Judge Benchslaps Richard Liebowitz Again Over His Request To Not Have To Tell Everyone About Previous Sanctions
from the not-gonna-happen dept
Judge Jesse Furman clearly is not interested in copyright troll Richard Liebowitz’s games any more. As you may recall, Furman put together that massive benchslap of Liebowitz last month, detailing the many, many, many times Liebowitz failed to follow court orders, and plenty of examples of where he appeared to lie to the court. Furman also included an appendix with an astounding list of 40 examples in other cases where Liebowitz had been found to similarly fail to follow court orders and/or lie to the court. The ruling concluded with Liebowitz being sanctioned a bit over $100k, but also with requirements that he send the order to all of his clients and every other judge handling a Liebowitz case.
Earlier this week, we wrote about Liebowitz (finally represented by other lawyers) trying to get those other sanctions removed (he paid the money, but doesn’t want to have to tell others about this ruling). His lawyers took the bold strategy of saying that it would be unfair to Liebowitz’s clients to have to inform them of what a terrible lawyer he is — and tried to excuse all the sanctions and failed order following as a result of (1) inexperience and (2) a “unique” business model of filing way too many cases.
Judge Furman is, shall we say, not impressed. He took all of two days to issue a 14 page order that is basically an encore presentation to the original benchslap. The first paragraph sets the tone:
On June 26, 2020, the Court issued a fifty-four page Opinion and Order — familiarity with which is assumed — imposing a range of monetary and non-monetary sanctions on the oft-sanctioned Plaintiff’s counsel Richard Liebowitz and his firm, the Liebowitz Law Firm, PLLC…. The sanctions were based on three sets of detailed findings: first, that Mr. Liebowitz had violated “at least six of the Court’s Orders”; second, that he repeatedly lied to the Court, including under oath at a hearing, about whether he had been granted permission by a mediator (the “Mediator”) for his client to participate in a mediation session by telephone; and third, that he had failed to reasonably investigate whether the photograph at issue (the “Photograph”) had been registered with the Copyright Office (it hadn’t), both prior to filing suit and when put on notice about the issue during the litigation…. The Court found that the sanctions, several of which involve notifying other clients and courts about the Court’s Opinion and Order, were reasonably necessary to deter repetition of the misconduct given Mr. Liebowitz’s “long and ignominious history.” … Mr. Liebowitz and his firm had thirty days to comply with several of the sanctions…. Two evenings ago — that is, twenty-four days after the Court’s decision and only four business days before the deadline — they filed a motion (styled as an order to show cause) asking the Court to stay those sanctions pending appeal.
You may sense that Furman is not happy about all this. He notes that there are four factors in determining whether or not a court should issue a stay regarding such sanctions pending an appeal: “(1) whether the stay applicant has made a strong showing that he is likely tosucceed on the merits; (2) whether the applicant will be irreparably injured absenta stay; (3) whether issuance of the stay will substantially injure the other partiesinterested in the proceeding; and (4) where the public interest lies.” He then notes: “the Court finds that the Movants do not come close to carrying their heavy burden.”
But Judge Furman is just getting warmed up:
The Court is tempted to leave things there and let its Opinion and Order, with its exhaustive findings and analysis, speak for itself. (Mr. Liebowitz’s shenanigans have surely consumed enough of this Court’s time and resources as it is.) But a few observations are in order, if only to aid the Circuit in the event that the Movants decide to now burden that court with having to decide on short notice whether a stay pending appeal is warranted.
Let’s just say that if a judge says that about you in an order, the rest of the document is not going to go well for you. Judge Furman highlights, as we did, that any “harm” done to Liebowitz from having to share the sanctions order is not from the sanctions order, but from Liebowitz’s own actions that resulted in the order:
For starters, the Movants’ claims of irreparable harm ring hollow for several reasons. First, the Movants’ principal claim is that the sanctions — which require service of the Court’s Opinion and Order on current and future clients and in current and future actions — will result in “severe and irreparable reputational and economic harm to their law practice.”… But any harm to Movants’ reputations resulting from the mere act of sharing the Court’s Opinion and Order is caused not by the sanctions themselves, but by growing awareness of Mr. Liebowitz’s own conduct and record, which are accurately recounted in the Court’s Opinion and Order. Notably, the Movants attack none of the history recounted in the Court’s Opinion and Order and few of the Court’s factual findings, and, as discussed below, their attacks on those findings are entirely unpersuasive.
And then he points out that the sanctions could have been worse, and that the court was actually somewhat restrained in how it chose to issue sanctions:
Significantly, the Court did not bar or even inhibit the Movants from filing any new action — though such sanctions have long been approved with respect to vexatious litigants…. Instead, its order merely requires the Movants to share information — that is, the Opinion and Order — with their clients and any courts in which they appear for a time, on the theory that they may be deterred from further misconduct by the knowledge that their clients and courts are likely to be more vigilant. Requiring a party to share truthful information — here, that this Court made certain findings and, on the basis of those findings, imposed sanctions on the Movants — does not constitute irreparable harm.
There’s also a footnote crammed in there noting that Liebowitz was free to inform his clients that he disagreed with the court’s findings and sanctions, or that he was planning to challenge them.
Second, to the extent that awareness of the Court’s Opinion and Order will cause the Movants’ reputational and economic harm, much of that harm has already occurred. As the old saying goes, the cat is out of the bag. The Court’s Opinion and Order is a public document and, due in no small part to Mr. Liebowitz’s well-deserved notoriety, it has already received fairly extensive publicity in the press and social media, particularly in the copyright world. Granting a stay would not undo any of that damage (which, needless to say, is ultimately attributable to Mr. Liebowitz’s own deplorable conduct rather than to the Court’s Opinion and Order itself). Put another way, the potential harm here is not irreparable; it is only marginal.
And here, there’s a footnote citing much of the coverage about the original order (including our own post about it).
Judge Furman also notes Liebowitz waiting until the clock was about to run out before filing this request:
Finally, a court “must consider a plaintiff’s delay in seeking relief when analyzing whether the plaintiff will suffer irreparable harm in the absence of relief.”… That is because “inexcusable delay in filing” a motion to stay “severely undermines the . . . argument that absent a stay irreparable harm would result.” Hirschfeld v. Bd. of Elections, 984 F.2d 35, 39 (2d Cir. 1993) (rebuking the Board of Elections for seeking a stay twenty-eight days after judgment was entered and only six days before election day). As noted, the Court gave the Movants thirty days in which to comply with the relevant sanctions or seek appropriate relief. Nevertheless, they waited until day twenty-four to seek a stay (at which point, no less, they proposed giving their adversary only three days in which to respond). Put simply, the Movants’ “delay, in itself, belies [their] conclusory assertions of irreparable harm” and “is enough to defeat [their] claim.”
By this point, it appears that Furman is still only getting warmed up. Because then he digs in on whether or not Liebowitz showed a likelihood of success on the merits, and the Judge would give that question a big, giant, humongous: “Nah.” Let’s just say, again, that this is not the kind of language you want to see in any order regarding an issue you’re a party to:
Their first attack is on the Court’s factual findings about Mr. Liebowitz’s lies with respect to the Mediator and his knowledge that the Photograph in question was not registered prior to filing the Complaint. But reading their motion papers, one wonders if they even read the Court’s Opinion and Order. With respect to Mr. Liebowitz’s lies regarding the Mediator, the Movants do little more than cherry pick a single email that they argue (unpersuasively) is more “equivocal” than the Court acknowledged…. In doing so, however, they all but ignore the fact that the Court’s findings were based in large part on its credibility assessments, following a full-blown evidentiary hearing, of the Mediator’s and Mr. Liebowitz’s testimony.
Just a general suggestion should you ever be facing an angry judge: don’t try to cherry pick statements out of context. It won’t work. And a judge may come back with this:
Meanwhile, the Movants attack a straw man when they contend that the Court erred by finding that Mr. Liebowitz “initiated this action knowing the Photograph was unregistered.”… Put simply, that portion of the Court’s sanctions decision was not based on a finding that Mr. Liebowitz knew when the complaint was filed that the Photograph had not yet been registered; indeed, the Court acknowledged that Mr. Liebowitz may not have personally known about the lack of registration at the time of filing…. Instead, the Court faulted Mr. Liebowitz and his firm for their “inexcusable failure to conduct a reasonable investigation before and during the case.”… Moreover, the Movants conspicuously focus solely on Mr. Liebowitz’s knowledge when the Complaint was filed and say next to nothing about the Court’s findings and analysis with respect to his or the firm’s knowledge and conduct “during” the case. As the Court emphasized, however, whatever knowledge the Movants may have had before filing suit, they certainly knew or should have known about the untimely registration by November 2019, when defense counsel explicitly put them “on notice of what turns out to have been a fatal defect in the Complaint.”… At that point, if not before, the Movants had an “obligation to investigate,” yet they conducted “no investigation” whatsoever until ordered to do so months later by the Court…. To the contrary, Mr. Liebowitz affirmatively represented to the Court that the registration alleged in the Complaint was “the correct” one and resisted discovery on the issue…. Mr. Liebowitz did not admit, as the Movants do now, that he lacked independent knowledge of the registration, let alone acknowledge, as the Movants do now, that the allegation in the Complaint was false; had he done so, the Court and Defendant would have learned sooner that the case was fatally flawed from its inception.
How about the claims that the sanctions are “disproportionate.” Again, that’s not going to fly, especially when the cases they cited in support… say the opposite.
The Court is confident, however, that the record set forth in the Opinion and Order, taken as a whole, justifies the scope and severity of the chosen sanctions. Ironically, the cases that the Movants themselves cite make plain that the Court acted well within its authority in imposing the sanctions on a nationwide basis. See, e.g., Gallop v. Cheney, 667 F.3d 226, 230 (2d Cir. 2012) (requiring counsel to “provide notice of sanctions imposed upon him in this case . . . to any federal court” in the Circuit “before which he appears or seeks to appear” for “a period of one year from the entry of [the] order”); Enmon v. Prospect Capital Corp., 675 F.3d 138, 148 (2d Cir. 2012) (affirming the district court’s sanctions order requiring a firm’s lawyers to submit the order “with any pro hac vice applications in the Southern District of New York”).
There’s also a fun footnote here:
In a footnote, the Movants suggest that the Court may have separately erred “in sanctioning Mr. Liebowitz and [his firm] for their conduct before other courts.” …. Putting aside the fact that a party may not raise an argument in a footnote, that argument is frivolous. The Court did not rely on the Movants’ “[v]iolations of orders in other litigation” as “the basis” of its decision to impose sanctions….. Instead, it took stock of Mr. Liebowitz’s “long and ignominious history” in evaluating what sanctions were necessary to deter further misconduct… The Court is not aware of, and the Movants do not cite, any authority for the extreme proposition that a court should blind itself to an attorney’s history of misconduct in crafting appropriate sanctions.
And then there’s the kicker. Judge Furman basically says, “dude, I let you off pretty easy, all things considered, and you come back with this?!?”
Indeed, if anything, the Movants’ own cases suggest that the Court did not go as far as it could have, given that the sanctions are limited in time and do not limit their ability to file new cases, but merely require disclosure…. The Movants are undoubtedly correct in asserting that “nationwide sanctions” are rare… but that is only because they are rarely warranted. Here, they were, as the record makes clear that the Movants’ practice — and misconduct — has begun to spread to other districts. Given that record, limiting sanctions to this District (or this Circuit) would not have been adequate to deter repetition of the misconduct; the Movants could simply file suits elsewhere. That is, the Court’s sanctions ensure that, for at least a year, any courts in which the Movants are litigating are “alert” to Mr. Liebowitz’s “past activities so that they may take judicial notice of matters relevant to new litigation brought by him.”… Anything less would be insufficient to deter repetition of Mr. Liebowitz’s misconduct.
There’s also a further note in a footnote questioning why Liebowitz is so insistent on filing cases in other districts… where his reputation has already been noted. And then adds in a dig about Liebowitz already admitting that he doesn’t quite have a handle on how to manage all these lawsuits he keeps filing:
The Movants may have expanded the geographic scope of their practice in order to file more cases and make more money. Or they may have done so in an effort to escape Mr. Liebowitz’s well-earned reputation as a problem in this District. (Not surprisingly, Mr. Liebowitz’s reputation seems to have either preceded him or to be catching up with him. See, e.g., In re Richard P. Liebowitz, No. 19-MC-80228 (JD), ECF No. 17, at 1-2 (N.D. Cal. June 12, 2020) (noting that Mr. Liebowitz’s “unprofessional and blameworthy conduct” is “consistent with the extensive public record of discipline he has amassed in courts across the United States”); Mondragon v. Nosrak LLC, No. 19-CV-1437 (CMA) (NRN), 2020 WL 2395641, at *1, *14 (D. Colo. May 11, 2020) (“Mr. Liebowitz’s continued practice of law represents a clear and present danger to the fair and efficient administration of justice . . . .”).) Either way, the decision to expand the firm’s practice is a strange one given Mr. Liebowitz’s own acknowledgment that his business management practices are “not [the] best” and that “things need to change.”
Then there’s the claim that Liebowitz made that requiring him to file a deposit copy of the copyright registration was somehow unduly burdensome. Remember, part of the problem in this case was that Liebowitz had claimed this photograph was registered, but it was not, and he had provided the registration number of a different work. So this sanction was to make sure that Liebowitz was actually doing the bare minimum required under the law — which Liebowitz argued is somehow unfair and takes away the rights of his clients. But, as Judge Furman notes, that’s not how any of this works:
Finally, the Movants assert in passing that, by requiring the Movants to file a deposit copy of a copyright registration upon the initiation of an action, the Court impermissibly “alter[ed] the statutory presumption of validity in copyright cases.” … Not so. The statute at issue provides only that “[p]ossession of a registration certificate creates a rebuttable presumption that the work in question” — that is, the work covered by the certificate — “is copyrightable”…. That presumption, however, is not even remotely implicated by the Court’s sanction requiring the Movants to verify and confirm that any work at issue in a new lawsuit is actually registered — which, after all, is a statutory condition precedent to even filing a copyright claim…. Moreover, the Movants’ argument falls flat for another reason: The sanction was imposed on them, based on their history of failing to investigate the evidentiary basis of their own pleadings, not on their current or future clients. That is, although violation of the sanction would subject the Movants to contempt in this Court, it would not in any way (at least absent independent action by the court presiding over the new action) affect the substantive rights of the Movants’ clients themselves.
Also, the claim that it would be too costly for Liebowitz to obtain the deposit copies from the Copyright Office? That’s so silly that Furman responds to it in a footnote:
On a related note, the Movants complain that the costs and delays involved in obtaining deposit copies of copyrighted works from the Copyright Office will reduce their clients’ recoveries and may result in statute-of-limitations problems…. The Court’s sanction may reduce some recoveries (although one would think that Mr. Liebowitz would absorb the difference rather than passing the costs on to his clients), but there are reasons to think the Movants overstate the potential impact. By Mr. Liebowitz’s own admission, he settles cases “in the low thousands or tens of thousands of dollars,”… a far cry from the $200 to $1,200 cost of obtaining a deposit copy…. Moreover, the sanction could serve to reduce the Movants’ overall expenses, given the substantial monetary sanctions that Mr. Liebowitz routinely incurs. Indeed, this is at least the third time that he and his clients have been made to pay approximately $100,000 due to his misconduct.… In any event, the costs are the price of the Movants’ misconduct and, for reasons already stated, they are necessary to deter and prevent future misconduct.
He also (in the same footnote) rejects the claim that having to get the deposit copy will create unnecessary delay, since you have three years to file a copyright infringement lawsuit, but does agree to modify the agreement just to clarify that point:
That said, to ensure that the Court’s sanction does not unintentionally harm a client through no fault of his or her own, the Court modifies the sanction (Sanction 6) to include the following proviso: In any case in which the Movants have a good-faith belief that waiting for deposit copies might cause their client’s claim to be barred by the statute of limitations, they may file, in lieu of the deposit copies, an affidavit (1) informing the court of such good-faith belief; (2) confirming that they have applied for, and are awaiting, deposit copies of the work(s) at issue; and (3) representing that they will promptly file such copies promptly upon their receipt.
Then there’s the public interest question regarding the sanctions. Liebowitz claims they’re not in the public interest. Take a wild, wild guess where the court came down on that. You may be a psychic, because I’m pretty sure you got this one right:
In the Court’s view, there is a strong public interest in shining a bright light on Mr. Liebowitz’s extraordinary record of misconduct and in ensuring that both courts and his clients, current and future, are aware of that history so that they can be vigilant in scrutinizing Mr. Liebowitz’s conduct….
Against that strong public interest, the Movants cite the “interest in the continuation of [their] law practice” because they have carved out “a successful law practice that provides a realistic prospect of recovery to copyright plaintiffs in relatively low-dollar infringement cases that otherwise could go unfiled.”… But the sanctions do not bar the Movants from “continu[ing their] law practice,” and Movants’ conclusory assertion that such cases would not be filed without them is unsubstantiated. (Moreover, to the extent that the Movants’ success is built on unsavory business practices or conduct unbecoming an officer of the court, it is, of course, not at all in the public interest for it to be perpetuated.) Nor do the Court’s sanctions deprive photographers of the opportunity to hire Mr. Leibowitz or his firm to bring suit. The sanctions merely ensure that such photographers do so with their eyes wide open, cognizant of the fact that they could be left holding the bag on a hefty attorney’s fee or sanctions award, see, e.g., Rock, 2020 WL 468904, at *2 (ordering Mr. Liebowitz’s client to pay the defendant’s attorney’s fees over $100,000), and of Mr. Liebowitz’s tendency to cut and run, perhaps sacrificing their interests in the process, when he feels that the heat is on him personally, see Usherson, 2020 WL 3483661, at *1. In short, insofar as the sanctions provide Mr. Liebowitz’s clients and courts with more information about his past, it is in the public interest for them to go into effect now, while the Grievance Committee ponders Mr. Liebowitz’s fate longer term.
In short: don’t try to play games with a federal judge.
Bringing it all around:
In sum, the Movants’ eleventh-hour request for a stay of the Court’s sanctions pending
appeal is denied and the Court’s sanctions remain in full force and effect….
Nor will the Court grant the Movants’ alternative request for an “administrative” stay
pending the Circuit’s decision on whether to grant a stay pending appeal…. Granting
an administrative stay would obviously ease the burden on the Circuit in the event that it is called
upon to decide if a longer stay is warranted. In the Court’s view, however, that virtue is
outweighed by the vice of rewarding an appellant for dilatory conduct. Deadlines matter. And
having given Mr. Liebowitz and his firm sufficient time to either comply or seek a stay, the
Court should not be forced to alter its deadline merely because they waited until the last minute
to do the latter. Instead, in the event of an appeal from this Order, the Court will leave it to Mr.
Liebowitz and his firm to explain to the Circuit why they put that court in the position of
deciding whether to grant a stay with only a few days remaining on the clock.
It’s pretty crazy that Liebowitz always seems to know when to cut and run when he’s put his own clients into an untenable position, but when his own ass is on the line, he has a history of digging deeper. I assume this one is not over yet.