Robertson v. Cartinhour

• Decision Date: 10 August 2012
• Docket Number: Civil Action No. 11–1919 (ESH).
• Citation: 883 F.Supp.2d 121
• Parties: Wade ROBERTSON, Plaintiff, v. William C. CARTINHOUR, Jr., et al., Defendants.
• Court: U.S. District Court — District of Columbia

883 F.Supp.2d 121

Wade ROBERTSON, Plaintiff,

v.William C. CARTINHOUR, Jr., et al., Defendants.

Civil Action No. 11–1919 (ESH).

United States District Court, District of Columbia.

Aug. 10, 2012.

Aaron P. Bradford, Alexander Christian Clayden, Lathrop & Gage, LLP–Denver, Denver, CO, for Plaintiff.

Cristin Jeanette Mack, Hall & Evans, LLC–Denver, Denver, CO, David Bernard Bedell Helfrey, Helfrey, Neiers & Jones, P.C., St. Louis, MO, for Defendant.

MEMORANDUM OPINION

ELLEN SEGAL HUVELLE, District Judge.

Yet again, this Court must confront the issue of sanctions arising from the litigation brought by Wade Robertson against Dr. William Cartinhour. This time the issue is whether to impose sanctions against Ty Clevenger for filing excessive and frivolous pleadings on behalf of his client, Wade Robertson, in violation of 28 U.S.C. § 1927. To date, in related litigation, Clevenger has been sanctioned by the D.C. Circuit in orders issued on October 19 and December 14, 2010; ¹ by Chief Judge Lamberth in a related bankruptcy proceeding on April 2, 2012; ² and by Bankruptcy Judge Teel in a seventy-nine page opinion where Clevenger was fined for, inter alia, his “complete disregard for the facts and law in advancing ... frivolous argument [s] [which] generated a staggering amount of work for the court, and has put Cartinhour and his attorney to the unnecessary burden of defending against frivolous arguments in this and other courts.” ³ If anything, Clevenger's conduct here is even more egregious than in these related cases. Therefore, this Court will grant the motion and sanction Clevenger for his vexatious and abusive litigation tactics in this case.⁴

BACKGROUND

This Court's involvement in Robertson's suits against Cartinhour dates back to 2009 when Robertson unsuccessfully sued Cartinhour, which ultimately resulted in a jury verdict in favor of Cartinhour for $7 million, including punitive damages of $3.5 million. The tortured history relating to that case, “ Robertson I,” and the current one, which has been referred to as “ Robertson II,” was last set forth in detail in a Memorandum Opinion dated March 16, 2012. In that opinion, this Court granted a motion to dismiss all counts, including charges of RICO and state common law claims, that Clevenger initially brought on Robertson's behalf against Cartinhour, his attorneys (“Kearney Attorneys”) in Robertson I and others in the Southern District of New York.⁵ Given the detailed recitation that appears in that Memorandum Opinion, the Court will only to summarize the relevant events that occurred subsequent to March 16, 2012.

1. On April 2, 2012, Chief Judge Lamberth imposed sanctions of $7,249.00 against Robertson and Clevenger jointly, recognizing that they had filed a frivolous bankruptcy case in an “attempt to stall litigation in this district in front of Judge Ellen Huvelle” ⁶ and finding that sanctions were warranted because of “the groundless nature of the [bankruptcy] appeal, unfounded whatsoever in the law....” ⁷

2. On April 3, 2012, in an unpublished opinion, the D.C. Circuit affirmed the jury's $7 million verdict in Robertson I and found that Robertson presented “no meritorious argument on appeal.” ⁸

3. On May 4, 2012, Bankruptcy Judge Teel granted a motion for sanctions and fined Clevenger and Robertson $10,000 each, finding that “Clevenger joined Robertson in knowingly and in bad faith advancing frivolous arguments in [the] bankruptcy case.” ⁹

4. On June 12, 2012, Clevenger filed an appeal in the D.C. Circuit seeking review of this Court's dismissal of Robertson II.

5. On June 25, 2012, Chief Judge Lamberth ordered Clevenger and Robertson to show cause why they “should not be enjoined from further filings [in the bankruptcy-related matters], filing further appeals from the underlying bankruptcy case, and from filing new related matters in this district court.” ¹⁰ In response to their objections, Chief Judge Lamberth responded to their objections on July 25, 2012, by listing the egregious behavior that Robertson and Clevenger have engaged in dating back to the inception of Robertson I.¹¹

Understandably with this history as backdrop, Cartinhour has now moved for sanctions against Clevenger for attorney's fees and costs incurred in Robertson II in the amount of $158,954.28. ( See Cartinhour Mot. For Sanctions Against Ty Clevenger, Esq. (“Cartinhour Mot.”).) ¹² In his initial response, Clevenger sought extensive discovery relating to the bills of Cartinhour's New York attorneys (“Yuzek Attorneys”); challenged whether Cartinhour actually incurred these fees in this litigation and whether the Yuzek Attorneys were acting under the direction of the Kearney Attorneys; and sought discovery from Cartinhour relating to whether he authorized the lawyers to act on his behalf.¹³ Clevenger also sought 90 days to oppose the sanctions motion.¹⁴ These motions were denied and finally, on May 21, 2012, Clevenger filed his response, in which he characterizes the Kearney Attorneys as “not honest men by nature” (Clevenger's Response to Mot. for Sanctions Purportedly Filed on Behalf of Def. Cartinhour (“Clevenger's Opp'n”) at 6) and argues that they have failed to meet their burden under 28 U.S.C. § 1927; that the Court cannot award sanctions for events that occurred in the Southern District of New York; and that the motion is brought for an improper purpose. ( Id. at 2, 4, 6.) These arguments are, as demonstrated below, utterly frivolous.

ANALYSIS

I. LEGAL STANDARD

Cartinhour seeks sanctions under 28 U.S.C. § 1927, which provides that an attorney who “so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.” 28 U.S.C. § 1927. The purpose of § 1927 is to allow the Court “to assess attorney's fees against an attorney who frustrates the progress of judicial proceedings.” United States v. Wallace, 964 F.2d 1214, 1218 (D.C.Cir.1992).

The District of Columbia “ ‘has not yet established whether the standard [for unreasonable and vexatious conduct under section 1927] should be recklessness or the more stringent bad faith.’ ” Huthnance v. Dist. of Columbia, 793 F.Supp.2d 177, 181 (D.D.C.2011) (quoting LaPrade v. Kidder Peabody & Co., 146 F.3d 899, 905 (D.C.Cir.1998)) (some internal quotation marks omitted); see also Wallace, 964 F.2d at 1218–19. However, it is clear that, to warrant such a sanction, the attorney's conduct must be “ at least ‘reckless.’ ” Id. at 1217. This means that there must be a “ ‘conscious choice of a course of action, either with knowledge of the serious danger to others involved in it or with knowledge of facts which would disclose this danger to any reasonable man.’ ” Id. at 1220 (quoting Restatement (Second) of Torts § 500 cmt. g (1964)). That is, the movant must show that the attorney in question acted recklessly or deliberately “in the face of a known risk.” Wallace, 964 F.2d at 1220.

According to Cartinhour, Clevenger has “multiplie[d] the proceedings ... unreasonably and vexatiously” in two ways. First, Clevenger filed Robertson II knowing that it was meritless and, second, he persisted in vigorously litigating Robertson II even after the jury's findings in Robertson I made clear that the allegations in Robertson II were baseless. These acts, Cartinhour contends, show a “serious and ‘studied disregard for an orderly judicial process' ” which was intended to evade this Court's jurisdiction and increase the cost of litigation to Cartinhour. (Cartinhour Mot. at 3 (quoting Jensen v. Phillips Screw Company, 546 F.3d 59, 64 (1st Cir.2008)).)

The D.C. Circuit has interpreted § 1927 to “impose[ ] a continuing obligation on attorneys by prohibiting the persistent prosecution of a meritless claim.” Wallace, 964 F.2d at 1220–21 (citing Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 875 (5th Cir.1988) (en banc)). In multiple cases, it has found § 1927 sanctions appropriate where “the attorney's behavior has been repeated or singularly egregious,” for example where the attorney “ ‘repeatedly took actions which required [the defendant] to expend unnecessary time and money, even though he had no intention of pursuing this litigation.’ ” Wallace, 964 F.2d at 1220–21 (quoting Fritz v. Honda Motor Co., 818 F.2d 924, 925 (D.C.Cir.1987) (alteration in original)); see also Reliance Ins. Co. v. Sweeney Corp., Maryland, 792 F.2d 1137, 1139 (D.C.Cir.1986) (“With so many worthy claims waiting to be resolved, we cannot tolerate unfounded and undeveloped claims. Sanctions for this behavior are clearly appropriate.”); see also The Jolly Group, Ltd. v. Medline Indus., Inc., 435 F.3d 717, 720 (7th Cir.2006) (“We have also interpreted § 1927 to impose a continuing duty upon attorneys to dismiss claims that are no longer viable.”) (internal quotation marks omitted).

II. CLEVENGER'S CONDUCT IN ROBERTSON II

Applying these standards, the Court has no difficulty concluding that sanctions are appropriate. First, Clevenger's decision to file Robertson II in the Southern District of New York, while Robertson I was pending in this Court, served to multiply proceedings, and, as recognized by this Court and the judge in the Southern District of New York, it was done for the improper purpose of forestalling litigation in Robertson I. Neither Cartinhour nor the Kearney Attorneys had any contacts with New York, and as had been set forth in Robertson II, Robertson was invited to amend (but chose not to do so) his complaint in Robertson I to include many of the very claims he subsequently sought to bring in Robertson II. See Robertson II, 867 F.Supp.2d at 46–48. Rather than bringing his claims in the suit he had initiated in this Court, he sought to enjoin litigation here by invoking the jurisdiction of both the Southern District of New York and the Bankruptcy Court. Id. at 45–48. In particular, several months before trial was to...