Liebowitz v. Bandshell Artist Management ( 2021 )

20-2304
Liebowitz v. Bandshell Artist Management
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2020
(Argued: April 7, 2021 Decided: July 23, 2021)
No. 20-2304-cv
––––––––––––––––––––––––––––––––––––
RICHARD P. LIEBOWITZ, LIEBOWITZ LAW FIRM, PLLC,
Appellants,
ARTHUR USHERSON,
Plaintiff,
-v.-
BANDSHELL ARTIST MANAGEMENT,
Defendant-Appellee. 1
––––––––––––––––––––––––––––––––––––
Before: LIVINGSTON, Chief Judge, WESLEY and CARNEY, Circuit Judges.
1 The Clerk of Court is respectfully directed to amend the caption as set forth
above.
1
Richard Liebowitz and his firm, the Liebowitz Law Firm, PLLC, appeal from
an Opinion and Order of the district court sanctioning them for their conduct
during their representation of Arthur Usherson in his copyright case against
Bandshell Artist Management. The district court specifically found that Liebowitz
repeatedly violated court orders, lied under oath to the district court, and brought
and maintained this case in bad faith. Citing its authority under 28 U.S.C. § 1927,
Federal Rule of Civil Procedure 16, and its inherent power, the district court
imposed monetary sanctions of $83,517.49 in attorney’s fees, $20,000 in additional
monetary sanctions, and nonmonetary sanctions that, inter alia, imposed
nationwide requirements on cases filed by Liebowitz or LLF. We hold that the
district court did not abuse its discretion in doing so. The district judge’s factual
findings – including the findings of bad faith – were adequately supported by the
evidence in the record and by the district court’s judgments of witness credibility.
Given these findings, the sanctions imposed by the district court, while strict, were
not an abuse of discretion. Accordingly, the order of the district court is affirmed.
FOR APPELLANTS: BRIAN A. JACOBS (Robert J. Anello, Kevin
Grossinger, A. Dennis Dillon, on the brief),
Morvillo Abramowitz Grand Iason &
Anello P.C., New York, NY.
FOR DEFENDANT-APPELLEE: BRAD R. NEWBERG, McGuireWoods LLP,
Tysons Corner, VA.
DEBRA ANN LIVINGSTON, Chief Judge:
Richard P. Liebowitz (“Liebowitz”) has been a member of the bar for a short
time. In that time, he has compiled an ignominious record of reprimands and
sanctions from judges across the country. This appeal concerns one such sanctions
order.
2
The United States District Court for the Southern District of New York
(Furman, J.) determined that Liebowitz brought and maintained a copyright
infringement action in bad faith; that he violated multiple court orders along the
way; and that, when questioned about his conduct, Liebowitz repeatedly lied to
the court, including under oath. Citing Federal Rule of Civil Procedure 16,
28 U.S.C. § 1927, and its inherent powers, the district court imposed sanctions of
$83,517.49 in attorney’s fees and $20,000 in additional monetary sanctions. Judge
Furman also imposed nonmonetary sanctions which required Liebowitz and his
firm, the Liebowitz Law Firm, PLLC (“LLF”): (1) to serve a copy of the district
court’s Opinion and Order (the “Order”) on every one of the firm’s clients
(including the plaintiff in the underlying suit here, Arthur Usherson
(“Usherson”)); (2) to file a copy of the Order on the docket of any pending cases in
which Liebowitz or his firm are involved; (3) to file a copy of the Order on the
docket of any case brought by Liebowitz or LLF for one year after the Order; and
(4) in any copyright infringement action brought by Liebowitz or LLF during this
same time period, to file a copy of the deposit files maintained by the U.S.
Copyright Office reflecting the plaintiff’s registration. 2
2 The district court later modified this final sanction to allow for an alternative
3
Liebowitz and LLF (together, “Appellants”) argue that the district court
based its Order on erroneous factual conclusions and further that its factual
findings, even if correct, do not support the monetary and nonmonetary sanctions
imposed. We disagree. We discern no clear error in the district court’s factual
findings and conclude that the district court acted well within the scope of its
discretion in imposing the sanctions given Liebowitz’s misconduct in this case.
Accordingly, we affirm.
BACKGROUND
I. Factual Background 3
A. The Underlying Copyright Action
This appeal arises out of an action filed by Appellants on behalf of Usherson
on July 10, 2019. The complaint alleges that Bandshell Artist Management
(“Bandshell”) infringed on Usherson’s copyright for a photograph of musician
Leon Redbone (the “Photograph”) and that at the time the complaint was filed the
Photograph was registered with the U.S. Copyright Office under Copyright
Registration Number VAu 1-080-046 (the “046 Registration”). In reality, the
where compliance would cause a client to run afoul of the statute of limitations.
3 The factual background presented here is derived from the district court’s
findings of fact, which we review for clear error.
4
Photograph was not registered. Moreover, Usherson had provided LLF with a CD-
ROM containing the photographs registered pursuant to the 046 Registration
before the complaint was filed and this CD-ROM did not contain the Photograph.
Sometime after July 10, 2019 – the date the complaint was filed – Usherson sent
LLF another CD-ROM containing photographs that he had not yet registered. This
collection included the Photograph. The firm proceeded to register the
photographs on the second CD-ROM on August 22, 2019. 4
B. The Efforts at Mediation
Unaware that the Photograph had not yet been registered, the district court
issued two orders on July 15, 2019, soon after the complaint was filed. The first set
the initial pretrial conference for October 10, 2019. The second referred the case to
the court-annexed Mediation Program and required the parties to conduct a
mediation pursuant to the Program’s procedures by September 26, 2019, two
weeks before the initial pretrial conference. Additionally, the order required LLF
to file proof of service of the summons and complaint within three days of service
4 Notably, as to LLF’s post-filing registration of the Photograph, Judge Furman
had already held in another case that a suit filed pre-registration is fatally flawed and
cannot be cured by a subsequent registration and amendment of the complaint. See
Malibu Media, LLC v. Doe, No. 18-CV-10956 (JMF), 2019 WL 1454317, at *1 (S.D.N.Y. Apr.
2, 2019).
5
being effected and to produce limited discovery related to the licensing of the
Photograph.
Liebowitz and LLF complied with none of these orders. The filing of proof
of service was untimely; Appellants failed to produce the required discovery; and
they failed to participate in the mediation by the required date. Instead, one week
after the deadline for mediation had passed, Liebowitz filed a letter suggesting the
mediation had not taken place because of the Mediation Office’s failure to assign
a mediator. He requested leave to hold a telephonic mediation.
In an order dated October 7, 2019, the district court criticized Liebowitz for
his attempt to blame the Mediation Office for his failure to meet the mediation
deadline, but concluded that mediation was still potentially valuable. The district
court therefore adjourned the pretrial conference that was scheduled to take place
on October 10 until November 14 and ordered, pointedly, that “[t]he parties shall
conduct the in-person mediation no later than October 31, 2019.” J. App’x at 4
(emphasis added). That same day, Bandshell’s counsel, Brad R. Newberg
(“Newberg”), inquired by email of Liebowitz “if any of October 11, 16, 28 or 31”
would work for both Liebowitz and his client and Liebowitz emailed back that
“October 31st at 12pm works.” J. App’x at 88.
6
The parties agreed to a mediation to be held on that date and time, and to
be facilitated by a member of the Southern District mediation panel recruited by
Liebowitz (“the Mediator”). On October 31, however, neither Liebowitz nor his
client, Usherson, appeared. Instead, two associates from LLF, neither of whom had
entered an appearance in the case, were sent in Liebowitz’s place. The lead
associate, James Freeman (“Freeman”), later informed the district court in a sworn
declaration that Liebowitz had apprised him of the existence of the matter only the
night before the mediation. 5 The second associate was Liebowitz’s sister, a newly
admitted lawyer attending only to “shadow” Freeman and to learn about the
process. Sp. App’x at 5. No agreement was reached at the mediation, a result that
the Mediator later attributed in part to the failure of Liebowitz and Usherson to
attend.
Bandshell moved for sanctions six days later, on November 6, about one
week before the initial pretrial conference was to take place. Bandshell charged
Liebowitz and Usherson with violating the court’s orders regarding mediation,
5 Rule 9(c) of the Mediation Program’s procedures explicitly provides that “[e]ach
represented party must be accompanied at mediation by the lawyer who will be
primarily responsible for handling the trial of the matter.” Rule 9(f) permits a party
residing more than 100 miles from the courthouse to participate by telephone, but only
with the advance approval of the mediator.
7
pre-mediation discovery, and proof of service and sought monetary sanctions and
dismissal of the case.
C. The Pretrial Conference and Sanctions Inquiry
Liebowitz first addressed the mediation controversy in a joint letter filed by
the parties before the initial pretrial conference. In this letter, Liebowitz claimed
that he and Usherson had received permission from the Mediator not to appear in
person. But in the same letter, Newberg indicated on behalf of Bandshell that
“virtually everything in Plaintiff’s statement is false” and that Newberg had
“warned Plaintiff against filing a false statement regarding the scheduled
mediation with the Court.” Sp. App’x at 6 (emphasis in original).
Liebowitz nevertheless repeated the claim, in a letter “response” to the
sanctions motion, that his client had received permission from the Mediator for
Usherson’s telephonic appearance and, in addition, that the Mediator was aware
that Liebowitz, too, would not appear. 6 Specifically, the letter represented that his
client had “obtained permission from the assigned mediator . . . to appear . . . by
telephone provided that counsel was present in person,” and that Liebowitz had
6This three-page letter response was itself in violation of a local rule requiring, as
relevant here, that opposition to a motion be in the form of a memorandum of law.
S.D.N.Y. R. 7.1.
8
informed the Mediator that an LLF associate “with knowledge of the facts of the
case would appear in-person, and [the Mediator] consented.” Sp. App’x at 7.
At the November 14 pretrial conference, Liebowitz, appearing as principal
trial counsel, stuck by this story, stating that the Mediator had given permission
for Usherson to appear by telephone. The district court, aware of proceedings
before another Southern District judge in which Liebowitz’s candor to the court
had that very week been seriously called into question, specifically warned
Liebowitz that he should be “very careful about the representations you make to
me.” 7 Sp. App’x at 8. The court then inquired when Liebowitz had informed the
Mediator that Usherson would not appear in person. Liebowitz answered, “I don’t
know the exact date, but it was before the mediation, and he said yes.” J. App’x at
204. On further inquiry from the court, Liebowitz also made clear that he had
personally advised the Mediator, by telephone, that Usherson would not appear
7 The pretrial conference before Judge Furman took place one day after Liebowitz
had been chastised by Judge Cathy Seibel for falsely and repeatedly representing that he
had failed to appear at a pretrial conference due to his grandfather’s death. Judge Seibel
had already held Liebowitz in contempt for these misrepresentations, as well as for
Liebowitz’s repeated refusal to provide documentation of his grandfather’s passing. See
Berger v. Imagina Consulting, Inc., No. 18-CV-8956 (CS), 2019 WL 6695047, at *3 (S.D.N.Y.
Nov. 1, 2019). Liebowitz’s continued dishonesty led Judge Siebel at the November 13
proceeding to question his fitness to practice law and to refer him to the Southern
District’s Grievance Committee.
9
in person, and that the Mediator “said that was okay.” J. App’x at 204. Freeman,
who was also present, stated that he had learned about the case only the night
before the scheduled mediation, and that he had no knowledge as to whether any
approvals had been secured for telephonic appearance.
At the same pretrial conference, Newberg also inquired whether the
Photograph had been registered before the lawsuit was filed, as the complaint
alleged. Bandshell had learned that Usherson had filed a copyright registration,
apparently for the Photograph, after the complaint was filed, suggesting that the
Photograph had not been registered before. If the Photograph in fact was not
registered when the complaint was filed (particularly in light of Judge Furman’s
decision in Malibu Media, LLC v. Doe, No. 18-CV-10956 (JMF), 2019 WL 1454317(S.D.N.Y. Apr. 2, 2019)) this could have required dismissal of the action. See 17
U.S.C. § 411(a) (“[N]o civil action” for copyright infringement “shall be instituted
until . . . registration of the copyright claim has been made.”). Bandshell requested
discovery on the potentially dispositive issue of whether the 046 Registration
referenced in the complaint actually covered the Photograph.
In response, Liebowitz obfuscated, replying “I don’t know what defense
counsel means about other registrations or other photographs. I will have to see
10
what my office did, but this is the correct registration.” J. App’x at 252–53. He
argued against limited discovery on the registration issue, urging the court to let
proceedings continue in the normal course, in the hope of “get[ting] to a settlement
number.” Sp. App’x at 10.
After the conference, Liebowitz was ordered to file a formal opposition to
the sanctions motion. This order included an instruction for both sides to address
whether an evidentiary hearing should be held and, if so, what form it should take.
Liebowitz’s formal opposition disregarded this instruction, but it once again
repeated the claim that Liebowitz had received permission for Usherson to appear
by telephone from the Mediator and that the Mediator had consented to
Liebowitz’s plan to have an associate appear in Liebowitz’s place. Liebowitz
submitted a sworn declaration affirming that he “sought and received approval
from . . . the assigned mediator[] for Mr. Usherson to attend the mediation via
telephone and for my associate James Freeman to appear who had full knowledge
of the case. I obtained [the Mediator’s] consent via telephone.” J. App’x at 132.
In response, Newberg submitted a declaration citing to emails from the
night before the mediation that suggested that both Bandshell and the Mediator
were under the impression that Usherson and Liebowitz would be appearing in
11
person the next day. 8 Further, Newberg attested that he called the Mediator on
November 19, a few days after the pretrial conference. The Mediator informed him
that on previous occasions he had allowed Liebowitz’s clients to appear by
telephone, but maintained that he had not given approval for telephonic
appearance in this case. According to Newberg, the Mediator told him that
Liebowitz had called on the night of October 30 and informed him, without asking
for approval, that Liebowitz was out of town and that his associate would be
attending the mediation. Usherson’s attendance was not discussed.
The district court ordered the Mediator to file a declaration, which he did.
In his declaration, the Mediator stated that he had spoken to Liebowitz by
telephone on October 30. During this call, Liebowitz did not inform him that an
8 Specifically, Newberg emailed the Mediator on the night before the scheduled
mediation, sending along a proposed agreement and affirming that Usherson could
accept the agreement or “we will see Mr. Liebowitz and Mr. Usherson tomorrow and we
can continue discussing the possibility of settlement at the mediation.” J. App’x at 216.
Later that same evening, the Mediator replied, affirming that he had spoken to Liebowitz
who said he would review the agreement and get back to them in the morning. The
Mediator further stated, “Hopefully we can settle this before [the] need to go to in person
mediation.” Sp. App’x at 16. Newberg responded that he would be catching an early train
to attend the mediation and assumed Liebowitz, who had been in California, was already
in New York or would catch a very early plane. The Mediator responded, “I understand.”
Sp. App’x at 16. In addition, Liebowitz himself was in email communication with
Newberg early in the morning on October 31, but at no time notified Newberg that
neither he nor Usherson would be attending the mediation in person.
12
associate, rather than Liebowitz himself, would appear the next day. The Mediator
denied that he had given permission for Usherson to appear by telephone. The
Mediator did note, however, that Liebowitz had sent an associate in his stead on
at least one other occasion and that his clients had appeared by telephone in other
mediations conducted by the Mediator without incident. Liebowitz thereafter filed
a letter on December 16, 2019 asserting that he contested statements made by the
Mediator in his declaration and that Liebowitz had “notified the Mediator that Mr.
Usherson would be appearing telephonically and that such request was granted.”
Sp. App’x at 13.
The district court concluded that an evidentiary hearing was necessary. On
December 17, 2019, the court issued an order scheduling the hearing. Two days
later, Liebowitz filed a stipulation of voluntary dismissal signed by both parties.
The parties agreed that the case should be dismissed with prejudice and that each
side would bear its costs and attorney’s fees. In a letter filed that same day,
Newberg affirmed that Bandshell had stipulated to Usherson’s withdrawal of the
case with prejudice, but that neither Newberg nor his client would have done so,
except for the fact that his firm was representing Bandshell pro bono. The district
13
court so-ordered the dismissal but retained jurisdiction in order to adjudicate the
motion for sanctions and related matters.
D. The Sanctions Hearing
The evidentiary hearing was held on January 8, 2020. The district court
treated the witnesses’ declarations as their direct testimony. Additionally, it
approved Liebowitz’s application to expand the record to include a new argument
(first suggested in the letter to the court of December 16, 2019) that the Mediator’s
“custom and practice” of allowing Liebowitz’s clients to appear telephonically
caused Liebowitz to harbor a good faith belief that he had the requisite permission
and could have caused the Mediator to forget whether, in fact, he granted
permission in this case. Sp. App’x at 13–14. Liebowitz was permitted to testify
about five previous cases in which he claimed the Mediator had given him oral
permission to have his clients appear by telephone. 9 But Liebowitz also admitted
on cross that in one of these very cases, he himself had objected to another party
appearing telephonically on the ground that the mediation rules require in-person
appearance – thus evidencing his understanding that permission was required.
9 He also added that in one case he had been given permission to have an associate
appear in his stead.
14
Regarding the present controversy, Liebowitz testified that he had called the
Mediator around 7:30 to 8:00 p.m. the night before the scheduled mediation and
received permission both for Usherson to appear by telephone and for Freeman to
appear as counsel. He made no written record of the call. When asked how he now
remembered the date of the call when he did not at the November 14 pretrial
conference, only two weeks after the event, Liebowitz testified that the emails
attached to Newberg’s initial declaration in support of Bandshell’s sanctions
motion had reminded him. When pressed on the fact that Newberg’s declaration
and the annexed emails were actually filed before the November 14 conference,
and that Liebowitz had responded to it in writing, he declared simply that “I often
forget things.” J. App’x at 394.
Liebowitz claimed during his testimony that he had a contingency plan if
the Meditator had denied his request for Usherson to participate by phone and for
Freeman to take Liebowitz’s place. At the time of the call with the Mediator,
Liebowitz was in Los Angeles, California, hosting a networking event and
Usherson was at home in Georgia. Despite never booking flights or even checking
the flight times, Liebowitz claimed he was prepared to return to New York
immediately. He did not claim to have informed Usherson about the potential
15
need immediately to travel, but testified that he was sure he could have called
Usherson and “kn[e]w that he’s always around.” J. App’x at 385.
Liebowitz’s testimony was notably at odds with the statements made by his
own associate, Freeman, to the effect that Freeman had only learned of the
existence of the case the night before the scheduled mediation. Liebowitz claimed,
to the contrary, that the two had spoken about the case on “numerous occasions.”
Sp. App’x at 17. Liebowitz also claimed in this testimony that he had informed
Freeman about the approvals given by the Mediator, notwithstanding Freeman’s
statement at the pretrial conference to the contrary. As to this latter discrepancy,
Liebowitz sounded a similar theme, suggesting that “people forget things,” and
that Freeman had done so. J. App’x at 382. Liebowitz also asserted that Freeman
properly appeared at the mediation because he was the lead attorney in the matter
even though it was Liebowitz who appeared as principal trial counsel at the
pretrial conference and, indeed, Freeman had not entered an appearance in the
case.
Newberg and the Mediator also testified. Newberg testified that he
remembered the Mediator saying at the mediation that he had been notified that
Liebowitz would be sending an associate. Newberg also recalled the Mediator
16
stating that he expected Usherson to attend in person. For his part, the Mediator
testified that he could not then recall whether Liebowitz had informed him that
Freeman would be appearing. 10 He testified unequivocally, however, that he did
not give permission for Usherson to appear by telephone despite speaking with
Liebowitz several times on October 30, the day before the mediation. He learned
that Usherson would not be coming only “[w]hen the mediation started.” Sp.
App’x at 19.
After the testimony, the district court heard oral argument. During
argument, Bandshell revealed that it had discovered that the Photograph had
indeed not been registered prior to the filing of the complaint. In response,
Freeman (serving as Liebowitz’s lawyer) stated that it was the regular practice of
LLF to file copyright infringement cases without verifying the registration of the
works in question to avoid expense. The firm instead took clients at their word
that the works in question were properly registered. Freeman stated that in this
case, Usherson had affirmed that the Photograph was registered.
10 He did acknowledge that prior to the mediation he had learned that Liebowitz
was in Los Angeles and that, as a result, it was unlikely he would attend in person.
17
The district court ordered an additional round of letter briefing on this issue.
In his letter, Liebowitz admitted that the statement in the complaint regarding the
registration of the Photograph was inaccurate. But he also noted that his firm had
registered the Photograph in August 2019 and he blamed the inaccuracy in the
complaint on an “administrative mistake[] or clerical error[] . . . in the copyright
registration process.” Sp. App’x at 20. In response, Bandshell contended that this
explanation “defie[d] belief,” as Liebowitz at the initial pretrial conference had
denied any knowledge of “other registrations or other photographs,” affirming
that the 046 Registration referenced in the complaint was correct. Sp. App’x at 20.
The district court ordered Liebowitz, Freeman, and Usherson to submit
declarations addressing the circumstances surrounding the inaccurate allegation
about the registration of the Photograph. Liebowitz admitted in his declaration
that he had conducted no investigation into the matter. This was despite
Usherson’s statement that he had sent the firm a CD-ROM prior to the filing of the
complaint which included all the photographs that had been registered pursuant
to the registration identified in the complaint. 11 Liebowitz claimed that he had
11 Usherson admitted that he had made a mistake in advising LLF that the
Photograph was registered as part of the 046 Registration. As for Freeman, he explained
that his representations regarding the Photograph’s registration were based on his
general knowledge of LLF’s practices rather than any personal knowledge regarding this
18
relied on the firm’s internal case-tracking system and that he had no role in filing
for the Photograph’s registration in August 2019. He asserted that he did not
realize that the Photograph was not properly registered until after the sanctions
hearing in January 2020.
II. The District Court’s Order
The district court entered the Order sanctioning Liebowitz and LLF on June
26, 2020. In it, the court found that sanctions were warranted for Liebowitz’s
conduct. Specifically, the district court found that Liebowitz violated no fewer
than six of the district court’s orders. 12 Judge Furman further concluded these
violations were willful. Next, the district court found that Liebowitz repeatedly
lied to the court, including under oath, about receiving permission for Usherson
to appear by telephone at the mediation. Citing, inter alia, Liebowitz’s demeanor
at the evidentiary hearing, the conflicts between Liebowitz’s testimony and that of
case.
12Four of these orders came on July 15, 2019, when the district court directed: (1)
the filing of proof of service no more than three days after service was effected; (2) the
production of limited discovery regarding licensing of the Photograph; (3) the attendance
of principal trial counsel at both the initial pretrial conference and the mediation session;
and (4) the participation of Liebowitz and Usherson in a mediation session not later than
two weeks before the pretrial conference, which was then scheduled for October 10. The
fifth was the October 7 order requiring that the mediation session be held no later than
October 31. The sixth was the November 15 order that Liebowitz address in his sanctions
briefing whether and how an evidentiary hearing should be held.
19
Newberg and the Mediator (both of whom the court found credible), and the
documentary evidence, the district judge found by clear and convincing evidence
that Liebowitz had not only made false statements to the court but had done so in
subjective bad faith. 13 Finally, the district court concluded, by clear and
convincing evidence, that Liebowitz brought and maintained the case in bad faith
by willfully disregarding the fact that the Photograph was not properly registered
at the time the complaint was filed. Judge Furman concluded that Liebowitz knew
the Photograph was not properly registered at least as of August 22, 2019, when
his firm registered the Photograph. In any event, he should have known and had
failed to conduct a reasonable investigation of his client’s statements. 14
13The court also indicated that a preponderance of the evidence, but not clear and
convincing evidence, supported a finding that Liebowitz lied about receiving permission
to have Freeman appear at the mediation session in his place.
14 Judge Furman pointed to Bandshell’s statements at the initial pretrial
conference about the potential defect in the complaint, Liebowitz’s evasive statements at
that conference, and his and LLF’s failure to investigate the potential issue until after it
was brought to a head at the hearing on January 8, 2020, and Liebowitz was ordered to
file a letter and then a declaration addressing the issue. The court concluded that
Liebowitz’s conduct was most consistent with attempting to evade the defect until he
could extract a settlement from Bandshell, which “undoubtedly demonstrates bad faith.”
Sp. App’x at 44. In so concluding, the court referred to another Southern District case in
which a district court determined that Liebowitz’s “stonewall[ing] [of] discovery
requests” when “faced with the prospect of the Defendants learning that the Photograph
was not registered” evinced bad faith. Rock v. Enfants Riches Deprimes, LLC, No. 17-CV-
2816 (ALC), 2020 WL 468904, at *3 (S.D.N.Y. Jan. 29, 2020). The district court also noted
that Liebowitz was “explicitly put on notice” at the initial pretrial conference of the fact
that pursuant to the court’s own decision in Malibu Media, an untimely registration is not
20
The district court then turned to the question of sanctions. First, it
determined attorney’s fees were an appropriate measure of sanctions for
Liebowitz’s misrepresentation that the Mediator gave permission for Usherson to
appear by phone and the multiple violations of the court’s orders. Though
Bandshell, represented by pro bono counsel, had disclaimed the right to collect any
fees, Judge Furman concluded that $83,517.49 was an appropriate fee for the work
Bandshell’s lawyers performed in connection with the mediation and the sanctions
motion and that the sum would be payable to the court. Second, Judge Furman
ordered Liebowitz and LLF to pay to the court an additional sanction of $20,000
for falsely alleging in the complaint that the Photograph was registered and for
not conducting a reasonable investigation either before the lawsuit was filed or
after they were put on notice of the potential defect in their pleadings. For both
categories of monetary sanctions, the district court cited its authority under
Federal Rule of Civil Procedure 16(f), 28 U.S.C. § 1927, and the court’s inherent
authority.
curable, so that a complaint filed before registration must be dismissed. Sp. App’x at 39–
40.
21
The district court next imposed nonmonetary sanctions. The first of these
sanctions required Liebowitz to serve a copy of the Order on Usherson and every
other current client of LLF. He and LLF were further required to file the Order on
the docket of each of their pending cases and any case they brought within a year
of the Order’s entry. The second sanction required, for a period of one year, that
complaints filed by Liebowitz or LLF involving claims of copyright infringement
include a copy of the deposit files maintained by the U.S. Copyright Office
showing the registration of the relevant copyrighted work or works involved in
the case.
Finally, the district court sent a copy of the Order to the Southern District’s
Grievance Committee so it could consider whether further discipline was
appropriate. The district court included with the Order an extensive appendix of
previous cases from a number of jurisdictions in which Liebowitz was
reprimanded or sanctioned for misconduct.
Liebowitz filed a timely notice of appeal. Separately he moved for a stay of
only the nonmonetary sanctions pending appeal in the district court. Judge
22
Furman denied the stay motion. 15 This Court similarly denied Liebowitz’s motion
for a stay. We now address the merits of his appeal.
DISCUSSION
District courts have inherent, statutory, and rule-based powers to sanction
lawyers for conduct that impedes the efficient administration of justice. Indeed,
we have said that district judges have an obligation to act to protect the public,
adversaries, and judicial resources from litigants and lawyers who show
themselves to be serial abusers of the judicial system. See Lau v. Meddaugh, 229 F.3d
121, 123 (2d Cir. 2000) (per curiam). “We review the imposition of sanctions for
abuse of discretion.” Huebner v. Midland Credit Mgmt., 897 F.3d 42, 53 (2d Cir. 2018).
To be sure, because sanctions proceedings are unique, placing the district judge in
the role of “‘accuser, fact finder and sentencing judge’ all in one,” ATSI Commc’ns,
Inc. v. Shaar Fund, Ltd., 579 F.3d 143, 150 (2d Cir. 2009) (quoting Schlaifer Nance &
Co., Inc. v. Estate of Warhol, 194 F.3d 323, 334 (2d Cir. 1999)), our review is “more
exacting than under the ordinary abuse-of-discretion standard,” id. (quoting Perez
15 The district court did, however, modify one of its sanctions to allow Liebowitz
or LLF to file an affidavit in lieu of the deposit copies in any case in which they had a
good faith belief that waiting for the deposit copy might cause a client’s claim to be
barred. Liebowitz and the firm were still required to file the deposit copies promptly
upon their receipt.
23
v. Danbury Hosp., 347 F.3d 419, 423 (2d Cir. 2003)). Moreover, “[d]epending on [the]
circumstances, a party facing sanctions may be entitled to enhanced procedural
protections” associated with criminal procedure, “beyond notice and an
opportunity to be heard.” Wolters Kluwer Fin. Servs., Inc. v. Scivantage, 564 F.3d 110,
116–17 (2d Cir. 2009); see also Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178,
1186 (2017) (noting that “when imposed pursuant to civil procedures,” an
attorney’s fees sanction pursuant to inherent powers must be “compensatory
rather than punitive”); Mackler Prods., Inc. v. Cohen (Mackler I), 146 F.3d 126, 128
(2d Cir. 1998) (discussing need for enhanced process in context of punitive fines).
With these cautions in mind, however, we emphasize that the sanctioning
authority of district courts both accords with and is a necessary aspect of their
“responsibility to manage their dockets ‘so as to achieve the orderly and
expeditious disposition of cases.’” In re World Trade Center Disaster Site Litig., 722
F.3d 483, 487 (2d Cir. 2013) (per curiam) (quoting Link v. Wabash R.R. Co., 370 U.S.
626, 630–31 (1962)).
Here, we conclude that the sanctions imposed by Judge Furman on
Liebowitz and LLF were well within the scope of the district court’s discretion.
Accordingly, we affirm the order of the district court.
24
I
At the start, Liebowitz admits that he did indeed violate the district court’s
orders. But he takes issue with the district court’s factual findings that: (1) he “lied
in bad faith” about his interactions with the Mediator; and (2) he brought and
maintained this suit in bad faith. 16 As to both findings, “[w]hether a litigant was
at fault or acted willfully or in bad faith are questions of fact” and thus are
reviewed for clear error. 17 Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302 (2d
Cir. 2009); see also Yukos Capital S.A.R.L. v. Feldman, 977 F.3d 216, 235 (2d Cir. 2020)
(“[C]lear and convincing evidence of bad faith is a prerequisite to an award of
sanctions under the court's inherent power.”); United States v. Int’l Brotherhood of
Teamsters, 948 F.2d 1338, 1345 (2d Cir. 1991) (noting that “[b]ad faith is the
16The district court concluded that Liebowitz’s representations to the court that
he received permission from the Mediator for Usherson to appear by phone were “false
and made in bad faith.” Sp. App’x at 29–30. Appellants use “lied in bad faith” as
shorthand for contesting this conclusion. Appellants’ Br. at 31.
17 To be sure, both inquiries involve both questions of fact about Liebowitz’s
knowledge, conduct, and motivations as well as questions of law about whether the
district court’s factual findings satisfy the relevant legal standard. Here, we conclude that
whether Liebowitz acted in bad faith primarily involves “case-specific factual issues”
and, accordingly, we review the district court’s decision with deference. U.S. Bank Nat’l
Ass’n ex rel. CWCapital Asset Mgmt. LLC v. Vill. at Lakeridge, LLC, 138 S. Ct. 960, 967 (2018);
cf. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 401–02 (1990) (suggesting, in the Rule 11
context, that where sanctions involve issues “rooted in factual determinations,” such as
whether a prefiling inquiry was reasonable, deferential review is appropriate).
25
touchstone” of sanctions under § 1927). We discern no such error in the record
here.
A
Liebowitz first assails the district court’s conclusion that he made false
statements to the court about receiving permission for Usherson to attend the
mediation in person and did so in bad faith. He contends that the district court
abused its discretion in finding, by clear and convincing evidence “based on a
careful review of the record, including an evaluation of the witnesses’ demeanor
at the January 8, 2020 hearing,” that Liebowitz repeatedly lied to the court,
including under oath, as to whether the Mediator authorized Usherson to appear
by telephone. 18 Sp. App’x at 29. This argument is unavailing.
At the start, the district court had ample reason to conclude, as it did, that
Liebowitz’s testimony that he received permission was “on its own terms . . .
unworthy of belief” because, inter alia, it lacked corroboration and required the
court to accept “patently incredible” claims such as that Liebowitz was prepared
to fly himself and Usherson from Los Angeles and Georgia, respectively, to New
Liebowitz does not dispute that such conduct, if properly found, is sanctionable
18
under Rule 16, 28 U.S.C. § 1927, and the district court’s inherent authority. His admitted
violation of multiple pretrial orders is similarly sanctionable pursuant to each of these
authorities and Liebowitz raises no argument to the contrary.
26
York on the morning of the mediation, and on a moment’s notice. Sp. App’x at 31.
By his own admission, Liebowitz made no notation of the oral permission he
allegedly obtained. Moreover, his testimony that he had spoken about the case on
numerous occasions with Freeman, and had informed him about receiving
permission from the Mediator for Liebowitz’s and Usherson’s absence, was
inconsistent with Freeman’s in-court statements at the initial pretrial conference.
In addition, as the district court found, Liebowitz’s claim to have received that
permission on October 30 is not reflected in any of the contemporaneous email
correspondence, which suggests no awareness on the Mediator’s part “that either
Mr. Usherson or Mr. Liebowitz would not be attending in person the next day–
much less that [the Mediator] had given them both permission not to attend that
very night . . . .” Sp. App’x at 31 (emphasis in original).
Liebowitz’s claim is most obviously contradicted by the Mediator himself,
“who testified unequivocally at the hearing that Mr. Liebowitz never mentioned
the possibility that Mr. Usherson would not attend the mediation in person.” Sp.
App’x at 30. The district court specifically credited the Mediator’s testimony and
discredited Liebowitz’s based on an assessment of the demeanor of each witness,
and the record as a whole. Appellants argue that the district court placed too much
27
weight on the emails between Newberg and the Mediator and that the Mediator,
contrary to the district court’s view, was not without any stake in the matter, but
had an interest in demonstrating compliance with the Mediation Program’s rules.
But “[w]hen, as here, credibility determinations are at issue, we give particularly
strong deference to a district court finding.” United States v. Wallace, 937 F.3d 130,
141 (2d Cir. 2019) (quoting United States v. Murphy, 703 F.3d 182, 189 (2d Cir. 2012)),
cert. denied, 140 S. Ct. 2551, and reh’g denied, 140 S. Ct. 2799 (2020). After reviewing
the record and evaluating the demeanor of the witnesses at the evidentiary
hearing, Judge Furman determined that the Mediator’s testimony was credible
and Liebowitz’s was not. We discern no error, much less clear error, in this
determination.
B
Appellants next argue the district court erred in concluding that Liebowitz
brought and maintained this suit in bad faith. A finding of bad faith in this context
requires a district court to determine both that challenged conduct “was without
a colorable basis” and that it was pursued in bad faith, “i.e., motivated by
improper purposes such as harassment or delay.” Schlaifer Nance & Co., 194 F.3d
at 336; see also Oliveri v. Thompson, 803 F.2d 1265, 1272 (2d Cir. 1986) (noting that
28
sanctions for bad faith conduct pursuant to inherent powers are “not restricted to
cases where the action is filed in bad faith,” but extend to the bad faith conduct of
a litigation). For a claim to be without color it must lack any legal or factual basis.19
Schlaifer Nance & Co., 194 F.3d at 337. Both “[a] finding of bad faith, and a finding
that conduct is without color or for an improper purpose, must be supported by a
high degree of specificity in the factual findings.” Wolters Kluwer, 564 F.3d at 114.
At the same time, in applying both standards “more often than not, ‘the district
court is better situated than the court of appeals to marshal the pertinent facts and
apply the fact-dependent legal standard that informs its determination as to
whether sanctions are warranted.’” Huebner, 897 F.3d at 53 (quoting Virginia Props.,
LLC v. T-Mobile Ne. LLC, 865 F.3d 110, 113 (2d Cir. 2017)). Liebowitz argues the
district court’s Order meets neither requirement. Again, we disagree.
We start with whether the complaint lacked a factual basis and was brought
and maintained in bad faith. Judge Furman concluded that Liebowitz’s actions in
bringing and maintaining the copyright claim were unsupported because the
Photograph was not registered at the time of filing and Section 411(a) of the
19 In contrast, “a claim is colorable ‘when it has some legal and factual support,
considered in light of the reasonable beliefs of the individual making the claim.’” Schlaifer
Nance & Co., Inc. v. Estate of Warhol, 194 F.3d 323, 337 (2d Cir. 1999) (quoting Nemeroff v.
Abelson, 620 F.2d 339, 348 (2d Cir. 1980) (per curiam)).
29
Copyright Act specifically states that “no civil action for infringement of the
copyright . . . shall be instituted until preregistration or registration of the
copyright claim has been made.” 17 U.S.C. § 411(a). Judge Furman found that
Liebowitz, who appeared as principal trial counsel in the matter and, indeed, was
the only attorney who had noticed an appearance, knew about the untimely
registration at least as of August 22, 2019, when LLF itself registered the
Photograph. 20 The record supports this factual determination.
But even if this were not the case – even accepting as true Liebowitz’s claim
that in August 2019 he was unaware of any problem with the complaint – the
record is crystal clear that Liebowitz was put on notice of the issue by Newberg at
the November 2019 pretrial conference. Bandshell had “discovered that after this
case was filed, Mr. Usherson filed a copyright registration, which . . . seems to be
on these photographs, so now it is unclear whether the registration in the
complaint actually does cover the photograph or if it is the new copyright
registration.” J. App’x at 252. Liebowitz affirmed to the court in that very
conference that the registration identified in the complaint “[was] the correct
20 The district court also found in the alternative that the evidence clearly and
convincingly demonstrated that Liebowitz should have known that the Photograph was not
registered.
30
registration” and that he was aware of no others – even though his firm had filed
for a second registration in August. J. App’x at 252–53. Moreover, he resisted
limited discovery on the issue, urging that the case should proceed in the normal
course so that “hopefully during that process the parties could eventually get to a
settlement number.” Sp. App’x at 10, 43.
Liebowitz concedes he took no subsequent action to ensure that his factual
representation to the district court was accurate. Indeed, even after being put on
notice that there was an issue as to the 046 Registration and even though his firm
was in possession of material from Usherson that could easily have resolved the
question, Liebowitz finally admitted to the flaw in the complaint only in January
2020 when confronted by Bandshell with definitive evidence that the complaint’s
allegation regarding the 046 Registration was false. And as the district court found,
Appellants admitted the falsehood even then “only because the Court ordered
them to file a letter addressing the issue and, when that did not clear things up,
declarations.” Sp. App’x at 42. In sum, the district court’s finding that the claim
lacked a factual basis and was maintained in bad faith – that Liebowitz “actively
stonewalled Mr. Newberg’s request for discovery” and pressed forward,
31
“hop[ing] to settle the case before the truth came to light” – had ample factual
support. Sp. App’x at 42–43.
Liebowitz argues that even assuming the above factual finding, his actions
were not legally baseless. In particular, he contends that the defect in the complaint
caused by the untimely registration could have been cured via amendment and
that his actions thus had at least some legal basis. Liebowitz admits that Judge
Furman had held in a previous case that post-registration amendment in the
circumstances here is impermissible, but he correctly points out that even in the
opinion in question Judge Furman acknowledged that other courts have reached
the opposite conclusion. See Malibu Media, LLC, 2019 WL 1454317, at *3.
But this argument misidentifies the conduct relevant to the inquiry. Even
assuming arguendo that Liebowitz might properly have moved to amend the
complaint once he discovered the untimely registration, this is not, in fact, what
Liebowitz did. Instead, the district court found that Liebowitz, despite knowing,
as of August 2019, that the Photograph was not registered – a fatal flaw for the
complaint as written – continued to defend the complaint without amendment,
resisting the discovery that would have revealed its fatal flaw. See Oliveri, 803 F.2d
at 1272 (discussing bad faith conduct of litigation as a proper basis for inherent
32
powers sanctions). Even Liebowitz must admit, moreover, that he was on notice
of the issue as of the November pretrial conference when it was explicitly raised
by Bandshell. But still Liebowitz did not promptly move to amend the complaint
or inform the district court that his representation at that conference was false.
Bandshell was thus required to expend resources defending against a complaint
that was without factual or legal basis as written, even assuming, arguendo, that an
amendment could have cured the problem.
As to whether Liebowitz was “motivated by improper purposes such as
harassment or delay,” Schlaifer Nance & Co., 194 F.3d at 336, Judge Furman found
he was, concluding that Liebowitz and LLF’s “willful disregard of the registration
requirement [was] part of their broader strategy to use the burdens of litigation to
extract settlements, even in frivolous or unmeritorious suits.” Sp. App’x at 44. This
finding is supported by Liebowitz and LLF’s “custom and practice” of failing to
investigate copyright registrations, Liebowitz’s failure to do so in this case despite
Bandshell’s questions specifically about whether the Photograph’s registration
was timely, his “active[] stonewall[ing]” of discovery on the issue, and his
suggestion, upon the registration issue being raised at the pretrial conference, that
the case be allowed to continue as normal in the hope of reaching a settlement. Sp.
33
App’x at 42–43. Liebowitz’s argument to the contrary is essentially that he made a
mistake in the course of running his law practice. But we discern no error in the
district court’s contrary conclusion.
* * *
In sum, the factual findings supporting the district court’s decision to
sanction Appellants were amply supported and in no way clearly erroneous.
Again, Liebowitz admittedly violated multiple court orders and raises no
challenge to this conclusion by the district court. As to the challenges that he does
make, the court adequately supported its findings: (1) that Liebowitz lied about
receiving permission from the Mediator for Usherson’s failure to attend the
mediation; and (2) that he acted in bad faith in pursuing Usherson’s claim based
on the 046 Registration. We turn next to Appellants’ challenges to the monetary
sanctions imposed by the district court.
II
“Depending on circumstances, a party facing sanctions may be entitled to
enhanced procedural protections beyond notice and an opportunity to be heard”
based on a line that the cases draw between civil and criminal sanctions. See
Wolters Kluwer, 564 F.3d at 116–17. This distinction attempts to ameliorate the risk
34
of unfairness or abuse that can arise in proceedings in which “the offended judge
[is] solely responsible for identifying, prosecuting, adjudicating, and sanctioning
the contumacious conduct.” Int’l Union, United Mine Workers of Am. v. Bagwell, 512
U.S. 821, 831 (1994). 21 Thus, “the imposition of a sufficiently substantial punitive
sanction” requires “procedural protections appropriate to a criminal case” (for
example, the requirement of proof beyond a reasonable doubt). Mackler I, 146 F.3d
at 130. Appellants argue that the district court’s award of an additional sanction
of $20,000 meets this threshold and that because the district court did not provide
criminal protections, that portion of the monetary sanctions must be vacated.
Appellants also raise a number of arguments against the district court’s award of
attorney’s fees, contending that it must be overturned or at least reduced. For the
reasons that follow, we disagree.
21 The Supreme Court’s decision in Bagwell addressed the distinction between
criminal and civil contempt, not sanctions, but this Court has “extended [its] reasoning .
. . to punitive sanctions against an attorney imposed under statutory or inherent
authority.” Wolters Kluwer, 564 F.3d at 117 (declining to extend Bagwell further to reach
reprimands against an attorney). The Supreme Court has also recognized that Bagwell’s
reasoning has application to sanctions in appropriate circumstances. See Goodyear Tire &
Rubber Co. v. Haeger, 137 S. Ct. 1178, 1186 (2017).
35
A
We start with the district court’s award of attorney’s fees. Judge Furman
concluded that the appropriate measure of attorney’s fees was the fees and costs
that Bandshell would have incurred in connection with the mediation and the
sanctions motion had it not been represented by pro bono counsel. These fees
totaled $83,517.49. The district court specifically stated that it was imposing these
sanctions for Liebowitz’s violations of the court’s orders and his lies related to the
mediation. Because Bandshell and its lawyers disclaimed any claim to collect
attorney’s fees, Judge Furman made the fees payable to the court.
Liebowitz raises several challenges to this sanction. He first argues that time
spent by pro bono counsel should not serve as a measure of sanctions. And even if
this is permissible, he argues that the district court erred by counting time spent
on litigating the sanctions motion as part of the fine. Finally, he argues that even
if this Court holds he is incorrect as to the above two points, the district court still
erred by counting the entire cost of litigating the sanctions motion when it found
that only one of the two issues raised in the motion was deserving of sanctions.22
We address and reject each of these arguments in turn.
22The district court found by clear and convincing evidence that Liebowitz lied
about having received the Mediator’s permission for Usherson to attend the mediation
36
First, we hold that neither the pro bono nature of Bandshell’s representation
nor Bandshell’s agreement, as part of the stipulated settlement, not to accept any
fees is a barrier to a sanction of attorney’s fees pursuant to a district court’s
inherent powers. Such sanctions still serve to “vindicat[e] judicial authority” even
when the fees are not reflected on a client’s bill. See Int’l Techs. Mktg., Inc. v. Verint
Sys., Ltd., 991 F.3d 361, 367 (2d Cir. 2021) (noting that monetary sanctions pursuant
to inherent power serve not only to compensate wronged parties but also to
vindicate the court’s authority). Even where the opposing party, as here, has
secured pro bono representation, sanctions of attorney’s fees still hold counsel liable
for unnecessarily consuming judicial and attorney resources. And while precedent
dictates that a district court awarding attorney’s fees must ensure the fee is
reasonable, this does not yoke the district court’s ability to protect the integrity of
its proceedings to the details of the billing arrangement between the opposing
party and its lawyers. 23 We therefore hold that attorney’s fees calculated based on
by phone. It indicated, however, that only a preponderance of the evidence supported a
finding that Liebowitz lied about the Mediator consenting to Freeman appearing as
counsel. Because a showing of bad faith by clear and convincing evidence is a prerequisite
to imposing sanctions under both § 1927 and the district court’s inherent authority
(although not generally Rule 16(f)), the district court found only the first category of
misconduct sanctionable.
23 In its recent decision in Goodyear Tire & Rubber Co., the Supreme Court stated
that for a sanction imposed pursuant to a district court’s inherent powers using civil
37
the work performed by Bandshell’s lawyers constituted an appropriate measure
of sanction under the district court’s inherent powers.
For similar reasons, we conclude that Bandshell’s pro bono representation
was no barrier to sanctions under 28 U.S.C. § 1927. 24 The subject of § 1927’s
prohibition is attorneys who engage in misconduct, and its scope is not limited by
the manner in which opposing counsel represents clients. See Oliveri, 803 F.2d at
1273 (“[A]wards under § 1927 are made only against attorneys or other persons
procedures to be permissible it must “go no further than to redress the wronged party
for losses sustained” and “may not impose an additional amount as punishment for the
sanctioned party’s misbehavior.” 137 S. Ct. at 1186 (internal quotation marks omitted).
Our holding does not conflict with this instruction. Judge Furman based the measure of
sanctions on what amount would have been sufficient to compensate Bandshell had its
lawyers charged a reasonable attorney’s fee based on their ordinary hourly rates. The fact
that Bandshell and its lawyers will not collect this amount from LLF does not transform
this amount into a punitive sanction nor entitle Appellants to process they would not be
due had Bandshell’s lawyers not chosen to waive their fees. Bandshell’s lawyers still
incurred losses as a result of the misconduct in question. We decline to interpret Goodyear
to permit the use of civil procedures only when such losses are ultimately included on a
client’s bill.
24 The full text of this provision reads:
Any attorney or other person admitted to conduct cases in any court of the
United States or any Territory thereof 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. Because we conclude that the attorney’s fee sanction was properly
imposed pursuant to § 1927 and the district court’s inherent authority, we need not
address the court’s alternative holding awarding these fees pursuant to Rule 16.
38
authorized to practice before the courts while an award made under the court's
inherent power may be made against an attorney, a party, or both.”). To condition
liability under this Section based on the pro bono or compensated nature of the
representation of the opposing party would strip the Section of its deterrent power
in an important class of cases.
Section 1927’s reference to attorney’s fees that are “reasonably incurred”
imposes no barrier to our interpretation. We find persuasive the Tenth Circuit’s
conclusion that the use of such a phrase does not restrict fees to those actually
charged to the client. See Centennial Archeology, Inc. v. AECOM, Inc., 688 F.3d 673,
681–82 (10th Cir. 2012) (discussing attorney-fee sanctions pursuant to Rule 37).
Accordingly, we hold that, as used in § 1927, “attorney’s fees reasonably incurred”
refers to the reasonable value of the work reasonably performed by opposing
counsel because of the sanctioned conduct, rather than the fee billed to the client.
See id. at 679 (“[A]n ‘attorney fee’ arises when a party uses an attorney, regardless
of whether the attorney charges the party a fee; and the amount of the fee is the
reasonable value of the attorney’s services.”). Thus, a § 1927 award of attorney’s
39
fees remains appropriate even when a party is being represented by counsel pro
bono. 25
Next, we reject Liebowitz’s contention that it was inappropriate to include
the attorney’s fees incurred in litigating the sanctions motion. Indeed, Liebowitz
admits that this Court has affirmed such an award in the past. See Enmon v. Prospect
Cap. Corp., 675 F.3d 138, 148–49 (2d Cir. 2012) (upholding imposition of fees for
litigation of sanctions motion pursuant to § 1927 and inherent powers). Nor was
such a sanction outside the range of permissible decisions here. Judge Furman
found that in the course of attempting to extract a settlement from Bandshell,
Liebowitz treated mandatory court orders as mere suggestions and lied when
confronted about doing so. And this is to say nothing of Liebowitz’s long track
25 We also reject Liebowitz’s argument that the pro bono nature of Bandshell’s
representation led its lawyers to run up an excessive bill. For one thing, the incentive to
spend excessive hours on unpaid work is balanced by the opportunity cost of forgoing
work for paying clients. Additionally, it is within the discretion of the district court to
consider whether the time spent on litigating an issue by pro bono counsel is reasonable
and we discern no abuse of discretion in the district court’s determination here that this
criterion was satisfied as to the time spent by opposing counsel on the mediation and
sanctions motion. We need not address Appellants’ argument regarding Bandshell’s
counsel’s admission that they “put so much time into a pro bono matter of limited
exposure to [their] client” because they “understood the importance of this issue beyond
this case, to both the bar and the Court.” Appellants’ Br. at 50 (quoting J. App’x at 275).
Appellants have waived this argument by failing to raise it in the first instance in the
district court; the role of such an admission in a future case in the district court’s
determination of the reasonableness of the hours counsel expended remains open.
40
record of similar conduct in courts across the country. See In re 60 E. 80th St.
Equities, Inc., 218 F.3d 109, 120 (2d Cir. 2000) (noting relevance, in context of § 1927,
of “fact that [counsel]’s behavior is repetitive”).
Appellants argue that awarding the costs of litigating sanctions motions
deters creative argumentation by parties defending against sanctions and
encourages the party seeking sanctions to pursue as many claims as possible
regardless of their merit. We are not convinced. As to the first point, one opposing
sanctions remains incentivized to make creative arguments in order to convince
the district court that sanctions are not warranted or ought be limited. Similarly,
the incentive for parties seeking sanctions to focus on their strongest arguments is
the same as it always is: to maximize their chance of success. At any rate, the
district court retains discretion to consider the relative merits of the parties’
arguments when considering whether to include the costs of litigating sanctions
in an award of attorney’s fees. And we discern no abuse of discretion in Judge
Furman’s decision that attorney’s fees in connection with the sanctions litigation
were merited here.
Third and finally, we hold it was not an abuse of discretion for the district
court to hold Liebowitz liable for the cost of litigating the entire sanctions motion
41
even when this motion was successful only in part. 26 In Enmon, we approved the
district court’s imposition of the full cost of litigating the sanctions motion in such
circumstances, noting specifically that “[t]he fact that [the district court] denied
the sanctions motion in part did not prevent [it] from imposing the full cost of
litigating the motion, which, if not completely successful on all . . . grounds . . . was
nevertheless well-founded.” 675 F.3d at 148. Liebowitz argues that the Supreme
Court’s decision in Goodyear compels a different result. We disagree.
In Goodyear, the Court stated that for inherent powers sanctions, the line
between civil and criminal awards of attorney’s fees is “a but-for test: The
complaining party . . . may recover ‘only the portion of his fees that he would not
have paid but for’ the misconduct.” Goodyear, 137 S. Ct. at 1187 (quoting Fox v. Vice,
563 U.S. 826, 836 (2011)). 27 But the Court specified that this standard does not
Applied to this case, we note that even though the district court did not agree
26
with Bandshell on one of its arguments for sanctions, it did conclude that Bandshell
would have prevailed on this point as well had the relevant standard been
preponderance of the evidence.
27 Though Goodyear is a case involving the district court’s inherent powers, a
footnote in the Court’s opinion affirms that fee shifting pursuant to § 1927 similarly
requires courts to find a causal connection to the misconduct at issue, though the Court
did not explicitly characterize the test as one of but-for causation. Goodyear, 137 S. Ct. at1186–87 n.5. Because we conclude the district court’s award was permissible under
Goodyear’s but-for test, we need not address whether the but-for test also applies to
sanctions under § 1927.
42
require precise accounting. Id. Instead, “‘[t]he essential goal’ in shifting fees is ‘to
do rough justice, not to achieve auditing perfection.’” Id. (quoting Fox, 563 U.S. at
838). Thus, a district court, as here, “may decide, for example, that all . . . of a
particular category of expenses . . . were incurred solely because of a litigant’s bad-
faith conduct” and should be compensated in the form of sanctions. Id. And such
judgments, made with the district court’s unique understanding of the litigation,
“are entitled to substantial deference on appeal.” Id.We understand Goodyear to have reinforced, not abrogated our conclusion
in Enmon that in appropriate cases a district court may, as part of a sanctions order,
hold lawyers liable for the cost of litigating a sanctions motion that is only partially
successful. Accordingly, we reject Liebowitz’s contrary claim.
B
We turn next to the $20,000 sanction the district court imposed in connection
with the complaint’s false allegation that the Photograph was registered pursuant
to the 046 Registration. Appellants argue that this sanction was punitive and,
because it was imposed without affording them the protections of criminal
procedure, impermissible. For the following reasons, we disagree and conclude
43
that the $20,000 sanction was permissible under Federal Rule of Civil Procedure
16(f) without reaching the applicability of § 1927 and inherent powers.
Liebowitz’s argument that the $20,000 sanction must be set aside or at least
reduced centers on this Court’s decisions in the two Mackler cases, in which we
vacated “punitive” monetary sanctions, imposed under the district court’s
inherent powers and payable to the court, that exceeded a $45,000 “compensatory”
sanction for attorney’s fees and expenses. Both Mackler cases involved a finding by
the district court that an attorney had knowingly allowed his client to commit
perjury during a trial and had caused an additional witness to provide false
evidence. Mackler I, 146 F.3d at 130. Before the first appeal, the district judge
imposed “compensatory” sanctions of $45,000 in attorney’s fees and expenses and
“punitive” sanctions of $10,000. Id. at 128. This Court vacated the sanctions order,
noting that “the imposition of a sufficiently substantial punitive sanction” requires
the protections of criminal procedure. Id. at 130. On remand, the district judge did
not conduct any further proceedings and instead reimposed the compensatory
sanction of $45,000 and a reduced punitive sanction of $2,000. Mackler Prods., Inc.
v. Cohen (Mackler II), 225 F.3d 136, 141 (2d Cir. 2000). We again concluded on appeal
that the now reduced punitive sanction was improper absent the use of criminal
44
procedures, reasoning that the gravamen of our earlier analysis “was whether or
not the sanction at issue was criminal or civil in character,” with the size of the
sanction representing but one factor in this analysis. Id. at 142 (emphasis in
original).
Appellants seize on this reasoning (as well as the other factors considered
in both Mackler decisions to conclude that the sanctions there were punitive) to
argue that here, too, the district court’s additional sanction, beyond attorney’s fees,
is punitive and therefore impermissible without the protections of criminal
procedure. But the present case is plainly distinguishable. Both Mackler appeals
addressed a situation in which the district court imposed sanctions in excess of
attorney’s fees and expenses for a single course of conduct, explicitly denominating
the amounts to be paid over and above the “compensatory” sanction as
“punitive.” Here, Liebowitz’s bad faith in connection with the complaint
represents a course of conduct separate and apart from his multiple violations of
court orders and his misrepresentations regarding the Mediator’s supposed assent
to Usherson’s telephonic appearance. And the district court made clear that the
$20,000 sanction was in connection with this separate misconduct. Moreover, the
court in no way suggested that the $20,000 sanction was intended to be punitive,
45
but gauged its amount as “no greater than necessary to provide adequate
deterrence, to Mr. Liebowitz, to his firm, and to others similarly situated.” Sp.
App’x at 51.
We nevertheless decline to reach the question whether the $20,000 sanction
was permissible pursuant to § 1927 or to the district court’s inherent powers. We
made clear in the Mackler opinions that whether a monetary sanction should be
treated as civil or criminal in character turns on several non-exhaustive factors,
including not only the size of a monetary sanction but “whether the sanction is
intended to be compensatory or punitive; whether it is payable to the court or to
the injured party; whether it is based on past wrongful conduct or is intended to
coerce future compliance; and whether any opportunity to purge the sanction is
provided.” 225 F.3d at 142. To be sure, none of these factors is by its nature
determinative, nor can the character of a sanction be assessed based merely on the
factors’ tally. As the Supreme Court recognized in Bagwell, in the related context
of contempt fines, the line between civil and criminal monetary sanctions is
“somewhat elusive” and can be difficult to parse. 512 U.S. at 830, 836.
Here, while the district court in no way suggested that the instant sanction
was intended to be punitive, the court did not explicitly discuss the basis for
46
deeming it to be civil, not criminal, in character. The court at no point attempted
to calibrate the sanction to fees and costs incurred by Bandshell or its counsel by
virtue of Appellants’ bad faith conduct in concealing the complaint’s
misrepresentation. Nor did it estimate an amount sufficient to compensate the
court for its own time, which our sister circuits have held may properly be the basis
of compensatory sanctions. See Eisenberg v. Univ. of N.M., 936 F.2d 1131, 1136 (10th
Cir. 1991) (Rule 11 sanction may be imposed based on court costs for use of court’s
time); Magnus Elecs., Inc. v. Masco Corp. of Ind., 871 F.2d 626, 634 (7th Cir. 1989)
(same).
To be sure, the sanction here is modest, in terms of the costs imposed on
Bandshell, its lawyers, and the court, all of which were required to spend time
sorting out Appellants’ falsehoods regarding the Photograph’s registration. And
to be clear, a monetary sanction may still constitute a coercive civil sanction, rather
than a criminal penalty, despite its non-compensatory character. See Bagwell, 512
U.S. at 834. Absent more explanation from the district court, however, we hesitate
definitively to conclude that the $20,000 sanction here was a permissible exercise
of its authority pursuant to § 1927 or its inherent powers.
47
We have no such hesitation, however, with regard to the district court’s
alternative holding under Federal Rule of Civil Procedure 16(f). 28 Rule 16
prohibits, inter alia, bad faith participation in pretrial conferences and permits the
district court to issue “any just orders” in response to such conduct. Fed. R. Civ.
Pr. 16(f). District courts acting pursuant to their authority under Rule 16(f) are free
to “design the sanction to fit the violation,” 6A Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1531 (3d ed.), and their focus “need not
be limited to compensation of opposing counsel,” Media Duplication Servs., Ltd. v.
HDG Software, 928 F.2d 1228, 1242 (1st Cir. 1991). Indeed, “[t]rial judges have
considerable discretion in the selection and imposition of sanctions” so as to “deter
28 That rule provides:
(f) Sanctions.
(1) In General. On motion or on its own, the court may issue any just orders,
including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney:
(A) fails to appear at a scheduling or other pretrial conference;
(B) is substantially unprepared to participate – or does not
participate in good faith – in the conference; or
(C) fails to obey a scheduling or other pretrial order.
(2) Imposing Fees and Costs. Instead of or in addition to any other sanction,
the court must order the party, its attorney, or both to pay the reasonable expenses –
including attorney’s fees – incurred because of any noncompliance with this rule, unless
the noncompliance was substantially justified or other circumstances make an award of
expenses unjust.
48
neglect” of pretrial obligations. Id. (quoting Barreto v. Citibank, N.A., 907 F.2d 15,
16 (1st Cir. 1990)). And “[d]eterrence is a widely recognized basis for determining
the amount of a monetary sanction” under Rule 16(f). See Jones v. Winnepesaukee
Realty, 990 F.2d 1, 6 (1st Cir. 1993).
To be clear, this is not to say that sanctions pursuant to Rule 16(f) may not
sometimes require the protection of criminal procedures. But in assessing Rule
16(f) sanctions, it must be kept in mind that the Rule itself requires a district court,
absent special circumstances, to order the payment of reasonable expenses,
including attorney’s fees, incurred as a result of noncompliance. It then expressly
provides that this sanction may be “in addition to” any other. Fed. R. Civ. P.
16(f)(2). As we have said before, the Rule’s “‘explicit reference to sanctions’ reflects
the Rule’s intention to ‘encourage forceful judicial management.’” Huebner, 897
F.3d at 53 (quoting Fed R. Civ. P. 16(f) advisory committee’s note to 1983
amendment). And we have no hesitation on the present record in concluding that
the $20,000 sanction was not punitive in character, when considered in light of
Rule 16’s mandate that district courts assess sanctions so as compensate for
Appellants’ misconduct and to deter it from happening again.
49
We have little trouble concluding Liebowitz’s conduct at and with respect
to the November pretrial conference was in bad faith, thus violating Rule 16.
Bandshell raised the issue of the registration at that pretrial conference, giving
Liebowitz an opportunity to respond. Liebowitz, as the district court found,
instead “stonewall[ed] . . . any investigation into the registration issue,” falsely
assuring the court that the registration identified in the complaint was “the correct
registration.” 29 Sp. App’x at 10, 51. This was not good faith participation in the
pretrial conference or with respect to it.
We also conclude that when assessed in light of Rule 16(f), the record is more
than sufficient, even without additional explanation from the district court, to
conclude that the sanctions amount chosen by the district court did not require the
protections of criminal procedure. As already indicated, the district court
explained that “sanctions of $20,000 [were] no greater than necessary to provide
adequate deterrence” to Liebowitz and to LLF. Sp. App’x at 51. And Liebowitz has
29 As previously noted, Liebowitz argues that he did not know, at the time, that
this was not the case. The district court’s factual finding to the contrary, however, is
amply supported. And, in any event, even on Liebowitz’s account, once indisputably
alerted to the issue, Liebowitz did not correct the record until months later, when
confronted with definitive evidence that the complaint’s allegation was false, even
though the means definitively to ascertain the truth were readily at hand and easily
consulted within the records of his own firm.
50
shown that his conduct is resistant to ordinary efforts to sanction him. See Sp.
App’x at 55–61 (detailing various instances of Liebowitz’s misconduct); see, e.g.,
Chevrestt v. Barstool Sports, Inc., No. 20-CV-1949 (VEC), 2020 WL 2301210, at *2, *4
(S.D.N.Y. May 8, 2020) (ordering Liebowitz to pay a sanction of $3,000 to the court
pursuant to Rule 16(f) and characterizing his “attempt to attribute his
‘administrative oversight’ to the COVID pandemic” as “disingenuous, distasteful,
unpersuasive, and likely perjurious”); Rice v. NBCUniversal Media, LLC, No. 19-
CV-447 (JMF), 2019 WL 3000808, at *4–5, *7 (S.D.N.Y. July 10, 2019) (sanctioning
Liebowitz and ordering him and LLF to pay monetary sanctions of $8,745.50
pursuant to Rule 16(f) and the court’s inherent powers for willful disobedience of
orders “requiring mediation and Liebowitz's appearance” at the initial
conference). Under Rule 16(f), the sanctions amount needed to be sufficiently
substantial both to compensate and to deter. And, moreover, the sum chosen by
the district court is consistent with comparable Rule 16 sanctions imposed in
addition to attorney’s fees and expenses that our sister circuits have upheld. See
Jones, 990 F.2d at 3, 5–6 (approving sanctions totaling $10,000 in addition to
attorney’s fees for “consistent failure to attend pretrial hearings and their bad faith
in conducting the litigation”).
51
Considered in light of Liebowitz’s conduct in this case, his previous similar
conduct, the need for deterrence, and similar sanctions approved by our sister
circuits, Judge Furman’s $20,000 sanction for Liebowitz’s bad faith conduct in
connection with the pretrial conference was not an abuse of discretion and did not
trigger a need for criminal procedures. Liebowitz’s argument to the contrary is
without merit.
III
Finally, we turn to the district court’s nonmonetary sanctions, which we
have already upheld in a summary order that issued on June 25, 2021. Liebowitz v.
Bandshell Artist Mgmt., ___ F. App’x ____, 2021 WL 2620416 (2d Cir. June 25, 2021).
As this Court has recognized, while “[p]unitive fines . . . are the common tools of
the criminal law,” nonmonetary sanctions of the sort here “are not traditional
criminal punishments” but serve “to ensure ethical conduct before the courts.” See
Wolters Kluwer, 564 F.3d at 117. Accordingly, a party challenging such sanctions
cannot typically argue that they must be set aside because criminal protections
were required. Id. at 118 (holding as to reprimands “that attorneys need not be
given the full rights required in a criminal trial before the court may impose such
nonmonetary disciplinary sanctions for litigation misconduct”). Although
52
Appellants do not argue the non-monetary sanctions required criminal
protections, they contend that the district court abused its discretion by imposing
overbroad sanctions when it required them to file a copy of the Order on the
docket of all of their cases nationwide and to obtain and file a copy of the official
deposit files maintained by the U.S. Copyright Office in all of their copyright
infringement cases. We again disagree.
Appellants’ arguments that the non-monetary sanctions are overbroad
because of their nationwide scope fail to persuade. Appellants rely on our decision
in Enmon, where the law firm made several misrepresentations and the district
court only required the firm to file a copy of its sanctions order with future pro hac
vice applications in the Southern District of New York. See 675 F.3d at 148. But
Liebowitz concedes that this Court has permitted nationwide relief in response to
abuses of the judicial process. See In re Hartford Textile Corp., 681 F.2d 895, 897 (2d
Cir. 1982) (enjoining further litigation by a party on a nationwide basis). And
unlike the law firm’s misconduct in Enmon, Liebowitz’s misconduct in this case –
including violating multiple court orders, repeatedly lying to the court, and
pursuing a complaint with a false allegation – justifies the nationwide scope of the
court’s sanctions here. Moreover, Liebowitz’s pattern of misconduct before many
53
judges of the Southern District of New York and across the country, described at
length in the district court’s opinion, squarely defeats Appellants’ suggestions to
the contrary. See, e.g., In re Martin-Trigona, 737 F.2d 1254, 1262 (2d Cir. 1984)
(affirming “restrictions placed upon [attorney’s] bringing of new actions in all
federal district courts” (emphasis added)). See generally Usherson v. Bandshell Artist
Mgmt., No. 19-CV-6368 (JMF), 2020 WL 3483661 (S.D.N.Y. June 26, 2020).
Finally, the district court did not abuse its discretion when it ordered
Liebowitz and LLF to obtain and file a copy of the deposit files with each copyright
infringement complaint they file for one year. Contrary to Liebowitz’s claim,
requiring Appellants to include a copy of the deposit files does not impermissibly
shift the burden of proof in copyright cases. Although the party challenging the
validity of a copyright registration bears the burden of proving invalidity, that
burden attaches only for presumptively valid copyrights; plaintiffs asserting
infringement bear the burden of establishing that presumption, and of proving
ownership. See Urbont v. Sony Music Ent., 831 F.3d 80, 88–89 (2d Cir. 2016); see also
Carol Barnhart Inc. v. Econ. Cover Corp., 773 F.2d 411, 414 (2d Cir. 1985). Given that
Freeman, Liebowitz’s associate, “admitted that it is the regular practice of [LLF] to
file copyright infringement cases without verifying that the works in question are
54
properly registered,” the district court’s sanction was appropriately chosen to
ensure misconduct would not recur. 30 Sp. App’x at 19–20.
* * *
Given Liebowitz’s serious and repeated misconduct, the Appellants here
merited sanctions reserved for attorneys and litigants who demonstrate via their
actions that unusual measures are required to deter future misbehavior, protect
other litigants, and maintain the integrity of the judicial system. Liebowitz’s brief
time as a member of the bar so far has been replete with actions suggesting an
unwillingness to comply with his obligations as an officer of the court. The district
court did not abuse its discretion in determining that sanctions were appropriate
and in imposing the sanctions here.
CONCLUSION
For the foregoing reasons, we AFFIRM the order of the district court.
30 Appellants’ argument that the sanction imposed a substantial burden because
deposit files are expensive to obtain is also unpersuasive. As the district court noted,
Liebowitz often settles cases “‘in the low thousands or tens of thousands of dollars’ . . . a
far cry from the $200 to $1,200 cost of obtaining a deposit copy.” Sp. App’x at 72–73 n.7.
55