Merle Royce v. Michael R. Needle P.C. ( 2020 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 18-2850, 18-2851, 18-3725, & 19-1054
MERLE L. ROYCE,
Plaintiff-Appellee,
v.
MICHAEL R. NEEDLE P.C.,
Defendant-Appellant,
v.
AMARI COMPANY, INC., et al.,
Defendants-Appellees,
and
RICHARD JOSEPH COCHRAN, et al.,
Appellees.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 15-cv-00259 — Rebecca R. Pallmeyer, Chief Judge.
____________________
ARGUED JANUARY 14, 2020 — DECIDED FEBRUARY 20, 2020
____________________
2 Nos. 18-2850, et al.
Before WOOD, Chief Judge, and ROVNER and ST. EVE, Circuit
Judges.
ST. EVE, Circuit Judge. This dispute over attorney’s fees has
a long, tortured history. Not because it is unduly complex or
involves novel legal issues, but because one of the attorneys—
Michael R. Needle—protracted it every step of the way. He
routinely and unapologetically tested the district court’s pa-
tience, disregarded court orders, and caused unnecessary de-
lays. As a result, the district court sanctioned Needle multiple
times for “obstructionist and vexatious” tactics.
The fee dispute arose only because Needle steadfastly
took an objectively frivolous position that he and his co-coun-
sel, Merle L. Royce, were entitled to the lion’s share—almost
sixty percent—of their clients’ settlement in an underlying
suit as attorney’s fees. Even Royce rejected Needle’s position
because the plain language of the contingent fee agreement
provided that attorney’s fees shall be one-third of the settle-
ment. The district court found the same, and then decided a
sub-dispute over the division of the aggregate attorney’s fee
between Royce and Needle under a separate co-counsel
agreement. The court awarded Needle sixty percent and
Royce forty percent of the aggregate attorney’s fee.
Needle appeals both decisions relating to the attorney’s
fee, the sanctions assessed against him, and a host of other
perceived errors. We affirm the judgment in all respects be-
cause the district court’s rulings were correct, the sanctions
were appropriate, and Needle’s other arguments are baseless.
I. Background
At its core, this is a simple contract dispute. It became pro-
tracted, however, and devolved into a three-and-a-half-year
Nos. 18-2850, et al. 3
row with over a thousand docket entries. Many, if not most,
of the filings were unrelated to resolving the merits. Our job,
however, is made considerably easier because the district
court—first Judge Shadur and then Judge Pallmeyer—effec-
tively managed this problematic litigation.
A. The underlying RICO action
This case stems from an underlying civil Racketeer Influ-
enced and Corrupt Organizations (RICO) action filed in 2007,
Amari Inc., et al. v. John Burgess, et al., No. 07-cv-1425 (N.D. Ill.).
Though not initially plaintiffs’ counsel, Needle and two Illi-
nois attorneys eventually came to represent the Amari plain-
tiffs—a group of sixteen individuals and companies. Needle
is a Pennsylvania attorney and the “sole attorney, share-
holder, officer and employee” of his law firm, Michael R. Nee-
dle P.C. (“Needle P.C.”). (In every practical sense, Needle and
Needle P.C. are the same.) The three attorneys drafted and
executed a contingent fee agreement with their clients. Ac-
cording to Needle, the fee agreement went through five
drafts.
The two Illinois attorneys would both later withdraw from
the representation, so Needle recruited another Illinois attor-
ney to serve as his co-counsel and local counsel, Royce. Nee-
dle and Royce entered into a co-counsel agreement that set
forth their division of any attorney’s fee received in the RICO
action. Specifically, they agreed to split half of any fee equally
and the other half proportional to the time each spent on the
matter.
Together Needle and Royce litigated the Amari suit for
several years before successfully settling the case in Novem-
ber 2013. Pursuant to a confidential settlement agreement, the
4 Nos. 18-2850, et al.
parties settled the RICO action for $4.2 million. Importantly,
the settlement agreement provided only for a single lump-
sum settlement amount of $4.2 million (payable in install-
ments according to a set schedule), without any further pro-
visions relating to attorney’s fees, costs, expenses, or the like.
All payments were made to Royce as escrow agent.
B. The attorney’s fee dispute
Instead of bringing an end to the matter, Needle was not
happy with his cut of the settlement. He asserted that the at-
torneys, he and Royce, were entitled to a greater fee amount
than Royce and the client group did. Specifically, Needle
wanted $2.5 million, or approximately sixty percent, of the
settlement amount as attorney’s fees, leaving the plaintiffs—
his clients—with $1.7 million. Needle and Royce also disa-
greed over the appropriate division of the attorney’s fee be-
tween themselves. The conflict froze the settlement proceeds
in escrow, so Royce filed an interpleader action seeking a de-
termination of the correct disbursements under the contin-
gent fee agreement and the co-counsel agreement.
C. The district court proceedings
In the interpleader action over the attorney’s fee, Needle
P.C. was initially represented by Cafferty Clobes Meriwether
& Sprengel LLP, a local law firm. Needle P.C. answered the
complaint and filed extensive, multicount counterclaims
against both Royce and the Amari plaintiffs. In the counter-
claims, Needle P.C. sought a constructive trust on the escrow
account; a declaratory judgment regarding the division of the
settlement fund between the plaintiffs and the attorneys and
between Royce and Needle; and a declaratory judgment that
section IV.1(A) of the contingent fee agreement (as opposed
Nos. 18-2850, et al. 5
to section IV.1(B)) governed the attorney’s fee. Needle P.C.
also brought claims against Royce for misrepresentation and
conversion. We are centrally concerned with Needle P.C.’s
counterclaim that section IV.1(A) of the fee agreement con-
trols the contingent fee dispute.
The core of Needle P.C.’s position—which underlies this
entire litigation—was that the attorney’s fee was “separately
negotiated” during the RICO suit settlement negotiations and
included in the lump-sum settlement amount, thus triggering
subparagraph (A) of the fee provision: “(A) any fee paid to
us … pursuant to any settlement agreement.” The district
court expressed to Needle P.C. on at least three different oc-
casions that it had serious concerns that Needle P.C. could
present this claim consistent with Federal Rule of Civil Proce-
dure 11(b). Needle P.C. did not heed the warning and contin-
ued to assert the counterclaim. So Royce and the Amari plain-
tiffs moved to dismiss the claim and also for Rule 11 sanc-
tions.
The district court dismissed the count asserting that sec-
tion IV.1(A) governed the attorney’s fee determination, find-
ing that Needle P.C.’s arguments were “not merely wrong but
frivolous, disregarding what anyone having taken a first-year
contracts class could identify as the pivotal legal issues” and
“utterly devoid of merit.” The dismissal came with an award
of sanctions against Needle P.C. and Cafferty Clobes, which
is discussed later.
1. Needle’s pro hac vice admission
Following briefing on the motion to dismiss and sanctions,
Cafferty Clobes moved to withdraw as Needle P.C.’s
6 Nos. 18-2850, et al.
counsel.1 Two months passed before a new attorney sought to
appear only as local counsel and Needle moved for leave to
appear pro hac vice on behalf of Needle P.C. The motion was
immediately met with opposition. Royce raised a concern that
Needle’s representation of Needle P.C. would implicate the
lawyer–witness rule, while the Amari plaintiffs pointed out an
alleged inaccuracy—or outright false representation—in Nee-
dle’s application for admission. The pro hac vice form asks if
the applicant is “currently the subject of an investigation of
the applicant’s professional conduct.” Needle checked the
box for “No.” According to the Amari plaintiffs, this was false
because at the time there were two active complaints and in-
vestigations pending before the Pennsylvania attorney disci-
plinary board. Though Needle attached an addendum to his
application explaining that during a telephone call with a dis-
ciplinary board staff attorney he was “informed” and “be-
lieved” there was no active investigation relating to him, he
never received written notification of a disposition of either
complaint. The Amari plaintiffs also contacted the disciplinary
board and were informed that both investigations of Needle
were still active.
The district court attempted to address Needle’s pro hac
vice application and the attendant issues at a status confer-
ence on October 19, 2015. It did not go well. The court permit-
ted Needle to appear telephonically, at Needle’s request, so
1 As noted, the district court sanctioned Cafferty Clobes for the Rule
11 violations that occurred while serving as counsel of record and before
its withdrawal from the case. Cafferty Clobes later apologized to the court
and opposing counsel for its role in filing the frivolous pleading and co-
operated with opposing counsel to amicably pay its share of the fee award
without objection or further litigation.
Nos. 18-2850, et al. 7
that he did not have to travel from Philadelphia to Chicago.
But Needle failed to call the court at the scheduled time. When
Needle’s local counsel then called him from the courtroom,
Needle blamed court staff for giving him the wrong number.
The bigger problem, however, was that Needle took the call
on his cell phone in public from a courthouse in Philadelphia.
Needle could not participate effectively because of the ambi-
ent noise on his end. Even though counsel for Royce, counsel
for the Amari plaintiffs, and local counsel were all present in
court, Needle prevented the hearing from going forward as
planned.
The court was understandably frustrated—it accommo-
dated Needle by allowing him to participate telephonically
and Needle abused that privilege. The court continued the
hearing to another date and ordered Needle to pay the costs
of counsel’s in-person attendance at the aborted hearing.
At the rescheduled hearing, Needle asserted only that the
lawyer–witness objection to his pro hac vice admission was
premature. But the legal issues at hand would inevitably re-
quire Needle’s testimony, and thus the lawyer–witness objec-
tion was ripe for ruling. The court denied Needle’s motion to
appear pro hac vice and directed local counsel to discuss the
scope of his representation of Needle P.C. and whether he
would now serve as lead counsel. Three days later, local coun-
sel withdrew.
2. Needle P.C.’s second amended pleadings
Needle P.C. went the next six months without counsel and
the litigation stalled. Needle himself decided to “ignor[e] the
litigation” by “not being on the telephone, not talking to any-
body about it.” In an effort to get the case back on track, the
8 Nos. 18-2850, et al.
court reluctantly permitted Needle to appear pro hac vice.
Further, the court permitted Needle to refile the second
amended counterclaims that he had previously attempted to
file without leave. In doing so, however, the court gave Nee-
dle a strict order: “File it, but don’t make any substantive
changes.” Needle obviously understood, how could he not,
responding, “I am not going to other than what I just said”
about correcting two typographical errors.
Mere days after the hearing Needle indicated his intent to
ignore the court’s order—and his own promise to the court—
by telling opposing counsel that he was “working on” the re-
vised versions of the second amended pleadings, which
“would add certain details.” Judge Shadur held another hear-
ing for the sole purpose of making an already plain court or-
der even more plain. Nonetheless, later that day, Needle filed
a motion for leave to file the second amended pleadings un-
der seal, attaching the proposed filings that contained numer-
ous substantive changes. This brought on a new round of mo-
tions, including for sanctions.
The district court was not amused. Judge Shadur never-
theless gave Needle yet another chance to file compliant
pleadings. The third time was not a charm: Needle still did
not obey the court’s order. Because of Needle’s “stubborn re-
fusal to comply” with the court’s order to refile the pleadings
with only promised typographical corrections, Judge Shadur
rejected Needle P.C.’s proposed amended pleadings. Instead,
Judge Shadur treated the versions that Needle originally at-
tempted to file without leave to do so as Needle P.C.’s opera-
tive pleadings. The court also granted Royce’s fee petition in
the amount of $24,480, and further ordered that Needle pay
an equal amount, $24,480, to the Clerk of Court as a sanction
Nos. 18-2850, et al. 9
for the “burdens thrust on the judicial system by Needle’s
conduct.”
3. Delays in the litigation
At this point, after a year and a half of proceedings and
over three hundred docket entries, the case still had not pro-
gressed past the pleading stage. In addition to the amended
pleading debacle and willful violation of the court’s order,
over the course of the next several months Needle repeatedly
and continuously failed to adhere to scheduling deadlines
and requested extensions at the last minute—sometimes on
the actual due date of a submission—which in turn would up-
set preset schedules and hearings. To make matters worse,
while he requested extra time to complete necessary filings,
Needle took the time to file several lengthy submissions re-
lated to ancillary and irrelevant issues. “Because of the inap-
propriateness of Needle’s conduct during the limited period
since he was granted pro hac vice status, that status [was] re-
voked,” and Needle was “ordered to obtain responsible new
counsel to represent” Needle P.C. Further, the court struck
without prejudice Needle P.C.’s second amended counter-
claims so that “new counsel [could] give prompt considera-
tion to what portions of the now-stricken pleadings by Needle
P.C. can properly be considered for reassertion in compliance
with the objective and subjective good faith demanded by
Rule 11(b).” Consequently, two years into the litigation, Nee-
dle P.C. still did not have an operative pleading.
A month went by with Needle P.C. failing to retain new
counsel, so Needle filed a motion for extension of time to find
counsel. The court granted the motion, ordering Needle to
provide regular updates on his efforts, but also temporarily
reinstating Needle’s pro hac vice admission on a limited basis
10 Nos. 18-2850, et al.
so the case could proceed “in an orderly way.” The order re-
quiring Needle P.C. to obtain independent counsel remained
intact.
Three months later Needle still had not retained counsel
for Needle P.C., nearly fifteen months after local counsel
withdrew. Due to the failure to “comply with [the] Court’s
repeated orders to obtain counsel … coupled with (a) the liti-
gation tactics regularly employed by Needle in this action as
well as (b) the false statements previously revealed to have
been made by Needle in having sought and having obtained
pro hac vice status in the first place,” Judge Shadur revoked
Needle’s pro hac vice status once again.
Royce then moved for an order of default because Needle
P.C. had failed to defend the action by not obtaining counsel
for an unjustifiable period of time. The court set a briefing
schedule, under which Needle requested and was given sixty
days to respond. Like Groundhog Day, the day before his re-
sponse brief was due Needle moved for an additional two
weeks to file it. Needle claimed he just discovered he had not
ordered a transcript he apparently needed—an entirely
avoidable delay. The court granted the extension, but not
without consequences. The court imposed sanctions under
28 U.S.C. § 1927 in the form of the reasonable costs and fees
that Royce’s counsel incurred as a result of the further delay
and the additional appearance at a preset hearing.
Judge Shadur was set to retire soon, so the fee action was
randomly reassigned to Judge Pallmeyer pursuant to
28 U.S.C. § 294(b). When the case came to Judge Pallmeyer in
June 2017, it was two-and-a-half years old and had largely
been consumed by needless disputes.
Nos. 18-2850, et al. 11
At that point, Judge Shadur had ruled that Needle and
Royce together were entitled to one-third of the RICO settle-
ment. Two disputes remained. The first was whether retainer
payments made to the attorneys during the RICO action were
to be deducted from the aggregate attorney’s fee. The second
was the division of the aggregate attorney’s fee between
Royce and Needle pursuant to the co-counsel agreement.
4. Deduction of retainer payments
Judge Pallmeyer set an evidentiary hearing on the matter
of the retainer payments. Royce and the Amari plaintiffs
moved to bar Needle from appearing or participating as
counsel at the evidentiary hearing based on his past conduct
and the revocation of his pro hac vice status. Judge Pallmeyer
granted the motion to the extent Needle was barred from ap-
pearing as counsel for Needle P.C., but permitted Needle to
participate in the hearing to represent his personal interests.
During the evidentiary hearing, Needle cross-examined
the two witnesses who testified and presented himself as an
additional witness. He conducted a direct examination of
himself, testifying in narrative fashion, and was cross-exam-
ined as well. Needle also introduced exhibits during the evi-
dentiary hearing. Indeed, Needle had sent opposing counsel
about 1,400 pages of proposed exhibits in advance of the hear-
ing.
After the evidentiary hearing, Judge Pallmeyer ruled that
retainer payments totaling $62,789 were authorized by the
management committee and by Needle, and thus were to be
deducted from the share of attorney’s fees. As part of her de-
cision, Judge Pallmeyer noted that she “d[id] not find Mr.
Needle’s position credible.”
12 Nos. 18-2850, et al.
5. The Royce–Needle co-counsel fee division
Following the determination regarding the retainer pay-
ments, the Royce–Needle fee split, which required Needle
P.C.’s direct participation, was the sole remaining issue. The
district court yet again ordered Needle to retain counsel for
Needle P.C., and gave him thirty days to do so. On the last
day of the deadline, three attorneys from the law firm Cozen
O’Connor filed appearances for Needle P.C. The representa-
tion did not last long, less than three months, before Cozen
O’Connor withdrew from the case for good cause.2 Another
attorney, Frank Fusco, substituted as counsel for Needle P.C.
and continues to represent Needle P.C. on appeal.
The co-counsel agreement, which Needle drafted, pro-
vided that any attorney’s fee
will be divided as follows: half of any such fee will be
divided equally, regardless of time or effort of either of
us, and the second half of any such fee will be divided
in proportion to the time you and I have spent on this
matter, regardless of any hourly rate.
The district court first found that the fee-splitting provision
complied with the relevant rules of ethics and thus was valid.
Therefore, Needle and Royce would divide half of the fee
equally and the other half proportionally.
As to the proportional amount, Needle argued that the ap-
propriate time split was 75/25 in his favor. After reviewing the
2The circumstances surrounding Cozen O’Connor’s withdrawal as
counsel for Needle P.C. and whether Cozen O’Connor is entitled to its fees
in quantum meruit are the source of another dispute and are the subject of
a separate opinion issued today.
Nos. 18-2850, et al. 13
briefs and the records, the court estimated that the proper
proportional time division was 70/30 in favor of Needle, only
five percent less than Needle advocated. Therefore, at the end
of the day, Needle was entitled to sixty percent of the aggre-
gate contingent fee amount ((½ x 50%) + (½ x 70%)) and Royce
forty percent ((½ x 50%) + (½ x 30%)).
6. The end of the fee dispute
The district court entered final judgment on July 24, 2018.
The judgment precisely distributed the RICO action’s $4.2
million settlement (now $4,062,476.01 being held in the
court’s registry) among all Amari plaintiffs and all attorneys.
After the final judgment was entered, Needle P.C. moved
for a new trial or to alter the judgment pursuant to Federal
Rule of Civil Procedure 59. The crux of the motion was that
(1) Needle P.C. was not permitted to reinstate the second
amended counterclaim when it obtained new counsel, (2) the
court did not engage in the requisite fact finding required to
determine the allocation of the aggregate attorney’s fee be-
tween Royce and Needle, and (3) Needle P.C. is entitled to a
new evidentiary hearing on the retainer issue because Needle
was not permitted to represent the professional corporation
and submit pretrial and posttrial submissions on its behalf.
Judge Pallmeyer denied the motion. The issues overlap with
the issues presented on appeal, so we will address them as
appropriate below. Significantly, though, regarding Needle
P.C.’s challenge to the reinstatement of the second amended
counterclaim, the court noted that after Judge Shadur initially
struck it, both Cozen O’Connor and Mr. Fusco had ample op-
portunity to review the stricken pleading and seek reinstate-
ment (or leave to file a newly amended pleading) but did not
14 Nos. 18-2850, et al.
do so until Mr. Fusco eventually did in the Rule 59 motion
after final judgment.
The fee action was finally disposed of in the district court
after three-and-a-half-years of litigation. This appeal by Nee-
dle P.C. followed.
II. Discussion
Needle P.C. raises myriad issues on appeal. In general
terms, its challenges relate primarily to jurisdiction, the deter-
mination of the aggregate attorney’s fee under the contingent
fee agreement, the determination of the attorney’s fee split be-
tween Royce and Needle pursuant to the co-counsel agree-
ment, and the sanctions imposed against Needle.3 Though
many of the arguments are underdeveloped and impenetra-
ble, we address each argument raised in turn.
A. Jurisdiction
Needle P.C. starts with jurisdiction, as we do ourselves,
and asserts that the district court lacked “interpleader juris-
diction” to hear the fee action. As best can be discerned, Nee-
dle P.C. contends that the parties should have submitted the
entire attorney’s fee dispute to arbitration instead of bringing
it in federal court based on an arbitration provision. This is
3Needle P.C. also purports to raise another issue on appeal, that it
was error to allow the management committee to issue a schedule of dis-
tribution. But Needle P.C. lacks standing to bring this challenge. The dis-
tribution schedule sets forth what amount of the settlement (less the one-
third attorney’s fee) each Amari plaintiff is to receive. It in no way affects
Needle P.C.’s share of the attorney’s fee. See Lujan v. Defs. of Wildlife,
504 U.S. 555, 560 (1992).
Nos. 18-2850, et al. 15
not a jurisdictional argument, however, but a contractual
right-to-arbitrate argument.
The presence of a contractual arbitration provision cannot
confer federal jurisdiction. See Vaden v. Discover Bank, 556 U.S.
49, 58–59 (2009); Magruder v. Fid. Brokerage Servs. LLC, 818 F.3d
285, 287 (7th Cir. 2016) (“The Federal Arbitration Act, 9 U.S.C.
§§ 1–16, does not grant federal jurisdiction.”). But the inverse
is not also true; if there is an independent basis for federal ju-
risdiction, an arbitration provision does not strip the federal
court of its jurisdiction. “Subject-matter jurisdiction cannot be
forfeited or waived … .” Ashcroft v. Iqbal, 556 U.S. 662, 671
(2009). On the other hand, a party can waive a contractual
right to arbitration. Kawasaki Heavy Indus., Ltd. v. Bombardier
Recreational Prod., Inc., 660 F.3d 988, 994 (7th Cir. 2011). And
to the extent Needle had a right to arbitrate the attorney’s fee
dispute, he clearly waived it.
We will infer waiver of the right to arbitrate if, considering
the totality of the circumstances, a party acted inconsistently
with the right to arbitrate. Kawasaki, 660 F.3d at 994. This in-
cludes, among several other factors, “the diligence or lack
thereof of the party seeking arbitration,” which should
“weigh heavily” in the analysis. Cabinetree of Wis., Inc. v. Kraft-
maid Cabinetry, Inc., 50 F.3d 388, 391 (7th Cir. 1995). Needle
never moved to compel arbitration and invokes the arbitra-
tion provision for the first time on appeal. A delay of over
three-and-a-half years is alone sufficient to find waiver, par-
ticularly where Needle actively participated in the litigation.
See St. Mary’s Med. Ctr. of Evansville, Inc. v. Disco Aluminum
Prod. Co., 969 F.2d 585, 589 (7th Cir. 1992). But Needle’s delay
does not stand by itself.
16 Nos. 18-2850, et al.
On appeal, Needle tells us that he “questioned the use of
interpleader” before the district court. Quite the opposite,
Needle explicitly argued to the district court that “the binding
mediation provision does not encompass or require a stay of
Needle’s counterclaims,” which, like the matters the court ad-
judicated, involved “the determination of the aggregate attor-
neys’ fee.” Reading further, “Needle respectfully submits that
[the federal court] is the proper forum to resolve all claims to
the Settlement fund. Accordingly, the binding mediation pro-
vision should not stay any of the proceedings in this case.”
Needle’s affirmative, unequivocal representation to the dis-
trict court constitutes a waiver of the right to arbitrate and
slams the door shut on any assertion that he can invoke it
now. See Cabinetree, 50 F.3d at 390 (“[A]n election to proceed
before a nonarbitral tribunal for the resolution of a contractual
dispute is a presumptive waiver of the right to arbitrate.”).
We also confirm the district court’s subject-matter jurisdic-
tion to the extent Needle P.C. suggests it was lacking. “For
that purpose, we must look to the suit as a whole, and we
must assess whether jurisdiction was proper as of the time the
suit commenced.” Autotech Techs. LP v. Integral Research &
Dev. Corp., 499 F.3d 737, 742 (7th Cir. 2007). Royce alleges that
diversity jurisdiction existed at the time he filed his inter-
pleader complaint. Diversity jurisdiction requires (1) com-
plete diversity of citizenship between the plaintiffs and the
defendants, and (2) an amount in controversy that exceeds
$75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a); see,
e.g., Del Vecchio v. Conseco, Inc., 230 F.3d 974, 977 (7th Cir.
2000). Neither requirement is in dispute. In fact, Needle P.C.’s
principal brief readily admits as much: “There was diversity.
… The settlement exceeded $75,000, as did many claims on
it.” And our own independent review confirms that the
Nos. 18-2850, et al. 17
requirements of § 1332(a) were met in this case. We are satis-
fied that the district court had jurisdiction over Royce’s inter-
pleader claim.
B. Interpretation of the contingent fee agreement
Needle P.C. challenges the district court’s motion to dis-
miss ruling, which he contends misconstrued the plain mean-
ing of “pursuant to” in the attorney’s fee provision of the con-
tingent fee agreement. We review a district court’s dismissal
for failure to state a claim without deference. Shipley v. Chi.
Bd. of Election Comm’rs, 947 F.3d 1056, 1060 (7th Cir. 2020). We
take all well-pleaded facts as true and draw all reasonable in-
ferences in the nonmoving party’s favor. Id. at 1060–61.
The attorney’s fee provision, section IV.1 of the contingent
fee agreement, provides that Needle and Royce, together,
will be entitled to a contingent fee equal to the greater
of: (A) any fee paid to us pursuant to a judgment and
award of fees under the RICO or other fee shifting stat-
ute or pursuant to any settlement agreement, or
(B) one-third of any recovery actually received, with
the recovery to be computed as any and all damages,
treble damages, punitive damages, costs, expenses, at-
torney’s fees or other compensation actually paid,
whether pursuant to settlement agreement or judg-
ment, less any retainer paid ….
Needle P.C. claims that subparagraph (A) of the fee provision
controls the attorney’s fee, as opposed to subparagraph (B).
This is because, according to Needle, a $2.5 million attorney’s
fee was “separately negotiated during the discussions that led
to the Settlement” of the RICO action, which was allegedly
included in the lump-sum settlement amount. Under his
18 Nos. 18-2850, et al.
reading of the provision, then, subparagraph (A) applies be-
cause the attorney’s fee is a “fee paid to us … pursuant to any
settlement agreement.” Otherwise, the one-third floor pro-
vided for in subparagraph (B) would net him far less.
The argument turns on the interpretation of a contract for
fees, so we look to Illinois contract law. In re Solis, 610 F.3d
969, 972 (7th Cir. 2010). In Illinois, words in a contract that are
clear and unambiguous must be given their plain and ordi-
nary meaning. Thompson v. Gordon, 948 N.E.2d 39, 47 (Ill.
2011); see also In re Solis, 610 F.3d at 972 (“In Illinois (as in all
states), a court gives contract terms their ‘common and gener-
ally accepted meaning,’ as informed by the ‘context of the
contract as a whole.’” (quoting Krilich v. Am. Nat’l Bank & Tr.
Co. of Chi., 778 N.E.2d 1153, 1164 (Ill. App. Ct. 2002)). Here,
the contingent fee agreement is clear on its face and its plain
meaning easily resolves the issue.
It is uncontested that the RICO settlement agreement does
not expressly provide for attorney’s fees. The settlement
agreement provides for a lump-sum settlement payment of
$4.2 million to “Plaintiffs” and sets forth a payment schedule.
There is no term, reference, or hint in the settlement agree-
ment to attorney’s fees. Not even an implication. We could
stop here—it defies common sense to argue that that an attor-
ney’s fee is “pursuant to” a settlement agreement that says
absolutely nothing of the sort.
Nevertheless, Needle P.C. insists that “pursuant to” car-
ries a broad meaning that does not demand that the settle-
ment agreement state the attorney’s fee. Of course, “pursuant
to” can have multiple dictionary definitions. Indeed, “pursu-
ant to” can mean: “In compliance with; in accordance with;
under;” “As authorized by; under;” or “In carrying out.”
Nos. 18-2850, et al. 19
Pursuant to, Black’s Law Dictionary (11th ed. 2019); see also
Fruitt v. Astrue, 604 F.3d 1217, 1220 (10th Cir. 2010) (using
same definitions of “pursuant to”); Acad. Imaging, LLC v. So-
terion Corp., 352 F. App’x 59, 74 (6th Cir. 2009) (same); Tenn.
Gas Pipeline Co. v. FERC, 17 F.3d 98, 104–05 (5th Cir. 1994)
(same). But under any definition, the meaning is the same in
this context. If the alleged attorney’s fee is “authorized by”
the settlement agreement, or the attorney’s fee is to be paid
“in compliance with” or as part of “carrying out” the settle-
ment agreement, then the attorney’s fee must find its roots in
the settlement agreement. There must be something, but there
is nothing. There is no plausible construction of “pursuant to”
that would mean an allegedly “separately negotiated,” non-
contractual, and nonidentifiable fee is a fee paid “pursuant
to” the settlement agreement.
Reading the contract as a whole points to the same conclu-
sion. The contingent fee agreement uses the phrase “pursuant
to” twice in subparagraph (A). While Needle focuses exclu-
sively on the second use in subparagraph (A), “pursuant to
any settlement agreement,” the first use undercuts any argu-
ment he may have had. The first half of subparagraph (A)
states: “any fee paid to us pursuant to a judgment and award
of fees under the RICO or other fee shifting statute.” A fee
paid “pursuant to” a statutorily authorized fee award is nec-
essarily expressly stated, at least in some minimal form. No
judgment could “award” attorney’s fees pursuant to a fee
shifting statute yet leave the actual “award” unstated. So
when the very same phrase “pursuant to” is used in the sec-
ond half of the clause, we construe it the same. An attorney’s
fee paid “pursuant to” a settlement agreement is a fee at least
minimally indicated therein.
20 Nos. 18-2850, et al.
Needle’s argument also suffers from a fatal factual flaw.
Over the course of many years of litigation, Needle has relent-
lessly avowed that the $2.5 million attorney’s fee was “sepa-
rately negotiated,” yet he has never identified a single piece
of evidence that supports his claim. We scoured the record too
and came up empty. Tellingly, one of Needle’s own clients
foreshadowed this outcome when this fee dispute first mate-
rialized: “There is no question, the settlement language
clearly states the plaintiffs have been awarded 4.2 million dol-
lars. There is NO MENTION of what the fees are to be paid to
attorneys and no mention of awarding of fees under RICO.”
That is exactly right.
The plain language of the contingent fee agreement dic-
tates that the attorney’s fee is determined under section
IV.1(B), or one-third of the settlement payment, less any re-
tainer fees.
C. Striking the second amended pleadings
Next, Needle P.C. argues that it was “improperly pre-
vented from proceeding on well-founded defenses and
claims.” The challenge is a mishmash of statements and argu-
ments, but appears to stem from the district court’s decision
to strike Needle P.C.’s second amended pleadings without
prejudice. The court, on its own or on motion, “may strike …
any redundant, immaterial, impertinent, or scandalous mat-
ter.” Fed. R. Civ. P. 12(f). We review a district court’s decision
to strike for an abuse of discretion and will disturb that deci-
sion only if it is unreasonable and arbitrary. Delta Consulting
Grp. v. R. Randle Const., Inc., 554 F.3d 1133, 1141 (7th Cir. 2009).
Recall that after Needle P.C. had gone six months without
counsel and brought the case to a “screeching halt,” Judge
Nos. 18-2850, et al. 21
Shadur reluctantly permitted Needle to appear pro hac vice
to move the proceedings along. In doing so, Judge Shadur
also permitted Needle to refile his second amended counter-
claims, which had previously been stricken when Needle at-
tempted to file the pleadings without leave and while not au-
thorized to appear in the case. But the court made clear on
several occasions that Needle was only to refile the second
amended pleadings and was not to make any substantive
changes. Needle flagrantly ignored Judge Shadur’s repeated
orders and filed the second amended counterclaims with nu-
merous substantive changes. Because Needle did so, the court
opted to ignore the newly filed second amended pleadings
and treat the original filed versions of the second amended
counterclaims as Needle P.C.’s operative pleadings.
Needle’s pro hac vice status lasted only four months. In
addition to deliberately disregarding the court’s order about
filing the second amended pleadings, Needle continued to en-
gage in “obstructionist tactics” and disrupt the orderly pro-
gress of litigation. “Because of the inappropriateness of Nee-
dle’s conduct during the limited period since he was granted
pro hac vice status,” Judge Shadur revoked it. The court also
struck without prejudice Needle P.C.’s second amended
counterclaims. But, critically, the court did so with the express
intention that “new counsel should give prompt considera-
tion to what portions of the now-stricken pleadings by Needle
P.C. can properly be considered for reassertion in compliance
with the objective and subjective good faith demanded by
Rule 11(b).”
When Needle finally obtained independent counsel for
Needle P.C., first Cozen O’Connor and then Mr. Fusco, nei-
ther set of counsel moved to reassert the second amended
22 Nos. 18-2850, et al.
counterclaims (or any version of an amended pleading) as
Judge Shadur invited. In fact, Cozen O’Connor sought to file
amended pleadings but it was Needle who “rejected Cozen’s
advice and only authorized Cozen to file a motion for leave to
file the sur-reply and not the amended answers.” It was not
until after final judgment was entered that Mr. Fusco even at-
tempted to reinstate the stricken pleadings; but at that point
it was too little too late.4
The court did not abuse its discretion in striking Needle
P.C.’s pleadings, particularly because Judge Shadur did so
without prejudice and with an explicit direction to new coun-
sel to seek reinstatement if appropriate. Rather, given the liti-
gation history up until that point—almost two years—the de-
cision to strike the pleadings subject to an investigation by in-
dependent counsel was entirely reasonable and certainly not
arbitrary. Needle P.C. was in no way “prevented” from pro-
ceeding on any well-founded claims had counsel sought to
timely reassert them.
And even if Judge Shadur’s decision to strike the pleading
is not viewed through the lens of Rule 12(f), district courts
“possess certain inherent powers, not conferred by rule or
statute, to manage their own affairs so as to achieve the or-
derly and expeditious disposition of cases.” Goodyear Tire &
Rubber Co. v. Haeger, 137 S. Ct. 1178, 1186 (2017) (quotations
omitted). That authority includes “the ability to fashion an
4 Further, during a status conference after Mr. Fusco appeared and
before final judgment was entered, opposing counsel alerted the court,
and thus Mr. Fusco, that Needle P.C.’s pleadings had been stricken with-
out prejudice subject to new counsel vetting them and that no one has yet
sought to reassert them. It was not for another three months, until after
final judgment, that Mr. Fusco moved to do so.
Nos. 18-2850, et al. 23
appropriate sanction for conduct which abuses the judicial
process.” Chambers v. NASCO, Inc., 501 U.S. 32, 44–45 (1991).
We need not dwell on this discussion; Needle’s conduct is
well-documented and speaks for itself, particularly with re-
spect to the second amended pleadings, and the district court
would have been well within its discretion to strike the plead-
ings as a sanction for Needle’s misconduct.
D. Revocation of Needle’s pro hac vice status
As noted above, the district court revoked Needle’s pro
hac vice admission twice during the litigation. But when
Judge Shadur did so the second time, Needle claims the sua
sponte revocation violated his Fifth Amendment due process
rights because he was entitled to notice and a hearing. We re-
view a district court’s decision to revoke an attorney’s admis-
sion pro hac vice for an abuse of discretion.
For support of this position, Needle relies on Johnson v.
Trueblood, 629 F.2d 302 (3d Cir. 1980) (per curiam). In that case,
the Third Circuit “believe[d] that some type of notice and an
opportunity to respond are necessary when a district court
seeks to revoke an attorney’s pro hac vice status.” Id. at 303.
As to how much is “some” and what “type” of notice is re-
quired, “flexibility is dictated because in some cases there
may be circumstances where formal notice is inappropriate.”
Id. at 303–04. The form of the notice is left to the district court’s
discretion, as long as the notice “adequately inform the attor-
ney of … the conduct of the attorney that is the subject of the
inquiry, and the specific reason this conduct may justify rev-
ocation.” Id. at 304. Nor is a “full scale hearing … required in
every case,” only “a meaningful opportunity to respond to
identified charges.” Id. We agree with Johnson’s general prin-
ciple that some form of notice and opportunity to respond is
24 Nos. 18-2850, et al.
required before a court revokes an attorney’s pro hac vice ad-
mission. But Johnson does not require the procedural safe-
guards that Needle suggests, such as a full hearing in front of
a different judge.
Admission pro hac vice is a privilege, not a right. See Leis
v. Flynt, 439 U.S. 438, 442 (1979) (per curiam). We recognize
that attorneys may have an interest in that privilege, but that
does not abridge the district court’s inherent authority “to
control admission to its bar and to discipline attorneys who
appear before it.” Chambers, 501 U.S. at 43 (citing Ex parte Burr,
9 Wheat. 529, 531 (1824)); In re Snyder, 472 U.S. 634, 645 n.6
(1985) (“Federal courts admit and suspend attorneys as an ex-
ercise of their inherent power.”). When an attorney abuses the
privilege of appearing pro hac vice, the district court may re-
voke that privilege as a sanction for misconduct. All that is
required before an attorney’s admission pro hac vice is re-
voked is adequate notice of the conduct in question and a rea-
sonable opportunity to be heard on the matter. We leave it to
the sound discretion of the district court to determine the ap-
propriate notice and opportunity to respond in each individ-
ual case.
Whatever minimal forms of notice and hearing may be re-
quired, this is not the case to define the contours. Needle had
ample notice of the subject misconduct and more than enough
opportunity to respond and conform his behavior to appro-
priate professional standards before the court revoked his pro
hac vice status. Here is just a small sampling of the notice Nee-
dle received:
 “I must tell you that you try anybody’s patience.”
Nos. 18-2850, et al. 25
 “[I]t is inappropriate for you to seek to take ad-
vantage of a grant that was simply intended to
make sure that we had an un-redacted version
available … because we then get ourselves into the
kind of discussion that has interrupted this case to
an extraordinarily extent by what I view as digres-
sions.”
 “You know, what I have seen here, as I indicated, is
a continued pattern of really distorted aspects of
this thing by taking snippets out of context and
then attempting to, I think, twist them to Mr. Nee-
dle’s own use.”
 “[A] case that has proved itself to be endless and to
which endlessness you have contributed extraordi-
narily.”
 “[This case has] been frustrated by Needle’s having
preferred—not for the first time—to pursue his
own agenda in generating work product on suit-re-
lated matters, rather than complying with the
court-ordered timetable that would have given
other counsel and this Court the intended oppor-
tunity to review his input in advance of the hear-
ing.”
 “[T]he nature of Needle’s irresponsible behavior
cannot be permitted to paralyze this litigation and
thus to keep it from reaching the merits as to all the
parties to this litigation.”
Indeed, the court had already revoked Needle’s pro hac vice
once and then reinstated it before revoking it again for his
continued misconduct. It is unclear what additional notice
26 Nos. 18-2850, et al.
Needle believes he is entitled to. And not only could Needle
have been “heard” on the matter by simply conducting him-
self appropriately, he also participated in every hearing and
had the opportunity to respond to each of the court’s admon-
itions.
Finally, we note that Needle’s criticism is questionable to
begin with. Only one month after Needle’s pro hac vice status
was revoked the second time, Judge Shadur again reinstated
it on a limited basis so that Needle could address the legal
questions raised by the pleadings. Further, Judge Shadur in-
dicated that Needle could continue to appear pro hac vice if
he obtained independent counsel to act as co-counsel. Nee-
dle’s complaint is much ado about nothing.
E. The alleged “default”
Needle P.C. repeatedly claims that it was defaulted. There
is no entry of default in the record. Although Royce did file a
motion for default because Needle P.C. had “‘failed to … de-
fend’ by failing to obtain counsel for nearly 11 months,” the
court never granted that motion and Needle P.C. was never
otherwise defaulted. Needle P.C. litigated the case to the end.
F. The co-counsel fee division
When Judge Pallmeyer was reassigned the case, Judge
Shadur had already ruled that the aggregate attorney’s fee
was one-third of the settlement amount under the fee agree-
ment. What was left of the fee dispute was the division of that
one-third between Royce and Needle. Judge Pallmeyer recog-
nized that “any resolution by some decision-maker … is not
going to make everybody happy,” and a quick and efficient
resolution was the best way to bring this never-ending case to
a close without continuing to incur unnecessary litigation
Nos. 18-2850, et al. 27
costs. Both sides submitted simultaneous five-page briefs ac-
companied by large appendices in support of their positions.
Needle contends that the district court erred in determining
the division of the attorney’s fee without a trial.
We review an attorney’s fee award for an abuse of discre-
tion. Rexam Beverage Can Co. v. Bolger, 620 F.3d 718, 738 (7th
Cir. 2010) (reviewing reasonableness of fees in fee petition for
abuse of discretion). Though this attorney’s fee dispute is not
an assessment of the reasonableness of a fee petition, we see
no practical difference that should demand a more stringent
standard of review. Both are fact-intensive inquiries that are
appropriate for the highly deferential standard given the dis-
trict court’s superior understanding of the litigation. See Dun-
ning v. Simmons Airlines, Inc., 62 F.3d 863, 872 (7th Cir. 1995).
And just like with a fee award, a district court is “not obli-
gated to conduct a line-by-line review of the bills to assess the
charges for reasonableness.” Rexam, 620 F.3d at 738. We have
recognized “the impracticalities of requiring courts to do an
item-by-item accounting.” Harper v. City of Chicago Heights,
223 F.3d 593, 605 (7th Cir. 2000).
The co-counsel agreement provided that any attorney’s
fee “will be divided as follows: half of any such fee will be
divided equally, regardless of time or effort of either of us,
and the second half of any such fee will be divided in propor-
tion to the time you and I have spent on this matter, regardless
of any hourly rate.” Thus, the fee division is subject to two
parts: an equal split and a proportional split. Although fee-
splitting agreements are subject to scrutiny under the rules of
professional conduct, the court found that the co-counsel
agreement’s fee-splitting provision complied with the
28 Nos. 18-2850, et al.
relevant rules of ethics and was thus valid. Needle does not
challenge that determination.
Turning to the second half of the fee-division formula—
the proportional split—Needle sought a 75/25 split. The dis-
trict court reviewed the parties’ submissions and the associ-
ated billing records and then made a reasoned determination
that the appropriate proportional split was 70/30 in Needle’s
favor, or five percent less than Needle claimed. He finds that
determination riddled with error and injustice yet does not
point to any specific or identifiable error. Rather, Needle as-
serts a general right to a “trial or referral” on this issue under
Federal Rule of Civil Procedure 55(b)(2). He is mistaken. Rule
55(b) relates to default judgments; this was not a default judg-
ment. And even then, the rule states only that a court may con-
duct a hearing if necessary, not that it must. That decision too
rests within the discretion of the district court. Dundee Cement
Co. v. Howard Pipe & Concrete Prod., Inc., 722 F.2d 1319, 1323
(7th Cir. 1983). Needle was not entitled to a trial, so we need
address only the reasonableness of the district court’s deci-
sion.
We cannot overlook an important detail in this fee dispute:
Royce kept detailed, contemporaneous billing records,
whereas Needle did not. Instead, Needle determined the
number of hours worked by examining his “electronic rec-
ords … of telephone, email, and computer activities.” Worse
yet, Needle did not even begin preparing his reconstructed
billing records until many months after the underlying RICO
action was settled and dismissed. (And apparently, he was
still in the midst of compiling his records of “time and activi-
ties in 2012 and 2013” years later in mid-2017.) Those recon-
structed daily time entries covered nearly six years of
Nos. 18-2850, et al. 29
litigation. Further, Judge Pallmeyer noted that Needle’s
“daily entries for the month of August 2012 are identical to
the daily entries for August 2013; his daily entries for Novem-
ber 2012 are identical to the daily entries for the following
year, as well.” And many of his entries were simply implau-
sible: “On 11 days, he ‘billed’ more than 20 hours; on another
35 days, he billed 17 to 20 hours, and on 43 days he billed be-
tween 15 and 17 hours.” Notwithstanding the fact that Nee-
dle’s reliance on supposed billing records was on “shaky
ground,” the court estimated that the appropriate division for
the proportional half of the fee formula was 70/30 in favor of
Needle.
The district court thoroughly reviewed all of the relevant
materials, which included extensive billing records, and
made a reasonable determination based on the evidence. We
hold that the district court did not abuse its discretion.
G. The retainer payments
The contingent fee agreement provided, in relevant part,
that the attorney’s fee was “one-third of any recovery actually
received, less any retainer paid pursuant to Section V below.”
Royce and the Amari plaintiffs claimed that approximately
$62,000 had been paid in retainer fees and should be deducted
from the one-third share. Needle contested that the Amari
plaintiffs had paid any retainer fees. The district court held an
evidentiary hearing to resolve the dispute. Needle claims er-
ror but we detect none.
Needle fully participated in the evidentiary hearing,
though not as counsel for Needle P.C. and only to represent
his personal interests. During the hearing, Needle cross-ex-
amined the two witnesses presented—a representative of the
30 Nos. 18-2850, et al.
management committee for the Amari plaintiffs and Royce.
Needle then presented himself as a witness and testified in
narrative fashion. He was cross-examined as well. Needle
also introduced exhibits during the evidentiary hearing.
After the evidentiary hearing, the district court ruled that
the management committee and Needle authorized retainer
payments totaling $62,789 and such fees were to be deducted
from the share of the attorney’s fee pursuant to the contingent
fee agreement. As part of her decision, Judge Pallmeyer noted
that she “d[id] not find Mr. Needle’s position credible.”
Needle had a full and fair opportunity to be heard on this
issue and participate in the evidentiary hearing. And without
him being able to articulate a definable error, we decline to
disturb the district court’s sound ruling. The retainer pay-
ments totaling $62,789 were properly deducted from the at-
torney’s fee.
H. Sanctions
The district court sanctioned Needle four times. One sanc-
tion was for filing a frivolous counterclaim in violation of
Rule 11(b), and the other three were for vexatious and ob-
structive conduct under 28 U.S.C. § 1927. Needle does not ap-
peal the amount of any sanction, just the fact that the court
imposed each one. We review the Rule 11 sanction first and
then take up the § 1927 sanctions together.
1. Rule 11(b) sanction
The district court sanctioned Needle P.C. for filing coun-
terclaims seeking a declaratory judgment that the attorney’s
fee is governed by section IV.1(A) of the contingent fee agree-
ment—claims the court deemed legally frivolous. Federal
Rule of Civil Procedure 11(b) requires that attorneys certify
Nos. 18-2850, et al. 31
“to the best of [their] knowledge, information, and belief,
formed after an inquiry reasonable under the circumstances”
that their filings have adequate foundation in fact and law
and lack an “improper purpose.” Fed. R. Civ. P. 11(b). The
rule “is principally designed to prevent baseless filings.”
Brunt v. Serv. Emps. Int’l Union, 284 F.3d 715, 721 (7th Cir.
2002). If the court determines that a lawyer or party has vio-
lated Rule 11(b), “the court may impose an appropriate sanc-
tion on any attorney, law firm, or party that violated the rule
or is responsible for the violation.” Fed. R. Civ. P. 11(c). We
review the decision to impose Rule 11 sanctions for abuse of
discretion. MAO-MSO Recovery II, LLC v. State Farm Mut.
Auto. Ins. Co., 935 F.3d 573, 583 (7th Cir. 2019).
Needle P.C. was not sanctioned because its position
turned out to be wrong, but because it was “frivolous, disre-
garding what anyone having taken a first-year contracts class
could identify as the pivotal legal issues” and “utterly devoid
of merit.” There was no attempt to construe the contingent fee
agreement “according to generally accepted principles of con-
tract interpretation.” Like here, Needle P.C. pointed to differ-
ent dictionary definitions of “pursuant to,” but “the only
thing that mattered” was what the phrase meant in the con-
tract. The contingent fee agreement and in turn the settlement
agreement were both plain. The settlement agreement “[i]n
no way could … be read to have made an award of attorneys’
fee,” and thus an alleged “separately negotiated” fee could
not be “pursuant to any settlement agreement.” Needle P.C.’s
contract interpretation arguments were “legally frivolous.”
“Frivolous or legally unreasonable arguments … may incur [a
Rule 11] penalty,” Berwick Grain Co. v. Ill. Dep’t of Agric.,
217 F.3d 502, 504 (7th Cir. 2000) (per curiam), and Needle
P.C.’s did here.
32 Nos. 18-2850, et al.
The district court also found that Needle P.C. presented its
counterclaims for an improper purpose. On several occasions
the court “had admonished [Needle] that it did not see how
those arguments could be presented consistently with Rule
11,” yet Needle charged ahead with a “determined indiffer-
ence to the legal merits of the case.” “The very point of Rule
11 is to lend incentive for litigants ‘to stop, think and investi-
gate more carefully before serving and filing papers.’” Ber-
wick, 217 F.3d at 505 (quoting Cooter & Gell v. Hartmarx Corp.,
496 U.S. 384, 398 (1990)). Needle disregarded both Rule 11
and the district court’s warnings and filed the frivolous plead-
ings anyway, so “he has no basis to complain about the dis-
trict court's decision to sanction him.” Id.
2. Section 1927 sanctions
“Any 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. Sanctions imposed pursuant to § 1927 are re-
viewed for an abuse of discretion. Bell v. Vacuforce, LLC,
908 F.3d 1075, 1081 (7th Cir. 2018).
Needle was sanctioned three separate times for vexatious
conduct. We review each sanction “not in isolation but in light
of ‘the entire procedural history of the case.’” e360 Insight, Inc.
v. Spamhaus Project, 658 F.3d 637, 643 (7th Cir. 2011) (quoting
Long v. Steepro, 213 F.3d 983, 986 (7th Cir. 2000)). And when,
as here, an attorney’s “contumacious conduct threatens a
court’s ability to control its own proceedings,” the district
court’s inherent authority to impose sanctions is “at its pinna-
cle.” Fuery v. City of Chicago, 900 F.3d 450, 464 (7th Cir. 2018).
The procedural history of this case more than supports the
Nos. 18-2850, et al. 33
sanctions—the record is “replete with delays, non-responses
to court orders, and missed deadlines.” Patterson v. Coca–Cola
Bottling Co., 852 F.2d 280, 284 (7th Cir. 1988) (per curiam) (af-
firming sanction of dismissal). In view of Needle’s pattern of
vexatious and obstructive conduct, the sanctions are easy to
justify in this case. We briefly touch on each one.
First, the district court sanctioned Needle when he tried to
attend a hearing telephonically from a courthouse in Philadel-
phia. Needle argues he should not be sanctioned for a “bad
telephone connection” or an uncontrollable “telephone
glitch.” His attempt to shift blame is belied by the record. The
court scheduled the hearing specifically to address Needle’s
pro hac vice application; his participation was indispensable.
But Needle fails to recognize that the court permitted him to
appear telephonically to accommodate him, not the other way
around. Needle abused that accommodation by taking the call
in a public place with too much ambient noise to participate
in the hearing, forcing it to be rescheduled. The blame for the
aborted hearing is Needle’s alone. The court reasonably im-
posed modest sanctions—the costs of Royce’s and the Amari
plaintiffs’ attendance, $600 and $700, respectively—for Nee-
dle unnecessarily multiplying the proceedings.
Second, Needle calls it an “egregious abuse of discretion”
to sanction him for filing the second amended pleadings con-
taining numerous substantive changes in violation of the
court’s order. This sanction speaks for itself. The court gave
Needle leave to refile the second amended pleadings but ex-
plicitly instructed Needle not to make any substantive
changes. The court’s first order was unmistakable, but the
court twice more held a hearing just to say it again. Despite
three separate instructions, Needle flagrantly and
34 Nos. 18-2850, et al.
unashamedly disobeyed the court’s order. The district court
outlined the history of “Needle’s continuing—and continuous
—intransigence and of his obstructionist tactics” before find-
ing that “the egregiousness of Needle’s conduct” warrants
both the “payment of the requested amount of $24,480 to
Royce in partial recompense for the services rendered by his
counsel” as well as a further sanction “to deal with the bur-
dens thrust upon the judicial system by Needle’s conduct” of
“a like sum—again, $24,480—[to] be paid by Needle to the
Clerk of Court for that reason.” The sanction was reasonable
compared to the vexatiousness of Needle’s conduct.
Third, and finally, the court sanctioned Needle after he re-
quested a two-week extension of time to file a brief. Because
the court granted the extension, Needle characterizes this as a
sanction merely for “asking” for it. Only by ignoring the sur-
rounding circumstances can Needle make this argument. Af-
ter Royce filed a motion to dismiss and for an order of default,
Needle requested and the court gave him sixty days to re-
spond. The court set a hearing for shortly after Needle’s re-
sponse was due. The day before the filing deadline Needle
asked for an extension. The reason, he claimed, was that the
previous day, or the fifty-eighth day of his response time,
Needle realized that he had not ordered a hearing transcript
that he felt was necessary for his response. There is no expla-
nation for why it took fifty-eight days to look for this suppos-
edly critical transcript. Although the court granted the two-
week extension, it also imposed the reasonable costs and fees
that opposing counsel incurred as a result of Needle’s conduct
further delaying the matter and requiring the additional ap-
pearance at the preset hearing. And contrary to Needle’s be-
lief, there is nothing inconsistent with a court both granting
an extension of time and assessing the costs incurred due to
Nos. 18-2850, et al. 35
the extension against the requester, especially on the record
in this case. Needle had a long history of delaying the pro-
ceedings and sanctions were appropriate for unreasonably
causing further delay.
The district court acted reasonably—and with considera-
ble restraint—in each instance by sanctioning Needle for his
conduct. We find no abuse of discretion whatsoever.
III. Conclusion
This relatively straightforward attorney’s fee dispute gov-
erned by contract was made exceedingly difficult by one at-
torney who took a frivolous legal position and turned it into
a multiyear litigation rife with delays and misconduct. The
district court did not err in its rulings or abuse its discretion
in imposing sanctions. The district court’s judgment is
AFFIRMED.