Second Circuit : Union Breached Duty and Costs Imposed Without Hearing in Error
Susan Chana Lask won this case on the issue of costs in a published Second Circuit opinion that Ms. Lask:
"In the case at hand, the District Court specifically found that Lask had not "acted in bad faith, vexatiously, wantonly or for oppressive reasons." Wilder, 2000 WL 959751, at *13 (using the standard for the imposition of sanctions set forth in Roadway Express, Inc. v. Piper, 447 U.S. 752, 766, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980)). Moreover, there is nothing in the record on appeal to suggest that Lask had negligently or recklessly failed to perform her responsibilities as an officer of the court. Accordingly, costs should not have been imposed on Lask under Rule 54(d)(1) of the Federal Rules of Civil Procedure." Wilder v. GL Bus Lines,258 F.3d 126,168 L.R.R.M.(BNA) 2203,143 Lab.Cas. P 11, 052, 50 Fed.R.Serv.3d 314 (C.A.2, 2001)
To be argued by
Susan Chana Lask, Esq.
UNITED STATES COURT OF APPEALSfor the
GL BUS LINES, INTERNATIONAL BUS SERVICES, INC. &
TRANSPORT WORKERS UNION OF AMERICA,LOCAL 225,
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
LAW OFFICES OF
SUSAN CHANA LASK
Attorneys for Petitioner-Appellant
853 Broadway, Suite 1516
New York, NY 10003
BRIEF OF APPELLANT
STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION
The United States District Court for the Southern District of New York has subject matter jurisdiction of this action based on Federal Laws, to wit: The Omnibus Transportation Employee Testing Act of 1991, 49 U.S.C. section 31306, 49 C.F.R. sections 382. 601 and 605, breach of duty of fair representation by the defendant Local 225 and section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. section 185-known as The Taft Hartley Act.
This Court has jurisdiction over this appeal pursuant to 28 U.S.C. Section 1291. On July 10, 2000, the District Court issued its Opinion and Order A361-384 and its July 14, 2000 Judgment A365a granting defendant-appellees Summary Judgment and imposing costs under Rule 54(d) personally upon plaintiff-appellant’s attorney. A Joint Appeal of plaintiff and Susan Chana Lask, Esq. was timely filed in the clerk’s office on August 14, 2000. A386. This appeal is from a final order of Summary Judgment against plaintiff-appellant and upon the issue created therein when District Court imposed costs personally against joint appellant Susan Chana Lask, Esq. without notice or a hearing and without basis.
STATEMENT OF THE ISSUES PRESENTED
I. Did the District Court err in granting defendants’ summary judgment when defendants GL
and the Union ignored plaintiff’s rights under 49 C.F.R. 382.601,605 and 49 U.S.C.
31306(e), causing plaintiff to be terminated from his job despite federal law mandating
referral to a substance abuse professional for evaluation, not termination? YES.
II. Did the District Court abuse its discretion under F.R.C.P 54(d) by imposing costs
against plaintiff’s counsel personally without notice and a hearing, when there was no
misconduct by counsel and the court recognized in its Opinion that there was no
misconduct by counsel? YES.
III. Did the District Court err in granting defendant union’s summary judgment motion when it
was filed untimely and without a request for an extension to file late pursuant to F.R.C.P
STATEMENT OF THE CASE
On September 24, 1999, Plaintiff-Appellant, Johnny Wilder, filed a Complaint in the Southern District of New York against G.L. Bus Lines (“GL”), International Bus Services, Inc. (“International”)and Transport Workers Union of America Local 225 (the “Union”). A1-19. The Complaint alleged wrongful (a) termination against GL and International and (b) breach of the collective bargaining agreement (under 29 U.S.C. § 185) and breach of duty of fair representation against the Union. On or about January 24, 2000 the Union filed its Motion for Summary Judgment arguing it did not breach its duty of fair representation to plaintiff-appellant which was denied after oral argument before Judge Baer on February 17, 2000, by that court’s March 3, 2000 Order. A69-70.
On February 17, 2000 and March 3, 2000, Judge Baer ordered that May 26, 2000 would be the last date to file fully briefed motions. A68;A70. On May 24, 2000, defendants GL and International filed their fully briefed Motion for Summary Judgment. A33-258. On May 27, 2000 Judge Baer so ordered that the court would only accept fully briefed motions and that the dates of Pretrial Scheduling Order should be abided by all parties. A290-291 . On June 6, 2000, defendant union still did not respond to plaintiff’s discovery nor did it comply with providing plaintiff’s counsel with a complete brief, yet on that date, it filed a Renewed Motion for Summary Judgment with the clerk, failing to comply with Judge Baer’s May 27, 2000 Order not to file incomplete briefs and to mind the dates for filing as ordered by the court. A292-335.
After oral argument on June 7, 2000, the District Court rendered its July 10, 2000 Opinion & Order granting defendants' motions, dismissing plaintiffs' complaint and imposing costs against plaintiff’s counsel, Susan Chana Lask, Esq., personally under Rule 54(d). A361-384. On July 14, 2000 the District Court filed its Judgment. A385. Within 30 days after the Judgment, plaintiff and its counsel timely filed their joint-notice of appeal to this Court. A386.
STATEMENT OF FACTS
A. Plaintiff Received Handbooks and Rules from his Employer and Union Which Embraced Federal Law
Plaintiff was a commercial bus driver and night supervisor for NYU from 1993 to 1997. A221;A300. In 1997, defendant G.L. obtained the NYU bus services contract, resulting in plaintiff being employed as a bus driver for defendant GL from 1997 to 1999. A4;A151;A220;A301. Defendant Union was the union representative for plaintiff as an employee with defendant GL. A105. GL and International distributed a copy of GL’s Employees Rules & Regulations to plaintiff. A6-7;A153. Part I, page 4, paragraph 3, “Federal, State and Municipal Laws”, of GL’s Employees Rules & Regulations incorporates all Federal laws. A162. Plaintiff also received a copy of the November, 1997-November, 1999 collective bargaining agreement (the “CBA”) governing plaintiff’s employment rights with his employer, defendant GL. A72-92. The Federal Motor Carrier Safety Regulations Handbook was also distributed to plaintiff when he commenced employment with defendant GL; it sets forth the Department of Transportation (“DOT”) laws that apply to commercial drivers such as the plaintiff. A48.
B. The Employer Conducted a Drug Test Pursuant to Federal Law and It Resulted Positive for Cannabinoids (Marijuana)
On March 10, 1999, plaintiff submitted to a urine test as part of his annual physical. A306. On March 15, 1999, plaintiff was informed by his dispatcher, Mr. Kiss, that he failed his drug test. A308; A309. That same day plaintiff spoke with Lisa Sisenswein, Director of Human Resources for GL and she informed him that he was terminated from his job because he failed the drug test. A310. Plaintiff informed his union representatives, President Richard Greulich and Secretary Carlos Padilla that he never ingested illegal drugs. A236.
C. Hearings were Held Before Plaintiff’s Employer With Respect to Plaintiff Claiming a False-Positive Resulted
On March 24, 2000 the plaintiff, his shop steward and assistant shop steward attended a hearing before defendant GL regarding his termination. A5;A106; A312. Plaintiff presented evidence that a false positive could have occurred by the fact that he was taking a series of herbal products and prescription medicines at the time. A106; A312. Defendant GL upheld plaintiff’s termination so an appeal hearing was then held before defendant GL on May 10, 1999. A106. Defendant GL upheld its determination to terminate plaintiff by its May 10, 1999 letter from its president, Charles Flateman, stating that since the urine test came back positive then the they had the right to terminate plaintiff under their Zero tolerance drug policy. A17-18; .
On May 25, 1999, Union President Richard Greulich submitted plaintiff’s case to the union board to consider if it would file for arbitration on plaintiff’s behalf. A107. The Union’s investigation into plaintiff’s case consisted solely of (a) receiving a June 11, 1999 letter from Dr. Ouvre, the doctor who administered the drug test for defendant GL, stating a false positive could not occur A108; A117 and (b) a June 14, 1999 telephone call with Dr. Wingert, a lab technician, who stated he believed a false positive could not occur. A108. Based on those conversations, the defendant Union sent plaintiff a July 2, 1999 letter stating it would not seek arbitration. A108.
D. The Employer Never Gave Plaintiff Notice of Its Zero Tolerance Policy Pursuant To DOT Section 382.601
Defendant GL claims it had a zero drug tolerance policy that required immediate termination from employment upon an employee’s drug test resulting positive. A18;A152-153. Plaintiff never received notice of defendant GL’s zero drug tolerance policy and he never signed a verification of such a policy. A237; A248. Other employees never received notice of such a zero drug tolerance policy contravening the DOT. A249. Defendant GL could not produce a signed receipt from plaintiff pursuant to DOT regulations. A125; A248.
At no time did anyone from the Union advise plaintiff as to his rights under the DOT where he should not be terminated but was to be referred to a Substance Abuse Professional (“SAP”) for evaluation. A9; A237. Plaintiff never heard from the Union again despite his calls A9-10 resulting in this action being filed in the District Court on September 24, 1999. A1.
SUMMARY OF ARGUMENT
DOT §§ 382.600 et. seq., mandate drug testing of commercial drivers . Section 382.605 therein states that if a driver’s drug test is positive then his employer shall refer that driver to a Substance Abuse Professional (“SAP”) for evaluation and rehabilitation, if necessary. The DOT § 382.605(d) also requires that employers of commercial drivers insure the distribution of the DOT regulations regarding drug testing of employees by mandating, pursuant to 49 C.F.R. § 382.605, that the employer obtain a signed receipt from the employee driver, verifying they received the drug test policies of the employer. The employer has the right to enforce policies other than the SAP and evaluation process mandated by DOT section and such different policies of the employer can only be enforced if it has complied with DOT § 382.601 by giving written notice of such different policies to the employee. Defendants GL and International did not comply with Federal Laws so they could not immediately terminate the plaintiff from his job and they should have, as mandated by the law, referred him to a SAP. Defendant Union failed to represent plaintiff’s interests by not advising him of nor protecting his rights to be referred to an SAP under the federal laws. The Union, instead, wrongfully agreed with defendants GL and International’s immediate termination policy and failed to protect his job. The District Court also ignored the mandates of the federal and it abused its discretion by imposing F.R.C.P. 54(d) costs against plaintiff’s attorney without notice and a hearing and in face of the District Court’s statement in its Opinion and Order, dated July 10, 2000, that it could not conclude plaintiff’s attorney acted in bad faith, vexatiously, wantonly or for oppressive reasons.
The case should be remanded to the District Court for trial and costs against plaintiff’s attorney must be dismissed or, even if the case is not remanded, costs can not be imposed against an attorney personally pursuant to Rule 54(d) and must be dismissed as against the attorney.
STANDARD OF REVIEW
This Court reviews a district court's grant of summary judgment de novo, construing the evidence in the light most favorable to the non-moving party. Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir.1999). A motion for summary judgment may be granted only if there is no genuine issue as to any material fact and the moving party is therefore entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Fed.R.Civ.P. 56. The role of the Court is to determine whether there are any genuine issues of material fact to be tried, not to decide them. Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1224 (2d. Cir.1994). In considering the motion, the Court must resolve ambiguities and draw all reasonable inferences in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). This Court reviews a grant of costs imposed personally against an attorney by an abuse of discretion standard. Farmer v. Arabian American Oil Co., 324 F.2d 359 (USCA 2nd Cir., 1963).
I. THE FEDERAL LAWS UNDER 49 C.F.R. § 382 MANDATE CERTAIN PROCEDURES AN EMPLOYER SHALL TAKE WITH RESPECT TO DRUG TESTING OF ITS EMPLOYEES AND THOSE LAWS SHOULD NOT BE IGNORED
The Federal laws exist to be followed, not to be ignored. Reames v. Dept. Of Public Works, City of Paterson, 310 N.J. Super. 71, 707 A. 2d 1377 (1998). Although Reames is a New Jersey case, it is good case law (and apparently the only case law on point) from the respected courts right across the River that dealt with this exact issue and exact laws. Reames held that substantial compliance with the Federal Laws involving drug testing of commercial drivers is required.
In Reames, the plaintiff was called in by its employer for a random urine test pursuant to 40 U.S.C. § 31306. He was asked to urinate in front of a police officer; however, Mr. Reames became nervous due to the lack of privacy and could not produce a sample. He was immediately fired for not producing a sample. An administrative hearing upheld his termination for failing to produce a sample during the test. The plaintiff appealed the administrative hearing’s conclusion to the Superior Court. Reames argued that his employer failed to adopt and disseminate to employees a detailed written policy complying with 49 C.F.R. § 382 et. seq (the “Regulations”). The Reames court found it of significant importance that the employer failed to comply with and ignored the mandates of § 382.60 of the Regulations, requiring the employer to provide educational material explaining its policies and procedures regarding drug testing and to obtain a signed written statement from the employees certifying receipt of said materials. Also, the court noted that § 382.605 contained specific rehabilitation provisions to which none were complied with. Specifically, the Reames court stated:
“Even more significant, however, than the mechanical failures of
specimen collection, was the City's complete failure to comply with
the mandates of Part 382. Without belaboring the point, we need only
refer to § 382.601, which requires the employer, prior to testing, to provide
each employee with educational materials explaining the employer's policies
and procedures for testing and to obtain a signed statement from each
employee certifying to receipt of this material. The employer is also
required to provide union representatives with notice of the availability
of these materials, and the minimum required contents of these materials
are specified in eleven separately numbered paragraphs. Moreover,
§ 382.605 contains specific and detailed rehabilitation provisions. None
of these requirements was complied with.” (at page 7).
Reames held substantial compliance with federal prescribed procedures is required and as the employer disregarded Federal Laws, then the court reversed the underlying decision to terminate Mr. Reames and reinstated him to his job.
A. The Regulations Mandate Employees Receive Written Notice of Procedures Imposed by the Employer If they Contravene the Rehabilitative Processes Prescribed by the Regulations
Regulation § 382.601 states that "each employer shall " distribute information regarding controlled substances and the employer's policies and drug testing procedures to employees and provide training to employees”. Section 382.601(c) allows the employer to impose other policies (i.e.-a zero tolerance policy) than the Regulations SAP referral and rehabilitation only when such other policies are “clearly and obviously described as being based on independent authority." To insure that the employees have notice of policies other than section 382’s mandatory SAP referral and evaluation, § 382.601(d) mandates that "Each employer shall ensure that each driver is required to sign a statement certifying that he or she received a copy of these materials..."
Defendant GL never distributed that information; A125; A237 A248-249 therefore it failed to follow the mandates of 382.601(c) wherein an employer may provide other policies. Defendants could not produce a signed receipt required by § 382.601(d) A125; A248 and the District Court’s July 10, 2000 Opinion & Order acknowledged that plaintiff never received written notice of a zero drug tolerance policy. A377. The only policy that could possibly be in effect, then, was § 382.605 which requires referral to a SAP and rehabilitation , if necessary, not immediate termination.
B. The Thrust of the Federal Regulations is Geared towards Rehabilitation, Not Termination
Senate Report No. 10254 (S. Rep. No. 54, 102nd Cong., 1st Sess., May 2, 1991) discussed amendments to legislation that would deter drug use by drivers of public motor carriers. Throughout that report the fact that rehabilitation exists and should be implemented was noted under the section “Motor Carriers”, stating companies are required to offer rehabilitation to employees found to be using illegal drugs.
Rehabilitation is specifically prescribed in The Omnibus Transportation Employee Testing Act of 1991, 49 U.S.C. § 31306, requiring an opportunity for commercial driver’s with a substance abuse problem to be treated, not immediately terminated, stating at § 31306 (e):
"Rehabilitation.--The Secretary of Transportation shall prescribe regulations establishing
requirements for rehabilitation programs that provide for the identification and opportunity
for treatment of operators of commercial motor vehicles who are found to have used alcohol
or a controlled substance in violation of law or a Government regulation."
In following the rehabilitative thrust of 49 U.S.C. § 31306, the Federal Motor Carrier Safety Regulations (the "Regulation"), 49 CFR 382 et. seq, encoded laws dealing with substance abuse and motor carriers. The Regulations are the laws that specifically deal with the employer’s responsibilities and procedures to be followed with respect to substance abuse testing procedures. Section 382.101(a) states it shall apply to "all employers of such persons who operate a commercial motor vehicle..." , then it lists the employer’s responsibilities with respect to drug misuse under § 382.605, “Referral, evaluation, and treatment”. That whole section deals with the fact that the employer shall send an employee who has failed a drug test to a substance abuse professional (“SAP”) and be evaluated, not immediately lose his job.
The Regulations clearly allow rehabilitation of the driver, not immediate termination--just looking at § 382.605, it tells us exactly what the employer shall do for each driver, stating that each driver shall:
(a)...be advised by the employer of the resources available to the driver in evaluating and
resolving problems associated with the misuse of alcohol and use of controlled
substances, including the names, addresses, and telephone numbers of substance abuse
professionals and counseling and treatment Programs;
(b) ...be evaluated by a substance abuse professional;
And, it allows for return to work after the above has been complied with as well implements rehabilitation, as follows:
(c)(1) Before a driver returns to duty requiring the performance of a safety- sensitive
function... The driver shall undergo a return-to-duty... controlled substances test
with a verified negative result if the conduct involved a controlled substance.
(2) In addition, each driver...,
(i) Shall be evaluated by a substance abuse professional to determine that the
driver has properly followed any rehabilitation program.
The Regulations allow for follow-up testing and rehabilitation visits so the driver may continue his livlihood while protecting the public and the employer with continued evaluations of the driver, ensuring he is drug free.
C. Defendants GL and the Union Ignored the Federal Regulations Requiring Notice of a “Zero Tolerance” Policy, therefore that Policy Never Applied to Plaintiff and He Should Have Never Been Terminated from his Job
In the present case, the same exact Regulations as in Reames were completely ignored by the employer, GL and International, with the Union following suit by failing to defend plaintiff’s rights thereunder. GL never gave plaintiff a copy of its Zero Tolerance Drug Policy and, in fact, GL could not produce a signed receipt of that policy from plaintiff as required under Regulation 382.605(d) because it did not exist. A125; A237 A248-249. Another GL Employee, Carl Patterson, verified the fact that GL employees never received a Zero Tolerance Drug Policy by his affidavit to the District Court. A249. Since the plaintiff had no notice of GL’s Zero Drug Tolerance Policy then GL violated the Regulation § 382.601(d) and, just as in Reames, plaintiff herein should not have been immediately terminated from his job. By law, GL should have referred plaintiff to an SAP for evaluation and rehabilitation, if that was determined to be necessary by the SAP.
II. DEFENDANT UNION BREACHED ITS DUTY OF FAIR REPRESENTATION BY FAILING TO ADVISE AND DEFEND PLAINTIFF OF HIS RIGHTS UNDER SECTION 49 C.F.R. 382.601 and 605 and 49 U.S.C. § 31306 (e), WHEREIN HE SHOULD NOT HAVE BEEN IMMEDIATELY TERMINATED FROM HIS JOB BUT SHOULD HAVE BEEN SENT TO A SUBSTANCE ABUSE PROFESSIONAL (“SAP”) FOR EVALUATION
The Supreme Court stated that a union breaches its duty of fair representation when it acts "arbitrary, discriminatory, or in bad faith" as to its union members. Vaca v. Sipes, 386 U.S. 171, 188, 87 S.Ct. 903, 916, 17 L.Ed.2d 842 (1967). That rule "applies to all union activity, ... [and] a union's actions are arbitrary only if ... the union's behavior is so far outside a 'wide range of reasonableness' as to be irrational." Air Line Pilots Ass'n, Intern. v. O'Neill, 499 U.S. 65, 67, 111 S.Ct. 1127, 1130, 113 L.Ed.2d 51 (1991), quoting Ford Motor Co. v. Huffman, 345 U.S. 330, 337, 73 S.Ct. 681, 686, 97 L.Ed. 1048 (1953). It was unreasonable and irrational for the Union to ignore plaintiff’s rights under the Regulations and just mechanically agree with defendant GL that immediate termination was legal.
A. A Union Can Not Ignore a Meritorious Grievance or Process it in a Perfunctory Manner
Plaintiff’s case was never taken to arbitration by the Union because it decided he was properly terminated under the employer’s “Zero Tolerance” policy. Under Vaca , it is in the union’s discretion as to whether or not it will take an employee’s case to arbitration; however, a union "may not arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion." Vaca, 386 U.S. at 190, 87 S.Ct. at 917. Nothing could be more perfunctory then the defendant Union in the present case completely ignoring plaintiff’s rights under Federal Law (as explained in section I herein above). Plaintiff had the right to be referred to an SAP for evaluation and possible rehabilitation under the Regulations. The Union simply followed suit with defendant GL in this case by taking GL’s position that (a) since plaintiff’s urine test returned positive for marijuana then (b) he should be terminated; completely ignoring plaintiff’s rights under the law, wherein he should have never been fired.
III. THE DISTRICT COURT IGNORED THE FEDERAL LAW REQUIREMENTS OF A SIGNED WRITTEN STATEMENT AND REHABILITATION UNDER SECTIONS 382.605
Plaintiff’s Complaint alleges that defendant GL did not comply with § 382.605 requiring distribution of policies contravening the Regulations SAP referral and evaluation. A7-9. The District Court ignored the most crucial element of this case-- that the employer’s failure to distribute its “Zero Tolerance” drug policy and obtain signed written statements from its employees voids any such a policy. Logically, the law defaults the employer to send the employee with a positive drug test to an SAP pursuant to Regulation 382.605, not terminate the employee/plaintiff. This is basic federal law and a material issue of fact to which the District Court should not have ignored and then dismissed the case.
In fact, at page 17 of its July 10, 2000 Opinion & Order, the District Court noted that the record indicated plaintiff never signed for nor received his copy of documents required by 49 C.F.R. 382.601(d) as well as never received the company’s “zero-tolerance” policy A377; yet, despite those breaches of the Regulations, the District Court concluded that “these facts do not obviate the results of the drug test and plaintiff cites no authority to support his spurious conclusion that plaintiff “can not be held to a standard he had no notice of””. A377. The District Court failed to recognize that the issue is not what the result of the drug test was but the fact that if the Regulations are completely ignored by the employer then an employers contravening policy of “Zero Tolerance” mandating immediate termination could not apply (see Reames).
Additionally, the District Court claims in its Opinion & Order at page that plaintiff did not cite authority to support the fact that the Regulations regarding SAP referral apply when the employer did not impose its contravening policies pursuant to the Regulations; however that is wrong, as the authority is the law itself. Plaintiff set out the Regulations before the District Court and the Regulations are clear as to SAP referral. The District Court again ignored the plain import of the Regulations before it.
A. THE DISTRICT COURT MISINTERPRETED THE MEANING OF “BEING RELIEVED FROM DUTY” WITH “IMMEDIATE TERMINATION”
As the court in Reames held, the Regulations exist to be followed, not ignored. The District Court’s Opinion, page 17, A377, misinterprets the Regulations to support its conclusion that termination was proper in this case. On one hand the District Court correctly states that the Regulations require the driver to be relieved of duty as soon as he tests positive--that is correct pursuant to section 382.215, but nowhere does it state immediate termination is the consequence. Termination, as occurred here, and being relieved from duty are two very different results. If the District Court followed through with its reasoning that being relieved from duty is required, it would have properly followed through with the Federal Law and concluded that the Regulations § 382.605 mandate the employer to refer the employee who tested positive to an SAP for evaluation. The thrust of the Regulations is a rehabilitative process that should not be ignored by the employer, the union and the courts.
IV. THE DISTRICT COURT EXCEEDED ITS DISCRETION BY IMPOSING COSTS PERSONALLY UPON PLAINTIFF’S ATTORNEY
As a preliminary matter, it is noted that the issue here is not the amount of costs or whether costs should have been imposed but that costs should not have been imposed personally upon plaintiff’s counsel and that is an appealable issue (general rule that an appeal does not lie from a decree solely for costs is inapplicable when the power of the court to assess the costs is at issue. U. S. v. Arizona Canning Co., C.A.10 (Colo.) 1954, 212 F.2d 532).
The District Court imposed Rule 54(d) costs against Appellant-Plaintiff’s attorney personally. A384. Rule 54, entitled "Costs Other than Attorneys' Fees," provides in pertinent part:
“Except when express provision therefor is made either in a statute of the United States
or in these rules, costs other than attorneys' fees shall be allowed as of course to the
prevailing party unless the court otherwise directs.”
It is not a rigid practice that costs should be imposed because the rule itself empowers the court to direct otherwise. Fishgold v. Sullivan Drydock & Repair Corp., 1946, 66 S.Ct. 1105, 328 U.S. 275, 90 L.Ed. 1230 (dictum). It is a matter of discretion. The District Court exceeded its discretion by ordering costs personally against the attorney for the plaintiff without a showing of some misconduct by the attorney and without notice and a hearing.
A. Costs Can Not Be Imposed Upon an Attorney Personally Unless there has been some Misconduct Pursuant to 28 USC § 1927
A District Court may impose costs personally against an attorney only under 28 USC § 1927, even though no explicit reference is made to that statute in the District Court’s opinion. Farmer v. Arabian American Oil Co., 324 F.2d 359 (USCA 2nd Cir., 1963); Buritzer v. Blum, 1985 WL 25022 (E.D.N.Y., 1985). The Farmer court noted that Rule 54(d) should be read in combination with 28 USC § 1927.
28 U.S.C. § 1927 provides that:
an "attorney or other person admitted to conduct cases in any court of the United States
or any Territory thereof who so multiplies the proceedings in any case as to increase
costs unreasonably and vexatiously may be required by the court to satisfy personally
such excess Costs."
Conduct which may subject counsel to being assessed personally for costs includes "an intentional departure from proper conduct”, “bad faith” or unreasonably and vexatiously multiplying the proceedings. Buritzer; Vails v. The Police Department of the City of N.Y., et. Al.,1999 WL 970490 (SDNY, 1999); In Re Silverman; 13 B.R. 270, 24 C.B.C. 471 (1981). The attorney must rise to a certain level of misconduct that is patently frivolous and/or touches upon ethics violations to be personally liable for Rule 54(d) costs, as the following cases illustrate.
In Hafter v. Farkas, 498 F.2d 587,(USCA 2d Cir., 1974) the Court of Appeals upheld the District Court’s imposition of costs against an attorney when he filed an action upon a settled case. The court noted the attorney’s misconduct violated several ethics codes. A similar set of facts ocurred in Hanley, et. Al v. Condrey , 467 F.2d 697 (USCA 2d Cir., 1972), when the Court of Appeals upheld and imposed costs upon an attorney personally when he appealed a settled case, did so without his client’s knowledge and even denigrated the District Court judge in his Brief. Both the Hafter and Hanley courts noted that those attorneys brought actions that simply wasted the court’s time and were held liable for costs. When attorneys in N. American Foreign Trading Corp. V. Zale Corp., 83 F.R.D. 293 (SDNY, 1979) filed a motion to disqualify their adversary’s counsel, the court held those attorneys personally liable for costs because their motion was patently frivolous since they had knowledge that there was no cause for it, the motion was filed solely to harass their adversary and delay the proceedings as well as their misconduct caused their adversary “an unwarranted increase” in the costs of that case.
On the other hand, Courts have been more temperate with respect to imposing costs against attorneys in face of their misconduct. In the recent case of Vails , this district did not impose costs upon attorneys even when they filed what the court stated was a “weak” Title VII case, and they filed it after the EEOC denied the claim after a ten day trial. The Vails court noted that the case forced the defendants to defend against it not once but twice and imposed costs, not against the attorneys, but against the plaintiff. In fact, the Vails court specifically noted that costs may be imposed even if the litigants file in forma pauperi.
Temperate or not, in this case there was no reason under the law to impose costs personally against the plaintiff’s attorney. The District Court in fact stated at page 23 of its Opinion and Order that it “could not conclude that plaintiff and his counsel have acted in bad faith, vexatiously, wantonly or for oppressive reasons.” A383. The law demands some misconduct and since there was no misconduct then costs were not warranted against counsel personally, no less such impositions by a District Court against counsel creates an unnecessary chilling effect as an attorney is justified in pursuing, and should pursue, his client’s cause vigorously. Hanley et. Al. V. Condrey, 467 F.2d 697 (USCA 2d Cir., 1972). Additionally, the District Court gave no justifiable reason to impose such costs against counsel other than it deciding on its own, at page 24 of its Opinion and Order, without notice and a hearing nor questioning any parties, that plaintiff probably did not understand the merits of his case so in the interests of justice costs should be imposed against his counsel. The District Court wrongfully came to such a conclusion, did so without any investigation to support such a conclusion, no less, no law supports costs to be imposed upon an attorney without notice and a hearing and misconduct.
B. COSTS CAN NOT BE IMPOSED AGAINST AN ATTORNEY PERSONALLY WITHOUT NOTICE AND A HEARING
Notice and a hearing is at least required before imposing costs personally against the attorney. Hanley(supra); Miles v. Dickson, 387 F.2d 716 (5th Cir. 1967). In Buritzer, the court found that the attorneys failed to present adverse legal authority which was in fact a case that those same attorneys were counsel for the losing party. Such misconduct, the court noted, rose to violations of professional responsibility; however, the Buritzer court gave those attorneys notice and a hearing by ordering them to explain their failure before it would order costs personally upon them. The Buritzer case leads to the conclusion that before a court will hold attorneys personally liable for costs, they are given a chance to be heard. In fact, the Hanley court noted that under 28 USC § 1927 notice and a hearing may be required before costs can be imposed upon an attorney.
V. DEFENDANT UNION’S SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED BECAUSE IT WAS UNTIMELY FILED, VIOLATING THE COURT’S SCHEDULING ORDER AND VIOLATING F.R.C.P. 6(d)
The District Court ordered May 26, 2000 as the last date to file motions in this case. Said Order was made three times to all parties; once on the record at a February 17, 2000 hearing, A67, a second time by the District Court’s March 3, 2000 Order, A70, and a third time when the District Court so ordered on May 27, 2000 that all parties should abide by that March 3, 2000 Order. A290-291. Despite such Orders, Defendant Union untimely filed its Motion for Summary Judgment on June 5, 2000, after May 26, and it was filed without being fully briefed, which was also in contravention of the District Court’s May 27, 2000 Order.
In Lujan, et al. V. National Wildlife Federation, et al., 497 U.S. 871, 110 S. Ct. 3177 (1990), the Supreme Court found that a party’s motion filed after the last date of a briefing scheduling order was inappropriate, specifically when the late filing party was on notice by the court several times prior of the last day to file. The Court stated in Lujan that a court can allow late filing but only if a late filing party makes a motion to the court pursuant to F.R.C.P. 6(d). In the instant case, defendant Union made no such motion and filed late despite the District Court’s Orders warning all parties to abide by its scheduling order timeline. The District Court’s Opinion is in error at page 24 , A384, wherein it grants the incomplete and untimely filed brief of Defendant Union.
For the forgoing reasons, plaintiff-appellant and joint-appellant respectfully request that this Court vacate the Judgment of the District Court, dated July 14, 2000, remand this case to that court for trial and dismiss costs or costs should be dismissed as against the attorney for plaintiff personally as a matter of and grant such other and further relief as this Court deems just and proper.
Dated: New York, New York
December 22, 2000
Law Offices of Susan Chana Lask
By: Susan Chana Lask, Esq. (scl-1744)
853 Broadway, Suite 1516
New York, NY 10003
Attorney for Plaintiff-Appellant