21-3127-cv (L) Kyros Law P.C. v. World Wrestling Entertainment, Inc.
In the United States Court of Appeals For the Second Circuit
August Term, 2022 Nos. 21-3127-cv (L), 21-3136-cv (XAP)
KYROS LAW P.C., KONSTANTINE W. KYROS, Appellants-Cross-Appellees,
MICHELLE JAMES, as mother and next friend of M.O., a minor child, and T.O, a minor child, JIMMY SNUKA, “SUPERFLY,” by and through his guardian, CAROLE SNUKA, SALVADOR GUERRERO, IV, a/k/a CHAVO GUERRERO, JR., CHAVO GUERRERO, SR., a/k/a CHAVO CLASSIC, BRYAN EMMETT CLARK, JR., a/k/a ADAM BOMB, DAVE HEBNER, EARL HEBNER, CARLENE B. MOORE-BEGNAUD, a/k/a JAZZ, MARK JINDRAK, JON HEIDENREICH, LARRY OLIVER, a/k/a CRIPPLER, BOBBI BILLARD, LOU MARCONI, BERNARD KNIGHTON, KELLI FUJIWARA SLOAN, on behalf of Estate of HARRY MASAYOSHI FUJIWARA, WILLIAM ALBERT HAYNES, III, RODNEY BEGNAUD, a/k/a RODNEY MACK, RUSS MCCULLOUGH, individually and on behalf of all others similarly situated, a/k/a BIG RUSS MCCULLOUGH, RYAN SAKODA, individually and on behalf of all others similarly situated, MATTHEW ROBERT WIESE, individually and on behalf of all others similarly situated, a/k/a LUTHER REIGNS, EVAN SINGLETON, VITO LOGRASSO, CASSANDRA FRAZIER, individually and as next of kin to her deceased husband, NELSON LEE FRAZIER, JR. a/k/a MABEL a/k/a VISCERA a/k/a BIG DADDY V a/k/a KING MABEL, and as personal representative of Estate of NELSON LEE FRAZIER, JR., deceased, SHIRLEY FELLOWS, on behalf of Estate of TIMOTHY ALAN SMITH a/k/a REX KING, JOSEPH M. LAURINAITIS, a/k/a ROAD WARRIOR ANIMAL, PAUL ORNDORFF, a/k/a MR. WONDERFUL, CHRIS PALLIES, a/k/a KING KONG BUNDY, ANTHONY NORRIS, a/k/a AHMED JOHNSON, JAMES HARRIS, a/k/a KAMALA, KEN PATERA, BARBARA MARIE LEYDIG, BERNARD KNIGHTON, as personal representative of Estate of BRIAN KNIGHTON, a/k/a AXL ROTTEN, MARTY JANNETTY, TERRY SZOPINSKI, a/k/a WARLORD, SIONE HAVIA VAILAHI, a/k/a BARBARIAN, TERRY BRUNK, a/k/a SABU, BARRY DARSOW, a/k/a SMASH, BILL EADIE, a/k/a AX, JOHN NORD, JONATHAN HUGGER, a/k/a JOHNNY THE BULL, JAMES BRUNZELL, SUSAN GREEN, ANGELO MOSCA, a/k/a KING KONG MOSCA, JAMES MANLEY, a/k/a JIM POWERS, MICHAEL ENOS, a/k/a MIKE, a/k/a BLAKE BEVERLY, BRUCE REED, a/k/a BUTCH, SYLAIN GRENIER, OMAR MIJARES, a/k/a OMAR ATLAS, DON LEO HEATON, a/k/a DON LEO JONATHAN, TROY MARTIN, a/k/a SHANE DOUGLAS, MARC COPANI, a/k/a MUHAMMAD HASSAN, MARK CANTERBURY, a/k/a HENRY GODWIN, VICTORIA OTIS, a/k/a PRINCESS VICTORIA, JUDY HARDEE, JUDY MARTIN, TIMOTHY SMITH, a/k/a REX KING, TRACY SMOTHERS, a/k/a FREDDIE JOE FLOYD, MICHAEL R. HALAC, a/k/a MANTAUR, RICK JONES, a/k/a BLACK BART, KEN JOHNSON, a/k/a SLICK, GEORGE GRAY, a/k/a ONE MAN GANG, FERRIN JESSE BARR, a/k/a J.J. FUNK, ROD PRICE, DONALD DRIGGERS, RONALD SCOTT HEARD, on behalf of Estate of RONALD HEARD a/k/a OUTLAW RON BASS, BORIS ZHUKOV, DAVID SILVA, JOHN JETER, a/k/a JOHNNY JETER, GAYLE SCHECTER, as personal representative of Estate of JON RECHNER a/k/a BALLS MAHONEY, ASHLEY MASSARO, a/k/a ASHLEY, CHARLES WICKS, a/k/a CHAD WICKS, PERRY SATULLO, a/k/a PERRY SATURN, CHARLES BERNARD SCAGGS, a/k/a FLASH FUNK, CAROLE M. SNUKA, on behalf of Estate of JAMES W. SNUKA,
Consolidated-Plaintiffs,
v.
2 WORLD WRESTLING ENTERTAINMENT, INC., Consolidated Plaintiff-Defendant-Appellee-Cross-Appellant,
VINCENT K. MCMAHON, individually and as the Trustee of the Vincent K. McMahon Irrevocable Trust u/t/a dtd. June 24, 2004, as the Trustee of the Vincent K. McMahon 2008, and as Special Trustee of the Vincent K. McMahon 2013 Irrev. Trust u/t/a dtd. December 5, 2013 and as Trust, Consolidated Defendant-Appellee-Cross-Appellant,
ROBERT WINDHAM, THOMAS BILLINGTON, JAMES WARE, OREAL PERRAS, JOHN DOES, various,
Consolidated-Defendants. *
On Appeal from a Judgment of the United States District Court for the District of Connecticut.
ARGUED: MARCH 30, 2023 DECIDED: AUGUST 28, 2023
Before: LIVINGSTON, Chief Judge, and NARDINI, Circuit Judge. †
* The Clerk of Court is respectfully directed to amend the caption as set forth above. † Judge Rosemary S. Pooler, originally a member of the panel, died on
August 10, 2023. The two remaining members of the panel, who are in agreement, have determined the matter. See 28 U.S.C. § 46(d); 2d Cir. IOP E(b); United States v. Desimone, 140 F.3d 457, 458-59 (2d Cir. 1998).
3 Appellants-Cross-Appellees Konstantine W. Kyros and his law firm, Kyros Law P.C. (together, “Kyros”), appeal from a judgment of the United States District Court for the District of Connecticut imposing sanctions for litigation misconduct under Rules 11 and 37 of the Federal Rules of Civil Procedure. In 2014 and 2015, Kyros brought several lawsuits against Appellees-Cross-Appellants World Wrestling Entertainment, Inc. and Vincent K. McMahon (together, “WWE”). These cases were initially filed in various jurisdictions across the country but were eventually consolidated in the District of Connecticut. This Court previously affirmed the district court’s dismissal of one of Kyros’s cases against WWE and dismissed the rest for lack of appellate jurisdiction. Kyros also previously challenged orders entered by the district court (Vanessa L. Bryant, Judge) determining that he should be sanctioned under Rules 11 and 37, but we also dismissed that appeal for lack of jurisdiction because the amount of sanctions had not yet been determined. Subsequently, the district court (Jeffrey A. Meyer, Judge) imposed sanctions against Kyros in the amount of $312,143.55—less than the full amount requested by WWE. Kyros now appeals these final sanctions determinations. On cross-appeal, WWE challenges the district court’s reduction of the requested fee award by application of the “forum rule,” under which a court calculates attorney’s fees with reference to the prevailing hourly rates in the forum in which the court sits. Finding no abuse of discretion, we AFFIRM the judgment.
KONSTANTINE W. KYROS, Kyros Law Offices, Hingham, MA, for Appellants-Cross- Appellees.
CURTIS B. KRASIK, K&L Gates LLP, Pittsburgh, PA (Jerry S. McDevitt, K&L
4 Gates LLP, Pittsburgh, PA, Jeffrey P. Mueller, Day Pitney LLP, Hartford CT, on the brief), for Appellees-Cross-Appellants.
WILLIAM J. NARDINI, Circuit Judge:
Over the course of several months in 2014 and 2015,
Appellants-Cross-Appellees Konstantine W. Kyros and his law firm,
Kyros Law P.C. (together, “Kyros”) filed, in jurisdictions across the
country, class action lawsuits and wrongful death lawsuits against
Appellees-Cross-Appellants World Wrestling Entertainment, Inc.
and Vincent K. McMahon (together, “WWE”), asserting various tort
claims that related to chronic traumatic encephalopathy (“CTE”) in
former wrestlers. In 2016, Kyros filed an additional mass action
lawsuit on behalf of fifty-three former wrestlers, asserting a wide
range of tort claims. See Laurinaitis v. World Wrestling Entm’t, Inc., No.
3:16-cv-1209-VLB (D. Conn.) (“Laurinaitis”). These lawsuits were all
eventually transferred to the United States District Court for the
District of Connecticut. We previously affirmed the district court’s
5 dismissal of the Laurinaitis complaint and dismissed Kyros’s appeals
of the other consolidated cases against WWE for lack of jurisdiction.
See Haynes v. World Wrestling Entm’t, Inc., 827 F. App’x 3 (2d Cir. 2020).
The present appeal concerns only the district court’s awards of
sanctions in Laurinaitis and Singleton v. World Wrestling Entertainment,
Inc., No. 3:15-cv-425-VLB (D. Conn.) (“Singleton”), one of the class
action lawsuits. At an earlier stage of the case, the district court
(Vanessa L. Bryant, Judge) ruled that Kyros had repeatedly engaged
in pleading and discovery misconduct and decided to impose
sanctions in Laurinaitis under Rule 11 of the Federal Rules of Civil
Procedure, and in Singleton under Rule 37. Although Kyros
challenged these orders in the previous appeal, we dismissed that
portion of his appeal because the district court had not yet entered a
final order that fixed the amount of sanctions. See Haynes, 827 F.
App’x at 11. Following our decision, the district court (Jeffrey A.
Meyer, Judge) adopted a recommended ruling of a magistrate judge
6 (Robert A. Richardson, Magistrate Judge) and awarded sanctions to
WWE in the amount of $312,143.55—less than WWE’s requested
amount of $533,926.44. McCullough v. World Wrestling Ent., Inc., 2021
WL 4472719, at *1, *4–5 (D. Conn. Sept. 30, 2021). 2 With the amount
of sanctions calculated, we now consider Kyros’s appeal of the Rule
11 and Rule 37 sanctions and WWE’s cross-appeal, which challenges
the district court’s application of the forum rule to award less than the
requested amount of sanctions.
I. Background
Two former wrestlers filed the Singleton complaint in January
2015 as a putative class action in the Eastern District of Pennsylvania,
alleging that they suffered from, or were at increased risk of
developing, degenerative neurological conditions as a result of
traumatic brain injuries sustained while wrestling for WWE. The
Pennsylvania district court transferred the action to the District of
2The consolidated cases were transferred to Judge Meyer’s docket on September 5, 2019.
7 Connecticut in March 2015. The Laurinaitis complaint, which was
filed in the District of Connecticut in July 2016, included a wide range
of tort claims and sought relief under various statutes on the ground
that WWE had misclassified the plaintiffs as independent contractors.
We discuss below the facts and procedural history of Singleton and
Laurinaitis to the extent they are relevant to the challenged sanctions
orders.
A. Rule 37 Sanctions in Singleton
At a Singleton status conference in June 2015, WWE provided
the district court with updates on Kyros’s various class actions and
raised concerns about apparent defects in the complaint, including
untimeliness and glaringly false allegations. As an example, WWE
pointed to the allegation that CTE had caused the plaintiffs’
“untimely death” when, in fact, the plaintiffs were still very much
alive. Supp. App’x at 73–74. The district court admonished Kyros for
filing a complaint that failed to satisfy fundamental pleading
8 standards and instructed him to re-file “without a lot of superfluous,
hyperbolic, inflammatory opinions and references to things that don’t
have any relevance.” Supp. App’x at 127–28. A week later, Kyros
filed a second amended complaint.
In March 2016, the district court dismissed all claims but one in
the second amended complaint. Specifically, the district court
allowed the plaintiffs’ fraudulent omission claim to proceed because
the complaint, as amended, alleged that WWE was aware of the link
between repeated head trauma and degenerative neurological
conditions at a time when the plaintiffs were still active as wrestlers
for WWE. 3 In dismissing the rest of the claims, the district court
again admonished Kyros for, among other things, making “patently
false,” “copied and pasted” allegations in the complaint; “repeatedly
3 WWE later moved for summary judgment as to the fraudulent omission claim, and the district court granted the motion in March 2018, concluding that Kyros failed to establish that WWE was aware of a link between wrestling and CTE during the relevant time period. The district court noted, “[o]nce again,” that Kyros had “asserted facts and advanced legal theories for which there is no reasonable evidentiary and legal basis,” and “caution[ed] that such conduct subjects counsel to Rule 11 sanctions.” Supp. App’x at 990.
9 misrepresent[ing] both the substance and the meaning” of certain
testimony; and failing to include specific and substantive allegations.
Special App’x at 7–9, 58.
During discovery on the fraudulent omission claim, WWE
served the plaintiffs with interrogatories. The plaintiffs responded,
and, after the parties met and conferred, WWE filed a motion to
compel, claiming that the plaintiffs’ responses were incomplete or
evasive. In May 2016, the district court granted in part the motion to
compel and ordered the plaintiffs to submit supplemental responses
to certain of the interrogatories. The district court instructed that,
where the plaintiffs were “unable to identify a statement or speaker
in response to an interrogatory,” they “must state that fact.” Supp.
App’x at 248.
On August 8, 2016, WWE moved for Rule 37 sanctions, arguing
that the plaintiffs failed to comply with the district court’s May 2016
order. The district court referred the Rule 37 motion to a magistrate
10 judge. In February 2018, the magistrate judge issued a recommended
ruling on the motion. He concluded that the plaintiffs’ interrogatory
responses were insufficient. For example, he noted that, rather than
identifying specific “deceptive public statement[s]” WWE had made,
the plaintiffs’ responses directed WWE to an “entire book” along with
“random publications and documents with little specificity or
guidance.” Special App’x at 175, 178. Accordingly, the magistrate
judge recommended sanctioning Kyros “to dissuade further abuse of
the discovery process and promote thorough compliance with court
orders moving forward.” Special App’x at 179–80.
Additionally, the magistrate judge observed that Kyros “ha[d]
been on notice that plaintiffs need to comply with Court orders and
the Federal Rules of Civil Procedure throughout this litigation,” id. at
180, and clarified that “plaintiffs and their counsel are now on notice
that any further noncompliance during the remainder of this
litigation may result in the dismissal of the case,” id. at 183. The
11 magistrate judge also recommended that Kyros pay WWE’s legal fees
in connection with the sanctions motion. In July 2018, the district
court adopted the magistrate judge’s recommended ruling.
B. Rule 11 Sanctions in Laurinaitis
Kyros filed the Laurinaitis complaint in July 2016 on behalf of
fifty-three former WWE wrestlers. The complaint was 214 pages long
and contained 667 paragraphs, including seventeen causes of action
that were each asserted on behalf of all plaintiffs. Shortly thereafter,
WWE notified Kyros of its intention to move for Rule 11 sanctions.
Specifically, on two occasions in August 2016, WWE served Kyros
with draft Rule 11 motions setting forth as grounds for sanctions,
among other things, the issues of time-barred claims in the complaint
and the lack of a good-faith basis for allegations regarding WWE’s
knowledge.
The draft Rule 11 motions asserted that many of the allegations
in the complaint appeared to have been indiscriminately cut and
12 pasted from a complaint filed in the National Football League
(“NFL”) concussion litigation. For example, the complaint alleged
that one purported wrestler (who was, instead, an NFL football
player) “sustained repeated and disabling head impacts while a
wrestler for the Steelers”—Pittsburgh’s NFL team. Special App’x at
205 (internal quotation marks omitted). Similarly, the complaint
alleged that various studies had warned of the danger that a
concussion would pose to a “football wrestler.” Supp. App’x at 346.
On October 17, 2016, after Kyros failed to withdraw or correct
the complaint, WWE filed in the district court its first motion for Rule
11 sanctions against Kyros and his co-counsel, premised on the two
draft motions it had served on Kyros in August 2016. WWE pointed
to purported “false allegations,” “frivolous legal claims,” and “bad
faith,” and sought dismissal of the complaint. Supp. App’x at 466.
The district court referred this first Rule 11 motion to the magistrate
judge.
13 Kyros responded in two ways. On November 9, 2016, he filed
a first amended complaint, which added numerous plaintiffs, pages,
and paragraphs. Then, in December 2016, Kyros filed an opposition
to WWE’s October sanctions motion, arguing that certain “improper”
allegations in the complaint were attributable to editing mistakes and
that the rest of the complaint contained plausible allegations made in
good faith.
Later in December 2016 WWE filed a second motion for Rule 11
sanctions, arguing that the first amended complaint was just as
deficient as the original one. Kyros opposed WWE’s December
sanctions motion, arguing that there was a good faith basis for the
plaintiffs’ allegations, that any plagiarism from the NFL litigation was
not sanctionable, and that the allegations were sufficient with respect
to tolling and knowledge.
In September 2017, the district court issued an interim order on
WWE’s pending motions to dismiss and for Rule 11 sanctions.
14 Admonishing Kyros for failing to comply with the Federal Rules of
Civil Procedure and its own prior instructions, the district court listed
several of the “numerous allegations” in the “335 page complaint
with 805 paragraphs . . . that a reasonable attorney would know are
inaccurate, irrelevant, or frivolous.” Special App’x at 150. The district
court concluded that the first amended complaint “remain[ed]
unnecessarily and extremely long, with an overwhelming number of
irrelevant allegations,” such that parsing the claims as they stood
“would be both a waste of judicial resources [and] unduly prejudicial
to the WWE.” Id. at 162–63. Ultimately, the district court reserved
judgment on the pending motions for Rule 11 sanctions and to
dismiss, pending the filing of a second amended complaint and the in
camera submission of sworn affidavits by each Laurinaitis plaintiff that
would “set[] forth facts within each plaintiff’s . . . personal knowledge
that form[ed] the factual basis of their claim.” Id. at 163. The district
court also warned Kyros that it would grant the motion to dismiss
15 and “pursuant to Rule 11(c)(3) . . . sua sponte revisit whether to award
attorney’s fees as a sanction,” if Kyros failed to comply with the order.
Id. at 165. Kyros subsequently filed a second amended complaint and
submitted affidavits on behalf of the plaintiffs.
In September 2018, the district court issued its final order in the
consolidated cases. The order first concluded that dismissal was
warranted because the second amended complaint and the affidavits
that Kyros had filed did not comply with its September 2017 order.
The district court reviewed Kyros’s “repeated failures to comply with
the clear, and unambiguous provisions of the Federal Rules of Civil
Procedure and this Court’s repeated instructions and admonitions,
which has resulted in a considerable waste of the Court’s and the
Defendants’ time and resources.” Id. at 196–97. It commented that
“despite second, third, and fourth chances to submit pleadings that
comply with Rules 8, 9, and 11, Attorney Kyros has persisted in
asserting pages and pages of frivolous claims and allegations for
16 which he lacked any factual basis.” Id. at 230–31. And it added that
Kyros “offered the Court no reason to believe that if given a fifth,
sixth, or seventh chance, he would prosecute this case in a manner
consistent with the Federal Rules of Civil Procedure.” Id. at 231.
The district court further concluded that an award of attorney’s
fees and costs was necessary to deter Kyros from violating Rule 11
and ordered Kyros to pay all legal fees that WWE reasonably incurred
in connection with the sanctions motions. “[I]n order to protect the
public,” the district court also ordered Kyros to send a copy of its
ruling to each of the Laurinaitis plaintiffs and any other future,
current, or former WWE wrestler who retained Kyros to sue WWE.
Id. Kyros appealed from that judgment.
On October 22, 2020, we affirmed the district court’s dismissal
of the Laurinaitis complaint. See Haynes, 827 F. App’x at 10. But we
dismissed as premature the appeal as to the Rule 11 sanctions—and
17 the Rule 37 sanctions in Singleton—because the amount of sanctions
had not yet been determined. Id. at 11.
C. Determination of the Amount of the Sanctions
The amount of sanctions was calculated in subsequent
proceedings. WWE asked for $533,926.44, which were the attorney’s
fees and costs it had incurred in connection with its three sanctions
motions. The district court referred WWE’s application to a
magistrate judge for a recommended ruling. On September 2, 2021,
the magistrate judge recommended an award of $312,143.55, which
included the Rule 37 sanctions in Singleton and the Rule 11 sanctions
in Laurinaitis. In reaching that number, the magistrate judge reduced
the amount of attorneys’ fees sought, based in part on a fifteen-
percent, “across-the-board” reduction, id. at 272, and in part on the
“forum rule,” under which a court calculates attorney’s fees with
reference to the prevailing hourly rates in the forum in which the
court sits, id. at 258.
18 WWE objected to the magistrate judge’s recommended ruling
on the ground that he erroneously applied the forum rule. Kyros
did not object to the recommended ruling. On September 30, 2021,
the district court overruled WWE’s objections and adopted the
magistrate judge’s recommendation, awarding WWE $312,143.55. In
particular, the district court rejected WWE’s argument that the forum
rule should not apply where certain of the consolidated cases had
originated in jurisdictions outside the forum, reasoning that local
counsel in Connecticut was at least as well positioned to defend the
litigation as the out-of-district counsel WWE retained. The district
court also noted that it was foreseeable that the cases would be
consolidated in Connecticut, in light of mandatory forum-selection
clauses in WWE’s contracts with the plaintiffs and the Connecticut
location of WWE’s corporate headquarters.
The district court also rejected WWE’s broader arguments that
the forum rule does not apply in the sanctions context and that the
19 fees WWE paid should be deemed presumptively reasonable. It
concluded that WWE failed to show that experienced civil litigators
in Connecticut could not have obtained the same result as out-of-
district counsel. And it endorsed the fifteen-percent, across-the-
board recommended reduction, reasoning that the magistrate judge’s
approach to trimming excess fees was a practical one.
Kyros appealed from the judgment imposing sanctions, and
WWE cross-appealed as to the application of the forum rule.
II. Discussion
On appeal, Kyros argues that the district court should not have
imposed any Rule 11 and Rule 37 sanctions at all. On cross-appeal,
by contrast, WWE argues that the award should have been higher;
specifically, it challenges the application of the forum rule to award a
lower amount of attorney’s fees than it actually paid. We address
each argument in turn and, as set forth below, find no abuse of
discretion in the district court’s imposition of sanctions or its
application of the forum rule.
20 A. Rule 11 Sanctions
This Court “review[s] the imposition of sanctions for abuse of
discretion.” Liebowitz v. Bandshell Artist Mgmt., 6 F.4th 267, 280 (2d Cir.
2021) (internal quotation marks omitted). “An abuse of discretion
occurs when a district court bases its ruling on an erroneous view of
the law or on a clearly erroneous assessment of the evidence, or
renders a decision that cannot be located within the range of
permissible decisions.” Huebner v. Midland Credit Mgmt., Inc., 897 F.3d
42, 53 (2d Cir. 2018) (internal quotation marks omitted). “This
deferential standard is applicable to the review of Rule 11 sanctions
because . . . the district court is familiar with the issues and litigants
and is thus better situated than the court of appeals to marshal the
pertinent facts and apply the fact-dependent legal standard mandated
by Rule 11.” Universitas Educ., LLC v. Nova Grp., Inc., 784 F.3d 99, 103
(2d Cir. 2015) (alteration and internal quotation marks omitted). Still,
our review of sanctions “is more exacting than under the ordinary
abuse-of-discretion standard” because “sanctions proceedings are
21 unique, placing the district judge in the role of accuser, fact finder and
sentencing judge all in one.” Liebowitz, 6 F.4th at 280 (internal
quotation marks omitted).
Federal Rule of Civil Procedure 11 provides that, “[b]y
presenting to the court a pleading, written motion, or other paper,”
an attorney “certifies that to the best of [her] knowledge, information,
and belief,” formed after a reasonable inquiry, the filing is: (1) “not
being presented for any improper purpose, such as to harass, cause
unnecessary delay, or needlessly increase the cost of litigation”;
(2) “warranted by existing law or by a nonfrivolous argument for
extending, modifying, or reversing existing law or for establishing
new law”; and (3) supported by available evidence, or evidence likely
to be discovered on further investigation. Fed. R. Civ. P. 11(b). A
court may sanction an attorney who violates Rule 11(b) if the court
first provides notice and a reasonable opportunity to respond. See
Fed. R. Civ. P. 11(c)(1).
22 A party must move for sanctions in a filing that is “separate[]
from any other motion” and that “describe[s] the specific conduct that
allegedly violates Rule 11(b).” Fed. R. Civ. P. 11(c)(2). Such a motion
may not be presented to the court until the expiration of a twenty-
one-day “safe harbor” period, during which the alleged violator has
the chance to withdraw or correct the challenged filing. See id. The
court may also initiate sanctions sua sponte by issuing an order “to
show cause why conduct specifically described in the order has not
violated Rule 11(b).” Fed. R. Civ. P. 11(c)(3). When a court initiates
Rule 11 sanctions sua sponte and the opportunity to correct or
withdraw the challenged submission is unavailable, the court must
make a finding of bad faith on the part of the attorney before imposing
the sanctions. See In re Pennie & Edmonds LLP, 323 F.3d 86, 91–92 (2d
Cir. 2003).
Kyros argues that the district court abused its discretion by
failing to follow the procedures set out in Rule 11 and by failing to
23 satisfy the requirements of due process. Characterizing the district
court’s Rule 11 sanctions order as having been imposed sua sponte,
Kyros contends that the district failed to issue the show-cause order
required by Rule 11(c)(3) and to provide him with notice and an
opportunity to be heard. By the same token, Kyros claims that the
district court failed to make the requisite finding of bad faith before
imposing sua sponte sanctions.
WWE asserts that Kyros’s characterization of the sanctions
order ignores the district court’s repeated admonitions and interim
order putting him on notice that his conduct risked punishment.
Noting the oppositions and sur-reply Kyros filed in response to its
Rule 11 motions as to the original and first amended Laurinaitis
complaints, WWE argues that Kyros cannot now claim that he lacked
notice of the grounds for sanctions. In particular, WWE suggests
that the district court gave Kyros “a last chance to avoid sanctions . . .
by complying with the Court’s detailed order regarding the
24 information to include in each plaintiff’s affidavit and filing amended
pleadings in accordance with the Federal Rules and the Court’s prior
instructions,” but Kyros did not comply. Appellees’ Br. at 47.
On the record before us, we find no abuse of discretion because
the district court ordered sanctions based on pleading defects that
WWE had identified in their motions seeking Rule 11 sanctions. As
detailed above, WWE first notified Kyros of its intention to seek Rule
11 sanctions in August 2016, raising the issues of time-barred claims
and the lack of a good-faith basis for allegations in the original
complaint regarding WWE’s knowledge. In October 2016, WWE
filed a motion for Rule 11 sanctions in the district court that
incorporated precisely those claims it had flagged in August. Days
after the Rule 11(c)(2) safe harbor period passed, Kyros filed a first
amended complaint, adding plaintiffs and new allegations without
addressing the issues of which WWE had complained in its sanctions
motion. As WWE notes, Kyros then opposed the October 2016
25 sanctions motion as well as WWE’s December 2016 motion for
sanctions as to the first amended complaint—even filing a sur-reply
in connection with the latter. These filings were all responsive to the
issues raised in WWE’s sanctions motions. As Kyros acknowledged
in a filing below, the district court’s September 2017 order reserved
judgment on these two sanctions motions, providing Kyros with an
opportunity to file yet another amended pleading in order to comply
with the Federal Rules. And, once Kyros filed yet another deficient
complaint (the second amended version), the district court sanctioned
Kyros under Rule 11 on the same timeliness and lack-of-good-faith
grounds that WWE had asserted in its earlier sanctions motions.
It is therefore clear from the record that the district court’s
sanctions order was based on WWE’s two motions for Rule 11
sanctions, not on some new and spontaneous initiative of the district
court. Kyros argues that the district court’s order was issued “sua
sponte,” but this misreads the record. The district court did state in its
26 September 2017 order that it would “sua sponte revisit” the sanctions
issue “pursuant to Rule 11(c)(3),” Special App’x at 165, but that
language appears in a ruling that merely reserved decision on WWE’s
already-filed sanctions motions. And the district court did not
ultimately follow the path of imposing sua sponte sanctions based on
the independent content of the second amended complaint. In its
September 2018 order granting sanctions, the court based its findings
on precisely the same conduct about which WWE had complained in
its two Rule 11 motions, including “factually unsupportable
allegations,” “frivolous claims,” and lack of a good-faith basis.
Special App’x 228–31. The decretal language of the September 2018
order likewise confirmed that the court was granting in part WWE’s
December 2016 sanctions motion—which was based entirely on the
original and first amended complaints—“to the extent it sought the
award of attorney’s fees and costs,” Special App’x at 232. And the
amount later awarded was premised entirely on attorney’s fees and
27 costs that WWE had expended on those two motions—that is, before
Kyros filed the second amended complaint. In other words, it makes
no difference that the district court had earlier suggested that it might
follow the route of considering sanctions sua sponte; its actual decision
was explicitly framed as a decision on WWE’s earlier-filed motions.
Accordingly, we reject Kyros’s argument that the sanctions order was
imposed sua sponte such that the district court was bound by the
procedural requirements of Rule 11(c)(3). 4
For much the same reasons, we reject Kyros’s argument that the
district court violated his due process rights by depriving him of
4 Kyros also argues that the district court erred in granting a sanctions motion addressed to the original and first amended complaints, well after Kyros had later filed a second amended complaint. Given the purpose of the safe harbor provision under Rule 11, we agree that district courts should ordinarily not reach back in time to sanction filings that were later superseded, because doing so risks the same lack of notice associated with truly “sua sponte” sanctions. We read In re Pennie & Edmonds, however, to impose a check on such a possibility by requiring a finding of subjective bad faith in the absence of “an explicit ‘safe harbor’ protection or an equivalent opportunity” to correct a deficient filing. 323 F.3d at 93. Here, because the WWE’s earlier motions gave Kyros the explicit benefit of the Rule’s safe harbor provision, no such finding was necessary. And even had WWE’s motions not provided this benefit, the district court’s repeated warnings to Kyros in this case would have likewise provided an “equivalent opportunity” to correct his filings—an opportunity he did not take.
28 notice and an opportunity to be heard before imposing sanctions.
Here, Kyros had abundant notice of the risk of, and the potential
grounds for, sanctions based on WWE’s Rule 11 motions and the
district court’s interim order reserving judgment. Indeed, Kyros took
advantage of multiple opportunities to be heard in his responses to
those sanctions motions and within the window the district court
gave him to amend his complaint. See, e.g., Margo v. Weiss, 213 F.3d
55, 63–64 (2d Cir. 2000) (concluding that “the district court was not
required to give appellants notice of grounds for sanctions that were
clearly expressed in defendants’ Rule 11 motion papers” and noting
that the appellants “took advantage of the notice they received from
the defendants’ Rule 11 papers” by submitting a declaration in
opposition to the motion). Under such circumstances, even our
“more exacting . . . abuse-of-discretion standard,” Liebowitz, 6 F.4th at
280, does not require us to craft new procedural hurdles for district
courts to clear before sanctioning attorneys who violate Rule 11(b).
29 We have considered the remainder of Kyros’s Rule 11
arguments and find them unpersuasive. See Int'l Ore & Fertilizer Corp.
v. SGS Control Services, Inc., 38 F.3d 1279, 1286–87 (2d Cir. 1994)
(“Appellants raise numerous objections on the merits to the
imposition of sanctions, but, even viewing the record in the light most
favorable to them, we cannot say that the district court abused its
discretion.”). Accordingly, we hold that the district court did not
abuse its discretion by imposing Rule 11 sanctions on Kyros.
B. Rule 37 Sanctions
As with Rule 11 sanctions, we review the imposition of Rule 37
sanctions for abuse of discretion. Yukos Capital S.A.R.L. v. Feldman, 977
F.3d 216, 234 (2d Cir. 2020). Just as a district court has broad
discretion to manage discovery, it likewise has wide discretion to
impose sanctions for abusing that process. See, e.g., S.E.C. v.
Razmilovic, 738 F.3d 14, 25 (2d Cir. 2013); Daval Steel Prods. v. M/V
Fakredine, 951 F.2d 1357, 1365 (2d Cir. 1991).
30 Rule 37 gives a district court the authority to impose “just”
sanctions on a party who fails to comply with a discovery order. Fed.
R. Civ. P. 37(b)(2)(A). In evaluating a district court’s exercise of its
discretion to impose such sanctions, we weigh factors like: “(1) the
willfulness of the non-compliant party or the reason for
noncompliance; (2) the efficacy of lesser sanctions; (3) the duration of
the period of noncompliance, and (4) whether the non-compliant
party had been warned of the consequences of noncompliance,”
S. New Eng. Tel. Co. v. Glob. NAPs Inc., 624 F.3d 123, 144 (2d Cir. 2010)
(internal quotation marks omitted). But “these factors are not
exclusive, and they need not each be resolved against the party
challenging the district court’s sanctions for us to conclude that those
sanctions were within the court’s discretion.” Id.
The district court properly imposed Rule 37 sanctions on Kyros
based on its finding that he failed to make a good-faith effort to
comply with its order to supplement his responses to certain of
31 WWE’s interrogatories. For example, rather than identifying specific
“deceptive public statement[s]” in response to one of the
interrogatories, Kyros’s supplemental responses directed WWE to an
“entire book” and, in general terms, various previously provided
documents and records. Special App’x at 186 (internal quotation
marks omitted). Like the district court, we find no error in the
magistrate judge’s thorough analysis. We agree that Kyros’s
discovery responses were insufficient and that Rule 37 sanctions were
warranted.
Kyros argues that the district court abused its discretion by
imposing Rule 37 sanctions on only him and his law firm because
WWE’s Rule 37 motion was directed to both “Plaintiffs and their
counsel.” Kyros Br. at 56 (quoting App’x at 67). He claims that an
order imposed under Rule 37(b) must be “directed at the party against
whom the sanctions are sought to be imposed.” Id. (internal quotation
marks omitted) (citing Daval Steel Prods., 951 F.2d at 1364). Kyros
32 made a similar argument below, and the district court rejected it,
relying in part on Rule 37(b)(2)(C), which requires the court to order
“the disobedient party, the attorney advising that party, or both to pay
the reasonable expenses, including attorney’s fees, caused by the
failure [to comply with the district court’s discovery order].” Special
App’x at 189 (emphasis added) (quoting Fed. R. Civ. P. 37(b)(2)(C)).
We agree with the district court. Both logic and the text of Rule
37(b)(2)(C) dictate that a court may impose sanctions in a targeted
way against the actors whom it identifies as responsible for
misconduct, whether those be parties, their attorneys, or both. On
appeal, Kyros points to no authority that supports his argument that
sanctions had to be imposed jointly on his clients as well as himself
(and his firm). Daval, the lone case Kyros cites, stands merely for the
proposition that one party’s violation of a discovery order directed
only to that party is not a sufficient basis for a court to impose
sanctions on another party to which no such discovery order had been
33 directed. See 951 F.2d at 1364. It does not suggest that a disobedient
party’s counsel is not covered by an order directed at that same party.
Kyros also argues that the district court abused its discretion
by imposing Rule 37 sanctions because WWE was not prejudiced by
the plaintiffs’ failure to provide sufficient responses to WWE’s
interrogatories. Specifically, Kyros makes the bare assertion that the
interrogatories were irrelevant and assigns particular significance to
the order of operations as it played out below—namely, that the case
was dismissed under Rule 56 before the plaintiffs provided their
responses to the interrogatories and that the district court issued the
sanctions order one year after the magistrate judge held a hearing on
the sanctions motion.
Once again, Kyros points to no authority that supports his
arguments. The Fifth Circuit case Kyros cites, FDIC v. Conner, 20 F.3d
1376, 1381–82 (5th Cir. 1994), suggests only that dismissal for failure to
comply with a discovery order is not justified where discovery
34 violations do not substantially prejudice defendants. But here, the
sanction imposed by the district court for the Singleton discovery was
an order to pay attorney’s fees and costs, not dismissal of the
complaint. (Dismissal did occur, to be sure; but that was on the
merits, not as a result of sanctions.) And the district court acted well
within its discretion when it ordered Kyros to supplement discovery
responses that, for example, directed WWE to “random publications
and documents with little specificity or guidance.” Special App’x at
178. In the magistrate judge’s words, the sanctions were imposed “to
dissuade further abuse of the discovery process and promote
thorough compliance with court orders moving forward”—not as a
means of disposing of the case. Id. at 179–80.
We decline to consider Kyros’s conclusory argument, already
considered and rejected below, that WWE’s interrogatories were
irrelevant. See Zhang v. Gonzales, 426 F.3d 540, 545 n.7 (2d Cir. 2005)
35 (deeming argument waived where “only a single conclusory
sentence” was devoted to it).
Accordingly, we find no abuse of discretion in the district
court’s imposition of Rule 37 sanctions on Kyros for his failure to
make a good-faith effort to comply with the court’s order compelling
responses to WWE’s interrogatories.
C. The Forum Rule
Finally, we turn to WWE’s cross-appeal, which challenges the
district court’s decision to award sanctions in an amount less than
requested by WWE, based on application of the forum rule. We
review for abuse of discretion a district court’s calculation of the
amount of attorney’s fees to be awarded. Holick v. Cellular Sales of New
York, LLC, 48 F.4th 101, 109 (2d Cir. 2022). “Our review is highly
deferential in this area because of the district court’s inherent
institutional advantages in determining attorneys’ fees.” H.C. v. New
York City Dep’t of Ed., 71 F.4th 120, 125 (2d Cir. 2023) (internal
quotation marks omitted). In conducting our review, we also bear in
36 mind that “[t]he essential goal in shifting fees . . . is to do rough
justice, not to achieve auditing perfection.” Fox v. Vice, 563 U.S. 826,
838 (2011).
One methodology district courts employ to determine the
amount of attorney’s fees to award involves the “forum rule,” under
which courts are directed to calculate fees based on the prevailing
rates in the forum in which the litigation was brought. Simmons v.
New York City Transit Auth., 575 F.3d 170, 172 (2d Cir. 2009). In
Simmons, we clarified that, “when faced with a request for an award
of higher out-of-district rates, a district court must first apply a
presumption in favor of application of the forum rule.” Id. at 175.
“[T]o overcome that presumption, a litigant must persuasively
establish that a reasonable client would have selected out-of-district
counsel because doing so would likely (not just possibly) produce a
substantially better net result.” Id. Among the “experience-based,
objective factors” district courts should consider in making that
37 determination is “counsel’s special expertise in litigating the
particular type of case, if the case is of such nature as to benefit from
special expertise.” Id. at 175–76. Litigants must also “make a
particularized showing . . . of the likelihood that use of in-district
counsel would produce a substantially inferior result.” Id. at 176.
WWE argues that the district court abused its discretion by
applying the forum rule for four main reasons. We consider each in
turn. First, WWE notes that the underlying consolidated cases began
in jurisdictions outside Connecticut, and asserts that the forum rule
“does not apply to a case that was initially brought in another district
but subsequently transferred to the forum.” WWE Br. at 49. For
support, WWE relies on our decision in Polk v. New York State
Department of Correctional Services, 722 F.2d 23 (2d Cir. 1983). But Polk
is inapposite. Polk concerned the fees awarded to an attorney who
initially filed a suit in his home district, after which the case was
transferred to the forum district—“not the typical situation in which
38 a lawyer from one district files suit in another district.” 722 F.2d at
25. In that case, where a class action relating to the plaintiff was
pending in the attorney’s home district, the Polk Court concluded the
district court had discretion to award fees based on the prevailing rate
in either an attorney’s home district or the forum district. Id. It also
reaffirmed a district court’s “broad discretion” to determine
reasonable fees, “[s]o long as unwarranted windfalls are not
awarded.” Id. Here, of course, the underlying cases were filed in
jurisdictions across the country—none of which was the home district
of out-of-district counsel—and were eventually consolidated in the
District of Connecticut, where the district court sits. Accordingly, Polk
does not control the outcome here. Polk, in any event, did not purport
to create an inflexible rule as to fees in transferred cases. On its own
terms, Polk described only what a district “normally” “will consider,”
as well as “special circumstance[s].” Id. Here, the district court
properly considered a number of such circumstances: that the
39 defendants themselves sought consolidation and had crafted forum-
selection clauses accordingly, and that out-of-district counsel was
never solely responsible for the Connecticut litigation such that it
could not have been handed over to local counsel. Special App’x at
277–78. The district court neither strayed outside its broad discretion
nor afforded an unwarranted windfall in its application of the forum
rule to reduce WWE’s award.
Second, WWE argues that district courts are “not constrained
to apply the forum rule where the attorney’s fees are awarded as
sanctions.” WWE Br. at 52. WWE cites On Time Aviation, Inc. v.
Bombardier Capital, Inc., 354 F. App’x 448 (2d Cir. 2009), a non-
precedential summary order that included the observation that “[t]he
reasoning behind the calculation of awards under fee-shifting statutes
. . . is not . . . precisely analogous to that applicable to Rule 11
awards.” 354 F. App’x at 452. We do not read On Time, however, to
suggest that any difference between statutory fee-shifting and Rule 11
40 awards would preclude application of the forum rule in the sanctions
context. Indeed, we see no reason why the rule should not
presumptively apply in each context. On Time suggests only that,
even after applying the forum rule, a district court may still act within
its discretion in ordering a larger award to serve the purpose of
deterrence under Rule 11. In this case, in any event, WWE points to
no evidence in the record indicating that the district court found itself
“constrained” to apply the forum rule. And the fact that fee-shifting
statutes and Rule 11 sanctions serve different purposes does not mean
that a district court abuses its discretion by applying the forum rule
to reduce a Rule 11 award. We will not disturb the district court’s
discretionary determination that the principal objectives of the
imposition of Rule 11 sanctions—“the deterrence of baseless filings
and the curbing of abuses,” Caisse Nationale de Credit Agricole-CNCA
v. Valcorp, Inc., 28 F.3d 259, 266 (2d Cir. 1994)—were furthered even
after it applied the forum rule to reduce the award.
41 Third, WWE argues that the forum rule does not apply because
WWE is a sophisticated paying client. In WWE’s view, “[b]ecause
there was an actual paying client” to serve as a touchstone, there was
“no need to perform a lodestar calculation to arrive at a
presumptively reasonable fee award.” WWE Br. at 55 (citing Perdue
v. Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010)). As we have
previously noted, an “actual billing arrangement” is a significant
factor in determining what fee is reasonable, but it is “not necessarily
controlling.” Crescent Publ’g Grp., Inc. v. Playboy Enterprises, Inc., 246
F.3d 142, 151 (2d Cir. 2001). It does not, therefore, create a
presumption of reasonableness, nor displace the initial application of
the forum rule. Here, the district court gave significant weight to
WWE’s decision to retain more expensive out-of-district counsel, but
concluded that WWE failed to overcome Simmons’s presumption in
favor of the application of the forum rule. Specifically, the district
court noted that the case was dismissed pre-trial based on deficiencies
42 in Kyros’s pleadings and discovery requests, and reasoned that such
matters are “within the general expertise of civil litigators.” Special
App’x at 281 (citing Simmons, 575 F.3d at 177 (reasoning that the party
bearing the cost of attorney’s fees “should not be required to pay for
a limousine when a sedan could have done the job”)). We find no
abuse of discretion in that determination.
Fourth, WWE argues that, even if the forum rule applies, WWE
is subject to an exception under Simmons because out-of-district
counsel “likely (not just possibly) produce[d] a substantially better
net result” than local counsel would have. 575 F.3d at 172. Citing
out-of-district counsel’s extensive experience representing WWE and
litigating CTE matters, WWE asserts that no local counsel had
comparable specific knowledge, nor could local counsel have
improved upon the results achieved below. The district court
acknowledged out-of-district counsel’s “longstanding involvement in
defending claims brought by former wrestlers,” Special App’x at 281,
43 but, as discussed above, concluded that WWE failed to show that out-
of-district counsel likely produced a substantially better net result,
especially where the case was dismissed based on deficient pleadings
and conduct during discovery—that is, egregious litigation
misconduct that in-district counsel would have been equally well
placed to identify and oppose. Once again, we see no reason to fault
that determination, made within the district court’s broad discretion.
Having carried out our “highly deferential,” H.C., 71 F.4th at
125, review of the district court’s efforts to achieve “rough justice,”
Fox, 563 U.S. at 838, in keeping with the goals of fee-shifting, we affirm
the district court’s application of the forum rule under the
circumstances of this case.
III. Conclusion
In sum, we hold as follows:
1. The district court did not abuse its discretion by imposing
Rule 11 sanctions on Kyros. WWE’s sanctions motions and
the district court’s order that reserved ruling on those
44 motions gave abundant notice to Kyros of the repeated
pleading deficiencies that risked imposition of sanctions,
and he was afforded sufficient opportunity to be heard.
2. The district court did not abuse its discretion by imposing
Rule 37 sanctions on Kyros because Kyros failed to make a
good-faith effort to comply with the district court’s order
compelling responses to WWE’s interrogatories.
3. The district court did not abuse its discretion by applying
the forum rule to award WWE less than the requested
amount of sanctions.
We therefore AFFIRM the judgment of the district court.