United States District Court, S.D. New York
November 16, 2005.
ASSOCIATION OF HOLOCAUST VICTIMS FOR RESTITUTION OF ARTWORK AND MASTERPIECES, a/k/a "AHVRAM," ET AL., Plaintiff
BANK AUSTRIA CREDITANSTALT AG, ET AL. Defendants.
The opinion of the court was delivered by: SHIRLEY KRAM, Senior District Judge
OPINION & ORDER
In May 2004, the Association of Holocaust Victims for
Restitution of Artwork and Masterpieces ("AHVRAM") and several
individuals (collectively "Plaintiffs") filed a $6.8 billion
lawsuit against various corporations, governmental entities, and
financial institutions, including Bank Austria Creditanstalt AG
("Bank Austria"), alleging the theft, retention, and sale of
artwork looted during the Holocaust. On August 19, 2005, this
Court dismissed Plaintiffs' complaint ("August 19 Order"). Ass'n
of Holocaust Victims for Restitution of Artwork & Masterpieces v.
Bank Austria Creditanstalt AG, No. 04 Civ. 3600, 2005 U.S. Dist.
LEXIS 17411, at *7 (S.D.N.Y. Aug. 19, 2005). In addition, the
Court granted Bank Austria's request for sanctions against Plaintiffs' counsel, Edward D. Fagan, ordered Mr. Fagan to pay
Bank Austria's fees and costs, and fined him $5,000. Id.
Plaintiffs now move for reconsideration of the August 19 Order,
leave to amend their complaint, and a stay of the Court's
judgment.*fn1 For the reasons set forth below, the Court
denies or dismisses all motions. In addition, the Court
establishes the amount of fees and costs due to Bank Austria, and
orders Mr. Fagan to pay his fine to the Court immediately.
I. Plaintiffs' Moving Papers
On September 16, 2005, Plaintiffs filed a "Notice of Motion
Pursuant to FRCP Rule 60," requesting reconsideration of the
August 19 Order, leave to amend their complaint, and a stay of
the Court's judgment ("Notice of Motion for Reconsideration").
(Pls.' Notice of Mot. Pursuant to FRCP Rule 60, Sept. 16, 2005.)
Additionally, Plaintiffs submitted an affidavit signed by Edward
D. Fagan ("Fagan Affidavit"). (Fagan Aff. September 16, 2005.)
However, Plaintiffs failed to submit a memorandum of law in
support of their motion. The Court recognized the omission and,
on September 28, 2005, granted Plaintiffs until October 7, 2005
to supplement the motion. As of this Opinion, Plaintiffs have
neither submitted supplemental materials nor requested a further extension. Consequently, the Court decides Plaintiffs' motion on
the basis of the papers currently before it.
A. Plaintiffs' Motion for Reconsideration is Denied*fn2
Plaintiffs move for reconsideration of the August 19 Order
"based upon newly discovered evidence and for other equitable
reasons" pursuant to Federal Rule of Civil Procedure 60. (Pls.'
Notice of Mot. Pursuant to FRCP Rule 60, at 2.) Although
Plaintiffs do not specify the subsections of Rule 60 that they
believe are applicable, their moving papers only appear relevant
to part (b), subsections (2) and (6).
Under Rule 60(b) (2), a party may move the court to reconsider
an order when the party presents "newly discovered evidence which
by due diligence could not have been discovered" prior to the
order. Fed.R.Civ.P. 60 (b) (2). "In order to succeed on a
motion pursuant to Rule 60 (b) (2), the movant must present
evidence that is `truly newly discovered or . . . could not have
been found by due diligence.'" See United States v. Potamkin
Cadillac Corp., 697 F.2d 491, 493 (2d Cir. 1983) (quoting
Westerly Elecs. Corp. v. Walter Kiddie & Co., 367 F.2d 269, 270
(2d Cir. 1966)), cert denied, 462 U.S. 1144 (1983). New evidence offered in support of the motion must be "highly
convincing." Kotlicky v. United States Fid. & Guar. Co.,
817 F.2d 6, 9 (2d Cir. 1987) (citation omitted).
In support of their motion, Plaintiffs rely on the Fagan
Affidavit, which is largely a personal narrative recounting the
formation of AHVRAM, clarifying the organization's goals, and
restating the merits of the complaint. (Fagan Aff. ¶¶ 3-23,
29-39, 76-82.) These portions of the affidavit present no newly
discovered evidence, and are more naturally read as a long
overdue response to Bank Austria's motion for sanctions, which
challenged the existence of AHVRAM and the validity of the
complaint. (Mot. to Impose Sanctions, Mar. 7, 2005.) Because this
"evidence" is in no sense newly discovered, it clearly does not
comprise proper grounds for reconsideration.
The Fagan Affidavit also alleges that evidence relating to the
substance of their complaint has been discovered "since late
2003/2004" (Fagan Aff. ¶ 40) and "in the last few weeks, months,
and years" (Fagan Aff. ¶ 69). However, the Affidavit fails to
distinguish evidence that was "truly newly discovered" after the
Court's August 19 Order from evidence that Plaintiffs discovered
in the "months" and "years" before that Order. Even assuming that
the Fagan Affidavit alleges any evidence not in Plaintiffs'
possession prior to the Court's Order, the Fagan Affidavit fails
to explain why any of the allegedly new evidence "could not have been found by due diligence" other than to suggest, without
documentation, the existence of "a conspiracy at the highest
levels of government." (Fagan Aff. ¶¶ 50, 71-75.) Plaintiffs'
vague explanations for why evidence was not offered earlier are
unconvincing and unsubstantiated, leading this Court to "reject
the explanations and to consider the `evidence' not newly
discovered." Potamkin Cadillac Corp., 697 F.2d at 493.
Moreover, the Fagan Affidavit's "unsubstantiated conclusory
allegations" of new evidence are not "highly convincing," and
warrant no change from the Court's prior ruling.*fn3 Long
v. Carberry, 151 F.R.D. 240, 244 (S.D.N.Y. 1993). Plaintiffs'
new evidence fails to cure the complaint's "`fundamentally
preliminary' defect[:] lack of subject matter jurisdiction."
Fidenas AG v. Compagnie Internationale Pour L'Informatique CII
Honeywell Bull S.A., 606 F.2d 5, 6 (2d Cir. 1979). To warrant
reconsideration of their complaint, Plaintiffs must present new
evidence providing some indication of the action's jurisdictional
basis. Not a single paragraph of the Fagan Affidavit bears upon the complaint's jurisdictional deficiency.
In short, even if newly discovered, "the evidence presented in
the [Fagan Affidavit] itself would not justify overturning the
prior decision." In re Joint E. & S. Dist. Asbestos Litig.,
774 F. Supp. 116, 120 (S.D.N.Y. 1991).
Under Rule 60 (b) (6), a court also has discretion to grant
reconsideration of an order for "any other reason justifying
relief." Fed.R.Civ.P. 60 (b) (6). Relief under Rule 60 (b) (6)
"is properly invoked where there are extraordinary circumstances,
or where the judgment may work an extreme and undue hardship."
Matarese v. LeFevre, 801 F.2d 98, 106 (2d Cir. 1986) (citations
omitted), cert. denied, 480 U.S. 908 (1987). Plaintiffs'
submissions provide no support for reconsideration under either
of these exceptional grounds. Accordingly, reconsideration under
this subsection is inappropriate.
In light of Plaintiffs' failure to present "highly convincing,"
newly discovered evidence within the meaning of Rule 60 (b) (2),
and because the Court finds no other reasons justifying
reconsideration of its previous Order, Plaintiffs' motion for
reconsideration is denied.
B. Plaintiffs' Request for Permission to File a Second Amended
Complaint Is Dismissed for Lack of Jurisdiction
Plaintiffs also request permission to file a second amended
complaint pursuant to Federal Rule of Civil Procedure 15. (Pls.' Notice of Mot. Pursuant to FRCP Rule 60, at 2.) Due to
Plaintiffs' recently filed notice of appeal,*fn4 the Court
is currently without jurisdiction to permit an amendment. See
Hernandez v. Coughlin, 18 F.3d 133, 138 (2d Cir. 1994); Denny
v. Barber, 576 F.2d 465, 468 (2d Cir. 1978). Consequently,
Plaintiffs' request is dismissed.
C. Plaintiffs' Request for a Stay is Denied
Finally, Plaintiffs request a stay of the judgment pending
their appeal to the Second Circuit.*fn5 Pursuant to Federal
Rule of Civil Procedure 62 (d), upon posting a supersedeas bond, a moving
party may obtain a stay of judgment pending appeal. See Murphy
v. Arlington Cent. Sch. Dist. Bd. of Educ., No. 99 Civ. 9294,
2003 WL 22048775, at *1 (S.D.N.Y. Sept. 2, 2003). The Court's
August 29, 2005 Judgment requires Plaintiffs' counsel, Mr. Fagan,
to pay a $5,000 fine and Bank Austria's reasonable attorney's
fees and costs. At this time, Mr. Fagan has neither posted, nor
expressed a willingness to post, a supersedeas bond.
The Court may, in its discretion, grant a stay without
requiring a supersedeas bond. Marcoux v. Farm Serv. & Supplies,
Inc., 290 F. Supp. 2d 457, 485 (S.D.N.Y. 2003). In evaluating
the applicability of this narrow exception, a court considers (1)
whether movants are likely to prevail on the merits of their
appeal; (2) whether, without a stay, movants will be irreparably
injured; (3) whether issuance of a stay will substantially harm
other parties interested in the proceedings; and (4) where the
public interest lies. De la Fuente v. DCI Telecomms., Inc.,
269 F. Supp. 2d 237, 240 (S.D.N.Y. 2003) (citing Hilton v.
Braunskill, 481 U.S. 770, 776 (1987)). "The party seeking the
stay without a bond has the burden of providing specific reasons
why the court should depart from the standard requirement of
granting a stay only after posting of a supersedeas bond in the
full amount of the judgment." Id. To evaluate whether Plaintiffs' submission supports a waiver of
the bond requirement, the Court looks to the Fagan Affidavit.
Regarding the first Hilton factor, the Fagan Affidavit does not
address the grounds for dismissal and simply denies that Mr.
Fagan's actions warranted sanctions. (Fagan Aff. ¶¶ 79-82).
Unsupported denials of liability and a complete failure to
contest or attempt to cure the complaint's deficiencies are
insufficient to show Plaintiffs' likelihood of success on appeal.
Furthermore, nothing in the Fagan Affidavit can be construed to
have any bearing on the final three Hilton factors, all of
which Plaintiffs have the burden to establish.
In conclusion, because Plaintiffs have failed to post bond to
obtain a stay of the judgment and provide insufficient support
for the Court to discretionarily waive the bond requirement, the
request for a stay of the judgment is denied.*fn6
II. Mr. Fagan's Liability for Bank Austria's Fees and Costs
On August 19, 2005, the Court sanctioned Mr. Fagan, citing his
attempted circumvention of an earlier Bank Austria settlement,
his conduct during the course of litigation, and his apparently
champertous stake in the action. The Court ordered Mr. Fagan to
pay Bank Austria's reasonable litigation fees and costs in connection with this action. Ass'n of Holocaust Victims
for Restitution of Artwork & Masterpieces, 2005 U.S. Dist.
LEXIS 17411, at *12-18 (S.D.N.Y. Aug. 19, 2005). In compliance with
the Court's Order, Bank Austria submitted a complete list of the attorney's
fees recorded and the costs incurred during its defense of the lawsuit.
(Moerdler Decl. Ex. A Sept. 8, 2005.) Although Mr. Fagan did not oppose
Bank Austria's fee application, the Court feels duty-bound to ensure that
the amount of attorney's fees sought is reseasonable. Cf. In re Texaco,
Inc. S'houlder Litig., 20 F. Supp. 2d 577, 589 (S.D.N.Y. 1998) (opining
that courts "are obliged to carefully scrutinize applications for counsel
fees"), rev'd on other grounds sub nom. Kaplan v. Rand,
192 F. 3d 60 (2d Cir. 1999).
A. Calculating Reasonable Attorney's Fees and Costs
When assessing attorney's fees as a sanction under Rule 11, district courts
in this Circuit often use the "lodestar" method to evaluate the reasonableness
of fees. See, e.g., Kirschner v. Zoning Bd. of Appeals of Valley Stream,
159 F.R.D. 391, 395 (E.D.N.Y. 1995). "That method initially estimates the
amount of the fee award by multiplying the number of hours reasonably
expended on the litigation by a reasonable hourly rate." Id. at 396
(citing Pennsylvania v. Delaware Valley Citizens' Council for Clean Air,
479 U.S. 546, 563 (1986)). In establishing a reasonable hourly rate, "district courts
generally must apply prevailing market rates for comparable
attorneys of comparable skill and standing in the pertinent legal
community." Savoie v. Merchants Bank, 166 F.3d 456, 463 (2d
Cir. 1999). "It is well-established that the prevailing community
the district court should consider to determine the lodestar
figure is the district in which the court sits." Luciano v.
Olsten Corp., 109 F.3d 111, 115 (2d Cir. 1997).
Bank Austria is represented by Stroock & Stroock & Lavan
("Stroock"), a national law firm headquartered in New York City.
Stroock commonly represents clients in high-stakes corporate
litigation, and the current case is no exception. After
representing Bank Austria in its settlement of Holocaust claims
over the past several years, negotiations in which Mr. Fagan was
intimately involved, Stroock was again called on to defend Bank
Austria against the instant complaint and its $6.8 billion prayer
for relief. (Am. Compl. ¶¶ 279-89.) Stroock staffed the massive
lawsuit with eight different lawyers, ranging from first- and
second-year associates to partners and counsel with nearly fifty
years of complex litigation experience. (Moerdler Decl. ¶ 7.)
Though Bank Austria provides the exact billing rates for each of
the attorneys involved in the case,*fn7 it limits its request to $350 per hour for partners staffed on the case and
$300 per hour for associates.
While $350 per hour for partners engaged in high-stakes
corporate litigation is certainly a reasonable rate, and $300 per
hour for mid- to senior-level associates is within reason, see,
e.g., Berlinsky v. Alcatel Alsthom Compagnie Generale
D'Electricite, 970 F. Supp. 348, 351 (S.D.N.Y. 1997) (awarding
$365 per hour to senior associates and up to $495 per hour for
seasoned partners); Auscape Int'l v. Nat'l Geographic Soc., No.
02 Civ. 6441, 2003 WL 21976400, at *5 (S.D.N.Y. Aug. 19, 2003)
(awarding $215-$495 per hour for associates and partners at a
large national law firm), the Court will reduce the hourly rate
for hours expended by the two junior associates staffed on the
case. For first- and second-year associates, the Court reduces
the hourly rate to $225 per hour.*fn8
The Court continues its analysis by reviewing the number of
hours expended on the litigation. Bank Austria indicates that the
eight attorneys assigned to the case expended a total of 1,309.1 hours. (Moerdler Decl. ¶ 8.) This time was spent drafting
several revisions of the motion to dismiss, drafting a motion to
quash, and preparing the Rule 11 motion. According to Bank
Austria, the fees, billed at customary hourly rates, reached
$626,145.00. (Moerdler Decl. ¶ 9.) Under the $350/$300 rate
structure detailed in the fee application, Bank Austria would be
entitled to $414,895.00 in fees. (Moerdler Decl. ¶ 8.) After
reducing the junior associates' hourly rate to $225 per hour, the
lodestar amount comes to $404,838.00.
Stroock's records begin on April 1, 2004, the day of Mr.
Fagan's Austrian news conference, and end on May 12, 2005, nearly
two months after Bank Austria filed its motion for sanctions
against Mr. Fagan. While it may be reasonable, and perhaps even
wise, to begin preparing for an imminent filing and to monitor
the case after formal court submissions have concluded, it is not
clear that this time is compensable under Rule 11. The Court
would have no power to sanction Mr. Fagan if he had never filed
the complaint, Fed.R.Civ.P. 11(b) (limiting sanctionable
conduct to representations to the court), and thus it declines to
make Mr. Fagan liable for any hours prior to Plaintiffs' filing
of the complaint or after Bank Austria filed its motion for
sanctions. The removal of the 40.5 hours expended on or before
May 11, 2004, and the 0.7 hours spent after March 7, 2005 reduces the total number of hours to
1,267.9 and the lodestar figure to $390,898.00.
Additionally, while Stroock's fee application does an exemplary
job of breaking its hours down by attorney and day, there are a
number of time entries that utilize "block billing."*fn9
While not prohibited, block billing has a tendency to obfuscate
the amount of time expended on distinct tasks and introduces an
element of vagueness into a fee application, making it difficult
to determine if the reported hours are "duplicative or
unnecessary." Sea Spray Holdings, Ltd. v. Pali Financial Group,
Inc., 277 F. Supp. 2d 323, 325-26 (S.D.N.Y. 2003). Vagueness
also plagues a number of time entries that are simply described
as "[a]ttention to" a certain task or "research on various
issues." See Vishipco Line v. Charles Schwab & Co., No. 02
Civ. 7823, 2003 WL 1936142, at *2 (S.D.N.Y. Apr. 23, 2003); In
re Spectre Group, Inc., 185 B.R. 146, 161 (Bankr. S.D.N.Y.
1995). While the Court recognizes that these time entries may well
document legitimate work, there is inadequate detail to transfer
all of these fees to Mr. Fagan.
In part because of these instances of block billing and
vagueness, the Court is unable to accurately break the fee
application into the individual tasks of which it is comprised.
In the Court's estimate, Bank Austria spent 623.8 hours drafting
the initial version of its motion to dismiss, 189.1 hours
revising its motion to dismiss after Plaintiffs filed the amended
complaint, 334.63 hours on its motion for Rule 11 sanctions,
62.98 hours on its motion to quash, and 57.38 hours in reply to
Plaintiffs' opposition to the motion to dismiss.*fn10 Based
on these tentative figures, the Court is concerned that the
number of hours billed may exceed what was reasonably required
for the tasks at hand. See Clarke v. Frank, 960 F.2d 1146,
1153 (2d Cir. 1992).
First, the Court is concerned that the 812.9 hours spent on
multiple drafts of the motion to dismiss were excessive. The
complaint was ultimately dismissed on jurisdictional grounds, and the motion to dismiss focused primarily on the finality of
the earlier settlement, jurisdictional arguments, and a lengthy
recounting of Mr. Fagan's related lawsuits. While time-consuming
evaluation of the earlier settlement and the issues raised by the
instant complaint was necessary, comprehensive briefing of
complex legal issues was minimal. Additionally, the 300-plus
hours spent on the motion for sanctions seems an unwieldy
percentage of the total number of hours spent throughout the
course of litigation. Essentially, for every three hours spent
defending Plaintiffs' action, Bank Austria spent another hour
putting together its motion for sanctions. Mr. Fagan's conduct
was flagrant, repetitive, and blatant. Bank Austria's motion for
sanctions was meticulous and helpful, but the Court hesitates to
find that the 334.63 hours spent on the motion were reasonable.
On the other hand, Bank Austria was confronted by the type of
lawsuit that is often described as "bet the firm" litigation.
Plaintiffs demanded $6.8 billion and were represented by a lawyer
that played a substantial role in a multi-million dollar
settlement with Bank Austria just years earlier. Putting up an
aggressive, and ultimately successful, fight was a reasonable
course of action. Cf. Landscape Props., Inc. v. Whisenhunt,
127 F.3d 678, 685 (8th Cir. 1997) (upholding an arguably
excessive award to attorneys that defended against frivolous
claims, because "the attorneys could not know how the district
court would view the case or their contentions, and they therefore
reasonably determined that a careful and through preparation was
necessary"). Indeed, the Court would expect Bank Austria to
zealously protect the earlier settlement. Moreover, the defense
efforts required by Bank Austria were multiplied by Mr. Fagan's
conduct throughout the litigation and the broad, imprecise scope
of the complaint.*fn11 The Court also notes that Bank
Austria has not sought reimbursement for "time billed by the
summer associates, paralegals and librarian-research assistants
who worked on the case" (Moerdler Decl. ¶ 5) and has reduced the
billing rates of its attorneys. (Moerdler Decl. ¶ 3.) Even still,
some reduction for excess is appropriate.
In order to account for these instances of block billing,
vagueness, and excess, the Court will reduce the lodestar figure.
It is common practice in this Circuit to reduce a fee award by an
across-the-board percentage where a precise hour-for-hour
reduction would be unwieldy or potentially inaccurate. See,
e.g., United States Football League v. Nat'l Football League,
887 F.2d 408, 415 (2d Cir. 1989) (affirming the reduction of
billed hours by 10% for vagueness in time entries); Sea Spray Holdings, Ltd., 277 F. Supp. 2d at 326 (S.D.N.Y.
2003) (reducing the lodestar figure by 15% to account for block
billing and excessive time entries); Libra Bank Ltd. v. Banco
Nacional de Costa Rica, 570 F. Supp. 870, 896 (S.D.N.Y. 1983)
(reducing the lodestar figure by 20% to account for
over-staffing). To better reflect the hours reasonably expended
on this matter, the Court reduces the lodestar figure calculated
above, $390,898.00, by 25%. Consequently, $293,173.50 is the
proper lodestar figure for Bank Austria's reasonable attorney's
Bank Austria also requests $52,347.14 in costs. The bank
provides a detailed allocation of these costs (Moerdler Decl. Ex.
E), and, after a thorough review, the Court finds them
reasonable. This amount is added to the $293,173.50 adjudged in
attorneys fees, adding up to a total of $345,520.64 for Bank
Austria's reasonable litigation fees and costs.
B. Attorney's Fees and Costs as a Rule 11 Sanction
Even after calculating reasonable attorney's fees and costs,
the Court must review its measure of sanctions in light of the
purposes of Rule 11. The primary purpose of Rule 11 sanctions is
deterrence, Caisse Nationale de Credit Agricole-CNCA v. Valcorp,
Inc., 28 F.3d 259, 266 (2d Cir. 1994), thus the amount of
attorney's fees awarded as a sanction is squarely within the
district court's discretion. While the district court may use the lodestar method to calculate the appropriate sanction
amount, it is also within the court's discretion to veer from
this calculation and award a lesser amount that appropriately
fulfills the deterrent function of Rule 11. Eastway Constr.
Corp. v. City of New York, 821 F.2d 121, 122 (2d Cir. 1987),
cert denied, 484 U.S. 918 (1987).
In the instant case, Mr. Fagan acts as a named plaintiff, a
director of plaintiff organization AHVRAM, and Plaintiffs' lead
counsel. Just five years before bringing this suit, Mr. Fagan
played an important role in a settlement with Bank Austria that
released the company from all claims for "Looted and/or Aryanized
Assets." (Settlement Agreement § 1(B), Mar. 15, 1999.) The terms
of that settlement were clearly stated. In addition, throughout
this litigation Bank Austria warned Mr. Fagan that it would seek
sanctions if Mr. Fagan refused to withdraw the lawsuit. Mr.
Fagan's willingness to file a lawsuit in direct contradiction to
the settlement he helped to produce, and in the face of Bank
Austria's persistent warnings of a pending Rule 11 motion,
convinces the court that to adequately deter Mr. Fagan from
bringing baseless suits in the future, he must be held liable for
the measure of reasonable fees and costs calculated above. A
similar case in the Fifth Circuit informs this Court's decision:
"By forcing [Mr. Fagan] to internalize the cost to [Bank Austria]
of responding, the award of attorneys' fees approximates optimal deterrence. It will dissuade [Mr. Fagan] and
other lawyers in the future from pursuing exhausted claims
without seeming overly punitive or giving [Bank Austria] a
windfall." Merriman v. Sec. Ins. Co. of Hartford,
100 F.3d 1187, 1194-95 (5th Cir. 1996); see also Brandt v. Schal
Assocs., Inc., 960 F.2d 640, 647 (7th Cir. 1992) ("A reasonably
accurate measure of the harm [the plaintiff] has done is what he
has cost his opponent. This is not an unreasonable method to
deter spurious suits and wasteful trial tactics.").
While the measure of fees ordered by this Opinion is a heavy
sanction, Mr. Fagan's behavior during the fee application process
has reinforced this Court's conclusion that a heavy sanction is
needed to appropriately deter Mr. Fagan from similar behavior in
the future. The Court has given Mr. Fagan every opportunity to
oppose Bank Austria's fee application. Despite the Court's
repeated attempts to contact Mr. Fagan, and its October 26, 2005
order granting Mr. Fagan until November 1, 2005 to submit its
opposition to Bank Austria's September 8, 2005 application, the
Court received no correspondence from Mr. Fagan until October 31,
2005. Early that morning, in violation of the Judge's Rules for
Attorneys 1 and 4, Mr. Fagan left a message on the chambers'
voicemail informing the Court that he would submit an opposition
in two weeks. As of this Opinion, the Court has received neither
an opposition nor a formal request for extension. This blatant disregard of procedural rules and
careless abdication of his duties as a lawyer is characteristic
of Mr. Fagan's conduct throughout this litigation. It is apparent
to this Court that a heavy sanction is needed to deter Mr. Fagan
from the conduct described in the August 19 Order.
As a final matter of the sanctions determination, courts must
take into account the financial circumstances of the sanctioned
party. Sassower v. Field, 973 F.2d 75, 81 (2d Cir. 1992).
Nothing in the record indicates that Mr. Fagan is incapable of
sustaining a judgment for attorney's fees. As noted above, Mr.
Fagan has failed to submit any papers objecting to Bank Austria's
fee application. Consequently, Mr. Fagan has not put the Court on
notice of an inability to pay sanctions. Moreover, the Court
notes that Mr. Fagan received a substantial attorney's fee award
in a recent multi-million dollar settlement approved by this
Court, In re Austrian & German Bank Holocaust Litig., No. 98
Civ. 3938, 2003 WL 402795 (S.D.N.Y. Feb. 21, 2003), and is
reported to have received millions of dollars for his work in
related lawsuits. See Daniel Wise, Handling of Holocaust Suit
Leads to Attorney's Sanction, N.Y.L.J., Aug. 23, 2005, at 1. In
sum, there is no evidence indicating Mr. Fagan's inability to pay
Bank Austria's fees and costs.
Consequently, Mr. Fagan is ordered to pay $345,520.64 for Bank
Austria's reasonable litigation fees and costs. This amount is due in full, absent Mr. Fagan's posting of a supersedeas bond
and attendant request for a stay of the judgment.
III. Mr. Fagan's Fine
Now that Plaintiffs' motions for reconsideration and a stay of
judgment have been denied, Mr. Fagan is ordered to pay the $5,000
fine set by the August 19 Order without delay. If he fails to pay
the $5,000 fine or post a supersedeas bond by December 2, 2005,
Mr. Fagan should be prepared to show cause as to why he should
not be held in contempt for failure to abide by the Court's
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