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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-11223
Non-Argument Calendar
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D.C. Docket No. 1:12-cv-22439-MGC
MICCOSUKEE TRIBE OF INDIANS OF FLORIDA,
Plaintiff,
BERNARDO ROMAN, III,
BERNARDO ROMAN III, P.A.,
Respondents-Appellants,
versus
BILLY CYPRESS, et al.,
Defendants,
DEXTER WAYNE LEHTINEN,
Esquire,
GUY A. LEWIS,
Esquire,
MICHAEL R. TEIN,
Esquire,
LEWIS TEIN PL,
A professional association,
Defendants-Appellees.
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________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 8, 2017)
Before TJOFLAT, WILLIAM PRYOR and FAY, Circuit Judges.
PER CURIAM:
Bernardo Roman III, appeals judgments that disqualified his counsel and
that sanctioned him and his law firm (collectively “Roman”) for filing in bad faith
a civil action on behalf of the Miccosukee Tribe of Indians of Florida against its
general counsel, Dexter Wayne Lehtinen, and attorney Lewis Tein. Roman argues
that the district court erred by disqualifying his counsel of choice and by
sanctioning him. Roman also argues that the district court erroneously based its
sanctions award on billing records that were submitted under seal. We affirm the
judgments to disqualify counsel and to sanction Roman, but we vacate the
sanctions award and remand for the district court to unseal the billing records, to
give Roman the opportunity to respond, and to provide an explanation for the
amount awarded to Lehtinen and Tein.
The disqualification of counsel requires that we review de novo the
application of the rules of professional conduct and related findings of fact for
clear error. Bayshore Ford Truck Sales, Inc. v. Ford Motor Co., 380 F.3d 1331,
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1338 (11th Cir. 2004). We review for an abuse of discretion all aspects of the
imposition of sanctions. Peer v. Lewis, 606 F.3d 1306, 1311 (11th Cir. 2010). A
district court “must afford the sanctioned party due process, both in determining
that the requisite bad faith exists and in assessing fees.” In re Mroz, 65 F.3d 1567,
1575 (11th Cir. 1995).
We reject Roman’s argument for reversal based on the disqualification of his
lead counsel, Angel Cortinas. Roman argues that the district court failed to “clearly
identify a specific Rule of Professional Conduct which is applicable . . . [and
explain how his] attorney violated that rule,” Schlumberger Techs., Inc. v. Wiley,
113 F.3d 1553, 1561 (11th Cir. 1997), but we disagree. The district court stated
that Cortinas was disqualified because he was in “partnership with Mr. Lehtinen”
when Lehtinen allegedly made false statements about his client, the Tribe.
Cortinas’s representation of Roman and the Tribe, the district court stated, violated
the “model rule [which] says that a lawyer in the firm cannot ignore the behavior
of other lawyers in the firm” who had a conflict of interest that could be imputed to
Cortinas. See Fla. R. Prof’l Conduct 4-1.09, 4-1.10(a).
Even if we assume that the district court erred in disqualifying Cortinas
under Rules 4-1.09 and 4-1.10, any error was harmless. See Fed. R. Civ. P 61
(“Unless justice requires otherwise, no error . . . by the [district] court . . . is [a]
ground . . . for vacating, modifying, or otherwise disturbing a judgment or order.”).
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Roman, as the “plaintiff in a civil case[,] [had] no constitutional right to counsel.”
Bass v. Perrin, 170 F.3d 1312, 1320 (11th Cir. 1999), and he opposed Tein’s and
Lehtinen’s requests for sanctions for two years. Roman does not argue that his or
his firm’s substantial rights were affected by proceeding with Cortinas’s associate,
Jonathan Kaskel. See Fed. R. Civ. P. 61. Roman also fails to identify anything that
could have been done differently or more effectively by Cortinas. See Richardson–
Merrell, Inc. v. Koller, 472 U.S. 424, 439 (1985) (“If respondent were to proceed
to trial and there received as effective or better assistance from substitute counsel
than the disqualified attorney could provide, any subsequent appeal of the
disqualification ruling would fail.”). Cortinas and Kaskel did not enter a notice of
appearance until after the first evidentiary hearing on the motions for sanctions and
after we had affirmed the dismissal of the Tribe’s complaint for lacking the
particularity required to state a claim for relief, Miccosukee Tribe of Indians of Fla.
v. Cypress, 814 F.3d 1202 (11th Cir. 2015). Roman investigated Tein and
Lehtinen; thrice revised the complaint against them; and defended against their
requests for sanctions. In the light of Roman’s familiarity with the facts, his legal
abilities, and his retention of Kaskel, we cannot say that disqualifying Cortinas
harmed Roman or his firm.
The district court did not abuse its discretion when it determined that Roman
filed the second amended complaint in bad faith. A party exhibits bad faith by
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pursuing a claim that it knows is frivolous. Peer, 606 F.3d at 1316. Roman alleged
that Lehtinen countenanced the misappropriation of millions of dollars from Tribe
members while falsely representing that the funds were being held in trust accounts
to satisfy tax liabilities they potentially owed to the federal government and
violated his fiduciary duty to the Tribe by disclosing its financial information to the
Internal Revenue Service. But Lehtinen established the allegations were
objectively frivolous by introducing testimony that the Tribe created two reserve
accounts to satisfy potential federal tax liabilities, by submitting financial records
and minutes from Tribe meetings about the balances in the reserve accounts, and
by presenting a letter recounting that attorney Larry Blum’s submitted the Tribe’s
financial documents to the Agency. Tein likewise controverted the allegations that
he had funneled to the Tribe Chairman millions of dollars in excessive fees
charged for fictitious or unnecessary services that Tribe members paid for using
loans obtained from, but not approved by or intended to be repaid to, the Tribe.
Tein introduced evidence that a Tribe member approved Tein’s invoices and was
repaying a loan obtained for legal fees; that Roman billed the Tribe large amounts
for his legal services; that Roman had in his custody records of Tribe members’
loan payments; that an accountant for the Tribe was fired after telling Roman about
existing loan schedules; and that an independent audit detected no financial
irregularities. Roman failed to produce any evidence that Tein transferred money
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to the Chairman or that Tein overbilled or falsely charged for his legal services.
The district court did not abuse its discretion when it sanctioned Roman
under Federal Rule of Civil Procedure 11 for frivolously accusing Lehtinen of
wrongdoing. Rule 11 exists “to deter baseless filings in district court.” Peer, 606
F.3d at 1311. The use of Rule 11 is particularly appropriate when a party
knowingly makes allegations that are objectively frivolous and persists in that
“position after it is no longer tenable.” Id. (quoting Rule 11 advisory committee
note (1993)). As the district court stated, Roman conducted an “investigation that
led to results differing” from his suspicions of wrongdoing by Lehtinen and then
“willfully abused the judicial process” by filing the second amended “complaint
that contained false and unsupported allegations” against Lehtinen. Sanctioning
Roman for falsely denunciating Lehtinen was necessary to prevent, the district
court reasonably determined, a “wayward and emboldened . . . counsel” from
“asserting such baseless allegations in the future.”
The district court also did not abuse its discretion when it exercised its
inherent authority to impose sanctions on Roman for pursuing baseless claims
against Tein. Tein sought sanctions under Federal Rule of Civil Procedure 11, yet
he failed to renew his motion after Roman filed the second amended complaint,
which would have given Roman 21 days to withdraw or correct the pleading. See
Fed. R. Civ. P. 11(c)(1)(A). That procedural misstep did not thwart the ability of
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the district court to proceed against Roman under its inherent authority. See Peer,
606 F.3d at 1314–15. If Roman “acted in bad faith, vexatiously, wantonly, or for
oppressive reasons,” the district court had the inherent authority to impose
sanctions. See Chambers v. NASCO, Inc., 501 U.S. 32, 46 (1991). Based on the
parties’ numerous filings and the material submitted during an eight-day
evidentiary hearing, the district court found that Roman knew or should have
known that his allegations against Tein were patently frivolous when there was no
evidence of kickbacks or fraudulent loans and Roman possessed ample information
that flatly contradicted his theories of wrongdoing. Because Roman filed a
complaint against Tein in bad faith, the district court acted within its authority to
sanction “conduct which [it found] abuse[d] the judicial process.” See id. at 44–45.
Roman argues that he was denied due process before being sanctioned under
the inherent authority of the district court, but we disagree. Roman was apprised of
the basis on which sanctions were imposed. Tein moved to sanction Roman for
filing the first amended complaint without factual support and in bad faith. See
Peer, 606 F.3d at 1314. Tein reacted similarly to the second amended complaint by
submitting a bench memorandum seeking the imposition of sanctions based on
Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, or the inherent authority of
the court. Tein’s filings provided Roman notice that his conduct was sanctionable
and why, and he was given ample opportunity to respond. See Mroz, 65 F.3d at
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1575. In addition to Roman’s testimony and arguments he made during the multi-
day evidentiary hearing, he submitted a bench memorandum and a supplemental
memorandum that opposed the district court using its inherent power to impose
sanctions. With all the information in hand, the district court determined that
Roman, despite receiving “continuous notice [of] sanctions . . . based on the
allegations in its [first amended] complaint,” made “more salacious and
astonishing allegations” in the second amended complaint without “evidence, or
[based on] patently frivolous evidence.” The district court afforded Roman due
process in determining whether to sanction him.
The district court violated Roman’s right to due process in determining the
amount of sanctions. The district court ordered Lehtinen and Tein to submit their
billing records under seal, which denied Roman notice of and an opportunity to
examine the amount of attorney’s fees and costs sought and to object, if warranted,
to their reasonableness. See Mroz, 65 F.3d at 1575. The order entered by the
district court likewise hampered Roman’s ability to challenge the calculation of the
sanctions because the order merely identified the amounts awarded and stated that
Lehtinen was not entitled to recover the value of his time attributable to
representing himself. The order is devoid of any discussion of how much time
counsel for Lehtinen and Tein worked on their cases or the amount the district
court applied as a reasonable hourly rate. See Dillard v. City of Greensboro, 213
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F.3d 1347, 1353 (11th Cir. 2000). Without that information, we cannot
meaningfully review the sanctions award. See Norman v. Hous. Auth. of City of
Montgomery, 836 F.2d 1292, 1304 (11th Cir. 1988). Because the district court
determined the sanction awards, which it described as “sizable,” in a manner that
denied Roman due process, we vacate that part of the order that awarded amounts
to Lehtinen and Tein and remand for the district court to unseal the billing records,
to give Roman an opportunity to respond, and to provide an explanation for the
amount of each award imposed.
We AFFIRM the imposition of sanctions on Roman, but we VACATE that
part of the order that awarded amounts to Lehtinen and Tein and REMAND for
further proceedings related to the sanctions award.
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Bernardo Roman, III v. Dexter Wayne Lehtinen
Combined Opinion