Sadis & Goldberg, LLP v. Banerjee

Background

Sadis & Goldberg, LLP sued its former client, Sumanta Banerjee, for unpaid legal fees. The court had previously entered a default judgment, but the Court of Appeals sent the case back for a determination of Banerjee’s domicile when the complaint was filed, because that issue affected diversity jurisdiction. The case then proceeded through jurisdictional discovery.

Sadis & Goldberg sought proposed subpoenas directed to HRB Tax Group and Fidelity Investments. The HRB subpoena sought working files related to Banerjee’s and Akshita S. Banerjee’s federal and state tax returns for 2013 through 2016, along with related communications. The Fidelity subpoena sought account-opening, account-modification, and account-statement documents for accounts in either person’s name for 2013 and 2014. Banerjee moved to quash both subpoenas, and the court denied that motion on August 26, 2019.

Attorney’s-Fee Standard

Sadis & Goldberg moved under Federal Rule of Civil Procedure 37(a)(5)(B) for the expenses, including attorney’s fees, that it incurred opposing the motion to quash. That rule generally requires the court to consider an award when a motion seeking to block or limit discovery is denied, after the person who filed the motion has an opportunity to be heard. The rule does not require payment if the motion was substantially justified or if other circumstances would make an award unjust.

Court’s Analysis

The court concluded that the motion to quash was not substantially justified. It determined that the subpoenas sought information relevant to Sadis & Goldberg’s jurisdictional claims. Banerjee’s arguments about the meaning of documents he had previously produced, and whether those documents fully answered the requests, concerned the merits of the discovery dispute rather than whether the subpoenas were valid and enforceable.

The court nevertheless found that other circumstances made a fee award unjust. Banerjee was proceeding without a lawyer and argued that he did not know an unsuccessful motion could result in a fee award. The court stated that this status did not automatically protect him from sanctions, but it considered the particular circumstances. When the court set the briefing schedule for the subpoena request, Banerjee had not been warned that he could be required to pay the expenses if his motion failed. In addition, his previous attorney had withdrawn about two weeks before Banerjee filed the motion to quash. The court also noted Banerjee’s earlier failures to appear at conferences and cooperate in discovery, and stated that he had previously been admonished to follow the Federal Rules of Civil Procedure.

Ruling

Judge Ona T. Wang denied Sadis & Goldberg’s motion for attorney’s fees. The court warned that future motions that are baseless, not made in good faith, or that unreasonably or vexatiously multiply the proceedings could result in sanctions under Rule 37(a)(5), 28 U.S.C. § 1927, or the court’s inherent authority.