Chester H. Borowski v. Depuy, Incorporated, a Division of Boehringer Mannheim Company, and Stephen Bales, Appeals of Mitchell A. Kramer & Associates

876 F.2d 1339, 13 Fed. R. Serv. 3d 794, 1989 U.S. App. LEXIS 8657
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 9, 1989
Docket88-2791, 88-3179 and 89-1014
StatusPublished
Cited by20 cases

This text of 876 F.2d 1339 (Chester H. Borowski v. Depuy, Incorporated, a Division of Boehringer Mannheim Company, and Stephen Bales, Appeals of Mitchell A. Kramer & Associates) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chester H. Borowski v. Depuy, Incorporated, a Division of Boehringer Mannheim Company, and Stephen Bales, Appeals of Mitchell A. Kramer & Associates, 876 F.2d 1339, 13 Fed. R. Serv. 3d 794, 1989 U.S. App. LEXIS 8657 (7th Cir. 1989).

Opinions

CUMMINGS, Circuit Judge.

These three appeals are facets of Borowski v. DePuy, Incorporated, 850 F.2d 297 (1988), where a sales representative sued his corporate employer and its former national sales manager, Stephen Bales, after plaintiffs discharge. In that opinion, we affirmed a summary judgment in favor of the defendants and imposed sanctions against plaintiffs counsel, appellant Mitchell A. Kramer, who subsequently filed these three appeals. While his firm and defendant Bales have filed a total of seven briefs in the three appeals, defendant De-Puy has not filed any brief. Because the briefs are so complete, we are dispensing with oral argument.

On February 13, 1989, Chief Judge Bauer ordered that these appeals be consolidated and considered by the same panel that decided the litigation reported in 850 F.2d 297. Since each appeal involves a different question, they will be considered seriatim.

No. 88-2791

Our prior opinion was handed down on June 17, 1988, and upheld the district court’s imposition of Fed.R.Civ.P. Rule 11 sanctions against Mitchell Kramer, who was Borowski’s counsel in this litigation. A month thereafter Magistrate Rosemond awarded $48,926.41 as attorney’s fees to DePuy’s counsel and $16,806.77 to co-defendant Bales’ counsel. On August 11, 1988, the district court adopted the magistrate’s report and recommendation in its entirety. This appeal is from the August 11 order and concerns the district court’s earlier denial of Kramer’s motion to take discovery regarding the reasonableness of the fees.1 Kramer now asks us to reverse the August 11, 1988, order of the district court in order to allow him to take discovery as to the reasonableness of the fees that have been awarded against Kramer.

The district court had originally denied Kramer’s motion for leave of court to seek expedited discovery on January 21, 1988. Judge Bua had relied on the Advisory Committee’s note with respect to the 1983 amendment of Rule 11 declaring that courts should allow discovery concerning Rule 11 sanctions “only in extraordinary circumstances.” This denial was predicated on two factors: (1) plaintiff “failed to demonstrate such extraordinary circumstances in the instant case” and (2) discovery would be particularly inappropriate because the two defendants “have included sufficient [attorney’s fee] details to render additional discovery unnecessary.” On this appeal, Kramer argues that the district court’s refusal to allow discovery about the reasonableness of the defendants’ attorney’s fees violated his due process rights. Kramer insists that expedited discovery was necessary in order to clear up “deficiencies and ambiguities” in the fee petitions.

In his brief on appeal, Kramer admits that he found no cases allowing discovery in connection with Rule 11 attorney fee sanctions (Br. 12). However, he asserts that this Court wrongfully described Rule 11 sanctions “as a general fee-shifting device.” Hays v. Sony Corp. of America, 847 F.2d 412, 419 (7th Cir.1988). We recently adhered to this view of Rule 11 in Hamer v. County of Lake, 871 F.2d 58, 60 (7th Cir.1989). As opposed to those cases, Kramer relies primarily on Gaiardo v. Ethyl Corp., 835 F.2d 479, 483 (1987), where the Third Circuit stated that “Rule 11 sanctions should not be viewed as a general fee shifting device” (emphasis supplied). The meaning of this phrase in Gaiardo was clarified elsewhere in the opinion where the court explained that Rule 11 “is not wholesale fee shifting but correction of litigation abuses” and that “the Rule must not be [1341]*1341used as an automatic penalty against an attorney” (pp. 483, 482) (emphasis supplied). We are in accord with those appraisals. Hays and Hamer are not in conflict with the Third Circuit, nor did Judge Bua’s discovery ruling transgress those authorities.

Kramer has been unable to cite any authority supporting his supposed due process right to discovery with respect to the Rule 11 sanctions imposed. Indeed, the pertinent cases hold that not even a hearing is required before the imposition of Rule 11 sanctions. McLaughlin v. Bradlee, 803 F.2d 1197, 1205-1206 (D.C.Cir.1986); Rodgers v. Lincoln Towing Service, Inc., 771 F.2d 194 (7th Cir.1985); Brown v. National Board of Medical Examiners, 800 F.2d 168 (7th Cir.1986); INVST Financial Group v. Chem-Nuclear Systems, Inc., 815 F.2d 391, 405 (6th Cir.1987); National Ass’n of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319, 1324 (D.C.Cir.1982).

This Court has already held that in cases like this an appellant is not entitled to discovery on the issue of attorney’s fees. Indianapolis Colts v. Mayor and City Council of Baltimore, 775 F.2d 177, 183 (1985). The record here shows that the defense attorneys had supported their fee requests with sufficient information (see Magistrate’s July 22, 1988, report at 4-6), so that there was no abuse of discretion in denying Kramer’s request for discovery.

Judge Bua’s order denying discovery (quoted at p. 3 above) contained two entirely satisfactory reasons to support his ruling. To grant discovery now would unduly prolong this already protracted litigation.

No. 88-3179

On July 22, 1988, Magistrate Rosemond issued a report awarding $47,216.01 to defendant DePuy and $16,287.77 to defendant Bales in attorneys’ fees and costs under Rule 11 of the Federal Rules of Civil Procedure. These were to be assessed solely against plaintiff’s lawyers, appellant Mitchell A. Kramer & Associates, of Philadelphia. The report was sent to plaintiff’s local counsel, Robert S. Atkins, who failed to forward it from Chicago to Kramer. No objections to the magistrate’s report were filed. On August 11, 1988, Judge Bua approved that report. Kramer received notice of that order four days thereafter.

Pursuant to Fed.R.Civ.P. Rule 60(b), on August 30, 1988, Kramer moved for relief from the district court’s August 11, 1988, order, asking the court to vacate that order and permit him to file untimely objections to the magistrate’s July 22, 1988, report. This motion was denied on October 7, 1988, on the ground that “excusable neglect” required by Rule 60(b)(1) was not shown in that local counsel Atkins had received the magistrate’s report a day or two after its docketing, which was adequate notice under Northern District of Illinois Rule 3.13C providing for service of notice on local counsel (having an office within that district).

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Bluebook (online)
876 F.2d 1339, 13 Fed. R. Serv. 3d 794, 1989 U.S. App. LEXIS 8657, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chester-h-borowski-v-depuy-incorporated-a-division-of-boehringer-ca7-1989.