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No. 05-____
___________________________________________________________________ In the Supreme Court of the United States. ____________________ Toni K. Claiborne and Elaine P. Boyd, Petitioners, -v- Roy Wisdom, George Mitchell Mott, Drake Terrace Apartments, Respondents. _____________________ On Petition for Writ of Certiorari to the United States _____________________ PETITION FOR WRIT OF CERTIORARI
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Dennis P. Derrick Seven Winthrop Street Essex, MA 01929-1203 (978) 768-6610 Counsel of Record |
-i- Questions Presented. 1. Did the petitioners receive the process due them under the fifth amendment to the federal constitution where they were denied adequate notice of the truncated sanction proceedings; denied the opportunity to adduce documentation in support of their objections to the sanctions despite an order of the court allowing them, indeed ordering them to be prepared to do so; denied the right to take testimony from or confront the respondents' attorney in rebuttal to his motion for sanctions; denied the right to argue on the evidence which rebutted the respondents' claim that their civil action was frivolous, vexatious or that it multiplied the proceedings; and then had sanctions imposed upon them by an unfair and biased tribunal? 2. Does the court of appeals' misapplication of 28 U.S.C. Section 1927, in assessing sanctions against the petitioners invoke this Court's duty of superintendence of the federal judiciary? -ii- Table of Contents
Questions Presented For Review..................................................................................................... i Table of Contents.............................................................................................................................ii Table of Authorities..........................................................................................................................iii Citations of Opinions and Orders......................................................................................................1 Basis for Jurisdiction in this Court......................................................................................................1 Constitutional and Statutory Provisions Involved................................................................................1 Statement of the Case....................................................................................................................... Argument Supporting Allowance of the Writ......................................................................................
Conclusion..................................................................................................................................... Appendix..................................................................................................................................... post
Table of Authorities 1. Citations of Opinions and Orders. The published opinion of the Court of Appeals for the Seventh Circuit in Toni K. Claiborne v. Roy Wisdom et al. (C.A. Nos. 04-1191 & 04-1302), reported at 414 F.3d 715, decided and filed July 7, 2005, affirming the District Court's order granting the Respondents' motion for attorney's fees, expenses and sanctions, is set forth in the Appendix hereto(App. 1-17). The unpublished Memorandum and Order of the United States District Court for the Southern District of Indiana, Indianapolis Division, in Toni K. Claiborne v. Roy Wisdom et al. (Civil Action No. IP 01-1234-C-YIF), dated February 11, 2003, granting the Respondents' motion for attorney's fees, expenses and sanctions, is set forth in the Appendix hereto(App. 21-37). The unpublished Order of the United States District Court for the Southern District of Indiana, Indianapolis Division, in Toni K. Claiborne v. Roy Wisdom et al. (Civil Action No. IP 01-1234-C-YIF), dated January 7, 2004, on the Respondents' Submission of Supplemental Time and Expenses, is set forth in the Appendix hereto(App. 18-20). The unpublished Entry of the Magistrate Judge for the United States District Court for the Southern District of Indiana, Indianapolis Division, in Toni K. Claiborne v. Roy Wisdom et al. (Civil Action No. IP 01-1234-C-YIF), dated November 26, 2002, addressing the Petitioners' discovery motions for the scheduled “evidentiary hearing,” is set forth in the Appendix hereto(App. 38-40). The unpublished pre-hearing Order of the United States District Court for the Southern District of Indiana, Indianapolis Division, in Toni K. Claiborne v. Roy Wisdom et al. (Civil Action No. IP 01-1234-C-YIF), dated October 31, 2002, is set forth in the Appendix hereto(App. 41-42). The unpublished Order of the United States District Court for the Southern District of Indiana, Indianapolis Division, in Toni K. Claiborne v. Roy Wisdom et al. (Civil Action No. IP 01-1234-C-YIF), dated July 22, 2002, on Petitioners' motion to file a corrected response, is set forth in the Appendix hereto(App. 43-45). The unpublished order of the Court of Appeals for the Seventh Circuit in Toni K. Claiborne v. Roy Wisdom et al. (C.A. Nos. 04-1191 & 04-1302), dated August 10, 2005, denying the petitioners' timely filed petition for rehearing, is set forth in the Appendix hereto(App. 46-47). Basis for Jurisdiction in this Court. The decision of the United States Court of Appeals for the Seventh Circuit affirming the District Court's order granting the Respondents' motion for attorney's fees, expenses and sanctions was entered on July 7, 2005; and its order denying the petitioners' timely filed petition for rehearing was filed on August 10, 2005(App.1;46). 2. This petition for writ of certiorari is filed within ninety (90) days of the date of the court of appeals' denial of the petitioners' timely filed petition for rehearing. 28 U.S.C. Section 2101(c). Revised Supreme Court Rule 13.3. The jurisdiction of this Court is invoked pursuant to the provisions of 28 U.S.C. Section 1254(1). Constitutional, Statutory and Rule Provisions
3.
4. Statement of the Case. The respondent Drake Terrace Apartments (“Drake”) is an apartment complex in Indianapolis, Indiana, which the respondent Puritan Home Funding, LP. (“Puritan”) privately owns and operates. The respondent Roy Wisdom (“Wisdom”) was Drake's resident manager in 2000; and Drake's property manager at the time was the respondent George Mitchell Mott(“Mott”). In July of 2000, the petitioner Toni K. Claiborne (“the petitioner” or “Claiborne”) began residing at Drake as a tenant. Within days of moving in, the resident manager Wisdom threatened petitioner with false claims of misconduct and eviction unless she acceded to his demands for sexual favors. When petitioner rejected his continuing demands, Wisdom issued an informal notice of eviction to Claiborne on July 31, 2000, a notice Wisdom would have revoked had petitioner given into his unlawful sexual harassment. The petitioner refused to accede to Wisdom's demands. As late as August 25, 2000, Wisdom was seen searching about the complex looking for Claiborne, telling another female tenant that he had seen Claiborne earlier and that she “looked good.” The petitioner Claiborne vacated her apartment at Drake on September 6, 2000. In March of 2001, she filed a claim of housing discrimination against some of the respondents with the Indiana Civil Rights Commission. While awaiting the Commission's investigation and resolution of her claim, the petitioner Claiborne communicated with the petitioner Elaine Parran Boyd, Esq., (“the petitioner” or “Boyd”), an attorney who was an associate with the law firm of Lee, Burns, Cossell & Kuehn, LLP, in order to identify her rights in the circumstances. Besides describing her own sexual harassment by Wisdom, the petitioner Claiborne told the petitioner Boyd that she (Claiborne) had spoken to other female tenants at Drake who had also been sexually harassed by Wisdom, specifically Kathy Reed, Brookie Reed, Carlene Waldridge and Mechelle Waldridge. Boyd then obtained statements from Kathy Reed and Mechelle Waldridge, both of whom supported Claiborne's claim that the respondent Wisdom with the condonation of the respondents Drake, Puritan and Mott compelled low-income female tenants of Drake to engage in sexual conduct in order to avoid eviction. Boyd's investigation in March 2001 of civil actions brought in Warren Township Small Claims Court further corroborated the allegations of Reed and Waldridge that eviction actions against female tenants at Drake were either filed or withdrawn depending upon the women's grant of sexual favors to the respondent Wisdom. In addition, the petitioner Boyd was given ten (10) separate handwritten notes authored by the respondent Wisdom in July and August of 2000 inviting the petitioner Claiborne to meet with him at the rental office (and his private living quarters in the adjacent apartment), even after Claiborne had been directed to vacate her apartment. Finally, Boyd interviewed various other persons at Drake including one Sheri Barker who supported Claiborne's claim that the respondent Wisdom sexually harassed Claiborne even after the notice of eviction had issued and that the respondents Drake, Puritan and Mott condoned his behavior. The petitioner Boyd mailed to Kathy Reed a transcribed statement of their interview for her to sign; however, Kathy Reed never signed the transcribed statement as she had moved out of Drake and the petitioner Boyd could not locate her. 5. Without a signed statement from Kathy Reed and because she did not know the new addresses of the corroborating witnesses who had since moved or had been evicted from Drake, the petitioner Boyd in March or April of 2001 employed an investigator in order to locate these witnesses, some of whom including Carlene Waldridge and William Brazelton feared retaliation by Wisdom if they offered statements against him. During the course of her investigation, Boyd learned that Drake had given Claiborne good references as a tenant, noting that it would accept her back into the complex if she so desired. In March and April of 2001, the petitioner Boyd communicated with the Indiana Civil Rights Commission about Claiborne's claims, the length of time it would take the Commission to investigate and then hear her case, and Claiborne's putative claim for punitive damages against the respondents, relief which the Commission did not have the jurisdiction to provide. On August 8, 2001, upon information and belief that the respondent Wisdom was about to leave the jurisdiction, the petitioner Boyd on behalf of the petitioner Claiborne filed this civil action against the respondents in the Marion County (Indiana) Circuit Court raising claims under both the federal Fair Housing Act Amendments of 1988 (FHA), 42. U.S.C. Sections 3601 et seq., and the Indiana Fair Housing Act, Ind. Code Sections 22-9.5-1-1 et seq. Claiborne alleged that she and other female tenants at Drake had been sexually harassed by Wisdom in July and August of 2000; that he had threatened them with eviction if they did not provide him with sexual favors; and that they had been forced to vacate their apartments when they failed to do so. The petitioner further alleged that she and her attorney, the petitioner Boyd, had interviewed corroborating witnesses prior to filing suit; that the respondent Wisdom had engaged in the same sort of unlawful conduct at other apartment complexes before being hired to work at the respondent Drake; and that the respondent Puritan as well as the other respondents were therefore negligent in hiring him. In addition, specifically relying upon the corroborating statements of some of the witnesses which they had interviewed, Claiborne claimed that all of the respondents, including the property manager Mott, the apartment complex Drake and the property owner Puritan, knew about or condoned Wisdom's conduct of threatening female tenants of Drake with eviction if they did not accede to his demands for sexual favors. Claiborne sought compensatory and punitive damages. Because the petitioner Claiborne's claims rested in part on the federal Fair Housing Act, the respondents removed the case to the federal district court for the Southern District of Indiana (Indianapolis Division) on August 23, 2001. Discovery ensued among the parties and the petitioner Claiborne was deposed on October 9, 2001. At Claiborne's deposition, the petitioner Boyd provided the respondents' counsel with an Initial Disclosures List which included the names of all witnesses who had information concerning some aspect of Claiborne's case. While Boyd could identify the witnesses, she could not provide their accurate addresses since most of them had moved from Drake. In addition, during her deposition, the petitioner Claiborne provided the respondents with further information concerning the identification of her witnesses. 6. By early December of 2001, some of Claiborne's witnesses had been located and were deposed. However, Kathy Reed and Mechelle Waldridge, crucial corroborating witnesses for the petitioner Claiborne, now recanted their earlier statements in March of 2001 supporting Claiborne's allegations. In fact, Kathy Reed testified at her deposition that when she received the transcribed statement from Boyd to sign, she called the respondent Wisdom whom she characterized as “a good friend” and told him about it. She then wrote Wisdom that she would not testify for Claiborne and that she appreciated everything he had done for her; and she admitted having received money from the respondent Wisdom. Faced with the reversal of testimony by these crucial witnesses and fearing that the other witnesses previously supportive of Claiborne would do the same, the petitioner Claiborne and her attorney, the petitioner Boyd, decided to make an offer of settlement with the respondents for a nominal sum in December of 2001. The respondents' attorney did not respond to this offer of settlement. Instead he embarked on additional, unnecessary, unreasonable and expensive depositions; brought an unresolved motion for summary judgment; and continued to complain that the petitioners Claiborne and Boyd had failed to respond to discovery requests. During these further depositions of the corroborating witnesses, including one Sherry Barker, they too now recanted their prior statements which had supported Claiborne's allegations leading to her complaint. In addition, after initially promising to depose the respondent Wisdom so that the petitioner could cross examine him, and then cancelling it three times, respondents' counsel notified the petitioner Boyd on February 11, 2002, that he was not going to depose Wisdom. On February 26, 2002, the respondents' counsel finally informed petitioner Boyd that he was rejecting her offer of settlement made almost three months earlier. After giving due notice to the respondents on March 7, 2002, the petitioners Claiborne and Boyd then moved to dismiss the action voluntarily on March 20, 2002, for the reasons that the deposed witnesses, formerly supportive of Claiborne, had now reversed their testimony and that Claiborne's action could not be sustained apart from this testimony. Despite Claiborne's motion to dismiss her case voluntarily, the respondents' counsel continued to perform legal work in defense of this case, twice amending his Initial Disclosures List, filing a response to Claiborne's voluntary motion to dismiss, and continuing to pursue discovery responses from the petitioner Boyd. On March 29, 2002, the District Court dismissed Claiborne's action with prejudice. In the same order, the District Judge invited the respondents to file a motion for costs and sanctions, including attorney's fees, within 14 days of the date of the judgment. On May 8, 2002, the respondents filed a motion for such relief under 28 U.S.C. Section 1927 and 42 U.S.C. Section 3613(c)(2). The petitioner Claiborne filed a response on May 24, 2002, one she sought to correct five days later by augmenting with new arguments and new affidavits. On July 22, 2002, the District Court, Young, J., denied Claiborne's motion to file a corrected response(App. 43-45). 7. On October 31, the District Court, on its own motion, entered an order setting the matter down for December 5, 2002,
(App. 41-42)(emphasis supplied). In anticipation of this hearing, the petitioner Boyd sought by motion to have the respondents' counsel release to her copies of the witnesses' complete deposition transcripts which he planned to use at the hearing and to depose the respondents' attorney prior to the hearing(App.38-40). In denying the petitioner's motion on November 26, 2002, the Magistrate Judge adverted to the fact that the upcoming hearing before the District Judge was to be “evidentiary” in nature where the petitioner Claiborne and the petitioner Boyd, consistent with the District Court's order of October 31, 2002, would have the opportunity “to substantiate [their] objections with appropriate documentation”(App. 38-39). As for deposing the respondents' attorney, the Magistrate Judge observed that there was no suggestion that such testimony would be relevant “or that [the petitioner or her counsel] could not elicit such testimony at the hearing”(App. 40). The hearing on the respondents' motion for costs and sanctions, including attorney's fees, eventually took place on December 20, 2002, in the District Court, with Young, J., presiding. Before any evidence was even sought to be introduced by either party, the District Judge announced that the petitioner Boyd had been sanctioned by other judges of the District Court in other cases and that “quite frankly, the Court is getting a bit frustrated with Ms. Boyd's level of practice in the Federal Courts....” As the hearing progressed, this theme of the petitioner Boyd being sanctioned in other cases was emphasized at least four more times by the District Judge and, taking his cue from the motion judge, by the respondents' attorney as well. Immediately after making these opening comments, Judge Young then advised the parties that this “evidentiary hearing” to consider the respondents' motion for costs and sanctions, including attorney's fees, was not going to be an evidentiary hearing at all. Instead, despite ordering the petitioner on October 31, 2002, to “be prepared to substantiate her objections with appropriate documentation,” Judge Young ruled peremptorily that he would consider only “argument” on the motion without a discussion of any of the facts of the case. As he put it, “[a]ll the evidence is in, as far as I'm concerned....This is not an evidentiary hearing.” 8. When asked by the petitioner Boyd about his prior order of October 31, 2002, giving her the opportunity, indeed ordering her to be prepared “to substantiate her objections [to the motion] with appropriate documentation,” the District Judge repeated his ruling that “we're not going to reargue the facts of this case.” He accordingly denied the petitioner Boyd's attempt to introduce documentary proof (in the form of deposition transcripts and other materials) which supported her contention that the petitioner Claiborne's claims when filed in court had a basis in fact, were founded upon the corroborating statements of many witnesses and were not frivolous or vexatious; and that it was only after most of the witnesses had recanted their earlier statements given to the petitioner Boyd about Wisdom's misconduct that she moved to dismiss the case. According to the motion judge, this proof addressed the facts of the case and had no bearing on the issue of whether the respondents were entitled to costs and sanctions, including attorney's fees. At the same time, the District Judge allowed the respondents' counsel to argue the facts of the case , e.g., the conduct of the attorneys in discovery proceedings, the testimony of the recanting witnesses, and the time spent in responding to discovery issues before the witnesses in early December of 2001 recanted their earlier statements. The respondents' attorney also was allowed to mention repeatedly the petitioner Boyd's conduct in other cases. On February 11, 2003, the District Court issued his findings of fact and rulings of law on the respondents' motion for costs and sanctions, including attorney's fees(App.21-37). He found that the petitioners Claiborne and Boyd had pursued a number of claims against the respondents without any factual basis(App.23-26). As for Claiborne, even though the core of her complaint against the respondents Mott, Drake and Puritan was that they were negligent in hiring the respondent Wisdom in view of his unlawful conduct at other apartment complexes and that they knew or should have known about Wisdom's conduct of threatening the female tenants of Drake with eviction if they did not accede to his demands for sexual favors, it was found that Claiborne's claims in this regard had no factual basis because she admitted that none of these three respondents “neither knew of her complaints nor intended to harm her”(App. 24)(emphasis supplied). While some of the respondent Wisdom's unlawful conduct against Claiborne took place as late as August 25, 2000, with Claiborne eventually leaving Drake on September 6, 2000, the motion judge nevertheless found that Claiborne was actually evicted on August 7, 2000, rendering time barred by one day her suit begun on August 8, 2001, stating an independent claim under the Indiana Fair Housing Act (App. 24). Finally, the District Court found that none of the witnesses supported Claiborne's allegation that the respondent Wisdom had sexually harassed other women at Drake besides her; that Mott, Drake or Puritan had condoned such conduct; or that any of the respondents had intimidated these witnesses(App. 24-25). 9. As for the petitioner Boyd, the District Judge blamed her for evasive and dilatory tactics in discovery because inter alia she did not know the addresses or telephone numbers of the corroborating witnesses who had since moved from Drake, even though the respondents who owned and operated Drake had better access to this information than Boyd(App. 25). In addition, it was found that “Ms. Boyd never made a reasonable inquiry before presenting serious allegations to this court”(App. 25). Instead of crediting Boyd's claim that most, if not all, of the corroborating witnesses had now recanted their earlier statements to her that Wisdom had threatened female tenants of Drake with eviction if they did not accede to his demands for sexual favors, the District Court found that “[i]n reality, the evidence shows that Ms. Boyd never communicated with the majority of the witnesses...”(App. 25-26). In support of this finding, the lower court identified several witnesses who now denied being contacted by Ms. Boyd; other witnesses in Claiborne's own family who denied discussing with her the sexual harassment “until she was evicted;” and still other witnesses (Mechelle Waldridge, Kathy Reed and Sherry Barker), some the most crucial in buttressing Claiborne's claim of Wisdom's pervasive sexual harassment at Drake, who now baldly denied having made their prior statements (App. 26). In this way, the District Judge without having seen or heard any of these witnesses, resolved the petitioner Boyd's claim of witness recantation by deciding for himself that the witnesses' most recent testimony denying their prior statements to Boyd about Wisdom was, in fact, truthful and that Boyd had brought this lawsuit against the respondents without any basis in fact. Upon these findings, Judge Young granted the respondents' motion for costs and sanctions, including attorney's fees, against the petitioner Claiborne under 42 U.S.C. Section 3613(c)(2), in the amount of $1.00(App. 27-28). As for the petitioner Boyd, the District Judge assessed sanctions against her pursuant to 28 U.S. C. Section 1927, in the amount of $107,845.77 for the respondents' fees and expenses(App. 28-37). The petitioner's law firm of Lee, Burns & Cossell, LLP, was subsequently found to be jointly and severally liable for these amounts(App. 4; 19). On January 7, 2004, the District Court granted the respondents' motion brought pursuant to 28 U.S.C. Section 1927, for supplemental attorney's fees and expenses for work performed on this case between May 8, 2002, and January 2, 2003, in the amount of $35,831.59, assessing this amount against both Boyd and her law firm(App. 18-20). The petitioners Claiborne and Boyd together with Boyd's law firm appealed these decisions by Judge Young to the Court of Appeals for the Seventh Circuit(App. 1-17). On July 7, 2005, in a unanimous opinion authored by Wood, J., the court of appeals affirmed the order of sanctions imposed upon both Claiborne and Boyd but reversed the ruling of the lower court making Boyd's law firm jointly and severally liable with Boyd for the sanctions imposed upon her(App. 17). 10. The court of appeals determined that the District Judge had not abused his discretion in finding that Claiborne's civil action was frivolous, ungrounded or fraudulent when it was filed in state court on August 8, 2001, the $1.00 sanction imposed upon her under 42 U.S.C. Section 3613(c)(2), was therefore proper(App. 7-8). The appellate court found ample support for Judge Young's finding that Claiborne's claim against Mott, Drake and Puritan was baseless because Claiborne admitted “that these Defendants did not intend to harm her in any fashion;” and because none of the witnesses corroborated her claim that Wisdom had sexually harassed her or other women at Drake or that the respondents had intimidated witnesses(App. 8). The court of appeals then rejected Claiborne's argument that the District Judge had denied both her and the petitioner Boyd due process of law by refusing to provide them with an evidentiary hearing whereby they could substantiate their objections to the respondents' motion for costs and sanctions, including attorney's fees, despite a prior order of the District Judge allowing them, indeed ordering them to be prepared to do so(App. 9). The appellate court saw it as nothing more than the motion judge refusing to permit Claiborne to file a tardy response to the respondents' motion(A.9). “These kind of decisions,” it ruled, “are properly seen as case management matters that fall within the district court's discretion, and we see no abuse of discretion here”(App. 9). Turning to the imposition of sanctions upon the petitioner Boyd under 28 U.S.C. Section 1927, the court of appeals ruled that the lower court did not abuse its discretion in finding that had Boyd acted in an objectively reasonable manner, she “would have realized that her client did not have a case months before March 20, 2002,” the date of the voluntary dismissal(App. 11). However, the appellate court, like the District Court, thought that the core reason justifying the sanction was that Boyd had pursued this action without any factual basis(App. 11-12). Ignoring Boyd's claim that all of her corroborating witnesses had recanted their prior statements about Wisdom's unlawful conduct in their deposition testimony, it observed that there was no explanation “why such an ill-founded case started in the first place”(App. 12). Nor did the court's own review of the record convince it that Judge Young had abused his discretion “in weighing the relative responsibility for plaintiffs and defendants in the way [he] did”(App. 12). It therefore concluded that the lower court did not abuse its discretion when it imposed the full amount of the respondents' attorney's fees on the petitioner Boyd, except the $1.00 that Claiborne was to pay(App. 12). The court of appeals did not consider whether Fed. R. Civ. P. 11 or a combination of Indiana's Rule 11 and the federal rule would independently support the sanction(App. 12). In conclusion, the appellate court directed the petitioner Boyd to show cause why it should not discipline her(App. 17). Moreover, it recommended that the District Court do likewise(App. 17). Finally, it instructed the Clerk of Court to send a copy of its opinion to the Indiana Supreme Court Disciplinary Commission “for whatever actions that body thinks appropriate” (App. 17). 11. In the wake of this decision, the petitioners Claiborne and Boyd petitioned the court of appeals for a rehearing of their claims. They argued that the procedure employed by the District Court when it heard the respondents' motion for costs and sanctions, including attorney's fees, violated their rights under the fifth amendment to the Federal constitution and that it erred in applying the “reasonableness” standard of 28 U.S.C. Section 1927, in ruling that Boyd was responsible for the full amount of the respondents' attorney's fees and expenses. On August 10, 2005, the court of appeals denied the petitioners' petition for rehearing(App. 46-47). The petitioners Claiborne and Boyd have now petitioned this Court for a writ of certiorari to the United States Court of Appeals for the Seventh Circuit. In the meantime, the respondents have now prosecuted in the District Court a third motion for sanctions against Boyd in the amount of $82,464.21 for attorney's fees allegedly incurred by them in responding separately to motions filed in this case by Boyd's law firm. 12. Argument Supporting Allowance of the Writ. 1. The Proceedings Below Sanctioning The Petitioners Violated Due Process. The petitioner Claiborne was sanctioned $1.00 pursuant to the provisions of 42 U.S.C. Section 3613(c)(2),which authorizes a prevailing party to recover “reasonable attorney's fees and costs.” The petitioner Boyd was sanctioned a total of $143,677.36 pursuant to 28 U.S.C. Section 1927, which exposes a party's attorney to liability when she “multiplies the proceedings in any case unreasonably and vexatiously.” The petitioners submit that the proceedings in District Court by which the petitioners were assessed these sanctions deprived them of the process due them under the fifth amendment to the Federal constitution in the following ways: they were denied adequate notice of the truncated sanction proceeding; they were denied the opportunity to adduce documentation in support of their objections to the sanctions despite an order of the court allowing them, indeed ordering them to be prepared to do so; they were denied the right to take testimony from or confront the respondents' attorney in rebuttal to his motion; they were denied the right to argue on the evidence which rebutted the respondents' claim that their civil action was frivolous, vexatious or that it multiplied the proceedings; and they were sanctioned by an unfair and biased tribunal. The Petitioners' Property Interest The starting point in defining the petitioners' rights is identifying the petitioners' property or liberty interest at risk in these proceedings. Under the due process clause of the fifth amendment, the petitioners would be entitled to procedural due process if the property/liberty interest at stake is deemed to be of such magnitude or importance that its loss can fairly be characterized as important; and it depends upon the extent to which the individual will be “condemned to suffer grievous loss.” Morrissey v. Brewer, 408 U.S. 471, 481(1972) quoting Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123,168(1951)(Frankfurter, J., concurring). Goldberg v. Kelly, 397 U.S. 254, 262-263(1970). Even though nominal, the sanction of $1.00 imposed upon the petitioner Claiborne constitutes a final, lasting deprivation of property entitling her to the protection of the Federal due process clause. Los Angeles v. David, 538 U.S. 715, 717(2003) (deprivation of money is the deprivation of property for purpose of evaluating due process protection). Cleveland Board of Education v. Loudermill, 470 U.S. 532, 538;541 (1885)(“The point is straightforward: the Due Process Clause provides that certain substantive rights—life, liberty, and property —cannot be deprived except pursuant to constitutionally adequate procedures”)(emphasis supplied). 13. The petitioner Boyd's property interest at stake in the proceedings below is just as clear. She faces a monetary fine of $143,677.36, together with accruing interest. In addition, the respondents have since filed a third motion for sanctions seeking to hold her liable for an additional $82,464.21 for attorney's fees allegedly incurred by them in responding separately to motions filed in this case by Boyd's law firm. Besides these money sanctions, the court of appeals has directed the petitioner Boyd to show cause why it should not discipline her; and it has recommended that the District Court do likewise(App. 17). It also instructed the Clerk of Court to send a copy of its opinion to the Indiana Supreme Court Disciplinary Commission “for whatever actions that body thinks appropriate” (App. 17). Beyond the property interest represented by these significant money sanctions imposed upon Boyd, then, the lower courts' actions have directly implicated her property right to the continued practice of law. In this respect, the monetary sanction goes beyond the dollar amount and acts “as a symbolic statement about the quality and integrity of an attorney's work—a statement which may have tangible effect upon the attorney's career....” Simmerman v. Corino, 27 F.3d 58, 64(3rd Cir. 1994). The stigmatic effect of this sanction upon the petitioner Boyd's legal practice directly affects her right to pursue a livelihood, a property right deserving of due process protection. Loudermill, 470 U.S. at 538. Barry v. Barchi, 443 U.S. 55, 69-70(1979)(Brennan, J., concurring in part). Board of Regents v. Roth , 408 U.S. 564, 576-578(1972). All of this analysis supports the proposition that when a litigant is sanctioned with fines under 42 U.S.C. Section 3613(c)(2), or when her attorney receives monetary sanctions under 28 U.S.C. Section 1927, the Due Process Clause mandates that such sanctions “should not be assessed lightly or without fair notice and an opportunity for a hearing on the record.” Roadway Express, Inc. v. Piper, 447 U.S. 752, 766-767(1980). What Process Was Due The Petitioners? Once it is determined that the Due Process Clause applies to the proceedings below, “the question remains what process is due.” Loudermill, 470 U.S. at 541 quoting Morrissey v. Brewer, 408 U.S. at 481. This Court's decision in Mathews v. Eldridge, 424 U.S. 319, 334-335(1976) dictates that the process due in any given instance is determined by weighing “the private interest that will be affected by the official action” against the government's asserted interest, “including the function involved” and the burdens the government would face in providing greater safeguards. Id. at 335. The Mathews calculus then contemplates a judicious balancing of these concerns, through an analysis of “the risk of an erroneous deprivation” of the private interest if the process were reduced and the “probable value, if any, of additional or substitute procedural safeguards.” Id. See Hamdi v. Rumsfeld, 542 U.S. 507, 528-529(2004). 14. Employing the Mathews calculus to the circumstances of this case in order to balance the petitioners' legitimate private interest not to be sanctioned with monetary fines unfairly or to have their livelihood threatened with disciplinary action against the judicial system's need for efficient administration, the petitioners submit that the process due them below consists of the following elements: A. Adequate Notice . The petitioners were entitled to notice of the hearing on sanctions in the District Court which was reasonably calculated, under all the circumstances, to apprise them of the precise nature of this proceeding. Mullane v. Central Hanover Tr. Co., 339 U.S. 306, 314(1950). The notice was required to be of a kind which would reasonably and fairly convey to them the required information so that they could appear and respond effectively with their objections in whatever form was allowed. Id. Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1,13-14(1978). B. A Full Evidentiary Hearing On Contested Fact Issues. The procedures to be employed should be “tailored to the capacities and circumstances of those who are to be heard.” Goldberg v. Kelly, 397 U.S. at 268-269. There were fundamental fact questions to be determined by the District Judge before he could impose sanctions consonant with the respondents' motion for such relief, e.g., was Claiborne's suit or the manner in which it was brought “unreasonable” or “vexatious;” and did the petitioner's conduct during its 7-month course “multiply the proceedings” within the meaning of 28 U.S.C. Section 1927? These questions invoked the adequacy of the factual investigation undertaken by the petitioner Boyd before she filed suit on August 8, 2001, and, as even the Court of Appeals for the Seventh Circuit has held in Shrock v. Altru Nurses Registry, 810 F.2d 658, 661-662(7th Cir. 1987), a hearing addressing these contested fact questions was required as a matter of due process. Moreover, considering the level of financial deprivation which would flow from the District Court's decision on sanctions and the low tolerance for the risk of a mistaken decision, see Morrissey v. Brewer, 408 U.S. at 485-489, these fact questions could not be resolved by just oral argument or by requiring that the parties submit their respective positions only “on the papers.” Instead, “[i]n almost every setting where important decisions turn on questions of fact, due process requires an opportunity to confront and cross examine adverse witnesses.” Goldberg v. Kelly, 397 U.S. at 269-270 citing ICC v. Louisville & N. R. Co. , 227 U.S. 88,93-94(1913) and Willner v. Committee on Character and Fitness, 373 U.S. 96, 103-104(1963). See Arnett v. Kennedy, 416 U.S. at 142-146. 15. The right to cross-examine and confront adverse witnesses and their evidence implies the right to marshal and adduce one's own evidence in support of a position on a contested fact issue such as whether the petitioner Boyd investigated Claiborne's claims sufficiently before bringing suit; whether she brought this suit unreasonably and vexatiously; whether she multiplied the proceedings; and whether there is an adequate explanation for the conduct deemed deficient. Especially where the contested facts were subject to different interpretations by the parties and where the resulting decision would result in dramatic monetary penalties as well as exposure to professional discipline for Boyd, the petitioners were entitled to a full evidentiary hearing so that the District Court would have a fair and complete record upon which to make its findings on each crucial fact issue while at the same time giving an appellate court a sufficient record upon which to review the hearing judge's fact finding. See Goldberg v. Kelly, supra. Any doubt by the hearing judge on this score should be resolved in favor of taking evidence. See Aoude v. Mobil Oil Corp., 862 F.2d 890,894(1st Cir.1988). In this process, the parties' respective burdens of proof would be a preponderance of the evidence. Addington v. Texas, 441 U.S. 418, 423(1979). See also Hamdi v. Rumsfeld, 542 U.S. at 534. C. A Fair And Impartial Tribunal. Due process requires a neutral and detached judge in the first instance. Hamdi v. Rumsfeld, 542 U.S. at 533 quoting Ward v. Monroeville, 409 U.S. 57, 61-62(1972). Withrow v. Larkin, 421 U.S. 35, 46-47(1975). Arnett v. Kennedy, 416 U.S. at 197. Goldberg v. Kelly, 397 U.S. at 271. In re Murchison, 349 U.S. 133, 136(1955). While the District Judge is more than a mere umpire----in fact, he is the governor of the proceedings before him—he cannot become an advocate or otherwise use his judicial powers to advantage or disadvantage a party unfairly. Quercia v. United States, 289 U.S. 466, 470(1933). Nor “should [he] give vent to personal spleen or respond to a personal grievance.” Offutt v. United States, 348 U.S. 11, 14(1954). See 28 U.S.C. Sections 455(a) and (b)(1). The Petitioners Were Denied The Process Due Them By The Fifth Amendment. The Notice Of The Truncated Sanction Proceeding Was Inadequate. After the respondents filed a motion for costs and sanctions, including attorney's fees, the District Court, on October 31, 2002, on its own motion, entered an order setting the matter down for a hearing on December 5, 2002, to address any objections the petitioners Claiborne and Boyd had to the motion(App. 41-42). The lower court explicitly directed the petitioners to be “prepared to substantiate [their] objections with appropriate documentation(App. 41-42). 16. The discovery pursued by the petitioner Boyd in anticipation of this evidentiary hearing eventually prompted a ruling by the Magistrate Judge denying discovery which reinforced the idea contained in the District Judge's order that the scheduled hearing in December was to be an”evidentiary hearing” where the petitioner could elicit testimony(App. 38-40). However, when the hearing on the respondents' motion eventually took place on December 20, 2002, the District Court, before any evidence was introduced by either party, advised them that this “evidentiary hearing” was not going to be an evidentiary hearing at all. Instead, despite ordering the petitioner on October 31, 2002, to “be prepared to substantiate her objections with appropriate documentation,” the District Judge ruled peremptorily that he would consider only “argument” on the motion without a discussion of any of the facts of the case or without any reference to documents from the petitioners. As he put it, “[a]ll the evidence is in, as far as I'm concerned....This is not an evidentiary hearing.” When asked by the petitioner Boyd about his earlier sua sponte order of October 31, 2002, giving her the opportunity, indeed ordering her to be prepared “to substantiate her objections [to the motion] with appropriate documentation,” the District Judge repeated his ruling that “we're not going to reargue the facts of this case.” He then denied the petitioners the right to introduce any documentation in support of their objections or the right to take testimony from the respondents' attorney concerning his claims for attorney's fees and expenses. All of this was at variance with the notice given by the District Judge, a notice which was not reasonably calculated to apprise the petitioners of, and permit adequate preparation for, this truncated hearing on sanctions, as required by this Court's decision in Memphis Light, Gas & Water Div. v. Craft, 436 U.S. at 14-15 and Mullane v. Central Hanover Trust Co., 339 U.S. at 314. Even if unintended, this new ruling restricting the petitioners' ability to object to the respondents' motion unfairly “sandbagged” the petitioners at the hearing, denied them the opportunity to be heard and violated their due process rights. “[W]hen notice is a person's due, process which is a mere gesture is not due process.” Mullane, 339 U.S. at 315. The District Judge's notice here was less than a mere gesture; it was incomplete, misleading and deprived the petitioners of a fair hearing on their objections to the respondents' motion for costs and sanctions, including attorney's fees. There Was No Full And Fair Hearing On The Petitioners' Objections To the Motion. If the petitioners had been given the opportunity, they would have adduced documentary proof (in the form of deposition transcripts and other materials) which supported their contention that the petitioner Claiborne's claims when filed in court on August 8, 2001, had a basis in fact, were founded upon the corroborating statements of their witnesses and were not unreasonable and vexatious; and that it was only after most of the witnesses had recanted their earlier statements given to the petitioner Boyd about Wisdom's misconduct that she moved to dismiss the case voluntarily. 17. All of these facts were germane to the issue of whether Boyd had investigated Claiborne's claims sufficiently before bringing suit; whether she brought this suit unreasonably and vexatiously; whether she multiplied the proceedings; and whether there was an adequate explanation for the conduct deemed deficient. According to the motion judge, however, this proof had no bearing on the issue of whether the respondents were entitled to costs and sanctions, including attorney's fees. At the same time, he allowed the respondents' counsel to argue the facts of the case and to mention repeatedly the petitioner Boyd's conduct in other cases. This one-sided constriction of the sanction hearing to the detriment of the petitioners did not constitute “mere management matters that fall within the district court's discretion,” as the court of appeals observed(App. 9). This refusal by the District Court to allow the petitioners to adduce even documentary proof in support of their objections--- -after expressly ordering them to be prepared to do so —violated their due process right to a full and fair evidentiary hearing on their objections, as guaranteed them by the constitution and the decisions of this Court. See Goldberg v. Kelly, 397 U.S. at 269-270 citing ICC v. Louisville & N. R. Co. , 227 U.S. at 93-94 and Willner v. Committee on Character and Fitness, 373 U.S. at103-104. See also Arnett v. Kennedy, 416 U.S. at 142-146. The District Judge Was Neither Fair Nor Impartial. Before any evidence was even sought to be introduced by either party, the District Judge announced that the petitioner Boyd had been sanctioned by other judge(s) of the District Court in other cases and that “quite frankly, the Court is getting a bit frustrated with Ms. Boyd's level of practice in the Federal Courts....” As the hearing progressed, this theme of the petitioner Boyd being sanctioned in other cases was emphasized at least four more times by the District Judge and, taking his cue from the motion judge and with his approval, by the respondents' attorney as well. In his findings, the District Judge refused to credit Boyd's claim that most, if not all, of the corroborating witnesses had now recanted their earlier statements to her that Wisdom had threatened female tenants of Drake with eviction if they did not accede to his demands for sexual favors(App. 25-26). Instead, the District Court found that “[i]n reality, the evidence shows that Ms. Boyd never communicated with the majority of the witnesses...”(App. 25-26). That is, the District Judge without having seen or heard any of these witnesses, resolved the petitioner Boyd's claim of witness recantation by deciding for himself that the witnesses' most recent testimony denying their prior statements to Boyd about Wisdom was, in fact, truthful and that Boyd had brought this lawsuit against the respondents without any basis in fact. The unmonitored act of assessing sanctions against an attorney can easily beget emotion. A court can lose sight of its otherwise dispassionate review of the facts and the law when it considers this kind of punishment. Moreover, where the motion judge has attained knowledge of an attorney through prior communication with fellow judges of the same court, he must be scrupulous both to avoid losing his partiality and to maintain his unfamiliarity with disputed matters which may come before him. In re Murchison, 349 U.S. at 138. See Quercia, 289 U.S. at 470. Thus a judge should disqualify himself in a proceeding in which his partiality might reasonably be questioned, including but not limited to instances where he has a personal bias or prejudice concerning a party. 28 U.S.C. Sections 455(a) and (b)(1). 18. The petitioners submit that the District Judge's unbending disapproval of Boyd and her conduct in other cases not before him irredeemably tainted his treatment of her in the proceedings below; predisposed him to deny her a fair hearing of her evidence in opposition to the respondents' motion; and rendered him incapable of believing that she had not brought this civil action unreasonably and vexatiously. On this record, the District Court was bound to disqualify himself because his partiality against Boyd might reasonably be questioned. For all of these reasons, the proceedings below sanctioning the petitioners violated the due process guaranteed them by the fifth amendment to the Federal constitution. 2. The Court of Appeals Misapplied 28 U.S.C. Section 1927, Invoking This Court's Power of Superintendence of the Federal Courts. The respondents were allowed as sanctions all attorney's fees and costs incurred by them from the time before the petitioners filed this civil action in State court to the date of the hearing; and they were allowed supplemental attorney's fees and expenses for work performed on this case between May 8, 2002, and January 2, 2003. No discrimination was made either in their requests or in the ultimate sanctions by the District Judge for those attorney's fees and expenses incurred before Claiborne brought suit or after she and Boyd made their offer of settlement or even after the notice of their voluntary dismissal on March 7, 2002. The respondents therefore were granted substantial attorney's fees and expenses as sanctions for a period of time when those fees and expenses had no nexus to the petitioners' alleged unreasonable and vexatious conduct. This result is a perversion of 28 U.S.C. Section 1927's language, finds no support in the decisional law interpreting its provisions, and justifiably invokes this Court's power of superintendency of the federal judiciary in order to correct the error. Under Section 1927, an 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 attorney's fees incurred because of such conduct.” Section 1927, being penal in nature, must be strictly construed. Monk v. Roadway Express, Inc., 599 F.2d 1378, 1382(5th Cir. 1979), aff'd sub. nom. Roadway Express, Inc. v. Piper, 447 U.S. 752(1980). Under the plain language of the statute, three requirements must be satisfied with an award of sanctions thereunder. First, the attorney must engage in “unreasonable and vexatious” conduct. Second, that “unreasonable and vexatious” conduct must be conduct that “multiplies the proceedings.” Finally, the dollar amount of the sanction must bear a financial nexus to the excess proceedings, i.e., the sanction may not exceed the “costs, expenses, and attorney's fees reasonably incurred because of such conduct.” 19. None of these requirements for the imposition of sanctions under Section 1927 was satisfied here. In the first place, for the reasons already identified herein, the petitioners had an objectively reasonable basis to believe at the time they filed this civil action in State court that Claiborne's allegations, buttressed as they were by the statements of supporting witnesses who were female tenants at Drake at the relevant time, that the respondents had violated both State and Federal housing discrimination laws when the respondent Wisdom repeatedly threatened female tenants of Drake with eviction if they did not accede to his demands for sexual favors. It was only after their supporting witnesses in December of 2001 recanted their supporting statements given to Boyd in March of 2001 that the petitioners immediately made an offer of settlement for a nominal sum, one it took almost three months for the respondents' attorney to reject; and then voluntarily dismissed their case immediately after this rejection of settlement. None of this conduct in this seven-month case bespeaks unreasonable and vexatious conduct. Second, the respondents made no showing that the petitioners conduct, however characterized, contributed to the multiplication of the proceedings or caused the “excess” expenses and attorney's fees sought. Section 1927 is indifferent to the equities of a dispute and is “concerned only with limiting the abuse of court processes.” Railway Express, Inc. v. Piper, 447 U.S. at 762. Here the respondents' attorney in the wake of a settlement offer by the petitioners for a nominal sum, after they had voluntarily dismissed their action, and then even after the sanction hearing itself, continued to accumulate fees and expenses for no good reason. None of these accumulated fees and expenses bear a causal connection to the petitioners' alleged misconduct, as required by Section 1927; and none of them deserve to be included in the sanction award as a matter of law. Eaton Aerospace v. SL Montevideo Technology, 129 Fed. Appx. 146, 153(6th Cir. 2005). Peterson v. BMI Refractories, 124 F.3d 1386, 1396(11th Cir. 1997). Martin v. Brown, 63 F.3d 1252, 1264-1265(3rd Cir. 1995). Pacific Dunlop Holdings, Inc. v. Barosh, 22 F.3d 113, 120(7th Cir. 1994). Moreover, the petitioners' “[s]ubstantial settlement offer[] should [have been] considered by the district court in determining an award of reasonable attorney's fees....” Moriarty v. SVEC, 233 F.3d 955, 967(7th Cir. 2000). The lower courts' misapplication of Section 1927 is error invoking this Court's power of superintendency of the federal judiciary and warranting the granting of this petition for writ of certiorari. 20. Conclusion. For all of these reasons identified herein, a writ of certiorari should issue to review the judgment of the United States Court of Appeals for the Seventh Circuit and, ultimately, to vacate the judgment and remand the matter to the District Court for a renewed evidentiary hearing consistent with due process before another judge of the District Court on the respondents' motion for costs and sanctions, including attorney's fees; or to provide the petitioners with such other relief as is fair and just in the circumstances.
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Respectfully submitted, Dennis P. Derrick Seven Winthrop Street Essex, MA 01929 (978) 768-6610 Counsel of Record |
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