Eisenberg v. Permanent Mission of Equatorial Guinea to the United Nations

Background

Leonard Eisenberg and Carol Eisenberg sued the Permanent Mission of Equatorial Guinea to the United Nations, alleging that it built and maintained structures that trespassed on and encroached on their property. The defendant challenged the court’s subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), arguing sovereign immunity. On July 30, 2019, the court denied that motion, and the Second Circuit affirmed the ruling on November 10, 2020.

The defendant then failed to provide responsive discovery despite the court’s directive and continued to assert sovereign immunity. The court later entered a default judgment for the plaintiffs on August 11, 2021. The plaintiffs moved for sanctions under Rule 11, which requires attorneys to have reasonable support for factual and legal positions presented to the court.

Parties’ Positions

The plaintiffs argued that the defendant frivolously continued to assert sovereign immunity after both the district court and the Second Circuit had rejected that position. They also argued that the defendant used delaying tactics and obstructed discovery, forcing them to seek an order compelling discovery and then default judgment. The defendant opposed the sanctions motion and continued to raise sovereign immunity in its opposition.

The plaintiffs sought $75,000 in attorney’s fees at an hourly rate of $450. Their fee request included time spent on the defendant’s appeal, mandatory mediation, and the sanctions motion.

Court’s Analysis

The court explained that Rule 11 sanctions require objective unreasonableness and that courts apply a high standard because sanctions can discourage vigorous advocacy. It nevertheless found sanctions appropriate because the defendant persisted in asserting immunity after the district court’s ruling had been affirmed and failed to provide discovery despite the court’s warning that noncompliance could result in sanctions.

The court stated that a fee-based sanction should reflect both the reasonable fees caused by the misconduct and the amount needed to deter similar conduct. It found the $450 hourly rate reasonable for senior lawyers in the Southern District of New York. However, because the defendant had a right to appeal the July 30, 2019 ruling, the court limited the compensable fees to work performed after November 10, 2020, when the Second Circuit affirmed the ruling. The court also included reasonable time spent on the sanctions motion.

Disposition

Judge Kenneth M. Karas granted the plaintiffs’ Motion for Sanctions for all hours attributable to the defendant’s misconduct after November 10, 2020. The court instructed the plaintiffs to provide an updated calculation of attorney’s fees within 30 days and directed the Clerk of Court to terminate the motion. The opinion did not state the final dollar amount of the sanctions award.