Ampro Energy, L.P. v. Forgey

United States Court of Appeals
Fifth Circuit
F I L E D
In the February 8, 2007
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
_______________
m 06-20073
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AMPRO ENERGY, L.P.,
Plaintiff,
VERSUS
JASON P. FORGEY, ET AL.,
Defendants,
ATTORNEY PETER ANDREW KRAUS,
Movant-Appellant.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
m 4:04-CV-3389
______________________________
Before SMITH, BARKSDALE, and DENNIS, Peter Kraus appeals the imposition of sanc-
Circuit Judges. tions. Finding no abuse of discretion, we
affirm.
PER CURIAM:*
*
Pursuant to 5TH CIR. R. 47.5, the court has
*
determined that this opinion should not be pub- (...continued)
lished and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
(continued...)
I. their counsel.” Five days after the order was
After the instant lawsuit was filed, Kraus issued, Kraus e-mailed plaintiff’s counsel
consulted with defendant Stream Gas & Elec- about the October 31 status report and stated
tric, Ltd. (“Stream”), about potentially filing that “[a]lthough I have sent you correspon-
counterclaims. Kraus then contacted counsel dence indicating I represent Stream in certain
for plaintiff Ampro Energy, L.P. (“Ampro”), matters, I have never entered an appearance as
to ascertain the status of the suit.1 On October counsel of record for any party in Ampro v.
31, 2005, Ampro filed a status report with the Forgey.” He suggested that plaintiff’s counsel
court that listed Kraus as counsel for several refrain from referring to him as counsel of rec-
defendants. The status report included, as Ex- ord and correct any representations “[t]o the
hibit 13, an e-mail exchange between Kraus, extent that [they] require correcting.”
plaintiff’s counsel, and Snyder, an executive of
Stream, in which plaintiff’s counsel asked On November 10, Dawna Kelly, the district
whether Kraus’s clients would execute a mutu- court’s case manager, faxed Kraus a copy of
al release of claims. Kraus responded with the the order with a personal note that the court
following: “expects youSSand your former clientsSSat the
hearing.” Kraus e-mailed Kelly, stating his
That would depend on the scope of the re- surprise at being summoned to the conference,
lease. My clients feel you [sic] clients’ ac- because he had “never entered any appearance
tions in challenging [Stream]’s startup dam- as counsel for any party in this lawsuit.” He
aged them, and are likley [sic] not going to explained his belief that the status report had
sign a release at this time to forfeit the right incorrectly identified him as counsel for
to pursue appropriate relief if they choose. Stream and Rodriguez.
That said, I’ll be happy to review your pro-
posed release. On November 14, the court responded to
Kraus via e-mail, stating, “I understand your
Snyder responded that there would be no re- limited participation. I expect you here No-
lease and that the suit should proceed. vember 16th.” Kraus responded that he un-
derstood and that he was in the process of ne-
Three days later, on November 3, the court gotiating a final resolution of Ampro’s claims
issued an order stating that a conference against Stream and Rodriguez.
would be held on November 16, and “the re-
maining individual parties must appear with Despite the court’s order, on the evening
before the conference Kraus prepared an
e-mail, apparently to Kelly, stating that the
1
The introductory paragraph of the e-mail parties had reached an agreement, and oppos-
stated the following: ing counsel would provide it to the court at the
hearing. Kraus then said that he would not
My name is Peter Kraus of the firm Waters & appear at the hearing, because “all claims and
Kraus of Dallas. I am contacting you in con- potential claims of any potential clients of mine
nection with our firm’s representation of Rob
will be disposed of by the agreed order of dis-
Snyder and his newly-created company, Stream
missal with prejudice.” Kraus did not send the
Energy, in regard to the ongoing litigation in
Federal District Court in Houston with your
e-mail to Kelly or the court, but only to oppos-
client, Ampro Energy, L.P. ing counsel.
2
Kraus did not appear at the hearing, and “[t]he only reference to appellant as counsel
“[b]ecause he ignored the court’s orderSSand for Stream was in an incorrect statement in
subsequent e-mailSSto appear,” the court or- plaintiff’s status report based on an assumption
dered sanctions of $1,000. Kraus filed a mo- that appellant was acting as Stream’s counsel
tion apologizing and asking the court to recon- in this case, and even that misstatement was
sider, asserting that the court lacked jurisdic- promptly corrected by appellant to both Am-
tion to issue sanctions because he was not a pro and to the Court.” But, as described
“party’s attorney” under Federal Rule of Civil above, this is not the only reference to Kraus
Procedure 16(f). The court denied the motion, as counsel. Kraus omits any mention of his
finding that Kraus had told opposing counsel communications stating that he represents par-
that he represented Snyder and Stream and ties to this suit and referring to such parties as
had told the court that he was negotiating on his clients.
behalf of Stream and Rodriguez, expected to
submit a final order on their behalf, and un- Although we are aware of no caselaw de-
derstood the court’s order for him to appear. fining when an attorney becomes a “party’s at-
torney” under Rule 16, we do not need such a
II. definition today. Kraus is Stream’s attorney
“This Court reviews the imposition of sanc- under any definition of the word, because he
tions for an abuse of discretion.” Maguire Oil stated that he was representing Stream, re-
Co. v. City of Houston, 143 F.3d 205, 208 ferred to Stream as his client, told the court
(5th Cir. 1998) (quoting Matta v. May, 118 he would be negotiating on behalf of Stream,
F.3d 410, 413 (5th Cir.1997)). “A court abus- and did negotiate on Stream’s behalf.
es its discretion to impose sanctions when a
ruling is based on an erroneous view of the law The sanctions were not based on an errone-
or on a clearly erroneous assessment of the ev- ous view of the law or on a clearly erroneous
idence.” Id. Rule 16(f) authorizes sanctions assessment of the evidence. Moreover,
“[i]f a party or party’s attorney fails to obey a Kraus’s thrice-repeated protestation that he
scheduling or pretrial order, or if no appear- will gladly pay the sanction to a charity if we
ance is made on behalf of a party at a schedul- will reverse the sanction rings hollow; either
ing or pretrial conference.” the sanction is reversible error, or it is not.
There is no abuse of discretion, and the order
Kraus contends that the district court imposing sanctions is AFFIRMED.
lacked jurisdiction to impose sanctions on him
because he was not a “party’s attorney.” The
court found, however, that Kraus had told
plaintiff’s counsel that he was representing
Stream and that he was negotiating on behalf
of Stream and Rodriguez and expected to sub-
mit a final order. In addition, the October 31
status report includes an e-mail from Kraus to
plaintiff’s counsel in which he refers to several
of the defendants as “my clients.”
Kraus rests his argument on the fact that
3