TJOFLAT, Circuit Judge:
Stripped to its essentials, this is a simple medical malpractice case. It was brought, however, as a multi-count RICO prosecution. Suspecting that the claims in the complaint lacked factual bases, the district court took an unusual step and granted the defendants leave to conduct discovery for the purpose of determining whether plaintiff's counsel had violated Rule 11 of the Federal Rules of Civil Procedure. The discovery was to determine whether plaintiff's counsel had conducted an "inquiry reasonable under the circumstances" into the factual support for the claims presented in the complaint.
During the Rule 11 discovery, the court dismissed the plaintiff's claims against one of the defendants for failure to state a claim upon which relief could be granted. After the discovery was completed, the defendants moved the court to sanction the plaintiff and one of her attorneys pursuant to Rule 11, 28 U.S.C. § 1927,
These consolidated appeals came after the district court issued its second sanctions order. Appellants — plaintiff and one of her attorneys — challenge the denials of the plaintiff's motions for recusal, the dismissal of the plaintiff's claims (except the malpractice claim), and the imposition of monetary sanctions in the form of attorneys' fees and costs.
We organize this opinion as follows. In Part I, we recite the events that led the defendants to seek Rule 11 sanctions early in the case. In Part II, we address the plaintiff's argument that the district court should have recused. In Part III, we consider the propriety of the court's dismissal of all but the plaintiff's malpractice claim as well as the court's imposition of monetary sanctions against the plaintiff and her attorney under Rule 11, 28 U.S.C. § 1927, and the court's inherent power. Finally, in Part IV, we discuss the tools a district court should use in dealing with the types of pleadings filed by the attorneys in this case.
In September 1992, Debbie Manov ("Manov"), a New Jersey resident suffering from endometriosis,
In August 1994, Manov, represented by Atlanta attorney Edward Kellogg, filed a medical malpractice suit in the Superior Court of Fulton County, Georgia. Named as defendants were Drs. Farr and Camran Nezhat and the Center. The alleged malpractice was the removal of a healthy appendix (during the laparoscopic procedure) which, in turn, caused an infection requiring further hospitalization.
Shortly after filing suit, Manov consulted James Neal ("Neal"), a Pennsylvania lawyer practicing out of his residence in Ohio. At the time, Neal and Michael Mixson ("Mixson"), an attorney from Monroe, Georgia, were prosecuting two other medical malpractice cases in Atlanta, both filed in December 1993, on behalf of Mary Mullen ("Mullen"). The first lawsuit, brought against Drs. Farr and Camran Nezhat, Dr. Earl Pennington, the Center, and Northside, was pending in the Fulton County Superior Court.
In her superior court complaint, Mullen alleged that on December 18, 1991, the Drs. Nezhat and Pennington negligently performed a bowel resection procedure to alleviate rectal endometriosis. Mullen alleged
By the time Manov spoke to Neal, he had amended the allegations in Mullen's state court suit to add two causes of action, for a total of nine.
Apparently, Manov was impressed with the manner in which Neal was handling Mullen's cases, so she decided that Neal should take over her lawsuit against the Drs. Nezhat and the Center. Neal said he would take the case, but would need to associate local counsel. Manov agreed. Neal thereafter searched the records of the Fulton County Superior Court for the names of other attorneys who had sued the Nezhats or the Center. He found Michael T. Byrne ("Byrne"), one of the appellants now before us.
Unbeknownst to Manov, the continuation of Neal's pro hac vice status in Mullen's state and federal court cases was being challenged on the grounds that he had violated the courts' discovery rules and the Code of Professional Responsibility by engaging in malicious and harassing conduct against the Nezhats and the Center. These challenges began in February 1994, when the defendants in both of Mullen's cases moved the courts to revoke Neal's pro hac vice status. In each case, the court denied the motion, but nonetheless condemned Neal's behavior. The district court's May 11, 1994 order stated that, although Neal's "conduct did not conclusively violate the Code of Professional Responsibility.... [his] actions bordered on conduct unbecoming an officer of the Court."
According to the defendants in Mullen's cases, Neal failed to heed the courts' admonitions. They therefore renewed their motions to revoke Neal's pro hac vice status and to have him disqualified as co-counsel in Mullen's cases.
The defendants in Mullen's district court case also sought Neal's disqualification. On September 27, 1995, they renewed their motion to revoke his pro hac vice status. Neal promptly withdrew from the case, thereby mooting defendants' motion.
As Neal's privilege to represent Mullen in her state and federal court cases was coming to an end, Byrne, on July 13, 1995, voluntarily dismissed Manov's superior court lawsuit.
As noted above, Manov's state court complaint contained only one count: the medical malpractice claim. The complaint Manov filed in the district court, however, which consisted of 78 pages and 299 paragraphs, contained eight additional counts. Its centerpiece was Manov's claims for damages under the state and federal RICO statutes, O.C.G.A. § 16-14-6
Each count of the complaint incorporated by reference the allegations of each preceding count.
The defendants answered Manov's complaint, asserting several affirmative defenses, including that the complaint failed to state a claim for relief.
On June 5, 1996, the district court granted the defendants leave to conduct Rule 11 discovery.
On June 28, Manov moved the court for leave to file an amended complaint. At this time, she also filed a "Motion for an Order Directing Defendant Ceana Nezhat to provide Sworn Testimony to this Court Within Three Days that He is a Bona Fide Physician."
Two months later, on September 6, Byrne filed an amended complaint.
Four days later, on September 27, Byrne, apparently anticipating the defendants' motions for Rule 11 sanctions, filed a memorandum in support of Manov's claims.
On July 8, 1997, Northside moved the district court to sanction Manov and Byrne pursuant to Rule 11, 28 U.S.C. § 1927, and the court's inherent power. Two days later, the Center and Nezhat defendants filed a similar motion. On July 14, Manov moved the court to defer ruling on the defendants' motions until she could conduct "Rule 11 defense discovery." Manov's motion did not describe the defensive discovery she wished to conduct. The court denied Manov's motion on July 30. On July 31, Manov supplemented her motion with a request that she be granted leave to obtain (1) records pertaining to the Drs. Nezhats' medical credentials, (2) reports relating to appendectomies performed by the Nezhats during 1992, and (3) reports relating to bowel resection procedures performed on sixteen patients. Manov contended that these records and reports would demonstrate that Count IV, alleging violations of the Georgia RICO statute, had evidentiary support. On August 6, 1997, the court denied Manov's motion.
On October 15, 1997, Neal, still lacking pro hac vice status but nonetheless appearing for Manov, moved the district court to impose sanctions against two of the Nezhats' lawyers, Henry D. Green and David F. Walbert, pursuant to the court's inherent power. Neal's motion represented that these attorneys had made "25 misrepresentations/material concealments in a May 3, 1996 letter to the Court, which in turn resulted in unilateral [Rule 11] discovery."
On February 23, 1998, the court granted the defendants' motions for sanctions and denied Neal's motion for sanctions. Drawing on its authority under Fed.R.Civ.P. 11, 28 U.S.C. § 1927, and its inherent power, the court found that Byrne's "pre-filing investigation [did] not support the filing of a RICO claim against the Nezhats ... [and that] the claim against the Nezhats was brought without a reasonable factual basis." The court held Manov and Byrne liable for the defendants' attorneys' fees and costs, the amounts to be fixed in a subsequent order.
On April 23, 1998, Manov again moved the district court to recuse pursuant to 28 U.S.C. § 455(a). In addition to the circumstance of McDevitt's former employment with the lawfirm representing the Nezhats and the Center (the basis for Manov's first motion to recuse), Manov contended that the court's rulings demonstrated an apparent bias against her. Thus, the court's "impartiality might reasonably be questioned." The district court denied the motion on June 1, 1998.
After the district court dismissed Manov's claims against Northside under Rule 12(c), as part of the February 23, 1998 sanctions order, and struck all of Manov's claims against the Nezhats and the Center except the medical malpractice claim, the Nezhats and the Center commenced discovery on the merits of that claim. When Manov refused to comply with a court order requiring her to provide the Nezhats and the Center with the basis for the opinion of her medical expert, they moved on April 21, 1998 to strike the expert from Manov's list of witnesses.
The district court's February 23, 1998 sanctions order required the defendants to present "documentation" evidencing the attorneys' fees and costs they had incurred in defending against Manov's claims (except her malpractice claim) and conducting their Rule 11 discovery. After the defendants submitted such proof, the court, on February 17, 1999, ordered Byrne and Manov to present evidence of their ability to pay the fees and costs the defendants were requesting.
Manov appeals (1) the two orders denying her motions to recuse pursuant to 28 U.S.C. § 455(a), (2) the court's dismissal of her claims against Northside, (3) the court's dismissal of all of her claims, except her medical malpractice count, against the Nezhats and the Center, and (4) the court's imposition of monetary sanctions. Byrne appeals the district court's imposition of monetary sanctions as well. We consider first Manov's argument that the district court should have recused.
Section 455(a) of the United States Code states: "Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned."
At some time prior to the commencement of his law clerk's duties with the district court, McDevitt was employed by Sullivan, Hall, Booth & Smith, an Atlanta law firm. The firm served as co-counsel for the Nezhats and the Center in the instant case.
Judge Tidwell recognized immediately that McDevitt had worked for one of the law firms involved in the case; therefore, he isolated McDevitt from the case and assigned the matter to another law clerk, Nancy Chapman. On July 8, 1996, Judge Tidwell learned from reading Manov's motion for recusal that McDevitt, while working as a Sullivan associate, had done some work on Mullen's state court case. After entertaining Manov's motion for recusal at a hearing the next day, Judge Tidwell said:
The record before us reveals that McDevitt's involvement in Mullen's state court case was limited to the following: McDevitt, as a Sullivan associate, worked for Henry D. Green, a Sullivan partner and co-counsel of record for the Nezhats and the Center. In this capacity, McDevitt signed a "Brief in Support of Defendants' Motion to Strike Plaintiff's Supplemental
The test for determining whether a judge should disqualify himself under section 455(a) is whether a reasonable person knowing all the facts would conclude that the judge's impartiality might reasonably be questioned. See Hepperle v. Johnston, 590 F.2d 609, 614 (5th Cir.1979). Stated another way, the question is "whether an objective, disinterested, lay observer fully informed of the facts underlying the grounds on which recusal was sought would entertain a significant doubt about the judge's impartiality." Carter v. West Pub. Co., No. 99-11959-EE, 1999 WL 994997 (11th Cir. November 1, 1999). Reduced to its essentials, Manov's argument is that, notwithstanding the district court's statements at the July 9 hearing, such an observer would entertain a significant doubt as to the court's impartiality. In other words, the observer would either (1) doubt the court's statement that McDevitt had been isolated from the case from the outset, or (2) conclude that, despite such isolation, there was a substantial likelihood that McDevitt would impart to the court information he had gleaned while working on Mullen's state court case, thereby prejudicing the court against Manov.
The record contains nothing that would cause a reasonable observer to doubt the truth of the court's statement that McDevitt had been, and would continue to be, isolated from the case. Moreover, there is nothing in the record that could cause a reasonable observer to draw the opposite conclusion — that McDevitt had been serving, and would continue to serve, as the court's elbow law clerk on the case. This brings us to the second inference Manov would have us draw: McDevitt's mere presence in the court's chambers created the appearance that the court was, and would continue to be, partial to the defendants.
As an initial matter we note that "[i]f a clerk has a possible conflict of interest, it is the clerk, not the judge who must
We disagree for two reasons. First, we reject the underlying assumption of Manov's argument, namely, that when a court employs a law clerk whose former employer appears before the court, there is a stronger basis for questioning the court's impartiality than when a court employs a law clerk who has accepted future employment with a firm appearing before the court. A law clerk has little incentive to influence a judge in an effort to curry favor with a former employer. Conversely, a law clerk has a financial incentive to benefit a future employer. Given this financial incentive, if ever a law clerk were of a mind to influence his judge, it would likely be for the benefit of a future rather than a former employer. Because precedent approves the isolation of a law clerk who has accepted future employment with counsel appearing before the court (see e.g., Hunt, 783 F.2d at 1015-16) it follows that isolating a law clerk should also be acceptable when the clerk's former employer appears before the court.
Second, we note that a law clerk has no incentive to violate a court's instruction that he isolate himself from the case and thereby subject himself to discharge. In this case, the district judge explained that, as a matter of course, he isolates law clerks from cases involving past or future employers. The obvious purpose of this procedure is to ensure that the appearance of partiality does not arise; as such, only a foolhardy law clerk would purposely circumvent the court's instruction by attempting to pass on information about a case. In sum, we hold that the district court did not abuse its discretion in denying Manov's first motion for recusal.
As noted, Manov's second motion for recusal cited the district court's rulings against Manov and asserted that such rulings would lead a reasonable observer to harbor a significant doubt about the court's impartiality. We are not persuaded
We now turn to the remaining issues in this appeal. First, we determine de novo whether the district court erred as a matter of law in dismissing Manov's claims against Northside in Counts III and IV. See Haitian Refugee Ctr. v. Baker. 949 F.2d 1109, 1110 (11th Cir.1991) ("[I]f the trial court misapplies the law we will review and correct the error without deference to that court's determination."). Second, we determine whether the court abused its discretion in imposing sanctions against Manov and Byrne, which, except for Manov's medical malpractice claim, included the dismissal of the remaining counts of the complaint. See United States v. Sigma Intern., Inc., 244 F.3d 841, 852 (11th Cir.2001) (In determining whether the court abused its discretion we ask whether it "applie[d] the wrong legal standard or ma[de] findings of fact that are clearly erroneous.") (internal citations omitted).
Both of these determinations — whether the court erred as a matter of law in dismissing the claims against Northside or abused its discretion in awarding sanctions — are guided by the fact that the root of this litigation is the medical malpractice claim that Manov brought against Drs. Farr and Camran Nezhat and the Center in the Fulton County Superior Court in August 1994. Manov alleged that she came to the Center in September 1992 for laproscopic surgery to alleviate endometriosis. The surgery was to be performed by Drs. Farr and Camran Nezhat. Prior to surgery, they informed her that her appendix may be infected and, if so, it should be removed when they performed the laproscopy. Manov agreed, and executed a consent both to the laproscopic procedure and a "possible appendectomy and any other procedure deemed necessary." During the laproscopic procedure, the doctors decided that Manov's appendix was infected and performed the appendectomy. Manov contended that the appendix was not infected and that the doctors were negligent in removing it. They were also negligent, she asserted, in the manner in which they performed the appendectomy because they left a portion of the appendix in her abdomen. This, in turn, caused an infection, which required further hospitalization and caused other complications.
As our discussion unfolds, it will become clear that the allegedly botched appendectomy and the resulting complications constitute the sum and substance of the injury Manov suffered in this case. Every count of the complaint, including Manov's Georgia RICO claim, derives from the appendectomy. With this background in mind, we address the issues posed above. We begin with the dismissal of Manov's claims against Northside in Counts III and IV.
Count III alleged that Northside breached its "duty of due care to monitor and investigate the ... practice of surgery [by the Drs. Nezhat] at Northside." Among other things, Northside failed to check the Nezhats' credentials, protect the Nezhats' patients from experimental and unnecessary surgery, and prevent the Nezhats from ordering nurses to perform medical procedures required by law to be performed by physicians. But for such negligence, argued Manov, Drs. Farr and Camran Nezhat would not have performed the appendectomy at issue.
Georgia's renewal statute provides that when an action is commenced in state court within the proper statute of limitations period, and the plaintiff voluntarily dismisses the action, the plaintiff may recommence the proceeding in federal court within six months after the dismissal. O.C.G.A. § 9-2-61. The district court found that the statute of limitations had expired on Manov's negligence claim against Northside. Under Georgia law, a plaintiff must bring a negligence action within two years of the act giving rise to the claim. O.C.G.A. § 9-3-33. Since Manov underwent surgery at Northside in September 1992, her negligence claim against Northside should have been brought by September 1994. She did not bring the claim until January 1996—thus, it was barred by the statute of limitations. The claim was not saved by Georgia's renewal statute because the statute only suspends the running of the statute of limitations against defendants named in the original complaint. Cornwell v. Williams Bros. Lumber Co., 139 Ga.App. 773, 229 S.E.2d 551, 552 (1976); Wagner v. Casey, 169 Ga.App. 500, 313 S.E.2d 756, 758 (1984).
Count IV alleged that the defendants, including Northside, violated Georgia's RICO law by engaging in racketeering activity. The district court dismissed Northside as a Count IV defendant
Having disposed of the first issue posed above, we turn to the second issue: whether the district court abused its discretion when it granted both Northside's and the Nezhats and Center's motions for sanctions, required Byrne and Manov to pay the defendants' attorneys' fees and costs, and dismissed all but one of Manov's claims against the Nezhats and the Center. The district court took this action pursuant to three separate sources of authority: Fed.R.Civ.P. 11, 28 U.S.C. § 1927, and the court's inherent power.
In reviewing the award of sanctions, we first discuss these sources of authority. After that, we examine the award of sanctions against Byrne and Manov. Specifically, we determine whether the district court abused its discretion because, as Manov contends, the court erred in concluding that the claims it dismissed (against the Nezhats and the Center) lacked a factual foundation. We have already determined that the court did not err in dismissing her claims against Northside; hence, as to that defendant, the question is whether the court abused its discretion in awarding Northside attorney's fees and costs. We defer answering that question at this juncture because the answer becomes self-evident after we examine Manov's complaint as a whole and find it (except for Count I) baseless.
In considering a motion for sanctions pursuant to Fed.R.Civ.P. 11,
The second source of authority for the sanctions levied in this case is 28 U.S.C. § 1927, which states:
As the express language of section 1927 indicates, this sanctioning mechanism is aimed at the unreasonable and vexatious multiplication of proceedings. Unlike Rule 11, which is aimed primarily at pleadings, under section 1927 attorneys are obligated to avoid dilatory tactics throughout the entire litigation. Also unlike Rule 11, "awards pursuant to § 1927 may be imposed only against the offending attorney; clients may not be saddled with such awards." United States v. Int'l B'hd of Teamsters, Chauffeurs, 948 F.2d 1338, 1345 (2d Cir.1991).
The third source of authority for the award of sanctions in this case is the district court's inherent power. This power is derived from the court's need "to manage [its] own affairs so as to achieve the orderly and expeditious disposition of cases." Chambers v. NASCO, Inc., 501 U.S. 32, 43, 111 S.Ct. 2123, 2132, 115 L.Ed.2d 27 (1991). The "inherent power of a court can be invoked even if procedural rules exist which sanction the same conduct." Chambers, 501 U.S. at 46, 111 S.Ct. at 2133.
One aspect of a court's inherent power is the ability to assess attorneys' fees and costs against the client or his attorney, or both, when either has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons."
The district court awarded sanctions against Byrne and Manov because the claims in the amended complaint, apart from the malpractice claim, lacked either a legal or a factual basis and because Byrne had failed to conduct a reasonable inquiry into the factual bases of the claims. As we have concluded, the district court properly dismissed Manov's claims against Northside. Our ensuing discussion, therefore, concerns Manov's claims against the Nezhats and the Center. The district court found those claims — in Counts II, IV, and V
Our review of the district court's award of sanctions necessarily begins with an analysis of the complaint, here the amended complaint. We note that, if the facts as pled failed to state a claim for relief, it was irrelevant whether Byrne conducted the requisite Rule 11 pre-filing factual investigation. Identifying Manov's claims — in terms of their legal underpinnings — is not difficult; the heading of each count announces whether the claim is for negligence, fraud, and so forth. The problem lies in determining which factual allegations of the complaint relate to which cause of action. The amended complaint, containing 6 counts, consists of 32 pages and 126 paragraphs. The amended complaint was drafted like the original complaint, in that each of the counts following Count I incorporated by reference every paragraph, and therefore every count, preceding it. Each count added a few paragraphs, which, in turn, were incorporated into the next count. In drafting a complaint this way, the pleader inevitably incorporates into a count factual allegations, and even defendants, that are not germane to the cause of action purportedly stated in that count. Accordingly, to determine whether a claim was legally cognizable, we must strip the claims to their essentials, which, in this case, requires considerable weeding. Having done so, we conclude that Count II, fraud, Count IV, Georgia RICO, and Count V, battery, were properly dismissed because they lacked factual support. Moreover, even if we accept Count IV's factual allegations as true, the count still fails because it failed to state a cause of action.
The district court had no difficulty, and neither do we, in discerning the allegations
Count II — fraud on the part of Drs. Farr and Camran Nezhat and the Center — and Count V — battery on the part of Drs. Farr, Camran, and Ceana Nezhat — are based almost exclusively on the facts giving rise to Count I. In Count II, Manov alleged that the defendants Nezhat obtained her consent to the appendectomy by fraudulently misrepresenting the potential presence of endometriosis on her appendix. In other words, the doctors knew that her appendix was healthy and lied when they told Manov that it might be infected. Their motive for lying, Manov alleged, was their "desire for continued financial gain at the expense of [Manov's] health and safety." In Count V, Manov alleged that the above fraudulent misrepresentation "vitiated" her consent; thus, in performing the appendectomy, the doctors committed a battery.
The district court properly found that Manov consented to the appendectomy. Manov does not dispute that she signed a consent form agreeing to the procedure. Thus, a contract between Manov and Drs. Farr and Camran Nezhat (the defendants who performed the appendectomy) was formed. Mattair v. St. Joseph's Hospital, Inc., 141 Ga.App. 597, 598, 234 S.E.2d 537 (1977). In entering into the contract, the physicians implicitly promised to exercise the care and skill required by the medical profession in the community. Id. Count I of the complaint alleged that the Drs. Farr and Camran Nezhat and the Center breached this duty of care.
Under Georgia law, one who consents to a surgical procedure cannot thereafter sue the surgeon for battery. Battery is an unlawful touching, so one who consents to being touched cannot claim a battery. Manov, however, attempted to circumvent this bar by contending that the physicians procured her consent through fraud — by stating falsely that her appendix might be infected. The district court rejected Manov's attempt because there is nothing in the record — save a bald assertion in her complaint — to support her allegation that the doctors knew in advance that her appendix was healthy and should not be removed. In any event, the doctors statements constituted reasoned medical opinions about what they might find once the laproscopic procedure was underway. Such statements do not amount to fraud. Cannon v. Smith, 187 Ga.App. 434, 370 S.E.2d 529, 531 (1988) ("At best, [such] allegations might establish negligence but not fraud."). In sum, both Count II-Fraud and Count V-Battery were nothing more than thinly veiled attempts to recast the malpractice claim. As such, these counts were not factually supportable.
Finally, we turn to the meat of Manov's amended complaint: Count IV alleging the violation of the Georgia RICO statute by all defendants.
O.C.G.A. § 16-14-4. Neither Count IV nor any other part of the amended complaint cites which of these provisions the defendants allegedly violated. We rule out a violation of subsection (c) because neither the count nor the amended complaint speaks of a conspiracy. Due to the pleader's failure to track any of the statutory language — with the exception of the words "enterprise" and "pattern of racketeering activity" — we cannot say with confidence whether Manov meant to allege a violation of subsection (a) or (b) or both.
While never identifying which subsection of O.C.G.A. § 16-14-4 the defendants allegedly violated, both the original complaint and the amended complaint alleged that each defendant was an "enterprise" and engaged in a "pattern of racketeering activity." The racketeering activity pled in the amended complaint consisted of eleven separate acts. The ensuing discussion depicts these acts in greater detail; we list them briefly here by means of an introduction. The racketeering acts were introduced with headings. The first was "18 U.S.C. 1341." It was followed by "FALSE/FRAUDULENT BILLING," "$200.00 INITIAL HOSPITAL CHARGE," "SERVICES PROVIDED BY ONLY ONE PHYSICIAN," "SERVICES PROVIDED BY NON-PHYSICIANS," "SEVERITY OF DISEASE/'22' MODIFIERS," "INSURANCE FORM INFORMATION," "ESTROPEL," "HOSPITAL COMPLICITY," "EVIDENCE TAMPERING," and "INFLUENCING WITNESSES."
Finally, we note that Count IV incorporates by reference all prior counts; therefore, it includes Count I-Malpractice, Count II-Fraud, and Count III-Negligence by Northside. Counts II and III do double service in that Count IV explicitly states that they also constituted acts of racketeering. Count V, the battery count, while not incorporated by reference, nonetheless serves as the basis for an act of racketeering as well. With these observations in mind, we examine the legal sufficiency of Count IV, specifically, each act of racketeering.
We dispose easily of the alleged acts of racketeering that amount to nothing more than the same fraud and battery charged in Counts II and V. Our prior discussion of these counts demonstrates they were pled without a factual basis. Similarly, the act of racketeering entitled "Hospital Complicity" is legally insufficient because, as discussed supra Part III.A.2, the pleader did not identify the Northside agent(s) responsible for the allegedly unlawful conduct.
The remaining acts of racketeering are all anchored on the federal mail fraud statute, 18 U.S.C. § 1341. To determine if these acts of racketeering were pled with legal or factual sufficiency, we review this circuit's requirements for pleading mail fraud in civil RICO cases. Mail fraud occurs when a person (1) intentionally participates in a scheme to defraud another of money or property and (2) uses the mails in furtherance of that scheme. See Pelletier, 921 F.2d at 1498; United States v. Downs, 870 F.2d 613, 615 (11th Cir.1989). Pelletier explains that in a
In that the mail fraud statute "has been interpreted by the Supreme Court and lower courts to include a proximate cause requirement — the plaintiff's injury must have been proximately caused by the commission of the predicate acts." Pelletier, 921 F.2d at 1499. This court's restrictive view of the proximate cause requirement
The following analysis of the remaining acts of racketeering reveals that they fail for either or both of the following reasons: (1) they do not state an injury to Manov or (2) they assert injuries allegedly suffered by third persons (namely Mullen). We consider these acts of racketeering in turn.
One alleged act of racketeering, pled in paragraphs 59-65 of the amended complaint, was that the defendants Nezhat committed medical journal fraud. The crux of this allegation is that the Nezhats used their medical journal articles as part of a marketing scheme to obtain money by false pretenses. In short, the amended complaint alleged that the defendants Nezhat used "the popular media" to advertise falsely their credentials and success rates. In particular, it alleged that the Nezhats falsely advertised that they developed the use of "surgery via laparoscope with a picture on a television screen" and that their work produced the highest pregnancy rates ever reported. The amended complaint further alleged that the Nezhats hired a public relations firm to ensure that their surgical successes were published in the popular media and that they authored a series of medical journal articles in which they claimed to have developed new, successful procedures.
According to the amended complaint, the Nezhats' representations to the media and in their journal articles were false
Manov is not a victim of a fraudulent misrepresentation. She sought the services of the Nezhats so they could surgically alleviate her endometriosis. The Nezhats represented to Manov that they would perform surgery to rectify her endometriosis and remove her appendix if it was infected. Any alleged injury Manov suffered as a result of this representation would be the result of malpractice, not fraud. In an attempt to recover treble damages under the Georgia RICO statute, however, the amended complaint's allegations about the Nezhats' purported misrepresentations reach far beyond her surgery to alleviate her endometriosis — the allegations encompass utter irrelevancies. For instance, Manov's surgery was conducted with a laparoscope; beyond this fact, there is no connection between her surgery and an allegation that the Nezhats falsely claimed to have invented laparoscopic surgery.
Furthermore, claims of surgical success in medical journals and popular magazines seem more akin to puffing than actionable misrepresentations. The label attributed to the Nezhats' statements, however, is unimportant because (1) none of the alleged misrepresentations were made to Manov, and (2) the alleged misrepresentations were unrelated to any harm suffered by Manov. Thus, insofar as Manov's mail fraud claim is based on medical journal and media fraud, it fails as a matter of law because the facts do not support a prima facie case for fraud.
Finally, we note that Neal asserted this same medical journal fraud claim as an act of racketeering in Mullen's state court case. The Fulton County Superior Court dismissed Mullen's RICO claim on summary judgment, and the Georgia Court of Appeals affirmed on October 22, 1996, shortly after Manov filed the amended complaint now before us.
Paragraphs 66-68 of the amended complaint bore the heading "FALSE/FRAUDULENT BILLING." None of the eleven instances of fraudulent billing listed under this heading, however, injured Manov. The amended complaint never specified how the supposed acts of fraudulent billing even related to Manov. Because "a civil RICO plaintiff must show ... that he was injured by reason of the defendant's acts of deception," Pelletier, 921 F.2d at 1499, this allegation fails as a matter of law.
Paragraphs 69-71 of the amended complaint bore the heading "$200.00 INITIAL HOSPITAL CHARGE." While these paragraphs alleged an injury to Manov in that she contends she was billed for a service she did not receive, this claim fails as an act of racketeering, because the allegations did not demonstrate how the billing constituted mail fraud. "When the alleged predicate act is mail ... fraud, the plaintiff must have been a target of the scheme to defraud and must have relied to his detriment on misrepresentations made in furtherance of that scheme." Tom's Amusement Co., Inc. v. Total Vending Serv., 243 Ga.App. 294,
Paragraphs 72-73 of the amended complaint bore the heading "SERVICES PROVIDED BY ONLY ONE PHYSICIAN." Manov believed that only Dr. Farr Nezhat was present for one of her surgeries, but she received a bill for the services of both Drs. Farr and Camran Nezhat. The district court found that there was no factual basis for this allegation and that Byrne would have realized that the claim was frivolous had he conducted a reasonable investigation. But, whether or not there was a factual basis, the allegation was flawed because it failed to include the elements of fraud. Paragraphs 72 and 73 are not saved by Manov's assertion that Mullen also believes that she was billed for the services of both Drs. Farr and Camran Nezhat when only one of them was present at her surgery. As explained above, Manov lacks standing to bring a claim based on an alleged misrepresentation to a third party. See Johnson Enter. v. FPL Group, Inc., 162 F.3d 1290, 1313 (11th Cir.1998).
Paragraphs 74-75 of the amended complaint bore the heading "SERVICES PROVIDED BY NON-PHYSICIANS." These paragraphs alleged that the Center routinely billed for physician services when the services were actually "performed by a non-physician, such conduct in violation of 18 U.S.C. 1341 (Mail Fraud), O.C.G.A. § 16-8-3 (Theft by Deception), and O.C.G.A. § 16-5-23 (Battery)." Manov based this allegation on her lawyers' belief that Ceana Nezhat had not been awarded a medical degree.
We agree with the district court that this allegation was frivolous because it lacked a factual basis. Moreover, it typified the harassing, bad faith nature in which Manov's attorneys prosecuted this case. Cf. Pelletier, 921 F.2d at 1514 (stating that Rule 11 sanctions are warranted when a party files a pleading in bad faith for an improper purpose). The factual inadequacies aside, the allegation was legally frivolous because the simple battery alleged in this case was not, and could not have been, an act of racketeering.
The amended complaint cited simple battery, O.C.G.A. § 16-5-23, as an act of racketeering. Simple battery is a misdemeanor. O.C.G.A. § 16-5-23(b). While Georgia RICO's definition of racketeering
The Georgia Supreme Court has held that misdemeanors are not included in the definition of racketeering activity. In Clark v. Security Life Insur. Co., 270 Ga. 165, 509 S.E.2d 602, 605 (1998), it stated:
(emphasis added). Although interpreting the catch-all provision in the definition of racketeering activity, O.C.G.A. § 16-4-3(9)(B), Clark clearly evidences the Georgia Supreme Court's unwillingness to import misdemeanor conduct into the definition of racketeering activity.
The [Georgia] General Assembly enacted RICO
Sevcech v. Ingles Mkts., Inc., 222 Ga.App. 221, 474 S.E.2d 4, 6 (1996) (second alteration in original) (citing O.C.G.A. § 16-14-2(b)). Finally, Georgia RICO's version of a catch-all provision, which makes out-of-state and federal offenses acts of racketeering, requires that the offenses be felonies,
Pretermitting the question of whether Georgia RICO's definition of racketeering activity includes the misdemeanor of simple battery,
The other alleged acts of racketeering were similarly flawed. Consider paragraphs 76-79 of the amended complaint which bore the heading "SEVERITY OF DISEASE/'22' MODIFIERS."
Paragraphs 80-81 of the amended complaint bore the heading "INSURANCE FORM INFORMATION." Manov alleged that the Nezhat defendants submitted forms to insurance companies indicating that patients had not pre-paid for services even though some patients, such as Manov, had pre-paid for services. Nowhere did the amended complaint indicate how this was an intentional misrepresentation upon which Manov relied to her detriment; nowhere did it allege that Manov was harmed by this practice. This allegation, therefore, was insufficient (1) because the complaint failed to allege the elements of fraud, see Tom's Amusement Co. v. Total Vending Servs., 243 Ga.App. 294, 533 S.E.2d 413, 419 (2000) (explaining that when the alleged predicate act is mail
Finally, paragraphs 111-116 of the amended complaint bore the heading "INFLUENCING WITNESSES." The thrust of this allegation was that the Nezhat defendants had persuaded a physician not to testify about the Nezhats' medical journal fraud. The physician, Dr. Harry Reich, would have testified that "Camran Nezhat could not produce patient data to verify [his] claims that he had laparoscopically treated 42 ectopic pregnancies, with no complications."
The final acts of racketeering bear the headings "ESTROPEL" and "EVIDENCE TAMPERING." Like the other acts of racketeering, these acts fail for want of a showing that they somehow injured Manov.
In conclusion, we concur with the district court that Count IV lacked a basis in fact. More importantly, it also lacked a legal basis. The court, therefore, had no alternative but to strike the count as frivolous.
Having distilled Manov's amended complaint to its essentials, we find that it remains what it was when Manov first brought suit in the Fulton County Superior Court: a garden variety medical malpractice claim. By expanding her case to include the RICO charge and the other baseless claims discussed above, Byrne subjected himself to sanctions. Pelletier, 921 F.2d at 1514 (stating that sanctions are proper "(1) when a party files a pleading that has no reasonable factual basis; (2) when a party files a pleading that is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; and (3) when a party files a pleading in bad faith for an improper purpose").
Byrne's professional responsibilities in this case required him to perform a reasonably thorough and objective investigation of the facts before asserting them as the bases for these causes of action. Byrne did not speak to a single person, apart from Neal, who had actual knowledge regarding the facts that purportedly supported the fraud charges. What is more, Byrne failed to research the law. Had he done so, he would have learned that Manov's RICO claims were doomed to failure. Byrne's responsibility to act with professional judgment only after a thorough, reasonable, and objective investigation of the claims at issue was heightened (1) because Mullen's RICO claims were pending appeal of an adverse summary judgment ruling and (2) because of the extraordinary nature of the RICO allegations in this case. See id. at 1522 (emphasizing that "[p]articularly with regard to civil RICO claims, plaintiff's must stop and think before filing them"). In short, we affirm the district court's imposition
Not only were sanctions justified under Rule 11, but the record is replete with instances of bad faith and dilatory tactics — thereby justifying sanctions under 28 U.S.C. § 1927 and the court's inherent power. Before he filed the case at hand, Byrne was aware of the orders issued by the judges presiding over Mullen's state and federal cases, which, collectively, labeled Neal's conduct as "deceitful and dishonest," "unethical," "malicious and harassing," and "unbecoming of an officer of the court." We find it telling that even though Byrne knew that Neal "was walking on thin ice when admitted [by the Fulton County Superior Court] pro hac vice to practice in Georgia", that the superior court had disqualified Neal from participating in Mullen's case, and that the judge in Mullen's federal court case was on the brink of doing so when Neal withdrew from the case, Byrne got involved in the case and continued to advance Neal's arguments. Moreover, shortly after filing Manov's case, Byrne was forewarned that Rule 11 sanctions were looming. Despite concerns expressed by the defendants and the court regarding the baseless allegations in the complaint, Byrne realleged and repled most of those allegations in the amended complaint, thereby forcing the defendants to respond to the same claims a second time.
Any doubt as to the meritless nature of the Georgia RICO count was removed when the Georgia Court of Appeals affirmed the summary judgment dismissal of Mullen's RICO claims. See Mullen v. Nezhat, 223 Ga.App. 278, 477 S.E.2d 417 (Ga. Ct.App.1996). Manov's Georgia RICO count was essentially a repleading of Mullen's RICO claims that the Fulton County Superior Court had rejected. At the time Byrne filed the complaint in this case, the summary judgment in Mullen's case had been appealed to the Georgia Court of Appeals. When Byrne filed Manov's amended complaint on September 6, 1996, the Georgia court had the appeal under advisement. Very disturbing to us is that Byrne failed to notify the district court after the Georgia Court of Appeals affirmed the summary judgment dismissal a few weeks later on October 22, 1996, effectively gutting his client's RICO claim.
The conclusion is inescapable that, with the exception of Manov's medical malpractice claim — which the district court's sanctions order left undisturbed — Byrne filed a frivolous lawsuit, in bad faith, for the purpose of extorting a settlement from the defendants. As a willing participant in Neal's continuing vendetta against the Nezhats, Byrne abused the judicial process. As such, sanctions against Byrne were wholly warranted.
We turn now to the award of sanctions against Manov. The district court's February 23, 1998 order granted both Northside's and the Nezhats and Center's motions for sanctions against Byrne and Manov, finding them jointly and severally liable for attorneys' fees and costs, and dismissed the remaining claims (except the malpractice claim) in the amended complaint. As in the award of sanctions against Byrne, the district court cited Rule 11, 28 U.S.C. § 1927, and its inherent power as the authority for the sanctions against Manov. In this subpart, we address the monetary sanctions imposed against Manov. In subpart 3, we consider the dismissal of her claims.
While the district court did not consider Manov's conduct separately from Byrne's conduct, it thoroughly analyzed each of the counts of the amended complaint. The court concluded from its analysis that the amended complaint (apart from the malpractice claim) was filed in violation of Rule 11, because there was "no factual or legal basis for the claims" against Northside, and that "had Byrne conducted the reasonable, open-minded investigation required of him, he should have concluded that the Georgia RICO claims against the Nezhats and the Center fell beyond the scope of what could be properly pled within the confines of Rule 11."
Sanctions against Manov under Rule 11 were proper if she knew or should have known that the allegations in the complaint were frivolous. See Worldwide Primates, Inc. v. McGreal, 26 F.3d 1089, 1093 (11th Cir.1994) (remanding the case to impose an appropriate sanction because the client pursued the claim "when it knew, or should have known, that its claim was legally and factually baseless"). That Manov was a represented party, not an attorney, does not insulate her from sanctions under Rule 11. A client may be sanctioned under Rule 11
The defendants contend that Manov's deposition testimony contradicted the allegations in the complaint, that her amendments to her deposition demonstrated that she was trying to change her testimony, and that she continued to rely on Neal after she learned of his disqualification in Mullen's state court case. Even if these allegations and other like-styled arguments set forth by the defendants are true, they do not indicate that Manov knew the complaint filed on her behalf was factually or legally baseless. Further, there is no evidence in the record indicating that Manov provided false information to her attorneys, thereby facilitating a factually groundless complaint. See Calloway v. Marvel Entertainment Group, 854 F.2d 1452, 1474-75 (2d Cir.1988) (noting that a factual misrepresentation is an example of wrongful conduct for which a party may be sanctioned in addition to, or instead of, counsel) rev'd on other grounds, Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989); see also Elliott v. M/V Lois B., 980 F.2d 1001, 1007 (5th Cir.1993) (affirming a sanction against a party for misrepresentations in the pleadings).
There is no indication that Manov was anything but truthful in relaying to counsel facts about her surgeries and post-operative complications. The inadequacies in the RICO and other counts in the amended complaint stemmed directly from her attorneys. The district court recognized that Neal and Byrne, not Manov, were responsible for the frivolous complaint. For example, consider the court's reasoning regarding the RICO claim brought against Northside:
Similarly, the court stated the following regarding the Nezhats and the Center's motion for sanctions:
Implicit in the district court's reasoning is the understanding that Manov's attorneys, not Manov, were responsible for the frivolous claims and pleadings. Accordingly, insofar as the monetary sanctions levied against Manov were based on the court's authority under Rule 11, they cannot be upheld.
The district court's failure to specify her sanctionable conduct is not what gives rise to our conclusion that the court abused its discretion in imposing monetary sanctions on Manov under Rule 11. See, e.g., White, 908 F.2d at 681 (explaining that "[w]hile the court's method of imposing sanctions was not optimal, neither was it an abuse of discretion, [because t]he court's findings and conclusions, which we have extensively quoted, were detailed enough to assist in appellate review, help assure the litigants  that the decision
The court expressly stated that "it was the decision of plaintiff's counsel to expand this litigation beyond the scope of that pled by her original attorney in state court"; as such, it is clear that Manov was not involved in the management of her case or the decisions that resulted in the actions the court found improper under Rule 11. See Independent Fire Ins. Co., 979 F.2d at 379 (explaining that "[w]hile Rule 11 ... does contemplate that sanctions can be levied against a `represented party', we are constrained to hold under the facts of this case that the `represented party' against which sanctions are levied must be a party who had some direct personal involvement in the management of the litigation and/or the decisions that resulted in the actions which the court finds improper under Rule 11"). Moreover, the court's statements demonstrate that, unlike the client in Pelletier, 921 F.2d 1465, Manov was not the mastermind behind the frivolous litigation. See also In re Big Rapids Mall Assocs., 98 F.3d 926, 932 (6th Cir.1996).
Although we find that monetary sanctions against Manov were not justified under Rule 11, the award of these sanctions may still be affirmed if the sanctions were proper under the court's inherent power.
In granting Northside's motion for sanctions, the district court repeatedly emphasized that
The district court went on to support its finding of bad faith by listing the following egregious acts: (1) plaintiff's counsel brought a negligence claim one-and-a-half years after the statute of limitations had run; (2) plaintiff's counsel argued that the statute was tolled as a result of Northside's
The district court followed similar reasoning in granting the Nezhats and the Center's motion for sanctions. Regarding the Georgia RICO claim, the district court stated: "It was the decision of plaintiff's counsel in this matter to file this action and to radically expand the scope of the allegations far beyond those pled by plaintiff's original attorney, in order to take advantage of what Byrne had hoped would be more expansive discovery, among other reasons." After emphasizing that it was plaintiff's counsel who expanded the scope of this litigation, the district court stated that plaintiff's counsel and plaintiff acted in bad faith in pursuing the RICO claim against the Nezhats. Therefore, according to the court, it was authorized under 28 U.S.C. § 1927 and the inherent power of the court to sanction plaintiff and her counsel.
Similarly, regarding Manov's battery count it stated:
Again, regarding Manov's fraud count, the district court stated:
The above analysis of the asserted bases for sanctioning Manov evidences a distinct and erroneous trend in the district court's reasoning. As a sanction against Manov and Byrne, the court awarded attorney's fees and dismissed all but the malpractice count. To justify these sanctions, the court cited Byrne's conduct from which it inferred bad faith. Then, the court summarily stated that both Byrne and Manov acted in bad faith. To support its findings of bad faith and otherwise sanctionable conduct, the court impermissibly relied solely on the actions of counsel. See Primus Automotive Fin. Servs. Inc., 115 F.3d at 650 (citing Martin v. Brown, 63 F.3d 1252, 1256 (3d Cir.1995) (explaining that "any sanctions imposed against [an attorney] should be based solely on his `own improper conduct without considering the conduct of the parties or any other attorney'") (quoting Martin v. Brown, 63 F.3d 1252, 1265 (3d Cir.1995))). Sanctionable conduct by a party's counsel does not necessarily parlay into sanctionable conduct by a party. See Donaldson v. Clark, 819 F.2d 1551, 1557 n. 6 (11th Cir. 1987) (explaining that it is advisable to avoid a sanction that penalizes the parties for the offenses of their counsel); M.E.N. Co. v. Control Fluidics, Inc., 834 F.2d 869, 873 (10th Cir.1987) ("Where sanctions are concerned, ... we have cautioned that `[i]f the fault lies with the attorneys, that is where the impact of the sanction should be lodged.'" (citation omitted)).
While bad faith is the "key to unlocking the court's inherent power," Barnes, 158 F.3d at 1214, a court must do more than conclude that a party acted in bad faith; it should make specific findings as to the party's conduct that warrants sanctions.
Nothing in the record indicates that Manov knew that a baseless claim had been brought on her behalf or that she was pursuing the Nezhats for a harassing or other impermissible purpose. See Barnes, 158 F.3d at 1214 ("A finding of bad faith is warranted where an attorney [or a client] knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent. A party also demonstrates bad faith by delaying or disrupting the litigation or hampering enforcement of a court order."). In fact, the minimal findings regarding Manov in the February 23, 1998 sanctions order directly undermined any conclusion of bad faith on her part. The court stated that "plaintiff testified that she was not even aware that racketeering allegations had been included in the complaint. Plaintiff also admitted that she did not understand the meaning of `racketeering.' ... It was the decision of plaintiff's counsel in this matter to file this action and to radically expand the scope of the allegations far beyond those pled by plaintiff's original attorney." The district court's statement that Manov was not even aware that racketeering allegations had been included in the complaint precludes the conclusion that she knowingly or recklessly filed a frivolous claim. As such, the court's findings that Manov acted in bad faith are clearly erroneous.
Not only does the court's own statement undermine a conclusion of bad faith, but its failure to specify Manov's sanctionable conduct renders us unable to affirm. This was brought to the court's attention in plaintiff's March 12, 1999 Response to Submission of Nezhat Defendants and Northside Hospital Regarding Baker v. Alderman, 158 F.3d 516 (11th Cir.1998).
These above quoted statements demonstrate that the court considered plaintiff's argument and rejected it. The statements also constitute an attempt to clarify or issue the following findings: (1) plaintiff made false statements in documents filed with the court and (2) plaintiff continued to rely on Neal after he was barred from the case. Finally, the court's statements demonstrate that it relied on a portion of the Defendants' Proposed Findings of Facts.
At first glance, it seems as if the district court, in its June 24, 1999 order, "cured" the failure of its February 23, 1998 sanctions order to cite Manov's sanctionable conduct. We must, nonetheless, reverse because the findings set forth in the June 24 order are irrelevant and could not serve as a basis for sanctions. Consider the finding that Manov made several false assertions in affidavits, depositions, and sworn statements filed with the court. Even if we accept this finding as true, false statements alone do not indicate bad faith. Without a "smoking gun" statement from the plaintiff, i.e., "I know my claim is frivolous and I am pursuing this claim to harass the defendants," a district court makes a determination of bad faith by drawing inferences from the conduct before it. Standing alone, a false or inconsistent statement in a deposition does not compel the conclusion of bad faith. A false statement can be evidence of bad faith, if, for instance, there is other evidence in the record indicating that the statement was made for a harassing or frivolous purpose. The record in this case, however, does not yield the inference that Manov knew her claim was frivolous or that she sought to harass the Nezhats. For instance, in their Proposed Findings of Fact, the defendants asserted (and the district court implicitly adopted)
The district court also found that Manov acted in bad faith because she continued to rely on Neal despite the court's specific admonition regarding his involvement in the litigation.
Moreover, instead of supporting the conclusion of bad faith, the Defendants' Proposed Findings of Fact, upon which the district court relied, further evidence that Manov was unaware of the frivolous and vexatious nature of this litigation. Consider the following statements from the Defendants' Proposed Findings of Fact: (1) none of Manov's lawyers informed her that Neal had been disqualified from Mullen's case in Fulton County Court or that Neal had been found unethical, malicious, relentless, harassing, and to be conducting a vendetta against the Nezhats; (2) in Manov's April 27, 1998 deposition, she stated she was unaware that the district court had ordered Neal not to participate "in any form or fashion in this case";
It is clear from the record — indeed, from the Defendants' Proposed Findings of Fact upon which the district court relied—that
Although monetary sanctions against Manov pursuant to Rule 11 and the court's inherent power were not proper, the court's dismissal of all counts except her malpractice claim was justified. As noted in Part I of this opinion, the district court entered its sanctions orders without explicitly passing on the sufficiency of the Nezhats and the Center's affirmative defense of failure to state a claim for relief. The court determined that some of the counts of the complaint — Count IV, Georgia RICO and Count II, fraud — lacked factual support, and that one count — battery — should be dismissed because the deposition testimony of record, coupled with the count's allegations, demonstrated that the count was both legally and factually frivolous. That the court considered the adequacy, as well as the frivolity, of Manov's claims is evident from its decision not to dismiss the malpractice claim, as it was pled with a legal and factual basis. Moreover, our review of the complaint, particularly the RICO count, reveals that Manov's claims are insufficient as a matter of law, see supra Part III.B.2.c. As such, the court did not err in dismissing all but the malpractice count of the complaint.
This case began in the Fulton County Superior court as an ordinary medical malpractice case. When the plaintiff switched lawyers, so did the scope and tenor of the case. Instead of simple medical malpractice, the case burgeoned into a broad-based RICO prosecution. The plaintiff's new lawyers were determined that the defendants would either settle or suffer professional ruin. They used every tool they could conceive of to extort settlement: going to the press, the United States Attorney, and even the FBI. The defendants refused to cave in. The case dragged on for three and a half years ending in the dismissal of the plaintiff's claims — including her malpractice claim — and the imposition of close to $400,000 in monetary sanctions against the plaintiff and one of her lawyers. One must ask, "how could it take so long and cost so much to dispose of such a case?" We would be remiss if we concluded this opinion without explaining how this could happen, and, more importantly, how it could have been avoided.
Manov's original complaint contained 78 pages, 299 paragraphs, 139 subparagraphs, and nine counts. Counts II through IX incorporated by reference all antecedent paragraphs, such that Count IX was an amalgamation of everything in the complaint. To say that the allegations of the complaint were vague and ambiguous — leaving the reader to guess at precisely what the plaintiff was claiming — is an understatement.
Rule 12(e) of the Federal Rules of Civil Procedure states:
The complaints in this case were "so vague and ambiguous that [the defendants] [could] not reasonably be required to frame a responsive pleading." None of the defendants, however, moved the court to order the plaintiff to file a more definite statement; instead, the defendants simply answered the complaints. In their answers, they responded to the numbered paragraphs of the complaints, admitting or denying the allegations thereof, and then
Although the defendants' affirmative defenses were comprehensible in a literal sense, because they addressed the amended complaint as a whole they were, as a practical matter, as vague and ambiguous as the amended complaint. By eschewing a Rule 12(e) motion for a more definite statement and choosing to answer the amended complaint in this fashion, the defendants in effect joined the plaintiff in setting the stage for the immense and unnecessary expenditure of resources evident in this case.
We have labeled pleadings such as Manov's complaints and the defendants' answers "shotgun" pleadings. See, e.g., Magluta v. Samples, 256 F.3d 1282 (11th Cir. 2001); Ebrahimi v. City of Huntsville Bd. of Educ., 114 F.3d 162, 168 (11th Cir.1997) (per curiam); Cesnik v. Edgewood Baptist Church, 88 F.3d 902, 905 (11th Cir.1996); Anderson v. Dist. Bd. of Trustees of Cent. Fla. Community College, 77 F.3d 364, 366-67 (11th Cir.1996); Pelletier v. Zweifel, 921 F.2d 1465, 1517-18 (11th Cir.1991); Fullman v. Graddick, 739 F.2d 553, 557 (11th Cir.1984). Unless the court requires a repleader — under Rule 12(e) or on its own initiative — a shotgun complaint leads to a shotgun answer. Where, as here, each count incorporates every antecedent allegation by reference, the defendant's affirmative defenses are not likely to respond to a particular cause of action but, instead, to the complaint as a whole. Such disjointed pleadings make it difficult, if not impossible, to set the boundaries for discovery. Hence, discovery disputes are inevitable.
Unfortunately, many district judges opt to do nothing; they simply let the case proceed to trial on the pleadings as they stand. They do so for two reasons. First, given a day-certain trial date, the case may settle. Second, narrowing the issues by effectively rearranging the pleadings in the style required by Rules 8 and 10, and then striking the insufficient claims and defenses, may render superfluous much of the parties' discovery. If that happens, the judge is effectively reversing his earlier, albeit tacit, position that the pleadings were legally sufficient, and saying to the parties: "You have needlessly expended time and money, and I allowed it." Consequently, it is unlikely that the issues will be narrowed to the point that only the meritorious claims and defenses remain. If the case does not settle, it proceeds to trial with the issues unnarrowed. There, the potential for error — and an unjust result and a subsequent appeal — is considerable.
Litigating a case framed by shotgun pleadings obviously harms one or both of the parties.
In addition to watering down the rights of the parties to have valid claims litigated efficiently — whether the plaintiff's or the defendant's — shotgun pleadings wreak havoc on the judicial system. Cases framed by shotgun pleadings consume an inordinate amount of a court's time. As a result, justice is delayed, if not denied, for litigants who are standing in the queue waiting to be heard. Their impression of the court's ability to take care of its business can hardly be favorable. As the public becomes aware of the harm suffered by the victims of shotgun pleading, it, too, cannot help but lose respect for the system. Moreover, the consequence of a trial court's inability, or apparent unwillingness, to halt the use of shotgun pleadings may
Shotgun pleadings, if tolerated, harm the court by impeding its ability to administer justice. The time a court spends managing litigation framed by shotgun pleadings should be devoted to other cases waiting to be heard. "[W]ast[ing] scarce judicial and parajudicial resources ... impedes the due administration of justice" and, in a very real sense, amounts to obstruction of justice. United States v. Silverman, 745 F.2d 1386,1395 (11th Cir.1984). See also United States v. Essex, 407 F.2d 214, 218 (6th Cir.1969). Although obstruction of justice is typically discussed in the context of criminal contempt, the concept informs the rules of law — both substantive and procedural — that have been devised to protect the courts and litigants (and therefore the public) from abusive litigation tactics, like shotgun pleadings.
As the district court stated in its February 23, 1998 order granting the defendants' motions for sanctions, the plaintiff and her lawyers "abused the judicial process" when they invoked the court's jurisdiction for the purposes of extorting a settlement from the defendants and, in the process, ruining the Nezhats' professional reputations. The defendants, of course, were aware of these purposes from the outset; the Nezhats, in particular, had been suffering the same abuse in Mullen's state court lawsuit. Unsure of what course to take to bring an end to the litigation, and thus the abuse, the defendants' lawyers turned to the court. After answering the plaintiff's complaint, they wrote a letter to the court describing their plight and suggesting that the court consider allowing them to conduct Rule 11 discovery to determine whether Byrne had conducted a pre-filing "inquiry reasonable under the circumstances" into the facts of the case, as required by Rule 11(b). In pursuing this course, defense counsel chose not to employ the tools provided by the Rules of Procedure, such as Rules 12(e) and (f), for stripping a complaint of bogus claims and scandalous allegations. The court, in turn, allowed itself to be guided by counsels' suggestion and similarly chose to allow the shotgun pleading to stand. Foregoing use of the tools provided by the Rules, the court granted the defendants leave to discover whether Byrne had investigated the factual underpinnings of his claims as required by Rule 11.
The importance of using the Rules to uncover bogus claims and defenses, thereby reducing the parties' dispute to its bare essentials, cannot be overemphasized.
District court intervention in this fashion accomplishes several objectives. First, it conserves judicial and parajudicial resources and thereby benefits litigants standing in the queue waiting to be heard.
For the reasons we have stated, the imposition of monetary sanctions against Byrne is AFFIRMED; the court's dismissal of the claims against Northside and the claims against the Nezhats and the Center (except Count I which Manov voluntarily dismissed) is AFFIRMED; and the imposition of monetary sanctions against Manov is VACATED.
Mullen v. Spanier et al., No. 1:93-CV-2882-CC (N.D.Ga.) (January 23, 1997).
From the Spring of 1994 to June 1996, Neal sent letters to federal prosecutors, the Federal Bureau of Investigation, and the Food and Drug Administration. Each letter accused the Nezhats of fraud and other criminal conduct. For example, in a May 1, 1994 letter to the United States Attorney for the Northern District of Georgia, Neal wrote: "I am writing concerning two Iranian surgeons (brothers/Naturalized Citizens), who I have become convinced are dangerous and amoral men, capable of and perhaps even inclined to harm Ms. Stacy Mullen, my client." Neal represented that the Nezhats had "committed a series of criminal maimings by deception." The May 1 letter was the first of several Neal directed to that United States Attorney. Neal's letters to the FBI contained similar allegations of criminal wrongdoing. Among other things, Neal told the FBI that the Nezhats were preparing to move their assets "off shore." As indicated in the text infra, the Fulton County Superior Court eventually barred Neal from participating in Mullen's case against the Nezhats and the Center, and shortly thereafter, he voluntarily withdrew from representing Mullen in her district court case against the directors of Northside. Notwithstanding his withdrawal from Mullen's cases, Neal's letters to the United States Attorney and the FBI continued unabated. In fact, Neal's letter-writing campaign against the Nezhats continued into the prosecution of the instant case on behalf of Manov.
Mullen v. Nezhat, No. E-23339 (Ga.Sup.Ct.) (August 16, 1995).
We note also that on April 10, 1995, the defendants renewed their motion to disqualify Neal in Mullen's superior court case. This motion was pending resolution when Byrne voluntarily dismissed Manov's superior court case.
Neither Count III nor any other part of Manov's complaint cited the subsection(s) of section 16-14-4 the defendants allegedly violated.
Section 1962 contains four subsections, (a)-(d). Subsection (a) makes it a crime for anyone who has derived income from "a pattern of racketeering activity . . . in which such person has participated as a principal ... to use or invest, directly or indirectly, any part of such income ... in acquisition of any interest in, or the establishment or operation of, any enterprise ... engaged in ... interstate ... commerce." Subsection (b) imposes criminal liability on anyone, who "through a pattern of racketeering activity ... acquire[s] or maintain[s], directly or indirectly, any interest in or control of any enterprise ... engaged in ... interstate ... commerce." Subsection (c) makes it a crime for any person "employed by or associated with any enterprise engaged in ... interstate ... commerce ... to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity." Subsection (d) makes it a crime for anyone to conspire to violate the substantive offenses of sections 1962(a)-(c).
Neither Count IX nor any other part of Manov's complaint cited the subsection(s) of section 1962 the defendants allegedly violated.
Because each count incorporated each preceding count, however, Count V actually sought recovery against the defendants who had been named in one or more of the preceding counts. In the Part III.B.2, we filter out the incorporated allegations that are obviously irrelevant to the theory of recovery stated in the title of the count.
(emphasis added). Proposed interrogatories nos. 36 and 37 asked Northside whether it received "any information from Georgia Baptist Hospital to the effect that Camran Nezhat has beaten a female physician in a stairwell at Georgia Baptist Hospital ... or concerning providing fee [sic] vaginal examinations to employees of Georgia Baptist or was making inappropriate comments to said individuals during vaginal examinations." Proposed interrogatory no. 50 asked Northside whether Camran Nezhat "was ever referred to as `Hands On' Nezhat ... while he was a resident in Buffalo." In the Proposed Findings of Fact the defendants submitted to the court on July 10, 1997, in support of their motions for sanctions, the defendants represented that Camran Nezhat served his residency in Buffalo, New York "twenty years ago."
Byrne based his belief that Ceana Nezhat was not a medical doctor on the following information obtained by Neal: On January 23, 1996, Neal wrote the Swiss Embassy in Tehran to inquire about Ceana Nezhat's medical training. Because the United States did not have diplomatic relations with Iran, Neal directed his correspondence through the Swiss Embassy. In his letter, he stated his belief that Ceana had not graduated from the University of Tehran Medical School in 1981 and asked the Swiss Embassy to confirm this belief. Neal received four documents in response. The first was a letter handwritten in Persian. The second, a translation of the letter, indicated "non-attendance" at the medical school by Ceana Nezhat after the first semester of 1978-79. The third document was a letter from Dr. G. Pourmand, Vice-Chancellor for Research and International Relations at Tehran University of Medical Sciences and Health Services, which, purporting to rely on information received from another part of the university, stated that Ceana Nezhat did not complete the 1978/79 period "due to no reference," and was not awarded a doctoral degree in medicine. The fourth document, a Swiss Embassy transmittal accompanying the first three, interpreted them only as stating that "Mr. Nezhat has no record of completing his medical course at the said University" (emphasis in original).
Apparently, there is a dispute about whether the language translation contained in the second document was accurate. The defendants contend — based on an unverified search and in the face of the ambiguity created by the fourth document, which indicated that there was simply no record of Ceana Nezhat completing his degree — that it was irresponsible for Byrne to allege in Manov's amended complaint that Ceana Nezhat was not a medical doctor. The lack of a record, they submit, does not parlay into the lack of a degree; rather, in light of the overwhelming evidence to the contrary, the allegation appears baseless. Ceana Nezhat holds a license to practice medicine and surgery from the State of Georgia. Furthermore, the Educational Commission for Foreign Medical Graduates ("ECFMG"), the lawfully designated agency for investigating and determining whether foreign medical graduates can be certified to practice medicine in the United States, certified that Ceana Nezhat satisfied all of its requirements and successfully passed its examinations. The defendants assert that, in certifying Ceana Nezhat, the ECFMG determined that he had a medical degree. Finally, Byrne ignored Ceana Nezhat's graduate work in medicine at the Nassau County Medical Center, a major affiliate of the State University of New York at Stoney Brook, and at the University of Illinois.
In addition to using Ceana Nezhat's purported lack of a medical degree as a basis for Manov's claims in Count IV and Count V of her amended complaint, the defendants contended that, in an effort to extort a settlement, Byrne and Neal informed the media and the medical community that Ceana Nezhat was not a physician. Northside's counsel represented to the district court that Manov's attorneys had sent a copy of their motion questioning Ceana Nezhat's credentials to a reporter, Linda Carroll, because, hours after the motion was filed, Carroll called Northside's counsel to ask "How can you allow persons not a doctor to be practicing there?" In his deposition (taken as part of the Rule 11 discovery), Byrne admitted speaking with Carroll a "dozen or less" times about the Nezhats.
Thus, the amended complaint read as follows: Count I alleging medical malpractice by the Center and Drs. Farr and Camran Nezhat; Count II alleging fraud by the Center and Drs. Farr and Camran Nezhat; Count III alleging negligence by Northside; Count IV alleging violations of Georgia RICO by all defendants; Count V alleging battery by Drs. Camran, Farr, and Ceana Nezhat; Count VI, "Punitive Damages [Against] All Defendants."
The court dismissed Count IV on the ground that, under the Georgia RICO statute, a corporation is not amenable to suit; rather, the plaintiff must sue the corporation's board of directors. Manov failed to do that. The court therefore concluded that Northside should be dropped from Count IV.
The court did not enter final judgment for Northside until September 1, 1999, when, pursuant to court order, "judgment [was] entered for the defendants against plaintiff on all claims and the action [was] dismissed."
The court's error was harmless. See Denis v. Liberty Mut. Ins. Co., 791 F.2d 846, 850 (11th Cir.1986); Boateng v. Interamerican Univ., Inc., 210 F.3d 56, 60 (1st Cir.2000). As the record amply demonstrates, at the time the court entertained Northside's motion to dismiss, the record was replete with references — some made by Manov's counsel — to the complaint in Manov's state court case, to the fact that the complaint did not name Northside, and to the date Byrne dismissed the case. In sum, Manov acknowledged, albeit tacitly, that there was no dispute concerning the facts relating to the time-bar issue.
Similarly, the court properly denied Manov's July 14 and 31, 1997 motions to engage in limited Rule 11 discovery. Specifically, Manov's discovery requests sought discovery of (1) the appendectomy surgeries performed by Drs. Nezhat and the Center during 1992; (2) the Center's records of sixteen patients who had bowel resection surgeries; (3) discovery as to the authenticity of the medical credentials of Drs. Farr, Camran, and Ceana Nezhat; and (4) the depositions of the defendant doctors. In that Manov's requests were neither relevant to defendants' motions for sanctions nor related to Rule 11, the district court properly denied the motions.
Id. at 633-34, 82 S.Ct. at 1390 (citation omitted). We agree with the Eighth Circuit that "[t]he principle enunciated by the Supreme Court [in Link] simply does not apply in a Rule 11 sanction context. Otherwise every award against an attorney under Rule 11 could also be assessed against the client." Kirk Capital Corp. v. Bailey, 16 F.3d 1485, 1492 (8th Cir.1994).
In re Big Rapids Mall Assocs., 98 F.3d at 930. In the case before us, the district court conducted this type of extensive review of Byrne's pre-filing investigation. As to Manov, however, the district court's analysis is flawed in that
Some of these inherent powers are made explicit by the enactment of procedural, disciplinary, and ethical rules. See Id. For instance, 18 U.S.C. § 401 codified a court's implicit power to hold litigants in criminal contempt: "[a] court ... shall have power to punish by fine or imprisonment, at its discretion, such contempt of its authority, and none other, as — (1) Misbehavior of any person in its presence or so near thereto as to obstruct the administration of justice; ... (3) Disobedience or resistance to its lawful writ, process, order, rule, decree, or command." 28 U.S.C. § 1927 authorizes the imposition of costs and fees upon counsel "who so multiplies the proceedings in any case unreasonably and vexatiously." Likewise, the Federal Rules of Civil Procedure include provisions authorizing courts to punish counsel for abuse in pleading and discovery. For instance, the following rules provide for the imposition of attorney's fees as a sanction: Fed.R.Civ.P. 11 (certification requirement for papers), 16(f) (pretrial conferences), 26(g) (certification requirement for discovery requests), 30(g) (oral deposition), 37 (sanctions for failure to cooperate with discovery), 56(g) (affidavits accompanying summary judgment motions). See also Chambers v. NASCO, Inc., 501 U.S. 32, 42 n. 8, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1990). Although they differ by context, sanctioning mechanisms are similar in that they are all rooted in the same basic goals — protecting the court and the public from litigation which impedes the administration of justice.
Besides being aimed at redressing obstruction of justice, sanctioning mechanisms are also similar in that
Id. In short, rules and procedures designed to redress obstruction of justice are "designed not only to protect participants in judicial proceedings but also to prevent miscarriages of justice." United States v. Walasek, 527 F.2d 676, 680 (3d Cir.1975).
After hearing oral argument and wading through the voluminous record in this case, our first thought was to return the case to the district court and instruct it to narrow the issues by ordering the plaintiff to redraft the complaint so that it conformed with the pleading requirements of Fed.R.Civ.P. 8 and 10. However, given the vast resources the parties and the district court had invested in the case thus far, as well as the need to bring this bitter controversy to an end, we opted to perform this narrowing exercise ourselves and conclude this torturous case.