16‐2944 (L)
Kim v. Kimm
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 August Term, 2017
4 (Submitted: October 23, 2017 Decided: February 27, 2018)
5 Docket Nos. 16‐2944, 16‐3115
6
7
8 DANIEL KIM,
9 Plaintiff‐Appellant‐Cross‐Appellee,
10 v.
11 MICHAEL S. KIMM D/B/A KIMM LAW FIRM, MICHAEL‐HYUN W. LEE, HYUNG SUK
12 CHOI A/K/A STEPHEN CHOI, CHUL HO PARK A/K/A/ CHARLIE PARK, JIN YOUNG
13 CHUNG A/K/A JAMIE CHUNG, CHARLIE AND YOU, INC. D/B/A SIK GAEK, SWAN
14 U.S.A., INC. D/B/A SIK GAEK,
15 Defendants‐Appellees‐Cross‐Appellants,
16
17 MICHAEL‐HYUN W. LEE,
18 Defendant‐Appellee,
19
20 HYUNG SUK CHOI, AKA STEPHEN CHOI,
21 Defendant.
22
23 Before: JACOBS, SACK, AND PARKER, Circuit Judges.
24 Plaintiff‐Appellant Daniel Kim appeals from a judgment entered in favor
25 of Defendants‐Appellees Michael S. Kimm, Michael‐Hyun W. Lee, Hyung Suk
26 Choi, Chul Ho Park, Charlie Park, Jin Young Chung, Charlie and You, Inc., and
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Kim v. Kimm, et al.
1 Swan U.S.A., Inc., by the United States District Court for the Eastern District of
2 New York (Allyne R. Ross, Judge). Kim alleges that the defendants were
3 members of two enterprises that conspired to sue him for, inter alia, trademark
4 infringement, and brings claims against them pursuant to the Racketeer
5 Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. In two
6 opinions, the district court granted the defendantsʹ motion to dismiss, denied the
7 plaintiffʹs motions to disqualify the defendantsʹ counsel and for leave to amend
8 his amended complaint, and denied the defendantsʹ motion for sanctions. We
9 agree with the district courtʹs resolution of these motions. Accordingly, the
10 judgment of the district court is
11 AFFIRMED.
12 DANIEL KIM, Haworth, NJ, Plaintiff‐
13 Appellant‐Cross‐Appellee, pro se.
14 MICHAEL S. KIMM, ADAM GARCIA, Kimm
15 Law Firm, Englewood Cliffs, NJ, for
16 Defendants‐Appellees‐Cross‐Appellants.
17 SACK, Circuit Judge:
18 The plaintiff Daniel Kim brings this action pursuant to the Racketeer
19 Influenced and Corrupt Organizations Act (ʺRICOʺ), 18 U.S.C. § 1961, et seq.,
20 alleging that the defendants engaged in a scheme to fraudulently bring suit
2
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1 against him for, inter alia, trademark infringement. The defendants moved to
2 dismiss the action for failure to state a claim under Federal Rule of Civil
3 Procedure 12(b)(6), arguing that their prior acts, as part of litigation they brought
4 against the plaintiff, do not constitute predicate acts for purposes of RICO. Kim
5 subsequently moved to disqualify defendant Michael S. Kimm as counsel for the
6 defendants and sought leave to further amend his amended complaint.
7 The United States District Court for the Eastern District of New York
8 (Allyne R. Ross, Judge) dismissed Kimʹs action for failure to state a claim,
9 agreeing with the defendants that Kim could not sustain a RICO action based on
10 the defendantsʹ prior litigation activities. The district court also denied Kimʹs
11 motion for leave to amend and to disqualify Kimm as counsel for the defendants.
12 The defendants then moved for sanctions pursuant to Federal Rules of Civil
13 Procedure Rule 11. The district court denied the motion.
14 Kim, now proceeding pro se, appeals the district courtʹs judgment
15 dismissing his action and the district courtʹs denial of his motions for leave to
16 amend and to disqualify Kimm. Kimm and his co‐defendants cross‐appeal,
17 challenging the district courtʹs denial of sanctions against Kim. We agree with
18 the district court that the alleged litigation activities do not constitute RICO
3
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1 predicate acts. We also conclude that the district court did not abuse its
2 discretion in denying Kim leave to amend, Kimʹs motion to disqualify, and the
3 defendantsʹ motion for sanctions. The judgment of the district court is therefore
4 affirmed.
5 BACKGROUND
6 I. The Sik Gaek I Lawsuit
7 The instant action arises from an earlier litigation, Sik Gaek, Inc. v. Yogiʹs II,
8 Inc., et al., No. 10‐CV‐4077 (ARR) (E.D.N.Y. 2010) (ʺSik Gaek Iʺ), which was filed in
9 the United States District Court for the Eastern District of New York on
10 September 7, 2010. In Sik Gaek I, Sik Gaek, Inc., the owner and operator of a
11 restaurant, sued Daniel Kim and the restaurant Kim owned, Yogiʹs II, Inc., over
12 the use of a trademark that Sik Gaek, Inc. allegedly owned. Sik Gaek, Inc.
13 alleged that Kim and Yogiʹs II, Inc. had failed to pay a $2 million fee pursuant to
14 a trademark license agreement and that, ʺin a sinister scheme,ʺ Kim had
15 attempted to circumvent the license and register the trademark himself.
16 Appellant Appʹx at 48–52. Sik Gaek, Inc. brought claims against Kim and Yogiʹs
17 II, Inc. for, inter alia, breach of contract, fraudulent trademark registration, and
18 trademark infringement. The district court granted summary judgment in favor
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1 of the defendant Kim on August 14, 2014. Sik Gaek, Inc. v. Yogiʹs II, Inc., 2014 WL
2 4063403, 2014 U.S. Dist. LEXIS 113165 (E.D.N.Y. Aug. 14, 2014). On August 21,
3 2014, the remaining claims against the defendant Yogiʹs II, Inc. were dismissed
4 by agreement of the parties.
5 II. District Court Proceedings
6 On August 15, 2015, Daniel Kim, a lawyer and a defendant in Sik Gaek I,
7 filed the instant action, bringing claims against parties in the Sik Gaek I lawsuit:
8 the owner of Sik Gaek, Inc., his wife and business partner, their two attorneys,
9 and an accountant. In his amended complaint, Kim alleges that the defendants
10 were members of two criminal enterprises that conspired to sue him for
11 trademark infringement and breach of contract in Sik Gaek I. According to Kim,
12 the Sik Gaek I lawsuit was nothing more than an ʺill‐conceived scheme or artificeʺ
13 designed to ʺextort $2 millionʺ from him. Appellant Appʹx at 9. Kim alleges that
14 the defendants completed false paperwork to pose as the owners of a trademark,
15 licensed the trademark to a third‐party, and then sued Kim for violating the
16 licensing agreement. Kim claims that these false legal documents were intended
17 to mislead the district court and therefore were predicate acts of obstruction of
18 justice, mail fraud, and wire fraud that constituted a pattern of racketeering
5
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1 activity. Kim also brought a RICO conspiracy claim, alleging that ʺthe entire
2 scheme or artifice could never have been set in motion without the express
3 agreement, cooperation and coordination of each individual defendant and his
4 assigned role.ʺ Appellant Appʹx at 40.
5 On September 11, 2015, the defendants filed a motion to dismiss for failure
6 to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
7 The defendants argued that Kim had failed adequately to allege a pattern of
8 racketeering activity, as required to state a RICO claim. The defendants raised
9 other arguments supporting their motion to dismiss, based on, inter alia, the
10 doctrines of collateral estoppel and res judicata. Kim subsequently moved to
11 disqualify Kimm as counsel in this litigation and to bar him from participating in
12 any defendantʹs defense other than his own. Kim also opposed the defendantsʹ
13 motion to dismiss and moved for leave to file a second amended complaint.
14 By unpublished opinion and order dated August 9, 2016, the district court
15 granted the defendantsʹ motion to dismiss. Appellant Appʹx at 257–76. The
16 court decided that Kim had failed to state a RICO claim because he had not
17 alleged predicate acts constituting a pattern of racketeering activity. The court
18 found that most of the alleged predicate acts concerned litigation activity in Sik
6
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1 Gaek I—specifically, the preparing, signing, and filing of declarations by Chul Ho
2 Park, Michael Kimm, and Hyung Suk Choi, all of whom are defendants in the
3 instant action—and reasoned that ʺ[w]ell‐established precedent and sound
4 public policy preclude such litigation activities from forming the basis for
5 predicate acts under [RICO].ʺ Dist. Ct. Op. at 8, Appellant Appʹx at 264. The
6 district court noted that Kimʹs amended complaint also included pre‐litigation
7 activities alleged as predicate acts, but found these allegations deficient as a
8 matter of law.
9 In its August 9, 2016, opinion and order, the district court also denied
10 Kimʹs motion to disqualify Kimm as counsel, concluding that the motion was
11 rendered moot by the district courtʹs dismissal of Kimʹs amended complaint.
12 Finally, the district court denied Kim leave to amend his complaint, reasoning
13 that amendment would be futile because the proposed amendments only added
14 additional litigation activities by the defendants which, as such, were insufficient
15 to form the basis for a RICO predicate act.
16 The defendants then moved for sanctions against Kim, arguing that his
17 lawsuit was meritless and seeking to recover fees expended in defending the Sik
18 Gaek I litigation. The district court denied the motion and in an unpublished
7
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1 opinion and order dated August 12, 2016, concluded that Kimʹs claims were
2 neither legally nor factually frivolous. The district court reasoned that although
3 it had joined the majority of courts in concluding that litigation activity could not
4 be predicate acts under RICO, at least some courts held differently and sanctions
5 were therefore inappropriate.
6 Kim timely appealed to this Court from the district courtʹs dismissal of his
7 action and denial of his motions for leave to amend his complaint and to
8 disqualify Kimm. The defendants timely cross‐appealed from the district courtʹs
9 denial of their motion for sanctions.
10 DISCUSSION
11 I. Failure to State a RICO Claim
12 The first issue in this appeal is whether the district court erred in granting
13 the defendantsʹ motion to dismiss pursuant to Rule 12(b)(6). Kim challenges the
14 district courtʹs holding that the defendantsʹ alleged litigation activities did not
15 constitute predicate acts for purposes of RICO.1
Kim does not raise any arguments regarding the district courtʹs holding that the
1
alleged pre‐litigation activities failed to state a RICO claim. We therefore conclude that
Kim has waived any such argument. See Norton v. Samʹs Club, 145 F.3d 114, 117 (2d Cir.
1998).
8
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1 ʺWe review de novo a district courtʹs dismissal of a complaint pursuant to
2 Rule 12(b)(6), construing the complaint liberally, accepting all factual allegations
3 in the complaint as true, and drawing all reasonable inferences in the plaintiffʹs
4 favor.ʺ Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). To survive
5 a motion to dismiss, a complaint ʺmust contain sufficient factual matter, accepted
6 as true, to state a claim to relief that is plausible on its face.ʺ Ashcroft v. Iqbal, 556
7 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)
8 (internal quotation marks omitted)).
9 A. RICO
10 Section 1964(c) of RICO, 18 U.S.C. §§ 1961–1968, provides a private right of
11 action to any person injured in its business or property by reason of a violation of
12 the activities prohibited by section 1962. ʺTo establish a RICO claim, a plaintiff
13 must show: (1) a violation of . . . 18 U.S.C. § 1692; (2) an injury to business or
14 property; and (3) that the injury was caused by the violation of Section 1962.ʺ
15 Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 120 (2d Cir. 2013) (quoting DeFalco v.
16 Bernas, 244 F.3d 286, 305 (2d Cir. 2001)). This appeal implicates the first of these
17 requirements, viz., whether the plaintiff has adequately alleged a violation of
18 section 1962. To establish such a violation, a plaintiff must show ʺ(1) conduct
9
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1 (2) of an enterprise (3) through a pattern (4) of racketeering activity.ʺ DeFalco v.
2 Bernas, 244 F.3d 286, 306 (2d Cir. 2001) (quoting Sedima, S.P.R.L. v. Imrex Co., 473
3 U.S. 479, 496 (1985)).
4 Here, the defendants argue—and the district court held—that Kim failed
5 adequately to allege a pattern of racketeering activity. ʺRacketeering activityʺ is
6 defined to include any ʺactʺ indictable under various specified federal statutes,
7 including the mail and wire fraud statutes and the obstruction of justice statute.
8 See 18 U.S.C. § 1961(1) (defining ʺracketeering activityʺ to include offenses
9 indictable under 18 U.S.C. §§ 1341 (relating to mail fraud), 1343 (relating to wire
10 fraud), and 1503 (relating to obstruction of justice)). A ʺpattern of racketeering
11 activityʺ is defined by the statute as ʺat least two acts of racketeering activityʺ
12 within a ten‐year period. 18 U.S.C. § 1691(5).
13 B. Litigation Activity as RICO Predicate Acts
14 Here, Kim purports to allege various predicate acts of mail fraud, wire
15 fraud, and obstruction of justice allegedly committed by the defendants. Most of
16 the alleged predicate acts concern actions purportedly taken by the defendants
17 during the Sik Gaek I litigation. Specifically, Kim alleges that the defendants
18 committed obstruction of justice, mail fraud, and wire fraud by:
10
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1 Preparing, signing, and electronically filing a November 14, 2010,
2 declaration sworn by defendant Chul Ho Park;
3 Preparing, signing, and filing a December 21, 2010, declaration sworn to
4 by defendant Park;
5 Preparing, signing, and filing a February 13, 2012, declaration sworn by
6 defendant Kimm; and
7 Preparing, signing, and filing a March 14, 2014, declaration sworn by
8 defendant Hyung Suk Choi.
9 Kim alleges that each of the four declarations were prepared, signed, and
10 filed with full knowledge that they contained fraudulent representations
11 intended to persuade the district court to find in favor of Sik Gaek, Inc. The
12 district court concluded that these litigation activities could not provide a basis
13 for predicate acts under Section 1962(c). It therefore dismissed Kimʹs complaint
14 for failure to state a claim. We affirm for substantially the reasons set forth by
15 the district court.
16 Although we have not spoken directly on the issue, other courts have held
17 that ʺ[i]n the absence of corruption,ʺ such litigation activity ʺcannot act as a
11
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1 predicate offense for a civil‐RICO claim.ʺ Snow Ingredients, Inc. v. SnoWizard, Inc.,
2 833 F.3d 512, 525 (5th Cir. 2016); Raney v. Allstate Ins. Co., 370 F.3d 1086, 1087–88
3 (11th Cir. 2004) (deciding that the ʺalleged conspiracy to extort money through
4 the filing of malicious lawsuitsʺ were not predicate acts of extortion or mail fraud
5 under RICO); Deck v. Engineered Laminates, 349 F.3d 1253, 1258 (10th Cir. 2003)
6 (deciding that meritless litigation is not a predicate act of extortion under RICO);
7 Gabovitch v. Shear, 70 F.3d 1252 (table), 1995 WL 697319, at *2, 1995 U.S. App.
8 LEXIS 32856, at *5 (1st Cir. 1995) (per curiam) (concluding that ʺproffering false
9 affidavits and testimony to [a] state courtʺ does not constitute a predicate act of
10 extortion or mail fraud); see also Curtis & Assocs., P.C. v. Law Offices of David M.
11 Bushman, Esq., 758 F. Supp. 2d 153, 171–72 (E.D.N.Y. 2010) (collecting cases from
12 district courts in the Second Circuit deciding ʺthat the litigation activities alleged
13 in [the complaint before the court] cannot properly form the basis for RICO
14 predicate actsʺ). We agree with the reasoning of these opinions and conclude
15 that allegations of frivolous, fraudulent, or baseless litigation activities—without
16 more—cannot constitute a RICO predicate act.
17 As the district court explained, there are compelling policy arguments
18 supporting this rule. First, ʺ[i]f litigation activity were adequate to state a claim
12
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1 under RICO, every unsuccessful lawsuit could spawn a retaliatory action,ʺ which
2 ʺwould inundate the federal courts with procedurally complex RICO pleadings.ʺ
3 Dist. Ct. Op. at 10–11, Appellant Appʹx at 266–67; see also Nora F. Engstrom,
4 Retaliatory RICO and the Puzzle of Fraudulent Claiming, 115 MICH. L. REV. 639, 696
5 (2017) (permitting RICO suits based on prior litigation activities would
6 ʺengender wasteful satellite litigationʺ). Furthermore, ʺpermitting such claims
7 would erode the principles undergirding the doctrines of res judicata and
8 collateral estoppel, as such claims frequently call into question the validity of
9 documents presented in the underlying litigation as well as the judicial decisions
10 that relied upon them.ʺ Dist. Ct. Op. at 11, Appellant Appʹx at 267; see also
11 Gabovitch, 1995 WL 697319, at *3, 1995 U.S. App. LEXIS 32856, at *7‐8 (ʺIn essence,
12 simply by alleging that defendantsʹ litigation stance in the state court case was
13 ʹfraudulent,ʹ plaintiff is insisting upon a right to relitigate that entire case in
14 federal court . . . . The RICO statute obviously was not meant to endorse any
15 such occurrence.ʺ). Moreover, endorsing this interpretation of RICO ʺwould chill
16 litigants and lawyers and frustrate the well‐established public policy goal of
17 maintaining open access to the courtsʺ because ʺany litigantʹs or attorneyʹs
18 pleading and correspondence in an unsuccessful lawsuit could lead to drastic
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1 RICO liability.ʺ Dist. Ct. Op. at 11, Appellant Appʹx at 267 (quoting Curtis &
2 Assocs., 758 F. Supp. 2d at 173); see also Engel v. CBS, Inc., 182 F.3d 124, 129 (2d
3 Cir. 1999) (noting the ʺstrong public policy of open access to the courts for all
4 parties and [the need] to avoid ad infinitum [litigation] with each party claiming
5 that the opponentʹs previous action was malicious and meritlessʺ (internal
6 quotation marks and citations omitted) (second brackets in original)).
7 Kim relies on Sykes v. Mel S. Harris & Associates LLC, 780 F.3d 70 (2d Cir.
8 2015) to argue that this Court ʺhas recognized RICO claims against attorneys . . .
9 for obtaining default judgments under false pretenses set forth in sham affidavits
10 of services.ʺ Appellant Br. at 16. Kimʹs reliance on this case is misplaced. As a
11 preliminary matter, it seems likely that Kim meant to cite a district court opinion
12 in that case, Sykes v. Mel Harris & Assocs., LLC, 757 F. Supp. 2d 413, 418 (S.D.N.Y.
13 2010), instead. There, the district court denied the defendantsʹ motion to dismiss
14 the plaintiffsʹ section 1962(c) claims, observing that the plaintiffs pleaded a
15 pattern of racketeering activity that included ʺat least twenty allegedly
16 fraudulent statements and eighteen acts involving use of the mail and wires over
17 three years, in furtherance of the alleged fraud.ʺ Id. at 425. Our 2015 opinion
18 cited by Kim addressed whether the district court abused its discretion by
14
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1 certifying class actions; we did not review the district courtʹs denial of the
2 defendantsʹ motion to dismiss. See Sykes, 780 F.3d at 79–80.
3 The district court opinion, even were it binding on us—which, unlike this
4 Courtʹs subsequent decision, of course, it is not—is also distinguishable from the
5 case at bar. The plaintiffs in Sykes alleged that the defendants engaged in a
6 ʺmassive scheme,ʺ in which a debt‐buying company, a law firm, a process‐
7 serving company, and others conspired with one another by buying consumer
8 debt, initiating actions against the debtors and improperly serving them, and
9 then filing fraudulent documents in state court to obtain default judgments. Id.
10 at 418–20. Accordingly, even though those defendants used litigation to carry
11 out their scheme, they also engaged in a variety of other out‐of‐court actions to
12 further this activity. In the case at bar, by contrast, the entire alleged scheme
13 involved the creation of fraudulent court documents.
14 We decline to reach the issue of whether all RICO actions based on
15 litigation activity are categorically meritless. We conclude only that where, as
16 here, a plaintiff alleges that a defendant engaged in a single frivolous, fraudulent,
17 or baseless lawsuit, such litigation activity alone cannot constitute a viable RICO
18 predicate act. We therefore agree with the district courtʹs thorough and well‐
15
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1 reasoned analysis to that effect and affirm its dismissal of Kimʹs amended
2 complaint.
3 II. Leave to Amend the Complaint
4 Kim contends that the district court also erred by denying him leave to file
5 a second amended complaint. We review the district courtʹs denial of leave to
6 amend for abuse of discretion. ATSI Commcʹns, Inc. v. Shaar Fund, Ltd., 493 F.3d
7 87, 108 (2d Cir. 2007). ʺAlthough Rule 15(a) of the Federal Rules of Civil
8 Procedure provides that leave to amend ʹshall be freely given when justice so
9 requires,ʹ it is within the sound discretion of the district court to grant or deny
10 leave to amend.ʺ McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir.
11 2007) (citation omitted). Leave to amend may be denied ʺfor good reason,
12 including futility, bad faith, undue delay, or undue prejudice to the opposing
13 party.ʺ Id. Here, Kimʹs proposed second amended complaint only added more
14 litigation‐related predicate acts, such as allegations pertaining to deposition
15 testimony, declarations, and court filings that he contends were fraudulent.
16 These proposed amendments do not change the nature of the alleged predicate
17 acts—litigation activities—which for the reasons discussed above, are deficient as
18 a matter of law. Therefore, because the proposed amendments would have no
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1 impact on the basis for the district courtʹs dismissal and would consequently be
2 futile, the district court did not abuse its discretion in denying Kim leave to
3 amend. See Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003) (ʺ[I]t is well established
4 that leave to amend a complaint need not be granted when amendment would be
5 futile.ʺ).
6 III. Motion to Disqualify
7 Kim next argues that the district court erred by denying Kimʹs motion to
8 disqualify Kimm as counsel for the defendants. We review the district courtʹs
9 failure to disqualify counsel for abuse of discretion. See Bobal v. Rensselaer
10 Polytechnic Inst., 916 F.2d 759, 764 (2d Cir. 1990). Kim contends that the district
11 court should have disqualified Kimm under the ʺadvocate‐witnessʺ rule. “The
12 advocate‐witness rule applies, first and foremost, where the attorney
13 representing the client before a jury seeks to serve as a fact witness in that very
14 proceeding.” Ramey v. Dist. 141, Int’l Ass’n of Machinists & Aerospace Workers, 378
15 F.3d 269, 282 (2d Cir. 2004) (first emphasis added; second emphasis in the
16 original). Here, the district court decided that Kimʹs motion to disqualify was
17 moot because it had already dismissed Kimʹs amended complaint with prejudice.
18 This was not an abuse of discretion. After the district court dismissed Kimʹs
17
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1 amended complaint, there was no likelihood that Kimm would testify as a fact
2 witness before a jury. Therefore, the district court properly dismissed Kimʹs
3 disqualification motion as moot.
4 IV. Motion for Sanctions
5 The defendants argue that the district court erred in denying their motion
6 for sanctions against Kim, which they sought pursuant to Rule 11 of the Federal
7 Rules of Civil Procedure and 28 U.S.C. § 1927.2 Rule 11 requires the ʺattorney or
8 unrepresented partyʺ filing litigation documents to certify that the documents:
9 (1) [are] not being presented for any improper purpose, such as
10 to harass, cause unnecessary delay, or needlessly increase the
11 cost of litigation [and] (2) the claims, defenses, and other legal
12 contentions are warranted by existing law or by a nonfrivolous
13 argument for extending, modifying, or reversing existing law or
14 for establishing new law.
15
16 Fed. R. Civ. P. 11(b). 28 U.S.C. § 1927 provides that ʺ[a]ny attorney . . . who so
17 multiplies the proceedings in any case unreasonably and vexatiously may be
18 required by the court to satisfy personally the excess costs, expenses, and
Although 28 U.S.C. § 1927 only reaches attorneys, the provision was potentially
2
applicable because Kim was represented by counsel before the district court, only
proceeding pro se in this appeal. Insofar as Kim himself had undertaken conduct
violating § 1927, he also could have been sanctioned under that provision because he is
in fact a lawyer, and we have held that § 1927 reaches litigants proceeding pro se who
are lawyers. See Sassower v. Field, 973 F.2d 75, 80 (2d Cir. 1992).
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1 attorneysʹ fees reasonably incurred because of such conduct.ʺ To impose
2 sanctions under this provision, ʺa court must find clear evidence that (1) the
3 offending partyʹs claims were entirely without color, and (2) the claims were
4 brought in bad faith—that is, ʹmotivated by improper purposes such as
5 harassment or delay.ʹʺ Eisemann v. Greene, 204 F.3d 393, 396 (2d Cir. 2000)
6 (quoting Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d 323, 336 (2d Cir. 1999)).
7 We review the district courtʹs denial of sanctions for abuse of discretion. Perez v.
8 Posse Comitatus, 373 F.3d 321, 325–26 (2d Cir. 2004).
9 The defendants argue that sanctions were appropriate because Kimʹs
10 claims were legally and factually frivolous. We conclude, however, that
11 although Kimʹs amended complaint ultimately failed to state a RICO claim, his
12 claims were not so obviously foreclosed by precedent as to make them legally
13 indefensible. At the time Kim filed this suit, there was no binding precedent in
14 this Circuit as to whether litigation activities could serve as predicate acts for
15 purposes of RICO. Indeed, some courts had endorsed the viability of some such
16 claims. See Sykes, 757 F. Supp. 2d at 425–26. Therefore, Kimʹs claims ʺwere not
17 foreclosed a priori by binding precedent even if they were unlikely to succeedʺ
18 and Kimʹs position ʺwas not unsupported by case law even though the cases he
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1 cited were not binding on the court adjudicating his claims.ʺ Fishoff v. Coty Inc.,
2 634 F.3d 647, 655 (2d Cir. 2011).
3 The defendants assert that sanctions are also appropriate because Kimʹs
4 claims are barred by the doctrines of collateral estoppel and res judicata,
5 rendering Kimʹs lawsuit frivolous. However, the defendants raise this issue only
6 in a cursory manner, without advancing any substantive arguments to support
7 their claim that Kimʹs lawsuit is precluded by earlier litigation. We therefore
8 conclude that the defendants have waived this argument. See Lederman v. New
9 York City Depʹt of Parks & Recreation, 731 F.3d 199, 203 n.1 (2d Cir. 2013)
10 (ʺ[A]ppellants must include in their briefs their ʹcontentions and the reasons for
11 them, with citations to the authorities and parts of the record on which the
12 appellant relies.ʹ Issues not sufficiently argued will be deemed waived and
13 ineligible for appellate review.ʺ (quoting Fed. R. App. P. 28(a)(9)(A))).
14 For these reasons, we conclude that the district court did not abuse its
15 discretion in denying the defendantsʹ motion for sanctions.
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1 CONCLUSION
2 We have considered the partiesʹ remaining arguments on appeal and find
3 them to be without merit. For the foregoing reasons, we AFFIRM the judgment
4 of the district court.
21