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John H. Libaire, Jr v. Myron Kaplan

January 30, 2012


The opinion of the court was delivered by: Hurley, Senior District Judge


By: Ronald J. Rosenberg

The following Memorandum and Order adopts the portion of Magistrate Judge Boyle's June 17, 2011 Report and Recommendation which awards defendants $83,557.74 in fees and costs related the judgment debtors' frivolous February 25, 2010 appeal to the Second Circuit, and modifies the recommended allocation of liability, as set forth below.


On May 22, 2009, the Court adopted a prior Report and Recommendation of Judge Boyle which recommended final judgment against the judgment debtors*fn1 in the amount of $94,845.45. (Docket No. 51.) The Clerk of Court entered judgment accordingly, and the judgment debtors unsuccessfully appealed the matter to the Second Circuit. See Libaire v. Kaplan, 395 Fed. Appx. 732 (2d Cir. 2010). On February 1, 2011, the Circuit granted defendant-appellees' motion for attorney's fees and costs, determining that the appeal was frivolous. Libaire v. Kaplan, No. 09-2659-cv (2d Cir. Feb 1, 2011)(hereinafter "Remand Order"). The matter was remanded to this Court to determine the amount of the award and the "allocation of those amounts between Plaintiff-Appellant and his counsel." Id.

Thereafter, I referred the matter to Judge Boyle for an inquest on fees and costs. Now before the Court is Judge Boyle's June 17, 2011 Report and Recommendation ("Report") recommending that defendants be awarded a total of $83,557.74 with liability apportioned as follows: plaintiff, John H. Libaire, Jr. ("Libaire") is responsible for 10 percent; Mitchell Stein ("Stein"), counsel to plaintiff, is responsible for 45 percent; and Steven Altman ("Altman"), counsel to judgment debtors, is responsible for the remaining 45 percent.*fn2 (Report at 24, docket no. 130.)

Both sides have submitted timely objections. The appellate debtors argue primarily that "[n]o award or at least a nominal award should be made against plaintiff and his counsel, and certainly no award whatsoever should be made against appellate counsel Altman." (Objections to June 17, 2011 Report and Recommendation by Plaintiff and his Counsel ("ADs' Obj.") at 2, docket no. 133.) Defendants object only to the portion of the Report that recommends how the award should be apportioned, arguing that all three appellate debtors should be held jointly and severally liable for the entire amount. (Ds' Obj. at 6.)



Rule 72(b) provides that "a district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to." Fed. R. Civ. P. 72(b)(3); see also 28 U.S.C. § 636(b)(1)(B). The Court may "accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Fed. R. Civ. P. 72(b)(3). "The de novo review requires the district court neither to 'rehear the contested testimony' nor to 'conduct a new hearing on contested issues.'" Gutman v. Klein, No. 03 Civ. 1570 (BMC)(RML), 2010 U.S. Dist. LEXIS 124707, *4 (E.D.N.Y. Nov. 24, 2010) (quoting United States v. Raddatz, 447 U.S. 667, 674-75 (1980)). Moreover, even on de novo review, a district court will generally "refuse to consider arguments, case law and/or evidentiary material which could have been, but was not, presented to the magistrate judge in the first instance." Kennedy v. Adamo, No. 02-CV-01776-ENV-RML, 2006 U.S. Dist. LEXIS 93900, *2-*3 (E.D.N.Y. Sept. 1, 2006) (internal quotation marks, alterations, and citations omitted). The Court reviews Judge Boyle's Report de novo.


The appellate debtors' objections open by quoting Federal Rule of Appellate Procedure ("FRAP") 38 -- the rule under which the Second Circuit granted defendants "attorneys' fees and costs as sanctions against Plaintiff-Appellant and his counsel for filing a frivolous appeal." (See Remand Order at 1.) The appellate debtors' recitation of the rule emphasizes its permissive language, noting, for example, that "sanctions may include the granting of reasonable attorneys' fees," and that there is no "bright-line rule" or clear standard for the imposition of Rule 38 sanctions. (ADs' Obj. at 3(citing the rule and cases)(emphasis provided in objection papers)). From here, the appellate debtors then assail Judge Boyle for failing to make a finding in his Report that "the appeal was groundless, without foundation and without merit." (Id. at 6.) The appellate debtors further contend that Judge Boyle improperly "side stepped" this purportedly necessary finding, suggesting that the Second Circuit's sanctions order never actually specified that the "entire" appeal was frivolous. (Id. at 6, n.1.)

These arguments, however, fall well outside the limited scope of this Court's jurisdiction on remand to "calculate" fees and costs and "enter and order against appellants in the appropriate amounts." Although the permissive nature of FRAP 38's language gives the Second Circuit discretion whether to impose sanctions for frivolous appeals, it does not give this Court that same option, nor does it in any way permit this Court to ignore direct remand orders from the Circuit.

Judge Boyle was particularly thorough in addressing this very issue in his Report, citing to a number of authorities in support of his unquestionably correct decision to "not revisit the Second Circuit's frivolousness determination as plaintiff seeks to argue here." (Report at 5; see id. ("The 'law of the case' doctrine 'compels compliance on remand with the dictates of the superior court and forecloses relitigation of issues expressly ...

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