Antolini v. N Corporation

District Court, S.D. New York·Decided December 16, 2020·No. 1:19-cv-07385·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DINO ANTOLINI, Plaintiff, -v.- 19 Civ. 7385 (KPF) N CORPORATION, NICHOLAS S. OPINION AND ORDER PRITZKER, SHIYANG HUI, and TIPSY SHANGHAI RESTAURANT MANAGEMENT, INC., Defendants. KATHERINE POLK FAILLA, District Judge: The Court has already imposed sanctions against Defendants for their repeated failures to abide by the Court’s discovery orders (Dkt. #39), and explained why it believes that these sanctions should be imposed on Defendants’ former counsel, Oliver Zhou, for his misrepresentations to the Court, see Antolini v. N Corp., No. 19 Civ. 7385 (KPF), 2020 WL 5089442, at *2- 3 (S.D.N.Y. Aug. 28, 2020). Before the Court now are Mr. Zhou’s submission as to why he does not believe he should be sanctioned (see Dkt. #74-75), and Plaintiff’s petition for attorneys’ fees (see Dkt. #42, 57). For the reasons discussed below, the Court finds that sanctions should be imposed against Mr. Zhou, and grants Plaintiff’s petition for fees in part. BACKGROUND1 By Order dated March 27, 2020, the Court imposed sanctions against Defendants for their repeated failures to abide by the Court’s discovery orders.

(Dkt. #39). The Court granted sanctions in the form of requiring Defendants to pay the attorneys’ fees that Plaintiff’s counsel had billed in connection with each of Plaintiff’s letter motions for sanctions, and ordered Plaintiff to file an accounting of hours billed. (Id.). On June 23, 2020, in light of additional proceedings and filings devoted to the issue of Defendants’ continued lack of compliance with their discovery obligations, the Court granted Plaintiff’s motion to submit a revised fee petition. (Dkt. #54). By Order dated August 28, 2020, the Court provided “specific notice” to Defendants’ former counsel, Oliver

Zhou, that the Court believed his improper conduct — stating to the Court that he represented Defendant N Corporation when he did not in fact have any contact with that party — gave rise to the sanctions imposed against Defendants, and set a briefing schedule for Mr. Zhou to be heard on the matter. Antolini, 2020 WL 5089442, at *1-2. Mr. Zhou submitted an affirmation in response to the Court’s Order on September 8, 2020 (see generally Zhou Aff.), and Plaintiff filed a response on September 10, 2020 (Dkt. #76).

1 Mr. Zhou filed the same affirmation on the docket twice in response to the Court’s August 28, 2020 Order. (See Dkt. #74-75). For ease of reference, the Court cites to Mr. Zhou’s affirmation using the convention “Zhou Aff. ¶ [ ]”; and refers to the transcript of the January 28, 2020 conference as “Hr’g Tr.” (Dkt. #88). At the outset of Mr. Zhou’s involvement in this case, he affirmatively represented to the Court that he was entering the case as counsel for N Corporation, one of three Defendants who have appeared in this case to date:

THE COURT: You’re coming into this case with some open discovery issues. I don’t want to know about privileged communications that you may have had with the defendants in this case, but is it your understanding that you would be coming in and representing all three defendants in this case? MR. ZHOU: … Yes, your Honor[.] (Hr’g Tr. 17; see also id. at 18). He further reassured the Court that he would be communicating with all three of his clients — including N Corporation — to address discovery disputes that were already festering in January 2020, when he first appeared on behalf of his new clients: THE COURT: … I would like you to communicate to your clients that it is of great concern to me that they have not been forthcoming with their discovery responses. And I’m sure you can advise them of the range of sanctions that I have available to me if they don’t. MR. ZHOU: Yes, your Honor. I will certainly advise them, and I will certainly report to you for any discovery issue if we cannot resolve between myself and Mr. Finkelstein. Then I will let your Honor know what’s the problem of the discovery, what’s the barriers, what’s the issues, and what’s the status. And then, based upon the facts or the joint letter we submit, between Mr. Finkelstein and I, and then you, Judge, your Honor, can make an informed decision as to the status and the problem and the completeness of the discovery. (Id. at 21). Indeed, in reliance on Mr. Zhou’s representations, the Court extended discovery to allow Defendants another chance to comply with their discovery Orders. (Dkt. #32). Yet, over the course of the next four months, “Mr. Zhou continued, baselessly, to hold himself out as N Corporation’s counsel despite having no communication with any N Corporation agent, receiving no documents or other discovery from N Corporation, and failing to

investigate or confirm whether he in fact represented N Corporation.” Antolini, 2020 WL 5089442, at *2. As a result, Defendants violated multiple discovery orders, Plaintiffs were prevented from getting discovery from N Corporation, and the parties and the Court wasted nearly half a year litigating needless discovery disputes. DISCUSSION A. Sanctions Against Mr. Zhou Are Justified The Court has “inherent power to supervise and control its own proceedings and to sanction counsel or a litigant for bad-faith conduct.”

Sussman v. Bank of Israel, 56 F.3d 450, 459 (2d Cir. 1995); see also 28 U.S.C. § 1927 (“Any attorney ... who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.”); Madison 92nd St. Assocs., LLC v. Marriott Int’l, Inc., No. 13 Civ. 291 (CM), 2013 WL 5913382, at *12 (S.D.N.Y. Oct. 31, 2013), aff’d sub nom. Boies, Schiller & Flexner LLP v. Host Hotels & Resorts, Inc., 603 F. App’x 19 (2d Cir. 2015) (summary order) (“The purpose of § 1927 is to ensure

that those who create unnecessary costs also bear them.”). Generally speaking, “[i]mposition of sanctions under a court’s inherent powers requires a specific finding that an attorney acted in bad faith,” and such sanctions “are appropriate only if there is clear evidence that the conduct at issue is [i] entirely without color and [ii] motivated by improper purposes.” Wolters Kluwer Fin. Servs., Inc. v. Scivantage, 564 F.3d 110, 114 (2d Cir. 2009).

Similarly, before imposing sanctions under 28 U.S.C. § 1927, a court “must find clear evidence that [i] the offending party’s claims were entirely meritless and [ii] the party acted for improper purposes.” Revson v. Cinque & Cinque, P.C., 221 F.3d 71, 79 (2d Cir. 2000) (internal quotation marks omitted) (quoting Agee v. Paramount Commc’ns Inc., 114 F.3d 395, 398 (2d Cir. 1997)); see generally Sorenson v. Wolfson, 683 F. App’x 33, 37 (2d Cir. 2017) (summary order) (discussing sanctions imposed under the inherent powers doctrine and 28 U.S.C. § 1927).

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