Muzikowski, Robert v. Paramount Pictures

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 05-3004 & 05-3005
ROBERT E. MUZIKOWSKI,
Plaintiff-Appellant,
v.
PARAMOUNT PICTURES CORP.,
SFX TOLLIN/ROBBINS, INC. and
FIREWORKS PICTURES,
Defendants-Appellees.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 01 C 6721—Charles P. Kocoras, Judge.
____________
ARGUED MAY 5, 2006—DECIDED FEBRUARY 8, 2007
____________
Before KANNE, WOOD, and SYKES, Circuit Judges.
WOOD, Circuit Judge. Robert Muzikowski has devoted
years of his life to coaching Little League Baseball teams
in economically depressed areas of Chicago. His com-
mitment to this pursuit led to a book about the league he
co-founded, and later to a movie produced by defendant
Paramount Pictures entitled Hardball, which was based
on the book. Muzikowski regarded the movie as defama-
tory and sued Paramount, claiming that one particular
character that Muzikowski believed was easily identifi-
able as himself was portrayed in a negative way, and
2 Nos. 05-3004 & 05-3005
that this amounted to disseminating falsehoods about
him and about his league.
This is the second time that Muzikowski has asked this
court to reverse a judgment in favor of Paramount. See
Muzikowski v. Paramount Pictures Corp., 322 F.3d 918(7th Cir. 2003) (Muzikowski I ). After considering his first
appeal, we concluded that the district court should not
have granted Paramount’s motion to dismiss, because
the heightened pleading standard that the Illinois courts
use does not apply in federal court to a claim of defama-
tion per se. Id. at 926. When Muzikowski returned to the
district court, he took advantage of his lawsuit’s second
lease on life to add several new claims. Nevertheless, the
district court again rejected his suit and granted sum-
mary judgment for Paramount. To top things off, the
court sanctioned Muzikowski’s lawyers from the law firm
Schuyler, Roche & Zwirner (SRZ) for their repeated fail-
ure to abide by an order requiring them to identify the
documents they planned to use at trial in support of
Muzikowski’s claims.
Muzikowski now challenges the district court’s grant
of summary judgment to Paramount on each of his claims.
In a separate appeal, SRZ contests the district court’s
sanctions order. We affirm both of the district court’s
decisions.
I
Because the underlying facts of this case are summa-
rized in our earlier decision, we repeat only those facts
relevant to the issues raised in this round of appeals.
Since 1991, Muzikowski has been involved in founding
and coaching inner-city Little League programs in Chi-
cago. In 1994, author Daniel Coyle, who had served as an
assistant coach of a team in a league in which Muzikowski
Nos. 05-3004 & 05-3005 3
had been involved, published a work of non-fiction titled
Hardball: A Season in the Projects. Although this book
focused on the children in the baseball league, it also
devoted some attention to the coaches, including
Muzikowski.
In 1993, Paramount acquired the motion picture rights
to the book; several years later, in 2001, it released the
Hardball film. The film told the story of a Little League
coach named Conor O’Neill. Although the movie claimed
that it was “a fictitious story and no actual persons, events
or organizations have been portrayed,” the O’Neill char-
acter had many similarities to Muzikowski. Both came
from Irish-Catholic working-class backgrounds; both were
involved in a bar fight in which they cut their hand;
both were jailed as a result; both experienced the death
of their father and financial difficulties. Nevertheless,
there were also differences between the real Muzikowski
and the fictional O’Neill. Some were benign and others
painted O’Neill as a far less reputable figure. On the
neutral side, there is nothing in the name “Conor O’Neill”
that would make one think of “Robert Muzikowski.” Also,
O’Neill is single with no children, unlike Muzikowski.
O’Neill coached only one team, while Muzikowski co-
founded and ran more than one league, in addition to
coaching his teams. Other differences were more trouble-
some: unlike Muzikowski, who had a history of alcohol
and drug abuse that he successfully overcame, O’Neill
was still an alcoholic at the time of the events portrayed
in the film; O’Neill was a compulsive gambler; and
O’Neill’s original motivation for becoming involved in the
team was a selfish desire to pay off a gambling debt.
Muzikowski was not flattered by the attention he
received because of the film. To the contrary, he was
convinced that the movie was a thinly disguised bio-
graphy of him, although at one point he conceded that
no fewer than three characters in the film could be con-
4 Nos. 05-3004 & 05-3005
strued to be him. Muzikowski felt that the movie por-
trayed him in a false and unflattering light, implying
wrongly that he (like the O’Neill character) had a drink-
ing problem and that he (like O’Neill) became a Little
League coach in order to pay off a gambling debt, rather
than out of a desire to help children. Offended and deter-
mined to protect his name, Muzikowski sued Paramount
for defamation and false light invasion of privacy under
Illinois law.
In the initial proceeding before the district court, the
court dismissed Muzikowski’s complaint under Rule
12(b)(6), concluding that he had failed to state a claim for
defamation per se under Illinois law because the Hard-
ball film was reasonably capable of an “innocent con-
struction,” meaning, for this purpose, that it could have
been referring to someone other than Muzikowski. We
reversed, holding that although the district court acted
correctly by applying Illinois substantive law, it improp-
erly held Muzikowski to Illinois’s heightened pleading
standard rather than the notice pleading requirements of
Federal Rule 8. Under the more lenient federal pleading
standard, we explained, Muzikowski “might [still] be
able to produce evidence showing that there is in fact
no reasonable interpretation of the movie that would
support an innocent construction.” Muzikowski I, 322
F.3d at 927. We reached the same conclusion concerning
Muzikowski’s false light invasion of privacy claim, explain-
ing that “[o]ur analysis of the false light claim tracks
our assessment of the claim for defamation per se.” Id.Back in the district court, Muzikowski amended his
complaint, adding new defamation counts and theories of
false advertising, intentional infliction of emotional
distress, and unjust enrichment. This time, the case
proceeded to summary judgment. Based on the record
presented by the parties’ submissions, the district court
granted summary judgment to Paramount. The court
Nos. 05-3004 & 05-3005 5
also sanctioned Muzikowski’s lawyers for their repeated
failure to abide by its orders to identify the documents
they planned to use at trial to support Muzikowski’s
claims. It ordered SRZ to pay Paramount $50,915.25.
Muzikowski and SRZ have each appealed.
II
The two primary theories on which Muzikowski relies
are defamation per se and the branch of the common law
tort of invasion of privacy that penalizes portrayal of the
plaintiff in a false light. We therefore address those
arguments first.
A
The Supreme Court of Illinois recently summarized the
law of defamation in Tuite v. Corbitt, 2006 WL 3742112(Ill. Dec. 21, 2006), as follows:
A statement is defamatory if it tends to harm a per-
son’s reputation to the extent that it lowers that
person in the eyes of the community or deters others
from associating with that person. . . . Statements
may be considered defamatory per se or defamatory
per quod . . . . A statement is defamatory per se if its
defamatory character is obvious and apparent on
its face and injury to the plaintiff ’s reputation may
be presumed. . . . In a defamation per quod action,
damage to the plaintiff ’s reputation is not presumed.
Rather, the plaintiff must plead and prove special
damages to recover. . . .
In Illinois, there are five categories of statements
that are defamatory per se: (1) statements imputing
the commission of a crime; (2) statements imputing
infection with a loathsome communicable disease;
(3) statements imputing an inability to perform or
6 Nos. 05-3004 & 05-3005
want of integrity in performing employment duties;
(4) statements imputing a lack of ability or that
otherwise prejudice a person in his or her profession or
business; and (5) statements imputing adultery or
fornication. . . . However, even if a statement falls
into one of the categories of words that are defama-
tory per se, it will not be actionable per se if it is
reasonably capable of an innocent construction. . . .
2006 WL 3742112 at *4-5 (citations omitted). Muzikowski,
like the plaintiff in Tuite, relies here on the theory of
defamation per se.
In contrast to a claim of defamation per quod, for which
a plaintiff is required to show “extrinsic facts . . . to ex-
plain [a statement’s] defamatory meaning,” a plaintiff
claiming defamation per se is not required to prove dam-
ages, since “the words used are so obviously and mate-
rially harmful to the plaintiff that injury to his reputation
may be presumed.” Kolegas v. Heftel Broadcasting Corp.,
607 N.E.2d 201, 206 (Ill. 1992); see also Muzikowski I, 322
F.3d at 924. In order to prove defamation per se, a plain-
tiff must show that her claim fits into one of the five
categories summarized in Tuite, supra. See also Bryson v.
News Am. Publ’ns, Inc., 672 N.E.2d 1207, 1214-15 (Ill.
1996). As the state supreme court reaffirmed in Tuite,
however, even if a statement falls into a recognized per se
category, it will not be actionable if it “may reasonably
be innocently interpreted or reasonably be interpreted
as referring to someone other than the plaintiff.” Tuite,
2006 WL 3742112 at *5 (quoting Chapski v. The Copley
Press, 442 N.E.2d 195, 199 (Ill. 1982)); Solaia Tech., LLC
v. Specialty Publ’g Co., 852 N.E.2d 825, 839 (Ill. 2006)
(same). Illinois has chosen a difficult standard to meet, as
“if a statement is capable of two reasonable construc-
tions, one defamatory and one innocent, the innocent one
will prevail.” Muzikowski I, 322 F.3d at 925 (citing Ander-
Nos. 05-3004 & 05-3005 7
son v. Vanden Dorpel, 667 N.E.2d 1296, 1302 (Ill. 1996)).
The supreme court has recognized that its version of the
innocent construction rule (which applies only to per se
actions) favors defendants, but it has concluded that “the
tougher standard is warranted because damages
are presumed in per se actions.” Tuite, 2006 WL 3742112at *9; Anderson, 667 N.E.2d at 1302.
In Muzikowski I, we ruled that Muzikowski’s complaint
adequately alleged (for purposes of FED. R. CIV. P. 8) that
the portrayal of O’Neill as an unlicensed securities broker
injured Muzikowski professionally (Muzikowski is a
licensed securities broker and insurance salesman), and
that the portrayal of O’Neill committing crimes such as
theft injured Muzikowski’s reputation as well. We held
that, on remand, Muzikowski had to overcome the inno-
cent construction rule by demonstrating that “no one
could think that anyone but him was meant, and the
changes to ‘his’ character, far from supporting an inno-
cent construction that O’Neill is a fictional or different
person, only serve to defame him. . . .” Muzikowski I, 322
F.3d at 927.
By reversing the district court’s grant of Paramount’s
motion to dismiss, and by noting that “facts beyond those
that appear in [Muzikowski’s] federal complaint may
be relevant to the reasonableness inquiry,” id. at 924-25,
we indicated to the district court that Muzikowski was
entitled to proceed with discovery. At the same time, we
warned that “the most serious hurdle Muzikowski faces
is the question whether he has in essence pleaded him-
self out of court, by showing that the federal trier of fact
(whether judge or jury) would be compelled to find an
innocent construction of the movie.” Id. at 926. We also
acknowledged that “[a]s the case develops further, of
course, it is entirely possible that Paramount will be able
to produce enough facts to support its ‘innocent construc-
8 Nos. 05-3004 & 05-3005
tion’ argument.” Id. at 927. In short, we left open the
possibility that Paramount might prevail at a later stage,
depending on how the evidence relevant to the innocent
construction rule developed.
Rather than focusing on remand on the evidentiary
burden we outlined, Muzikowski instead argued to the
district court that our decision definitively resolved in
his favor the question whether he had presented suf-
ficient evidence on the innocent construction issue to
reach a jury. The district court interpreted our opinion
otherwise; it granted Paramount summary judgment on
the merits, explaining that “[t]he allegedly defamatory
portrayal can be construed as not referring to Muzikowski
or to any real person at all. . . . Because the [innocent
construction] rule applies, no issues remain for a jury to
decide with respect to these claims, and Paramount is
entitled to summary judgment.”
On appeal, Muzikowski urges this court to find that the
law of the case establishes that Paramount cannot take
advantage of the innocent construction rule. Unfortu-
nately, however, he has misunderstood our statement
(made in the generous procedural setting of review under
FED. R. CIV. P. 12(b)(6), which assumes all facts and
inferences favorably to the plaintiff) that the similarities
between himself and O’Neill “could cause a reasonable
person in the community to believe that O’Neill was
intended to depict him and that Paramount intended
Hardball’s mischaracterizations to refer to him.”
Muzikowski I, 322 F.3d at 926. This sentence fragment
can be understood properly only in the broader context
of our discussion of the question whether Muzikowski’s
original complaint met Rule 8 notice pleading standards.
What we said was this:
Muzikowski’s claim for defamation per se does not fall
under the special pleading regime of Rule 9, and thus
Nos. 05-3004 & 05-3005 9
he is entitled to the usual rules for notice pleading
established by Rule 8. Even if Muzikowski’s complaint
would not have met Illinois’s heightened pleading
standard, we are satisfied that it was sufficient to
put Paramount on notice of his claim. In his com-
plaint, he lists in great detail many similarities
between himself and O’Neill that could cause a reason-
able person in the community to believe that O’Neill
was intended to depict him and that Paramount
intended Hardball’s mischaracterizations to refer to
him.
Id. We went on to hold that in order to reach a jury,
Muzikowski first had to show that the innocent construc-
tion rule should not apply to Paramount’s representation
of O’Neill. Id.In Tuite, the Supreme Court of Illinois was asked to
jettison the innocent construction rule and join the major-
ity of states, but it declined the invitation. Instead, it
reaffirmed several important points about the rule. First,
it confirmed that the rule must be applied in a con-
textual, common-sense manner:
[A] written or oral statement is to be considered
in context, with the words and the implications there-
from given their natural and obvious meaning; if, as
so construed, the statement may reasonably be in-
nocently interpreted or reasonably be interpreted
as referring to someone other than the plaintiff it
cannot be actionable per se.
Tuite, 2006 WL 3742112 at *6, quoting from Chapski, 442
N.E.2d at 199. Next, it reiterated that “statements rea-
sonably capable of an innocent construction should be
interpreted as nondefamatory,” citing Mittleman v. Witous,
552 N.E.2d 973, 979 (Ill. 1989). Tuite, 2006 WL 3742112at *6. Finally, following Bryson, the court held that
“the innocent construction rule does not require courts to
10 Nos. 05-3004 & 05-3005
strain to find an unnatural innocent meaning for a state-
ment when a defamatory meaning is far more reason-
able.” Id. at *7.
Although Tuite had not yet been decided when this
case was before the district court, the principles it an-
nounced were already well established. It was the district
court’s job to decide whether, in light of the summary
judgment record, the statements in Hardball could
reasonably (i.e., without undue strain) be interpreted
innocently or as referring to someone other than
Muzikowski. It was predictable that this would be a
difficult task for Muzikowski, but it was not a fool’s
errand. The pleadings indicated that there are a great
many similarities between the O’Neill character and
Muzikowski. As Muzikowski emphasizes, in addition to
coaching Little League on the west side of Chicago, both
he and O’Neill share Irish descent and working class
backgrounds, have at some point gambled on sports
and engaged in heavy drinking, have some affiliation
with security brokerage firms, and are regulars at a bar
named “Duffy’s.” There are also some important differ-
ences between Muzikowski and O’Neill. To be sure, some
of those differences portray O’Neill as a disreputable
character. For example, unlike Muzikowski, who kicked
his drinking habit years before becoming involved with
Little League, O’Neill continues to drink throughout
the Hardball film. While Muzikowski’s motives for be-
coming involved in the league were altruistic, O’Neill
began coaching as a means to pay off a gambling debt.
Whereas O’Neill is the coach of a single team, Muzikowski
“co-founded and ran more than one league in addition to
coaching his teams.”
If this were all that the record contained, we would
be tempted to ask the Supreme Court of Illinois wheth-
er liability can be avoided if the only details that distin-
guish the plaintiff from the character described by the
Nos. 05-3004 & 05-3005 11
defendant are themselves defamatory. None of the cases
that we have examined present that situation, and we
are far from confident that Illinois would adopt a rule
under which the more defamatory the movie was, the
better the studio’s defense would be. See, e.g., Geisler v.
Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980); Springer v.
Viking Press, 90 A.D.2d 315, 457 N.Y.S.2d 246, 250 (N.Y.
App. Div. 1982) (Kupferman, J., dissenting). But, as we
explained earlier, the record in our case is not so one-
sided. Non-defamatory differences were also evident. The
two men had different names; one had children and the
other did not; and O’Neill was less involved with the
Little League program.
The district court concluded that the acknowledged
similarities between Muzikowski and O’Neill “demon-
strate[d] only that reasonable viewers could see the
connection Muzikowski detects between himself and the
film’s protagonist, not that they must.” It was impor-
tant (though not dispositive) that the character in Hard-
ball did not share Muzikowski’s name. We acknowledge
that certain similarities between Muzikowski and O’Neill
are striking enough that, at the summary judgment
stage, we must assume that at least some viewers of
the film who knew Muzikowski or who had read Coyle’s
book reasonably concluded that O’Neill’s character was
based on Muzikowski. On the other hand, the significant
differences between O’Neill and Muzikowski could just
as easily have led a reasonable viewer who knew about
Muzikowski to conclude that O’Neill represented either a
composite of the coaches described in Coyle’s Hardball
book (a possibility that Muzikowski recognized in some
early court documents he filed) or an amalgam of these
real-life figures with a stock Hollywood leading man.
Most jurisdictions do not use an innocent construction
rule as favorable to defendants as Illinois’s rule is. See
David A. Anderson, Defamation in Fiction: Avoiding
12 Nos. 05-3004 & 05-3005
Defamation Problems in Fiction, 51 Brooklyn L. Rev. 383,
393-94 (1985). But it is Illinois law that governs
Muzikowski’s case, and it is our obligation to apply its
law as faithfully as we can. Reviewing the district
court’s judgment de novo, we conclude that the O’Neill
character is reasonably susceptible to both innocent and
defamatory constructions. Put in the language Tuite used,
“the statement[s] may reasonably be innocently inter-
preted or reasonably be interpreted as referring to some-
one other than the plaintiff ” and thus they are not action-
able per se. 2006 WL 3742112 at *6. As a result,
Muzikowski cannot prevail on his defamation claim. And
since the “of and concerning” requirement of the tort of
false light invasion of privacy is “basically the same as
the innocent construction rule,” Muzikowski I, 322 F.3d
at 927 (citing Schaffer v. Zekman, 554 N.E.2d 988, 993 &
n.2 (Ill. App. Ct. 1990)), the district court properly
granted Paramount summary judgment on this claim as
well.
B
The legal theories that Muzikowski added on remand
included charges of false advertising and related con-
sumer fraud in violation of § 43 of the Lanham Act, 15
U.S.C. § 1125(a), the Illinois Uniform Deceptive Trade
Practices Act, 815 ILCS 510/2, and the Illinois Consumer
Fraud and Deceptive Business Practices Act, 815 ILCS
505/2. With respect to the last of these, Muzikowski
claimed that Paramount’s promotion of the Hardball
movie as “inspired by a true story” was false because of
the extent to which Muzikowski’s life story was changed
in the film. The district court concluded that these
theories failed too, because Muzikowski had neither
demonstrated that Paramount’s advertisement was false
nor that consumers who viewed the advertisements had
been deceived.
Nos. 05-3004 & 05-3005 13
In order to establish a claim of false or deceptive adver-
tising under § 43(a) of the Lanham Act, a plaintiff must
show that the defendant made a material false state-
ment of fact in a commercial advertisement and that the
false statement deceived or had the tendency to deceive
a substantial segment of its audience. Hot Wax, Inc. v.
Turtle Wax, Inc., 191 F.3d 813, 819 (7th Cir. 1999). The
district court held, and we have previously assumed
without deciding, that this analysis also applies to Illinois
false advertising claims. See Peaceable Planet, Inc. v. Ty,
Inc., 362 F.3d 986, 994 (7th Cir. 2004); Web Printing
Controls Co. v. Oxy-Dry Corp., 906 F.2d 1202, 1206 n.5
(7th Cir. 1990). Because Muzikowski does not argue to the
contrary, we assume the same in this case.
In granting summary judgment to Paramount on the
false advertising claims, the district court reasoned that
Paramount’s statement “inspired by a true story” is
“literally true,” observing that neither party disputes
the veracity of the statement. Paramount insists that
its advertisement represents the film as “the story of . . .
the [Little League] team featured in Coyle’s book.”
Muzikowski, on the other hand, contends that the ad-
vertisements “lead viewers to believe that the story is his.”
Since Muzikowski does not in any event contest the
district court’s conclusion that Paramount’s advertising
for Hardball did not contain a false statement of fact, we
conclude that he has waived both this argument and
his false advertising claims generally.
Even if we were to find that Muzikowski had not
waived these points, we would sustain the district court’s
judgment on an alternative basis. In order to show that a
substantial segment of Hardball’s audience was deceived
by Paramount’s advertising for the film, Muzikowski
presented 18 affidavits from individuals who knew him
personally or had personal knowledge of his association
with Little League baseball and who, in addition, had seen
14 Nos. 05-3004 & 05-3005
the Hardball film. These affidavits all stated that
“I believed the main character in the movie, Conor
O’Neill, . . . was portraying Bob [Muzikowski]” and listed
specific reasons for this belief. The district court con-
cluded that, given the size of the movie’s audience (the
court noted that the film had grossed more than $40
million), the affidavits fell “far short” of proving that a
substantial segment of the film’s viewers—most of whom
presumably did not have the same personal acquaintance
with Muzikowski as the affiants—was deceived by Para-
mount’s advertising. Given the fact that this theory
requires proof of the impact of the film on a substantial
segment of the viewership, we agree with the district
court that the 18 affidavits were not enough. Although
Muzikowski argues that he was required only to present
enough evidence of viewer deception to create a disputed
issue of fact, the affidavits constituted the type of
“de minimis evidence of confusion” we have previously
held insufficient to withstand a motion for summary
judgment. See Packman v. Chi. Tribune Co., 267 F.3d 628,
645 (7th Cir. 2001).
Muzikowski’s remaining claims of intentional infliction
of emotional distress and unjust enrichment require
little discussion. In order to prove intentional infliction
of emotional distress in Illinois, a plaintiff must show
that the defendant engaged in “truly extreme and outra-
geous” conduct. McGrath v. Fahey, 533 N.E.2d 806, 809
(Ill. 1988). The only conduct Muzikowski complains of,
however, was Paramount’s allegedly false portrayal of
him in the Hardball film. Even if we were to assume for
the sake of argument that O’Neill was a defamatory
portrayal of Muzikowski, this portrayal was insufficiently
extreme and outrageous to qualify as a tort under Illi-
nois law. See id. (holding that “[m]ere insults [and] indigni-
ties” do not constitute outrageous conduct). Even O’Neill
was redeemed in the end, after all, and the behavior the
Nos. 05-3004 & 05-3005 15
movie portrays falls well short of “extreme and outrageous”
conduct. Finally, since Paramount obtained the rights to
Coyle’s book legitimately, as far as this record shows, and
it adapted its script from the book, Muzikowski cannot
prove that it was unjustly enriched by its use of details
about Muzikowski’s life in the Hardball movie.
III
Finally, we turn to Muzikowski’s lawyers’ appeal of the
district court’s sanctions order. We review a district
court’s entry of sanctions under FED. R. CIV. P. 37, and
the penalty itself, for an abuse of discretion. In re Thomas
Consol. Indus., Inc., 456 F.3d 719, 724 (7th Cir. 2006);
Johnson v. Kakvand, 192 F.3d 656, 661 (7th Cir. 1999)
(“District courts possess wide latitude in fashioning
appropriate sanctions and evaluating the reasonableness
of the attorneys’ fees requested.”).
The court sanctioned SRZ for failing to comply in good
faith with its order to comply with an interrogatory
requiring counsel to identify the documents they planned
to rely on at trial to support Muzikowski’s claims. Rather
than comply with this order, Muzikowski’s lawyers
identified 14,599 pages of documents that they character-
ized as “for possible use at trial.” When the district
court questioned why they had failed to comply, SRZ
for mysterious reasons claimed that the court had never
issued such an order. The district court found this ex-
planation wholly unsatisfactory, stating that Muzikow-
ski’s lawyers “persistence in the unfounded position that
the course of action pursued in this case was a reason-
able interpretation of express in-court directions consti-
tutes willful disobedience of court orders that we simply
cannot countenance.”
On appeal, SRZ’s only challenge to the entry of sanc-
tions is to repeat the unconvincing argument that
16 Nos. 05-3004 & 05-3005
neither Paramount’s interrogatory nor the district court’s
oral and written orders specifically required counsel to
identify all documents that they intended to use at trial.
Having reviewed the relevant transcripts, we agree with
the district court that SRZ’s position is entirely unfounded.
And even if we were to accept SRZ’s version of events, SRZ
still fails to explain why it did not fully comply with the
district court’s order after the court referred the dis-
covery dispute to a magistrate to determine “whether or
not there has been good faith compliance . . . on the part
of the plaintiff to make a realistic assessment of the
documents intended to be used at trial.” (Emphasis added.)
Once the failure to comply was established, Rule 37(b)(2)
provides that “the court shall require the party failing
to obey the order or the attorney advising that party or
both to pay the reasonable expenses, including attor-
ney’s fees, caused by the failure, unless the court finds
that the failure was substantially justified or that other
circumstances make an award of expenses unjust.” (Em-
phasis added.) The district court reasonably concluded
that there was no justification or excuse here that would
have exempted SRZ from the normal rule.
SRZ’s challenge to the penalty imposed is no more
convincing. Although SRZ contests the reasonableness of
the hours expended by Paramount’s lawyers reviewing
the documents Muzikowski produced, the magistrate
judge characterized Paramount’s figures as a low-ball
estimate, explaining that the figure was “reasonable
especially in light of the fact that its attorneys real-
istically reviewed thousands of pages of documents far in
excess of the 14,599 figure [on which the magistrate
based the sanctions].” Nor are we convinced by SRZ’s
contention that the district court erred by basing its
sanctions calculation on the hourly rate Paramount’s
lawyers charged defendants, rather than requiring Para-
mount to prove “that the rates claimed are market rates.”
Nos. 05-3004 & 05-3005 17
It is well established that “[t]he attorney’s actual billing
rate for comparable work is presumptively appropriate to
use as the market rate.” People Who Care v. Rockford Bd.
of Educ., Sch. Dist. No. 205, 90 F.3d 1307, 1310 (7th Cir.
1996) (quotation marks omitted). Only “[i]f the court is
unable to determine the attorney’s true billing rate . . .
(because he maintains a contingent fee or public inter-
est practice, for example)” should the court “look to the
next best evidence—the rate charged by lawyers in the
community of reasonably comparable skill, experience, and
reputation.” Id. (quotation marks omitted). As far as we
can tell, SRZ has never come forth with any evidence to
show that the rates charged by Paramount’s lawyers are
not market rates. The district court therefore did not
abuse its discretion by accepting these rates as reasonable.
IV
For all these reasons, we AFFIRM the district court’s
grant of summary judgment to Paramount and AFFIRM
the court’s issuance of sanctions against SRZ. In so doing,
we wish to add that this result is largely driven by the
strict approach Illinois takes to the innocent construc-
tion rule. It would have been far better if Paramount had
not touted Hardball as something so closely based on
reality, only later to turn around and disclaim any such
connection with real people. From all that we can see,
Muzikowski provided an important service to the chil-
dren of Chicago; he did so because he cared about them;
and he was understandably frustrated to see the movie
portray a much less admirable character.
That said, we note that Paramount has requested this
court to order SRZ to reimburse it for the costs and fees it
has incurred in connection with the appeal of the sanctions
issue. It appears, however, that Paramount has not
formally made a motion under FED. R. APP. P. 38 or
18 Nos. 05-3004 & 05-3005
otherwise specifying the relief it requests and the
grounds on which it relies. We therefore order SRZ to
SHOW CAUSE why it should not be ordered to pay the
reasonable attorneys’ fees Paramount incurred in con-
nection with the sanctions appeal. Its statement is due
within 10 days of the date of this opinion.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-8-07