24-558-cv(L) Laba v. JBO Worldwide Supply Pty Ltd.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of January, two thousand twenty-five.
PRESENT: JOSÉ A. CABRANES, REENA RAGGI, MARIA ARAÚJO KAHN, Circuit Judges. _____________________________________
REMI LABA,
Plaintiff-Appellant-Cross-Appellee,
v. 24-558-cv(L), 24-561-cv(XAP)
JBO WORLDWIDE SUPPLY PTY LTD, Defendant-Appellee-Cross- Appellant. ∗
_____________________________________________
FOR PLAINTIFF-APPELLANT KEVIN MURPHY, Wuersch & CROSS-APPELLEE: Gering LLP, New York, NY (Kenneth S. Sussmane, McCue Sussmane Zapfel & Cohen P.C., New York, NY, on the brief).
FOR DEFENDANT-APPELLEE- JONATHAN E. MOSKIN, (Quinn N. CROSS-APPELLANT: D’Isa, on the brief), Foley & Lardner LLP, New York, NY.
Appeal from a February 12, 2024 judgment of the United States District Court for
the Southern District of New York (Alvin K. Hellerstein, J.; Katharine H. Parker, M.J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-Appellant-Cross-Appellee Remi Laba (“Laba”) and Defendant-Appellee-
Cross-Appellant JBO Worldwide Supply Pty Ltd (“JBO”) each appeal the district court’s
order exercising its inherent authority to grant JBO’s motion for sanctions against Laba
and his counsel in the amount of $191,364 of JBO’s attorneys’ fees and costs.
Laba and JBO each challenge the district court’s finding, adopted from the
∗ The Clerk of Court is respectfully directed to amend the official case caption as set forth above. 2 magistrate judge’s report and recommendation, that Laba and his counsel committed
fraud on the court by submitting multiple declarations falsely asserting that a purported
finder’s fee agreement between the parties had been signed by JBO’s managing director,
and by failing to correct those misrepresentations after the forgery became apparent.
Laba argues that the magistrate judge, and, by extension, the district judge, relied on the
wrong legal standard, erred in assessing the evidence, failed to make a bad faith finding,
and denied Laba’s counsel adequate notice of his potential liability. On cross appeal, JBO
contends that the district court should have imposed sanctions pursuant to Rule 11 and
28 U.S.C. § 1927, and awarded attorneys’ fees and costs to cover the entire litigation. Both
challenges are unavailing.
We assume the parties’ familiarity with the underlying facts, the procedural
history, and the issues on appeal, to which we refer only as necessary to explain our
decision.
DISCUSSION
We review for abuse of discretion “all aspects” of a district court’s imposition of
sanctions. Mackler Prods., Inc. v. Cohen, 225 F.3d 136, 141 (2d Cir. 2000); see also Kim v.
Kimm, 884 F.3d 98, 106 (2d Cir. 2018) (applying abuse of discretion standard to a denial
of sanctions). A court abuses its discretion when it “bases its ruling on an erroneous view
of the law or on a clearly erroneous assessment of the evidence, or renders a decision that
3 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). Further, we
review for clear error any of the district court’s underlying findings of fact. See Mackler
Prods., 225 F.3d at 141.
When a district court invokes its inherent power to impose a sanction of attorneys’
fees for actions taken by an attorney on behalf of a client, “the district court must make
an explicit finding of bad faith.” United States v. Seltzer, 227 F.3d 36, 42 (2d Cir. 2000).
That requirement applies whether the sanction is premised on a lawyer's representational
or non-representational conduct. See Rossbach v. Montefiore Med. Ctr., 81 F.4th 124, 143
(2d Cir. 2023). “Bad faith can be inferred when the actions taken are so completely
without merit as to require the conclusion that they must have been undertaken for some
improper purpose.” Schlaifer Nance & Co. v. Est. of Warhol, 194 F.3d 323, 338 (2d Cir. 1999)
(internal quotation marks omitted). In such circumstances, “even a single bad-faith
filing” may be sanctionable. Int'l Techs. Mktg., Inc. v. Verint Sys., Ltd., 991 F.3d 361, 369
(2d Cir. 2021).
Here, after receiving notice of the sanctions motion and an opportunity to be heard
at an evidentiary hearing, Laba failed to attend the hearing, and his counsel appeared on
Laba’s behalf but did not testify. After the hearing the magistrate judge found, by clear
and convincing evidence, that the managing director’s signature on the purported
4 finder’s fee agreement had been forged. The magistrate judge further concluded that
“Laba and his counsel acted in bad faith” because they “knew that the signature was
fraudulent and fabricated” and yet failed to correct the contrary misrepresentations in
Laba’s declarations. App’x 1371, 1376. In a detailed and thorough report, the magistrate
judge set forth the underlying facts and evidence supporting her conclusions, including
testimony from JBO’s expert 1, evaluation of metadata, comparison of relevant documents
in evidence, assessment of the witnesses’ credibility, and common knowledge of basic
computer functions such as Outlook.
I. Laba’s Challenge to the Sanctions Order
Laba and his counsel’s various challenges to the imposition of sanctions are
unavailing. Evidence that Laba himself fabricated the signature was not necessary to
support the magistrate judge’s finding that Laba and his counsel knew of the fabrication
in committing a fraud on the court. The magistrate judge found that the fabricated
signature “was obvious at least by December 15, 2021, when JBO filed its discovery
sanctions motion and Laba could no longer state that emails would show the contract
was authentic.” App’x 1376. Laba’s subsequent submission of “false declarations and
testimony that he received the Agreement from JBO,” and the failure of either Laba or
1In addition to not appearing at the hearing to testify or otherwise defend his conduct, Laba did not offer any additional testimony from his computer expert to rebut JBO’s expert.
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24-558-cv(L) Laba v. JBO Worldwide Supply Pty Ltd.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of January, two thousand twenty-five.
PRESENT: JOSÉ A. CABRANES, REENA RAGGI, MARIA ARAÚJO KAHN, Circuit Judges. _____________________________________
REMI LABA,
Plaintiff-Appellant-Cross-Appellee,
v. 24-558-cv(L), 24-561-cv(XAP)
JBO WORLDWIDE SUPPLY PTY LTD, Defendant-Appellee-Cross- Appellant. ∗
_____________________________________________
FOR PLAINTIFF-APPELLANT KEVIN MURPHY, Wuersch & CROSS-APPELLEE: Gering LLP, New York, NY (Kenneth S. Sussmane, McCue Sussmane Zapfel & Cohen P.C., New York, NY, on the brief).
FOR DEFENDANT-APPELLEE- JONATHAN E. MOSKIN, (Quinn N. CROSS-APPELLANT: D’Isa, on the brief), Foley & Lardner LLP, New York, NY.
Appeal from a February 12, 2024 judgment of the United States District Court for
the Southern District of New York (Alvin K. Hellerstein, J.; Katharine H. Parker, M.J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-Appellant-Cross-Appellee Remi Laba (“Laba”) and Defendant-Appellee-
Cross-Appellant JBO Worldwide Supply Pty Ltd (“JBO”) each appeal the district court’s
order exercising its inherent authority to grant JBO’s motion for sanctions against Laba
and his counsel in the amount of $191,364 of JBO’s attorneys’ fees and costs.
Laba and JBO each challenge the district court’s finding, adopted from the
∗ The Clerk of Court is respectfully directed to amend the official case caption as set forth above. 2 magistrate judge’s report and recommendation, that Laba and his counsel committed
fraud on the court by submitting multiple declarations falsely asserting that a purported
finder’s fee agreement between the parties had been signed by JBO’s managing director,
and by failing to correct those misrepresentations after the forgery became apparent.
Laba argues that the magistrate judge, and, by extension, the district judge, relied on the
wrong legal standard, erred in assessing the evidence, failed to make a bad faith finding,
and denied Laba’s counsel adequate notice of his potential liability. On cross appeal, JBO
contends that the district court should have imposed sanctions pursuant to Rule 11 and
28 U.S.C. § 1927, and awarded attorneys’ fees and costs to cover the entire litigation. Both
challenges are unavailing.
We assume the parties’ familiarity with the underlying facts, the procedural
history, and the issues on appeal, to which we refer only as necessary to explain our
decision.
DISCUSSION
We review for abuse of discretion “all aspects” of a district court’s imposition of
sanctions. Mackler Prods., Inc. v. Cohen, 225 F.3d 136, 141 (2d Cir. 2000); see also Kim v.
Kimm, 884 F.3d 98, 106 (2d Cir. 2018) (applying abuse of discretion standard to a denial
of sanctions). A court abuses its discretion when it “bases its ruling on an erroneous view
of the law or on a clearly erroneous assessment of the evidence, or renders a decision that
3 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). Further, we
review for clear error any of the district court’s underlying findings of fact. See Mackler
Prods., 225 F.3d at 141.
When a district court invokes its inherent power to impose a sanction of attorneys’
fees for actions taken by an attorney on behalf of a client, “the district court must make
an explicit finding of bad faith.” United States v. Seltzer, 227 F.3d 36, 42 (2d Cir. 2000).
That requirement applies whether the sanction is premised on a lawyer's representational
or non-representational conduct. See Rossbach v. Montefiore Med. Ctr., 81 F.4th 124, 143
(2d Cir. 2023). “Bad faith can be inferred when the actions taken are so completely
without merit as to require the conclusion that they must have been undertaken for some
improper purpose.” Schlaifer Nance & Co. v. Est. of Warhol, 194 F.3d 323, 338 (2d Cir. 1999)
(internal quotation marks omitted). In such circumstances, “even a single bad-faith
filing” may be sanctionable. Int'l Techs. Mktg., Inc. v. Verint Sys., Ltd., 991 F.3d 361, 369
(2d Cir. 2021).
Here, after receiving notice of the sanctions motion and an opportunity to be heard
at an evidentiary hearing, Laba failed to attend the hearing, and his counsel appeared on
Laba’s behalf but did not testify. After the hearing the magistrate judge found, by clear
and convincing evidence, that the managing director’s signature on the purported
4 finder’s fee agreement had been forged. The magistrate judge further concluded that
“Laba and his counsel acted in bad faith” because they “knew that the signature was
fraudulent and fabricated” and yet failed to correct the contrary misrepresentations in
Laba’s declarations. App’x 1371, 1376. In a detailed and thorough report, the magistrate
judge set forth the underlying facts and evidence supporting her conclusions, including
testimony from JBO’s expert 1, evaluation of metadata, comparison of relevant documents
in evidence, assessment of the witnesses’ credibility, and common knowledge of basic
computer functions such as Outlook.
I. Laba’s Challenge to the Sanctions Order
Laba and his counsel’s various challenges to the imposition of sanctions are
unavailing. Evidence that Laba himself fabricated the signature was not necessary to
support the magistrate judge’s finding that Laba and his counsel knew of the fabrication
in committing a fraud on the court. The magistrate judge found that the fabricated
signature “was obvious at least by December 15, 2021, when JBO filed its discovery
sanctions motion and Laba could no longer state that emails would show the contract
was authentic.” App’x 1376. Laba’s subsequent submission of “false declarations and
testimony that he received the Agreement from JBO,” and the failure of either Laba or
1In addition to not appearing at the hearing to testify or otherwise defend his conduct, Laba did not offer any additional testimony from his computer expert to rebut JBO’s expert. 5 counsel to “correct[] the record or withdr[a]w the false statements,” led the magistrate
judge, and then the district judge, “to the inescapable conclusion that a fraud has been
committed on the Court.” Id. at 1375–76. This finding that Laba and counsel both acted
in bad faith is not clearly erroneous and is sufficient to justify the imposition of sanctions.
See Oliveri v. Thompson, 803 F.2d 1265, 1272 (2d Cir. 1986) (noting inherent power to
sanction “is not restricted to cases where the action is filed in bad faith,” and sanctions
“may be imposed either for commencing or for continuing an action in bad faith,
vexatiously, wantonly, or for oppressive reasons” (emphasis added)).
As for the magistrate judge’s reference to her own experience, she did so only
where the subject matter consisted of generalized knowledge that was sufficiently
indisputable to support her factual findings. Because factfinders are permitted to rely on
common sense and personal experience when drawing inferences about evidence, we
identify no error. See United States v. Huezo, 546 F.3d 174, 182 (2d Cir. 2008).
II. JBO’s Challenge to the Sanctions Order
JBO’s challenge seeking to increase the scope of the district court’s sanctions award
is similarly unavailing. 2 We review a district court’s decision on whether to impose
sanctions under its inherent power for abuse of discretion, and “[c]aselaw and the
2 Because we uphold the district court’s award of sanctions under its inherent power, we need not reach its alternate rulings regarding sanctions under Rule 11 and 28 U.S.C. § 1927. See Johnson v. Univ. of Rochester Med. Ctr., 642 F.3d 121, 125 (2d Cir. 2011) (per curiam). 6 purpose of courts’ inherent power confirm that our review is highly deferential.” Yukos
Cap. S.A.R.L. v. Feldman, 977 F.3d 216, 235 (2d Cir. 2020). In the magistrate judge’s well-
considered report and recommendation, she determined that sanctions should be
imposed “in the form of JBO’s attorneys’ fees associated with briefing the present
sanctions motions, fees associated with preparing for Laba’s deposition, and costs
associated with Laba’s deposition and JBO’s expert reports and testimony.” App’x 1386–
87. The scope of the sanctions was a matter committed to the discretion of the district
court, and we identify no abuse in its award.
* * *
We have considered the parties’ remaining arguments and find them to be without
merit. Accordingly, we AFFIRM the order of the district court.
FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court