By Robert B. Barnett Jr., J.D.
A district court did not abuse its discretion in issuing strict penalties against an attorney who was a serial abuser of the judicial system.
The Second Circuit has upheld an award of more than $100,000 in sanctions against an attorney in a copyright infringement case because the attorney (1) violated no fewer than six district court orders, (2) repeatedly lied to the court, including under oath, and (3) filed the lawsuit in bad faith because he should have known that his client had not properly registered the photograph before the infringement suit was filed. Additional nonmonetary sanctions, which were also upheld, included a requirement that the attorney notify every current client of the sanctions and a requirement that every copyright infringement case he files for the next year include a copy of the deposit file containing the registration of the subject of the lawsuit. The court also required that the notice to the clients include an extensive appendix of previous cases from numerous jurisdictions in which the attorney was reprimanded or sanctioned for misconduct (Liebowitz v. Bandshell Artist Management, July 23, 2021, Livingston, D.).
Background. Arthur Usherson sued Bandshell Artist Management for copyright infringement, involving a photograph of the musician Leon Redbone. Usherson held copyrights on numerous photographs he had taken, but not on the Redbone photo, at least at the time he filed suit in the Southern District of New York. Usherson was represented by Richard P. Liebowitz, a relatively new member of the bar.
The court ordered that the two parties conduct mediation. It also issued orders that Usherson file a proof service of the complaint within three days of service and that Usherson conduct limited discovery about the licensing of the photograph. Userson complied with none of the orders, including the mediation meeting.
The court rescheduled mediation just prior to the pretrial conference. Neither Usherson nor his attorney Liebowitz, however, showed up at the rescheduled mediation session. Instead, Liebowitz sent two associates who were informed the night before that they would be attending. Bandshell then moved for sanctions. Liebowitz responded with a letter claiming that he had permission from the mediator not to appear and that his client had permission to appear telephonically. At the pretrial conference, Liebowitz continued to assert that he had permission not to appear. At that conference, Bandshell’s attorney asked whether the photograph had been registered before suit was filed. He asked the question after learning that Liebowitz’s firm had sought registration after suit had been filed. Liebowitz continued to assert that Usherson had the proper registration for the photograph.
After the pretrial conference, the court asked Liebowitz to filed a formal opposition to the sanctions motion. Liebowitz’s response ignored the court’s request that he address whether an evidentiary hearing would be necessary. Instead, Liebowitz continued to assert that he had permission not to appear at the mediation session. Bandshell’s response raised questions about the truth of that allegation, noting that the mediator told Bandshell’s attorney that Liebowitz did not have permission not to attend. The court ordered the mediator to file a declaration. The mediator said that he knew nothing about associates appearing on Liebowitz’s behalf and that he had never given Usherson permission to appear by telephone. As a result, the court ordered an evidentiary hearing.
Two days after the hearing was scheduled but before it was held, Liebowitz filed a stipulation of dismissal with prejudice. The court ordered dismissal but retained jurisdiction to adjudicate the sanctions motion. After the mediation hearing, where Liebowitz, Bandshell’s attorney, and the mediator all testified, and after further oral argument where it was revealed that registration had not occurred prior to suit being filed, the court the court ordered more letter briefing. The court then entered an order sanctioning Liebowitz because of at least six knowing and willful violations of court orders, several false statements made to the court in subjective bad faith, and the filing of a lawsuit in bad faith because the photograph was not properly registered. Even if Liebowitz was being truthful when he said that he did not know that the photograph was unregistered, he was in possession of information from his client before suit was filed that indicated that the photograph was unregistered.
As for the sanctions themselves, the court first ordered that Liebowitz pay Bandshell’s attorney $83,527.49 in attorney fees to cover the cost of the sanctions efforts. The interesting aspect of the award was that Bandshell’s attorney was working pro bono, so the fees were ordered paid to the court. Second, the court ordered Liebowitz to pay an additional $20,000 as a penalty for filing suit without registration. Third, the court imposed additional non-monetary sanctions, which consisted of requiring that Liebowitz filed a copy of the sanctions order on Usherson and every other current client that he had. He was also required to file a copy of the order on the docket of every case then pending plus any case filed within the next year. Also, for the next year, any copyright infringement complaint that Liebowitz filed was required to include a copy of the deposit files maintained by the U.S. Copyright Office showing registration of the copyrighted work involved in the case. And, finally, the court ordered that a copy of the order be sent to the Southern District’s Grievance Committee for consideration of further attorney discipline. The sanctions order that Liebowitz was required to share with clients was to include "an extensive appendix of previous cases from a number of jurisdictions in which Liebowitz was reprimanded or sanctioned for misconduct."
Liebowitz appealed the decision to the Second Circuit Court of Appeals.
Mediation session. The Second Circuit began by noting that it agreed with the district court that Liebowitz repeatedly lied to the court about the conditions surrounding the mediation session that he skipped. The lower court had every reason to reject Liebowitz’s statements and to conclude that he did not have permission not to appear and that his client did not have permission to appear telephonically. The court also found "patently incredible" Liebowitz’s claim that he and his client were prepared to fly into the mediation session in New York that morning, if necessary and at a moment’s notice (Liebowitz was in Los Angeles; his client was in Atlanta). The court rightfully chose instead to believe the testimony of Bandshell’s attorney and the mediator.
Filing of suit. The Second Circuit also agreed with the trial court that Liebowitz was guilty of bad faith when he filed suit without registration. Even if Liebowitz did not know the registration status when suit was filed, he knew no later than the pretrial conference. Even then, he resisted limited discovery on the issue, and he pressed ahead with the suit. In addition, he apparently made no further efforts to determine if registration had occurred before suit. He also disavowed any knowledge of his firm’s post-suit efforts to file for registration. As a result, the Second Circuit concluded that the lower court did not abuse its discretion in finding that Liebowitz filed the suit in bad faith.
Criminal implications. Liebowitz argued that the sanctions imposed upon him were criminal in nature, thus entitling him to additional procedural protections that he did not receive. The Second Circuit disagreed. As for the award of attorney fees, the measure the lower court used was the fees and costs that Bandshell would have incurred had it not been represented pro bono. The Second Circuit ruled that the pro bono nature of the representation was not a barrier to a sanction of attorney fees. Thus, a sanction based on those fees was an appropriate measure. The sanctions were civil in nature and did not trigger any criminal protections.
As for the $20,000 sanction, the Second Circuit concluded that it was permissible under Federal Rule of Civil Procedure 16(f), without triggering any criminal protections. Liebowitz argued that the sanction was punitive because it went beyond attorney fees, which made it impermissible without criminal procedure protections. This case could be distinguished from other Second Circuit cases where such a decision had been reached because this case involved Liebowitz’s bad faith filing of the lawsuit. In other words, imposing the $20,000 would have been improper under those other cases only if it arose out of the same conduct as the attorney fee award. In this case, however, the $20,000 was imposed for separate conduct—filing an infringement suit in bad faith. As a result, it was properly imposed, and it triggered no criminal procedure protections.
Non-monetary sanctions. The Second Circuit also confirmed the award of the non-monetary sanctions. They were not overly broad simply because they had a national scope. Liebowitz’s egregious conduct justified such an extensive order. His pattern of misconduct before many judges around the country also supported the wide scope.
The Second Circuit, therefore, affirmed the lower court ruling in full.
The case is No. 20-2304.
Attorneys: Robert J. Anello (Morvillo Abramowitz Grand Iason & Anello PC) for Richard P. Liebowitz. Brad Newberg (McGuirewoods LLP) for Bandshell Artist Management.
Companies: Bandshell Artist Management
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