united states district court middle district · pdf filea motion for reconsideration may fall...

1

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA

JACKSONVILLE DIVISION IN RE: ENGLE CASES

Case No. 3:09-cv-10000-J-WGY-JBT

___________________________/

SPECIAL MASTER’S RESPONSE TO THE WILNER FIRM, P.A.’S MOTION TO ALTER OR

AMEND THE SANCTIONS ORDER, AND FARAH & FARAH, P.A. AND CHARLIE FARAH’S MOTION FOR RECONSIDERATION

Pursuant to the November 22, 2017 Order (Doc. 2195), the Special Master

responds to The Wilner Firm, P.A. (“Wilner”)’s Motion to Alter or Amend the

Sanctions Order (Doc. 2189) (“Wilner’s Motion”), and Farah & Farah, P.A. and

Charlie Farah (“Farah”)’s Motion for Reconsideration (“Farah’s Motion”) (Doc.

2196). For the reasons stated below, the Special Master recommends denying both

motions.

INTRODUCTION

Wilner and Farah ask this Court to alter or reconsider the extremely detailed and

comprehensive 148-page Opinion and Order (Doc. 2181) (“Sanctions Order”)

finding that Wilner and Farah engaged in sanctionable conduct in 1,250 cases.

Unlike a typical district court order, the Sanctions Order contains the collective

analysis and conclusion of four United States District Court Judges, each with the

specialized knowledge and perspective of having presided over these cases for years.

The decision occurred after lengthy deliberation and with the benefit of the Special

Master’s Report and Recommendation, and extensive briefing and argument by

Case 3:09-cv-10000-WGY-JBT Document 2209 Filed 01/12/18 of 21 PageID 66307

2

Wilner and Farah. In the end, the sanction was proportionate to the degree of

misconduct and harm to the public. The Court demonstrated significant restraint by

imposing a modest $6,983.42 sanction per case, which simply compensated for the

harm caused. While the cumulative total is significant, so was the harm.

MEMORANDUM OF LAW

Motions to alter or amend a judgment are governed by Rule 59(e), Federal Rules

of Civil Procedure.1 A “judgment,” as the term is used in Rule 59(e), includes any

order from which an appeal lies. Fed. R. Civ. P. 54(a). “When evaluating a motion

to reconsider, a court should proceed cautiously, realizing that ‘in the interests of

finality and conservation of scarce judicial resources, reconsideration of a previous

order is an extraordinary remedy to be employed sparingly.’” United States v. Bailey,

288 F. Supp. 2d 1261, 1267 (M.D.Fla. 2003) (citation omitted).

The only grounds for granting a Rule 59 motion are newly-discovered evidence

or manifest errors of law or fact – neither of which are presented in either Wilner’s

Motion or Farah’s Motion. See Arthur v. King, 500 F.3d 1335, 1343 (11th Cir. 2007).

As a result, a district court does not abuse its discretion when denying a Rule 59(e)

motion which seeks to “relitigate old matters, raise argument or present evidence that

1 Wilner also cites to Rule 60(e), which governs motions for relief from a judgment or order. While not styled as a motion for reconsideration, Wilner correctly notes that a motion for reconsideration may fall within either Rule 59(e) or 60(b). Courts, however, generally construe motions for reconsideration under Rule 59(e) if filed timely. See Winsey v. Nationstar Mortg. LLC, No. 8:17-CV-979-T-33AEP, 2017 WL 2931381, at *1 (M.D. Fla. July 10, 2017) (“[W]hen a motion for reconsideration is filed within 28 days of an order, Rule 59 applies”).


3

could have been raised prior to the entry of judgment.” Wilchombe v. TeeVee Toons,

Inc., 555 F.3d 949, 957 (11th Cir. 2009) (quoting Michael Linet, Inc. v. Village of

Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005)). “This prohibition includes new

arguments that were ‘previously available, but not pressed.’” Id. (quoting Stone v.

Wall, 135 F.3d 1438, 1442 (11th Cir. 1998)) (per curiam). Indeed, Rule 59(e)

motions do not afford an unsuccessful litigant “two bites at the apple.” American

Home Assur. Co. v. Glenn Estess & Associates, Inc., 763 F.2d 1237, 1239 (11th Cir. 1985).

“While, in a motion for reconsideration, a party may seek to correct clear errors in a

court order or judgment, an error is not ‘clear and obvious’ if the legal issues are ‘at

least arguable.’” U.S. v. Barnes, 2012 WL 3194419 (M.D.Fla. June 05, 2012) (internal

quotation omitted) (quoting American Home Assurance Co., 763 F.2d at 1239).

In its motion, Farah claims that the Court mischaracterizes its involvement and

should apportion fault. Wilner, on the other hand, argues: (1) it should not be

sanctioned for the 572 plaintiffs that did not respond to the Federal Questionnaire;

(2) the Special Master’s investigative costs should not be part of the sanction; (3) the

Court should have employed a different methodology; and (4) the Sanction Order is

unconstitutionally excessive. Only the third basis, (methodology used by the Court),

is a new argument that could not have been raised prior to the entry of the Sanctions

Order. Even though Wilner’s other arguments may be summarily denied, the

Special Master will address each of the arguments raised by Wilner and Farah.


4

I. COURT PROPERLY SANCTIONED WILNER FOR THE 572 PLAINTIFFS WHO DID NOT RESPOND TO THE FEDERAL QUESTIONNAIRE

Pursuant to 28 U.S.C. § 1927,2 the Court ordered monetary sanctions against

Wilner for “vexatiously and unreasonably multipl[ying] the proceedings by filing and

maintaining these 572 lawsuits for years before the Court finally dismissed them over

Counsel's objections.” In re Engle Cases, No. 309CV10000JWGYJBT, 2017 WL

4675652, at *53 (M.D. Fla. Oct. 18, 2017). As the Court correctly noted:

The filing and maintenance of these 572 cases is emblematic of the larger problems in the federal Engle litigation. Wilner and Farah filed lawsuits on behalf of plaintiffs who did not authorize them, continued to maintain suits even after plaintiffs manifested their desire not to pursue a lawsuit, failed to keep in touch with their so-called “clients” or keep themselves apprised of their “clients'” status, and made misleading statements to the Court regarding the level of contact they had with their clients. Indeed, when the Court pressed Wilner at the December 13, 2016 hearing about whether he had signed authorizations to file the complaints, he ultimately admitted: “Probably not.” (Doc. 2174 at 135).

Id. Indeed, Wilner could only demonstrate that 45 clients, out of the approximately

3,700 for whom he purported to represent, provided prior authorization to file these

lawsuits. Id. at *5 n.9 and *53 n.60. Dating back all the way to 1995, Wilner sent

letters to purported clients expressly stating: “we cannot act as your attorneys . . .”

See Special Master’s Report and Recommendation (“2016 R&R”) at 87 (Doc. 2147).

Moreover, Wilner confirmed that the individuals who contacted the firm had

2 Alternatively, the Court sanctioned Wilner pursuant to its inherent authority. See In re Engle Cases, 2017 WL 4675652 at *55 (“[S]anctions under the Court's inherent authority are warranted in the alternative”).


5

“specifically been advised and have agreed that our firm cannot represent them in

pursuing individual suits against the tobacco industry due to the time, expense, and

difficulty such representation would require.” Id. at 84; Exhibit 10; In re Engle Cases,

2017 WL 4675652 at 10.

Despite filing and maintaining lawsuits on behalf of their purported clients for

approximately four years, Wilner still did not have basic contact information for 14

of them or even knowledge of the first name of two of those clients. Wilner does not

know why the other 558 plaintiffs did not return the Federal Questionnaire because

the firm had not been in contact with these “clients.” Based on all the evidence

presented, the Court correctly concluded, with “definite and firm conviction,” that

these 572 plaintiffs who did not return the Federal Questionnaire did not authorize

Wilner and Farah to file or maintain these lawsuits. Id. at 53.

Wilner does not present any new evidence to show that the Court’s conclusion

was incorrect. Rather, Wilner pivots by suggesting it cannot be sanctioned for these

plaintiffs’ “voluntary decision” to not return the Federal Questionnaire. Wilner does

not know whether any of these plaintiffs made a voluntary decision because the firm

never discussed the Federal Questionnaire with any of these clients. Indeed, at least

14 of the plaintiffs could not have made a voluntary decision because Wilner never

provided them with the Federal Questionnaire. Wilner, however, is not being

sanctioned for these plaintiffs’ voluntary decisions, but rather its own voluntary

decisions. Wilner decided to file lawsuits on behalf of individuals without their

knowledge or authorization. Wilner decided to maintain these lawsuits for years


6

without these individuals’ knowledge or authorization. In doing so, Wilner deprived

these 572 individuals of their right to make voluntary decisions as to what counsel to

retain, how to compensate that counsel, and whether to file and maintain a personal

injury suit. The Court properly sanctioned Wilner for its own conduct.

II. COURT PROPERLY INCLUDED THE SPECIAL MASTER’S INVESTIGATIVE COSTS

Wilner moves to alter or amend the Sanctions Order to exclude the Special

Master’s investigative costs3 as “unprecedented and enormous” and in violation of

Rule 53, Federal Rules of Civil Procedure. While Wilner may view the Special

Master’s investigation as unprecedented, at least “[e]qually unprecedented is a

lawyer filing 1,250 frivolous lawsuits, followed by years of maintaining those cases

through obfuscation and recalcitrance.” In re Engle Cases, 2017 WL 4675652 at *66.

The Special Master’s investigation was extensive, but no more so than was necessary

to discharge his court-ordered obligation. As previously stated, the Special Master

and those working for him set out to perform the assigned duty “fairly and

efficiently.” See Special Master’s Response (Doc. 2170). The Special Master stands

by the time spent as necessary to uncover the “breathtaking scale of Wilner and

Farah’s wrongdoing.” In re Engle Cases, 2017 WL 4675652 at *66. The Court

agreed, noting that a “massive investigation [was] required to unearth and document

Wilner's and Farah's misconduct.” Id. at *65 n.73.

3 On September 15, 2017, the Special Master filed his investigative costs at the Court’s direction. (Doc. 2180). In the more than a month that followed before the Court entered its sanctions order (Doc. 2181), Wilner did not object.


7

Moreover, the hourly rates submitted to the Court are well below the market.

According to a Florida Bar survey, the median hourly rate for an attorney in Florida

was $300. See The Florida Bar Results of the 2016 Economic and Law Office Management

Survey. 4 A survey conducted by the National Law Review reveals that the law firm

employed by Wilner to represent it during the sanctions proceeding charges an

average hourly rate of $595 per partner and $325 per associate. See National Law

Journal’s Billing Survey.5 Their lowest hourly rate for a partner was $335, and $210 for

an associate. Id. By comparison, the Department of Justice hourly rate for the

attorneys supporting the Special Master ranged from just $155.79 to $194.34 per

hour.6 Under the circumstances, the Special Master’s investigative costs are more

than reasonable.

In addition, Rule 53 does not limit the Court’s authority to sanction. Rather, the

rule provides that “the court must fix the master's compensation on the basis and

terms stated in the appointing order, but the court may set a new basis and terms

after giving notice and an opportunity to be heard.” Fed. R. Civ. P. 53(g). The

Court, however, is not compensating the Special Master pursuant to Rule 53.

Indeed, the Special Master will not receive any compensation.

4 Available at https://webprod.floridabar.org/wp-content/uploads/2017/04/tfb-2016-economics-survey-report.pdf.

5 Available at https://www.law.com/nationallawjournal/almID/1202636785489/

6 Each of the four DOJ attorneys previously billed higher raters while in private practice.


8

Instead, the Court is sanctioning Wilner and Farah for their improper conduct.

As the Court correctly noted, it has the authority to include the costs, expenses, and

attorney’s fees incurred in prosecuting the sanctions proceedings. In re Engle Cases,

2017 WL 4675652 at *65 n.74 (citing Norelus v. Denny’s, Inc., 628 F.3d 1270, 1297–

1302 (11th Cir. 2010); In re Tutu Wells Contamination Litig., 120 F.3d 368, 387 n.21,

387–88 (3d Cir. 1997); and Silva v. Witschen, 19 F.3d 725, 733 n.15 (1st Cir. 1994)).

In Norelus, the Eleventh Circuit reasoned that the “time, effort, and money a party

must spend to get another party sanctioned realistically is part of the harm caused by

that other party's wrongful conduct. Norelus, 628 F.3d at 1298. “[A] district court

may include costs arising from the sanctions proceedings in the sanctions award.”

Id.

Here, the public incurred considerable costs to prosecute the sanctions

proceedings. Included in those expenses are the Special Master’s investigative costs.

As the Court correctly noted, “[t]he substantial time and resources that the United

States Attorney spent investigating Wilner's and Farah's misconduct could have been

used to prosecute other violations of the law.” In re Engle Cases, 2017 WL 4675652 at

*65. Therefore, the Court properly compensated the public for the time and

resources the Special Master had to allocate to this investigation.

III. COURT REASONABLY ESTIMATED ITS COSTS

The Court’s decision to sanction Wilner for the costs the public incurred because

of its frivolous filings was proper. A district court enjoys broad discretion to


9

determine the type and amount of a sanction.7 In re Engle Cases, 2017 WL 4675652 at

*63. The Court exercised its discretion to “design a monetary sanction so that it

compensates the public for the waste of judicial resources caused by an attorney's

misconduct.” Id. The Special Master agrees that “a sanction that reimburses the

public for the diversion of judicial resources caused by frivolous, bad faith litigation

falls within the scope of the three applicable authorities—Rule 11, § 1927, and the

judiciary's inherent power.” Id.

The Court is entitled to substantial deference as to these determinations in light of

its “superior understanding of the litigation.” Goodyear Tire & Rubber Co. v. Haeger,

137 S. Ct. 1178, 1187 (2017). Armed with that superior understanding, the Court

found that Wilner’s misconduct imposed “incredible strains . . . on the justice

system—strains that were magnified by the fact that, at the time, the Middle District

of Florida had the ninth heaviest weighted caseload in the country (out of 94 district

courts).” Id. The Court further found that Wilner’s actions “delayed, perhaps by

years, plaintiffs with meritorious cases from having their claims heard.” Id. at *64.

The Court’s findings are consistent with the notion that the “judicial system of

dispute resolution is not cost free and those who abuse it through misconduct impose

7 Under Rule 11 alone, a $6,983.42 fine per case would have been appropriate. See Spolter v. Suntrust Bank, 403 F. App'x 387, 391 (11th Cir. 2010) (affirming a $10,000 fine in addition to assessing attorney's fees and costs); Riccard v. Prudential Ins. Co., 307 F.3d 1277, 1295 (11th Cir. 2002) ($10,000 fine); see also Rhodes v. MacDonald, 670 F. Supp. 2d 1363, 1382 (M.D. Ga. 2009), aff'd, 368 F. App'x 949 (11th Cir. 2010) ($20,000 fine).


10

direct costs on the law abiding taxpayers who support it.” Id. (quoting Specialized

Plating, Inc. v. Federal Envtl. Serv., Inc., 975 F.Supp. 397, 398 (D. Mass. 1997)).

While district courts have wide discretion in determining the appropriate

sanction, a court must apply the correct standard. See Fox v. Vice, 563 U.S. 826, 838

(2011). Here, the Court correctly applied the “but-for” standard when determining

the amount of the sanction. See In re Engle Cases, 2017 WL 4675652 at *63. Under

the “but-for” test, the Court could impose the entire cost of a lawsuit if the suit was a

sham from the beginning. See Goodyear, 137 S.Ct. at 1187-88 (“If a plaintiff initiates

a case in complete bad faith, so that every cost of defense is attributable only to

sanctioned behavior, the court may again make a blanket award.”). Applying this

standard, the Court specifically found that “[b]ecause these cases were frivolous from

their inception, and because Wilner's and Farah's entire course of conduct

throughout, and indeed preceding, the litigation was part of a pattern of advancing

invalid claims, the Court [identified] the entire cost of these frivolous suits as directly

resulting from Counsel's behavior.” In re Engle Cases, 2017 WL 4675652 at *65.

In determining the amount of the sanction, the Supreme Court cautioned that it

should not result in a second major litigation. Fox, 563 U.S. at 838 (quoting Hensley

v. Eckerhart, 461 U.S. 424, 437(1983)). Therefore, the Supreme Court instructed that

a district court need not achieve auditing perfection. Goodyear, 137 S. Ct. at 1187

(citing Fox, 563 U.S. 826). A district court may take into account its overall sense of a

suit, and may use estimates in calculating the amount. See id. Because, as the


11

Supreme Court has stated repeatedly, the “essential goal” of the district court is “to

do rough justice.” Id.

In performing this rough justice, the Court first looked to the Rand Study to

determine the average costs to taxpayers for personal injury cases in federal court.

While Wilner attacks the Rand Study, the use of this study alone to calculate the

costs would have been reasonable, as it “has been approved and adopted by

numerous courts.” Nogess v. Poydras Ctr., LLC, No. CV 16-15227, 2017 WL 396307,

at *14 (E.D. La. Jan. 30, 2017). Instead of using the average costs, Wilner would

have the Court become the “green-eyeshade accountants” the Supreme Court has

often stressed it “need not, and indeed should not, become.” Goodyear, 137 S. Ct. at

1187 (quoting Fox, 563 U.S. 826).

Nevertheless, and even though the data from the Rand Study provided “a basis

for assessing the value of judicial resources wasted by frivolous litigation,” the Court

did not rely solely on the study. Instead, the Court’s decision was informed by its

specialized knowledge of the costs of this litigation. The Court found that the

amount generated using the Rand Study “inadequately captures the enormity and

complexity of the challenges Wilner's and Farah's behavior put before the Court.” In

re Engle Cases, 2017 WL 4675652 at *65. The Court further found that the Rand

Study “likely underestimates the financial drain on the Court's resources because the

Engle cases were not ‘average,’ but were complex and necessitated substantial Court

time and effort.” Id.

In addition, the Court found that:


12

For nearly two and a half years, from early 2011 to mid–2013, the judges of this Court devoted an incalculable amount of time to parsing through thousands of cases to sort out legitimate cases from illegitimate ones. The Court's efforts, mostly opposed by Wilner, included holding multi-judge panel hearings in June 2011 and June 2012 to address the bloated Engle docket, finding and appointing a Temporary Special Master to assist the Court in coping with case management, ordering Wilner to send questionnaires to the plaintiffs, reviewing the Temporary Special Master's reports and analyses, disposing of the frivolous lawsuits (often over Counsel's opposition, as with the hundreds of cases involving Pre–Deceased Plaintiffs and those where the plaintiff never returned a questionnaire), and various other in-chambers tasks. Other litigants suffered as a result—both within and outside the Engle litigation—because the time and resources the Court had to devote to these tasks could have been spent resolving other cases. Ironically, even Wilner himself once acknowledged—albeit in the context of pushing for his own case management plan—that (1) the large volume of Engle claims imposed a significant burden on judicial resources, and (2) delay would harm plaintiffs and the public interest. (Doc. 25 at 8–11).

Id. at *65. Therefore, substantial deference is due to Court’s superior understanding

of the litigation and determination that the actual costs incurred exceeded the

average costs indicated by the Rand Study.

IV. SANCTION ORDER IS NOT UNCONSTITUTIONALLY EXCESSIVE

Wilner argues that the civil sanction imposed by this Court violates the excessive

fines clause of the Eighth Amendment based on an overbroad reading of the

Supreme Court’s decision in Austin v. United States, 509 U.S. 602 (1993). The

Supreme Court, however, limited its review to “whether the Excessive Fines Clause

of the Eighth Amendment applies to forfeitures of property under 21 U.S.C. §§

881(a)(4) and (a)(7).” United States v. Ursery, 518 U.S. 267, 281 (1996) (quoting Austin,

509 U.S. at 604.). While the Excessive Fines Clause is not limited solely to criminal

proceedings, the question turns on what constitutes a “punishment” for the purposes


13

of the Eighth Amendment. In Austin, the Supreme Court held that “forfeiture under

[§§ 881(a)(4) and (a)(7)] constitutes ‘payment to a sovereign as punishment for some

offense,’ and, as such, is subject to the limitations of the Eighth Amendment's

Excessive Fines Clause.” Id. (quoting Austin, 509 U.S. at 622.). The Supreme Court

has not held that civil sanctions under Rule 11, 28 U.S.C. §1927, or inherent

authority necessarily constitute a punishment under the Eighth Amendment.

The Eleventh Circuit, however, has acknowledged that “there is some language

in Austin suggesting that, unless a civil sanction solely serves remedial purposes, it

may be considered punishment and thus subject to scrutiny as to whether it violates

the Excessive Fines Clause. Cole v. U.S. Dep't of Agric., A.S.C.S., 133 F.3d 803, 808

(11th Cir. 1998) (emphasis in original). The Supreme Court’s subsequent decision in

Bajakajian has called into question whether a sanction must solely serve a remedial

purpose. See United States v. Bajakajian, 524 U.S. 321 (1998). As the Eighth Circuit

observed:

there is a strong conflicting signal from Bajakajian. After concluding that the criminal forfeiture at issue was punishment, the Court turned to the question whether the forfeiture was an excessive fine. In answering that question affirmatively, the majority distinguished many long-standing customs forfeiture statutes, including statutes authorizing the “forfeiture” of monetary penalties proportioned to the value of goods. Those forfeitures, the Court explained, “serv[ed] the remedial purpose of reimbursing the Government for the losses accruing from the evasion of customs duties,” without discussing whether they were also in part punitive. Bajakajian, 118 S.Ct. at 2040-41. The four dissenters in Bajakajian complained that the majority “treats many fines as ‘remedial’ penalties even though they far exceed the harm suffered.... In the majority's universe, a fine is not a punishment even if it is much larger than the money owed. This confuses whether a fine is excessive with whether it is a punishment.” Id. 118 S.Ct. at 2041-42. If the Bajakajian dissenters have properly construed the majority opinion, then civil


14

penalties imposed under 41 U.S.C. § 55(a)(1) may not be subject to the Excessive Fines Clause at all, because like customs forfeitures they serve the remedial purpose of reimbursing the government for losses accruing from kickbacks.

United States v. Lippert, 148 F.3d 974, 978 (8th Cir. 1998).

Wilner suggests that the sanction imposed by the Court is a punishment because

Rule 11 sanctions may serve deterrent purposes. See Wilner’s Motion at 15. While

deterrence is a traditional goal of punishment, the Supreme Court has recognized

that all civil penalties will have some deterrent effect but that does not necessarily

render them a punishment. Cole, 133 F.3d at 806 (citing Hudson v. United States, 522

U.S. 93, 102 (1997). The same is true of civil sanctions. If any deterrent purpose is

sufficient to declare a civil sanction to be punishment, then all civil sanctions are

necessarily punishment and it becomes unnecessary to evaluate whether a civil

sanction is a “fine” under the Excessive Fines Clause. See In re Wyly, 552 B.R. 338,

613 (Bankr. N.D. Tex. 2016). This “cannot be the proper result in light of the fact

that Austin does not declare it unnecessary to analyze whether civil sanctions are

fines, and the fact that Bajakajian declares that traditional, civil, in rem forfeitures as

they were understood at the time the Eighth Amendment was enacted are not fines.”

Id.

Nevertheless, even if the Court’s civil sanction constitutes a punishment, it still

does not violate the Excessive Fines Clause. “The touchstone of the constitutional

inquiry under the Excessive Fines Clause is the principle of proportionality: The

amount of the forfeiture must bear some relationship to the gravity of the offense that

it is designed to punish.” Bajakajian, 524 U.S. 321, 334 (1998). In Bajakajian, the


15

Supreme Court held that the $357,144 forfeiture sought by the government was

grossly disproportionate to the gravity of the defendant's offense of failing to report

that he was transporting more than $10,000 outside the United States. 524 U.S. at

325, 339–40. The Supreme Court reasoned that the forfeiture would be grossly

disproportionate to the crime because the maximum fine authorized by Congress

was $5,000, and the harm caused to the government was minimal. Id. at 338–339.

Unlike in Bajakajian, the sanction in this case is not grossly disproportionate to

the harm caused. To the contrary, the sanction is equal to the harm caused. The

Court determined that Wilner and Farah were responsible for filing and maintaining

at least 1,250 frivolous suits, with each frivolous lawsuit costing the judiciary, on

average, $6,983.42. In re Engle Cases, 2017 WL 4675652 at *65. Therefore, the

sanction is directly proportionate to the harm caused by the misconduct.

In this regard, the sanction order is most analogous to a restitution order. “The

circuits that have considered challenges to restitution orders under the Excessive

Fines clause have held that where the restitution order reflects the amount of the

victim's loss no constitutional violation has occurred.” United States v. Newell, 658

F.3d 1, 35 (1st Cir. 2011) (citing United States v. Lessner, 498 F.3d 185, 205–06 (3d Cir.

2007); United States v. Newsome, 322 F.3d 328, 342 (4th Cir. 2003); and United States v.

Dubose, 146 F.3d 1141, 1145 (9th Cir. 1998)). This is not surprising because

restitution is inherently proportional in that it restores the victim to the status quo

ante. Id. Likewise, the Court’s Sanction Order restores the victim (the public) to the

status quo ante.


16

For purposes of the Excessive Fines Clause, a court should determine whether

each fine individually, not the cumulative amount, is grossly disproportionate. See

Moustakis v. City of Fort Lauderdale, 338 F. App'x 820, 822 (11th Cir. 2009). In

Moustakis, the Eleventh Circuit held that a $150 per day fine for violating the Code

was not excessive, even though the cumulative fine of $700,000, was more than the

value of the house violating the Code. Id. The $700,000 fine was caused by the

failure to bring the house into compliance with the Code each day for 14 years. Id.

The Eleventh Circuit reasoned that “the $700,000 fine is, literally, directly

proportionate to the offense.” Similarly, “[i]t must also be remembered that this

sanction is not imposed for a single case. It is instead $6,983.42—a modest sum

given the egregiousness of Counsel's conduct and its adverse consequences on the

Court's docket—imposed for each of the 1,250 frivolous lawsuits that Counsel

advanced in bad faith (plus the cost of the Special Master's labor).” In re Engle Cases,

2017 WL 4675652 at *66. Rather than being grossly disproportionate to the harm,

the $9,164,404.12 sanction here is, literally, directly proportionate.

Finally, Wilner’s focus on whether its conduct was reprehensible is misguided.

While Wilner’s actions were no doubt reprehensible, the degree of reprehensibility is

relevant to the reasonableness of a punitive damages award. See State Farm Mut.

Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003). The sanctions order, however, is

not punitive. 8 It went no further than to compensate the public for its loss. As a

8 The sanctions imposed by the Court are dwarfed by attorney’s fees generated by these improper filings. In re Engle Cases, 2017 WL 4675652 at *66 (“The Court is so


17

result, Wilner cannot show that any portion of the sanction is punitive, let violative

of the Constitution.

V. FARAH’S INVOLVEMENT WAS NOT MISCHARACTERIZED

Farah tries to distance itself from Wilner and the Engle litigation, but recognizes

that it should have taken a more active role in the litigation. Indeed, Farah

affirmatively decided to become counsel of record for every single case. See Exhibit 1

to 2016 R&R. (The Farah Firm then appeared as counsel of record in each individual

action. . .”). From the beginning, “The Farah Firm and The Wilner Firm agreed to a

division of labor; The Farah Firm actively supported the entire action, at significant

cost, while The Wilner Firm took primary responsibility for conducting trials and

other court appearances.” Exhibit 1 to 2016 R&R. Farah authorized Wilner, and

later Lief Cabraser, to affix its signature block on papers filed with the Court. While

Farah suggests it does not recall reviewing a draft of the response filed by Lieff

Cabraser (Doc. 158), Farah never objected to its inclusion in any filing or otherwise

notified the Court that any document was filed without its permission. As counsel of

record, Farah received service copies of the files, thus expressly putting it on notice of

the positions that were being argued on its behalf.9

assured because it is holding in escrow approximately $45 million in attorneys' fees and costs from the global settlement of the remaining federal Engle cases.”)

9 Farah is correct in pointing out that its signature block does not appear on Doc. 359, but that does not affect the Court’s underlying reason for sanctioning Farah.


18

Farah further suggests that the Court should not take into account Ms. Walker’s

statement concerning Farah. Ms. Walker informed Lieff Cabraser that she told

Farah her parents had never lived in Florida. She further claimed that “Farah &

Farah told her to just list her county in FL and still go ahead and fill out paperwork.”

Exhibit 79 to 2016 R&R at 258. Farah does not deny this occurred. Rather, Farah

highlights that Ms. Walker’s father was not one of the clients Farah provided to

Wilner and that that it did not participate in the questionnaire process. Farah,

however, admits that it “spent considerable resources to contact and update plaintiffs

after the complaints were filed.” Farah’s Motion at 4. Farah previously described

itself as “heavily involved in working cases.” 2016 R&R at 71. Farah sent “its own

employees to The Wilner Firm to assist with the tobacco litigation” and “even hired

investigators after the Court began reviewing the inclusion of certain plaintiffs.” Id.

“Overall, The Wilner Firm directed The Farah Firm how to participate, but The

Farah Firm’s role was not de minimus.” Id. In light of Farah’s admitted involvement

in contacting plaintiffs and Ms. Walker’s unequivocal statements about Farah, the

Court gave Ms. Walker’s statements the appropriate weight.

VI. SANCTION AWARD SHOULD NOT BE APPORTIONED

Farah objects to the Court finding that Wilner and Farah “were responsible for

investigating and filing each of the Engle-progeny lawsuits, and it was Wilner and

Farah themselves who signed each of the complaints.” In re Engle Cases, 2017 WL

4675652 at *67. While Farah authorized Wilner to file the complaints with its

signature block, Farah suggests that it is incorrect to consider them a cosigner. Farah


19

acknowledges, however, that a lack of signature does not absolve it of all

responsibility. Indeed, “to conclude that [co-] counsel has no responsibility, because

[co-]counsel did not physically sign any of the pertinent pleadings would be a

hypertechnical and nonsensical reading of Rule 11.” Ideal Instruments, Inc. v. Rivard

Instruments, Inc., 243 F.R.D. 322, 348 n.6 (N.D. Iowa 2007). This conclusion

comports with Rule 11, which “permits the court to consider whether other attorneys

in the firm, co-counsel, other law firms, or the party itself should be held accountable

for their part in causing a violation.” Fed. R. Civ. P. 11(c), Adv. Cmt. Note, 1993

amend. Farah, however, suggests “that as a non-signor [its] liability should be

proportionate to [its] responsibilities. Farah and Wilner, however, had an equal

responsibility to the Court.

As indicated in the 2016 R&R, an attorney also violates Rule 11 by “later

advocating” a claim, even if he never signed the offending paper. As the Eleventh

Circuit has explained, “later advocating” receives a broad interpretation and can

consist of no more than appearing in the case. See Turner v. Sungard Bus. Sys., Inc., 91

F.3d 1418, 1421 (11th Cir. 1996) (sanctioning substitute counsel who filed nothing

more than a notice of appearance but who knew or should have known that the

complaint was meritless and failed to seek dismissal). As Farah admits, it “then

appeared as counsel of record in each individual action. . .” See Exhibit 1 to 2016

R&R. And even though Farah may not have formally signed the original complaint,

by continuing the suit, they unquestionably later advocated it. See Vehicle Operation


20

Techs. LLC v. Am. Honda Motor Co. Inc., 67 F. Supp. 3d 637, 653 (D. Del. 2014). As a

result, the Court properly held Wilner and Farah jointly responsible.

CONCLUSION

Based on the forgoing, The Wilner Firm, P.A.’s Motion to Alter or Amend the

Sanctions Order (Doc. 2189), and Farah & Farah, P.A. and Charlie Farah’s Motion

for Reconsideration (Doc. 2196) should be denied.

MARIA CHAPA LOPEZ United States Attorney Special Master

By: s/ Sean P. Flynn SEAN P. FLYNN Deputy Chief, Civil Division Assistant United States Attorney Florida Bar No. 0112914 United States Attorney’s Office 400 North Tampa Street, Suite 3200 Tampa, Florida 33602 Telephone: (813) 274-6000 Facsimile: (813) 274-6200 Email: [email protected]


21

CERTIFICATE OF SERVICE

I hereby certify that on January 12, 2018, I electronically filed the foregoing

with the Clerk of Court by using the CM/ECF system, which will send a notice of

electronic filing to counsel of record.

s/ Sean P. Flynn SEAN P. FLYNN Assistant United States Attorney


united states district court middle district · pdf filea motion for reconsideration may fall...

Documents