Sillam v. Labaton Sucharow LLP

Background

Gerard Sillam and Aldric Sauliner sued Labaton Sucharow LLP and other defendants. The complaint alleges that the defendants breached an arrangement under which the plaintiffs would refer potential clients to the law firm.

The ruling concerned a discovery dispute rather than the underlying contract allegations. The plaintiffs wanted their depositions taken in France. The defendants asked Magistrate Judge Ona T. Wang to require the plaintiffs to appear in the United States because the plaintiffs had previously started four criminal proceedings against the defendants in France related to the subject matter or conduct of the lawsuit. Those proceedings had been dismissed after trial.

In January 2023, the plaintiffs’ then-lawyer, Douglas M. Reda, told Magistrate Judge Wang that the plaintiffs would sign whatever documents the defendants considered necessary for protection and acknowledged that dismissal could be the ultimate sanction. Based on those representations, Judge Wang allowed the depositions to occur in France or remotely. She also allowed the defendants to prepare declarations or similar agreements addressing concerns about further proceedings in France.

The declaration and French complaints

On February 16, 2023, Sillam and Sauliner signed declarations under oath before a French official and under penalty of perjury. Sillam agreed that he would not file or pursue any type of legal proceeding in France—including a criminal proceeding or criminal complaint—against the defendants, their counsel, or affiliated people if it related directly or indirectly to the deposition or lawsuit. He also agreed that violating the promises could result in sanctions or other remedies by the New York court, including monetary sanctions, an order requiring the deposition to continue in New York, or dismissal of the action.

Magistrate Judge Wang ordered Sillam to disclose what he had filed with French authorities. He disclosed a police report and the March 2023 complaint but again did not disclose its dismissal or refiling until after the judge made a preliminary finding that he had not shown cause for failing to comply. Judge Wang ordered Sillam to pay reasonable fees and costs under Federal Rule of Civil Procedure 37(a)(5) for work involving the declaration, his deposition, and motion practice concerning the 2023 Complaints. She also directed the defendants to address whether additional sanctions were warranted under other rules, a federal statute, or the court’s inherent authority. The opinion states that Magistrate Judge Wang was still considering those filings.

McMahon’s review and ruling

Judge McMahon treated the sanctions order as a non-dispositive discovery order. Under that standard, the district court could change the order only if it was clearly erroneous or contrary to law—that is, if the order left the court with a firm conviction that a mistake had been made or failed to apply the relevant law or rules.

Judge McMahon upheld the order. She agreed that the declaration plainly covered any criminal proceeding related to the lawsuit and did not make an exception for complaints that Sillam considered meritorious. The declaration was also not limited to proceedings concerning the deposition. The court found that Sillam had signed the declaration after having an opportunity to consult lawyers in New York and France and after affirming that it had been translated into French.

The court also upheld Magistrate Judge Wang’s finding that Sillam acted in bad faith and intentionally violated his promises. Judge McMahon emphasized that Sillam did not show that he had specifically consulted Reda before filing the 2023 Complaints, that he was not forthcoming about the complaints during his deposition or the show-cause process, and that his claimed understanding of the declaration could not override its unambiguous language. The court stated that Sillam’s arguments about the complaints’ merits did not excuse the violation.

The decision therefore affirmed the magistrate judge’s order directing that Sillam be sanctioned and overruled Sillam’s objections. It did not dismiss the lawsuit in this decision or impose the additional sanctions that Magistrate Judge Wang was separately considering.

Future warning and discovery location

Judge McMahon warned that further obstructive or harassing conduct—including filing related proceedings in France or failing to comply with orders—could require Sillam to show cause why the lawsuit should not be dismissed. The court explained that dismissal could be an available sanction under Rule 37(b)(2), but the decision did not impose dismissal.

The court also ordered that no further discovery take place in France or remotely. It stated that because Sillam chose to sue in the Southern District of New York, he was required to comply with that court’s rules and orders.