Seraphin et al v. Morris Publishing Group, LLC, et al.

Filing 24

ORDER granting 22 Bill of Costs/Motion. The Clerk is directed to enter a judgment against Appellant Ed Slavin in favor of Appellees for $11,784.56. Signed by Judge J. Randal Hall on 04/16/2012. (thb)

I,
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION
In re:
MORRIS PUBLISHING GROUP, LLC,

et al.,
Debtors.

JUDITH SERAPHIN and
ED SLAVIN,
Appellants,

MORRIS PUBLISHING GROUP, LLC,

et al.,
Appellees.

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Chapter 11
Case No. 10-10134 (JSD)
Jointly Administered

CV 110-056

ORDER

Presently pending before the Court is Appellees' Bill of Costs
(doc. no. 22), which the Court treats as a motion for sanctions
pursuant to Federal Rule of Bankruptcy Procedure 8020, and
Appellant Ed Slavin's Preliminary Response to Debtors Demand for
Fees (doc. no. 23). Appellees' motion is GRANTED to the extent set
forth below.

I. BACKGROUND

On January 19, 2010, Morris Publishing Group, LLC and fourteen
affiliated entities ("Appellees") filed petitions for relief under
Chapter 11 and a joint plan of reorganization in the United States
Bankruptcy Court for the Southern District of Georgia ("Bankruptcy
Court").' Appellees are publishers, and one of their numerous
publications is the St. Augustine Record (the "Record"), which
provides local and national news to the citizens of St. Augustine,
Florida.
On January 25, 2010, pro se litigants Judith Seraphin and Ed
Slavin ("Appellants") filed a "Motion to Intervene, Motion to
Appoint Trustee or Examiner and Motion to Hold Telephonic Hearing
on Debtor's Neglect of Journalistic Duties." (Doc. no. 1, Ex. 14)
Appellants are self-proclaimed "local community activists" -from St.
Augustine, Florida, who read and subscribe to the Record. (Id. at
1.) In their January 25, 2010 motion, Appellants stated that they
have been "horrified" by the general decline in the quality and
quantity of the Record's news coverage over the past five to ten
years. (Id.) Appellants sought to intervene in the bankruptcy
proceeding "because [Appellees] have admitted there will be 'no
change' [in news coverage] as a result of their Chapter 11 filing,"
which Appellants claim is "akin to an alcoholic going to his first
AA meeting, saying there will be 'no change.'"

(Id. at 1.)

Appellants also sought to present their concerns "about declining

The cases were consolidated for procedural purposes and jointly
administered.
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news budgets and journalistic practices after full and fair
disclosure and discovery, at an evidentiary hearing, with mandatory
testimony by Morris Communications' owners and managers about the
etiology of their wretched failure to cover the news without fear
or favor due to declining news budgets." (Id. at 2.)
In a thorough and well-reasoned order, the Bankruptcy Court
denied Appellants' motion, which was treated as an objection to
confirmation. The court held that Appellants lacked standing as
parties in interest, and had not shown sufficient cause for
intervention. (See Doc. no. 1, Ex. 20.) Appellants subsequently
filed a motion for reconsideration on February 16, 2010 (doc. no.
1, Ex. 28), which the Bankruptcy Court denied (see doc. no. 1, Ex.
29)

2

Appellants f i-led a si-ngle notice of appeal, as well.-

a

single designation of items in the record and statement of issues
presented, regarding both Bankruptcy Court orders. (See Doc. no.
1, exs. 33 & 39.) Appellees subsequently filed a motion to dismiss
the appeal. (See Doc. no. 7.) In conjunction with their motion to
dismiss, Appellees filed a motion for damages pursuant to Federal
Rule of Bankruptcy Procedure 8020. (Doc. no. 7.)
On March 28, 2011, this Court granted Appellees' motion to
dismiss the appeal. (Doc. no. 20.) The Court held that Appellants
2
Appellants' motion for reconsideration largely ignored the substance
of the Bankruptcy court's Order. Rather than addressing the Order's numerous
citations to authority, Appellants continued asserting claims based upon
their belief that their right to intervene arises from the public's interest
and the First Amendment of the Constitution. (See Doc. no. 28 at 2 ("Our
Constitution is in shreds if Debtors are permitted to escape from their debts
and to change nothing and to do nothing to improve the quality of the
newspaper in our Nation's Oldest City.").)

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lacked standing to appeal because they were not aggrieved parties.
Moreover, the Court found that even if Appellants had standing,
their appeal would be denied as moot because the plan of
reorganization had been substantially consummated and effective
relief was no longer available to Appellants.
In regard to the motion for damages, the Court found that the
appeal was "entirely devoid of merit" as Appellants had "ignored
the substance of the Bankruptcy Court's Order in their frivolous
motion for reconsideration." As such, the Court found that there
was an appropriate basis for sanctions under Rule 8020. The
Eleventh Circuit's reluctance to impose sanctions on pro se
litigants led the Court to conclude that sanctions could not be
imposed upon Appellant Judith Seraphin. However, because Appellant
Ed Slavin was a--formerly licensed attorney, the Court found that
sanctions could be imposed upon him. See Bonfiglio v. Nugent, 986
F.2d 1391, 1394 (11th Cir. 1993) (imposing Rule 38 sanctions on pro
se litigant in part because he was an attorney who "should have

known better"). The Court retained jurisdiction for the limited
purpose of awarding damages and costs pursuant to Rule 8020, and
Appellees were directed to submit a detailed accounting of all
costs and fees directly related to the dismissed appeal.
In compliance with the Court's Order, Appellees have now
submitted a Bill of Costs (doc. no. 22) and the Affidavit of
Nicholas N. Miller, a partner at the law firm of Neal Gerber &
Eisenberg, LLP ("NGE").

According to these documents, Appellees

seek a total of $59,772.06 in costs and fees.

Im

This amount

includes, among other things, $56,864.50 in attorney's fees,
$907.56 in fees relating to copying charges and other court fees,
and $875.00 for fees of the Clerk. Appellees believe that an award
of sanctions for the full amount requested is warranted because
Slavin does not appear to be deterred by the Court's Order.
In his response, Slavin once again challenges the Court's
decisions regarding standing and mootness. Moreover, he asserts
that the bill of costs is "retaliatory." He claims that imposing a
nearly $60,000.00 fee amounts to an excessive fine in violation of
the Eight Amendment.

II. DISCUSSION
Sanctions for taking an appeal may be granted in the Court's
discretion pursuant to Rule 8020 of the Federal Rules of Bankruptcy
Procedure. Because the language of Rule 8020 is similar to Federal
Rule of Appellate Procedure 38, courts apply cases interpreting
Rule 38 in determining whether to grant sanctions under Rule 8020.
See Steffen v. Berman, No. 8:09-cv-1953, 2010 WL 2293235 (M.D. Fla.
June 7, 2010) (citing advisory committee note to federal bankruptcy
rule 8020) .

"Rule 38 sanctions have been imposed against

appellants who raise 'clearly frivolous claims' in the face of
established law and clear facts."

Misabec Mercantile, Inc. De

Panama v. Donaldson, Lufkin & Jenerette ACLI Futures, Inc., 853
F.2d 834, 841 (11th Cir. 1988) (citation omitted) .

"For purposes

of Rule 38 sanctions, a claim is frivolous if it is 'utterly devoid

of merit.'" Nettles, Jr. v. City of Leesburg Police Dept., 415
Fed. Appx. 116, 123 (11th Cir. 2010) (quoting Bonfiglio v. Nugent,
986 F.2d 1391, 1393 (11th dr. 1993)).
Because the Court previously determined that sanctions are
appropriate in this case, the only question before this Court is
the amount of fees that should be imposed upon Slavin. A district
court "may award just damages and single or double costs" if the
appeal is frivolous. Fed. R. Bank. P. 8020. Moreover, sanctions
awarded by the Court must be sufficiently related to or directly
caused by the filing of the appeal. Lyddon v. Geothermal Props.,
996 F.2d 212, 214 (9th Cir. 1993) (citing Cooter & Gell v. Hatmarx
Corp., 496 U.S. 384 (1990)). This excludes, for example, costs
associated with the filing of the motion for sanctions itself. Id.
The Court is also cognizant of the fact that "[w]hile an award of
attorney's fees may be necessary to fulfill the deterrent purposes
of Rule 8020, the award should not subject the appellant to
financial ruin." In Re Busson-Sokolik, 635 F.3d 261, 271 (7th Cir.
2011) (internal citations omitted)
Here, Appellees seek $56,864.50 in attorney's fees for the
work performed on the bankruptcy appeal. As an initial matter, the
Court can only consider the time actually spent by Appellees on the
appeal. The fees should be limited to the time period between
Appellants' filing of their notice of appeal and the Court's Order
deeming the appeal frivolous. Therefore, the Court only considered
fees accrued between February 24, 2010 and March 28, 2011.
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As

such, Appellees are not entitled to recover for the time spent
reviewing this Court's March 28, 2011 Order.
Appellees assert that their request for fees in the amount of
$56,864.50 is reasonable in light of a number of factors. These
factors include the experience of Appellees' counsel, the volume of
pleadings, the complexity of the appeal and its importance to the
success of the underlying Bankruptcy case, the time devoted by
counsel to handling the appeal, and the cost of comparable services
in the relevant market. While the Court does not dispute the high
quality of the legal work provided by Appellees' counsel and the
importance of the appeal to this complex Bankruptcy case, the
appeal standing alone did not involve overly complex facts or legal
issues. Further, the Court does not agree that a higher national
standard for attorney's fees should apply. This appeal involved
two pro se appellants raising claims, albeit frivolous claims,
against a single local newspaper owned by Appellees. This appeal
is simply not the type of nationally significant case that would
warrant the application of national legal market standards. The
request for fees should instead be governed by the standards of the
Southern District of Georgia.
In light of these findings and recognizing that Slavin
proceeded pro se, the Court believes that an award of attorney's
fees in the amount of $10,000 is an appropriate sanction that will
deter him from filing frivolous motions in the future without
causing him severe financial hardship.
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III. CONCLUSION
Based on the foregoing, Appellees' motion (doc. no. 22) is
GRANTED to the extent set forth above. Damages are awarded in the
amount of $11,784.56, which represents attorney's fees plus costs,
against Appellant Slavin. The Clerk is DIRECTED to ENTER A
JUDGMENT against Appellant Ed Slavin in favor of Appellees for
$11,784.56.

ORDER ENTERED at Augusta, Georgia, this

day of April,

2012.
HONORJBLE J. NDAL HALL
tINIT'D STATES DISTRICT JUDGE
SQT1IERN DISTRICT OF GEORGIA

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