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3. 4th Circuit upholds $1M sanction for law…

Trials & Litigation

4th Circuit upholds $1M sanction for law firm that tried to ‘sabotage’ federal court’s authority

By Debra Cassens Weiss

October 29, 2024, 3:50 pm CDT

A federal judge had inherent power to impose a $1.05 million sanction against a Maryland law firm for asking state courts to order an end to U.S. district court litigation, a federal appeals court ruled last week.

The 4th U.S. Circuit Court of Appeals at Richmond, Virginia, affirmed the sanction against Napoli Law, which was accused of breaching a contract to share attorney fees promised in a referral deal. Napoli Law had filed lawsuits in two New York state courts that sought an order for the plaintiff, the Keyes Law Firm, to dismiss the federal case.

“District courts are not powerless to act in the face of contumacious conduct so expressly designed to undercut, and even sabotage, their adjudicative authority,” the 4th Circuit said in an Oct. 24 opinion by Judge J. Harvie Wilkinson III, an appointee of former President Ronald Reagan.

Napoli Law had filed the state court suits after the district court in Maryland rejected its motion to dismiss the fee case.

“In every practical sense,” Wilkinson said, “Napoli asked a state court in New York to overrule a federal district court in Maryland. It is hard to imagine a more flagrant challenge to the district court’s authority or a more obvious spur to litigation hither and yon.”

The 4th Circuit rejected Napoli Law’s argument that federal courts only have power to sanction conduct outside the courtroom when it is in direct defiance of a court order.

“To ask a district court to foresee and expressly prohibit through court order every conceivable abuse of process is to ask it to chase its tail,” Wilkinson wrote. “Litigation is complicated enough as it is. District courts should not have to wage a sprawling, three-front war to defend their rightful role.”

Law360 and the Maryland Daily Record have coverage of the decision.

The sanction against Napoli Law followed a December 2019 verdict of more than $861,000 for the Keyes Law Firm. It also followed a previous sanction of nearly $317,000 against Napoli Law for defiance of discovery orders.

The second sanction was for the state court suits and “other bad-faith misconduct,” the appeals court said. “The full list of Napoli’s sanctioned misconduct is long and troubling. It included repeated defiance of court orders, frivolous motions, and last-minute document dumps, to name just a few examples.”

Lawyer Paul J. Napoli formed Napoli Law after the breakup of Napoli Bern Ripka Shkolnik, according to Law360. The suit by the Keyes Law Firm had claimed that the prior firm violated fee-sharing agreements for referrals of asbestos cases. The Keyes Law Firm’s suit named 17 defendants alleged to be alter egos of the original firm and lawyer Napoli, according to Law360.

Marc Bern, a former Napoli Bern name partner, settled the case and was dropped from the Keyes Law Firm suit.

In a statement to Law360, lawyer Napoli said Napoli Law and Napoli Bern are distinct entities. The appeals court disregarded the distinction and overlooked the fact that many of the underlying cases have concluded through settlement or dismissal, he said.

“Keyes consistently held the misconception that there were still tens of millions in fees outstanding, despite having already received millions, a view the jury ultimately sided with us on,” Napoli said. “In the end, it became evident that we had prevailed in the underlying case. The firm is evaluating further briefing to remedy these misconceptions.”

Louis Malick of the Keyes Law Firm told the Maryland Daily Record that the firm is pleased with the 4th Circuit’s decision.

“It sends a strong message to certain members of the profession that the sort of tactics employed in this case will not be tolerated and that district judges have ample authority to sanction misconduct,” Malick told the Maryland Daily Record in an email.

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3. Was Jack Smith’s appointment unconstitutional?…

Constitutional Law

Was Jack Smith’s appointment unconstitutional? He has no more authority than Taylor Swift, amicus brief argues

By Debra Cassens Weiss

December 21, 2023, 2:21 pm CST

Special counsel Jack Smith’s appointment was unconstitutional, leaving him powerless to obtain a quick U.S. Supreme Court decision on immunity claims by former President Donald Trump, according to an amicus brief signed by former U.S. Attorney General Edwin Meese and two law professors.

“Not clothed in the authority of the federal government, Smith is a modern example of the naked emperor,” the Dec. 20 amicus brief argues. “Improperly appointed, he has no more authority to represent the United States in this court than Bryce Harper, Taylor Swift or Jeff Bezos.”

The law professors who co-wrote the brief with Meese are Steven G. Calabresi of the Northwestern University Pritzker School of Law and Gary S. Lawson of the Boston University School of Law.

Calabresi summarized the arguments in a post for the Volokh Conspiracy.

The brief argues that Attorney General Merrick Garland “exceeded his statutory and constitutional authority” when he appointed Smith in November 2022. Because Smith’s appointment was unconstitutional, “every action that he has taken since his appointment is now null and void,” Calabresi argued at the Volokh Conspiracy.

Smith—who was not nominated to be special counsel by President Joe Biden or confirmed by the U.S. Senate—has nationwide jurisdiction, making him more powerful that any of the 93 Senate-confirmed U.S. attorneys, Calabresi said. Federal law allows the attorney general to appoint attorneys to assist U.S. attorneys but not to replace them, he wrote.

The argument is that the appointments clause requires all federal offices “not otherwise provided for” in the Constitution to be established by law. Yet there is no statute establishing the Office of Special Counsel within the U.S. Department of Justice. Nor is there a statute allowing the attorney general to appoint an inferior officer special counsel with the powers given to Smith. And inferior officers, in any event, must be controlled by a superior officer, but Garland doesn’t have that power over Smith under DOJ regulations.

The appointments clause makes clear that the “default mode” of appointment for all officers is presidential nomination, Senate confirmation and presidential appointment, the brief says.

There is a proper way to appoint a special counsel like Smith, Calabresi said at the Volokh Conspiracy. Garland should “ask one of the very best Senate-confirmed U.S. attorneys now in office to prosecute the cases arising out of the events of Jan. 6, 2021, or the misuse of classified documents case, to be special counsel” with nationwide authority.

The attorney general could then appoint Smith to be the special counsel’s special assistant, and the Trump cases could then be “restarted from scratch” Calabresi wrote.

“We do not want future U.S. attorney generals, such as the ones Donald Trump might appoint, if he is reelected in 2024, to be able to pick any tough thug lawyer off the street and empower him in the way Attorney General Merrick Garland has empowered private citizen Jack Smith,” Calabresi wrote. “Think of what that would have led to during the McCarthy era.”