Sillam v. Labaton Sucharow LLP

Background

Gerard Sillam and Aldric Saulnier sued Labaton Sucharow, LLP, Christopher J. Keller, and Lawrence A. Sucharow. The dispute arose from alleged referral-fee arrangements and later settlement agreements. Plaintiffs alleged that Labaton had made false sworn statements about whether it represented certain clients covered by the 2009 settlements. The court had previously declined to dismiss the fraudulent-inducement claim against Labaton and Keller.

The case then proceeded through contentious discovery under Magistrate Judge Ona T. Wang. Plaintiffs asked to give depositions in France rather than New York. Judge Wang allowed the depositions to occur in Paris or remotely with plaintiffs remaining in France, but required plaintiffs to sign declarations promising not to file or pursue legal proceedings in France relating directly or indirectly to the depositions or the lawsuit.

Discovery Violation and Sanction

After signing the declarations, Sillam filed two additional criminal actions in France against the defendants and their attorneys. He did not tell Judge Wang or the defendants about those filings. Judge Wang found that Sillam had violated the condition for taking his deposition abroad and imposed a sanction consisting of the attorneys’ fees and expenses caused by his misconduct. She later set the sanction at $146,280.

Judge McMahon affirmed Judge Wang’s sanction order and warned that failure to follow the court’s orders and cooperate in the case would result in dismissal. Sillam did not pay the sanction by the August 30, 2024 deadline. He also did not timely object to Judge Wang’s order in the district court, obtain a stay, or submit evidence supporting his claim that he could not afford to pay. His attorney’s attempted direct appeal to the Court of Appeals did not challenge the sanction in a way that stayed the payment obligation.

Ruling

The defendants moved to dismiss the complaint as a sanction for Sillam’s failure to comply with the payment order. Judge McMahon held that a district court may dismiss a complaint for failure to comply with a sanctions order, including an order requiring payment of the opposing party’s attorneys’ fees. She concluded that dismissal was deserved because Sillam had ignored the sanction order after being warned that failure to comply with court orders could lead to dismissal.

The court nevertheless conditionally granted the defendants’ motion rather than directing immediate dismissal. Sillam was given until 3 p.m. Eastern time on December 20, 2024, to pay the entire $146,280 sanction. If the payment was not received and cleared by that deadline, the court stated that it would direct the clerk to dismiss the case with prejudice as to Sillam. The opinion does not state that this conditional dismissal had already taken effect.