If you heard a collective gasp last Friday, it could have been caused by the latest news about prolific copyright infringement filer Richard Liebowitz. SDNY Judge Jesse M. Furman added to the growing list of sanctions awards against Liebowitz when he imposed sanctions against Liebowitz and the firm in the amount of $103,517.49, and also imposed a series of somewhat extraordinary non-monetary sanctions, including requiring Liebowitz to serve a copy of the Court's Opinion and Order on all of his clients and to file a copy of the order in all of his currently pending cases and in any new case commenced in the next year. Judge Furman's June 26, 2020 Opinion and Order (the "Order") in Usherson v. Bandshell Artist Management can be found here.

My immediate reaction to this news was both to say: "Did you see what happened to Liebowitz?" and also to ask, "Can the court do that?" So, I asked my colleague Tyler Maulsby, who is in our firm's Legal Ethics and Professional Responsibility Group and chairs the New York City Bar Association's Committee on Professional Ethics, to address the latter question.

The Order

Before turning things over to Tyler, let's take a brief look at what happened here. Judge Furman's 54-page decision is worth reading, because it describes a litany of lies and misrepresentations to the Court, many of which were under oath. Liebowitz's problems started when he disregarded orders concerning an upcoming mediation, and were aggravated when neither he nor his client showed up at the mediation (instead he sent two "associates," including his sister, Rebecca Liebowitz, who apparently is newly admitted to the bar). Then, after the defendant's motion for sanctions led to an evidentiary hearing, Liebowitz lied under oath about whether the mediator gave him and his client permission to appear at the mediation telephonically. To put a final nail in the Liebowitz coffin, it turned out that the copyright in the photograph that was the subject of the complaint had not been registered prior to the commencement of the case, a fatal deficiency.

This was, of course, not an isolated incident for Liebowitz, who has been criticized and sanctioned in many of the 2000+ copyright cases he has filed in the SDNY and elsewhere in the few years since he graduated from law school and was admitted to the bar. Indeed, Judge Furman attached to his Order an Appendix listing 36 such instances (see the link above).

In the interest of brevity, here is a quote from Judge Furman's Order, in which he refers to a recent incident where Liebowitz was found to have lied to another SDNY judge about the date of the death of his own grandfather in an attempt to justify a missed court date, and summarizes Liebowitz's conduct in this case:

"One might think that a lawyer with this record would tread carefully, particularly before a judge who had recently sanctioned him. See Rice v. NBCUniversal Media, LLC, No. 19-CV-447 (JMF), 2019 WL 3000808, at *4 (S.D.N.Y. July 10, 2019). But - as this case makes clear - not Mr. Liebowitz. In November of last year, Mr. Liebowitz appeared, in the company of a criminal defense lawyer, before another judge on this Court after being held in contempt for repeatedly lying, including under oath, about the date his own grandfather had died to justify his failure to attend a court conference. See Berger v. Imagina Consulting, Inc., No. 18-CV-8956 (CS), ECF No. 62 (S.D.N.Y. Nov. 13, 2019) ("Berger Tr."). The very next day, he appeared before the undersigned and - despite an explicit warning to be "very, very, very careful about the representations" he made in court - lied about his compliance with a court Order that had required an in-person mediation. See ECF No. 50 ("Initial Conf. Tr."), at 7. Making matters worse, Mr. Liebowitz then repeated that lie, over and over, and ultimately under oath during an evidentiary hearing. On top of that, he violated at least six court Orders. And to cap it off, defense counsel discovered only after incurring the expenses of litigating the case that the Complaint Mr. Liebowitz prepared and filed contained a false allegation - namely, that the photograph at issue in this case had previously been registered with the Copyright Office - that would have required dismissal of the lawsuit at its inception."

The bottom line is that, in addition to the monetary sanction of $103,517.49 (calculated by awarding $83,517,49 as reflecting the attorneys' fees incurred by defendants in defending the case plus $20,000 for falsely alleging that the photograph had been registered), Judge Furman imposed a series of sanctions on Liebowitz designed to deter future misconduct. Specifically, the Court ordered Liebowitz and his firm to:

Serve a copy of the Order on every one of the firm's current clients within 30 days and to file proof of such service;

Serve a copy of the Order on the docket of every currently pending case brought by Liebowitz and/or his firm and to file proof of such service;

File a copy of the Order on the docket within two days of commencement of the action in every case Liebowitz and/or his firm files in the next year; and

Include a copy of the deposit record of the relevant photograph filed with the Copyright Office with the complaint in every action filed by Liebowitz and/or his firm in the next year.

In addition, the Court stated that it is sending a copy of its Order to the Chair of the Court's Grievance Committee to take whatever action that committee deemed appropriate.

This all leads to a few questions: Does the Court have the power to do this? Are the non-monetary sanctions appropriate? Does the Court's order extend to cases filed outside of the SDNY? Can Liebowitz appeal? Does Liebowitz face serious consequences from the referral to the Court's Grievance Committee? For some answers, I turn things over to Tyler.

A Brief Overview of Sanctions in Federal Court

In order to answer these questions, it is helpful to understand the law of sanctions in federal court, which can be complicated. The Order identified three different forms of sanctions that the Court believed applied to Liebowitz's conduct.

First, the Court concluded that Liebowitz's failure to obey its scheduling orders or attend the mediation violated Rule 16(f) of the Federal Rules of Civil Procedure, which permits a court to impose sanctions for a lawyer's failure to obey a scheduling or pretrial order. To find a violation of Rule 16(f) a court must find by clear and convincing evidence that a lawyer disregarded an unambiguous pretrial or scheduling order.

Second, the Court sanctioned Liebowitz under its "inherent authority" to sanction parties (including lawyers) for abuse of the litigation process. This type of sanction is not based on any rule or statute, but is instead based on the courts' inherent powers "to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." Goodyear Tire & Rubber Co. v. Haeger, 137 S.Ct. 1178, 1186 (2017) (quotations omitted). To sanction a lawyer under the court's inherent powers, the court must find that the lawyer acted in bad faith.

Third, the Court sanctioned Liebowitz under 28 U.S.C. § 1927, which permits an award of attorneys' fees where a lawyer "multiplies the proceedings in any case unreasonably and vexatiously." Similar to sanctions under a court's inherent powers, Section 1927 also requires a finding that the lawyer acted in bad faith.

Applying these standards, Judge Furman found that:

Sanctions are appropriate for (1) Mr. Liebowitz's repeated violations of the Court's Orders; (2) Mr. Liebowitz's repeated lies to the Court, including under oath, about whether the Mediator granted Mr. Liebowitz and his client permission to participate in the mediation by telephone; and (3) the false allegation in the Complaint regarding registration of the Photograph and the failure to reasonably investigate the issue, both prior to filing suit and when put on notice about the issue during the litigation.

Are the Sanctions Against Liebowitz Permissible?

As outlined above, once the Court concluded that it could sanction Liebowitz, it did not hold back. But did it go too far?

As a general rule, any sanction must be proportional to the misconduct at issue, taking into account factors including whether the misconduct was the product of intentional bad faith, whether the misconduct was part of a larger pattern of misbehavior and whether it is likely to happen in the future. Also, as the Order noted, "Sanctions should be no more severe than reasonably necessary to deter repetition." Taking all of that into account, Judge Furman imposed a myriad of monetary and non-monetary sanctions.

From a professional responsibility perspective, the non-monetary sanctions in the Order raise several interesting questions. First, were the sanctions really proportional to Liebowitz's misconduct? On one hand, requiring Liebowitz to serve all of the firm's current clients with a copy of the Order and requiring him to include a deposit copy of the copyrighted work with any new complaint he files goes well beyond the individual case in which the misconduct occurred. On the other hand, the Court made clear that it believed these sanctions were appropriate to deter future conduct, especially in light of prior sanctions orders against Liebowitz. On that point, the Court reasoned: "there may be no sanction short of disbarment that would stop Mr. Liebowitz from further misconduct. But because disbarment is an issue for the Grievance Committee, this Court is left with the task of crafting a sanction that could conceivably deter Mr. Liebowitz from repeating his misconduct again."

Second, do the non-monetary sanctions exceed the Court's jurisdiction? In other words, can the Court really require Liebowitz to file a copy of the Order in all of his cases and to file a deposit copy of the copyrighted work at issue in all new copyright complaints, regardless of where he brings the case? As a general rule, courts have broad discretion in regulating attorney conduct and courts have held that sanctions may extend beyond the case in which the conduct occurred. Similarly, courts have required that, as part of a sanction, a lawyer include a copy of the sanctions order with any future pro hac vice application in order to put other courts on notice of the lawyer's past misconduct. Although extreme, the requirement that Liebowitz take certain actions in future cases (e.g. filing a deposit copy with new complaints) may be within the court's purview.

Third, can the court require Liebowitz to serve a copy of the Order on all of the firm's current clients? Most likely. It is not uncommon for a court to require a lawyer to serve a copy of a sanctions order on his or her client in order to ensure that the client understands the severity of the lawyer's misconduct. Although one could argue that this part of the Order impermissibly intrudes on Liebowitz's attorney-client relationship with other clients who had nothing to do with this matter, it is important to remember that the Court sanctioned both Liebowitz and his law firm. As a result, and given the fact that Liebowitz's firm is quite small and its practice highly focused on copyright infringement claims by photograpers like the one in the Usherson case, there is arguably a reasonable relationship between this sanction and the court's desire to deter future misconduct and warn other clients of the firm.

What's Next?

Given the severity of the sanctions against Liebowitz, it seems likely that he will appeal. Appellate courts review district court sanctions for abuse of discretion. Moreover, the 54-page Order included detailed findings of fact and conclusions of law, meaning that Liebowitz will have a high hurdle to overcome if he wants to obtain reversal.

In addition to any appeal, the Court also stated that it was sending a copy of the Order to the Grievance Committee for the Southern District of New York. Judge Seibel in the SDNY did the same thing in the Berger case cited above where Liebowitz was found to have lied about the date of the death of his grandfather. As a result, a grievance proceeding is likely. Unlike the sanctions order, where the purpose is to determine the appropriate sanction in light of Liebowitz's conduct in the case, the grievance process will determine whether Liebowitz violated the New York Rules of Professional Conduct (the "RPCs") and, if so, what the appropriate disciplinary sanction should be. Disciplinary sanctions can range from a public censure to more severe sanctions such as suspension or disbarment. In addition, if a lawyer is disciplined by a federal bar, the lawyer will likely face reciprocal disciplinary proceedings in any state where he or she is admitted.

The conduct in the Order raises a number of ethical concerns under the RPCs. As noted, the Court found that Liebowitz failed to follow a scheduling order and to attend a mediation, lied under oath about obtaining the mediator's permission for his client to appear telephonically, and failed to properly investigate whether his client held a valid copyright registration in the photograph at issue, even after he was put on notice of the deficiency. This conduct raises serious questions under the RPCs, including (among others): RPC 1.1(a), which requires a lawyer to provide competent representation to a client; RPC 3.3(a), which prohibits a lawyer from making a false statement of fact or law to a tribunal; RPC 3.4(c), which prohibits a lawyer from disregarding a standing order of the tribunal; RPC 8.4(c), which prohibits a lawyer from engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; and RPC 8.4(d), which prohibits conduct that is prejudicial to the administration of justice.

The Order also detailed the numerous other occasions where Liebowitz was sanctioned for similar misconduct. All of this is fair game before a grievance committee, which can consider all of these instances as part of the disciplinary proceeding. It is also worth noting that because of the level of detail in the prior sanctions orders, Liebowitz may be collaterally estopped from re-litigating a number of issues in any grievance proceeding.

Only time will tell how this plays out, but the recent Order is certainly the most significant in an ever-growing body of Liebowitz sanctions case law.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.