Second Circuit upholds imposition of more than $100,000 in sanctions against attorney, affirming district court’s findings that attorney lied to court regarding mediation process and acted in bad faith in pursuing copyright infringement lawsuit based on untimely filed copyright registration.
The Second Circuit upheld the imposition of over $100,000 in sanctions, including $83,500 in defendant’s attorneys’ fees, against attorney Richard Liebowitz, who is well known in the copyright arena for bringing thousands of copyright suits over the past few years. In affirming the district court’s decision, the court of appeals focused on Liebowitz’s conduct during his representation of photographer Arthur Usherson against Bandshell Artist Management in a copyright infringement lawsuit. Recognizing Liebowitz’s “ignominious record of reprimands and sanctions from judges across the country,” the Second Circuit held that the district court had sufficiently supported its findings that Liebowitz had lied in representing to the district court that the mediator hearing the dispute had given both lawyer and client permission not to appear in person at the mediation and that Liebowitz acted in bad faith in pursuing Usherson’s copyright infringement claim.
With respect to Liebowitz’s conduct in the mediation, Liebowitz had no written proof of the oral permission that he had allegedly obtained from the mediator, and Liebowitz’s claim was contradicted by the mediator himself, who testified that Liebowitz had never mentioned the possibility that he and Usherson would not attend the mediation in person. The district court had evaluated the demeanors of Liebowitz and the mediator at the evidentiary hearing, concluding that the mediator’s testimony was credible and Liebowitz’s was not, and the Second Circuit discerned no error in that determination.
With respect to Liebowitz’s bad faith in pursuing the claim, the court of appeals agreed with the district court’s factual finding that when Liebowitz himself registered the photograph after the complaint was filed, he knew that the photograph was not registered at the time of the complaint (a prerequisite to bringing a copyright infringement claim). In the alternative, even if Liebowitz did not know about the untimely registration, he was put on notice during the pretrial conference, when counsel for the defendant specifically asked Liebowitz whether the registration was timely. The Second Circuit also affirmed the district court’s finding that Liebowitz was motivated by improper purposes such as harassment or delay, based on Liebowitz’s “custom and practice” of failing to investigate copyright registrations, as well as his attempts to evade the issues with the defective complaint and obstruct discovery until he could obtain a settlement. In agreeing with the district court that the complaint in the copyright case had no factual or legal merit, the Second Circuit also pointed to the fact that Liebowitz, despite knowing that the photograph was not registered, did not move to amend the complaint, but instead resisted the discovery that would have revealed the fatal defect.
On appeal, Liebowitz also challenged the nature of the sanctions—approximately $83,500 of which was based on attorney’s fees, and an additional $20,000 fine stemming from Liebowitz’s bad faith conduct in falsely alleging that the photograph was registered when the complaint was filed. The Second Circuit rejected Liebowitz’s argument that he should not have to pay attorneys’ fees because opposing counsel had taken the case on a pro bono basis, holding that sanctions of attorneys’ fees still hold counsel liable for “unnecessarily consuming judicial and attorney resources.” The court also rejected his argument that the $20,000 sanction was punitive and impermissible because it was imposed without affording him the protections of criminal procedure, noting that district courts acting pursuant to their authority under Federal Rule of Civil Procedure 16(f) are free to “design the sanction to fit the violation” and issue “any just orders” in response to bad faith participation in pretrial conferences. The court of appeals emphasized that the monetary sanctions needed to be sufficiently substantial both to compensate and to deter. Here, considering Liebowitz’s previous similar conduct, the need to compensate for his misconduct in this case and to deter him from engaging in similar future conduct justified the additional $20,000 sanction.
Finally, the Second Circuit confirmed that the nationwide non-monetary sanctions against Liebowitz were appropriate. Based on Liebowitz’s violation of multiple court orders, his habitual lies to the court, and his pursuit of a complaint containing a false allegation, the court of appeals found that the district court did not abuse its discretion when it ordered Liebowitz to serve his clients with the district court’s order and to file a copy of the order on the docket of all of his cases nationwide.