Category Archives: U.S. Supreme Court

U.S. DOJ files Statement in TIKD in federal lawsuit arguing that Florida Bar is not immune from Sherman antitrust allegations

Hello everyone and welcome to this Ethics Alert Update which will discuss the recent (March 12, 2018) Statement of Interest filed by the United States Department of Justice arguing that The Florida Bar is not immune or exempt from antitrust under the Sherman Antitrust Act based upon the U.S. Supreme Court’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  The case is TIKD Services LLC, v. The Florida Bar, et al., Case No. 1:17-cv-24103-MGC (U.S. District Court, Southern District of Florida-Miami Division).  The Statement of Interest is available on the PACER federal document system here:  https://www.pacer.gov/login.html (subscription required).

As I previously blogged, TIKD Services, LLC filed the federal lawsuit against The Florida Bar, the Ticket Clinic law firm, and other individuals in the U.S. District Court, Southern District of Florida on November 8, 2017.  The TIKD app allows an individual who has received a traffic citation to upload a photo of the citation and pay a fixed fee and TIKD retains an attorney to represent that individual.  If the individual receives points against his or her license, TIKD refunds the payment and pays the cost of the ticket.  The business model is based on the fact that contested traffic tickets are often dismissed or a lower fine is assessed and, since TIKD deals in volume, it can charge a lower price than a lawyer who is separately retained by the individual.

The Florida Bar issued a staff opinion finding that lawyers who work with TIKD and similar programs could be in violation of Florida Bar disciplinary rules, including fee splitting and interference with the lawyer’s independent professional judgment.  A complaint was filed with The Florida Bar by members of the law firm alleging that TIKD was engaging in the unauthorized practice of law (UPL).  That complaint is currently pending and the Bar has recommended further proceedings.

TIKD then filed the federal lawsuit court alleging conspiracy, restraint of trade, tortious interference with business relationships, and antitrust violations.  The defendants include The Florida Bar, attorney Mark S. Good, who founded The Ticket Clinic law firm, and other individuals.  According to the federal Complaint, The Florida Bar advised TIKD that it was opening an unlicensed practice of law investigation into the company’s activities after the company was featured in a Miami Herald story and a few months later, attorneys with The Ticket Clinic threatened to report two of TIKD’s lawyers to The Florida Bar if they continued to work with TIKD.

A state lawsuit was filed and was settled; however, TIKD alleges in the federal Complaint that The Florida Bar and the Ticket Clinic law firm continued to make a “concerted effort” to put it out of business, and that the firm’s lawyers continued filing “baseless ethics complaints” against attorneys who represent TIKD customers.

A recent (February 21, 2018) Motion for Sanctions filed by the Ticket Clinic law firm alleged, inter alia, that The Florida Bar has immunity, which immunized the individual defendants, that the individuals have immunity on other grounds, that the lawsuit is frivolous on other grounds, and that the lawsuit should be dismissed and the Plaintiffs should be sanctioned.

On March 12, 2018, the U.S. Department of Justice filed a statement of interest stating that The Florida Bar is not immune from federal or state antitrust liability under the Sherman Act as an arm of the state based upon the U.S. Supreme Court’s 2015 decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  According to the statement:

“The Florida Bar defendants assert, as one ground for their motion to dismiss, that they are entitled to protection against Sherman Act claims by the state-action doctrine of Parker v. Brown, 317 U.S. 341 (1943), without having to satisfy either the “clear articulation” or “active supervision” requirements of that doctrine. That position is incorrect. The Supreme Court’s most recent state-action decision, N. Carolina State Bd. of Dental Examiners v. FTC, 135 S. Ct. 1101 (2015), clarified the state-action doctrine with respect to state agencies that regulate learned professions. It requires that the Bar, if “controlled by active market participants,” id. at 1114, must satisfy the clear articulation and active supervision requirements in order to obtain state-action protection.”

Bottom line:  As I have previously blogged, this is one of the first cases filed in Florida (and possible in any jurisdiction) which directly alleges that a State Bar’s procedures violate the Sherman Antitrust Act in reliance upon the U.S. Supreme Court opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  The Statement of Interest filed by the U.S. Department of Justice agrees with that analysis and argues that it is correct.  Stay tuned…

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

Advertisements

Leave a comment

Filed under Attorney Ethics, Bar antitrust, Bar regulation and antitrust, BAR UPL antitrust, Florida Bar, Florida Bar TIKD antitrust lawsuit, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer antitrust, Lawyer assisting unlicensed practice of law, Lawyer assisting unlicensed practice of law (UPL), Lawyer assisting UPL, Lawyer ethics, Lawyer Ethics and Professionalism, North Carolina Dental Board, North Carolina dental whitening case and UPL, TIKD UPL Bar request for Florida Supreme Court injunction, TIKD US DOJ Statement of Interest no Bar immunity, TIKD v Florida Bar Motion for Sanctions, TIKD v. Florida Bar antitrust federal lawsuit, U.S. Constitution and UPL regulation- professional speech and application of UPL rules, U.S. Supreme Court

U.S. Supreme Court holds that bad faith fee sanction under court’s inherent authority is limited to fees incurred solely from the misconduct

Hello everyone and welcome to this Ethics Alert which will discuss the important and very recent United States Supreme Court opinion which held that a bad faith fee sanction based upon a court’s inherent authority is limited to fees incurred solely as a result of the misconduct.  The case is Goodyear Tire & Rubber Co., v. Haeger, 813 F. 3d 1233, No. 15–1406 (Argued January 10, 2017—Decided April 18, 2017).  The United  States Supreme Court opinion is here:  https://www.supremecourt.gov/opinions/16pdf/15-1406_db8e.pdf

According to the opinion, which was delivered by Justice Kagan, the Haegers sued Goodyear Tire & Rubber Company, alleging that the failure of a Goodyear G159 tire caused the family’s motorhome to swerve off the road and flip over.  “After several years of contentious discovery, marked by Goodyear’s slow response to repeated requests for internal G159 test results, the parties settled the case. Some months later, the Haegers’ lawyer learned that, in another lawsuit involving the G159, Goodyear had disclosed test results indicating that the tire got unusually hot at highway speeds. In subsequent correspondence, Goodyear conceded withholding the information from the Haegers, even though they had requested all testing data. The Haegers then sought sanctions for discovery fraud, urging that Goodyear’s misconduct entitled them to attorney’s fees and costs expended in the litigation.

“The District Court found that Goodyear had engaged in an extended course of misconduct. Exercising its inherent power to sanction bad-faith behavior, the court awarded the Haegers $2.7 million—the entire sum they had spent in legal fees and costs since the moment, early in the litigation, when Goodyear made its first dishonest discovery response. The court said that in the usual case, sanctions ordered pursuant to a court’s inherent power to sanction litigation misconduct must be limited to the amount of legal fees caused by that misconduct. But it determined that in cases of particularly egregious behavior, a court can award a party all of the attorney’s fees incurred in a case, without any need to find a “causal link between [the expenses and] the sanctionable conduct.” (citation omitted)

“As further support for its award, the District Court concluded that full and timely disclosure of the test results would likely have led Goodyear to settle the case much earlier. Acknowledging that the Ninth Circuit might require a link between the misconduct and the harm caused, however, the court also made a contingent award of $2 million. That smaller amount, designed to take effect if the Ninth Circuit reversed the larger award, deducted $700,000 in fees the Haegers incurred in developing claims against other defendants and proving their own medical damages. The Ninth Circuit affirmed the full $2.7 million award, concluding that the District Court had properly awarded the Haegers all the fees they incurred during the time when Goodyear was acting in bad faith.

Goodyear argued that, due to the failure of the court to link the fee with the misconduct, the fee award should be reversed and an instruction to the trial court to reconsider the matter. The Haegers argued that the award should be upheld because the lower courts articulated and applied the appropriate but-for causation standard, or, even if they did not, the fee award in fact passes the but-for test.

“The Haegers’ defense of the lower courts’ reasoning is a non-starter: Neither court used the correct legal standard. The District Court specifically disclaimed the need for a causal link on the ground that this was a “truly egregious” case. 906 F. Supp. 2d, at 975. And the Ninth Circuit found that the trial court could grant all attorney’s fees incurred “during the time when [Goodyear was] acting in bad faith,” 813 F. 3d 1233, 1249—a temporal, not causal, limitation. A sanctioning court must determine which fees were incurred because of, and solely because of, the misconduct at issue, and no such finding lies behind the $2.7 million award made and affirmed below. Nor is this Court inclined to fill in the gap, as the Haegers urge. As an initial matter, the Haegers have not shown that this litigation would have settled as soon as Goodyear divulged the heat-test results (a showing that would justify an all-fees award from the moment Goodyear was supposed to disclose). Further, they cannot demonstrate that Goodyear’s non-disclosure so permeated the suit as to make that misconduct a but-for cause of every subsequent legal expense, totaling the full $2.7 million.”

“Although the District Court considered causation in arriving at its back-up award of $2 million, it is unclear whether its understanding of that requirement corresponds to the appropriate standard—an uncertainty pointing toward throwing out the fee award and instructing the trial court to consider the matter anew. However, the Haegers contend that Goodyear has waived any ability to challenge the contingent award since the $2 million sum reflects Goodyear’s own submission that only about $700,000 of the fees sought would have been incurred regardless of the company’s behavior. The Court of Appeals did not address that issue, and this Court declines to decide it in the first instance. The possibility of waiver should therefore be the initial order of business on remand.”

The opinion held that “(w)hen a federal court exercises its inherent authority to sanction bad-faith conduct by ordering a litigant to pay the other side’s legal fees, the award is limited to the fees the innocent party incurred solely because of the misconduct—or put another way, to the fees that party would not have incurred but for the bad faith.”  The case was reversed and remanded.

Bottom line: This U.S. Supreme Court opinion is important since it addresses and resolves (at least in the federal courts) the question of whether a court exercising its inherent authority to sanction bad faith misconduct by awarding fees must limit the fees to those incurred as a direct result of the lawyer’s misconduct.  The opinion found in the affirmative and that the fees awarded must be shown to have been incurred solely as a result of the misconduct.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under .S. Supreme Court, Attorney Ethics, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer sanctions, U.S. Supreme Court

U.S. Supreme Court holds that bad faith fee sanction under court’s inherent authority is limited to fees incurred solely from the misconduct

Hello everyone and welcome to this Ethics Alert which will discuss the important and very recent United States Supreme Court opinion which held that a bad faith fee sanction based upon a court’s inherent authority is limited to fees incurred solely as a result of the misconduct.  The case is Goodyear Tire & Rubber Co., v. Haeger, 813 F. 3d 1233, No. 15–1406 (Argued January 10, 2017—Decided April 18, 2017).  The United States Supreme Court opinion is here:  https://www.supremecourt.gov/opinions/16pdf/15-1406_db8e.pdf

According to the opinion, which was delivered by Justice Kagan, the Haegers sued Goodyear Tire & Rubber Company, alleging that the failure of a Goodyear G159 tire caused the family’s motorhome to swerve off the road and flip over.  “After several years of contentious discovery, marked by Goodyear’s slow response to repeated requests for internal G159 test results, the parties settled the case. Some months later, the Haegers’ lawyer learned that, in another lawsuit involving the G159, Goodyear had disclosed test results indicating that the tire got unusually hot at highway speeds. In subsequent correspondence, Goodyear conceded withholding the information from the Haegers, even though they had requested all testing data. The Haegers then sought sanctions for discovery fraud, urging that Goodyear’s misconduct entitled them to attorney’s fees and costs expended in the litigation.

“The District Court found that Goodyear had engaged in an extended course of misconduct. Exercising its inherent power to sanction bad-faith behavior, the court awarded the Haegers $2.7 million—the entire sum they had spent in legal fees and costs since the moment, early in the litigation, when Goodyear made its first dishonest discovery response. The court said that in the usual case, sanctions ordered pursuant to a court’s inherent power to sanction litigation misconduct must be limited to the amount of legal fees caused by that misconduct. But it determined that in cases of particularly egregious behavior, a court can award a party all of the attorney’s fees incurred in a case, without any need to find a “causal link between [the expenses and] the sanctionable conduct.” (citation omitted)

“As further support for its award, the District Court concluded that full and timely disclosure of the test results would likely have led Goodyear to settle the case much earlier. Acknowledging that the Ninth Circuit might require a link between the misconduct and the harm caused, however, the court also made a contingent award of $2 million. That smaller amount, designed to take effect if the Ninth Circuit reversed the larger award, deducted $700,000 in fees the Haegers incurred in developing claims against other defendants and proving their own medical damages. The Ninth Circuit affirmed the full $2.7 million award, concluding that the District Court had properly awarded the Haegers all the fees they incurred during the time when Goodyear was acting in bad faith.

Goodyear argued that, due to the failure of the court to link the fee with the misconduct, the fee award should be reversed and an instruction to the trial court to reconsider the matter. The Haegers argued that the award should be upheld because the lower courts articulated and applied the appropriate but-for causation standard, or, even if they did not, the fee award in fact passes the but-for test.

“The Haegers’ defense of the lower courts’ reasoning is a non-starter: Neither court used the correct legal standard. The District Court specifically disclaimed the need for a causal link on the ground that this was a “truly egregious” case. 906 F. Supp. 2d, at 975. And the Ninth Circuit found that the trial court could grant all attorney’s fees incurred “during the time when [Goodyear was] acting in bad faith,” 813 F. 3d 1233, 1249—a temporal, not causal, limitation. A sanctioning court must determine which fees were incurred because of, and solely because of, the misconduct at issue, and no such finding lies behind the $2.7 million award made and affirmed below. Nor is this Court inclined to fill in the gap, as the Haegers urge. As an initial matter, the Haegers have not shown that this litigation would have settled as soon as Goodyear divulged the heat-test results (a showing that would justify an all-fees award from the moment Goodyear was supposed to disclose). Further, they cannot demonstrate that Goodyear’s non-disclosure so permeated the suit as to make that misconduct a but-for cause of every subsequent legal expense, totaling the full $2.7 million.”

“Although the District Court considered causation in arriving at its back-up award of $2 million, it is unclear whether its understanding of that requirement corresponds to the appropriate standard—an uncertainty pointing toward throwing out the fee award and instructing the trial court to consider the matter anew. However, the Haegers contend that Goodyear has waived any ability to challenge the contingent award since the $2 million sum reflects Goodyear’s own submission that only about $700,000 of the fees sought would have been incurred regardless of the company’s behavior. The Court of Appeals did not address that issue, and this Court declines to decide it in the first instance. The possibility of waiver should therefore be the initial order of business on remand.”

The opinion held that “(w)hen a federal court exercises its inherent authority to sanction bad-faith conduct by ordering a litigant to pay the other side’s legal fees, the award is limited to the fees the innocent party incurred solely because of the misconduct—or put another way, to the fees that party would not have incurred but for the bad faith.”  The case was reversed and remanded.

Bottom line: This U.S. Supreme Court opinion is important since it addresses and resolves (at least in the federal courts) the question of whether a court exercising its inherent authority to sanction bad faith misconduct by awarding fees must limit the fees to those incurred as a direct result of the lawyer’s misconduct.  The opinion found in the affirmative and that the fees awarded must be shown to have been incurred solely as a result of the misconduct.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under .S. Supreme Court, bad faith fee sanction under court’s inherent authority is limited to fees incurred solely from the misconduct, bad faith fee sanction under court’s inherent authority limited to fees incurred solely from the misconduct, Fee sanctions inherent authority of court to impose, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Uncategorized