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Goodwin v. MTA Bus Company

United States District Court, E.D. New York

March 22, 2017

CARL GOODWIN, Plaintiff,


          JAMES ORENSTEIN U.S. Magistrate Judge

         Plaintiff Carl Goodwin ("Goodwin") has accused defendant MTA Bus Company (the "MTA") of unlawfully discriminating against him on the basis of his disability. See Docket Entry ("DE") 1 (Complaint). The MTA now asks the court to impose sanctions on Goodwin's former counsel, Frank & Associates, P.C. ("F&A"), for having filed a frivolous complaint, and to award it reasonable attorneys' fees for defending against Goodwin's claims. See DE 49; Fed.R.Civ.P. 11 ("Rule 11"); 28 U.S.C. § 1927 ("Section 1927"). Upon a referral from the Honorable Roslynn R. Mauskopf, United States District Judge, I now deny the defendant's motion.[1]

         I. Background

         Goodwin, then represented by F&A, filed his Complaint on August 12, 2014, accusing the MTA of failing to accommodate his disability and discriminating against him by maintaining an inflexible policy that did not provide for reasonable accommodation for probationary employees, and thereby violating his rights under federal, state, and municipal law. Complaint ¶ 1; see Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. (the "ADA"); New York State Human Rights Law, N.Y. Exec. Law §§ 296-97; New York City Human Rights Law, N.Y.C. Admin. Code § 8-107. Goodwin alleged that the MTA terminated his employment as a bus driver for being medically disqualified to operate a transit vehicle on the basis of taking anticoagulant medication for his deep vein thrombosis ("DVT") condition. Complaint ¶¶ 31-41. He further alleged that he had objected to his termination and requested reasonable accommodation for his disability - specifically a restricted, non-driving work assignment - but was told he was ineligible for such accommodation because he was not a full time employee. Id. ¶ 33.

         Before filing suit, Goodwin filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission ("EEOC"). Id. ¶ 5. On February 10, 2014, the EEOC determined that there was probable cause to believe that the MTA had discriminated against Goodwin because of his disability, that it had retaliated against him because of his participation in a legally protected activity, and that the challenged MTA policy was discriminatory. See Id. ¶ 6; DE 64 (EEOC Final Determination dated Feb. 10, 2014; originally submitted at a conference on Apr. 7, 2016). The EEOC then issued a right-to-sue letter on July 1, 2014, see DE 1 at 12-13; and Goodwin then timely filed this action on August 12, 2014.

         The parties exchanged discovery from January 6 through November 5, 2015. See DE 10 through DE 29. When, after several delays, discovery closed on the latter date, I afforded the MTA an opportunity to seek leave "promptly" to file a motion for summary judgment. DE 29. The MTA did so that same day, arguing that Goodwin was never able to establish a disability discrimination case under the ADA because he was neither disabled within the meaning of that law, nor was he "otherwise qualified" to perform the essential functions of his job as a bus operator because the state law forbids him from doing so. DE 30. The court held a pre-motion conference and set a briefing schedule for the motion on December 3, 2015. See DE 32.

         Pursuant to the court's schedule, the MTA served its motion papers on January 28, 2016. Goodwin's response was due on March 24, 2016. The day before that deadline, on March 23, 2016, F&A moved to withdraw from representing Goodwin. DE 35. The firm explained that upon receiving the MTA's motion, it "engaged in diligent research … and … concluded there [was] no valid defense to [it]." DE 35-1 ("Frank Decl.") ¶ 5. On that basis, F&A determined that filing a response to the summary judgment motion would violate Rule 11. Id.

         The MTA immediately responded by requesting sanctions and noting that F&A had already violated Rule 11's mandate to "conduct a reasonable inquiry into the causes of action" and refrain from filing frivolous pleadings. DE 36. F&A opposed the request for sanctions, arguing that it filed the Complaint based upon the EEOC's findings that there was reasonable cause to believe that MTA had discriminated against Goodwin because of his disability. DE 39. I held a conference on the motion to withdraw on April 7, 2016. Goodwin appeared and consented to the withdrawal, but his counsel from F&A did not appear; I nevertheless granted the motion to withdraw. DE 41.

         The MTA filed the instant fully briefed motion on June 13, 2016 See DE 49-1 (memorandum in support) ("Memo."); DE 50 (memorandum in opposition) ("Opp."); DE 51 (reply memorandum) ("Reply"). The court referred it to me by Order dated June 13, 2016.

         II. Discussion

         A. Rule 11

         By filing the Complaint, Goodwin's counsel necessarily made three certifications to the court to the best of his knowledge, information, and belief: that the pleading was "not being presented for any improper purpose[;]" that its claims were "warranted by existing law[;]" and that counsel had or expected he would likely secure evidentiary support for all of the Complaint's factual allegations. Fed.R.Civ.P. 11(b). Rule 11 places an "'affirmative duty on each attorney to conduct a reasonable inquiry into the viability of a pleading before it is signed.'" Gutierrez v. Fox, 141 F.3d 425, 427 (2d Cir. 1998) (quoting Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 253 (2d Cir. 1985)). "'The standard for triggering the award of fees under Rule 11 is objective unreasonableness, ' and is not based on subjective beliefs of the person making the statement." Storey v. Cello Holdings, L.L.C., 347 F.3d 370, 387 (2d Cir. 2003) (quoting Margo v. Weiss, 213 F.3d 55, 65 (2d Cir. 2000)). Sanctions are appropriate where "it should have been patently obvious to any attorney who had familiarized himself with the law" that his action was frivolous. Four Keys Leasing & Maint. Corp. v. Simithis, 849 F.2d 770, 773 (2d Cir. 1988); see also Pisciotta v. Dobrynina, 2009 WL 1913393, at *2 (E.D.N.Y. July 2, 2009) ("'Rule 11 explicitly and unambiguously imposes an affirmative duty on each attorney to conduct a reasonable inquiry into the viability of a pleading before it is signed.'" (quoting Four Keys Leasing, 849 F.2d at 774)).

         "Although the imposition of sanctions is within the province of the district court, 'any such decision [should be] made with restraint and discretion.'" Pannonia Farms, Inc. v. USA Cable, 426 F.3d 650, 652 (2d Cir. 2005) (quoting Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d 323, 334 (2d Cir. 1999)). Even where a court has determined that Rule 11(b) has been violated, "the decision whether to impose sanctions is not mandatory, but rather is a matter for the court's discretion." McLeod v. Verizon New York, Inc., 995 F.Supp.2d 134, 145 (E.D.N.Y. 2014). "'[W]hen divining the point at which an argument turns from merely losing to losing and sanctionable, … courts [must] resolve all doubts in favor of the signer' of the pleading." Dagostino v. Comput. Credit, Inc., 2017 WL 776086, at *10 (E.D.N.Y. Feb. 28, 2017) (quoting Rodick v. City of Schenectady, 1 F.3d 1341, 1350 (2d Cir. 1993)); see also MacDraw, Inc. v. CIT Grp. Equip. Fin., Inc., 73 F.3d 1253, 1259 (2d Cir. 1996) (noting that "Rule 11 sanctions must be imposed with caution").

         Further, under the "safe harbor" provision of Rule 11(c), a motion for sanctions must be served, but "must not be filed or be presented to the court if the challenged paper, claim, defense, contention or denial is withdrawn or appropriately corrected within 21 days of service or within another time the court sets." Fed.R.Civ.P. 11(c)(2). An informal warning in the form of a letter without service of a separate Rule 11 motion is not sufficient to trigger the start of the safe harbor period, but the advisory committee note to the rule explains that "[i]n most cases … counsel should be expected to give informal notice to the other party … of a potential violation before proceeding to prepare and serve a Rule 11 motion." Star Mark Mgmt., Inc. v Koon Chun Hing Kee Soy & Sauce Factory, Ltd., 682 F.3d 170, 175 (2d Cir. 2012) (quoting Fed.R.Civ.P. 11(b)-(c) advisory committee's note to 1993 Amendments). Notably, the advisory committee note goes on to state that "the motion should be served promptly after the inappropriate paper is filed, and, if delayed too long, may be viewed as untimely." Fed.R.Civ.P. 11(b)-(c) advisory committee's note to 1993 Amendments; see also In re Pennie & ...

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