W. James Mac Naughton v. Shai Harmelech

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 18-1047
_____________
W. JAMES MAC NAUGHTON,
Appellant
v.
SHAI HARMELECH; CABLE AMERICA, INC., d/b/a Satellite America
and USA Satellite & Cable, Inc.; USA SATELLITE & CABLE, INC.
______________
Appeal from the United States District Court
for the District of New Jersey
(District Court No. 2-09-cv-05450)
District Judge: Honorable Kevin McNulty
______________
Submitted Under Third Circuit L.A.R. 34.1(a)
March 9, 2020
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Before: McKEE, AMBRO, and PHIPPS, Circuit Judges.
(Opinion filed: June 23, 2020)
_______________________
OPINION*
______________________
McKee, Circuit Judge
Attorney W. James Mac Naughton appeals the denial of his motion for pro se
attorney’s fees. Mac Naughton argues that the New Jersey Supreme Court’s decision in
*
This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Segal v. Lynch, 48 A.3d 328 (N.J. 2012), does not prevent him from recovering such fees
and non-taxable litigation costs because it does not apply retroactively. The District Court
denied Mac Naughton’s motion in a well-reasoned Memorandum Opinion1 that adopted
and supplemented the Magistrate Judge’s thorough Report and Recommendation.2 After a
plenary review,3 we agree with the District Court’s assessment. Thus, for the reasons set
forth in the Memorandum Opinion, as well as our independent assessment of Mac
Naughton’s retroactivity argument, we will affirm.4
The Segal Court held that pro se attorney-litigants cannot recover attorneys’ fees
under a fee-shifting statute.5 However, the New Jersey Supreme Court did not specifically
decide whether Segal applies retroactively or whether pro se attorney-litigants are barred
from collecting contractually-based non-taxable costs. Mac Naughton raises these two
points in his arguments on appeal. He argues that Segal does not retroactively apply to his
2009 contract for pro se attorney’s fees, or at least does not apply to the time he spent
acting pro se before Segal.6 He also argues that Segal does not apply to his contractually-
1
A-3-7.
2
A-8-18.
3
Raab v. City of Ocean City, 833 F.3d 286, 292 (3d Cir. 2016) (“We review a district
court’s denial of attorney’s fees for abuse of discretion. . . . However, if the fee
application was denied based on the district court’s conclusions on questions of law, our
review is plenary.” (citation omitted)).
4
The District Court had jurisdiction pursuant to 28 U.S.C. § 1332(a). We have
jurisdiction pursuant to 28 U.S.C. § 1291.
5
Segal v. Lynch, 48 A.3d 328, 346–48 (N.J. 2012).
6
Id. at 9. As Mac Naughton does not argue that Segal does not apply to contractually-
based attorney’s fees, we will not address that issue. See Appellant Br., 9.
2
based litigation costs. Resolving these questions requires us to predict how the New Jersey
Supreme Court would handle these issues.7
New Jersey follows the traditional rule of “a presumption in favor of
retrospectivity.”8 To determine whether a “new rule of law” should be applied retroactively
or prospectively, New Jersey courts consider the following policy factors: “(1) the purpose
of the rule and whether it would be furthered by a retroactive application, (2) the degree of
reliance placed on the old rule by those who administered it, and (3) the effect a retroactive
application would have on the administration of justice.”9 Applying these factors, we
conclude Segal should be applied retroactively.
First, Segal did not create a new rule of law, rather the Segal court reconciled a split:
“The conflicting decisions found in our trial and appellate courts express a variety of policy
considerations in support of or in opposition to permitting attorneys to be awarded counsel
fees for representing themselves.”10 Second, the goals of Segal are served by retroactive
application. All pro se litigants will be treated equally and thereby maintain public
confidence in the judicial system.11 Third, retroactive application of Segal does not cause
substantial inequitable results. As there was a split of authority on this issue, pro se
7
Hunt v. U.S. Tobacco Co., 538 F.3d 217, 220–21 (3d Cir. 2008).
8
Twp. of Stafford v. Stafford Twp. Zoning Bd. of Adjustment, 711 A.2d 282, 287 (N.J.
1998). See also In re Contest of Nov. 8, 2011 Gen. Election of Office of New Jersey Gen.
Assembly, 40 A.3d 684, 707 (N.J. 2012).
9
Twp. of Stafford, 711 A.2d at 287–88 (quoting State v. Knight, 678 A.2d 642, 651–52
(N.J. 1996)).
10
Segal, 48 A.3d at 346–48 (citing appellate and trial level decisions between 1994 and
2011 that fluctuated between permitting or barring pro se attorney’s fees).
11
Id. at 347-48.
3
attorney-litigants cannot reasonably argue their detrimental reliance on now overturned
precedent. Moreover, as to Mac Naughton specifically, given that he argued for the
application of Illinois law before the District Court, he cannot now argue that he
detrimentally relied on pre-Segal case law when drafting the promissory agreement and
litigating its enforcement.12
Finally, as to Mac Naughton’s claim that Segal does not apply to his non-taxable
litigation costs, we also find his argument does not have merit. Similarly situated pro se
litigants who are not attorneys would not be able to recover those fees or costs. Thus,
Segal’s emphasis on not creating two classes of pro se litigants with different remedies
bars Mac Naughton’s recovery.13
For the foregoing reasons, we will affirm the District Court’s opinion and the pro
se application for attorney’s fees and non-taxable costs is denied.
12
See Appellant Br., 10, 14; see also A-12.
13
Segal, 48 A.3d at 347 (quoting Gruber & Colabella, P.A. v. Erickson, 784 A.2d 758,
761 (N.J. Super. Law. Div. 2001)) (“Most significantly, one court emphasized that ‘to
hold otherwise would in effect create two separate classes of pro se litigants—those who
are attorneys and those who are not—and grant different rights and remedies to each.’”
(internal quotation marks omitted)).
4