Discon, Inc. v. NYNEX Corp.

4 F.3d 130, 1993 WL 342215
CourtCourt of Appeals for the Second Circuit
DecidedAugust 26, 1993
DocketNo. 1846, Docket 93-7317
StatusPublished
Cited by20 cases

This text of 4 F.3d 130 (Discon, Inc. v. NYNEX Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Discon, Inc. v. NYNEX Corp., 4 F.3d 130, 1993 WL 342215 (2d Cir. 1993).

Opinion

GEORGE C. PRATT, Circuit Judge:

BACKGROUND

Discon, Inc. (“Discon”) filed a complaint alleging that the defendants NYNEX Corporation, NYNEX Material Enterprises, New York Telephone Company, Robert J. Ecken-rode, and Bernard O’Reilly (“NYNEX”) had combined and conspired to monopolize the market for removal services for central office telephone equipment. Discon’s complaint alleged sixteen causes of action under the federal antitrust laws, RICO, and New York State statutory and common law. Appellant George J. Navagh, Esq., appeared as counsel of record for Discon.

NYNEX moved to dismiss the complaint for failure to state a claim. Eleven days before the scheduled oral argument of the motion to dismiss, Navagh filed an affidavit requesting that appellant Scott J. Rafferty, Esq., be admitted pro hac vice to represent Discon. NYNEX opposed the application for Rafferty’s admission on the ground that other courts in which he had litigated had made adverse findings as to his conduct and his tendency to misstate both law and fact.

The district court “adjourned generally” Rafferty’s application for admission pro hac vice and denied Discon’s request to adjourn the oral argument. The court also ordered that if Rafferty applied for full admission to the bar of the court under Local Rule 3 he should state in his verified petition for admission that a contested motion for his admission pro hac vice was pending, and he should deliver a copy of his verified petition to the court’s chambers.

Later, the court granted NYNEX’s motion to dismiss, but without prejudice, and Discon was granted leave to file an amended complaint. When Discon filed its amended complaint, NYNEX again moved to dismiss. By letter Navagh reminded the court that over a year earlier it had adjourned Rafferty’s application to appear pro hac vice; Navagh suggested that granting Rafferty’s application “on an early day” would enable Rafferty “to prepare for [NYNEX’s] argument.” The court scheduled oral argument on Rafferty’s application. After testimony by Rafferty regarding the charges about his character and alleged misconduct in other courts, and after argument, the court, on the following day, rendered a decision from the bench denying Rafferty’s motion for pro hac vice admission.

Discon moved for reconsideration of this denial, and sought sanctions against Struve for alleged perjury and misrepresentations in affidavits opposing the pro hac vice application. NYNEX filed a memorandum of law in opposition to the motion for reconsideration and, in a footnote, suggested that the court “might appropriately consider sanctioning Mr. Rafferty and plaintiffs counsel for the bringing of a patently baseless and improper motion for reconsideration.”

On April 1, 1993, the court filed the decision and order that is now before us on review. The court denied the motion for [132]*132reconsideration on the ground that it was without merit. It also denied the motion to sanction Struve. However, the court imposed sanctions upon Rafferty and Navagh for violating Fed.R.Civ.P. 11 in their motion to reconsider. The court stated that the motion contained “so many misrepresentations, falsehoods and inaccuracies” that it would not address them all, but that it would only “highlight a few of the distortions” that warranted the imposition of Rule 11 sanctions. The court then described five specific alleged misrepresentations.

The court ordered Rafferty to pay a fine of $2,500 and Navagh to pay $500. It further directed Navagh and Rafferty to share equally in paying the attorneys’ fees and costs of NYNEX’s counsel expended in opposing the motion to reconsider. At the time of oral argument before this court, the amount of attorney’s fees was yet to be determined by the district court on the basis of affidavits filed by NYNEX and opposing affidavits filed by Rafferty and Navagh.

The court also ordered that Diseon, itself, “pay no part of the sanction” imposed on its attorneys, because “it was not responsible for the sanctioned conduct.” Moreover, the court stayed the underlying action “pending payment of the fines and attorneys’ fees herein imposed on Messrs. Rafferty and Na-vagh” and directed the clerk of the court “not to accept additional papers from [Discon] for filing (except for affidavits relating to attorneys’ fees).”

By a single notice of appeal Rafferty and Navagh have appealed from the sanctions imposed on them and from the denial of sanctions against Struve, and Discon has appealed from the order directing the clerk not to accept additional papers for filing.

Before we confront the merits of the problems raised by this unusual order, we must first consider whether we have jurisdiction over this appeal.

DISCUSSION

Essentially we have two appeals before us, one by the attorneys, the other by the client, Discon. As to the attorneys’ appeal, the district court not only fined the two attorneys $2,500 and $500, respectively; it also ordered them jointly to pay NYNEX’s attorneys’ fees and costs in an amount that is yet to be determined. While as a final collateral order under Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), a sanction award may be appealed separately from the merits of the underlying action, see Thomas E. Hoar, Inc. v. Sara Lee Corp., 882 F.2d 682, 685-87 (2d Cir.1989), cert. denied sub nom. Greenspan, Jaffe & Rosenblatt v. Sara Lee Corp., 498 U.S. 846, 111 S.Ct. 132, 112 L.Ed.2d 100 (1990), when the amount of the sanction has not yet been reduced to a sum certain, we lack jurisdiction to review the sanction. Cooper v. Salomon Brothers Inc., 1 F.3d 82 (2d Cir.1993).

Reliance by Rafferty and Navagh on Budinich v. Becton Dickinson & Co., 486 U.S. 196, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988), as authority for appellate jurisdiction is misplaced. Budinich held that “a decision on the merits is a ‘final decision’ for purposes of [28 U.S.C.] § 1291 whether or not there remains for adjudication a request for attorney’s fees attributable to the case.” Id. at 202-03, 108 S.Ct. at 1722 (emphasis added). Here there has been no decision on the merits, only an award of sanctions against the attorneys. Even if we were to extend Budi-nich from the attorneys’ fee context to a sanction context and then to apply its reasoning in reverse so as to permit the sanction to be appealed before the merits appeal, we still would not have an appealable order, because the amount of the sanction against the attorney has not been determined and for that reason the order is not yet final for purposes of the Cohen doctrine.

Were we to entertain the attorneys’ appeal at this time and affirm, we would undoubtedly be soon faced with another appeal challenging the amount of fees determined by the district court.

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Discon, Inc. v. Nynex Corporation
4 F.3d 130 (Second Circuit, 1993)

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4 F.3d 130, 1993 WL 342215, Counsel Stack Legal Research, https://law.counselstack.com/opinion/discon-inc-v-nynex-corp-ca2-1993.