that the documents requested would be produced "forthwith." Despite Abady's representation, the Publishers failed to comply with Schoenberg's discovery request. Abady subsequently received three letters between March 13 and March 25 from plaintiff's counsel urging compliance, but he did not respond by producing the documents.

In the interim, an amended answer was served on March 15, 1991, setting forth lack of subject matter jurisdiction as the first affirmative defense. The next day, Abady requested a pre-motion conference in conformity with the Judge Edelstein's rules, for the purpose of presenting defendants' motion to dismiss for lack of subject matter jurisdiction. At a pre-trial conference held on June 5, 1991, the district court refused to address the issue of subject matter jurisdiction and prohibited Abady By order dated June 19, 1991, the district court granted this motion and found that "the failure of defendants to comply with discovery is without justification." This order directed that "on or before June 26, 1991, defendants shall, without objection, produce all the documents requested in Plaintiff's First Request for Production of Documents at the offices of plaintiff's counsel."

                from submitting his client's motion to dismiss until the Publishers had responded to Schoenberg's request for the production of documents.   The district court did, however, allow Schoenberg to submit a motion, pursuant to Fed.R.Civ.P. 37, to compel discovery
                

Before receiving the written order, Abady wrote a letter to the district court, dated June 19, 1991, urging the court to reconsider its oral order forbidding Abady from filing defendants' motion to dismiss. In this letter, Abady discussed in detail the subject matter jurisdiction issue, and argued that the court had no discretion to ignore this issue. Abady also informed the court that he would seek a writ of mandamus from the Court of Appeals unless the district court allowed the Publishers to file a motion to dismiss before they were compelled to complete discovery.

After receiving the court's written order, Abady again wrote the district court. In a letter dated June 20, 1991, Abady asked the court to entertain defendant's motion to dismiss. Abady noted that the court's failure to do so put him in an awkward position, because while he did not wish to bring a mandamus action in the Second Circuit, he would feel compelled to do so if the court continued to refuse to entertain his client's motion to dismiss. The district court responded by advising Abady that he was forbidden from filing the motion to dismiss.

On behalf of the Publishers, Abady filed a petition for writ of mandamus in the Court of Appeals on July 12, 1991. The petition for the writ requested this Court to direct the district court to vacate its June 19, 1991 order compelling discovery and immediately to consider and rule on the Publishers' motion. In the alternative, the Publishers requested that this Court treat the district court's deferral of defendant's motion as a denial and asked the Court to rule on it. On August 13, 1991, this Court denied the Publishers' motion.

Immediately after the decision was rendered from the bench, Schoenberg's counsel promised Abady that Schoenberg would not move for contempt until August 20, 1991 in order to give the Publishers time to comply with the discovery request. The Publishers nevertheless failed to comply by this date. Thereafter, on August 23, 1991, plaintiff's counsel requested a pre-motion conference for the purpose of seeking permission to move for contempt against the Publishers and sanctions against the Publishers and their counsel, appellant Abady. This conference was scheduled for September 4, 1991 at 4:00 p.m. On September 4, 1991, an envelope containing documents allegedly responding to Schoenberg's discovery request was delivered to plaintiff's counsel approximately five hours before the conference. Believing that he had satisfied the court's prerequisite to filing the Publisher's motion to dismiss, Abady filed the motion on September 4, immediately prior to the conference, and noticed a return date of September 17, 1991. However, the district court refused to consider the motion at that time, or at any time thereafter.

At the September 4th pre-motion conference, Schoenberg contended that the Publisher's production was defective in a number of respects: the production contained no bates numbers; no written responses were given; there were unexplained redactions; and responsive documents were alleged to be missing. At this conference Abady attempted to show the court that he had complied with the discovery request. The district court did not allow Abady an opportunity to support this contention at the conference, but instead informed Abady that he would have ample opportunity to be heard at a contempt hearing.

An order to show cause for contempt and sanctions was issued by the district court on September 27, 1991. This order was On October 15, 1991, a contempt hearing was held. Paul C. Kurland, a member of Snow Becker Krauss, P.C., appeared for the defendants, because appellant had resigned from the firm two days earlier. However,...