Judge Slams Prenda And Paul Duffy; Calls Them Out For Lying And 'Duplicitous Behavior'
from the not-going-well dept
As you may or may not recall, Duffy tried to keep the case in state court by doing a little trick whereby they added Paul Hansmeier's law firm, Alpha Law Firm, in an amended complaint (which would keep the case in state court since both the defendants and one of the plaintiffs would all be in Minnesota). Yet, as it quickly came out, the amended complaint was done through questionable means -- by apparently misrepresenting information to the court clerk, who told the court that Prenda's lawyer had misled her. So that attempt to keep it in state court totally failed, but Duffy then (on top of that) lied about the situation to the federal court.
Judge Darrah points basically all of this out and rips Duffy to shreds in the ruling. A few choice quotes:
When pressed, at the remand hearing on August 14, 2013, Duffy, counsel for Prenda, admitted he “filed substantially the same motion in the Southern District.”.... As discussed above, when asked what the Southern District of Illinois said about the motion, Duffy stated to the Court: “They denied the motion. They indicated - - the Court indicated that on the four corners of the complaint, it stated that it was a Minnesota corporation. However, the complaint also states that its principal place of business is in Minnesota.” .... However, the record reflects that the Southern District of Illinois Court said nothing of the sort. Duffy had the opportunity to address this lie in his response to the Motion for Sanctions and did not. To fabricate what a federal judge said in a ruling before another court falls well outside the bounds of proper advocacy and demonstrates a serious disregard for the judicial process.Needless to say, the court rules in favor of sanctions, noting Duffy's "unreasonable and vexatious conduct."
Following this duplicitous behavior before the Court, Duffy sought to withdraw the renewed motion for remand, generously explaining that the reason for the withdrawal was “due to the apparent confusion arising from [the] motion.”...
[....] Prenda, through its counsel, Paul Duffy, filed a response to the Motion for Sanctions. In it, they argue that “Defendants have made no showing that attorney Hoerner was aware that service had been accomplished at the time he attempted to file the amended complaint.” (Resp. to Motion for Sanctions at 10 (emphasis added).) Demonstrating Hoerner was aware that service had been accomplished is not necessary to determine the deception inherent in Hoerner’s affirmative (and false) representation to Kent that service had not been accomplished.
Indeed, rather than explain their conduct, they seek to attack the form and procedure by which Defendants filed their Motion for Sanctions. Prenda contends it is entitled to the safe harbor provision under Fed. R. Civ. P. 11(c)(2), which provides that a motion for sanctions may not be filed “if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service . . . .” Here, however, Prenda does nothing to explain or withdraw its assertions regarding what the Southern District of Illinois purportedly said about Alpha. Moreover, in its motion to withdraw the renewed motion for remand, Prenda continues to stand on its rejected assertions, insisting that “there was not diversity jurisdiction in this Court” and that Prenda “vehemently disagrees with representations made by Defendants . . . regarding its motion, but nevertheless due to the apparent confusion arising from Plaintiff’s motion, Plaintiff seeks to withdraw it.” .... The purpose of Rule 11 is to, in part, emphasize “the duty of candor by subjecting litigants to potential sanctions for insisting upon a position after it is no longer tenable.” Fed. R. Civ. P. 11 1993 Advisory Committee’s Notes (1993 Amendments) (emphasis added). Moreover, sanctions under Section 1927 and pursuant to the Court’s inherent authority are not subject to the safe harbor provision.
[....] Grasping at straws, Prenda next asserts Defendants failed to serve their Rule 11 motion pursuant to Fed. R. Civ. P. 5 and that “Duffy has never consented in writing (or otherwise) to accept service of papers via electronic means.” ... This is clearly rebutted by the docket itself, which indicates that Duffy is an E-Filer of the Northern District of Illinois. “[S]ubject to the provisions of Fed. R. Civ. P. 5(b)(3), the Notice of Electronic Filing constitutes service under Fed. R. Civ. P. 5(b)(2)(D) . . . as to all E-Filers in a case assigned to ECF.” .... Therefore, whether or not Duffy realizes it, as an E-Filer, he has accepted service by electronic means.
[....] In a final act of audacity, Prenda, in response to Defendants’ Motion for Sanctions, contends that the “Court should award Prenda the fees it incurred in defending against Defendants’ patently frivolous motion.”