In a complex set of related actions, the Court found that sanctions against several of the parties and attorneys were warranted, based on misrepresentations in the District Court and in the Fifth Circuit that there was no writing demonstrating an alliance between and among them, despite an express written agreement between the Cox Firm and Porter wherein Porter stipulated that he and Aeroframe would pay all Aeroframe employees’ claims out of any funds received by him or Aeroframe from the lawsuit; forum shopping in the form of multiple lawsuits against the same defendants alleging identical causes of action in several different parishes; violations of Rule 3.3 (Candor to the Court) and Rule 1.7 (Concurrent Conflicts of Interest); and a finding that the respondents had acted in bad faith throughout the course of the litigation.
Subsequent to that initial sanctions determination, the Magistrate Judge found that respondents continued to violate Rule 3.3 (Candor to the Tribunal) by insisting, without foundation, that they were prevented from conducting discovery: “Despite the court’s explicit clarification that nothing had curtailed discovery in either of the Ashford cases and that the court was allowing the discovery at Aeroframe’s expense, Aeroframe then characterized the discovery ruling as a ‘refusal to allow discovery upon opposing party, ATS.’ As a result, Aeroframe claimed to be ‘unable to confirm or deny the exact amount of wages currently due and owed to each plaintiff.’ Aeroframe then compounded this sanctionable and self-serving mischaracterization of the court’s ruling by adopting its Cooley opposition in 12 other cases.”
In addition, the Magistrate found, despite the Court’s previous recognition that “separate motions and memoranda throughout this proceeding that all made the same arguments does indeed constitute unreasonable and vexations multiplication of the proceedings”, the respondents continued waste judicial resources through synchronized, multiple, and/or ill-considered filings. For example, after the Court issued a judgment in each formerly-consolidated case, granting in part and denying in part ATS’s motion for summary judgment, the plaintiffs filed a Motion for Entry of Judgment in 15 Aeroframe dockets, claiming that ‘all issues as to Plaintiffs have been decided’ and the Court’s recent judgment ‘resolves each and every claim of the Plaintiffs in the consolidated cases leaving no issue to be determined with respect to the original Plaintiffs.’ The District Court, relying on plaintiffs’ representations, granted the motion. The following day, the plaintiffs moved to amend the judgments they had requested because, despite the language in their motions, not all issues had been resolved. The Court then had to rescind the orders. Despite the lack of final judgment, plaintiffs then filed a notice of appeal in each of these 14 cases, which were all dismissed for lack of jurisdiction. “In isolation, and on a single docket, the episode just recounted could be dismissed as an unfortunate error, but when viewed alongside other episodes of carelessness and disregard for the court’s attempts to inject order into the proceedings, and in the context the unnecessary procedural complexity of these matters, this conduct is not excusable. Plaintiffs’ counsel’s carelessness also supports our previous conclusions that counsel was not truly interested in the claims of these plaintiff-employees but instead was focused on the overall plan to get to ATS’s deep pockets.”
Addressing, then, the quantum of the sanction, the Magistrate Judge recommended the full $1,751,136.94 in fees and costs requested. “There is no single transgression that gave rise to some discernable set of ATS’s litigation expenses. All of Respondents’ efforts to arrange this litigation to their satisfaction – starting with their decision to simultaneously represent both Roger Porter and Aeroframe’s former employees when in fact Aeroframe was the alter ego of Roger Porter – were tainted by a bad-faith effort to gain advantage over ATS by whatever means necessary, with little or no regard to candor, professionalism, or judicial economy.”
The Magistrate Court rejected the argument that the fee petition was insufficiently particularized. “This litigation was conceived as an attempt to avoid federal jurisdiction by concealing the true alignment of the non-ATS parties, and it progressed via unnecessarily multiplied motion practice designed to wear ATS down. Respondents have largely neglected the true interests of the former Aeroframe employees such as Mr. Ashford. The misconduct at issue so thoroughly infects the proceedings that it is near impossible to locate legitimate advocacy in the midst of that misconduct. The court has reviewed the fee submissions from ATS, and the court finds that all of the legal fees incurred by ATS from May 1, 2014, onward were caused by the conduct being sanctioned today.”
The Magistrate then rejected the argument that there was a failure to mitigate.
Finally, the Magistrate rejected the argument that sanctions were limited under Rule 11 and/or 28 U.S.C. §1927, specifically that: (a) sanctions must be limited to fees incurred in the District Court (not at the Fifth Circuit or in State Court), (b) sanctions under Rule 11 must be tied to particular pleadings, and/or (c) sanctions under Section 1927 must be directed only at attorneys, not parties. “Because the latter two arguments do not directly address limitations placed on the court’s use of inherent powers, the court does not address these arguments at length.” With respect to the first argument: “The behavior the court seeks to sanction today is distinct from the discrete litigation decision of undertaking a frivolous appeal. As detailed in the original Report and Recommendation on sanctions, the court sanctions Respondents’ years-long course of conduct based on evidence of bad faith throughout the litigation. These circumstances are different from the limited problem posed by a single meritless appeal – which the appellate court would doubtless be best able to judge – because this sanction award is aimed at a gestalt of bad-faith behaviors that happened to sweep the litigants to the appellate level several times. For that reason, we conclude that it is appropriate to award sanctions in the amount of fees ATS incurred at the appellate level because they were incurred as a result of a larger scheme of abuses of process occurring beyond the courtroom, rather than as a result of a single ill-conceived decision to appeal.” Factually, moreover, court’s review of the submitted invoices confirms that the fee submissions start with ATS’s preparations to remove the cases and that ATS does request to recover for fees incurred in connection with activities before the state courts.
Ashford v. Aeroframe, No. 14-992, Doc. 339 (W.D.La. Feb. 4, 2022).