[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JUNE 11, 2009
No. 08-14064
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 08-00046-CV-ORL-22-GAP,
BKCY No. 01-00533-BK-ABB
6:08cv00046
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellants,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellee.
____________________________________________
6:08cv00268
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellants,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellee.
____________________________________________
6:08cv00269
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellants,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellee.
____________________________________________
6:08cv00270
2
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellants,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellee.
____________________________________________
6:08cv00271
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
Plaintiff-Appellant,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellee.
____________________________________________
3
6:08cv000272
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellants,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellee.
________________________
No. 08-14536
________________________
D. C. Docket No. 08-00046-CV-ORL-GAP,
BKCY No. 01-00533-BK-ABB
6:08cv00046
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
4
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellees,
LAURO LAW FIRM,
Interested Party-Appellee,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellant.
____________________________________________
6:08cv00268
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellees,
LAURO LAW FIRM,
Interested Party-Appellee,
5
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellant.
____________________________________________
6:08cv00269
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellees,
LAURO LAW FIRM,
Interested Party-Appellee,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellant.
____________________________________________
6:08cv00270
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
6
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellees,
LAURO LAW FIRM,
Interested Party-Appellee,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellant.
____________________________________________
6:08cv00271
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
Plaintiff-Appellees,
LAURO LAW FIRM,
Interested Party-Appellee,
versus
7
EVERGREEN SECURITY, LTD.,
Defendant-Appellant.
____________________________________________
6:08cv000272
In Re: EVERGREEN SECURITY, LTD.,
Debtor.
____________________________________________
PETER R. GINSBERG,
PETER R. GINSBERG, P.C.,
Plaintiffs-Appellees,
LAURO LAW FIRM,
Interested Party-Appellee,
versus
EVERGREEN SECURITY, LTD.,
Defendant-Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(June 11, 2009)
8
Before BIRCH, HULL and FAY, Circuit Judges.
FAY, Circuit Judge:
Peter R. Ginsberg and Peter R. Ginsberg, P.C. appeal the district court’s
decision to affirm the bankruptcy court’s imposition of sanctions. The bankruptcy
court awarded sanctions based on Ginsberg’s actions in conjunction with the filing
of a Recusal Motion.
Ginsberg asserts three issues on appeal: (1) the district court abused its
discretion in affirming the bankruptcy court’s Sanctions Order and its imposition
of sanctions; (2) the district court abused its discretion in affirming the bankruptcy
court’s decision not to testify about or discuss the complaint of judicial
misconduct; and (3) the district court abused its discretion in affirming the
bankruptcy court’s denial of Ginsberg’s Ore Tenus Motion to Transfer the
Sanctions Motion. We affirm the district court which affirmed the bankruptcy
court.
I. FACTUAL BACKGROUND
This appeal arises from the adversary proceeding instituted by Evergreen
Security, Ltd. (“Evergreen”) in the Bankruptcy Court for the Middle District of
Florida. Evergreen, deemed a “ponzi scheme,” filed a voluntary petition for
Chapter 11 bankruptcy (“the main case”). Jon Knight and Anthony Huggins were
9
principal actors in the scheme, both individually and through various corporate
entities. R.W. Cuthill was appointed as the Chapter 11 trustee to recover funds
belonging to Evergreen in order to pay Evergreen’s creditors.
Cuthill instituted an adversary proceeding for $6.5 million fraudulently
transferred from Evergreen Trust (an entity wholly owned by Evergreen) to
Mataeka, and later to Knight, Huggins, and others.1 This action is referred to as
the “Mataeka AP.” Judge Briskman served as the bankruptcy judge in the main
case and the Mataeka AP. Peter Ginsberg, of Peter R. Ginsberg P.C. (collectively
“Ginsberg”), represented Knight. GrayRobinson attorneys Scott Spradley and
Maureen Vitucci served as local counsel for Ginsberg, as well as main counsel for
Huggins, Mataeka and Atlantic Portfolio Analytics & Management, Inc.
(“APAM”).2 R. Scott Shuker and his firm Latham Shuker Eden & Beaudine LLP
(“Latham”) represented Cuthill and Evergreen.
Cuthill prevailed in the Mataeka AP. The court issued a judgment against
Knight, Huggins, and Mataeka jointly and severally for nearly $8 million, and
against APAM for $2.5 million. In an effort to collect on the Mataeka AP
Judgment, Evergreen (through Cuthill) filed three involuntary Chapter 7
1
Knight and Huggins pled guilty to criminal charges arising from this theft. They were
sentenced to probation and fined.
2
APAM was also a named party in the Mataeka AP proceeding.
10
bankruptcy petitions against Knight, Huggins and APAM and Judge Briskman
appointed an interim trustee in both the Knight and Huggins involuntary actions.
On July 26, 2006, the court began the final evidentiary hearing on the involuntary
petitions, and Evergreen completed its prima facie case that day.
The next day, on July 27, 2006, Knight, Huggins, Mataeka, and APAM,
through counsel Ginsberg, filed a Motion for Recusal, Motion to Disqualify,
Disclosure of all Ex-Parte Communications and Revocation of all Prior Orders
(“Recusal Motion”) in the main case only.3 The parties requested the court recuse
itself, disqualify Latham, disclose all ex parte communications and filings, and
revoke all orders previously entered in this case and all other adversary
proceedings. Less then a month later, Ginsberg filed a Petition for Writ of
Mandamus with the district court asking for a stay of all pending proceedings until
the resolution of the Recusal Motion. A Supplemental Petition for Writ of
Mandamus was filed a week later, seeking Judge Briskman’s removal from ruling
on the Recusal Motion and all related proceedings. Both of these writs were
denied.
3
Although Ginsberg and Spradley both had a hand in drafting the Recusal Motion, it
appears that Ginsberg did the lion’s share. (Sanctions Order at 61) (“The Tenor and content of
the Recusal Motion and the Respondent’s billing records establish Ginsberg was its principal
drafter and driving force.”). Since Spradley has not appealed the imposition of sanctions, we
refer to Ginsberg as the author of the Recusal Motion.
11
On October 10, 2006 Evergreen filed a motion seeking sanctions against
attorneys Spradley, Vitucci, and Ginsberg, and the law firms of GrayRobinson and
Peter R. Ginsberg, P.C. (“Sanctions Motion”). Ginsberg then filed a third Petition
for Writ of Mandamus requesting that the district court compel Judge Briskman to
reconsider and reverse the decision to exclude himself as a witness. The district
court denied the third Petition for Writ of Mandamus.
Evidentiary hearings on the Recusal Motion were held on November 29,
2006, December 11, 2006 and January 29, 2007. On February 27, 2007 the
bankruptcy court denied the Recusal Motion, and on August 17, 2007 Judge
Briskman issued an Order to Show Cause whether sanctions should be imposed.
On August 28, 2007 Judge Briskman conducted an evidentiary hearing on the
Sanctions Motion. The court granted the Sanctions Motion on January 2, 2008. In
the Sanctions Order, Judge Briskman imposed monetary sanctions of $371,517.69
against Ginsberg and barred him from practicing before the United States
Bankruptcy Court for the Middle District of Florida for a period of five years.4
Ginsberg appealed both Orders. On June 17, 2008, District Court Judge Anne C.
4
Pursuant to an August 8, 2007 settlement agreement with Evergreen, GrayRobinson
agreed to pay Evergreen $300,000 in resolution of the Sanctions Motion. The court found this
settlement amount “an appropriate sanction to redress all wrongful acts of GrayRobinson,
Vitucci, and Spradley falling within the purview of the Sanctions Motions, Section 105(a) of the
Bankruptcy Code, and the Court’s inherent powers to sanction wrongful conduct.” (Sanctions
Order at 84-85.)
12
Conway entered an order affirming, among other things, the bankruptcy court’s
denial of the recusal motion and imposition of sanctions.
II. LEGAL STANDARD
Federal courts, including bankruptcy courts, possess inherent authority to
impose sanctions against attorneys and their clients. In re Walker, 532 F.3d 1304,
1309 (11th Cir. 2008). “This power is derived from the court’s need to manage
[its] own affairs so as to achieve the orderly and expeditious disposition of cases.”
Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1304 (11th Cir. 2006) (internal citations
omitted). Federal statute 11 U.S.C. § 105(a) also gives the court the authority to
“sua sponte, tak[e] any action or mak[e] any determination necessary or
appropriate to enforce or implement court orders or rules, or to prevent an abuse of
process.” 11 U.S.C. § 105(a) (2005).
We review the exercise of these powers for abuse of discretion. In re
Sunshine Jr. Stores, Inc., 456 F.3d at 1304. Under this standard, “we ask whether
[the court] ‘applie[d] the wrong legal standard or ma[de] findings of fact that are
clearly erroneous.’” Id. (quoting Byrne v. Nezhat, 261 F.3d 1075, 1106 (11th Cir.
2001)).
III. DISCUSSION
13
Ginsberg appeals the bankruptcy court’s imposition of sanctions for the
drafting, filing and litigating of the Recusal Motion. Ginsberg alleges that the
district court erred in affirming the sanctions because (1) the Recusal Motion was
proper; (2) the bankruptcy court should have disclosed the existence of a
complaint of judicial misconduct and testified to its contents; and (3) the
bankruptcy court should not have presided over the Sanctions Motion. We
address each contention below.
A. Recusal Motion
A party may file a Recusal Motion when a Judge’s impartiality may
reasonably be questioned. See 28 U.S.C. § 455(a) (“Any justice, judge, or
magistrate judge of the United States shall disqualify himself in any proceeding in
which his impartiality might reasonably be questioned.”). “The inquiry of whether
a judge's impartiality might reasonably be questioned under § 455(a) is an
objective standard designed to promote the public's confidence in the impartiality
and integrity of the judicial process." Davis v. Jones, 506 F.3d 1325, 1332 n.12
(11th Cir. 2007) (internal citations omitted). Thus, the court looks to “the
perspective of a reasonable observer who is informed of all the surrounding facts
and circumstances.’” Cheney v. U.S. Dist. Court for Dist. of Columbia, 541 U.S.
913, 924 (2004) (quoting Microsoft Corp. v. United States, 530 U.S. 1301, 1302
14
(2000)); see also Glass v. Pfeffer, 849 F.2d 1261, 1267 (10th Cir. 1988) (“Under
this section, factual allegations need not be taken as true, and the test is whether ‘a
reasonable person, knowing all the relevant facts, would harbor doubts about the
judge’s impartiality.’” (quoting Hinman v. Rogers, 831 F.2d 937, 938 (10th Cir.
1987))).
Ginsberg essentially pled three bases for the appearance of impartiality: (1)
the filing of a complaint of judicial misconduct against Judge Briskman in a
previous matter involving Shuker; (2) the bankruptcy court’s acceptance and
consideration of Shuker’s ex parte and oversized filing; and (3) Shuker’s
violations of the Florida Rules of Professional Conduct. The bankruptcy court
found that Ginsberg failed to establish any legal or factual support for these
allegations and that the Motion was filed for an improper purpose. We find that
the bankruptcy court was not clearly erroneous in its findings of fact and that it
applied the correct legal standards.
1. Hudson’s Judicial Council Complaint
On appeal, Ginsberg asserts that the filing of a complaint of judicial
misconduct with the Judicial Council of the Eleventh Circuit was his main basis
for filing the Recusal Motion. Ginsberg’s Recusal Motion repeatedly referenced
this complaint of judicial misconduct (“the Complaint”), which was filed by Phil
15
Hudson (“Hudson”) with the Judicial Council, regarding Judge Briskman’s
conduct in the bankruptcy action Advanced Telecomm. Network, Inc. v. Daniel
W. Allen (“ATN”). (Recusal Mot. at 2.)
In ATN Shuker represented ATN, Hudson represented the
defendants/creditors Daniel and David Allen, and Judge Briskman initially
presided. Cuthill served as a witness in that case, but there is no overlap in the
parties or the issues between ATN and the instant bankruptcy proceedings.
According to the Recusal Motion, Shuker filed an ex parte motion in ATN,
Judge Briskman held an ex parte hearing on that motion, and Judge Briskman
ordered the ex parte motion be removed from the docket. These allegations are
generally accurate. However, it is important to note the context. ATN was
attempting to recover funds from the Allens. At the motion hearing, Shuker
expressed ATN’s concern that the Allens would secret assets in other corporations
to avoid turning them over. The Allens had already been ruled in contempt of two
orders relating to the disclosure or repatriation of assets, so ATN did not want to
give the Allens any advance warning of its attempt to have a temporary receiver
appointed. At the hearing, Shuker and Judge Briskman also discussed the
possibility of the Allens being arrested for contempt. Judge Briskman agreed to
take the hearing off the docket sheet so that the Allens would not have advance
16
warning of the matters discussed therein. A court reporter who transcribed the
hearing was also present and a full record was made.
Hudson later learned of the ex parte motion and hearing and filed an
Emergency Motion to Disqualify Opposing Counsel. At some point ATN was
transferred to Bankruptcy Judge Jenneman, who held a hearing on the Motion and
denied it. In her Order denying the Motion, Judge Jenneman stated, “ex parte
hearings, while discouraged, are sometimes appropriate. In this case, the decision
to allow ATN to proceed with a hearing without notice to the Allens does not
appear improper. Moreover, the hearing was held on the record.” (Am. Memo.
Op. Den. Defs.’ Emergency Mot. to Disqualify at 8.) Thereafter, Hudson also
filed the Complaint with the Judicial Council of the Eleventh Circuit.
In this case, Ginsberg first learned of Hudson’s Complaint from Spradley on
July 7, 2006. Spradley received an email from an attorney with his firm named
John Anthony informing him that Hudson had filed a Complaint related to the
ATN matter. Anthony heard this from another attorney (not Hudson). On the
same day, Spradley spoke to Hudson about the Complaint, confirmed that Hudson
had in fact filed one, and informed Ginsberg of what he had learned. (Sanctions
Tr. Vol. II at 119.) On July 8, 2006 Ginsberg began researching the Recusal
Motion. (Id. at 18.) Ginsberg himself never spoke to Hudson before filing the
17
Recusal Motion (id. at 30), and neither Spradley nor Ginsberg asked Hudson for a
copy of the Complaint or other proof of its filing (see id. at 30; 142, 153-54).
At the sanctions hearing Ginsberg testified that after reviewing the ATN
docket he detected “parallels” between the ATN case and this one. (Sanctions Tr.
Vol. I at 169.) Ginsberg said he was troubled by the appointment of an interim
trustee in both cases. (Id.) Additionally, Ginsberg claimed that Shuker’s threats
of imprisonment in ATN reminded Huggins and Knight of Shuker’s threats of
imprisonment in this case (discussed below), and they were concerned about the
implication that Shuker would have Judge Briskman’s approval in doing so. (Id.)
Ginsberg therefore filed the Recusal Motion.
In the Motion, Ginsberg alleged that “Judge Briskman presiding here is,
himself, under investigation by the 11th Circuit Court of Appeals following ex
parte, allegedly inappropriate communications with Mr. R. Scott Shuker.”
(Recusal Mot. at 2.) Ginsberg claimed that Judge Briskman’s failure to notify the
parties of the ongoing investigation, as well as Shuker’s role as a future witness in
the investigation, further bolstered the appearance of partiality. (Id. at 21, 27.)
a. Lack of Factual Support
18
We find that the bankruptcy court was not clearly erroneous in finding no
factual support for Ginsberg’s assertion that the existence of the Complaint created
an appearance of impropriety requiring recusal.
The mere filing of a complaint of judicial misconduct is not grounds for
recusal. As Shuker’s expert witness Lubet explained, it would be detrimental to
the judicial system if a judge had to disqualify himself anytime someone filed a
complaint about his conduct. A party would only have to file a complaint to get a
different judge. Lubet testified that the Rules of the Judicial Council of the
Eleventh Circuit Governing Complaints of Judicial Misconduct or Disability
(“Judicial Council Rules”) allow lots of complaints to be filed, many of which are
frivolous. (Recusal Tr. Vol. II at 13-14.) The Rules therefore create their own
screening mechanism for these complaints; a stage one “limited inquiry” to
determine whether a “formal investigation” into the validity of the complaint is
necessary. (Id.); see also Judicial Council Rule 4(a) (“the Chief Judge may
conduct a limited inquiry for the purpose of determining – (1) whether appropriate
corrective action has been or can be taken without the necessity for a formal
investigation; and (2) whether the facts stated in the complaint are plainly untrue
or are incapable of being established through investigation.” (emphasis added)).
This limited inquiry resolves 98% of all filed complaints; only 2% of all
19
complaints ever proceed to the formal investigation stage. (Recusal Tr. Vol. II at
13-14.) It would create an absurd result to force a judge to recuse himself because
of the 2% possibility that the complaint will become an investigation and the even
smaller chance that an involved party will be called as a witness in that
investigation. (Id.) Thus, the mere existence of a complaint of judicial misconduct
does not create an appearance of impropriety.
While a formal investigation into a complaint may trigger recusal, there is
no evidence of an impending investigation here. Yet, the Recusal Motion referred
to the Complaint as an “investigation” twelve times, made fourteen implications
of the existence of a formal investigation, and referred to Shuker as a “key player
in the investigation” and a “future witness.” (Recusal Mot. at 21.) During the
Sanctions Hearing, Ginsberg testified that he assumed there was an “ongoing
investigation” by virtue of the fact that Hudson’s Complaint had not been
dismissed for a number of months.5 Yet, according to the Judicial Council Rules
the length of time that a complaint remains pending is irrelevant.6 Ginsberg
further asserted that Spradley used the term “investigation” when relating his
5
At the time the Recusal Motion was filed the Complaint had only been pending for five
or six months. (Sanctions Tr. Vol. II at 162.)
6
Shuker’s Expert Witness Lubet testified that the House Judiciary Committee has held a
series of hearings about the length of time it has taken to handle these complaints. (Recusal Tr.
Vol. II at 50.)
20
conversations with Hudson (Sanctions Tr. Vol. II at 5) and Spradley testified that
Hudson had used the term “investigation” when relating the events to him (id. at
136-37, 142). In Hudson’s deposition, however, he testified that he never used the
term “investigation.” (Sanctions Order at 28.) Anthony’s deposition revealed he
did use the term “investigation,” but Anthony admitted that he had no first hand
knowledge of the Complaint. (Recusal Ex. II at 56-57, 62.) Anthony compared
his knowledge of the Complaint to knowledge about “Britney Spears’ divorce . . .
a lot of people have heard a lot.” (Id. at 56-57.)
Moreover, the Judicial Council Rules clearly state that if the Chief Judge
was conducting a formal investigation, Hudson (the complainant) would be
informed. See Judicial Council Rule 4(c) (“If the complaint is not dismissed . . .
the Chief Judge shall appoint a special committee . . . to investigate the allegations
of the complaint . . . . The Chief Judge shall notify the complainant and the
complained-of judge of the appointment of a special committee . . . .” (emphasis
added)). Hudson was never notified of such and never indicated to anyone that he
had been. Spradley testified that Hudson’s only correspondence with the Judicial
Council of the Eleventh Circuit was immediately after he filed his Complaint.
(Sanctions Tr. Vol. II at 142.) Hudson received a letter confirming the Complaint
was received and submitted to the Chief Judge. (Id.) Spradley further testified
21
that he spoke with Hudson three or four times after that “with the expressed reason
to ask if he had heard the result or an update, and he replied in the negative.” (Id.
at 154.) Even though the Judicial Council Rules clearly state that Hudson would
be informed if his Complaint was dismissed or moved to the investigation stage,
Ginsberg relied only on the fact that Hudson was not informed of a change in
status to deem it an “investigation.”7 This is clearly an unreasonable reliance and
jump to an unsupported conclusion.
Similarly, the mere existence of an ex parte hearing is not grounds for
recusal. As Lubet explained there are many reasons judges properly hold ex parte
hearings, such as a temporary restraining order or bail revocation proceedings.
Indeed, in ATN Judge Jenneman stated that ex parte hearings may be appropriate.
(Am. Memo. Op. Den. Defs.’ Emergency Mot. to Disqualify at 9.) In fact, Judge
Jenneman held that the ex parte hearing in ATN did not create the appearance of
7
On appeal Ginsberg asserts that “a technical definition of investigation” was not
suggested. (Initial Br. at 34.) Spradley also testified at the Sanctions Hearing that he looked up
the term "investigation" in Webster's dictionary and believed it to apply to the present situation.
(Sanctions Tr. Vol. II at 137.) Yet, at the same hearing Ginsberg testified that his “unequivocal
understanding was that the complaint had passed through the first phase, that the chief judge had
come to the conclusion there was merit to the complaint, and that whether it was the chief judge
or the committee, witnesses were going to be contacted, information was to be gathered.”
(Sanctions Tr. Vol. I at 80.) This is not the dictionary definition of “investigation,” but a
definition in accordance with the procedure outlined by the Judicial Council Rules indicating that
Ginsberg was asserting the technical definition of investigation in the Recusal Motion.
22
impropriety. (Id.) (“[T]he conversation [did] not rise to the level of a specifically
identifiable impropriety.”).
b. Lack of Legal Support
The bankruptcy court also found that the Recusal Motion lacked legal
support. We agree.
The only case Ginsberg relied on for the proposition that a complaint of
judicial misconduct (which Ginsberg equates with an investigation) requires
recusal was United States v. Garrudo, 869 F. Supp. 1574 (S.D. Fla. 1994).
(Recusal Mot. at 20.) In Garrudo, a district court judge was under investigation by
the United States Attorney’s Office “for accepting gratuities worth thousands of
dollars . . . .” Garrudo, 869 F.Supp. at 1576. While presiding over criminal cases,
the judge was told he was the “subject” of a pending United States Attorney’s
Office investigation. Id. The Judge was subsequently interviewed by federal
agents and served with a grand jury subpoena duces tecum. Id. Once he was
informed that his status was elevated to that of a “target” the judge recused himself
from all pending criminal matters. Id. Criminal defendants convicted or
sentenced by the judge while the investigation was pending, but before the judge
recused himself, challenged their convictions. Id. The defendants claimed that the
23
judge had an incentive to curry favor with the government. Id. The district court
held that recusal was appropriate.8
Ginsberg argues that the criminal grand jury investigation in Garrudo and
the present judicial misconduct complaint are analogous. (Recusal Mot. at 20)
(“Fortunately there are few cases in which courts have had to apply the recusal
statute to a circumstance in which a judge is under an investigation like the instant
investigation. A notable exception is Garrudo.” (emphasis added)). However,
there is no evidence that Judge Briskman was under investigation, let alone a
criminal one. In our view, a civil complaint of judicial misconduct and a criminal
grand jury investigation are not analogous.
The facts at issue here are further distinguishable from Garrudo. Ginsberg
relies on Garrudo for the principle that “an alignment of interests between the
presiding judge and counsel in a position to influence the outcome of an
investigation or inquiry affecting the judge would cause a reasonable objective
observer to question the impartiality of the court.” (Initial Br. at 32.) In Garrudo,
however, the party conducting the investigation (the United States Government)
was actually before the court, so the court may have had an incentive to curry
8
This decision was affirmed by an 11th Circuit panel. A subsequent en banc court split
evenly on the question of recusal, thereby affirming the previous ruling by operation of law.
24
favor. Here, there was no investigation, only a complaint which had a 2% chance
of becoming an investigation. Moreover, the existence of the investigation was
well known in Garrudo and could therefore affect public confidence in the
judiciary. The investigation was discussed in various newspapers and was printed
on the front page of the Miami Daily Business Review. Garrudo, 869 F. Supp. at
1576. On the other hand, evidence of this Complaint was not in the public forum
until Ginsberg filed the Recusal Motion. A confidential complaint that the public
is not aware of does not have any affect on the “public's confidence in the
impartiality and integrity of the judicial process.” See Davis, 506 F.3d at 1332
n.12.
In this regard, we agree with the rulings of the bankruptcy court and the
district court.
2. Ex Parte Communications
In the Recusal Motion Ginsberg cites to two allegedly inappropriate ex
parte communications between Shuker and Judge Briskman in the Mataeka AP
proceeding: a discovery motion and proposed findings of fact and conclusions of
law (“FOFCOL”).9
9
On appeal, Ginsberg asserts that these incidents "were not intended as separate
instances of misconduct warranting recusal." (Initial Br. at 34.) The incidents merely
demonstrate that an objective observer would question the court's impartiality. (Id.) These
25
a. Discovery Motion
The bankruptcy court found that Ginsberg had no factual support for his
assertion that Shuker “apparently”10 filed an ex parte emergency motion to compel
production of documents (“Emergency Motion”) and that Judge Briskman’s
subsequent order “was accomplished without a hearing” even though Spradley
objected to the requested relief. The record supports the conclusion that such an
assertion was groundless.
The facts surrounding this showed that Shuker filed an Emergency Motion
in the Knight proceeding on July 17, 2006, six days before the July 24, 2006 trial
date. Upon receipt, Judge Briskman’s chambers called Spradley’s office to
schedule a hearing, but Spradley was out of town and unavailable, and there was
no offer to send someone else from his office. As the trial was set for six days
after the Emergency Motion was filed, “[w]aiting to conduct a hearing upon
Spradley’s return from vacation was not an option.” (Recusal Order at 28.) A
hearing was therefore held and an Order was entered.
allegations, however, lack factual support and therefore do not affect the appearance of partiality.
See Cheney, 541 U.S. at 924 (the decision to disqualify must be “made from the perspective of a
reasonable observer who is informed of all the surrounding facts and circumstances.” (citations
omitted) (emphasis in original)).
10
Ginsberg testified that he hedged his allegations with the word "apparently" because
Ginsberg was never given either Shuker's motion or the Judge's order. (Sanctions Tr. Vol. II at
43.)
26
There is no evidence, however, that the Emergency Motion was filed ex
parte. Before filing the Emergency Motion Shuker emailed Spradley, requesting
expedited discovery. Spradley copied Ginsberg on his response, denying Shuker’s
request. Thus, both Spradley and Ginsberg were on notice that Shuker was
seeking discovery and that a hearing was imminent. Moreover, both Spradley and
Ginsberg were given formal notice of the filing of the Motion. The certificate of
service attached to the Motion indicates that GrayRobinson and Ginsberg were
both served electronically, by fax and first-class mail.11 Finally, the Order entered
was not Shuker’s proposed order, and in fact granted only some of the relief that
Shuker requested. In our view, Judge Briskman appropriately addressed an
evidentiary issue within the time constraints and there was in fact no basis for the
allegations made in the Recusal Motion.
b. Findings of Fact and Conclusions of Law
The record also fully supports the finding of the bankruptcy court that
Ginsberg’s contention that the court ordered the parties to file ex parte FOFCOL
and relied on Shuker’s oversized FOFCOL was without any basis whatsoever.
11
Ginsberg’s allegation of lack of service is even more confusing because Ginsberg’s
pro hac vice application listed GrayRobinson attorney Vitucci as the designated person to be
served in the Mataeka Proceeding. Service to Ginsberg was not required.
27
A June 20, 2005 email from Susan Coberly, Judge Briskman’s assistant,
inviting the parties to file FOFCOL, not to exceed 15 pages, is the only written
document Ginsberg presented to prove the filings were court ordered. The email
did not discuss service. Both sides subsequently submitted FOFCOL to the court
without serving each other. Shuker’s FOFCOL was 46 pages long. Months later
in a deposition, Spradley and Ginsberg learned of this 46-page submission when
the deponent referred to it.
Spradley immediately sent Shuker an email expressing his concern about
Evergreen’s failure to comply with the court’s 15-page limitation. (Email from
Spradley to Shuker of 10/10/05.) Shuker responded to the email, stating “I
understand that you called Susan about the page [length] and were informed the
Judge has not yet looked at either proposed findings. Thus, it seems the simple
solution is for me to cut mine down to 15 pages and replace the longer one.”
(Email from Shuker to Spradley of 10/17/05.) On November 3, 2005 Shuker again
emailed Spradley to inform him that he had submitted a revised, 15-page
FOFCOL. “By the way, we submitted revised FOFCOL today which were 15
pages; the Judge never reviewed the longer one. Thus, I assume that is now a
moot issue.” (Email from Shuker to Spradley of 11/03/05) (emphasis added). The
next day Spradley responded in apparent understanding: “Thanks for the note re:
28
findings and conclusions. I’ll call you in a while.” (Email from Spradley to
Shuker of 11/04/05.)
At the end of trial the court allowed the parties to file another set of
FOFCOL. Shuker testified that Spradley and Ginsberg objected to his suggestion
of not exchanging these submissions. An objection was filed and a hearing was
scheduled but Spradley and Ginsberg opted out of the hearing and their objection
was thereby withdrawn. Both sides then submitted FOFCOL to the court without
serving each other. This time Shuker submitted a 15-page document. Spradley
and Ginsberg, however, submitted a 23-page filing: a 15-page document entitled
“Defendants’ Proposed Findings of Fact and Conclusions of Law” and an 8-page
document entitled “Citations to the Record.” All of the submissions were
manipulated to maximize word space: the parties used smaller font and margins
than the local rules allow.
I. Ex Parte Nature
There is no evidence that the ex parte nature of the filings were court-
ordered. Spradley testified that “I cannot state with certainty that [Ms. Coberly]
said the Court specifically says you are not to give the other side the documents.
But whatever words were said, I came away with the impression that’s what we
were to do, and then the fact that the parties acted in conformity with that.”
29
(Recusal Tr. Vol. IV at 133.) Ginsberg did not directly communicate with Ms.
Coberly, but testified that he was told by Spradley the court had ordered ex parte
filings. (Sanctions Tr. Vol. I at 95-96.) Ginsberg further testified that the court
ordered the second FOFCOL be filed ex parte in open court and that he objected at
that time. (Id.) However, Ginsberg could not locate a transcript or any other
evidence of this directive. (Sanctions Tr. Vol. II at 49-51.) Neither can we.
On the other hand, Shuker testified that the FOFCOL were filed ex
parte based on a mutual understanding between the lawyers; it was not based on a
court order. (Id. at 185-86.) Shuker explained that during the first filing the trial
was still ongoing and he did not want the opposition’s witnesses to read his
clients’ FOFCOL and change their testimony. (Id.) For the second filing, Shuker
testified that the trial had been so expensive that he did not want to add the costs
of exchanging and objecting to each others submissions. (Id.)
At best, Ginsberg presented evidence that the attorneys had some
understanding about not serving each other. We find no evidence, however, that
the court ordered the parties to submit the filings ex parte or that the court was
aware that such was being done.
ii. Reliance on 46-page Filing
30
We also find no evidence that Judge Briskman read, let alone relied on,
Evergreen’s 46-page FOFCOL and Ginsberg has presented none.
Due to the overlap between the court’s ultimate FOFCOL and Evergreen’s
46-page FOFCOL, Spradley and Ginsberg contended that Judge Briskman relied
on the 46-page document. (See Recusal Tr. Vol. IV at 97; Sanctions Tr. Vol. I at
100.) Spradley and Ginsberg also felt it significant that the court never disclosed
the 46-page submission or formally rejected the oversized filing.
Yet, neither Spradley nor Ginsberg had any reason to believe Judge
Briskman or his law clerk actually read the 46-page FOFCOL. (See, e.g., Recusal
Tr. Vol. III at 67, 153; Sanctions Tr. Vol. I at 101.) The only evidence produced
was the emails discussed above, which suggest that Judge Briskman did not read
the 46-page FOFCOL and that it was a “moot issue.” Further, at the time the
Motion was filed, neither Ginsberg nor Spradley had seen the 15-page replacement
FOFCOL or the FOFCOL submitted at the conclusion of the trial. (Recusal Tr.
Vol. III at 97.) At the recusal hearing Shuker testified that all of the facts and
conclusions contained in the 46-page submission could be found in Evergreen’s
two 15-page submissions or in the FOFCOL in the Kime opinion, a related case
cited in Evergreen’s 15-page submission. Spradley and Ginsberg conceded that
they had never reviewed either of Evergreen’s 15-page submissions or compared
31
those documents with the court’s ultimate FOFCOL. Ginsberg says he assumed
that Judge Briskman read the oversized FOFCOL. This is another unjustified
position in the face of emails to the contrary.
Moreover, Shuker’s expert witness Professor Lubet explained that even if
the emails are incorrect and Judge Briskman actually read the 46-page submission,
he could have easily disregarded it. Indeed, judges are asked to disregard
evidence all of the time.
Finally, we note that although Ginsberg and Spradley were quick to accuse
Shuker of filing an oversized FOFCOL (“Mr. Shuker took advantage of the
clandestine filings by blatantly flaunting the page limits imposed on Movants”
(emphasis added)), their own FOFCOL was oversized and in violation of the Local
Rules. (Recusal Mot. at 27.)
Once again, the record supports the bankruptcy court’s findings.
3. Shuker’s Behavior
Finally, the Recusal Motion complained of Shuker’s behavior and
statements which allegedly violated Rules 4-3.4(g) and 4-3.4(h) of the Florida
Rules of Professional Conduct.12 The Motion alleged Shuker made “unethical
12
On appeal Ginsberg does not address the allegations of Shuker’s improper conduct.
Because Shuker’s conduct was alleged as a basis for filing the Recusal Motion we still address it
below.
32
threats of seeking, and promises of obtaining, the incarceration of the individual
Movants and similar threats directed at Movant’s Counsel.” (Recusal Mot. at 3.)
The bankruptcy court found that Shuker’s behavior did not rise to the level of a
disciplinary rule violation or create doubts about the bankruptcy court’s
impartiality. The record supports this finding.
a. Threats to Knight and Huggins
After a court hearing in which Shuker sought orders directing Knight and
Huggins to repatriate certain funds or be held in civil contempt, the Recusal
Motion asserts that Shuker told Knight and Huggins they would end up in jail if
they did not settle, and Huggins would “die in jail.” (Recusal Mot. at 9.) It is now
clear that this never happened.
Knight’s own testimony belies the facts as stated in the Recusal Motion.
The Motion states that “Mr. Shuker approached [Knight and Huggins] outside the
door of the Court and announced that . . . [Knight and Huggins] would ‘end up in
jail’ and that Mr. Huggins, 67-years old, ‘would die in jail.’” (Id.) According to
Knight, however, Shuker did not approach either Knight or Huggins, his
comments were made only to Spradley and Ginsberg. (Recusal Tr. Vol. IV at 162;
Knight Aff. at 2.) Knight testified that while Spradley and Shuker were speaking
in the hallway, Shuker told Spradley if he did not have a settlement on his desk
33
soon, Spradley’s clients were going to go to jail and Huggins would die in jail.
(Id.) Knight claims that although he was not part of the conversation, he was
within earshot and overheard Shuker’s threats. (Id.) Huggins, however, was in
the bathroom (out of earshot) at the time. (Id.) Being within earshot of two
lawyers negotiating is much different than being approached by opposing counsel.
Further, if Huggins was in the bathroom during Shuker’s alleged threats, Shuker
could not have told Mr. Huggins that he “would die in jail.”
Moreover, Shuker testified that this was a warning, not a threat. (Recusal
Tr. Vol. IV at 196.) If Huggins and Knight did not make a settlement offer for the
money already owed they risked being found in civil contempt and sent to jail.
(Id.)
Again, there is simply no support in the record for these allegations. Such
misstatements reflect either a failure to investigate or a deliberate attempt to
deceive.
b. Threats to Spradley
In another example of “Mr. Shuker threaten[ing] to use what he apparently
thought was his court-granted right to threaten imprisonment,” the Motion
references an incident at Knight’s deposition. (Recusal Mot. at 9.) Shuker was
allegedly enraged when he saw Spradley at the deposition. Shuker told Spradley
34
to leave the room and threatened that he would be arrested for trespass if he did
not leave. Spradley did not leave. Shuker then left the room, calmed down, and
returned a few minutes later. The deposition was taken with Spradley present.
Again, the Motion fails to put the incident in context. Shuker testified that
the Knight deposition at issue was not for the general Mataeka proceeding, but for
the private purpose of accessing Knight’s funds in aid of execution of an existing
judgment. Shuker did not believe that Spradley had a right to be at the deposition.
Further, Huggins was to be deposed immediately after Knight. Thus, Shuker did
not want Huggins’ counsel in the room for Knight’s deposition. He did not want
Huggins to know what Knight was being questioned about or testifying to.
Shuker himself acknowledged that his behavior was improper. Spradley
emailed Shuker the next day outlining the inappropriate comment and Shuker
responded with an apology email.
The language used in the Recusal Motion fails to tell the whole story and
thereby exaggerates what occurred.
c. Threats to Ginsberg
The Motion further mentioned that Shuker threatened to file a bar grievance
against Ginsberg during the deposition of Charles Baron on August 9, 2005.
35
In our view, Shuker’s conduct is understandable in context. At the recusal
hearing, Shuker testified that during a previous deposition Ginsberg interrupted
him on numerous occasions and even stopped the deposition mid-question to take
Knight (the deponent) out of the room. Knight allegedly returned to the
deposition and, without being asked a related question, immediately retracted a
previous answer. During the Baron deposition Shuker testified that he threatened
Ginsberg with the filing of a bar grievance if Ginsberg continued with the same
conduct. Shuker did not want Ginsberg to further interfere with the deposition by
telling Baron how to respond to questions. Shuker explained that he threatened a
bar grievance to stop this unethical conduct. Ginsberg does not contest his alleged
conduct.
d. Appearance of Impropriety
Finally, the Motion asserted that Judge Briskman’s apparent endorsement of
Shuker’s behavior created the appearance of impropriety. (See, e.g., Recusal Mot.
at 10) (“Mr. Shuker continued to craft his own set of procedures, as endorsed by
the Court”); (id. at 28) (“The proceeding, and prior proceedings, so empowered
Mr. Shuker that he felt able to threaten the individual Movants with incarceration .
. . ”) (id. at 26) (“Similarly, [Shuker] appears to have received a judicial nod to
continue to ignore the automatic stay . . .”); (id. at 9) (“Mr. Shuker threatened to
36
use what he apparently thought was his court-granted right to threaten
imprisonment.”) (emphasis added). Spradley and Ginsberg also testified that they
believed the court endorsed Shuker’s actions. During the recusal hearing,
Spradley testified that he drew an inference from Shuker’s conduct - threatening
imprisonment on two occasions - that Shuker believed he only had to call Judge
Briskman to secure an arrest. (Recusal Tr. Vol. III at 103-07.) He testified that he
was not aware of any additional facts that would support these allegations, but that
the allegations reflected his “impression” based on Shuker’s behavior. (Id.)
Ginsberg also testified that it seemed Shuker felt empowered by Judge Briskman
to act as he wanted. (Sanctions Tr. Vol. I at 104-05.) He stated:
In the context of reviewing the ATN matter, the idea that Mr.
Shuker felt so comfortable with threatening people and so
comfortable with doing what he was doing, that he was prepared
to call Judge Briskman in for assistance and effectuate Mr.
Spradley’s arrest raised additional red flags about what it was that
caused Mr. Shuker apparently to feel so empowered in our
proceedings.
(Id.)
Ginsberg later recanted this basis for the Recusal Motion (the court’s
endorsement of Shuker’s behavior) in a letter to the court dated January 19, 2007.
In the letter, Ginsberg stated:
37
Other matters have been raised in the instant hearing, including
actions by Mr. Shuker in relation to parties and counsel.
However, we do not believe that any evidence has been entered
regarding a relationship between your Honor and Mr. Shuker that
show [sic] that you endorsed such actions, and thus believe that,
although the activities were inappropriate, they do not serve as a
basis for the relief requested by the Motion. We believe that Mr.
Shuker was acting on his own at those times.
(Letter from Ginsberg to Judge Briskman of 1/19/07.) Ginsberg testified at the
sanctions hearing that the letter was only to clear up a misunderstanding, he never
alleged “an illicit or an improper relationship between Mr. Shuker and Judge
Briskman.” (Sanctions Tr. Vol. II at 14.) Ginsberg explained that for recusal he
was only required to prove that the public might perceive impropriety from
Shuker’s actions, not actual court endorsement. (Id; see also Sanctions Tr. Vol. I
at 117.) In our view, however, even though Ginsberg presented no evidence of
court endorsement, the Recusal Motion clearly accused the court of endorsing
Shuker’s actions. Such an allegation under these circumstances is improper.
We therefore find that the bankruptcy court was not clearly erroneous in its
fact finding which is fully supported by the record.
4. Improper Purpose/Bad Faith
On appeal, Ginsberg alleges that the filing of the Motion was not
sanctionable; it was well justified in fact and law and was brought for a proper
38
purpose. In our view, a court could reasonably conclude that the content, timing,
and tone of the Recusal Motion indicate bad faith.
a. Sanctions
In this case, the bankruptcy court sanctioned Ginsberg under Federal Rule
of Bankruptcy Procedure 9011, the court’s inherent sanctioning powers, and 11
U.S.C. § 105. On appeal to the district court, Ginsberg argued that the Sanctions
Motion violated Rule 9011's twenty-one-day safe harbor provision.13 The district
court found that it was not necessary to decide whether the safe harbor provision
was violated because the sanctions imposed were clearly valid under 11 U.S.C. §
105. In re Evergreen, 391 B.R. at 188. We agree.
Under Section 105(a) the court may take any action “necessary or
appropriate to enforce or implement court orders or rules, or to prevent an abuse of
process.” 11 U.S.C. § 105(a). Thus, a court may impose sanctions if a party
violates a court order or rule. See, e.g., Jove Eng’g, Inc. v. I.R.S., 92 F.3d 1539,
1542 (11th Cir. 1996) (awarding sanctions under Section 105(a) for a violation of
an automatic stay provision).
13
The safe harbor provision allows attorneys to withdraw motions like this within
twenty-one days from the date of filing. If a party so withdraws the motion, it is not
sanctionable. Even though Ginsberg did not withdraw the Recusal Motion within twenty one
days from the date of filing, he argued that the Sanctions Motion was still in violation of the safe
harbor provision because it was filed before the expiration of the extra three days given for
mailings.
39
Sanctions were also imposed under the bankruptcy court’s inherent power
which is similarly not affected by the safe harbor provision of Rule 9011. To
impose sanctions under the court’s inherent power, the court must find bad faith.
In re Walker, 532 F.3d at 1309. “A finding of bad faith is warranted where an
attorney knowingly or recklessly raises a frivolous argument, or argues a
meritorious claim for the purpose of harassing an opponent. A party also
demonstrates bad faith by delaying or disrupting the litigation or hampering
enforcement of a court order.” (Id.) (internal citations omitted). “If particularly
egregious, the pursuit of a claim without reasonable inquiry into the underlying
facts can be the basis for a finding of bad faith.” Barnes v. Dalton, 158 F.3d 1212,
1214 (11th Cir. 1998); see also Jones v. Int’l Riding Helmets, Ltd., 49 F.3d 692,
695-96 (11th Cir. 1995) (finding that a court must determine whether a reasonable
inquiry was conducted prior to the filing of a pleading); In the Matter of Med.
One, Inc., 68 B.R. 150, 152 (Bankr. M.D. Fla. 1986) (finding that failure to make a
reasonable inquiry into whether a filing alleged valid claims was sanctionable).
Further, continually advancing “groundless and patently frivolous litigation” is
“tantamount to bad faith.” Glass, 849 F.2d at 1265.
b. Challenges to Adverse Rulings
40
The bankruptcy court was fully justified in finding that the Recusal Motion
was filed and litigated as “an offensive litigation strategy.” (Sanctions Order at
68.)
Challenges to adverse rulings are generally grounds for appeal, not recusal.
In re Walker, 532 F.3d at 1311; see also Bolin v. Story, 225 F.3d 1234, 1239 (11th
Cir. 2000) (“[E]xcept where pervasive bias is shown, a judge’s rulings in the same
or a related case are not a sufficient basis for recusal.”). Nevertheless, a
considerable portion of the Recusal Motion disputed rulings unfavorable to the
debtors.14 (See, e.g., Recusal Mot. at 2) (referring to “a series of dubious judicial
actions taken in conjunction with Mr. Shuker.”). The Recusal Motion criticizes
the court for appointing an interim trustee;15 not sufficiently addressing the
automatic stay;16 granting the discovery order;17 making incorrect FOFCOL in the
14
At least twenty-seven paragraphs in the Recusal Motion disputed adverse rulings.
15
"Ignoring the absolute dearth of evidence justifying the appointment of an interim
trustee, and without making a single finding of fact on the record or in his Order, Judge Briskman
granted the appointment." (Recusal Mot. at 9.)
16
Ginsberg argued that Shuker and Cuthill violated the automatic stay provisions in the
bankruptcy code by seeking discovery on at least four occasions and that the court "refused" to
enforce the automatic stay. (Recusal Mot. at 11-12.)
17
Ginsberg asserted that the expedited discovery motion discussed above was filed ex
parte and granted without a hearing even though Spradley objected to the relief requested.
41
Mataeka AP judgment;18 and miscalculating the damages award in the Mataeka AP
judgment.19 Spradley even conceded in testimony that he was “really frustrated at
that point, the fact that I felt relief was coming down in favor of the plaintiff and
against the defendants in the case and in a fashion that didn’t appear to be just.”
(Recusal Tr. Vol. III at 146.) Yet, a recusal motion is an improper vehicle to
dispute disagreeable adverse rulings. It is a clear abuse of such a pleading.
Additionally, Ginsberg requested the revocation of all orders previously
entered in the Mataeka AP and related proceedings. In other words, Ginsberg
sought the revocation of more than 250 orders all previously entered in the
Evergreen case. Yet, Ginsberg presented no evidence that this was an
extraordinary circumstance which required vacatur. Liljeberg v. Health Servs.
Acquisition Corp., 486 U.S. 847, 863 (1988) (noting that vacatur should only be
applied in “extraordinary circumstances” (citation omitted)). In our view,
requesting this kind of relief, while discussing numerous rulings adverse to the
18
The Recusal Motion referenced the March 22, 2006 judgment in favor of Evergreen,
claiming it was factually inaccurate and providing specific examples of the alleged inaccuracies.
(Recusal Mot. at 13-14.)
19
The Recusal Motion criticized the amount of damages awarded to Evergreen, claiming
they were erroneously calculated because of Judge Briskman's reliance on Cuthill's testimony and
representations. (Recusal Mot. at 16-18.)
42
debtors, strongly suggests that the Motion was presented to hamper enforcement
of the bankruptcy court’s orders.
c. Delay Tactic
The bankruptcy court also did not err in concluding that Ginsberg filed the
Recusal Motion to postpone the involuntary bankruptcy proceedings against his
client and the appeal from the Mataeka AP Judgment.
Filing the Recusal Motion frustrated Evergreen’s collection efforts on an
almost $8 million judgment. The Recusal Motion was filed the day after
Evergreen finished its prima facie case on the involuntary bankruptcy proceedings
and it apparently was clear to all concerned that Evergreen was going to prevail.
The Motion was not filed until July 26th even though many of the incidents
outlined in the Motion happened much earlier.20 Ginsberg further petitioned the
district court to stay all related proceedings.
Ginsberg also continually stalled the Recusal hearing. Two days before the
scheduled pre-hearing conference, he sought a stay of the proceedings pending the
resolution of his Petition for a Writ of Mandamus. Ginsberg then postponed the
20
The Shuker/Ginsberg deposition skirmish happened almost a year before the Recusal
Motion was filed, the 46-page FOFCOL was filed ten months before the Recusal Motion was
filed and the issue appeared to be moot, and the Shuker/Spradley deposition skirmish occurred
seven weeks prior to the filing of the Recusal Motion.
43
final evidentiary hearing for one month due to his availability constraints and
those of his expert witness. Days before the trial, Ginsberg again sought to
continue the trial for two weeks “in order to properly prepare for the depositions of
the witnesses and to properly prepare for the final evidentiary hearing.” (Recusal
Order at 14.) Finally, at the evidentiary hearing, after both parties finished
presenting their cases in chief, Ginsberg asked for a continuance to present his
rebuttal case. The evidentiary hearing was continued almost two months, at which
time Ginsberg sent a letter to the court saying he did not intend on presenting a
rebuttal case.
Moreover, the record shows Ginsberg tried to delay the filing of an appeal.
After filing the Recusal Motion, Ginsberg filed a motion for extension of time to
appeal the Mataeka AP Judgment. The district court found that “the stated reasons
for wanting to put off filing an initial brief have varied with each filing seeking
delay. Taken as a whole, the record is cause for concern.” (D. Ct. Case 06-cv-
00837-JA, D.E. # 43.)
These delaying tactics further support the bankruptcy court’s finding of
Ginsberg’s bad faith.
d. Disrespectful Tone
44
Finally, the bankruptcy court did not err in finding that Ginsberg's
overzealous litigation tactics, use of factual inaccuracies, and disrespectful
behavior demonstrate bad faith.
Quoting Blackstone, the United States Supreme Court explained that "the
law will not suppose a possibility of bias or favour in a judge, who is already
sworn to administer impartial justice, and whose authority greatly depends upon
that presumption and idea." Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 820
(1986) (quoting 3 W. Blackstone, Commentaries at *361). That does not mean
that a judge should never disqualify himself for personal bias or prejudice, but it
should not be supposed. And as to counsel, as the Ohio Supreme Court has put it,
[t]he law demands that all counsel foster respect and dignity for
those who administer and enforce the law. Conduct that is
degrading and disrespectful to judges and fellow attorneys is
neither zealous advocacy nor a legitimate trial tactic. Lying to a
tribunal and making false accusations against judges and fellow
attorneys can never be condoned.
Columbus Bar Assn. v. Vogel, 881 N.E.2d 1244, 1249 (Ohio 2008).
Yet, the record shows Ginsberg indulged in disrespectful statements without
legal or factual foundation. Ginsberg ignored all facts indicating that the court did
not direct or engage in ex parte communications, rely on extra judicial materials,
or endorse Shuker's actions. Ginsberg knew about Judge Jenneman’s order, yet
45
Ginsberg did not even mention that Judge Jenneman had held that the ex parte
hearing was not improper.
Instead of engaging in a reasonable fact finding investigation before making
allegations, Ginsberg supposed bias and favor in all of Judge Briskman’s actions.
For example, because the court did not denounce Shuker’s 46-page FOFCOL,
Ginsberg claimed the oversized filing was intentional: “One can only reasonably
conclude that neither the Court nor Mr. Shuker had any intention of Mr. Shuker
being limited to filing the proposed findings within the page limit demanded of the
Movants.” (Recusal Mot. at 27) (emphasis added). Ginsberg also assumed the
court relied on the 46-page FOFCOL even though there was evidence to the
contrary. Further, the Recusal Motion compared Judge Briskman's conduct to
criminal judicial misconduct even though Ginsberg had no actual, personal
knowledge of the Complaint and no reason to believe that it alleged criminal
misconduct. Indeed, Ginsberg did not speak directly to Hudson about the
Complaint before calling it an “investigation” or try to contact any of the other
people present at the relevant ATN proceeding.
Ginsberg also testified that he was advised by his expert witness Justice
Harding that "he had an ethical obligation to see this through" to convince the
court that Ginsberg did not file the Recusal Motion for tactical purposes.
46
(Sanctions Tr. Vol. I at 90-91.) However, the record refutes this contention. The
record shows that Harding did not advise Ginsberg to file the Recusal Motion, as
Harding was not engaged by GrayRobinson until after the Recusal Motion was
filed. Justice Harding was also not given all of the evidence to develop his expert
opinion. For example, Justice Harding was never told that Evergreen filed a
subsequent 15-page FOFCOL, he was not shown the emails between Shuker and
Spradley discussing whether the court had considered the 46-page submission, nor
was he given the 15-page FOFCOL to compare with the court's ultimate FOFCOL.
(Sanctions Tr. Vol. I at 54-57.)
Moreover, Ginsberg failed to re-evaluate his accusations after the
evidentiary hearing on the Recusal Motion. Ginsberg repeated his claim of
court-ordered ex parte filings even after the recusal hearing revealed no evidence
of such a directive. Ginsberg continued to assert that Judge Briskman relied on
the 46-page FOFCOL even though there were emails referencing the discussions
of Spradley and Shuker with the court’s staff that the 46-page submission was not
considered and all of the information in the ultimate FOFCOL could be found
elsewhere. Additionally, Ginsberg continued to allege that the Judicial Council
had launched an "investigation" into Judge Briskman's conduct even after he
learned that Hudson would have been notified if an "investigation" was initiated.
47
Further, after Knight testified that he merely overheard Shuker’s threats of
imprisonment, Ginsberg still continued to assert that Shuker approached Knight
and Huggins and threatened them with imprisonment. Similarly, even after Knight
testified that Huggins was in the bathroom at the time of Shuker’s alleged threat,
Ginsberg contended that Shuker told Huggins he would die in jail. The evidence
produced at the hearing was sufficient for Spradley and GrayRobinson to pull out
of the Recusal Motion. Yet, even with mounting evidence to the contrary,
Ginsberg continued to argue the Recusal Motion.
Further, Ginsberg was extremely difficult to deal with and disrespectful to
the court. He refused to answer the court's questions, treated the court as an
adversary and continually made inflammatory statements. For example, Ginsberg
exaggerated the implications of Judge Briskman’s actions, alleging that his
conduct “relates directly to the judicial processes, namely the integrity of trial
transcripts, and a party’s due process rights and liberty.” (Recusal Mot. at 19.)
Ginsberg opened the Recusal Hearing by claiming: "Your honor has compromised
my health, your Honor has compromised my immune system." (Recusal Tr. Vol. I
at 5.) Ginsberg also used accusatory, unsupported language in the three petitions
for writ of mandamus; asserted that Judge Briskman faced “potential career ending
punishment”; and accused him of trying to surreptitiously “brush the matter under
48
the carpet” so he could “retain authority over these very important issues of
judicial and professional conduct." (Response Br. at 16.)
Ginsberg also purposefully pursued recusal very publicly. After learning of
Hudson's Complaint, Ginsberg did not first request a private hearing with Judge
Briskman and all counsel in these cases to address his concerns, nor did he file the
Recusal Motion under seal (ignoring the preference for confidentiality inherent in
the Judicial Council Rules discussed below). Instead, the first time Ginsberg
raised the Complaint was in a 31-page accusatory motion which used the term
"investigation" twelve times and referenced adverse rulings fifty-four times.
Ginsberg also immediately brought the Recusal Motion to the attention of the
district court. He filed three petitions for a writ of mandamus with the district
court while the Recusal Motion was still pending.21
In our view, Ginsberg’s dogged pursuit of a frivolous claim indicates bad
faith.
B. Disclosure of the Complaint
21
The Supreme Court has said: “Mandamus, prohibition and injunction against judges
are drastic and extraordinary remedies. We do not doubt power in a proper case to issue such
writs. But they have the unfortunate consequence of making the judge a litigant, obliged to
obtain personal counsel or to leave his defense to one of the litigants before him. These remedies
should be resorted to only where appeal is a clearly inadequate remedy. We are unwilling to
utilize them as a substitute for appeal. As extraordinary remedies, they are reserved for really
extraordinary causes.” Ex parte Fahey, 332 U.S. 258, 259-60 (1947).
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The bankruptcy court did not abuse its discretion by refusing to disclose the
existence of the Complaint.
The Judicial Council Rules have strict confidentiality requirements.
Judicial Council Rule 16 requires that “complaints, records of investigations and
proceedings relating to allegations of judicial misconduct or disability shall be
maintained as confidential matters, and shall not be disclosed to the public.”
Judicial Council Rule 15(f) does allow disclosure of a complaint “upon the written
consent of both the complained-of judge and the Chief Judge,” but in our view the
strict confidentiality requirements indicate the generally secretive nature of
judicial complaints.
This preference for confidentiality maintains public confidence in the
judiciary. Keeping the existence of the Complaint confidential kept the Complaint
from “affecting the public's confidence in the impartiality and integrity of the
judicial process." Davis, 506 F.3d at 1332 n.12 (internal citations omitted). It
defies logic for Ginsberg to file a motion asserting harm to public confidence in
the judiciary when his own actions in filing the Motion and attempting to make the
Complaint public are creating such harm. Surely if he was so concerned, Ginsberg
could have inquired about the Complaint out of the public eye. Yet, the first time
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Judge Briskman was asked to disclose information about the Complaint was in full
public view.
Indeed, Ginsberg was relentless in his attempts to force Judge Briskman to
testify about the Complaint and make it public. First, Ginsberg listed Judge
Briskman as a witness in the pretrial disclosures for the recusal hearing. When
Judge Briskman entered an order excluding himself as a witness, Ginsberg sought
to compel Judge Briskman to testify. After postponing his rebuttal case during the
Recusal Motion hearing, Ginsberg wrote a letter to Judge Briskman again
requesting he make disclosures about the Complaint. Later, on August 8, 2007,
Ginsberg filed another Motion Requesting the Honorable Arthur Briskman Make
Certain Disclosures on the Record (“Disclosure Motion”) and before Judge
Briskman ruled on the Disclosure Motion, at the commencement of the sanctions
hearing, Ginsberg made an additional ore tenus motion to have Judge Briskman
disclose his knowledge of the Complaint on the record.
In addition to the Judicial Council Rules’ preference for confidentiality,
Federal Rule of Evidence 605 also states that a judge cannot testify at a trial in
which he is presiding. F.R.E. Rule 605. Moreover, a judge is not required to
recuse himself so that he can testify. See, e.g., Cheeves v. So. Clays, Inc., 797
F.Supp. 1570, 1582-83 (M.D. Ga. 1992) (having a judge testify is manipulated
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harassment, as it would cause an unjustified voluntary disqualification of the
presiding judge or endless delays in the litigation); Sensley v. Albritton, 385 F.3d
591, 599 (5th Cir. 2004) (“a federal judge has a duty to sit where not disqualified
which is equally as strong as its duty to not sit where disqualified”) (quoting Laird
v. Tatum, 409 U.S. 824, 837 (1972)). As Judge Briskman presided over both the
recusal hearing and the sanctions hearing, he could not testify at either.
Ginsberg argued that Judge Briskman should have recused himself from
both hearings, but Section 455(a) places the burden to decide recusal on the judge
who is the subject of the Motion. Section 455(a) states that “any justice, judge, or
magistrate judge of the United States shall disqualify himself.” 11 U.S.C. § 455(a)
(emphasis added). Further, judges routinely preside over motions for their own
recusal. For example, Justice Scalia presided over a motion to recuse him in a
case before the United States Supreme Court. Cheney, 541 U.S. at 913. The Fifth
Circuit also held in In re Corrugated Container Antitrust Litigation that “[i]t is for
the judge who is the object of the affidavit (of bias) to pass on its sufficiency.”
614 F.2d 958, 963 n.9 (5th Cir. 1980) (quoting 13 Wright, Miller & Cooper §
3551 at 375).22
22
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.
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In the event that Judge Briskman erred in some rulings, Ginsberg should
have waited to deal with these issues on appeal. In re Walker, 532 F.3d at 1311
(“Adverse rulings are grounds for appeal but rarely are grounds for recusal . . .”).
The district court here (through Judge Antoon) advised Ginsberg as much in the
denial of Ginsberg’s Third Petition for Writ of Mandamus, explaining that
Ginsberg should wait until Judge Briskman issued a ruling on the Recusal Motion
and then appeal it, but Ginsberg simply ignored this instruction. Further,
Ginsberg’s dogged pursuit of Judge Briskman’s testimony supports the bankruptcy
court’s finding of bad faith. See Indus. Risk Insurers v. M.A.N.
Gutehoffnungshutte GmbH, 141 F.3d 1434, 1448 (11th Cir. 1998) ("Improper
purpose may be shown by excessive persistence in pursuing a claim or defense in
the face of repeated adverse rulings.").
For all of these reasons we find that the bankruptcy court was not clearly
erroneous in its fact finding and applied correct legal standards.
C. Presiding over the Sanctions Hearing
Finally, the bankruptcy court did not err in presiding over the Sanctions
Motion.
On appeal Ginsberg asserts that Judge Briskman was too emotionally
involved in the matter and should have transferred the Sanctions Motion to the
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district court or another bankruptcy court judge. In certain circumstances “there
are criticisms of judicial conduct which are so personal and so probably
productive of bias that the judge must disqualify himself to avoid being the judge
in his own case.” Ungar v. Sarafite, 376 U.S. 575, 583 (1964). However, that
does not mean that every attack on a judge disqualifies him from sitting. Id.; see
also Sensley, 385 F.3d at 599. “We cannot assume that judges are so irascible and
sensitive that they cannot fairly and impartially deal with resistance to their
authority or with highly charged arguments about the soundness of their
decisions.” Ungar, 376 U.S. at 584. Requiring recusal for all disruptive,
recalcitrant and disagreeable commentary would undermine the judiciary. See
Mayberry v. Pennsylvania, 400 U.S. 455, 463 (1971). “A judge cannot be driven
out of a case.” Id.
As we have found that Judge Briskman appropriately presided over the
Recusal Motion hearing, we also find that Judge Briskman was in the best position
to sanction Ginsberg for his conduct therein. We further agree with the district
court that “[w]hile some of the Bankruptcy Judge’s remarks at the sanctions
hearing were immoderate, they were not sufficiently egregious to ‘reveal such a
high degree of favoritism or antagonism as to make fair judgment impossible.’”
Evergreen, 391 B.R. at 189 n.6 (quoting Liteky v. United States, 510 U.S. 540,
54
555 (1994)). In our view, Ginsberg’s egregious conduct - including interrupting
Judge Briskman and grossly mischaracterizing the facts - warranted some of Judge
Briskman’s admonishments. Our reading of the transcripts convinces us that for
the most part Judge Briskman showed great patience and accommodated Ginsberg,
who was experiencing health problems, over and over again.
IV. CONCLUSION: REASONABLENESS OF SANCTIONS
Ginsberg’s unfounded allegations and improper motive support a finding of
bad faith. See In re Walker, 532 F.3d at 1310. We therefore believe the court did
not abuse its discretion in imposing sanctions under either Section 105(a) or the
court’s inherent authority to sanction improper conduct.
“Civil penalties must either be compensatory or designed to coerce
compliance.” In re Dyer, 322 F.3d 1178, 1192 (9th Cir. 2003) (citing F.J.
Hanshaw Enters., Inc. v. Emerald River Dev., Inc., 244 F.3d 1128, 1137-38 (9th
Cir. 2001)). “On review, it is not necessary to psychoanalyze the [attorneys’
actions] to discover the smallest dollar value that would deter. Our task is to
ensure that the district court did not abuse its discretion in crafting a sanction
award reasonably calculated to deter litigation abuse.” Merriman v. Sec. Ins. Co.
of Hartford, 100 F.3d 1187, 1194 (5th Cir. 1996).
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The bankruptcy court did not abuse its discretion in imposing both
compensatory sanctions (monetary sanctions) and sanctions designed to coerce
compliance (suspension). In our view, Ginsberg’s relentless pursuit of the Recusal
Motion, even after the evidentiary hearing revealed no factual support for
Ginsberg’s contentions, demonstrates that a monetary sanction alone would be
insufficient to deter Ginsberg from similarly egregious behavior in the future.
Therefore, the imposition of monetary sanctions and a suspension is justified.
Moreover, because Ginsberg is a non-bankruptcy (by his admission), New York
lawyer who appeared pro hac vice before the Bankruptcy Court in the Middle
District of Florida, we find that a five year suspension in that court is not too
severe. Finally, the monetary sanctions imposed by the bankruptcy court were
based upon the attorneys’ fees incurred by the appellees and were fully supported
in the record.
Based on the foregoing analysis we affirm the district court’s decision to
affirm the bankruptcy court’s imposition of sanctions.
AFFIRMED.
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