Clients Gone Wild! Course Materials

CLIENTS GONE WILD!
The Ethical Obligations & Pitfalls of incivility
A NarrativePros ShowCourse CLE
FACULTY BIOGRAPHIES (by order of appearance) Chris Carlson (moderator) is an attorney and actor who teaches law at Hamline Law School, defends asylum seekers in his private practice and, as a professional actor, has amassed more than 100 film, television, radio and stage credits. He co-founded Thirst theater and started NarrativePros as a training and consulting company that brings artistic and business professionals together to learn from and inspire each other. Chris founded NarrativePros in 2006 to bring artists and other professionals who rely on the power of their narratives to learn from each other. Jack S. Nordby (panelist) was a Minnesota Fourth Judicial District judge for Hennepin County, Minnesota (retiring in 2011). He was appointed to this position in 1995 and was elected to full terms in 1996, 2002 and 2008. He is currently assigned to the Criminal division and his term expires in January of 2015. Judge Nordby began his legal career in 1965 as a private practice lawyer with the firm of Thomson, Wylde & Nordby. He then became a Rapoport for the firm of Wylde & Nordby in 1980. He worked for Meshbesher & Spence, Ltd. from 1985 to 1995, when he was appointed district judge. Nordby received his B.A. degree from Harvard College in 1964 and his LL.B. degree from Harvard Law School in 1967. He was also enrolled in the Post-Graduate English Department at the University of Minnesota in 1967 and 1968. Dr. Kelly Wilson (panelist) has had extensive forensic training, including a predoctoral internship at the United States Medical Center for Federal Prisoners, and a postdoctoral forensic fellowship at Harvard Medical Schools Psychiatry and Law Service. She was employed as a forensic examiner at the Federal Medical Center in Rochester, Minnesota. She was also employed by Minnesota State Operated Forensic Services where she served as a forensic evaluator, Risk Assessment Coordinator, Lead Forensic Psychologist, and the Director of Forensic Psychology Training. She has served as adjunct faculty at the University of Minnesota Medical Schools Department of Psychiatry and the William Mitchell College of Law. She has extensive experience conducting forensic evaluations for criminal, civil, juvenile, and family courts. She also specializes in trial consultation, mental health case law,
attorney training, and conducting Independent Medical Examinations in civil matters. Joe Friedberg (panelist) has extensive experience in litigating criminal, white-collar criminal, and complex civil cases in state and federal courts across the United States including the United States Supreme Court. His clients include physicians, bankers, lawyers, chief executive officers, athletes, and police officers. The Minnesota Association of Criminal Defense Lawyers honored him with their Distinguished Service Award. He is President of the American Board of Criminal Lawyers and is a member of the American Board of Trial Advocates. He is a fellow in the American College of Trial Lawyers. The National Board of Trial Advocacy has certified him as a criminal trial specialist. He is a frequent lecturer at law schools and continuing legal education seminars and is a television and radio commentator. Minnesota Law & Politics named him to their Minnesota Legal Hall of Fame as one of the 100 most influential lawyers in the history of the state. Joe is listed in all editions of The Best Lawyers in America.
COURSE MATERIALS Document Description Page
1 ........COURTS MEMORANDUM AND ORDER ON PLAINTIFFS MOTION TO COMPEL AND THE COURTS RULE TO SHOW CAUSE UPON DEFENSE COUNSEL (2/29/2008) ........3 2 ........MEMORANDUM OF LAW IN SUPPORT OF JOSEPH R. ZICCARDIS MOTION FOR RECONSIDERATION ..............48 3 ........AFFIDAVIT OF JOSEPH R. ZICCARDI (3/14/2008) ........63 4 ........AFFIDAVIT OF AARON WIDER (3/14/2008) ...............70 5 ........RESPONSE OF GMAC BANK TO JOSEPH R. ZICCARDI, ESQUIRES MOTION FOR RECONSIDERATION OF THIS COURTS FEBRUARY 29, 2008 MEMORANDUM OPINION (3/28/2008) ........................................74 6 ........REPLY MEMORANDUM OF JOSEPH R. ZICCARDI, ESQUIRE, IN FURTHER SUPPORT OF HIS MOTION FOR RECONSIDERATION (4/4/2008) .........................85 7 ........REPLY MEMORANDUM IN FURTHER SUPPORT OF MOTION FOR LEAVE TO WITHDRAW AS COUNSEL FOR DEFENDANT HTFC CORPORATION ...................................102 8 ........COURTS MEMORANDUM AND ORDER (8/12/2008) (252 F.R.D. 253, 265 (E.D.Pa 2008)) ................111 9 ........Pennsylvania Rules of Professional Conduct 3.4, 3.5, and 8.4 (with comments) .......................144
CLIENTS GONE WILD!
A ShowCourse CLE
Document 1
Annotations & Compilation 2011 NarrativePros LLC
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA GMAC BANK, Plaintiff, v. HTFC CORP., Defendant. : : : : : : : : : : : CIVIL ACTION NO. 06-5291
M E M O R A N D U M EDUARDO C. ROBRENO, J. TABLE OF CONTENTS I. II. INTRODUCTION.. . . . . . . . . . . . . . . . . . . . . . . 3 BACKGROUND.. . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . 4 4 6 8 9 FEBRUARY 29, 2008
III. MOTION TO COMPEL AND FOR SANCTIONS AGAINST WIDER.. . A. Legal Standard. . . . . . . . . . . . . . . . . B. Discussion. . . . . . . . . . . . . . . . . . . 1. Summary of Widers conduct.. . . . . . . . a. Hostile, uncivil, and vulgar conduct. b. Impeding, delaying, and frustrating fair examination. . . . . . . . . . . c. Failure to answer and intentionally evasive answers.. . . . . . . . . . . 2. HTFCs defenses of Widers conduct.. . . . a. Relevance.. . . . . . . . . . . . . . b. Confidentiality.. . . . . . . . . . . c. Provocation.. . . . . . . . . . . . . d. Mental condition. . . . . . . . . . . 3. Motion to compel and for sanctions.. . . . a. Violation of Rule 37(a)(3)(B)(i). . . b. Violation of Rule 30(d)(2). . . . . . IV.
. . . . . . . . . . . . . . . . . . . .
12 16 18 18 20 21 22 25 25 27 28 29
RULE TO SHOW CAUSE AS TO SANCTIONS AGAINST ZICCARDI. . . A. Legal Standard. . . . . . . . . . . . . . . . . . .
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B.
Discussion. . . . . . . . . . . . . . . . . 1. Summary of Ziccardis conduct. . . . . 2. Ziccardis defenses of his conduct.. . a. Adequacy of intervention. . . . . b. Good faith. . . . . . . . . . . . c. Confidentiality.. . . . . . . . . 3. Rule to show cause as to sanctions.. . a. Violation of Rule 37(a)(3)(B)(i). b. Violation of Rule 30(d)(2). . . .
. . . . . . . . .
. . . . . . . . .
. . . . . . . . .
. . . . . . . . .
30 30 31 31 34 36 37 37 40 41
V.
CONCLUSION.. . . . . . . . . . . . . . . . . . . . . . .
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I.
INTRODUCTION The issue of how to rein in incivility by counsel in
depositions has been the subject of considerable interest in the legal profession for some time. Less discussed, perhaps because
it is less frequent, but nevertheless just as pernicious, is what to do about uncivil conduct by a witness at a deposition. An
important corollary to the issue is what is the duty of counsel who is confronted by uncivil conduct by his own witness. The spectacular failure of the deposition process in this case occurred during two deposition sessions in the course of a commercial dispute. The deponent, Aaron Wider, is the owner
and chief executive officer of Defendant HTFC Corp. Before the Court are a motion to compel and for sanctions filed by Plaintiff GMAC Bank and a rule to show cause issued by the Court upon counsel for HTFC and Wider, Joseph Ziccardi, Esq., why sanctions should not be imposed upon counsel. A hearing was held on December 20, 2007, and the parties submitted supplemental briefing thereafter. For the reasons that
follow, the motion to compel will be granted, and Wider and Ziccardi will be sanctioned.
II.
BACKGROUND Plaintiff GMAC Bank administers residential mortgage
loans, and Defendant HTFC Corp. takes loan applications and sells 3
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residential mortgage loans to lenders, such as GMAC.
GMAC and GMAC
HTFC entered into a contract for the sale of certain loans. claims that HTFC breached the contract by selling it certain loans that were improperly underwritten and not investment quality, and refusing to repurchase them, as required by the contract. HTFC, in turn, asserts a counterclaim for tortious
interference with contract based on GMACs allegedly improper administration of certain loans to HTFCs clients. On September 26 and November 8, 2007, GMAC sought to take the deposition of Aaron Wider, owner and chief executive officer of HTFC. According to GMAC, due to Widers abusive
conduct toward counsel, obstruction and delay of the deposition proceedings, and failure to answer and evasive responses to questions propounded at the deposition, GMAC was unable to complete the deposition. GMAC brings the instant motion to
compel Widers deposition and for sanctions.
III. MOTION TO COMPEL AND FOR SANCTIONS AGAINST WIDER A. Legal Standard Federal Rule of Civil Procedure 30 governs depositions by oral examination.1
1
Rule 30 sets forth a detailed protocol
The Federal Rules of Civil Procedure were amended, effective December 1, 2007. See United States Courts: Federal Rulemaking, http://www.uscourts.gov/rules/index2.html (last accessed Feb. 28, 2008). The misconduct at issue here occurred before the effective date of the amended rules. As relevant 4
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governing the conduct of parties, counsel, and deponents at depositions. The rule provides that examination and
cross-examination of a deponent proceed as they would at trial under the Federal Rules of Evidence. Fed. R. Civ. P. 30(c)(1).
The rule permits objections by counsel: An objection, at the time of the examination . . . must be noted on the record, but the examination still proceeds; the testimony is taken subject to any objection. Fed. R. Civ. P. 30(c)(2).
If a deponent fails to answer a question asked under Rule 30, or provides an answer that is evasive or incomplete, then a motion to compel the deposition testimony may be filed. Fed. R. Civ. P. 37(a)(3)(B)(i), (a)(4). If the motion is
granted . . . the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movants reasonable expenses incurred in making the motion, including attorney's fees. Fed. R. Civ. P. 37(a)(5)(A).
If a persons conduct is so egregious that it impedes, delays, or frustrates the fair examination of the deponent,2 the here, however, the amendment to the rules is limited to the restyling and renumbering of certain rules. Therefore, the Court will cite to the amended rules. Although a deponents conduct in frustrating a deposition can be the functional equivalent of failure to appear at a deposition, courts have been reluctant to impose sanctions on that basis. See Estrada v. Rowland, 69 F.3d 405, 406 (9th Cir. 1995) (Estrada attended his deposition but refused
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Court may impose an additional appropriate sanction on that person,3 including the reasonable expenses and attorney's fees incurred by any party.4 Fed. R. Civ. P. 30(d)(2).
B.
Discussion More than 98% of all civil cases filed in the federal
courts result in disposition by way of settlement or pretrial
to testify. This is not a failure to appear for the purposes of Rule 37(d).); accord R.W. Int'l Corp. v. Welch Foods, Inc., 937 F.2d 11, 15 n.2 (1st Cir. 1991); SEC v. Research Automation Corp., 521 F.2d 585, 589 (2d Cir. 1975); Stevens v. Greyhound Lines, Inc., 710 F.2d 1224, 1228 (7th Cir. 1983); Aziz v. Wright, 34 F.3d 587, 589 (8th Cir. 1994). A person includes the deponent, any party, or any other person involved in the deposition. In re BWP Gas, LLC, 2006 WL 2883012, at *1 (Bankr. E.D. Pa. June 13, 2006) (quoting Fed. R. Civ. P. 30 advisory committees notes).
3
The text of Rule 30(d)(2) does not define appropriate sanction or reasonable expenses and attorneys fees. Courts have used their discretion to fashion a variety of remedies. See, e.g., Biovail Labs., Inc. v. Anchen Pharms., Inc., 233 F.R.D. 648, 654 (C.D. Cal. 2006) (requiring payment of costs and attorneys fees incurred in preparing this discovery motion, as well as . . . costs incurred in the first deposition and also costs attendant to resetting Dr. Seths deposition, including travel costs for defendants counsel); Plump v. Kraft Foods N. Am., Inc., No. 02-7754, 2003 WL 23019166, at *1 (N.D. Ill. Dec. 23, 2003) (requiring plaintiff to pay the costs and fees incurred by defendant . . . in preparing, filing and arguing [the] Motion for Sanctions . . . and in taking the second session of [plaintiffs] deposition); Morales v. Zondo, Inc., 204 F.R.D. 50, 57-58 (S.D.N.Y. 2001) (requiring payment of the transcript cost of [the] deposition, [counsel]s normal hourly rate multiplied by the number of hours during which he questioned [the deponent], and $1,500 to the Clerk of the Court.).
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adjudication.5
Very often, these results turn on evidence Thus, depositions play an extremely
obtained during depositions.
important role in the American system of justice. Although the Federal Rules of Civil Procedure inform the procedures to be followed and the duties and rights of parties, witnesses, and counsel during and in connection with depositions, the rules are largely self-executing. Depositions
usually occur at a lawyers office, outside the view of the public and without judicial supervision. Although, in
appearance, more informal than a court proceeding, they are an integral part of the Courts procedures and the staple of modern litigation. For the process to succeed, it is essential that the
parties, attorneys, and witnesses participating in depositions conduct themselves with civility and decency. Because few depositions warrant sanctions more than this one, Widers conduct merits an extended discussion.6
5
The
See Admin. Office of the U.S. Courts, Judicial Business of the United States Courts: 2006, Table C-4A (stating that only 1.3% of all civil cases in U.S. district courts reached trial in 2006), http://www.uscourts.gov/judbus2006/appendices/c4a.pdf. HTFC, defense counsel, and Wider have received ample notice and opportunities to be heard concerning the possible imposition of sanctions. Specific notice of the sanctions being considered was first given at a telephone discovery conference on December 7, 2007. Notice was again provided in subsequent orders of the Court (doc. nos. 40, 41). On December 21, 2007, an inperson hearing on the motion to compel and for sanctions and the rule to show cause was held, with Wider in attendance, where both parties were invited to offer evidence and present oral argument. At the hearing, the Court again put HTFC, defense counsel, and
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Court has reviewed in detail the transcript and video recordings of the two-day deposition of Wider,7 and summarizes its findings below.8
1.
Summary of Widers conduct
Widers assault on the deposition proceedings involved three types of inappropriate behavior: 1) engaging in hostile, uncivil, and vulgar conduct; 2) impeding, delaying, and frustrating fair examination; and 3) failing to answer and providing intentionally evasive answers to deposition questions. Multiple examples of each are provided below.
Wider on notice of the specific sanctions being considered. Thereafter, the parties were afforded the opportunity to submit supplemental briefing. See In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 278 F.3d 175, 191 (3d Cir. 2002) (holding that due process will usually require notice of the precise sanctioning tool that the court intends to employ). Copies of the transcript and the video recording will be filed of record.
7
This opinion quotes many of Widers uncensored remarks. While the use of profanity in the opinion is distasteful, it is necessary in order to capture the nature of the offensive conduct displayed by the deponent. See, e.g., Saldana v. Kmart Corp., 260 F.3d 228, 235-38 (3d Cir. 2001) (repeatedly quoting, without censoring, the word fuck where the severity of such language was relevant to motion for sanctions); McColm v. S.F. Hous. Auth., No. 02-5810, 2006 WL 3591208, at *1 (N.D. Cal. Dec. 11, 2006); Lynn v. Roberts, No. 03-3464, 2005 WL 3087841, at *6 & n.36 (D. Kan. Nov. 1, 2005).
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a.
Hostile, uncivil, and vulgar conduct
Throughout his deposition, Wider sought to intimidate opposing counsel by maintaining a persistently hostile demeanor, employing uncivil insults, and using profuse vulgarity. Q. A. Q. A. Q. A. [T]his is your loan file, what do Mr. and Mrs. Fitzgerald do for a living? I dont know. Open it up and find it. Look at your loan file and tell me. Open it up and find it. Im not your fucking bitch. Take a look at your loan application. Do it yourself. Do it yourself. You want to do this in front of a judge. Would you prefer to [do] this in front of a judge? Then, shut the fuck up. Sir, take a look-Im taking a break. Fuck him. You open up the document. You want me to look at something, you get the document out. Earn your fucking money asshole. Isnt the law wonderful. Better get used to it. Youll retire when Im done.
Q. A.
Wider Dep., Nov. 8, 2007, at 418:25-419:17. Q. And you have a hard time comprehending. Were going to adjourn this deposition if this happens again because you are offending every single person. Dont speak for anybody in here except yourself fuck face. Im speaking for myself and Im speaking for the Court Reporter. If she had a problem with me she would say something. She knows its [not] directed toward her. Its directed to you because youre a piece of shit and a piece of garbage and Im the only person in your life that is fucking up your world and I enjoy it. I enjoy it and when you sit there and say Im perpetrating a fraud Im just better at the law than you are and you cant get in the fucking door and its pissing you off. Keep trying.
A. Q. A.
Id. at 433:19-434:11. 9
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Q. A. Q. A. Q. A. Q. A. Q. A. Q. A.
Have you spoken to Mr. Petinton about the subpoena he received for documents? He mentioned [it] to me. He laughed at you. What did he say? He thought you were a joke. What else did he say? That youre a joke. Did he say he had documents responsive to the subpoena? He had no documents. He doesnt discuss things with me. He just said youre a joke. Thats what he said? Yes. So he shares your opinion on these things as well? Yes, youre a joke.
Id. at 437:24-438:15. Q. Do you know-A. No, I dont know. Be specific. MR. ZICCARDI: Let him finish the question. Q. Sir, if you cant be a little more civil-A. I am very civil. Q. --in how you respond to my questions-A. I am very civil. Q. What we can do is we can have this deposition in front of a judge. A. We can do that. Q. And the judge can-A. Lets do that. Q. No, no. Were not going to-A. Lets do that; this way he can rip your ass out. Q. Were not going to do that, sir, okay. A. Then dont fuckin threaten me, asshole. Q. Well, sir, I would appreciate it if you would control your language in light of the people that are present in the room and I would appreciate it if you would be a little more courteous, okay. A. Im very courteous. Q. Okay. Now-A. Lets go in front of a judge and shut up. Q. Sir-A. Shut your mouth. Wider Dep., Sept. 26, 2007, 28:7-29:15. The above are only a few examples of Widers hostile, 10
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uncivil, and vulgar conduct, which persisted throughout the nearly 12 hours of deposition testimony. In fact, Wider used the To put
word fuck and variants thereof no less than 73 times.
this in perspective--in this commercial case, where GMACs claim is for breach of contract and HTFCs counterclaim is for tortious interference with contract--the word contract and variants thereof were used only 14 times. constructive purpose. Such profuse vulgarity had no
The Court is left with the impression that
such abusive language was chosen solely to intimidate and demean opposing counsel.9 This impression is confirmed by Widers repeated references to himself as the professor and a doctor of law, and repeated expressions of his belief that counsel for GMAC is a joke and a fucking idiot. See Wider Dep., Nov. 8, 2007,
437:24-438:15; Wider Dep., Sept. 26, 2007, at 65:15-66:7.
In Saldana, the Third Circuit reversed the district courts order imposing sanctions on an attorney pursuant to its inherent power for a handful of uses of the word fuck. 260 F.3d at 238. Saldana is distinguishable from this case in several respects. First, the abusive language in Saldana did not occur in the presence of the Court or in an ancillary proceeding such as a deposition, but rather during telephone conversations between attorneys. Second, far from a handful of vulgar words, Wider filled numerous pages of the deposition transcript with vulgarity and insult. Finally, the Court does not employ its inherent powers in this case, as the Federal Rules of Civil Procedure provide the authority to impose sanctions. See Prudential, 278 F.3d at 189 ([G]enerally, a court's inherent power should be reserved for those cases in which the conduct of a party or an attorney is egregious and no other basis for sanctions exists. (quotation omitted)).
9
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Additionally, although GMACs counsel consistently and respectfully addressed the deponent as Mr. Wider, the deponent repeatedly and patronizingly addressed GMACs counsel by his first name. See, e.g., Wider Dep., Sept. 26, 2007, at 366:8-20.
b.
Impeding, delaying, and frustrating fair examination
Equally serious is Widers willful exploitation of the discovery process. Wider impeded the deposition by improperly
interposing his own objections, delayed the proceedings by providing unnecessarily protracted answers and repeatedly interrupting counsel for GMACs questioning, and proudly expressed his intent to frustrate his examination. Q. A. Are you done? No, Im not. Im going to keep going. Ill have you flying in and out of New York City every single month and this will go on for years. And, by the way, along the way GMAC will be bankrupt along the way and I will laugh at you.
Wider Dep., Nov. 8, 2007, at 434:12-17. Q. A. Q. A. Q. A. Q. A. Q. A. Well, do you know the purpose for these transactions? Why the fuck would I know that? Im just asking you whether you know. Why the fuck would I know that? Im asking whether or not you know that. Its got nothing to do with the transaction. Dont ask stupid questions. Ask smart questions. So if Mr. Petinton were to say that he knew the purpose of these transactions that you knew-It doesnt make a difference. --hed be lying? I dont give a flying fuck what hes lying about. It has no bearing. Stick to the here and now; youll get out of here quicker because Ill take months. Youll 12
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Q. A.
be back and forth. Ill make your life miserable. Trust me. Youll be drinking breakfast, lunch, and dinner every day. Start asking some real questions. All right. So this-You want to know what color I wipe my ass with? I swear to you, my four-year-old knows more than you.
Wider Dep., Sept. 26, 2007, at 251:6-252:11. Q. A. Q. A. Q. A. Q. A. Q. A. Q. A. My question is-My question is go in front of a judge and stop threatening me. Im not threatening you, sir. Then shut up. What Im telling you is that if you cant-I can. If you dont like my response-No, no, sir. --then note that Im refusing to answer it. Sir. Deal with it because this is how its going to be like clock work. All right, sir. And Ill tell you what uncivil and what uncourteous is. Telling you to go fuck yourself is uncivil. If you ask a question, Im going to give you a response. If you pry into my fathers death, Im going to give you a response. If you fuck with my mental illness, Im going to give you a response. And if you threaten to put me in front of a judge, lets do it. I got all the time in the day, all the time in the day, and the judge will restrain you. Are you done, sir? No, Im not. Were just beginning.
Q. A.
Id. at 28:18-30:25. Wider accomplished his dilatory purpose in part by abruptly storming out of the deposition on several occasions and repeatedly forcing counsel to take breaks. Q. Well, I will represent to you he did and that I served Mr. Finger with a subpoena for all of the records of the closings on those loans, including the records of payments and disbursements. And youre shooting blanks. 13
A.
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Q. A. Q. A. Q. A. Q. A. Q. A.
Are you very pleased with yourself, sir? Yes, I am. Because youre trying to perpetrate a fraud and hide it? Go fuck yourself, Bob. Now, youre going to have to wait. Sir, if you keep walking out-Shut the fuck up. Here we go again. I have a business to run. You dont have a business to run. You have a deposition. Shut the fuck up. Dont tell me what to do. You sit there. Youre on the payroll. You can sit there and juice your client; youre not juicing me. [Wider leaves the room.]
Wider Dep., Nov. 8, 2007, 432:6-433:1. Q. A. You need to tell me-Your representation of your company willfully went out and tried to fuck up my life. You dont need to know anything about this company. MR. ZICCARDI: Lets take a break. MR. BODZIN [counsel for GMAC]: We can take a break but were not going to do this over and over again. If Mr. Wider simply does not want to answer questions or answers questions in this manner were not going to have a conference every time it happens. Hopefully, you will be able to speak with him and persuade him thats not an appropriate response to my questions. THE WITNESS: Were having a conference tomorrow, Bob. Why dont you get a motion from the Judge because hes going to give you an ass licking. Id. at 362:15-363:8. In addition to exploiting the deposition process with the apparent purpose of increasing the financial burden on GMAC, Wider repeatedly violated the procedural rules governing the deposition. Instead of allowing his counsel to make objections, Further, even in
Wider regularly interposed his own objections. 14
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the absence of any objection from counsel or instruction not to answer, Wider improperly refused to answer questions. Q. A. Q. A. Q. A. Q. A. Going back to the deed between yourself and the Sacaro Trust on April 29, 2005, what was the purpose of that transaction? Thats confidential. You know the laws of Trusts. Its not confidential. Yes, it is. What was the purpose of that transaction? None of your business. Thats the law. What is the Sacaro Trust? None of your business. Not even a Judge could get me to enforce that.
Id. at 405:19-406:6. Q. A. Q. A. Q. A. Q. A. What was the purpose-None of your---for buying a property for $525,000 and on the same day, conveying it to a trust, and then conveying it back to you for $1,150,000? None of your business. No, [it] is my business. Its none of you[r] business. This is the law. Look it up. My question is what is your purpose? Im answering your question, okay. Im a doctor of law. Im not here to teach you. You come to my university, you pay for it. Its on a need-to-know basis. You dont need to know.
Wider Dep., Sept. 26, 2007, at 65:15-66:7. The video recording of the deposition reveals further indicia of Widers intent to exploit and protract his deposition. At multiple points during the deposition, Wider would follow his inappropriate, obstructive, or dilatory remarks with a gleeful smirk directed at his counsel, at the transcriptionist, and even directly at the camera. See, e.g., Wider Dep. Video, Nov. 11,
2007, at 10:38:00-:30; Wider Dep. Video, Sept. 26, 2007, at 15
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10:45:00-:30, 15:27:00-:30.
In fact, after a particularly odious
instance of obstruction, Wider would even pat himself on the back, flaunting his exploitation of the deposition process, and asking, Isnt the law wonderful? 8, 2007, at 418:25-419:17. See, e.g., Wider Dep., Nov.
c.
Failure to answer and intentionally evasive answers
Wider often refused to answer questions, and, when he did answer questions, provided intentionally uncooperative and long-winded answers to straightforward questions. Q. A. Q. A. Q. A. My question is where are you currently employed? Im not. I just told [you] I work for free. Okay. Youre not employed by HTFC Corporation? No, I own HTFC Corporation. Be specific. Okay. And what do the initials HTFC mean? Hit That Fuckin Clown. Thats what it means. Its an acronym.
Wider Dep., Sept. 26, 2007, at 16:14-25. Q. A. Q. A. Q. A. Q. A. Q. A. Q. Did you ever reside at 1004 Broadway? Cant recall. You dont know where you lived? No, I dont. You dont know where you lived? According to you, Ive got psychiatric issues. So I cant recall. You remember that. Sir, this is November of 2007. Thats right. You dont recall where you lived between 2005 and 2006? Well, according to you Ive got psychiatric issues since the last deposition. No, I-So you dont recall where you lived.
Wider Dep., Nov. 8, 2007, at 407:20-408:10. 16
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Q. A.
Is it just a coincidence Mr. Petinton was involved as the Trustee in connection with both of those Trusts? Its not a coincidence that Im a genius at what I do. I obey the law and live the law. You practice the law. Sir, Im not going to be interrupted while I am speaking. I live the law. You serve the law. You practice the law. I abide by the law and enforce the law to the fullest extent the law allows. The only difference between you and I is I have a pair of balls and you dont. The only difference between the average person [and me] is I have a pair of balls and they dont. You think its funny. Im not the one chasing $15 million ass wipe.
Id. at 428:3-18. Q. Sir, during the time period of January 2006 through March 2007, can you identify any specific loans that you wanted to sell into the marketplace that you were unable to sell? Hundreds. [I] can identify hundreds. Identify those loans for me. I dont carry them in my head, Bob. Where is the information that would describe these loans? Can you spell your name backwards, Bob? Thats what youre asking. Everything is done electronically. Everythings in the files. Can you spell your name backwards, Bob? Tell me.
A. Q. A. Q. A.
Wider Dep., Sept. 26, 2007, at 366:8-20. Q. Do you know who--and, again, youll see on the fourth page that there is a direction that the Deed be returned by mail to GCF Development, do you know why? Yes, were testing Carlton Cheatss program. Im sorry? I am testing Carlton Cheats program on TV. Who is Carlton Cheats program? You dont watch Carlton Cheats on TV? Buy a house. Rehab a house. I suggest you watch TV. I answered your question. Why is the direction this deed be returned to GCF Development testing Carlton Cheatss program? Go watch the program and find out. Im not here 17
A. Q. A. Q. A. Q. A.
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Q. A.
to educate you, Bob. You dont have an answer to that either? I just answered you. You dont like the answer. You might not be able to manipulate me to get an answer but when I tell [you] thats my answer you fucking accept it or dont.
Wider Dep., Nov. 8, 2007, at 413:14-414:12. Q. A. Q. A. Q. A. Q. A. Sir, were you involved in flipping that property? You tell me. Sir, Im going to ask the questions. Youre going to answer the question. I just responded with a question. Were you involved in flipping the property at 207 North Rutherford? You tell me. And you provide that evidence to the court. It doesnt work that way, sir. Yes, it does. Thats my answer. Listen, we can go around in circles and youll end up with the same answer. You tell me. Youre that good. Youre hired by GMAC. Sir, my question is, and I expect an answer. I cant recall. Were you involved in flipping 207 North Rutherford? I cant recall. Im involved in flipping you.
Q. A. Q. A.
Wider Dep., Sept. 26, 2007, 253:12-254:11.
2.
HTFCs defenses of Widers conduct
Although conceding that Widers conduct at his deposition was crude and vulgar, HTFC advances several arguments in an attempt to justify Widers conduct.
a.
Relevance
HTFC argues that Widers refusal to respond to questions during his deposition was justified because many of 18
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GMACs questions were irrelevant.
HTFC is incorrect.
Federal
Rule of Civil Procedure 30(c)(2) provides that a deponent must answer all deposition questions--notwithstanding counsels objections--unless counsel expressly instructs the deponent not to answer or moves to suspend the deposition. In fact, Wider was
expressly advised of this rule by GMACs counsel, but continued to be recalcitrant and nonresponsive. See Wider Dep., Nov. 8,
2007, at 12:20 (If your counsel has objections to my questions, your counsel can raise objections. In the absence of an
objection or instruction from your counsel, you have to answer my questions; do you understand that?). If counsel for a deponent believes that a question is improper, the Federal Rules give him three choices: 1) he may object to the question and allow the deposition to proceed while preserving the objection, see Fed. R. Civ. P. 30(c)(2); 2) he may instruct the witness not to answer, generally to preserve a privilege or enforce a court-ordered limitation,10 see id.; or 3) The rule speaks in absolute terms, permitting counsel to instruct the witness not to answer only to preserve a privilege, to enforce a limitation ordered by the court, or to present a motion under Rule 30(d)(3). Fed. R. Civ. P. 30(c)(2). As a practical matter, some courts have interpreted the rule to provide greater flexibility. Compare Hall v. Clifton Precision, 150 F.R.D. 525, 531 (E.D. Pa. 1993) (Counsel shall not direct or request a witness not answer a question, unless that counsel has objected to the question on the ground that the answer is protected by a privilege or a limitation on evidence directed by the court.), with Prudential-LMI Commercial Ins. Co. v. Windmere Corp., No. 94-0197, 1995 WL 37635, at *2 (E.D. Pa. Jan. 23, 1995) (certain courts take the view that a deponent need not answer if
10
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he may suspend the proceedings and bring a motion to terminate or limit the deposition if it is being conducted in bad faith or in order to unreasonably annoy, embarrass, or oppress the deponent or a party, see Fed. R. Civ. P. 30(d)(3)(A). The rules do not permit a deponent to interpose objections himself. They do not permit evasive or uncooperative
answers merely because a deponent is dissatisfied with a question. And they certainly do not permit intentionally
prolonging a deposition to further burden the litigation.
b.
Confidentiality
HTFC similarly argues that Wider refused to respond to certain questions because they sought confidential information. Defense counsel, however, only objected on confidentiality grounds on a few occasions; on most occasions, Wider directly and improperly made an objection himself, and when pressed, simply refused to answer the question. Moreover, HTFC did not seek a In fact, HTFC did
protective order prior to Widers deposition.
not file a motion for protective order until nearly a month after Widers deposition was completed.11 the objection is that the question is irrelevant, argumentative, or misleading). See generally Acri v. Golden Triangle Mgmt. Acceptance Co., No. 93-12188, 142 Pitt. L.J. 225 (Com. Pl. 1994) (comparing the two approaches).
11
Rule 26(c) provides, in pertinent part: 20
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c.
Provocation
HTFC next argues that Widers abusive and obstructive conduct is justified because he was merely reacting to deposing counsels provocative and accusatory questions. simply astonishing. This argument is
As evidenced in the video recording of the
deposition, counsel for GMAC comported himself with courtesy, respect, and professionalism; this was no easy feat, considering Widers unrelenting insults, vulgarity, and mockery, most of which were a direct assault on counsel for GMAC. Far from provocative, counsel for GMAC asked relevant questions of the type seen in the ordinary course of a deposition in a commercial case. responses. It was Wider who gave the provocative
For instance, when deposing counsel asked Wider to
look at his loan file, Wider responded, Open it up and find it. A party or any person from whom discovery is sought may move for a protective order . . . on matters relating to a deposition, in the court for the district where the deposition will be taken. . . . The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including . . . [an order] requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way. Fed. R. Civ. P. 26(c)(1)(G). Therefore, the proper course of conduct for HTFC would have been to, before the deposition began, obtain a protective order from the Court. See id. Failing that, HTFC could have adjourned the deposition and sought a protective order from the Court. See Fed. R. Civ. P. 30(d)(3)(A). The rule does not permit HTFC to proceed with the doomed deposition, knowing that Wider will refuse to answer questions based on the purported confidentiality of the information sought. 21
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Im not your fucking bitch.
When the request was renewed, Wider Wider Dep.,
responded by telling counsel to shut the fuck up. Nov. 8, 2007, at 418:25-419:17.
Subsequently, when counsel for
GMAC represented that he had served a third party with a subpoena for certain records, Wider responded: And youre shooting blanks. Id. at 432:6-433:1. Finally, Wider referred to counsel
for GMAC as a clown throughout the deposition, and when asked what the initials HTFC mean, Wider responded: Hit That Fuckin Clown. Wider Dep., Sept. 26, 2007, at 16:14-25. Counsel for GMAC exercised great restraint in the face of Widers persistent attempts to incite him to anger. deposing counsel could not have been less provocative. In short, Thus, the
purported provocation of Wider cannot justify his abusive, obstructive, and evasive conduct.
d.
Mental condition
Finally, HTFC argues that Widers conduct at his deposition is explained by a mental condition, which should be considered as a mitigating factor in imposing any sanctions. At the hearing on the instant motion, both Wider and his treating physician, Dr. Oscar Calderon, were present. Although the Court afforded Wider the opportunity to present
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testimony under oath, no witnesses were called.12
After the
hearing, HTFC requested that it be able to submit an affidavit from Dr. Calderon under seal. The Court granted the request, but
specifically advised HTFC in the order of December 21, 2007, that it would not consider the affidavit ex parte, but rather that Plaintiff is entitled to discovery of the subject matter of the medical records in connection with the pending motion to compel and for sanctions. Disregarding the Courts order, HTFC filed
the affidavit under seal but never served a copy upon opposing counsel. Accordingly, the Court will not consider the affidavit
of Dr. Calderon. Moreover, Widers argument that his alleged mental condition mitigates his sanctionable conduct has no merit. Within the first few minutes of the deposition, counsel for GMAC inquired as to Widers mental condition, and Wider replied that he suffers from an anxiety disorder. Wider also indicated,
however, that he had taken his medication the day of the deposition, as he has every day for ten years, and is accustomed to the medication. exchange took place: Q.
12
Before questioning commenced, the following
Well, are you feeling any adverse [e]ffects [from
During the hearing, defense counsel purported to offer an apology to the Court and opposing counsel on Widers behalf. Tellingly, although he was present at the hearing and was afforded the opportunity to address the Court, Wider himself remained silent throughout the proceedings. 23
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A. Q. A.
your] medication right now? Not right now, no. All right. If at any time during the deposition you are feeling adverse [e]ffects of the medication, will you let me know that? Yes. Therefore, Wider and his
Wider Dep., Sept. 26, 2007, 9:6-9:16.
counsel were well aware of their ability to stop the deposition whenever Wider felt any adverse effects from his medication. Nonetheless, during the nearly 12 hours of deposition testimony-which was pervaded by Widers abusive, obstructive, and evasive conduct--Wider reported an adverse effect from his medication on only two occasions.13 On other occasions, Wider used his mental illness as a dubious defense to avoid answering questions. For example, when
asked where he lived during 2005 and 2006, Wider responded: According to you, Ive got psychiatric issues. recall. You remember that. So I cant
Wider Dep., Nov. 8, 2007, at
407:20-408:10.
Wider also gave deposing counsel reason to doubt
the sincerity of his claim of mental illness, stating at one point that he was not receiving psychiatric treatment and just ha[s] anxiety; in fact, when asked whether he had ever been
On both occasions, counsel for GMAC immediately agreed to adjourn the deposition until Wider had recovered. See Wider Dep., Sept. 26, 2007, at 13:2, 71:8. On the first occasion, Wider became angry and left the room, leading to a five-minute recess. On the second occasion, Wider reported blurred vision, and counsel for GMAC agreed to adjourn until Wider regained his vision, and a ten-minute recess was taken.
13
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diagnosed as being paranoid or schizophrenic, Wider replied, Not at all. Im a genius. Wider Dep., Sept. 26, 2007, at 91:8-16.
Whatever truth there may be to Widers claim of anxiety and mental instability, it does not justify or mitigate his abusive, obstructive, and evasive behavior.
3.
Motion to compel and for sanctions
In light of the overwhelming evidence that Widers conduct at his deposition violated Federal Rules of Civil Procedure 37(a)(3)(B)(i) and 30(d)(2), the motion to compel will be granted and sanctions will be imposed upon Wider.
a.
Violation of Rule 37(a)(3)(B)(i)
As explained above, a party seeking discovery may move for an order compelling an answer if a deponent fails to answer a question asked during a deposition. Fed. R. Civ. P.
37(a)(3)(B)(i); see also Fed. R. Civ. P. 37(a)(4) (providing that an evasive or incomplete . . . answer . . . must be treated as a failure to . . . answer). The record reveals that Wider
continually failed to answer questions propounded at his deposition. When Wider did answer questions, his answers were This is a clear violation of Rule
evasive and non-responsive.
37(a)(3)(B)(i), and thus GMACs motion to compel will be granted. Accordingly, Widers deposition will be taken in Philadelphia, 25
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PA, under the supervision of a magistrate judge. Because the motion to compel will be granted, the Court must determine whether sanctions are appropriate under Rule 37(a)(5)(A) (If the motion [to compel] is granted . . . the court must . . . require the . . . deponent whose conduct necessitated the motion . . . to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.). purpose. Sanctions under Rule 37(a)(5)(A) have a compensatory See Hutto v. Finney, 437 U.S. 678, 690 n.14 (1978)
(The award . . . makes the prevailing party whole for expenses caused by his opponent's obstinacy.). Sanctions are not
appropriate, however, if the movant filed the motion before attempting in good faith to obtain the . . . discovery without court action, the opposing party's nondisclosure . . . was substantially justified, or other circumstances make an award of expenses unjust. Fed. R. Civ. P. 37(a)(5)(A)(i)-(iii).
Here, Widers failure to answer questions propounded at his deposition was not justified. Moreover, GMAC attempted in
good faith over the course of nearly 12 hours to obtain Widers deposition testimony, with very little success. Therefore,
because no circumstances exist here that would make an award of expenses unjust, the Court will require Wider to pay the reasonable expenses incurred by GMAC in preparing and arguing the instant motion, including attorney's fees, pursuant to Rule 26
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37(a)(5)(A). On January 3, 2008, GMAC filed a fee petition indicating that it incurred $13,026.00 in fees and expenses in connection with the motion to compel. the fee petition. HTFC has not objected to
Therefore, as there is no objection, and the
Court finds the amount to be reasonable, HTFC will be ordered to pay GMAC $13,026.00, pursuant to Rule 37(a)(5)(A).
b.
Violation of Rule 30(d)(2)
As discussed above, [t]he court may impose an appropriate sanction--including the reasonable expenses and attorney's fees incurred by any party--on a person who impedes, delays, or frustrates the fair examination of the deponent. Fed. R. Civ. P. 30(d)(2). As with Rule 37(a)(5)(A), an award of
costs and fees under Rule 30(d)(2) may be used to compensate the party aggrieved by the frustration of the deposition. See Plump,
2003 WL 23019166, at *1 ([C]osts and attorneys fees awarded are those incurred as a result of the frustration of fair deposition examination. Thus, time that may have been appropriately spent
in order to represent the client might not necessarily qualify as time that can be reimbursed as a sanction. (emphasis added)). Here, the record is replete with evidence that Wider willfully and in bad faith impeded, delayed, and frustrated his fair examination. See supra Part III.B.1.b. 27 Although the
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deposition lasted for nearly 12 hours, little of Widers testimony is of any value due to his willful frustration of the deposition. In light of this clear violation of Rule 30(d)(2),
the Court will impose sanctions upon Wider. The Court will order Wider to pay the reasonable expenses and attorneys fees incurred by GMAC in preparing for and conducting the portion of the deposition sessions on September 26 and November 8, 2007 that was frustrated by Widers conduct. On January 3, 2008, GMAC filed a fee petition
indicating that it incurred $16,814.60 in attorneys fees and $3685.66 in costs in connection with Widers deposition. has not objected to the fee petition. HTFC
Upon a detailed review of
the transcript and video recording of the deposition sessions, the Court finds that approximately 75% of the time spent deposing Wider was time wasted due to Widers frustration of fair examination. Therefore, the Court will impose upon Wider a
sanction consisting of the costs incurred in connection with his deposition ($3685.66), plus 75% of the attorneys fees incurred in connection with the deposition ($12,610.95), or $16,296.61.
IV.
RULE TO SHOW CAUSE AS TO SANCTIONS AGAINST ZICCARDI The Court turns now to the question of whether defense
counsel Joseph Ziccardis conduct at Widers deposition warrants
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sanctions under the Federal Rules of Civil Procedure.14
A.
Legal Standard The Federal Rules specifically provide for sanctions if
a deponent[s] fail[ure] to answer a question or evasive or incomplete answers at a deposition necessitate a motion to compel. Fed. R. Civ. P. 37(a)(3)(B)(i), (a)(4), (a)(5)(A).
These sanctions can apply to attorneys: If the motion is granted . . . the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movants reasonable expenses incurred in making the motion, including attorney's fees. (emphasis added). Fed. R. Civ. P. 37(a)(5)(A)
Therefore, an attorney who improperly
advis[es] a deponent to provide evasive or incomplete answers or to refuse to answer questions propounded at a deposition is
Ziccardi was not the only attorney representing Wider or HTFC during Widers deposition. Raymond Voulo, Esq., Widers New York counsel, was also present at, but did not defend, the deposition. The Court does not consider sanctions against Voulo because he is not an attorney of record in this case. Daniel Strick, Esq., HTFCs local counsel and Ziccardis sponsor for admission pro hac vice, is an attorney of record in this case. The parties agree, however, that Strick was not involved in Widers deposition, and thus sanctions will not be considered against him either. The Court will only consider sanctions against Ziccardi, who was counsel for Wider at the deposition and is lead counsel for HTFC in this case. Ziccardi has received ample notice of the specific sanctions considered by the Court and opportunity to be heard. See supra note 6.
14
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subject to sanctions.
Sanctions must be imposed unless Fed. R. Civ.
circumstances make an award of expenses unjust. P. 37(a)(5)(A)(i)-(iii).
In addition, an attorney may be sanctioned for engaging in conduct that impedes, delays, or frustrates the fair examination of the deponent. Fed. R. Civ. P. 30(d)(2)
(empowering a court to impose an appropriate sanction, including reasonable expenses and attorney's fees incurred by any party); see also In re BWP Gas, 2006 WL 2883012, at *1 (noting that Rule 30(d)(2) can apply to any . . . person involved in the deposition); Redwood v. Dobson, 476 F.3d 462, 469-70 (7th Cir. 2007) (applying Rule 30(d)(2) sanctions to an attorney for failing to adjourn a futile deposition and improperly instructing his client not to respond to questions).
B.
Discussion 1. Summary of Ziccardis conduct
As evidenced by the portions of the record quoted at length above, throughout the deposition, notwithstanding the severe and repeated nature of Widers misconduct, Ziccardi persistently failed to intercede and correct Widers violations of the Federal Rules. See supra Part III.B.1. Instead, Ziccardi
sat idly by as a mere spectator to Widers abusive, obstructive, and evasive behavior; and when he did speak, he either 30
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incorrectly directed the witness not to answer,15 dared opposing counsel to file a motion to compel,16 or even joined in Widers offensive conduct.17
2.
Ziccardis defenses of his conduct a. Adequacy of intervention
Ziccardi argues that he made sufficient efforts to intervene and curb his clients misconduct. To that effect, the
few attempts that Ziccardi did make to control his client were limited to mildly worded requests to Wider to answer a question or not interrupt counsel for GMAC. See, e.g., Wider Dep., Sept.
26, 2007, at 26:23, 37:3, 69:8, 114:12, 158:12, 204:7, 231:4232:8, 254:12-256:6. Ziccardi avers that many of his efforts to correct his
See, e.g., Wider Dep., Nov. 8, 2007, at 363:17-365:9; Wider Dep., Sept. 26, 2007, at 74:15-76:24.
15
See Wider Dep., Nov. 8, 2007, at 366:15-367:3 (after Wider answered the question Where is the information that would describe those loans? with Can you spell your name backwards, Bob?, Ziccardi defended the response: Take whatever action you want to take. I mean, he is trying to answer the questions and he is answering the questions and he will continue to answer the questions); id. at 363:17-365:9 (challenging opposing counsel to file whatever motion you want to file after Wider improperly refused to answer a question).
16
See Wider Dep., Nov. 8, 2007, at 372:7-14 (Ziccardi chuckling at Widers abusive behavior toward counsel for GMAC, which was followed by this response from counsel for GMAC: You know, your snickering counsel is not appropriate either because all youre doing is encouraging the behavior of your client).
17
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clients misconduct occurred off the record.
Even if this
assertion is to be believed, Widers continuing misconduct indicates that whatever efforts Ziccardi made were woefully ineffectual. In fact, Ziccardis meek attempts to intercede and
his otherwise silent toleration of Widers conduct only emboldened Wider to further flout the procedural rules: MR. BODZIN: Im going to ask the question again and Ill ask it a different way so as to make sure that Im not characterizing this witnesss testimony. THE WITNESS: Get his [Ziccardis] permission. MR. BODZIN: I dont need his permission. THE WITNESS: Yes you do. Q. My question is in submitting loans originated by HTFC for purchase by GMAC, was it HTFCs policy that so long as there was an appraisal that supported the value of the property, it was not up to HTFC to report to GMAC flip activity? MR. ZICCARDI: Same objection. Go ahead. A. My attorney just told you to get fucked and so did I. MR. ZICCARDI: No. THE WITNESS: Okay. Thats for the record. Q. First of all, your attorney didnt tell me that. You told me that and now you can answer the question. A. Go get fucked. Q. Youre not answering the question? A. I did answer your question. Q. No, thats not an answer to the question. A. Thats my answer to your question. Q. Okay. A. My attorney very nicely told you that he objects. Fuck you. And Im telling you on behalf of my attorney, fuck you. Id. at 256:11-259:7. It is true that any attorney can be blindsided by a recalcitrant client who engages in unexpected sanctionable 32
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conduct at a deposition.
An attorney faced with such a client
cannot, however, simply sit back, allow the deposition to proceed, and then blame the client when the deposition process breaks down. See Redwood, 476 F.3d at 469-70 (It is precisely
when animosity runs high that playing by the rules is vital. . . . Because depositions take place in law offices rather than
courtrooms, adherence to professional standards is vital, for the judge has no direct means of control.). Moreover, Ziccardi was not blindsided by Wider. Rather, he had ample notice of Widers intent to frustrate the deposition. Widers first outburst and unilateral interruption
of the deposition occurred a mere six minutes after the deposition had begun. 9:21-22. See Wider Dep. Video, Sept. 26, 2007, at
Widers first use of profanity and hostile behavior See
toward opposing counsel occurred only a few minutes later. id. at 9:27:30-9:28:00.
Therefore, Ziccardi was on notice at an
early point during the deposition of his clients hostility toward opposing counsel and efforts to frustrate the deposition. Nonetheless, Ziccardi allowed the deposition to drag on for over two days and nearly twelve hours of testimony, much of which was an unmitigated waste of time and resources. Ziccardi never once suggested that the ill-fated deposition be adjourned. In fact, even though the deposition was
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office, it was counsel for GMAC who suggested adjournment several times, see Wider Dep., Nov. 8, 2007, at 366:23, 433:20, and who eventually adjourned the deposition after enduring the last of many onslaughts from Wider: Q. A. MR. THE MR. Yes or no, did he ask you if you had any documents? Shut the fuck up. Dont raise your voice to me. BODZIN: Were adjourning this deposition. WITNESS: Good. BODZIN: Were adjourning this deposition. Were going back to the Judge. Were going to let the Judge decide if this was an appropriate way for anybody to behave at a deposition. Im not going to continue-WITNESS: You dont point your fucking fingers at me. You dont raise your fucking voice at me. And Im going to spit right back at you. BODZIN: Im not going to continue to be subject to this harassment, this rudeness is absolutely inappropriate conduct and Im going to adjourn this deposition right now. WITNESS: Good.
THE MR.
THE
Id. at 439:4-24. Based on the record, the Court rejects the argument that Ziccardi made adequate efforts to curb Widers misconduct.
b.
Good faith
Ziccardi argues that his actions at Widers deposition were not taken in bad faith, but rather with the intent to move the discovery process along by attempting to complete the deposition of Mr. Wider. Deft.s Memo. of Law in Resp. to
Plf.s Mot. to Compel and Rule to Show Cause 8-9. However, the imposition of sanctions under Federal 34
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Rules of Civil Procedure 30(d)(2) and 37(a)(5)(A) does not require a finding of bad faith. See Sicurelli v. Jeneric/
Pentron, Inc., No. 03-4934, 2005 WL 3591701, at *8 (E.D.N.Y. Dec. 30, 2005) ([F]or purposes of Rule [30(d)(2)], a clear showing of bad faith on the part of the attorney against whom sanctions are sought is not required. Instead, the imposition of sanctions
under Rule [30(d)(2)] requires only that the attorneys conduct frustrated the fair examination of the deponent.); Pucket v. Hot Springs Sch. Dist. No. 23-2, 239 F.R.D. 572, 588 (D.S.D. 2006) (same); Devaney v. Contl Am. Ins. Co., 989 F.2d 1154, 1162 (11th Cir. 1993) (rejecting the notion of a bad faith requirement under Rule 37(a)(5)(A) (citing Merritt v. Intl Brotherhood of Boilermakers, 649 F.2d 1013, 1019 (5th Cir. 1981))). Even if a finding of bad faith were required here, the record, viewed as a whole, inexorably leads to the conclusion that Ziccardis conduct was undertaken in bad faith. Given the
length of the deposition and the severe, repeated, and pervasive nature of Widers misconduct, it is clear that Ziccardis failure to intervene was not merely negligent, but rather willful. Ziccardis bad faith is further revealed by his challenges to opposing counsel to file whatever motion you want to file and his snickering at Widers abusive conduct.18
18
Wider Dep., Nov. 8,
In re Minniti, 242 B.R. 843 (E.D. Pa. 2000), cited by Ziccardi, is consistent with a finding of bad faith here. See id. at 850 (imposing sanctions and noting that bad faith may be 35
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2007, at 363:17-365:9, 372:7-14; see Prudential, 278 F.3d at 190 (affirming finding of bad faith because [w]hen viewed individually, each single instance of misbehavior by [counsel] might not warrant the sanctions arrived at by the court, but considered as a whole, his transgressions evidence a pattern of obfuscation and mean spiritedness). Therefore, even if a
finding of bad faith were required, the record supports such a finding in this case.
c.
Confidentiality
Ziccardi further attempts to justify his conduct by arguing that the questions propounded at the deposition by counsel for GMAC sought confidential information and thus were properly not answered by Wider. However, Ziccardi did not
generally object to the questions on that basis at the deposition,19 and he did not seek an adjournment to obtain a protective order, as permitted by Federal Rule of Civil Procedure 30(d)(3)(A). See supra note 11. In fact, HTFC did not move for
inferred when the attorneys actions are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose (quotation omitted)). On at least one occasion during the deposition, Ziccardi demonstrated that he knew that he was authorized under the Federal Rules to object to questions seeking confidential information, see Wider Dep., Nov. 8, 2007, at 363:17-365:9 (Im going to object . . . on the basis . . . [that] I think it seeks confidential proprietary business information of HTFC which HTFC is not going to disclose.).
19
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a protective order until a month after the deposition had concluded. Having failed to timely object to the questions at
the deposition and/or move for a protective order, Ziccardi cannot now justify his failure to control his client on the basis that he sought to protect the confidentiality of certain communications at the deposition.
3.
Rule to show cause as to sanctions
Because he has failed to show cause why sanctions should not be imposed, the Court will impose sanctions upon Ziccardi.
a.
Violation of Rule 37(a)(3)(B)(i)
As explained above, if a motion to compel is necessitated by a deponents evasive or incomplete answers or failure to answer questions, the movant may seek sanctions against the attorney advising that conduct. 37(a)(3)(B)(i), (a)(4), (a)(5)(A). Fed. R. Civ. P.
It is beyond dispute that
Wider provided evasive and incomplete answers and failed to answer questions propounded at his deposition. III.B.1.c. See supra Part
The remaining question is whether Ziccardi
advis[ed] Widers misconduct. It is true that, in most instances, Ziccardi did not actively counsel Wider on the record to provide evasive or 37
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incomplete answers or to refuse to answer questions.
What is
remarkable about Ziccardis conduct is not his actions, but rather his failure to act. Despite the pervasiveness of Widers
evasive and incomplete answers and his repeated failure to answer questions, Ziccardi failed to take remedial steps to curb his clients misconduct. The nature of Widers misconduct was so severe and pervasive, and his violations of the Federal Rules of Civil Procedure so frequent and blatant, that any reasonable attorney representing Wider would have intervened in an effort to curb Widers misconduct. Ziccardis failure to address, then and
there, Widers misconduct could have no other effect but to empower Wider to persist in his behavior. Under these
circumstances, the Court equates Ziccardis silence with endorsement and ratification of Widers misconduct.20 This
endorsement and ratification by Ziccardi is the functional equivalent of advising [Widers] conduct under Rule
Ziccardis endorsement of Widers evasive and incomplete answers and failure to answer is further evidenced by Ziccardis statements on the record. See, e.g., Wider Dep., Nov. 8, 2007, at 363:17-365:9 (challenging opposing counsel to file whatever motion you want to file after Wider had improperly refused to answer a question); id. at 366:15-367:3 (Take whatever action you want to take. I mean, he is trying to answer the questions and he is answering the questions and he will continue to answer the questions.). Ziccardis endorsement of Widers conduct is most clearly shown by these statements: Ziccardi endorsed Widers misconduct so thoroughly that he dared opposing counsel to file the instant motion to compel.
20
38
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37(a)(5)(A). Rule 37(a)(5)(A) provides for sanctions against the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both. P. 37(a)(5)(A). Fed. R. Civ.
Because Ziccardis actions and inaction at
Widers deposition constitute the functional equivalent of advising Widers misconduct, Ziccardi must compensate GMAC for the expense it incurred in having to file the instant motion to compel. See Hutto, 437 U.S. at 690 n.14 (The award . . . makes
the prevailing party whole for expenses caused by his opponent's obstinacy.).21 Accordingly, because the circumstances here do not make the imposition of sanctions unjust, Ziccardi will be ordered to pay to GMAC, jointly and severally with Wider, the $13,026.00 in fees and expenses that GMAC incurred in connection with the motion to compel. See supra Part III.B.3.a.
Even if Rule 37(a)(5)(A) did not contemplate such sanctions, the Court would be authorized to sanction Ziccardi pursuant to its inherent authority. See In re Cendant Corp., 260 F.3d 183, 199 (3d Cir. 2001) (This Court . . . has recognized the authority of district courts to wield sanctioning power, in the form of the courts inherent authority, where necessary to preserve the integrity of the judicial process.); see also Tr., Dec. 7, 2007, at 5 (providing notice to Ziccardi that the Court may consider sanctions pursuant to its inherent power); supra Part IV.B.2.b (noting that Ziccardi engaged in bad faith conduct, which is a prerequisite for the imposition of sanctions pursuant to the Courts inherent authority).
21
39
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b.
Violation of Rule 30(d)(2)
As discussed above, [t]he court may impose an appropriate sanction--including the reasonable expenses and attorney's fees incurred by any party--on a person who impedes, delays, or frustrates the fair examination of the deponent. Fed. R. Civ. P. 30(d)(2). The Court has no difficulty finding that Ziccardis inaction impeded, delayed, and frustrated Widers fair examination.22 For example, had Ziccardi prevented Wider from
improperly interposing his own objections, the deposition would have proceeded in a much more expeditious manner. Had Ziccardi
curbed Widers abusive bullying of counsel for GMAC, counsel for GMAC would not have been forced to adjourn the deposition before its completion. Had Ziccardi warned Wider that providing evasive
and incomplete answers would result in sanctions, the deposition could have been completed without requiring the Courts intervention. Instead, Ziccardis persistent inaction in the
face of Widers gross misconduct impeded, delayed, and Rule 30(d)(2) does not require that an attorney take some affirmative act in order to frustrate a deposition, but rather contemplates sanctions for attorney inaction as well. See Fed. R. Civ. P. 30(d)(2) (authorizing sanctions upon any person who impedes, delays, or frustrates the fair examination of the deponent); see, e.g., Redwood, 476 F.3d at 467-69 (imposing Rule 30(d)(2) sanctions upon an attorney for failing to suspend a contentious and fruitless deposition, failing to seek a protective order that would have cured the confidentiality dispute hindering the deposition, and instead improperly instructing his client not to answer questions).
22
40
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contributed to the total frustration Widers deposition. Therefore, Ziccardi will be sanctioned for violating Rule 30(d)(2). The Court will order Ziccardi to pay to GMAC,
jointly and severally with Wider, the $16,296.61 in costs and fees incurred by GMAC in connection with the deposition. supra Part III.B.3.b. See
V.
CONCLUSION Widers conduct was outrageous. Ziccardis complicity
is inexcusable.
Therefore, sanctions will be imposed.
It is the Courts hope that these sanctions will motivate Wider and HTFC to proceed in a civil and expeditious manner with this deposition and the remainder of discovery, and Ziccardi to adhere faithfully to the Federal Rules of Civil Procedure.23
23
Otherwise, more severe sanctions will follow.24
As an officer of the Court admitted pro hac vice, Ziccardi is subject to the Pennsylvania Rules of Professional Conduct. See id. (Acts or omissions by an attorney admitted to practice before this Court . . . which violate the [Pennsylvania] Rules of Professional Conduct . . . shall constitute misconduct and shall be grounds for discipline.). Ziccardis conduct at Widers deposition also violated several Rules of Professional Conduct. See, e.g., Pa. R. Profl Conduct 8.4(d) (providing that it is a violation of the rules to engage in conduct that is prejudicial to the administration of justice); Pa. R. Profl Conduct 3.5 & cmt 5 (providing that [a] lawyer shall not . . . engage in conduct intended to disrupt a tribunal, which includes a deposition); Pa. R. Profl Conduct 3.4 & cmt. 1 (providing that an attorney may not unlawfully obstruct another partys access to evidence, which includes using obstructive tactics in discovery procedure). Ordinarily, a disciplinary authority is the proper forum for determining whether professional discipline 41
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The motion to compel and for sanctions (doc. no. 34) will be granted. Sanctions will be imposed on Aaron Wider and
Joseph Ziccardi, jointly and severally, in the amount of $29,322.61. An appropriate order follows.
is warranted for violations of the Rules of Professional Conduct. See Greenfield v. U.S. Healthcare, Inc., 146 F.R.D. 118, 128 (E.D. Pa. 1993). The Court will refrain from referring this matter to a disciplinary authority in this case, however, because the sanctions imposed pursuant to the Federal Rules of Civil Procedure are sufficient to achieve the remedial purpose of the Rules of Professional Conduct. Should the misconduct continue, however, referral to a disciplinary authority may be considered. See, e.g., Nat. Grange Mut. Ins. Co. v. Sharp Equip. Co., No. 01-0628, 2002 WL 442823, at *7-8 (E.D. Pa. 2002) (One additional and important factor is that all of the evasive, untruthful, delaying, and combative responses to deposition questions were supplied by Mr. Korey Blanck, the president and sole shareholder of Sharp Equipment Company. As his outrageous conduct during his depositions is the primary reason for the pending motion for sanctions, we weigh this factor very strongly in favor of dismissing Sharp Equipment's and Mr. Blancks claims and counter-claims.).
24
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA GMAC BANK, Plaintiff, v. HTFC CORP., Defendant. : : : : : : : : : CIVIL ACTION NO. 06-5291
O R D E R AND NOW, this 29th day of February, 2008, for the reasons stated in the accompanying Memorandum, it is hereby ORDERED that Plaintiffs motion to compel and for sanctions (doc. no. 34) is GRANTED. IT IS FURTHER ORDERED that the deposition of Aaron Wider shall take place at the U.S. Courthouse, 601 Market Street, Philadelphia, PA, before a magistrate judge, within 30 days of the date of this order, at a date and time to be designated by the magistrate judge. IT IS FURTHER ORDERED that Aaron Wider and Joseph Ziccardi shall pay, jointly and severally, to GMAC Bank the amount of $13,026.00, representing the fees and expenses incurred by GMAC Bank in connection with the instant motion to compel by March 25, 2008. IT IS FURTHER ORDERED that Aaron Wider and Joseph Ziccardi shall pay, jointly and severally, the amount of $16,296.61, representing the expenses and 75% of the fees
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incurred by GMAC Bank in connection with Widers deposition in New York, NY on September 26 and November 8, 2007, by March 25, 2008. IT IS FURTHER ORDERED that the motion for protective order (doc. no. 39) is DENIED without prejudice.25 IT IS FURTHER ORDERED that Defendant shall produce a copy of the documents filed under seal pursuant to the order of December 21, 2007 (doc. no. 46) to Plaintiff.
AND IT IS SO ORDERED. s/ Eduardo C. Robreno EDUARDO C. ROBRENO, J.
See Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994). HTFC does not explain, as to each document or set of documents, why the documents should be designated confidential.
25
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Document 2
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA GMAC BANK, a Utah Industrial Bank, Plaintiff, vs. HTFC CORPORATION, Defendant. ) ) ) ) ) ) ) ) )
CIVIL ACTION No. 06 CV 5291
MEMORANDUM OF LAW IN SUPPORT OF JOSEPH R. ZICCARDIS MOTION FOR RECONSIDERATION Attorney Joseph R. Ziccardi, pro se, hereby submits this Memorandum of Law in Support of his Motion For Reconsideration pursuant to the Federal Rules of Civil Procedure and other applicable law. I. INTRODUCTION Due Process represents one of the most fundamental principles underlying the American legal system. In its simplest terms, it requires that one be afforded both notice and an
opportunity to be heard before one can be deprived of certain rights or privileges the more important the right or privilege that is in jeopardy, the more strict the standards for the process that is due prior to its deprivation. Another important and fundamental principle of the American legal system is the notion that each of us has the right to counsel in certain situations. That principle is nearly absolute in the criminal justice context and far less certain in the civil context. Just as with Due Process, the more important the potential loss, the more likely we will be to have a right to counsel.
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In both situations, the degree of protection that the law affords us is determined by the value that our legal system places on the right that is in jeopardy. In other words, our legal system has prioritized certain rights and privileges above others (e.g., freedom is more important than money) and the law affords the most protection for those rights and privileges it deems most important. What the American legal system has never done at least not in theory is to deem certain people more worthy, certain ideas more noteworthy or certain beliefs more legitimate than others. As to these matters, it is said, Justice is blind. This case tests the degree to which our legal system continues to regard as fundamental some of these principles. Here, Ziccardi an attorney with an exemplary record until this Courts recent ruling was deprived of his right to Due Process in connection with the Courts consideration of whether to impose sanctions against him. That deprivation began with deficient notice as to the particular tool that the Court was considering employing to sanction him. Because that notice was deficient, his opportunity to be heard was meaningless. As a result, the Court was deprived of the opportunity to engage in meaningful fact-finding that would have revealed the falsity of certain key facts on which the Court largely based its ruling and would have demonstrated the truth of, among other things, the following: (1) Ziccardi never joined in [his] clients offensive conduct by chuckling or otherwise the snicker referenced by Mr. Bodzin in the deposition was that of Raymond Voulo, the deponents New York counsel; (2) Ziccardi did not sit idly by as a mere spectator and his significant, repeated efforts to curb his clients behavior did occur, in large part, off the record, as is completely proper; and (3) Ziccardi never dared opposing counsel to take any action, as evidenced by an examination of the videotape, as well as opposing counsels actions and statements in support of Ziccardi.
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The Courts reconsideration of these matters, in light of the newly available evidence and the need to correct clear errors of law and fact would represent a productive and positive step toward repairing the system collapse that occurred here. A reversal of the Courts findings, conclusions and Order as they relate to Ziccardi would further the ends of justice. Upon a fair examination of what is set forth below, the Court must find that Ziccardi engaged in no wrongdoing and must find that there is no just reason that supports the entry of an Order imposing sanctions against him. II. PROCEDURAL BACKGROUND On September 26, 2007 and November 8, 2007 Aaron Wider, CEO of defendant corporation, was produced for deposition. Subsequently, Plaintiff filed a motion to compel and for sanctions against Defendant in the form of reimbursement of fees and costs incurred in preparing the motion to compel and for re-deposing Mr. Wider. Plaintiffs Motion to Compel sought an Order (a) compelling Wider to appear for the completion of his deposition and to fully answer the questions he improperly refused to answer and/or provided evasive or incomplete answers to at his previous deposition, (b) requiring HTFC to pay the expenses incurred by GMAC in taking the previous deposition and making this Motion, including its reasonable attorneys fees and costs; and (c) ordering that in the event Wider refuses to comply, judgment will be entered against HTFC as to both GMAC Banks Complaint and HTFCs Counterclaim.1 Plaintiffs Motion to Compel was not directed at Attorney Ziccardi or his conduct. On November 30, 2007, this Court issued an Order scheduling an initial hearing on Plaintiffs Motion to Compel for December 7, 2007.2 During the December 7, 2007 initial hearing on plaintiffs Motion held via telephone conference, this Court stated that it was not
1 2
See, Plaintiffs Motion to Compel, which is document no. 34 of the docket in this case. See, document no. 37 of the docket in this case. 3
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really sure how to proceed here, and that, under the Code of Professional Conduct, counsel has certain obligations as an officer of the court which have to be harmonized with counsels obligations to provide zealous representations.3 Transcript of Dec. 7, 2007 Proceedings, p. 7. This Court further stated that, at least at first glance, [Ziccardis] conduct implicates the Rules of Professional Conduct 3.4, 3.5 and 8.4. And it is with regret that I must conclude that. It doesnt mean you have violated, but they have been implicated and I think they need to be explored. I will issue a rule to show cause why your pro hac vice admission should not be revoked or whether this matter should be referred to a disciplinary board, and whether or not financial penalty should also be imposed. Transcript of Dec. 7, 2007 Proceedings, p. 7. As a result, this Court entered a Rule to Show Cause as to Why Sanctions Should Not be Entered returnable on December 21, 2007. Following the December 7, 2007 hearing, this Court entered an Order that confirming entry of the Rule to Show Cause.4 In said Order, this Court advised that, in addition to Rules 3.4, 3.5, and 8.4, the Court will also consider whether Mr. Ziccardis conduct violates Rules 1.1, 1.2, and 1.3 of the Pennsylvania Rules of Professional Conduct. On December 21, 2007 this Honorable Court conducted a hearing on Plaintiffs Motion To Compel and the Rule to Show Cause Against Ziccardi. Consistent with its prior Orders, this Court began the hearing by stating that We are here on a motion to compel and we are also here on a rule to show cause 5 Transcript of Dec. 21, 2007 Proceedings, p. 2. The Court further stated that, Notice was provided in connection with the motion to compel, which implicates conduct under Rule 30(c)(3), as well as 30(b)(2), and sanctions under Rule 37, and
3 4 5
The transcript of December 7, 2007 hearing is document no. 42 of the docket in this case. See, document no. 40 of the docket in this case. The Transcript of December 21, 2007 hearing is document no. 47 of the docket in this case. 4
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that in connection with the rule to show cause, the Court will consider counsels duty during the course of the deposition and it implicates a number of provisions of the Pennsylvania Rules of Professional Conduct. Transcript of Dec. 21, 2007 Proceedings, p. 2, l. 14-17. Following the hearing on plaintiffs Motion to Compel, this Court turned to the Rule to Show Cause hearing. In connection therewith, this Court stated, There are a number of rules of professional conduct which I think are implicated. And I do not doubt that off the record you made every effort, you dont have to go into that. Im limiting myself to what is apparent on the record, including whether the lawyers shall not engage in conduct intended to disrupt the tribunal, that includes a deposition, thats Rule of Professional Conduct 3.5, Comment 5. It also involves attempts to unlawfully obstruct another partys access to evidence, including obstructive tactics in the discovery process, thats Professional Conduct Rule 3.4, Comment 1. There are Rule 3 requires a lawyer to take reasonable remedial measures if a lawyer comes to know that a client who is testifying in a deposition has offered evidence that is false. Transcript of Dec. 21, 2007 Proceedings, pp. 13-14. At the conclusion of the hearing, this Court further stated that, concerning the rule to show cause, that also implicates, as I have no said on at least two occasions, the role of counsel during the course of depositions. And I had identified previously in the rule to show cause Pennsylvania Rule of Professional Conduct 3.4 or 3.5, 8.4 as well as 3.2 and 3.3. Transcript of Dec. 21, 2007 Proceedings, p. 18, l. 14-19. The Court concluded the hearing by providing additional time, until January 3, 2008, for the parties to make additional submissions, after which the Court would issue a ruling promptly thereafter. Transcript of Dec. 21, 2007 Proceedings, pp. 18-19.
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On January 3, 2008, the parties filed their additional submissions. The brief filed by defendant addressed Ziccardis conduct as it related to the Rules of Professional Conduct cited by this Court in the December 7, 2007 hearing and Order, and at the December 21, 2007 hearing. Defendants brief did not address Ziccardis conduct as it related to FRCP 30 or FRCP 37. In its additional submission, plaintiff did not address Ziccardis conduct or otherwise request that sanctions be imposed against Ziccardi. On February 29, 2008, this Court issued its Memorandum Opinion and Order sanctioning Ziccardi pursuant to FRCP 30 and 37 for his conduct during the depositions of defendants representative. For the reasons herein set forth, Ziccardi now moves for reconsideration of that portion of this Courts February 29, 2008 order finding that he violated FRCP 30 and FRCP 37, and imposing sanctions on him for said violations. III. THE LEGAL STANDARD The purpose of a motion for reconsideration, as noted by the Third Circuit Court of Appeals, is to correct manifest errors of law or fact or to present newly discovered evidence. Max's Seafood Caf v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999) (quoting Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985)). Accordingly, a judgment may be altered or amended if the party seeking reconsideration shows at least one of the following grounds: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice.(citing North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir.1995)).
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IV.
ARGUMENT A. ZICCARDI WAS DENIED DUE PROCESS WHEN THE COURT FAILED TO PROVIDE HIM WITH NOTICE OF THE PRECISE SANCTIONING TOOL THAT IT INTENDED TO EMPLOY.
The Due Process Clause of the Fifth Amendment requires a federal court to provide notice and an opportunity to be heard before sanctions are imposed on a[n] ... attorney. Martin v. Brown, 63 F.3d 1252, 1262 (3d Cir. 1995). The Third Circuit Court of Appeals has held that particularized notice is required to comport with due process. Fellheimer, Eichen & Braverman, P.C. v. Charter Technologies, Inc., 57 F.3d 1215, 1225 (3d Cir. 1995). Generally speaking, particularized notice will usually require notice of the precise sanctioning tool that the court intends to employ. Id. An opportunity to be heard is especially important where a lawyer or firm's reputation is at stake, because sanctions act as a symbolic statement about the quality and integrity of an attorney's work a statement which may have a tangible effect upon the attorney's career. Id. at 1227. Here, the notice prong of the Due Process that the Court afforded Ziccardi is found in the Rule To Show Cause that it issued on December 7, 2007. See, Dec. 7, 2007 Order issuing Rule To Show Cause. That Order incorporates by reference the Courts comments during the telephone conference that was held earlier that day, during which the Court said that: Under the Code of Professional Conduct, counsel has certain obligations as an officer of the court which have to be harmonized with counsels obligations to provide zealous representations. In this particular case, once a witness or deponent conducts himself in the manner which is designating to obstruct the proceedings, I dont think counsel can just sit idly by and do nothing. I would equate it to a situation where a witness is providing false and perjurious testimony and counsel is aware of it, and under the Rules it requires that counsel discuss the matter with his client and if the client refuses to correct and remedy the testimony, then counsel has an obligation to correct it and/or withdraw from the proceedings. I think that at least at first glance, Mr. Ziccardi, I think your conduct implicates the Rules of Professional Conduct 3.4, 3.5 and 8.4. And it is with regret that I must conclude that. It doesnt mean you have violated, but they
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have been implicated and I think they need to be explored. I will issue a rule to show cause why your pro hac vice admission should not be revoked or whether this matter should be referred to a disciplinary board, and whether or not financial penalty should also be imposed. Transcript of Dec. 7, 2007 Proceedings, pp. 7-8. At no time did Ziccardi have any indication that the Court was considering imposing sanctions upon him by means of either FRCP 30 or FRCP 37. To the contrary, the Courts relevant Orders and statements were clear to differentiate, as the Court did at the December 21, 2007 hearing, stating that: We are here on a motion to compel and we are also here on a rule to show cause Notice was provided in connection with the motion to compel, which implicates conduct under Rule 30(c)(3), as well as 30(b)(2), and sanctions under Rule 37. In connection with the rule to show cause, the Court will consider counsels duty during the course of the deposition and it implicates a number of provisions of the Pennsylvania Rules of Professional Conduct. Transcript of Dec. 21, 2007 Proceedings, p. 2, l. 14-17. Consistently, the Court was extremely careful to address the Rule To Show Cause separately and distinct from all other pending matters, especially the Motion To Compel that had been filed against Defendant pursuant to FRCP 30 and 37. At no time did the Court ever indicate let alone provide particularized notice that it intended to employ either Rule 30 or 37 as a sanctioning tool against Ziccardi. For example, during the December 7, 2007 telephone conference, the Court was extremely cautious in addressing the two matters separately. See generally, Transcript of Dec. 7, 2007 Proceedings, p. 7. As further evidence of the Courts distinction between the two matters, later that same day the Court issued two separate orders: one Order relating strictly to plaintiffs motion to compel, brought pursuant to FRCP 30 and 37 (Doc. 41), the other issuing the Rule To Show Cause based on certain Rules of Procedural Conduct that the Court believed had been implicated by Ziccardis conduct at the depositions (Doc. 40).
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The imposition of sanctions against Ziccardi pursuant to FRCP 30 and 37 violates Ziccardis Due Process rights, as the record demonstrates that prior to the issuance of the Courts February 29, 2008 Memorandum Opinion, Ziccardi had absolutely no notice that the Court was considering imposing sanctions upon him pursuant to FRCP 30 and/or 37. The Court's statement that, "Ziccardi has received ample notice of the specific sanctions considered by the Court and an opportunity to be heard," (see, Memorandum Opinion at p. 29, fn. 14) is a misapplication of the relevant law to the facts of this case. Accordingly, the Courts use Rules 30 and 37 as the applicable legal standard is a clear error of law, and the imposition of sanctions against Ziccardi should not stand. B. BECAUSE THE COURTS FEBRUARY 29, 2008 MEMORANDUM OPINION AND ORDER ARE BASED ON CLEAR ERRORS OF FACT, THE COURT SHOULD, UPON RECONSIDERATION, FIND THAT ZICCARDI DID NOT ENGAGE IN ANY CONDUCT THAT WOULD WARRANT THE IMPOSITION OF SANCTIONS AGAINST HIM, AND SHOULD MODIFY AND VACATE ITS MEMORANDUM OPINION AND ORDER ACCORDINGLY
The Courts Opinion must also be reconsidered and its Order amended to correct a number of clear errors of fact. The Court summarizes Ziccardis conduct by saying that he sat idly by as a mere spectator to Widers behavior; and when he did speak, he either incorrectly directed the witness not to answer, dared opposing counsel to file a motion to compel, or even joined in the offensive conduct. Opinion at pp. 30-31. (Footnotes omitted.) The conclusion that Ziccardi joined in the offensive conduct is based solely on the Courts erroneous belief that it was Ziccardi who chuckl[ed] at Widers abusive behavior toward counsel for GMAC. As the Court correctly noted, there were two attorneys who appeared on Widers behalf at his deposition, Ziccardi and Raymond Voulo, Widers New York counsel. At no time did Ziccardi chuckle, snicker or otherwise condone Widers disruptive
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conduct. Ziccardi Affidavit, 22;6 Voulo Affidavit, 9.7 The comment by plaintiffs counsel that the Court cites (You know, your snickering counsel is not appropriate either because all youre doing is encouraging the behavior of your client) was not directed at Ziccardi (Voulo Affidavit, 9), but rather at Mr. Voulo (Ziccardi Affidavit, 22). The reason that plaintiffs counsel directed that statement at Mr. Voulo is that Mr. Voulo was the counsel who chuckled, or made some other non-verbal comment, at Widers offensive conduct. Thus, the Courts conclusion that Ziccardi joined in Widers offensive conduct is clearly in error. Nor did Ziccardi dare[] opposing counsel to file a motion to compel, as the Court erroneously concludes. The best evidence of this point may be the fact that plaintiffs Motion to Compel was not directed at Ziccardi, nor is there any mention of Ziccardi in plaintiffs Motion. That, however, is not the only evidence. While it is true that Ziccardi made the statements that the Court cites in connection with this issue (e.g., file whatever motion you want to file), it is not true that those statements represented a dare or challenge to opposing counsel, Mr. Bodzin. To the contrary, those statements were an acknowledgment by one lawyer to another that there was no point in arguing the issue during an already contentious proceeding. It was an offer to agree to disagree so that the deposition could proceed. This is evidenced by Ziccardis even tone and mild demeanor as captured on the videotape of the deposition. The February 29, 2008 Order is also based on assumptions that the facts demonstrate are incorrect. For example, this Court asserts that an on-the-record admonition would have curbed Widers conduct. As the attached affidavits establish, Wider was repeatedly admonished by two The Affidavit of Joseph R. Ziccardi is attached hereto as Exhibit A. Said affidavit contains evidence which was unavailable as of the December 21, 2007 hearing, given that Ziccardi was counsel of record for defendant. As of the filing of this Motion, Ziccardi has moved to withdraw from defendants representation, and Wider has consented to disclosure of the statements set forth in said affidavit. 7 The Affidavit of Raymond Voulo is attached hereto as Exhibit B. 10
6
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attorneys, yet he disregarded those admonitions and continued his conduct.8 Wider was also repeatedly instructed as to proper conduct during the deposition, and warned by two attorneys that if his conduct continued, he would likely be fined, sanctioned or have a judgment entered against HTFC. Under these circumstances, the Courts assumption that statements on the record would have terminated Widers conduct is in error.9 This Courts decision further assumes that a lawyer has an obligation to admonish his client on the record. The Federal Rules of Civil Procedure do not set forth such a requirement, and it fails to account for an attorneys obligation to his client pursuant to the Rules of Professional Conduct. An attorney stands in a fiduciary relationship to the client. Estate of Re v. Kornstein, Veisz & Wexler, 958 F.Supp. 907, 924 (S.D.N.Y. 1997). As such, an attorney is charged with a high degree of undivided loyalty to his client. Id., 958 F.Supp. at 924.
Moreover, the fiduciary obligations an attorney owes his clients are among the most stringent to be found. It is axiomatic that an attorney who undertakes representation of a client owes that client both a duty of competent representation and the highest duty of honesty, fidelity and confidentiality. Milgrub v. Continental Casualty Company, 2007 WL 625039 (W.D.Pa. 2007). This Courts Memorandum and Opinion fails to acknowledge the conflict facing Ziccardi during the depositions. Either he admonished his client on the record, risking a claim for violation of his ethical obligation to his client, or he terminated the deposition, risking interference with plaintiffs right to depose Wider and violation of the Federal Rules of Civil Procedure. This was an untenable position, fraught with peril in either situation. Given this
8 9
The Affidavit of Aaron Wider is attached hereto as Exhibit C. As the transcripts indicate, even in instances in which Ziccardi instructed Wider on the record to respond or answer the question, he nevertheless refused to do so. 11
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conflict, the Courts finding of violation of FRCP 30 and 37, and the imposition of sanctions, was clear error, and it should not stand. C. ZICCARDI WAS DEPRIVED OF ANY OPPORTUNITY TO OBJECT TO PLAINTIFFS DEFICIENT FEE PETITION WHICH FAILED TO PROVIDE A REASONABLE BASIS FOR THE COURTS DETERMINATION OF THE AMOUNT OF THE MONETARY SANCTION IMPOSED UPON ZICCARDI.
Assuming arguendo that the imposition of sanctions against Ziccardi was appropriate, the monetary amount of the sanction imposed is not sufficiently supported by the record. Moreover, Ziccardi had no opportunity to raise this issue prior to the entry of the Courts February 29, 2008 Order. Therefore, at a minimum, the Court should vacate those portions of its Order that require Ziccardi to make payment to plaintiff in those unsupported and improperly determined amounts ($13,026.00 and $16,296.61). The party seeking attorneys fees has the burden of establishing the reasonableness of the fees by submitting evidence supporting the hours worked and the rates claimed. Apple Corps Limited, MPL v. International Collectors Society, 25 F.Supp.2d 480, 485 (D.N.J. 1998). To meet this burden, counsel must produce satisfactory evidence in addition to [their] own affidavits that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation. Id., citing Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984). Further, counsel seeking attorneys fees must document the hours for which payment is sought with sufficient specificity to allow the district court to determine if the hours claimed are unreasonable for the work performed. Apple Corps, 25 F.Supp.2d at 486. The fee petition must include some fairly definite information as to the hours devoted to various general activities, , and the hours spent by various classes of attorneys. Id.
12
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This Courts determination of the amount of the monetary sanction that it ordered Ziccardi to pay was based solely on the general, conclusory, and unsupported statements contained in the affidavits of plaintiffs counsel. Plaintiff had the burden to establish that the fees sought were reasonable, both with regard to the number of hours spent and the hourly rate charged. However, plaintiff failed to produce any itemized billing statement(s) or other
documentation of the tasks performed, the time spent on those tasks, or any detailed information from which this Court could determine whether the hours claimed were reasonable for the work performed. Nor did plaintiff submit any evidence demonstrating that the hourly rate of each of its attorneys was reasonable and in line with prevailing rates in the community. Instead, plaintiff submitted only the affidavits of counsel setting forth the total number of hours spent, and the attorneys hourly billable rate. See Affidavit of Robert B. Bodzin (Doc. 49, pp. 5-6) and Affidavit of Donald G. Heeman (Doc. 49, pp. 8-9), both filed January 3, 2008. Such affidavits are insufficient to sustain plaintiffs burden in this regard, and the award of sanctions in an amount supported only by these general and unsupported allegations should not stand. In its February 29, 2008 Memorandum, this Court stated that, HTFC has not objected to [plaintiffs] fee petition.10 While that is true, the Court overlooks the fact that Ziccardi never had an opportunity to object to the fee petition or to raise the issue subsequent to its filing. At the conclusion of the December 21, 2007 hearing, the Court stated that, If the parties wish to make any further submission I look forward to receiving those submissions by the 3rd of January. Promptly thereafter, then I will issue a decision[.] Transcript of Dec. 21, 2007 Proceedings, p. 19, lines 1-5.
See, Feb. 29, 2008 Order, Sec. III(B)(3)(a), p. 27, and Sec. III(B)(3)(b), p. 28, both of which are adopted by this Court in its discussion of sanctions against Ziccardi. See, Feb. 29, 2008 Order, Sec. IV(B)(3)(a), p. 39, and Sec. IV(B)(3)(b), p. 41.
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That fee petition, however, was part of plaintiffs Supplemental Memorandum (Doc. 49), which was filed on the same day that HTFC filed its Supplemental Memorandum (Doc. 48), as this Court ordered at the conclusion of the December 21, 2007 hearing. Specifically, this Court stated that it would look forward to receiving those submissions by the 3rd of January, and promptly thereafter, [the Court would] issue a decision on these matters [to which] the parties have had an opportunity to respond. See, Transcript of Dec. 21, 2007 hearing, p. 19. Because the parties submissions were due to be filed (and were filed) on the same day, Ziccardi had no opportunity to respond to the plaintiffs fee petition or to object to the deficiencies therein. Based on this Courts statements at the conclusion of the December 21, 2007 hearing that a decision would be rendered promptly thereafter, additional submissions were not invited, and Ziccardi had no opportunity to be heard on this issue. Accordingly, because the plaintiff failed to sustain its burden to establish that the attorneys fees and costs sought were reasonable, and due to the lack of opportunity afforded to Ziccardi to be heard on this issue, the Order imposing sanctions in that amount must be vacated. Respectfully submitted, JOSEPH R. ZICCARDI
By:
s/ Joseph R. Ziccardi Joseph R. Ziccardi, Esq. ZICCARDI LAW OFFICES 20 North Clark Street Suite 1100 Chicago, Illinois 60602 (312) 372-3477
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Document 3
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AFFIDAVIT OF JOSEPH R. ZICCARDI The undersigned, being first duly sworn under oath, hereby deposes and states as follows: 1. I am an attorney licensed to practice in the State of Illinois since 1993. I have at
all times been a member in good standing, and I have never been disciplined, sanctioned, censured, reprimanded or suspended, nor has my conduct ever been called into question or the subject of an inquiry by the Attorney Registration and Disciplinary Commission, which is the governing body for Illinois lawyers. Nor has my conduct ever been called into question by any court, tribunal, or agency. 2. I first represented HTFC Corporation four years ago in a lawsuit filed in the
United States District Court for the Northern District of Illinois captioned Guaranty Residential Lending v. International Mortgage Center, et al., case no. 03 C 5485. 3. In the Guaranty case, I represented HTFC Corporation during the two-day
deposition of Mr. Wider, which occurred on June 8, 2004 and July 14, 2004, respectively. During both days of that deposition, Mr. Wider conducted himself appropriately, provided responsive answers to the questions asked, did not engage in name-calling or use profanity, and he was not combative with opposing counsel.
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4.
As lead counsel for defendant HTFC Corporation in this case, I represented Aaron
Wider (in his capacity as CEO of HTFC) at his deposition, which began on September 26, 2007. 5. Beginning approximately two weeks before the September 26th deposition, I
began discussing with Mr. Wider the proper procedure for his deposition. I explained the issues that would likely be addressed, as well as his conduct during the deposition. Additionally, in that period, I had approximately four more conversations with Mr. Wider in which I counseled him as to the proper demeanor and manner of responding to questions posed of him during his deposition. 6. On September 25, 2007, the day prior to the deposition, beginning at
approximately 2:00 p.m., both Raymond Voulo, who is HTFCs corporate counsel from New York, and I met with Aaron Wider to prepare for his testimony. During that meeting, both Mr. Voulo and I repeatedly advised Mr. Wider of the proper behavior during his deposition. I specifically cautioned him against the use of profanities or other insulting language, and I strongly recommended that he maintain good manners and proper decorum at all times during his deposition. This meeting lasted approximately five hours. 7. On September 26, 2007, prior to the deposition, I again met with Mr. Wider to
review the issues for the deposition and prepare him for his testimony. During this meeting, I stressed to him the importance of the deposition, the procedure to be followed and the requirement of proper decorum. 8. Notwithstanding our numerous conferences prior to the deposition, shortly after
his deposition began on September 26, 2007, Mr. Wider became belligerent. We immediately took a break, and I again instructed him during that break to maintain his composure, refrain from getting agitated and respond to the questions asked of him.
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9.
Upon his return to the deposition and in response to additional questioning, Mr.
Wider again became very belligerent, agitated, and upset, which pattern continued to occur throughout the deposition. At various points, Mr. Wider walked out of the deposition, despite my admonition that this was not proper behavior. 10. During each of the breaks, both Ray Voulo and I instructed Mr. Wider that he had
to control himself and simply answer the questions asked. We further instructed him to refrain from insulting plaintiffs counsel, providing non-responsive answers or otherwise failing to cooperate with the deposition procedure. 11. During these breaks, Mr. Wider acknowledged that he understood these
instructions and promised that he would attempt to respond appropriately to the questions asked of him, as well as to control his outbursts and refrain from verbally attacking plaintiffs counsel. 12. Following the breaks, Mr. Widers conduct improved, but only for a short time.
Despite his repeated assurances during the breaks that he would control himself during the deposition, Mr. Wider quickly lost control and again resorted to the use of profanities and vulgarities. 13. Following the termination of the deposition on September 26, 2007, I again met
with Mr. Wider for a few hours to prepare him for his deposition in a related case, Residential Funding Corporation v. HTFC Corporation, which was pending in the U.S. District Court for the District of Minnesota (the RFC Case). 14. On September 27, 2007, Mr. Wider appeared at his deposition in the RFC Case.
That deposition was completed in approximately three hours, and Mr. Wider completed his testimony without incident or the use of profanity, name-calling or other inappropriate behavior.
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15.
The continuation of Mr. Widers deposition in the instant case was set to occur on
November 8, 2007. Given that Mr. Wider had successfully completed his deposition in the RFC Case, I believed that he would be able to complete his deposition in this case, as he assured me that he would. 16. A few days prior to this deposition, I again spoke with Mr. Wider to advise that
his conduct during the first part of his deposition could not, and absolutely should not, be repeated, and that under no circumstances would it be tolerated. Mr. Wider confirmed his understanding and promised that he would answer the questions so that we could complete the deposition. 17. On November 7, 2007, I again met for approximately 3-4 hours with Mr. Wider
and Mr. Voulo to prepare for Mr. Widers deposition testimony. We both again stressed the importance of appropriate conduct for the deposition, and Mr. Wider agreed to behave appropriately. I reiterated that his conduct during this first deposition was completely unacceptable and that, if it continued, he would undoubtedly be reprimanded by the Judge, [would] possibly be sanctioned, and may even have judgment entered against HTFC Corporation. Mr. Wider again acknowledged his understanding of these admonitions and agreed to control himself during the deposition. 18. On November 8, 2007, prior to the deposition, I met with Mr. Wider and again
instructed him in no uncertain terms that he was to cooperate and respond to the questions asked of him. 19. At the November 8, 2007 deposition, Mr. Wider again lost his composure and
continued his use of profanities toward plaintiffs counsel. Similar to the September 26, 2007
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deposition, Mr. Wider agreed during these breaks to control his outbursts, but he failed to do so while giving testimony. 20. Prior to the termination of the deposition on November 8, 2007, I again explicitly
stated to Mr. Wider that his conduct was completely unacceptable and that it must terminate immediately. I again advised that he must respond to the questions asked of him without the inclusion of irrelevant or unresponsive material, and that he absolutely must control himself. I further explained that his conduct would, among other things, undoubtedly damage his case and the likelihood of successfully defending this matter. 21. Notwithstanding my admonitions, Mr. Wider continued to argue with plaintiffs
counsel, swear at him and otherwise ignore my explicit instructions and advice. 22. I did not chuckle or snicker at Mr. Widers conduct as is referenced at page
372 of the November 8, 2007 transcript, nor at any point during either of his deposition sessions. Mr. Bodzins comment to this effect was not directed at me, as I did not make any noise or other comment to encourage Mr. Widers behavior. That comment was directed at Mr. Voulo, who made the noise. 23. Following the termination of the deposition, I apologized to plaintiffs counsel,
Bob Bodzin, for Mr. Widers conduct and for the time that was spent by all parties in an effort to complete the deposition without success. Mr. Bodzin replied, My comments were not directed at you, and that he knew Mr. Widers conduct was the issue, and that he would pursue the matter with the Court. 24. On December 7, 2007, upon learning that this Court had issued a Rule to Show
Cause against me related to my conduct during his deposition, Mr. Wider profusely apologized to
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me and repeatedly stated that this was not my doing, that I had done everything I possibly could to control him, and that he had disregarded my advice and the advice of Mr. Voulo. 25. Throughout this litigation, and throughout nearly fifteen years of practicing law, I
have at all times conducted myself with integrity, professionalism and courtesy, and within the bounds of my ethical obligations as an attorney. Throughout this litigation, I represented my client to the best of my ability, and I acted professionally and courteously toward all parties and counsel.
Dated: March 14, 2008
s/ Joseph R. Ziccardi Joseph R. Ziccardi
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA GMAC BANK, a Utah Industrial Bank Plaintiff, vs. HTFC CORPORATION, Defendant. : : : : : : : : : : CIVIL ACTION
No. 06-5291
RESPONSE OF GMAC BANK TO JOSEPH R. ZICCARDI, ESQUIRES MOTION FOR RECONSIDERATION OF THIS COURTS FEBRUARY 29, 2008 MEMORANDUM OPINION I. INTRODUCTION Despite ample notice by this Court that the conduct of Joseph R. Ziccardi, Esquire (Ziccardi) might warrant revocation of his pro hac vice admission, referral to the disciplinary board, and a financial penalty, Ziccardi claims he never had any indication that this Court was considering imposing sanctions upon him.1 Yet this Court provided Ziccardi with two weeks advance notice of a hearing, an opportunity to present testimony, and an opportunity to be represented by counsel. At the December 21, 2007 hearing, Ziccardi chose not to be separately represented by counsel, and chose not to offer any testimony or evidence on behalf of himself or HTFC Corporation (HTFC), even though all of the witnesses who might have testified were present in the courtroom. At the conclusion of the December 21, 2007 hearing, the Court provided another opportunity for supplemental submissions by all parties, and HTFC submitted an 18 page
1
Memorandum of Joseph R. Ziccardi, Esquire (Ziccardi Memo) at p. 8.
{00216855;v1} Annotations & Compilation 2011 NarrativePros LLC
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brief of which 14 pages were devoted to why Ziccardi should not be sanctioned. Now, after this Court has imposed sanctions, Ziccardi claims he was denied procedural due process when, in fact, this Court provided Ziccardi with the precise notice he now claims was absent and multiple opportunities to be heard. Ziccardis Motion for Reconsideration is fatally flawed as it does not seek reconsideration, but seeks to introduce facts through Affidavits that Ziccardi and HTFC chose not to present at the hearing and therefore, are not subject to cross-examination. 2 Moreover, even if considered, the Affidavits do not change the conduct of Aaron Wider (Wider) and Ziccardi that was observed by this Court in hours of videotaped deposition testimony. II. STATEMENT OF THE FACTS On November 29, 2007, GMAC Bank (GMAC) filed a Motion to Compel the Deposition of Aaron Wider. This Court scheduled a telephone hearing on December 7, 2007 at which time this Court clearly stated the serious nature of the matter: Now, this is a serious matter and I will tell you that Ive been around civil proceedings for 30 years, both as a lawyer and as a judge. Ive never seen anything like this. And I havent seen the video. I understand its a video deposition which I am anxious to see. We can disagree and I have been in many contentious situations, but the type of exchanges that the witness engaged in with counsel were certainly new to me. So I dont want to take this matter over the telephone. Were going to set a hearing here in person to give the defendant and Mr. Wider, if he wishes to, an opportunity to explain what went on here. As I said, these are extremely serious matters. There are thousands of depositions that take place every day in our system of justice. If they were to proceed along the lines that this deposition has proceeded on, frankly I think the system would collapse.
Ziccardi states his Affidavit contains evidence which was unavailable as of the December 21, 2007 hearing, given that Ziccardi was counsel of record for defendant. Ziccardi Memo p. 4, footnote 6. But Ziccardi is still counsel of record. Moreover, if Ziccardi believed there was a conflict in representing HTFC and himself, he should have so advised this Court at or prior to the December 21, 2007 hearing.
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Transcript of December 7, 2007 hearing at page 6. This Court then set a hearing for December 21, 2007, a full two weeks later, and clearly placed Ziccardi on notice that he might be sanctioned as a result of his conduct. Specifically, the Court stated: There is one matter of further concern here in the case, Mr. Ziccardi, that really involves the conduct of counsel, and Im not entirely sure how we should proceed in this matter. That is, under the Code of Professional Conduct, counsel has certain obligations as an officer of the Court which have to be harmonized with counsels obligations to provide zealous representations. But in this particular case, once a witness deponent conducts himself or herself in the manner which is designating to obstruct the proceedings, I dont think counsel can just sit idly by and do nothing. I would equate it to a situation where a witness is providing false and perjurious testimony and counsel is aware of it, and under the Rules it requires that counsel discuss the matter with his client and if the client refuses to correct and remedy the testimony, then counsel has an obligation to correct it and/or withdraw from the proceedings. And I think that at least at first glance, Mr. Ziccardi, I think your conduct implicates the Rules of Professional Conduct 3.4, 3.5 and 8.4. And it is with regret that I must conclude that. It doesnt mean you have violated, but they have been implicated and I think they need to be explored. I will issue a rule to show cause why your pro hoc vice admission should not be revoked or whether this matter should be referred to a disciplinary board, and whether or not financial penalty should also be imposed, and that rule will also be returnable on the 21st day of December at 9:00 a.m. Id. at page 7-8. [Emphasis Added.] Finally, this Court clearly advised that the parties, and their counsel, would have an opportunity to present evidence at the hearing: Parties, witnesses, counsel obviously will have an opportunity to present evidence and to be represented by counsel if so wished at the hearingand we will explore that and give the parties an opportunity then to present a contrary point of view at a full hearing on the merits.
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Id. at page 8. [Emphasis Added.] Present in the courtroom at the hearing on December 21, 2007, were: (1) Ziccardi, (2) Wider, (3) Raymond Voulo, Esquire, and (4) Widers physician, Oscar Calderon, M.D. Each had an opportunity to testify and be cross-examined, but HTFC, Wider and Ziccardi chose not to call any witnesses. Neither Wider nor Ziccardi apologized or offered any explanation for their conduct. Instead, Ziccardi presented a disingenuous argument that showed little remorse and aggravated, rather than mitigated, the severity of Widers and Ziccardis conduct. Now, unhappy with the result of its ill-advised strategy, Ziccardi seeks a do-over by offering new evidence and Affidavits without the opportunity for cross-examination. Even if the Affidavits were considered by this Court, they do little to advance Ziccardis arguments. While the video record may be unclear as to whether it was Ziccardi and/or his cocounsel, Raymond Vuolo3 who snickered, both Ziccardi and Vuolo acted as a team in representing Wider throughout his depositions. Moreover, it was Ziccardi who instructed Wider not to answer the clearly proper questions about HTFCs Counterclaim that preceded the snickering: MR. BODZIN: Q. Now, during the time period from lets say the beginning of 2006 through March of 2007, what other institutions do you have correspondent agreements with?
THE WITNESS: A. Q. A.
3
Many, its on as-need to know basis and you dont need to know. You need to tell me that. No, I dont.
Mr. Vuolo is not counsel of record and was not admitted to represent either HTFC or Wider in this matter.
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Q. A. Q. A.
You need to tell me. Bob, your company -You need to tell me. Your representation of your company willfully went out and tried to fuck up my life. You dont need to know anything about this company. Lets take a break. We can take a break but were not going to do this over and over again. If Mr. Wider simply does not want to answer questions or answers questions in this manner were not going to have a conference every time it happens. Hopefully, you will be able to speak with him and persuade him thats not an appropriate response to my questions.
MR. ZICCARDI: MR. BODZIN:
THE WITNESS:
Were having a conference tomorrow, Bob. Why dont you get a Motion from the Judge because hes going to give you an ass licking. Lets go. Dont ask questions that have nothing to do with this. The time is 11:31 a.m. and were off the record.
MR. ZICCARDI: THE WITNESS:
THE VIDEOGRAPHER: (Short recess). THE VIDEOGRAPHER: MR. BODZIN:
The time is now 11:35 a.m. and were back on the record.
Mr. Wider, what other banks did HTFC have correspondent agreements with in the time period of January 2006 through March of 2007? Im going to object to that just on the basis, one, that I dont believe its relevant. Two, I think it
MR. ZICCARDI:
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seeks the confidentiality proprietary business information of HTFC which HTFC is not going to disclose. MR. BODZIN: MR. ZICCARDI: MR. BODZIN: So youre instructing your witness not to answer the question? He is not going to answer the question. If the claim of HTFC is that during the time period of January 2006 through March of 2007 it was unable to sell certain loans to Deutsche Bank and Nomura Securities, it is certainly highly relevant and discoverable as to whether or not HTFC had other options for selling loans. If you are instructing the witness not to answer the question; then, we will simply ask the Court to preclude HTFC from seeking damages with respect to that claim. So you may want to reconsider that. MR. ZICCARDI: You can file whatever Motion you want to file. The reality, though, is that the confidential information of HTFC following the last deposition there were a number of items that had gotten out and for some reason are now in the press --
November 8, 20007 Deposition of Aaron Wider (Wider dep.) p. 362-364. Moreover, Ziccardi failed to avail himself of many opportunities presented to address Widers outrageous conduct. For example, Ziccardi actually suggests that Widers flippant comments were responsive: MR. BODZIN: Sir, during the time period of January 2006 through March 2007, can you identify any specific loans that you wanted to sell into the market place that you were unable to sell? Hundred. How can I identify hundreds? Identify those loans for me?
A. Q.
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A. Q. A.
I dont carry them in my head, Bob. Where is the information that would describe those loans? Can you spell your name backwards, Bob? Thats what youre asking. Everything is done electronically. Everythings in files. Can you spell your name backwards, Bob? Tell me. If you want to instruct your client to act in a civilized manner; otherwise, were going to adjourn this deposition. Take whatever action you want to take. I mean, he is trying to answer the questions and he is answering the questions and he will continue to answer the questions.
MR. BODZIN:
MR. ZICCARDI:
Id. at 366-367. III. ARGUMENT A. Applicable Legal Standing
Since the Federal Rules of Civil Procedure do not technically recognize a Motion for Reconsideration, such a Motion filed within ten days after entering an Order is ordinarily treated as a Motion to Alter or Amend. Reconsideration should only be entertained when there is: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available [when the Order was entered]; (3) the need to correct a clear error of law or fact to prevent manifest injustice. North River Ins. Co. v. CIGNA Insurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). [Emphasis Added]. None of these factors are presented by Ziccardis Motion. B. The Inherent Power to Sanction
Among the implied and incidental powers of a Federal Court, is the power is discipline attorneys who appear before it. Fellheimer v. Charter Technologies, 57 F.3rd 1215 (1995); citing Chambers v. NASCO, Inc., 501 US 32, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991). A
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primary aspect of that discretion is the ability to fashion an appropriate sanction for conduct which abuses the judicial process. Id. at p. 12. C. Procedural Due Process
GMAC agrees that fundamental notions of due process require fair notice and an opportunity for a hearing on the record. Roadway Express, Inc. v. Piper, 447 US 757, 767, 100 S. Ct. 2455, 2464, 65 L. Ed. 2d (1980). But here, it is undeniable that Ziccardi had ample notice of the precise conduct at issue, two weeks advance notice of a hearing, an opportunity to present witnesses, and an opportunity to be represented by counsel. See, Martin v. Brown, 63 F.3d 1252 (3d Cir. 1995). The notion that Ziccardi was denied procedural due process is clearly
contradicted by the record. D. The Award of Sanctions Was Supported by the Record
The Courts award of sanctions was supported by the Affidavits of GMACs counsel that were specific as to: (1) the time spent on the matters involved; (2) the rates of each billing lawyer; (3) and the reasonableness of the legal fees. Moreover, Ziccardi and HTFC had ample opportunity to question any aspect of the fees, but chose not to. In the 57 days between GMACs submission of its January 3, 2008 Supplemental Memorandum of Law neither Ziccardi nor HTFC ever: (1) requesting any billing information from GMAC; (2) requested an opportunity to respond to the requests for counsel fees, or (3) asked this Court to take any action on the claim for fees. The award of sanctions was neither harsh nor inappropriate. To the contrary, the Court tempered the sanctions by awarding only 75% of the costs incurred by GMAC. IV. CONCLUSION For each and all of the foregoing reasons, the Motion for Reconsideration of Joseph R. Ziccardi should be denied.
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KLEINBARD BELL & BRECKER LLP By: /s/ ROBERT B. BODZIN #31323 MELISSA C. PRINCE #92553 One Liberty Place, 46th Floor 1650 Market Street Philadelphia, PA 19103 (215) 568-2000 Attorneys for GMAC Bank, A Utah Industrial Bank
OF COUNSEL: FELHABER, LARSON, FENLON & VOGT, P.A. JAMES W. RUDE #94171 DONALD G. HEEMAN #286023 RYAN A. OLSON #340935 220 South Sixth Street, Suite 2200 Minneapolis, MN 55402-4504 (612) 339-6321
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
GMAC BANK, a Utah Industrial Bank Plaintiff, vs. HTFC CORPORATION, Defendant.
: : : : : : : : : :
CIVIL ACTION
No. 06-5291
CERTIFICATE OF SERVICE I, MELISSA C. PRINCE, hereby certify that on the 28th day of March, 2008, a true and correct copy of the foregoing Reply of GMAC Bank to Joseph R. Ziccardis Motion for Reconsideration of this Courts February 29, 2008 Memorandum Opinion has been filed electronically and is available for viewing and downloading from the ECF system. I further certify that I caused a true and correct copy of the same to be served upon the following counsel via electronic filing: Joseph R. Ziccardi, Esquire Ziccardi Law Offices 20 North Clark Street, Suite 1100 Chicago, Illinois 60602 Daniel S. Strick, Esquire Lucas and Cavalier, LLC 1601 Market Street, Suite 2230 Philadelphia, PA 19103 KLEINBARD BELL & BRECKER LLP By:_______/s/_______________________ MELISSA C. PRINCE One Liberty Place, 46th Floor 1650 Market Street Philadelphia, PA 19103 (215) 568-2000
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REPLY MEMORANDUM OF JOSEPH R. ZICCARDI, ESQUIRE, IN FURTHER SUPPORT OF HIS MOTION FOR RECONSIDERATION Joseph R. Ziccardi, Esquire, pro se, hereby submits this Reply Memorandum In Further Support Of His Motion For Reconsideration pursuant to the Federal Rules of Civil Procedure and other applicable law. I. INTRODUCTION Of all of the statements made by Aaron Wider during the two days of his deposition testimony, there is one subject on which he was conclusively and indisputably wrong: the intelligence of GMACs lead counsel. No one can credibly deny that Mr. Bodzin is a brilliant legal strategist whose litigation savvy is likely unparalleled in any jurisdiction. Unfortunately for defendant HTFC, Mr. Wider took every inch of the twelve hours worth of rope that was handed to him and successfully hanged himself with it. Now heading for the gallows right behind Mr. Wider is defense counsel, Joseph Ziccardi, an honorable but mild-mannered attorney with a modest practice and an impeccable ethical record maintained throughout his nearly fifteen years practicing law until now. Ziccardi now finds himself in the unenviable position of having lost a case, lost a client, and most important,
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lost the ability to honestly state that no one has ever called into question his professional conduct. This might all be palatable to Ziccardi if only it were not so unjust. In a situation where, as here, neither the facts nor the law have been found or applied in accordance with the mandates of the Constitution that Ziccardi swore to uphold, acceptance of ones fate is counter-intuitive to the well-educated and ethical lawyer. Nevertheless, Ziccardi holds out hope that the system that he has dutifully served for most of his adult life and the principles that he has defended on behalf of numerous needy clients will not fail him now. II. STATEMENT OF THE FACTS1 Deficient Notice GMAC attempts to refute Ziccardis Due Process argument by falsely quoting the sentence that encapsulates Ziccardis main point with regard to lack of proper notice. GMAC blatantly lies that, Ziccardi claims he never had any indication that this Court was considering imposing sanctions upon him. (GMAC Response, p. 1.) GMAC then purports to cite to the place in Ziccardis Memorandum In Support Of His Motion For Reconsideration (Memorandum) where the quoted statement allegedly appears. (GMAC Response, p.1, fn. 1.) Ziccardi has never made any such claim. The complete sentence appearing on page 8 of Ziccardis Memorandum reads: At no time did Ziccardi have any indication that the Court was considering imposing sanctions upon him by means of either FRCP 30 or FRCP 37. (Italicized emphasis in original; underlined emphasis added.) By omitting the latter part of that sentence, GMAC lays the foundation for its utter misrepresentation of Ziccardis entire Due Process argument. In this section, Ziccardi will only address some of the facts that GMAC has falsely stated, mischaracterized, and/or omitted from its Response. 2
1
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It is beyond dispute and the record clearly demonstrates that prior to this Courts February 29, 2008, Memorandum Opinion and Order (Opinion), Ziccardi had absolutely no notice that the Court was considering imposing a sanction upon him under the Federal Rules of Civil Procedure. Of course, all parties and counsel had notice that the Court was considering imposing sanctions upon Wider pursuant to the Federal Rules of Civil Procedure. GMAC now attempts to confuse and misrepresent the facts by citing to and quoting from the content of notices that were given to Wider (as to his conduct, the rules implicated thereby, and potential sanctions being considered) as having applied to Ziccardi (as to Ziccardis conduct, the rules implicated thereby, and the potential sanctions being considered). Each time that the Court addressed the issue of sanctions arising out of the conduct that occurred during both sessions of Widers deposition, it clearly delineated between Widers conduct, the rules that the Court believed were implicated by Widers conduct, and the potential sanctions that Wider might face as a result of having violated those particular rules, on the one hand, and Ziccardis conduct, the rules that the Court believed were implicated by Ziccardis conduct, and the potential sanctions that Ziccardi might face as a result of having violated those particular rules, on the other hand. This argument and the facts that support it are stated at pages 8-9 of the Memorandum. Moreover, at no time prior to February 29, 2008, did Ziccardi have any indication that the Court was considering imposing liability on him for Widers conduct. There were three particular occasions on which the Court provided expressed, specific notice to Ziccardi of the conduct (by Ziccardi) that the Court was concerned with, the rules that the Court believed had been implicated by Ziccardis conduct, and the potential sanction(s) that the Court was considering imposing upon Ziccardi in the event that the Court found that Ziccardis conduct had violated those particular rules. The Courts first notice was provided
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during the telephone conference that occurred on the morning of December 7, 2007; the Courts second notice was provided later that same day in the Rule To Show Cause that the Court issued against Ziccardi; and the Courts third and final notice was provided to Ziccardi on December 21, 2007, at the hearing held on the Rule To Show Cause, where the Court stated: Now, Mr. Ziccardi, there are a number of rules of professional conduct which I think are implicated. And I do not doubt that off the record you made every effort, you dont have to go into that. Im limiting myself to what is apparent on the record, including whether the lawyers shall not engage in conduct intended to disrupt the tribunal, that includes a deposition, thats Rule of Professional Conduct 3.5, Comment 5. It also involves attempts to unlawfully obstruct another partys access to evidence, including obstructive tactics in the discovery process, thats Professional Conduct Rule 3.4, Comment 1. There are Rule 3 requires a lawyer to take reasonable remedial measures if a lawyer comes to know that a client who is testifying in a deposition has offered evidence that is false. The point here is that, if the conduct is not appropriate conduct and it is attempting to obstruct the administration of justice, a lawyer cant just sit idly by and allow the conduct to proceed any more than if a person is testifying falsely you can allow perjurious testimony to go forward. This conduct, particularly the level of hostility, profanity and obscenities, have nothing to do with the case. You cant sit idly by and allow that to happen and, if the client continues to do it, then you have to withdraw. You cant just sit there and allow this to happen. Transcript of Hearing held on December 21, 2007, p. 13, line 18 to p. 14, line 16. Toward the end of that hearing, the Court summarized its concerns and reiterated its notice as to each respondent, first Wider then Ziccardi. After concluding its discussion as to Widers conduct, the Federal Rules of Civil Procedure that had been implicated by Widers conduct, and the form of sanctions that the Court was considering imposing on Wider, the Court then separately addressed Ziccardis conduct, the rules that the Court believed had been
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implicated by Ziccardis conduct, and the form of sanction that the Court was considering imposing on Ziccardi, stating: Concerning the rule to show cause, that also implicates, as I have now said on at least two occasions, the role of counsel during the course of depositions. And I had identified previously in the rule to show cause Pennsylvania Rule of Professional Conduct 3.4 or 3.5, 8.4, and as well as 3.2 and 3.3. Under those rules, if found to have been violated, the Court may consider directing that counsel take further continuing education and remedial education in the area, pay a financial sanction, the Court may revoke the pro hac vice admission and, ultimately and most seriously, refer the matter to the disciplinary board. Transcript of Hearing held on December 21, 2007, p. 18, lines 14-24. At no time prior to February 29, 2008, did the Court ever indicate that it was considering imposing sanctions on Ziccardi for violation of the Federal Rules of Civil Procedure. To the contrary, the Court consistently referred to Ziccardis conduct in terms of how the Court believed that conduct may have implicated certain Rules of Professional Conduct. Nor did the Court ever indicate that it was considering imposing sanctions on Ziccardi for Widers conduct. To the contrary, the Courts statements indicate that it was, at least at that time, concerned with Ziccardis conduct insofar as he neglected to adjourn the deposition and withdraw from the representation of defendant HTFC, in the face of Widers conduct. Meaningless Opportunities To Be Heard By misquoting and utterly mischaracterizing that portion of Ziccardis Due Process argument that demonstrates the insufficiency of the notice that Ziccardi received, GMAC is able to avoid that portion of Ziccardis Due Process argument that demonstrates that each of the socalled opportunities to be heard were meaningless. At each of those multiple opportunities to be heard (GMAC Response at p. 2), Ziccardi directed his arguments to the issues contained in the deficient notice (e.g., whether the Rules of Professional Conduct had been violated,
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whether he could have and should have adjourned the deposition and moved to withdraw from the representation of HTFC). Significantly, the choices that Ziccardi made with regard to certain proceedings and submissions whether to be separately represented by counsel, whether to offer testimony or evidence on his behalf, which issues to address in his supplemental brief were based entirely on the notice that was provided to Ziccardi by the Court and on the Courts statements. For example, GMAC both criticizes and relies on the fact that Ziccardi chose not to present certain evidence at the December 21, 2007 hearing. However, it ignores the fact that at that hearing, the Court explicitly stated: Now, Mr. Ziccardi, there are a number of rules of professional conduct which I think are implicated. And I do not doubt that off the record you made every effort, you dont have to go into that. Im limiting myself to what is apparent on the record[.] Transcript of Hearing held on December 21, 2007, p. 13, lines 18-22. As discussed more fully below, that statement caused Ziccardi to do and refrain from doing numerous things that GMAC now both criticizes Ziccardi for and relies upon in making its arguments. Newly Available Evidence GMAC disingenuously argues that the evidence offered by Ziccardi is not newly available, essentially because nothing has changed since the December 21, 2007 hearing. (See GMAC Response at p. 2, fn. 2.) In order to facilitate that argument, GMAC first dismisses the fact that Ziccardi has moved to withdraw as counsel for defendant HTFC. More important, GMAC omits completely (by way of another incomplete quote to Ziccardis Memorandum) the fact that Wider has consented to disclosure of the statements set forth in [Ziccardis Affidavit]. (Memorandum at p. 10, fn. 6.) Absent Widers consent (or other circumstances that had not yet
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occurred as of December 21, 2007), Ziccardi was duty bound not to disclose certain information contained in his Affidavit pursuant to Rule 1.6 of the Rules of Professional Conduct. Equally misleading is GMACs statement that, [E]ven if considered, the Affidavits do not change the conduct of [Wider] and Ziccardi that was observed by this Court in hours of videotaped deposition testimony. (GMAC Response at p. 2.) First, while the Affidavits do not change the conduct, they do serve to correct certain erroneous factual findings that the Court and that Ziccardi never had an opportunity to address (e.g., the findings that Ziccardi snickered at Widers conduct or dared opposing counsel to do anything). Second, the Affidavits largely address what occurred off the record, another issue on which Ziccardi was deprived of a meaningful opportunity to be heard because of the insufficient notice and the Courts statement to Ziccardi that, [I] do not doubt that off the record you made every effort, you dont have to go into that. Im limiting myself to what is apparent on the record[.] Transcript of Hearing held on December 21, 2007, p. 13, lines 19-22 (emphasis added). Character Assassination Equally false as to Ziccardi is GMACs statement that, Neither Wider nor Ziccardi apologized or offered any explanation for their conduct. (Response at p. 4.) That is simply not true. At the December 21, 2007 hearing, after agreeing with the Court that Widers conduct was wholly unacceptable and has no place in the legal system, Ziccardi declared that he tried to correct it and did what he could to correct it when the Court interrupted and asked, And, when you failed, thats - - what did you do? (Transcript of Hearing held on December 21, 2007, p. 14, lines 21-22.) Ziccardi went on to explain generally his efforts and his overall goal with regard to Widers deposition (id. at pp. 14-16), and then specifically stated, If that was improper
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- - and I didnt think it was and I thought I did what I could - - if that was improper, then I do apologize[.] (Id. at p. 16, lines 305.) (Emphasis added.) Further, in his Affidavit Ziccardi plainly states: Following the termination of the deposition, I apologized to plaintiffs counsel, Bob Bodzin, for Mr. Widers conduct and for the time that was spent by all parties in an effort to complete the deposition without success. Mr. Bodzin replied, My comments were not directed at you, and that he knew Mr. Widers conduct was the issue, and he would pursue the matter with the Court. Ziccardi Affidavit, 23. Significantly, although GMACs counsel, Mr. Bodzin, was present and therefore has personal knowledge of most of the events giving rise to these issues, he has not submitted his own Affidavit denying Ziccardis statements, nor does GMAC even argue that the statements contained in Ziccardis Affidavit are false. Nor is it true that Ziccardi presented a disingenuous argument that showed little remorse and aggravated, rather than mitigated, the severity of Widers and Ziccardis conduct. (Response at p. 4.) That accusation obviously refers to Ziccardis statements at the December 21, 2007 hearing relating to Widers conduct, in which Ziccardi attempted to explain that Wider interpreted some of the deposition questions as provocative. Contrary to Mr. Bodzins
statements in response during the hearing, and contrary to GMACs arguments since then, at no time did Ziccardi ever state that the questions were, in fact, provocative. He was attempting to explain Widers overreaction to seemingly benign questions, and he did so by explaining Widers interpretation of certain questions. Moreover, Ziccardi never asserted that Widers inaccurate interpretation in any way excused Widers behavior; only that it provided a partial explanation for some of it. (Transcript of Hearing held on December 21, 2007, p. 5, lines 9-22.) The most egregious mischaracterization of all, however, is the one that is implicit rather than explicit and pervasive throughout GMACs Response and throughout the Courts
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Memorandum Opinion and Order.
That is the suggestion or assumption that Ziccardi is
inseparable and indistinguishable from Wider. If the rule is that we, as lawyers, are our clients keepers, equally chargeable with and for every aspect of their conduct throughout the course of litigation, that we are further underwriters and guarantors of any liability they may incur therein if that is the rule, it will have a chilling effect on the integrity and fundamental principles that currently (presumably) underlie and comprise the American legal system. III. ARGUMENT A. Applicable Legal Standards
It is well settled that reconsideration should be entertained when one of the following three factors is present: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the Order was entered; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice. North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). GMAC argues that, None of these factors are presented by Ziccardis Motion. (GMAC Response at p. 7.) As set forth more fully herein, Ziccardi has demonstrated the existence of newly available evidence, at least one clear error of law, and numerous clear errors of fact. In the absence of reconsideration, these errors will result in manifest injustice. GMAC presented this legal standard under the heading Applicable Legal Standing. (GMAC Response at p. 7.) (Emphasis added.) Perhaps that nomenclature was a sort of Freudian slip, as Ziccardi questions GMACs standing to assert for the first time here most of the
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arguments that it asserts.2 At no time prior to Ziccardis Motion For Reconsideration did GMAC take any position criticizing Ziccardis conduct in connection with Widers deposition. In fact, at the December 21, 2007, hearing, counsel for GMAC, Mr. Bodzin, specifically stated: Your Honor, in our motion we did not address Mr. Ziccardis conduct. I feel a bit conflicted in that I dont have a position with respect to Mr. Ziccardis conduct other than I am trying to zealously represent my client, which means getting a prompt adjudication of this case. So I am certainly not in favor of anything that will delay the adjudication of this case. I think the record speaks for itself as to what Mr. Ziccardi could or could not have done. I would like to tell the Court though that outside of the deposition itself that for the most part Mr. Ziccardi has acted in a professional and courteous way in my dealings with him. I guess my concern is that, if Mr. Ziccardi continues to represent Mr. Wider, whether, with good intentions or not, hes going to have any ability to influence Mr. Wider in his conduct going forward. Transcript of Hearing held on December 21, 2007, p. 16, line 18 to p. 17, line 7. Ziccardi questions whether, at this late date, GMAC can now raise an objection to conduct that occurred during deposition sessions that took place four and five months ago. While GMAC styles its objections in the form of arguments opposing Ziccardis Motion For Reconsideration, they appear to be objections that should have been timely raised as required by the Federal Rules of Civil Procedure as they are objections that are asserted pursuant to the Federal Rules of Civil Procedure. Thus, at a minimum, GMACs entire Response appears to be an untimely objection to a purported discovery violation. Moreover, because GMACs Motion To Compel was not asserted against Ziccardi nor did GMAC seek sanctions against Ziccardi in connection with its Motion To Compel, it would appear that it lacks standing to argue in support of sanctions that the Court, sua sponte, imposed.
Ziccardi recognizes that GMAC has standing to argue the issue of the calculation and substantiation (or lack thereof) of its claimed attorneys fees, although he maintains that GMAC lacks standing to seek to recover those fees from Ziccardi for the first time here.
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B.
Due Process Insufficient Notice
GMAC completely ignores the well-settled law cited in Ziccardis Memorandum and holding that Due Process requires that an attorney be given particularized notice of the precise sanctioning tool that the Court intends to employ. (Memorandum at pp. 7-9.) The facts, as they appear in the record, clearly demonstrate that Ziccardi was given notice only that the Court intended to employ one or more of certain Rules of Professional Conduct. However, in its Memorandum Opinion and Order, the Court employed Federal Rules of Civil Procedure 30 and 37 as its sanctioning tools against Ziccardi. This is a clear violation of Due Process. The notice that Ziccardi received is fully set forth above and in the Memorandum and there is no need to repeat it here. What does bear repeating, however, is the Courts statement to Ziccardi that: [I] do not doubt that off the record you made every effort, you dont have to go into that. Im limiting myself to what is apparent on the record[.] (Transcript of Hearing held on December 21, 2007, p. 13, lines 19-22. ) (Emphasis added.) That statement and the significance of those two sentences cannot be understated. First, the Courts instruction that Ziccardi need not to go into what occurred off the record, and the Courts statement that it was limiting itself to an examination of what is apparent on the record, caused Ziccardi to reasonably believe that he need not address many of the facts that are now presented in the three Affidavits submitted in support of the Motion to Reconsider. Confining his commentary to what occurred on the record, Ziccardi would not have addressed the alleged snicker because he knew that he was not the one who had snickered and he knew that Mr. Bodzins comment regarding the same had not been addressed at him (Ziccardi). Nor would Ziccardi have addressed any alleged dare because he knew that his
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comment was not a dare. Nor would he have addressed any alleged improper instruction not to answer questions because he knew that the Motion To Compel had not been directed at him and he knew that, under no circumstance, did a direction not to answer two questions (assuming arguendo that those instructions were improper) give rise to either the filing of the Motion To Compel or the claim for in excess of $30,000.00 in attorneys fees. In fact, both the Court and GMAC acknowledged that, Even where Ziccardi directed the witness to answer, he failed to do so. Given the Courts statements, at the conclusion of the December 21, 2007 hearing, Ziccardi was left with the impression and reasonable beliefs that: 1. The Court believed that Ziccardi had made every effort off the record and knew that Ziccardi did everything that he could think of to try to control Wider and Widers behavior; 2. The Court believed that Ziccardi should have admonished Wider on the record; 3. The Court believed that the Rules of Professional Conduct mandated Ziccardis withdrawal after his efforts to curb Widers conduct failed; and 4. GMAC was not taking a position adverse to Ziccardi with regard to Ziccardis conduct at the two deposition sessions. Opportunities To Be Heard Based on those reasonable beliefs and due to the notice that Ziccardi received from the Court, his opportunity to be heard by way of the supplemental brief (filed January 3, 2008) focused exclusively on: the Rules of Professional Conduct cited by the Court, as well as Rule 1.6 concerning confidentiality (attempting to explain why Ziccardi did not admonish Wider on the record, an argument wholly misunderstood or misinterpreted by the Court in its Memorandum Opinion); Rules relating to mandatory and permissive withdrawal and a discussion of why Ziccardi could not have withdrawn in conformity with the Rules at that point.
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Ziccardi believed then, and still believes now, that the Federal Rules of Civil Procedure do not authorize the lawyer defending a deposition to terminate or adjourn the deposition in the absence of harassment or improper conduct by the lawyer conducting the deposition. See, Hearst/ABC-Viacom Entertainment Services v. Goodway Marketing, Inc., 145 F.R.D. 59 (E.D. Pa. 1992).3 Nor is the Courts analogy to the situation where client is offering false testimony supported by the Rules or the case law. In the false testimony situation, the rules contain a specific exception for the disclosure of perjury such that the Rules do not merely authorize that disclosure, they require it. Even in that situation, the lawyer must first know that the testimony is false. Then, the lawyer must attempt to dissuade the client from proffering the false
testimony. Finally, if the client persists, the lawyers duty to prevent and disclose fraud upon the court mandates that the lawyer act adverse to his clients interest. See, Nix v. Whiteside (475 U.S. 157, 106 S.Ct. 988 (1986). Most significantly, when the Court told Ziccardi that it had no doubt that off the record, Ziccardi made every effort, it vitiated any purported notice that the Court was considering or remotely believed that Ziccardi had acted in bad faith. The Courts purported finding of bad faith can not be reconciled with its assurance to Ziccardi that it had no doubt While the issuance of an order terminating a deposition is a matter within the sound discretion of the court, the power to halt or limit examination is sparingly used. 4A J. Moore, J. Lucas, Moore's Federal Practice 40.61 (2d ed. 1991). To obtain a protective order under Rule 30(d), the moving party must show that the examination is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the witness or party. Unless a sufficient showing of these grounds are made the motion will be denied. 8 C. Wright & A. Miller, Federal Practice and Procedure 2116, at 428 (1970). Moreover, as one commentator has warned, an objecting party who demands the termination of a deposition may subject himself to costs and reasonable expenses, which may be considerable where the taking of the deposition has ceased upon demand, if the court finds that his motion for a protective order has no substantial basis. 4A J. Moore, J. Lucas, Moore's Federal Practice 40.61 (2d ed. 1991).
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that Ziccardi made every effort. Nor can the Courts statement be reconciled with a finding that any violation by Ziccardi was willful or that he advised the conduct as the Court found. Ziccardi had no notice in fact he had notice to the contrary that the Court was considering his silence on the record as tantamount to endorsement or ratification of Widers conduct. This is so particularly where, as here, the Court effectively precluded him from offering evidence as to what occurred off the record. If Ziccardi had known then (as Due Process requires), what he knows now, he certainly would have made different choices as to how to effectively use his opportunities to be heard. C. Policy Concerns
GMAC implies that Ziccardi does not understand the serious nature of this matter. Nothing could be farther from the truth. Perhaps no one appreciates the serious nature of this matter more than Ziccardi does. Ziccardi understands and appreciates, as he has from the outset, the serious nature of this matter. For lawyers, orders imposing sanctions go beyond the mere monetary penalty. In Simmerman v. Corino, 27 F.3d 58 (3d Cir. 1994), the U.S. Court of Appeals for the Third Circuit recognized that the impact of attorney sanctions goes beyond the dollar amount and acts as a symbolic statement about the quality and integrity of an attorneys work a statement which may have tangible effect upon the attorneys career. Id. at 64. One year later, the court again recognized that the dollar amounts of the sanctions imposed and the potential liability for the unquantified sanction are insignificant in comparison to their stigmatic effect. Martin v. Brown, 63 F.3d 1252, 1260 (3d Cir. 1995).
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D.
GMAC Presents No Evidence That Might Substantiate The Amount Of Costs And Attorneys Fees Claimed
As set forth more specifically in Ziccardis Memorandum of Law in Support of his Motion for Reconsideration, the party seeking attorneys fees has the burden of establishing the reasonableness of the fees by submitting evidence supporting the hours worked and the rates claimed. Apple Corps Limited, MPL v. International Collectors Society, 25 F.Supp.2d 480, 485 (D.N.J. 1998). To sustain that burden, GMAC must provide specific information establishing the hours devoted to certain tasks to allow the Court to determine the reasonableness of the time spent and fees sought. Id. GMAC fails to sustain its burden in this regard, as the conclusory and vague statements in the affidavits of GMACs counsel did not provide this Court with the requisite specificity to ascertain how the time was spent, or whether it was reasonably expended on this matter. Without any citation to any authority whatsoever, GMAC simply asserts that the affidavits submitted were specific as to the time spent on matters involved, the rates of each billing lawyer, and the reasonableness of the legal fees. Nor does GMAC distinguish, or even attempt to distinguish, the cases cited by Ziccardi, which mandate the specificity required for an award of attorneys fees. As the case law establishes, the conclusory attestations of GMACs counsel in their affidavits are insufficient to support the amount of attorneys fees awarded. Accordingly, the award of sanctions in amounts equal to the claimed fees should be vacated. GMAC further asserts that Ziccardi had ample time to question any aspect of the fees but chose not to do so. GMACs argument ignores the fact that there was no reason for Ziccardi to request clarification or further information because Ziccardi, as set forth more fully above, had no notice that this Court was considering imposing sanctions on him as measured by the amount of GMACs attorneys fees and costs. To the contrary, Ziccardis only notice prior to the hearing
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was the Rule to Show Cause why he should not be sanctioned for conduct that the Court believed may have violated certain Rules of Professional Conduct. While Ziccardi did have notice that, if the Court were to find that he had violated any of those Rules, the Court would consider whether some sort of financial penalty (among other possible remedies) should be imposed, he never had any indication whatsoever that GMAC or anyone would seek to impose on him nearly $30,000.00 worth of alleged costs and attorneys fees as a sanction. As GMAC well knows, its fee petition was submitted in connection with its Motion To Compel, which was directed at Widers conduct, not the conduct of Ziccardi. V. CONCLUSION For each and all of the foregoing reasons, and for each and all of the reasons set forth in Ziccardis Motion for Reconsideration and his Memorandum Of Law In Support Of His Motion For Reconsideration, Ziccardis Motion For Reconsideration should be granted. Respectfully submitted, JOSEPH R. ZICCARDI
By:
s/ Joseph R. Ziccardi Joseph R. Ziccardi, Esq. ZICCARDI LAW OFFICES 20 North Clark Street Suite 1100 Chicago, Illinois 60602 (312) 372-3477
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REPLY MEMORANDUM IN FURTHER SUPPORT OF MOTION FOR LEAVE TO WITHDRAW AS COUNSEL FOR DEFENDANT HTFC CORPORATION Joseph R. Ziccardi, Esquire (Ziccardi or Counsel), hereby submits this reply memorandum in further support of his Motion For Leave To Withdraw As Counsel For Defendant HTFC Corporation (Motion To Withdraw). Filed in connection with this
memorandum is the Affidavit Of Joseph R. Ziccardi, Esquire, which is incorporated by reference herein. I. FACTS & BACKGROUND The Memorandum and Order entered by this Court on February 29, 2008 gave rise to an immediate and very sharp conflict of interest between lawyer (Ziccardi) and client (defendant HTFC). Within moments of reading the Courts Memorandum in its entirety, Ziccardi
immediately consulted with an attorney whose practice focuses exclusively on issues of lawyers professional responsibility for the purpose of determining the appropriate ethical and legal course of action. As a result of, inter alia, that consultation (and others), careful consideration of the facts, the law, the rules, the procedural circumstances, and the potential impact on the interests of all concerned, Ziccardi concluded that the only proper course of action was for him to
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immediately seek leave to withdraw from the representation of HTFC. Based on the honest and reasonable belief that in light of the Courts February 29 Memorandum and Order continued representation of HTFC would likely result in a violation of the Rules of Professional Conduct, and just six days after this Court issued its Memorandum and Order, Ziccardi promptly filed his Motion To Withdraw. GMAC, by way of contrast, interposes a response that utterly fails to consider the relevant Rules of Professional Conduct, mischaracterizes potentially controlling case law, ignores recent factual and procedural developments in the case at bar, and ultimately amounts to nothing more than a frivolous objection that serves no purpose other than to increase needlessly the cost of the litigation. GMAC relies heavily on the assertion that Ziccardis withdrawal will prejudice GMAC by causing delay. Conspicuously absent from that argument is any mention of the fact that the parties have executed a stipulation consenting to the entry of judgment against HTFC, which if entered, will resolve all pending claims and thus there would be nothing to delay. The purported concern over potential delay is of course merely a pretext; GMACs true intention and likely hope is that Ziccardi will remain and function as guarantor of payment of the monetary sanctions.1 II. THE LEGAL STANDARD A. GMAC Urges This Court To Apply A Legal Standard That Omits Consideration Of The Rules Of Professional Conduct
The gravamen of Ziccardis Motion To Withdraw is that, in light of the conflict created by the Courts February 29 Memorandum and Order, continued representation of defendant will likely constitute a violation of one or more of the Rules of Professional Conduct. GMACs
Even if Ziccardi were granted leave to withdraw his appearance as counsel for defendant, he nevertheless remains subject to the jurisdiction of this Court for purposes of adjudicating the issues raised in his Motion To Reconsider the Courts Memorandum and Opinion of February 29, 2008, and remains subject to the jurisdiction of this Court until those issues are fully and fairly litigated and finally resolved.
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presentation of the applicable legal standard in fact its entire memorandum omits any reference to the Rules of Professional Conduct (RPC or Rules). Certain of those rules provide the entire basis for the Motion To Withdraw. By neglecting to address those rules, GMAC fails to refute the sound reasoning underlying Ziccardis request to withdraw from the representation of defendant. Perhaps more important, by neglecting to address those rules, GMACs analysis omits from its balancing test certain fundamental interests that will be significantly affected by the Courts decision on the issue presented by the instant motion. B. The Appropriate Legal Analysis Includes Consideration Of The Rules Of Professional Conduct With Particular Attention To Mandatory vs. Permissive Withdrawal
Ziccardi has identified two bases for his Motion To Withdraw, both of which are governed (at least in part) by the Rules of Professional Conduct. The first basis, a concurrent conflict of interest between attorney and client, gives rise to mandatory withdrawal from the representation under the Rules. The second basis for Ziccardis motion, the clients failure to meet its financial obligations to the lawyer and the resulting financial hardship on the lawyer, presents a permissive withdrawal situation. In the former situation, mandatory withdrawal, the Rules provide that the lawyer must terminate the representation. In the latter situation, permissive withdrawal, the Rules provide that the lawyer may terminate the representation, after considering other factors and complying with certain formalities. Thus, the correct legal analysis includes consideration of the following rules. Mandatory Withdrawal is addressed in Rule 1.7(a), which provides in pertinent part that: (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: * * *
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(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. Pa. Rules of Prof. Conduct, Rule 1.7(a)(2). (Emphasis added.) Permissive Withdrawal is addressed in Rule 1.7(b), which provides that: (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent. Pa. Rules of Prof. Conduct, Rule 1.7(b). (Emphasis added.) III. GMACS RESPONSE IN OPPOSITION TO ZICCARDIS MOTION INTERPOSES NOTHING MORE THAN A FRIVOLOUS OBJECTION AND NEEDLESS INCREASE IN THE COST OF LITIGATION This case could have been concluded more than two months ago, when HTFC offered to consent to the entry of judgment against it. Ignoring that significant fact in its response in opposition to Ziccardis Motion To Withdraw, GMAC reduces Ziccardis grounds for withdrawal to the following, which appears ironically enough in a footnote to its argument that the effective administration of justice would be hindered by allowing withdrawal. GMAC states that: Ziccardi seeks to withdraw because of a claimed conflict concerning this Courts sanctions. Such a conflict, even if it existed, is limited to the sanctions for which Ziccardi has already obtained counsel and filed a pro se Motion for [sic] Reconsideration. Ziccardi fails to identify any conflict that would prevent him from continuing to represent HTFC on the substantive claims of GMAC Bank.
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(GMAC Response, p. 5, footnote 1.) The implication that no conflict exists is simply astounding in light of the findings and conclusions made by this Court with regard to Ziccardis purported conduct, as set forth in this Courts Memorandum of February 29, 2008. Contrary to GMACs suggestion, the conflict is not limited to the issue of sanctions. Serious allegations that go to the heart of a lawyers integrity have been made against Ziccardi, and that implicates far more than the financial interest implicated by the Order to pay monetary sanctions. Ziccardis defense against the Courts accusations will necessarily involve disclosure of confidential communications, at a minimum. While such disclosure is expressly authorized by Rule 1.6(c)(4),2 the mere act of disclosure (even without regard to the content of the disclosure) is adverse to the clients interest in that, inter alia, it undermines (if not obliterates) the trust that is said to be the foundation of the attorneyclient relationship. GMAC asserts four reasons for opposing Ziccardis request for leave to withdraw as counsel for defendant: (1) HTFC has not obtained substitute counsel; (2) the monetary sanctions have not been paid to GMAC; (3) Wider has not yet appeared for his court-ordered deposition; and (4) any further delay in the resolution of this case will be prejudicial to GMAC Bank. (GMACs Memorandum In Opposition, pp. 1-2.) None of those reasons are responsive to the grounds for Ziccardis Motion To Withdraw. The cases relied upon by GMAC are inapposite, and in certain instances, do not stand for the proposition for which they are cited by GMAC. In nearly every case, the attorney seeking leave to withdraw cited irreconcilable differences with the client as the reasonable ground
Rule 1.6(c)(4) provides that: "A lawyer may reveal such information to the extent that the lawyer reasonably believes is necessary to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim or disciplinary proceeding against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client."
2
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for withdrawal. Here, Ziccardi cites and demonstrates a concurrent conflict of interest that mandates his withdrawal from the representation if he is to comply with the Rules of Professional Conduct. Clearly, this is not a permissive withdrawal situation as in the cases cited by GMAC and asserting irreconcilable differences as the reasonable ground for counsels requested leave to withdraw. Ziccardi presents far more compelling reasons than irreconcilable differences in support of his motion and GMAC simply chooses to ignore those reasons and urges the Court to ignore the important interests implicated by those reasons. Most egregious, however, is GMACs characterization of DAmico v. Panasonic, 1998 WL 54405 (E.D. Pa. 1998). GMAC incorrectly reads DAmico and suggests that it stands for the proposition that extensive non-compliance during discovery will justify a courts denial of counsels request for leave to withdraw. That is not the holding of DAmico. In fact, the court specifically stated that it was not precluding the withdrawal of counsel should the litigation continue but that counsel would first have to comply with the requirement of notice to his client, as a threshold matter, which counsel in DAmico had not done. Finally, GMAC requests that this Court impose two conditions precedent to Ziccardis withdrawal yet cites absolutely no authority that supports the proposition that a court may impose such conditions. GMAC argues that, before Ziccardi may be granted leave to withdraw, three things must occur: (1) substitute counsel must appear for defendant; (2) the monetary sanction award must be paid; and (3) Aaron Wider must appear for his court-ordered deposition. This argument is devoid of any legal support. If substitute counsel were to appear on behalf of defendant, nothing more would be required to facilitate Ziccardis withdrawal from the representation. That utterly disingenuous argument by GMAC reveals that its response in
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opposition to Ziccardis Motion To Withdraw is nothing more than a poorly disguised and improper motion to enforce the Order imposing sanctions3 and an exercise in legal fees. III. CONCLUSION WHEREFORE, Joseph R. Ziccardi, Esquire, respectfully requests that this Honorable Court enter an Order granting his Motion For Leave To Withdraw As Counsel For Defendant HTFC Corporation. Respectfully submitted, JOSEPH R. ZICCARDI, ESQUIRE
s/ Joseph R. Ziccardi Joseph R. Ziccardi, Esq. ZICCARDI LAW OFFICES 20 North Clark Street, Suite 1100 Chicago, Illinois 60602 (312) 372-3477
GMAC is well aware that Ziccardi has filed a Motion For Reconsideration of that Memorandum and Order.
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CERTIFICATE OF SERVICE I, Joseph R. Ziccardi, Esq., certify that a true and correct copy of the Reply Memorandum in Further Support of Motion for Leave to Withdraw as Counsel for Defendant HTFC Corporation was served upon the following individuals via the following methods: Robert B. Bodzin, Esq. Kleinbard, Bell & Brecker, LLP 1900 Market Street, 7th Floor Phildelphia, PA 19103 Attorney for Plaintiff (Via ECF) Daniel Strick, Esq. Lucas & Cavalier, LLC 1601 Market Street, Suite 2230 Philadelphia, PA 19103 Local Counsel for HTFC Corporation (Via ECF) Aaron Wider HTFC Corporation 324 Clocks Blvd. Massapequa, NY 11758-7742 (Via e-mail transmission) Samuel Stretton, Esq. 301 South High Street P.O. Box 3231 West Chester, PA 19381-3231 (Via ECF) Dated: March 27, 2008 By: s/ Joseph R. Ziccardi Joseph R. Ziccardi, Esq. ZICCARDI LAW OFFICES 20 North Clark Street, Suite 1100 Chicago, Illinois 60602 (312) 372-3477
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA GMAC BANK, Plaintiff, v. HTFC CORP., Defendant. : : : : : : : : : : CIVIL ACTION NO. 06-5291
M E M O R A N D U M EDUARDO C. ROBRENO, J. AUGUST 12, 2008
Before the Court is defense counsel Joseph Ziccardis motion for reconsideration of the February 29, 2008 memorandum and order sanctioning him for his conduct at the deposition of Aaron Wider, CEO of HTFC Corp.1 F.R.D. 182 (E.D. Pa. 2008). This action arises out of a contract dispute over the selling and servicing of mortgage loans between Plaintiff GMAC Bank and Defendant HTFC Corp. GMAC attempted to depose Wider Due to See GMAC Bank v. HTFC Corp., 248
over two days on September 26 and November 8, 2007.
Widers abusive, obstructive, and evasive behavior, and Ziccardis inaction in the face of Widers pervasive misconduct, GMACs efforts to depose Wider were frustrated. See GMAC, 248
F.R.D. 182 (more fully describing the events occurring at Widers
After filing the motion for reconsideration pro se, Ziccardi retained counsel, who adopted the pro se motion.
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deposition).
After providing notice and several opportunities to
be heard, the Court issued its February 29, 2008 memorandum and order, in which it held that Widers conduct was outrageous and Ziccardis complicity is inexcusable, and sanctioned them jointly and severally under Federal Rules of Civil Procedure 30(d)(2) and 37(a)(5)(A). Id. at 198-99. Ziccardi now moves for
reconsideration of the sanctions order, arguing, inter alia, that the Court did not provide him with adequate notice of the sanctions being considered. Before imposing sanctions, due process ordinarily requires that the Court provide the person subject to sanctions with notice of: 1) the reason for the sanctions, 2) the form of the sanctions, and 3) the legal rule authorizing the sanctions. In re Tutu Wells Contamination Litig., 120 F.3d 368, 379 (3d Cir. 1997). The purpose of these requirements is to ensure that the
person subject to sanctions has the ability to mount a meaningful defense and rebut the charges made against him by the Court. Id.
Accordingly, if the notice provided is sufficient to ensure that the person subject to sanctions can mount a meaningful defense to the Courts charges, that notice is constitutionally valid, even if it does not state with precision the legal rule authorizing sanctions. Id. In this case, as explained further below, the notice provided to Ziccardi satisfied the requirements of due process.
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First, Ziccardi received notice several times that the reason for the sanctions was his inaction in the face of Widers pervasive misconduct. Second, Ziccardi was put on notice that the Court
was considering imposing a financial sanction that would compensate the injured party for the expenses it incurred as a result of the failed deposition, including notice of and an opportunity to object to the exact amount of the monetary sanctions. Finally, while Ziccardi did not receive notice that
the Federal Rules of Civil Procedure governed the sanctions being considered by the Court, the notice that was provided enabled him to rebut the charges being considered by the Court and mount a meaningful defense. will be denied. Accordingly, the motion for reconsideration
I.
BACKGROUND In light of the procedural due process issues raised by
the motion for reconsideration, the Court will review in detail the proceedings relating to the February 29, 2008 memorandum and order imposing sanctions upon Ziccardi.
A.
Motion to Compel and Initial Conference On November 28, 2007, Plaintiff GMAC Bank filed a
motion to compel the deposition testimony of Wider, and for sanctions. See Pl.s Mot. to Compel (doc. no. 34). The motion
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sought payment by HTFC of the fees and expenses incurred by GMAC in taking the deposition and filing the motion to compel, pursuant to Federal Rules of Civil Procedure 30 and 37. The
motion did not seek any sanctions against Ziccardi; rather, it sought an order requiring HTFC to pay the expenses incurred by GMAC in taking the previous deposition and making this Motion, including its reasonable attorneys fees and costs, citing Federal Rules of Civil Procedure 30 and 37. Id. at 1.
On December 7, 2007, the Court held a conference with counsel for both parties by telephone. At the conference, the
Court afforded counsel an opportunity to be heard on the motion to compel. The Court then offered its preliminary impression
that Widers conduct implicated Rule 37(a)(4) and the inherent power of the Court to ensure that civil proceedings are conducted in the manner which is dignified and which protects the administration of justice. (doc. no. 42). The Court also addressed defense counsels conduct: There is one matter of further concern here in the case, Mr. Ziccardi, that really involves the conduct of counsel, and Im not entirely sure how we should proceed in this matter. That is, under the Code of Professional Conduct, counsel has certain obligations as an officer of the court which have to be harmonized with counsels obligations to provide zealous representation. But in this particular case, once a witness deponent conducts himself or herself in the manner which is designed to obstruct the proceedings, I dont think counsel can just sit idly by and do nothing. I would equate it to a situation where a 4 Tel. Conf. Tr. 5-6, Dec. 7, 2007
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witness is providing false and perjurious testimony and counsel is aware of it, and under the Rules it requires that counsel has an obligation to correct it and/or withdraw from the proceedings. And I think that at least at first glance, Mr. Ziccardi, I think your conduct implicates the Rules of Professional Conduct 3.4, 3.5 and 8.4. And it is with regret that I must conclude that. It doesnt mean you have violated, but they have been implicated and I think they need to be explored. I will issue a rule to show cause why your pro hac vice admission should not be revoked or whether this matter should be referred to a disciplinary board, and whether or not financial penalty should also be imposed . . . . Id. at 7-8. The Court additionally noted that this is a serious
matter and that a full hearing on the merits would be held. Id. at 8.
B.
Rule to Show Cause and Hearing The day of the telephone conference, the Court issued a
rule to show cause, which asked Ziccardi to show cause why he should not be sanctioned for his conduct during the deposition of Aaron Wider on September 26, 2007 and November 8, 2007, for the reasons set forth in the telephone discovery conference on December 7, 2007. 40). Rule to Show Cause, Dec. 7, 2007 (doc. no.
The rule additionally notified Ziccardi that Rules 1.1,
1.2, 1.3, 3.4, 3.5, and 8.4 of the Pennsylvania Rules of Professional Conduct would be considered by the Court in deciding whether to impose sanctions. Id.
On December 21, 2007, the Court began the hearing on the rule to show cause by stating: 5
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Notice was provided to counsel and to the parties in connection with the motion to compel, which implicates conduct under Rule 30(c)(3), as well as 30[(d)](2), and sanctions under Rule 37. In connection with the rule to show cause, the Court will consider counsels duty during the course of the deposition [as] it implicates a number of provisions of the Pennsylvania Rules of Professional Conduct. Hrg Tr., Dec. 21, 2007 (doc. no. 47), at 2. The Court then directly addressed Ziccardi: frankly, as I told you over the telephone, I was really taken aback. I
had just never seen a performance such as Mr. Widers performance there, and also about your inability to control the situation in some form. Id. at 4. Ziccardi responded by acknowledging that
Widers conduct was inappropriate, and that Ziccardi tried to stop that from happening, including making significant efforts that occurred off the record, and thus are not apparent on the deposition transcript. Id. at 8. Ziccardi argued that taking
such breaks did work for a while, but that we just could not continue to take breaks. Id. at 8-9.
The Court responded as follows: [I] do not doubt that off the record you made every effort, you dont have to go into that. Im limiting myself to what is apparent on the record, including whether the lawyers shall not engage in conduct intended to disrupt the tribunal, that includes a deposition, thats Rule of Professional Conduct 3.5, Comment 5. It also involves attempts to unlawfully obstruct another partys access to evidence, including obstructive tactics in the discovery process, thats Professional Conduct Rule 3.4, Comment 1. There are-Rule 3 requires a lawyer to take reasonable remedial measures if a lawyer comes to know that a client who is testifying in a deposition has offered evidence that is 6
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false. The point here is that, if the conduct is not appropriate conduct and it is attempting to obstruct the administration of justice, a lawyer cant just sit idly by and allow the conduct to proceed any more than if a person is testifying falsely you can allow perjurious testimony to go forward. This conduct, particularly the level of hostility, profanity and obscenities, have nothing to do with the case. You cant sit idly by and allow that to happen and, if the client continues to do it, then you have to withdraw. You cant just sit there and allow that to happen. Id. at 13-14. Ziccardi responded by arguing that his goal was to get this done, was to accomplish this, to let counsel get his deposition, adding that withdrawal would not have served his clients interests and would only have caused further delay. at 14. Id.
C.
Supplemental Briefing At the hearing on the rule to show cause, after counsel
for both sides had concluded their arguments, the Court indicated that it would afford them a round of supplemental briefing. Court then summarized the applicable rules: [T]he Court will address what is the measure[ ] [of] relief that needs to be imposed in this case, one that will permit litigation to proceed on the merits and that will compensate the injured party for expenses incurred as a result of the deponents conduct; and, three, which will vindicate the administration of justice from what appears to be a frontal assault. The Rules of Civil Procedure address this conduct and the Court will consider Rule 30(c)(2), Rule 30(d)(2) and Rule 37(a)(5). Among the remedies which are available under those rules are the resumption of the deposition in Philadelphia under the superintendency of the 7 The
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magistrate judge, imposition of reasonable attorneys fees for bringing this motion, as well as reasonable attorneys fees for implementing the relief of a further deposition, and other financial sanctions may be appropriate. Concerning the rule to show cause, that also implicates, as I have now said on at least two occasions, the role of counsel during the course of depositions. And I had identified previously in the rule to show cause Pennsylvania Rule of Professional Conduct 3.4 or 3.5, 8.4, and as well as 3.2 and 3.3. Under those rules, if found to have been violated, the Court may consider directing that counsel take further continuing education and remedial education in the area, pay a financial sanction, the Court may revoke the pro hac vice admission and, ultimately and most seriously, refer the matter to the disciplinary board. Id. at 17-18. The Court concluded the hearing by permitting GMAC
to submit, along with its supplemental memorandum of law, a detailed itemization of counsel fees. counsel did not object. Id. Id. at 19. Defense
GMAC submitted a supplemental memorandum, along with the promised statement of costs and fees (doc. no. 49). Neither
Ziccardi nor Wider objected to the amount of costs and fees sought. Ziccardi submitted a supplemental memorandum of law on Ziccardi did not specifically
the same day (doc. no. 48).
address any Federal Rule of Civil Procedure; he did, however, address several Rules of Professional Conduct, and further addressed several comments made by the Court at the hearing on the rule to show cause. For example, Ziccardi directly addressed the Courts concern that his inaction in the face of Widers conduct obstructed the deposition: 8
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Based on this Courts statements during the initial and subsequent hearing on plaintiffs motion to compel, this Court is concerned that R.P.C. 8.4(d) may have been implicated in that counsels conduct may have been prejudicial to the administration of justice, which includes depositions. As set forth above, defendants counsel did not sit idly by and allow the conduct to occur. Instead, he took such action as he deemed appropriate given the circumstances and his obligation to represent his client. Whether such action was sufficient to control Mr. Wider must be determined at the time such conduct occurred, and not with the benefit of hindsight, as this situation was unique and not commonplace. Def.s Supp. Mem. of Law 12. Ziccardi also reiterated that the communications in which counsel admonished Mr. Wider occurred off the record, adding that Ziccardi did not encourage, instruct, or influence Widers improper conduct. Id. at 5-7. Ziccardi
additionally argued that he did not interfere in plaintiffs ability to depose Mr. Wider, remained respectful of plaintiffs counsel and attempted to move the deposition along so plaintiff could obtain discovery, adding that his own conduct during the deposition was in no way disruptive. Id. at 10.
D.
Memorandum and Order Imposing Sanctions On February 29, 2008, the Court issued the memorandum
and order sanctioning Wider and Ziccardi, jointly and severally, in the amount of $29,322.61. F.R.D. 182 (E.D. Pa. 2008). See GMAC Bank v. HTFC Corp., 248 This amount is based on the costs
and fees incurred by GMAC in connection with Widers deposition 9
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and the motion to compel further deposition testimony from Wider. The memorandum first discussed Widers improper conduct, concluding that Wider violated Federal Rule of Civil Procedure 37(a)(3)(B)(i) by failing to answer and providing evasive and incomplete answers to deposition questions, and imposing sanctions under Rule 37(a)(5)(A). See id. at 193. The
Court further concluded that Widers conduct violated Rule 30(d)(2) by frustrating his fair examination, and imposed sanctions under that rule as well. See id. at 194.
The memorandum next turned to Ziccardi, finding that throughout the deposition, notwithstanding the severe and repeated nature of Widers misconduct, Ziccardi persistently failed to intercede and correct Widers violations of the Federal Rules. Id. at 194-95.
Ziccardi sat idly by as a mere spectator to Widers abusive, obstructive, and evasive behavior; and when he did speak, he either incorrectly directed the witness not to answer, dared opposing counsel to file a motion to compel, or even joined in Widers offensive conduct. Id. at 195. The Court next dismissed Ziccardis defenses: that he made sufficient efforts to intervene and curb his clients misconduct, including efforts off the record; that his actions were not taken in bad faith; and that his conduct was justified by confidentiality concerns. Id. at 196-97. The Court then
imposed sanctions, finding, as with Wider, that Ziccardis
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conduct violated Rules 37(a)(3)(B)(i) and 30(d)(2) of the Federal Rules of Civil Procedure, and that sanctions were warranted under Rules 37(a)(5)(A) and 30(d)(2). As to Rule 37(a)(3)(B)(i), the Court noted that it was authorized by Rule 37(a)(5)(A) to impose sanctions on Ziccardi, who was the attorney advising Widers failure to answer and evasive or incomplete answers to deposition questions. 197. Id. at
The Court stated that although Ziccardi did not actively
counsel Wider on the record to provide evasive or incomplete answers, he repeatedly failed to take remedial steps to curb his clients misconduct. Id. The Court reasoned that sanctions
were warranted because Widers violations of the rules were so frequent and blatant, that [u]nder these circumstances, Ziccardis silence constitute[s] the functional equivalent of advising Widers misconduct under Rule 37(a)(5)(A). 197-98. Id. at
Therefore, the Court sanctioned Ziccardi, jointly and
severally with Wider, ordering him to pay the $13,026.00 in fees and expenses that GMAC incurred in connection with the motion to compel. Id. at 198. This amount was based on GMACs statement See id. at 193.
of fees, to which Ziccardi did not object.
Turning next to Rule 30(d)(2), the Court held that Ziccardis conduct violated that rule in that it imped[ed], delay[ed], or frustrate[d] the fair examination of the deponent. Id. at 198. The Court specifically noted that Ziccardi failed to
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prevent[ ] Wider from improperly interposing his own objections and curb[ ] Widers abusive bullying of counsel for GMAC, and that his conduct was instead characterized by his persistent inaction in the face of Widers gross misconduct. Id. at 198.
The Court thus sanctioned Ziccardi, ordering him to pay, jointly and severally with Wider, the $16,296.61 in costs and fees incurred by GMAC in connection with the deposition. Id. This
amount was also based on GMACs uncontested statement of fees and expenses. See id. at 194.
E.
Proceedings Following the Sanctions Order On March 21, 2008, in light of the filing of the
instant motion for reconsideration, the Court granted a motion filed by Ziccardi to stay enforcement of the sanctions order until the motion for reconsideration was resolved (doc. no. 74). On June 18, 2008, the Court held a hearing on the motion for reconsideration and all other pending motions. At the hearing, counsel for Ziccardi briefly argued that Ziccardi was not afforded adequate notice of the sanctions being considered by the Court. See Hrg Tr. 5:16-8:13. The
majority of counsels time, however, was spent arguing the merits, i.e., rearguing the issues raised by the rule to show cause. Id. at 8:14-26:6. Counsel reemphasized that Ziccardi
instructed Wider off the record to cease disrupting the
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deposition.
Id. at 11:11-13:14.
Counsel also repeated
Ziccardis contention that the Courts analogy to an attorneys affirmative obligation to act when his client commits perjury is inapposite here. Id. at 13:15-20:25. Finally, counsel argued
that, although an attorney does have a duty to terminate a deposition and cannot sit there like a potted plant when a client refuses to cease his obstructive behavior, that duty had not yet kick[ed] in in this case. Id. at 18:21-23:6.
II.
LEGAL STANDARD A motion for reconsideration may be granted under
certain limited circumstances: The purpose of a motion for reconsideration, we have held, is to correct manifest errors of law or fact or to present newly discovered evidence. Accordingly, a judgment may be altered or amended if the party seeking reconsideration shows at least one of the following grounds: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice. Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (internal citations and quotations omitted). Parties are not free to relitigate issues that the Court has already decided, nor should parties make additional arguments which should have been made before judgment. Smith v.
City of Chester, 155 F.R.D. 95, 97 (E.D. Pa. 1994) (asking 13
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litigants to evaluate whether what may seem to be clear error of law is in fact simply a disagreement between the Court and the litigant); Glendon Energy Co. v. Borough of Glendon, 836 F. Supp. 1109, 1122 (E.D. Pa. 1993) (It is improper on a motion for reconsideration to ask the Court to rethink what it had already thought through--rightly or wrongly. (quotation omitted)). Ziccardi argues that the Courts sanctions order should be reconsidered for two reasons. First, Ziccardi seeks another
hearing, arguing that he did not receive adequate notice that the Court was considering sanctioning him under the Federal Rules of Civil Procedure, as opposed to the Pennsylvania Rules of Professional Conduct. Second, Ziccardi argues that the sanctions
order should be reversed because the Court has committed clear errors of law and fact.
III. PROCEDURAL DUE PROCESS Ziccardi contends that the Court committed a clear error of law by failing to put him on adequate notice that it was considering sanctions under the Federal Rules of Civil Procedure, thus denying him a meaningful opportunity to be heard.
A.
Due Process Requirements In considering sanctions upon an attorney, courts must
provide the attorney with due process.
In re Tutu Wells
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Contamination Litig., 120 F.3d 368, 379 (3d Cir. 1997), criticized on other grounds by Comuso v. Natl R.R. Passenger Corp., 267 F.3d 331, 339 (3d Cir. 2001).2 The Third Circuit has
stated that the fundamental requirements of due process--notice and an opportunity to respond--must be afforded before any sanction is imposed. Id. at 379. In Tutu Wells, the Third
Circuit went so far as to say: The party against whom sanctions are being considered is entitled to notice of the legal rule on which the sanctions would be based, the reasons for the sanctions, and the form of the potential sanctions. Without such notice, the opportunity to be heard would be meaningless: only with this information can a party respond to the court's concerns in an intelligent manner. In other words, a party cannot adequately defend himself against the imposition of sanctions unless he or she is aware of the issues that must be addressed to avoid the sanctions. . . . [D]ramatic differences in the relief being considered by the district court may lead to substantially different (e.g., more detailed, differently directed) responses by the alleged offender. Id. at 380 (emphases added) (quotations omitted).
In Cunningham v. Hamilton County, 527 U.S. 198 (1999), the Supreme Court held that a sanctions order disqualifying an attorney was not immediately appealable because it could be effectively reviewed on appeal from a final judgment. Comuso, 267 F.3d at 338 (citing Cunningham, 527 U.S. at 205-07). Cunningham concerned only the appealability of a sanctions order, not due process requirements. In Comuso, the Third Circuit held that Tutu Wells was no longer good law to the extent that [it] conflict[s] with Cunningham. 267 F.3d at 339. The Court did not disapprove of the due process analysis in Tutu Wells, which has been applied and cited with approval in several subsequent cases. See, e.g., In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 278 F.3d 175, 193 (3d Cir. 2002); Saldana v. Kmart Corp., 260 F.3d 228, 236 (3d Cir. 2001). 15
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The Third Circuit was careful to note, however, that it was not announcing a bright-line rule; rather, the precise contours of the process that is due var[y] given the particular context. Id. The court clarified its holding with a discussion
of its prior cases, which warrants quoting at length: A brief examination of . . . our cases illustrates the operation of this notice rule and the policy justifications supporting it. In Fellheimer, Eichen & Braverman, P.C. v. Charter Technologies, Inc., 57 F.3d 1215 (3d Cir. 1995), we rejected a party's argument that he was denied adequate notice because of the failure to notify him that sanctions under 28 U.S.C. 1927, in addition to those under Rule 11, were being considered. We noted that a showing of bad faith conduct is required to impose sanctions under 1927 but is not required under Rule 11. Without notice that possible 1927 sanctions were at stake, a party might not employ his opportunity to be heard to rebut charges of bad faith. However, our examination of the context and the factual background of the case revealed that the party was well aware that he was being charged with bad faith conduct. That he was unaware of the possible 1927 sanctions was immaterial, for he knew that he would need to confront the charge of bad faith conduct to defend himself in the sanction proceeding. In short, our concern in Fellheimer was that the party in fact had the opportunity to mount a meaningful defense. When it became evident that under the circumstances he did, we determined that the notice had been adequate. In our discussion in Fellheimer, we distinguished Jones v. Pittsburgh National Corp., 899 F.2d 1350 (3d Cir. 1990). In Jones, the party was not explicitly notified of the possibility of 1927 sanctions, nor did the context or factual background of the case suggest that he was charged with bad faith conduct. Because the party was not on notice as to the particular factors that he must address if he is to avoid sanctions, notice was inadequate. Id. at 379-80 (emphasis added). In short, the issue is whether
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mount a meaningful defense.
B.
Process Afforded to Ziccardi This is not a case where no notice or opportunity to be
heard was given prior to the imposition of sanctions.
See
Figueroa v. Buccaneer Hotel Inc., 188 F.3d 172, 183 (3d Cir. 1999) (vacating sanctions order and remanding because no notice or hearing was afforded). In fact, Ziccardi does not dispute
that he received several notices that the Court was considering sanctions and several opportunities to be heard. Rather,
Ziccardi makes a narrower argument: he argues that the notices given by the Court prior to the hearings were defective, and thus that he was unable to meaningfully defend his conduct at the hearings. As noted above, before imposing sanctions, a court
must typically provide notice of the reason for the sanctions, the form of the sanctions, and the legal rule authorizing the sanctions. Tutu Wells, 120 F.3d at 380. Each aspect of the
notice provided to Ziccardi will be addressed in turn.
1.
Reason for the sanctions
The logic behind requiring notice of the reason the Court is considering sanctions is readily discernable: [A] party cannot adequately defend himself against the imposition of sanctions unless he or she is aware of the issues that must be
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addressed to avoid the sanctions.
Tutu Wells, 120 F.3d at 380.
In this case, the Court on multiple occasions provided Ziccardi with specific notice of the issues to be addressed in order to avoid sanctions. At the initial telephone conference
and the hearing on the rule to show cause, the Court described Ziccardis conduct at Widers deposition with particularity, and explicitly stated its reason for considering sanctions. See Tel.
Conf. Tr. 7-8, Dec. 7, 2007 ([O]nce a witness deponent conducts himself or herself in the manner which is designed to obstruct the proceedings, I dont think counsel can just sit idly by and do nothing. I would equate it to a situation where a witness is
providing false and perjurious testimony and counsel is aware of it, and under the Rules it requires that counsel has an obligation to correct it and/or withdraw from the proceedings.); Hrg Tr. 13-14, Dec. 21, 2007 ([I]f the conduct is not appropriate conduct and it is attempting to obstruct the administration of justice, a lawyer cant just sit idly by and allow the conduct to proceed any more than if a person is testifying falsely you can allow perjurious testimony to go forward. This conduct, particularly the level of hostility,
profanity and obscenities, ha[s] nothing to do with the case. You cant sit idly by and allow that to happen and, if the client continues to do it, then you have to withdraw. sit there and allow that to happen.). You cant just
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Since the initial telephone conference, the Courts rationale for imposing sanctions has remained the same: What is remarkable about Ziccardi's conduct is not his actions, but rather his failure to act. GMAC, 248 F.R.D. at 197. Therefore,
Ziccardi cannot have been unfairly surprised when the Court sanctioned him for having persistently failed to intercede and correct Widers violations of the Federal Rules, and having sat idly by as a mere spectator to Widers abusive, obstructive, and evasive behavior, notwithstanding the severe and repeated nature of Widers misconduct. Id. at 194-95. Thus, Ziccardi
had ample notice of the reason for the sanctions.3
2.
Form of sanctions
Notice of the form of sanctions, including notice of the potential severity of the sanctions, is important because dramatic differences in the relief being considered by the
Ziccardi argues that notice was defective because the Court specified at the hearing, Im limiting myself to what is apparent on the record, but the Courts memorandum and order purportedly considered matters occurring off the record. Hrg Tr. 13:19-22, Dec. 21, 2007. This argument is meritless. The analysis in the memorandum and order--consistent with the above statement--accepted as true Ziccardis allegations that he admonished Wider off the record. See GMAC, 248 F.R.D. at 195 (Even if this assertion is to be believed, Wider's continuing misconduct indicates that whatever efforts Ziccardi made were woefully ineffectual.). As such, Ziccardis request for an evidentiary hearing, Mot. for Recons. 1, is baseless. Because the Court has accepted as true Ziccardis allegations that he admonished Wider off the record, no presentation of evidence is warranted. 19
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district court may lead to substantially different (e.g., more detailed, differently directed) responses by the alleged offender. Tutu Wells, 120 F.3d at 388. At the initial telephone conference, the Court informed Ziccardi that it was considering imposing a financial penalty. Tel. Conf. Tr. 7-8, Dec. 7, 2007. At the December 21, 2007
hearing on the rule to show cause, the Court reiterated that a financial sanction may be imposed upon him, noting that the relief that needs to be imposed in this case will compensate the injured party for expenses incurred as a result of the deponents conduct. Hrg Tr. 17-18, Dec. 21, 2007. The
sanctions actually imposed on Ziccardi amount to $29,322.61; as explained above, this amount is based on the costs and fees incurred by GMAC in both taking Widers deposition and filing the motion to compel necessitated by the failure of that deposition. See GMAC, 248 F.R.D. at 194, 198. Ziccardi received advance
notice of this amount through the fee petition submitted by GMAC, to which Ziccardi did not object. Thus, Ziccardi had ample
notice of both the form and severity of the sanctions imposed.4
Even if the Court had not provided Ziccardi with such specific notice, Ziccardi was certainly aware that the Court was considering serious sanctions. At the hearing on the rule to show cause, the Court emphasized that the events occurring at Widers deposition were a frontal assault on the administration of justice, which caused the Court to be taken aback by Ziccardis inability to control the situation in some form. Hrg Tr. 4, 17-18. At the initial telephone conference, the Court advised Ziccardi not only that monetary sanctions might 20
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3.
Legal rule authorizing sanctions
The only remaining question is whether Ziccardi was provided with a statement of the specific legal rule upon which sanctions would be based. He was not. The Courts oral and
written notices to Ziccardi suggested that sanctions were being considered pursuant to the Pennsylvania Rules of Professional Conduct, not the Federal Rules of Civil Procedure. See Tel.
Conf. 7-8; Rule to Show Cause, Dec. 7, 2007; Hrg Tr. 2, Dec. 21, 2007. Thus, the relevant inquiry is: does the failure to state
the specific rule authorizing sanctions render the otherwise detailed notice provided to Ziccardi inadequate? As explained
above, the Third Circuit has set forth the analysis required to answer this question: the Courts notice is constitutionally adequate only if it enabled Ziccardi to mount a meaningful defense, i.e., attempt to rebut [the] charges being considered by the Court. Tutu Wells, 120 F.3d at 379-80.
In In re Prudential Insurance Co. America Sales
issue, but also that more severe penalties might be imposed, such as the revocation of his pro hac vice admission and referral of the matter to the disciplinary board. Tel. Conf. Tr. 7-8. The Court reiterated this warning at the hearing on the rule to show cause, noting that it would consider most seriously, refer[ring] the matter to the disciplinary board. Hrg Tr. 18. Thus, having received notice that the Courts sanction could result in the most severe punishment--a disciplinary sanction, such as suspension or even disbarment--Ziccardi was aware that serious sanctions were being considered. Therefore, the fact that he did not prepare a substantially different (e.g., more detailed, differently directed) respons[e] cannot be blamed on the Court. Tutu Wells, 120 F.3d at 388. 21
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Practice Litigation Agent Actions, 278 F.3d 175 (3d Cir. 2002), the trial court gave notice to an attorney that sanctions under 28 U.S.C. 1927 were being considered, but the court instead imposed sanctions pursuant to its inherent powers, requiring him to attach a copy of a report and recommendation discussing his misconduct to future applications for pro hac vice admission for the next five years. Id. at 191. The Third Circuit vacated the
sanctions order, reasoning that although [counsel] was clearly on notice that the court was empowered to make him pay for the increase in cost resulting from his vexatious conduct . . . it is not as clear that [he] had notice that the court was considering requiring him to attach his scarlet letter to his pro hac vice admissions in the District of New Jersey. Id. at 193. In
The logic of Prudential does not apply here.
Prudential, the court imposed an exotic and severe sanction that could only have been authorized under its inherent powers, not under 1927. In this case, the Court did not impose any such
sanction, but rather imposed the conventional sanction of payment of costs and fees. Moreover, as discussed above, Ziccardi was
put on specific notice several times that the Court was considering a financial sanction with the goal of compensating GMAC for the expenses caused by the failed deposition. e.g., Hrg Tr. 17-18, Dec. 21, 2007. Similarly, in Jones, 899 F.2d 1350--discussed in Tutu See,
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Wells--an attorney was notified that Rule 11 sanctions were being considered, but was instead sanctioned under 1927. Because
1927 requires a showing of bad faith, and Rule 11 does not, the attorney was not aware that he was being charged with bad faith conduct, and thus did not have a meaningful opportunity to refute such a charge. Jones). See Tutu Wells, 120 F.3d at 380 (discussing
Accordingly, the failure to specify the legal rule upon
which sanctions were based was fatal. Here, Ziccardi was not deprived of any such opportunity to refute a charge. See GMAC, 248 F.R.D. at 196 (noting that The notice in Jones was
finding of bad faith is not required).
defective because it, in effect, deprived the attorney of the opportunity to argue against part of the charge; namely, that he had engaged in bad faith conduct. Here, Ziccardi received notice
that the Court was considering sanctioning him for his inaction in the face of Widers pervasive misconduct. Ziccardi defended
against the charge of inaction by arguing that his intentions were good, that he made certain efforts off the record, and that the Court should not second-guess his decisions under difficult circumstances. The Court considered and rejected these
arguments, and sanctioned him for his persistent inaction in the face of Widers gross misconduct. Id. at 198. Accordingly,
Ziccardi was not deprived of any opportunity to mount a defense; he mounted a comprehensive defense, but the Court rejected it.
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Rather than Prudential and Jones, the decision in Fellheimer is instructive here. 57 F.3d 1215. In Fellheimer,
the court noticed sanctions under Rule 11, but imposed sanctions under its inherent power, which usually requires a finding of bad faith. Id. at 1225. The Third Circuit distinguished Jones,
reasoning that both the movant and the trial court had made it clear that [they] suspected [the attorney] of having acted in bad faith well in advance of any hearing on the sanctions motion. Id. at 1226. In other words, the context and the factual
background of the case revealed that the party was well aware that he was being charged with bad faith conduct. 120 F.3d at 380 (discussing Fellheimer). Tutu Wells,
Therefore, because the
attorneys ability to mount a meaningful defense was not in fact prejudiced, the Third Circuit refused to overturn the trial courts sanction merely because the court applied the wrong label to the righteous use of its inherent sanction power. Fellheimer, 57 F.3d at 1227. That is precisely what happened here. Ziccardi was on
notice from the initial telephone conference on December 7, 2007 of the Courts charge that once a witness deponent conducts himself or herself in the manner which is designed to obstruct the proceedings, I dont think counsel can just sit idly by and do nothing. Tel. Conf. Tr. 7-8. Ziccardi argued against this
charge at both the hearing on the rule to show cause and in his
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supplemental memorandum; the Court simply disagreed with his argument. Thus, while Ziccardi did not receive notice that the
Federal Rules of Civil Procedure governed the sanctions being considered by the Court, the notice that was provided enabled him to rebut the charges being considered by the Court and mount a meaningful defense. Therefore, the notice provided to Ziccardi
was constitutionally adequate.
C.
Opportunity to Object to Fee Petition In addition to challenging the Courts notice of
sanctions, Ziccardi argues that his procedural due process rights were violated because he was denied an opportunity to object to GMACs request for attorneys fees. As noted above, at the conclusion of the hearing on the rule to show cause, the Court commented that the measure[ ] [of] relief that needs to be imposed in this case is one that will compensate the injured party for expenses incurred as a result of the deponents conduct. Hrg Tr., Dec. 21, 2007, at 17. With
reference to the rule to show cause, the Court noted that it may consider directing that counsel . . . pay a financial sanction. Id. at 18. Immediately following this discussion, the Court
noted that the matter would be taken under advisement, and permitted the parties to make supplemental submissions by January 3, 2008. The Court then stated: Promptly thereafter, then I
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will issue a decision on these matters now that the parties have had an opportunity to respond and also have been afforded an opportunity to make further submissions in the case. 19. Id. at 18-
When asked if there were any further issues, counsel for
GMAC stated: [A]s you have allowed for an additional time for submissions, within that time period we will submit a detailed itemization of counsel fees. Ziccardi did not object, and the Id. at 19.
Court permitted GMAC to make the submission.
On January 3, 2008, both parties filed supplemental submissions. GMACs submission included two affidavits listing
the costs and fees incurred by various counsel, along with the hourly rates of counsel (doc. no. 49). At no time prior to the
issuance of the February 29, 2008 sanctions order did Ziccardi object to GMACs fee petition. Ziccardi now argues that he had
no opportunity to object to the fee petition because the Court did not instruct him to file any such objection. Ziccardi
contends that the Courts statement that a decision would be forthcoming promptly after the January 3 submissions foreclosed any opportunity for him to object to the fee petition. argument lacks merit. It is true that [t]he burden is on the party filing a fee petition to establish that the rate claimed is reasonable. Keenan v. City of Phila., 983 F.2d 459, 473 (3d Cir. 1992). meet this burden, the fee petitioner must submit evidence To This
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supporting the hours worked.
Watson v. Massanari, 177 F. Supp.
2d 359, 363 (E.D. Pa. 2001) (quoting Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)). It is well-established,
however, that in this circuit, a court may not reduce counsel fees sua sponte as excessive, redundant, or otherwise unnecessary in the absence of a sufficiently specific objection to the amount of fees requested. United States v. Eleven
Vehicles, Their Equip. & Accessories, 200 F.3d 203, 212 (3d Cir. 2000).5 This is because [o]nly with proper notice can the Id. Thus,
claimant know which request to defend as reasonable. the Third Circuit has stated:
[W]hen an opposing party has been afforded the opportunity to raise a material fact issue as to the accuracy of representations as to hours spent, or the necessity for their expenditure, and declines to do so, no reason occurs to us for permitting the trial court to disregard uncontested affidavits filed by a fee applicant. Id. at 212 (quotation omitted). It is therefore the burden of
the party seeking a reduction in the fee award to make a sufficiently specific objection to the substance of a fee
This prohibition did not preclude the Court from reducing the amount of attorneys fees awarded in connection with Widers deposition to 75% of the amount sought. The reduction to 75% was made because the Court found that approximately 75% of the time spent deposing Wider was time wasted due to Wider's frustration of fair examination. GMAC, 248 F.R.D. at 194. The reduction was not made because the Court found that GMACs fee petition was unreasonable or otherwise deficient, but rather pursuant to the Courts authority to fashion an appropriate sanction under Rule 30(d)(2). 27
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request.
Id. In this case, GMAC submitted a fee petition on January
3, 2008.
The fee petition attached affidavits stating the number
of hours billed, the billing attorneys, and their hourly rates. The sanctions order did not issue until February 29, 2008. Ziccardi thus had 57 days to object to the fee petition. Ziccardi attempts to blame the Court for his failure to do so, arguing that the Courts statement that a decision would be issued promptly after the submissions were made on January 3, 2008, somehow foreclosed him from objecting to the fee petition. The case law, however, clearly places the burden on him to object to the fee petition; in fact, it is the Court that was foreclosed from diminishing the amount of attorneys fees sought absent a sufficiently specific objection from Ziccardi.6 Accordingly,
no violation of Ziccardis due process rights has occurred.
IV.
SUFFICIENCY OF ZICCARDIS CONDUCT Even if the Court had failed to provide Ziccardi with
In light of Ziccardis failure to object to the fee petition, the Court does not reach the argument that the petition was insufficiently specific. It nonetheless bears mention that the fee petitions were supported by affidavits breaking down the number of hours billed by both task performed and by attorney, stating the hourly rate of each attorney, and listing separately the amount of costs incurred. As such, the petitions were specific enough to allow the district court to determine if the hours claimed are unreasonable for the work performed. Keenan, 983 F.2d at 473. 28
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adequate notice of the sanctions being considered, the relief to which Ziccardi would be entitled would be adequate notice and another opportunity to be heard. See Martin v. Brown, 63 F.3d
1252, 1262 n.12 (3d Cir. 1995) (Because we conclude that the district court failed to afford [the attorney] procedural due process, we believe it unnecessary and inappropriate for us to decide on this record her contention that she engaged in no sanctionable misconduct. We believe the district court must
first address these matters on remand, after [she] is afforded the procedural safeguards required by the Due Process Clause.). However, the Court has for all practical purposes already provided this relief to Ziccardi. As explained above, at
the June 18, 2008 hearing on the instant motion, Ziccardi was given an opportunity to--and did in fact--reargue the merits of the rule to show cause through his counsel. See Hrg Tr. 27,
June 18, 2008 (counsel for Ziccardi stating that to some extent . . . a due process matter may have been corrected by this hearing). The arguments offered--all of which have already been
considered by the Court--are improper bases for a motion for reconsideration; nonetheless, the Court will briefly discuss their merits for the sake of completeness. First, Ziccardi argues that he did not snicker at Widers conduct and did not dare opposing counsel to file a motion to compel. As the Court has previously explained, these
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findings of fact were not necessary to the Courts decision to sanction Ziccardi, which was based on his inaction, not his actions. See GMAC, 248 F.R.D. at 197.7 Second, Ziccardi argues that the Federal Rules do not impose a duty on a lawyer to admonish a client on the record against frustrating a deposition. The Court need not decide this
issue, however, as the sanctions order was not dependent on any such duty. The Court did not refuse to consider Ziccardis off-
the-record efforts, but instead found them to be insufficient in light of both Widers continuing misconduct and Ziccardis onthe-record conduct.8 See id. at 196.
Third, Ziccardi argued through his counsel at the June 18, 2008 hearing that, although he had an obligation to terminate the deposition eventually, that obligation had not kick[ed] in yet in this case, and it is improper for the Court to secondguess an attorneys decision as to the timing of when to terminate a deposition. It is true that the timing of the
decision to terminate a deposition may be difficult to pin down
Aside from an illustrative purpose, the snicker and dare findings of fact were used in dicta to support a finding of bad faith. See GMAC, 248 F.R.D. at 196. This finding was not necessary to the Courts imposition of sanctions under Federal Rules 30(d)(2) and 37(a)(5)(A), which do not require a finding of bad faith. See GMAC, 248 F.R.D. at 196. As the Court assumed Ziccardis allegations of his offthe-record intervention to be true, the affidavits attached to the motion for reconsideration attesting to such off-the-record efforts serve no purpose. 30
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in some cases.
The discovery process would certainly not benefit
from the premature termination of depositions at the slightest sign a problem. Moreover, in close cases, it may be difficult
for the Court to second-guess the attorneys judgment; after all, only the attorney actually attended the deposition and witnessed the specific problems first-hand. But this is not a close case.
As the Court previously explained, Ziccardi allowed the deposition to drag on for over two days and nearly twelve hours of testimony, much of which was an unmitigated waste of time and resources. Ziccardi never once suggested that the ill-fated GMAC, 248 F.R.D. at 196. Thus,
deposition be adjourned.
although courts would be wise to hesitate in close cases before second-guessing an attorneys judgment as to when a deposition should be terminated, no such pause is warranted here.
V.
CONCLUSION For the foregoing reasons, Joseph Ziccardis motion for
reconsideration (doc. no. 68) will be denied.
Additionally, the
motion for reconsideration having been disposed of, the stay of enforcement of the Courts February 29, 2008 order will be lifted. An appropriate order follows.
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA GMAC BANK, Plaintiff, v. HTFC CORP., Defendant. : : : : : : : : : CIVIL ACTION NO. 06-5291
O R D E R AND NOW, this 12th day of August, 2008, for the reasons stated in the accompanying Memorandum, it is hereby ORDERED that Joseph Ziccardis motion for reconsideration (doc. no. 68) is DENIED. IT IS FURTHER ORDERED that the stay of enforcement of the Courts February 29, 2008 order is LIFTED.
AND IT IS SO ORDERED. S/Eduardo C. Robreno EDUARDO C. ROBRENO, J.
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Pennsylvania Rule of Professional Conduct 3.4. Fairness to Opposing Party and Counsel. A lawyer shall not: (a) unlawfully obstruct another partys access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value or assist another person to do any such act; (b) falsify evidence, counsel or assist a witness to testify falsely, pay, offer to pay, or acquiesce in the payment of compensation to a witness contingent upon the content of the witness testimony or the outcome of the case; but a lawyer may pay, cause to be paid, guarantee or acquiesce in the payment of: (1) expenses reasonably incurred by a witness in attending or testifying, (2) reasonable compensation to a witness for the witness loss of time in attending or testifying, and (3) a reasonable fee for the professional services of an expert witness; (c) when appearing before a tribunal, assert the lawyers personal opinion as to the justness of a cause, as to the credibility of a witness, as to the culpability of a civil litigant, or as to the guilt or innocence of an accused; but the lawyer may argue, on the lawyers analysis of the evidence, for any position or conclusion with respect to the matters stated herein; or (d) request a person other than a client to refrain from voluntarily giving relevant information to another party unless: (1) the person is a relative or an employee or other agent of a client; and (2) the lawyer reasonably believes that the persons interests will not be adversely affected by refraining from giving such information and such conduct is not prohibited by Rule 4.2. Comment: (1) The procedure of the adversary system contemplates that the evidence in a case is to be marshaled competitively by the contending parties. Fair competition in the adversary system is secured by prohibitions against destruction or concealment of evidence, improperly influencing witnesses, obstructive tactics in discovery procedure, and the like. (2) Documents and other items of evidence are often essential to establish a claim or defense. Subject to evidentiary privileges, the right of an opposing party, including the
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government, to obtain evidence through discovery or subpoena is an important procedural right. The exercise of that right can be frustrated if relevant material is altered, concealed or destroyed. Applicable law in many jurisdictions makes it an offense to destroy material for purpose of impairing its availability in a pending proceeding or one whose commencement can be foreseen. Falsifying evidence is also generally a criminal offense. Paragraph (a) applies to evidentiary material generally, including computerized information. Applicable law may permit a lawyer to take temporary possession of physical evidence of client crimes for the purpose of conducting a limited examination that will not alter or destroy material characteristics of the evidence. In such a case, applicable law may require the lawyer to turn the evidence over to the police or other prosecuting authority, depending on the circumstances. (3) With regard to paragraph (b), it is not improper to pay a witnesss expenses or to compensate an expert witness on terms permitted by law. The common law rule in most jurisdictions is that it is improper to pay an occurrence witness any fee for testifying and that it is improper to pay an expert witness a contingent fee. (4) Paragraph (d) permits a lawyer to advise employees of a client to refrain from giving information to another party, for the employees may identify their interests with those of the client. See also Rules 4.2 and 4.3(b).
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Pennsylvania Rule of Professional Conduct 3.5. Impartiality and Decorum of the Tribunal. A lawyer shall not: (a) seek to influence a judge, juror, prospective juror or other official by means prohibited by law; (b) communicate ex parte with such a person during the proceeding unless authorized to do so by law or court order; (c) communicate with a juror or prospective juror after discharge of the jury if: (1) the communication is prohibited by law or court order; (2) the juror has made known to the lawyer a desire not to communicate; or (3) the communication involves misrepresentation, coercion, duress of harassment; or (d) engage in conduct intended to disrupt a tribunal. Comment: (1) Many forms of improper influence upon a tribunal are proscribed by criminal law. Others are specified in the ABA Model Code of Judicial Conduct, with which an advocate should be familiar. A lawyer is required to avoid contributing to a violation of such provisions. (2) During a proceeding a lawyer may not communicate ex parte with persons serving in an official capacity in the proceeding, such as judges, masters or jurors, unless authorized to do so by law or court order. (3) A lawyer may on occasion want to communicate with a juror or prospective juror after the jury has been discharged. The lawyer may do so unless the communication is prohibited by law or a court order but must respect the desire of the juror not to talk with the lawyer. The lawyer may not engage in improper conduct during the communication. (4) The advocates function is to present evidence and argument so that the cause may be decided according to law. Refraining from abusive or obstreperous conduct is a corollary of the advocates right to speak on behalf of litigants. A lawyer may stand firm against abuse by a judge but should avoid reciprocation; the judges default is no justification for similar dereliction by an advocate. An advocate can present the cause, protect the record for subsequent review and preserve professional integrity by patient firmness no less effectively than by belligerence or theatrics. (5) The duty to refrain from disruptive conduct applies to any proceeding of a tribunal, including a deposition. See Rule 1.0(m).
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Pennsylvania Rule of Professional Conduct 8.4. Misconduct. It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; (b) commit a criminal act that reflects adversely on the lawyers honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice; (e) state or imply an ability to influence improperly a government agency or official or to achieve results by means that violate the Rules of Professional Conduct or other law; or (f) knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law. Comment: (1) Lawyers are subject to discipline when they violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so or do so through the acts of another, as when they request or instruct an agent to do so on the lawyers behalf. Paragraph (a), however, does not prohibit a lawyer from advising a client of action the client is lawfully entitled to take. (2) Many kinds of illegal conduct reflect adversely on fitness to practice law, such as offenses involving fraud and the offense of willful failure to file an income tax return. However, some kinds of offenses carry no such implication. Traditionally, the distinction was drawn in terms of offenses involving moral turpitude. That concept can be construed to include offenses concerning some matters of personal morality, such as adultery and comparable offenses, that have no specific connection to fitness for the practice of law. Although a lawyer is personally answerable to the entire criminal law, a lawyer should be professionally answerable only for offenses that indicate lack of those characteristics relevant to law practice. Offenses involving violence, dishonesty, breach of trust, or serious interference with the administration of justice are in that category. A pattern of repeated offenses, even ones of
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minor significance when considered separately, can indicate indifference to legal obligation. (3) A lawyer may refuse to comply with an obligation imposed by law upon a good faith belief that no valid obligation exists. The provisions of Rule 1.2(d) concerning a good faith challenge to the validity, scope, meaning or application of the law apply to challenges of legal regulation of the practice of law. (4) Lawyers holding public office assume legal responsibilities going beyond those of other citizens. A lawyers abuse of public office can suggest an inability to fulfill the professional role of lawyers. The same is true of abuse of positions of private trust such as trustee, executor, administrator, guardian, agent and officer, director or manager of a corporation or other organization.
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