The 4th Circuit has upheld a $1M fine for a law firm that attempted to’sabotage the authority’ of federal courts
Trials & Litigation
4th Circuit upholds $1M sanction for law firm that tried to ‘sabotage’ federal court’s authority
October 29, 2024, 3:50 pm CDT
A federal judge had inherent power to impose a $1.05 million sanction against a Maryland law firm for asking state courts to order an end to U.S. district court litigation, a federal appeals court ruled last week. (Image from Shutterstock)
A federal judge had inherent power to impose a $1.05 million sanction against a Maryland law firm for asking state courts to order an end to U.S. district court litigation, a federal appeals court ruled last week.
The 4th U.S. The Circuit Court of Appeals in Richmond, Virginia, affirmed that the sanction was imposed against Napoli Law for breaching a contract involving attorney fees. Napoli Law had filed lawsuits in two New York state courts that sought an order for the plaintiff, the Keyes Law Firm, to dismiss the federal case.
“District courts are not powerless to act in the face of contumacious conduct so expressly designed to undercut, and even sabotage, their adjudicative authority,” the 4th Circuit said in an Oct. 24 opinion by Judge J. Harvie Wilkinson III, an appointee of former President Ronald Reagan.
Napoli Law had filed the state court suits after the district court in Maryland rejected its motion to dismiss the fee case.
“In every practical sense,” Wilkinson said, “Napoli asked a state court in New York to overrule a federal district court in Maryland. It is difficult to imagine a more blatant challenge to the authority of the district court or a more obvious catalyst for litigation. “Litigation can be complicated enough.” The Maryland Daily Record and Law360 have covered the decision.
The sanctions against Napoli Law follow a December 2018 verdict of more than $861,000.
The sanction was imposed after a December 2018 verdict of over $861,000 in favor of the Keyes Law firm.
The previous sanction of nearly $317,000 against Napoli Law for defiance of discovery orders. It also followed an earlier sanction of almost $317,000 against Napoli Law due to defiance of discovery order. The list of Napoli’s sanctioned misconduct was long and troubling. It included repeated defiance of court orders, frivolous motions, and last-minute document dumps, to name just a few examples.”
Lawyer Paul J. Napoli formed Napoli Law after the breakup of Napoli Bern Ripka Shkolnik, according to Law360. According to Law360, the Keyes Law Firm’s suit named 17 defendants who were alleged to be alter egos of the original firm and lawyer Napoli. Marc Bern, a former Napoli Bern name partner settled the case and was dropped from the Keyes Law Firm suit. Lawyer Napoli told Law360 that Napoli Law and Napoli Bern were two separate entities. He said that the appeals court ignored the distinction, and that many of the underlying lawsuits had been settled or dismissed. “It became clear that we had won the underlying case,” Napoli said. The firm is evaluating further briefing to remedy these misconceptions.”
Louis Malick of the Keyes Law Firm told the Maryland Daily Record that the firm is pleased with the 4th Circuit’s decision.
“It sends a strong message to certain members of the profession that the sort of tactics employed in this case will not be tolerated and that district judges have ample authority to sanction misconduct,” Malick told the Maryland Daily Record in an email.
