Irwin Industrial Tool Company v. Bibow Industries, Inc. et al

Filing 129

Judge Douglas P. Woodlock: MEMORANDUM AND ORDER entered granting 110 Motion for Sanctions in the amount of $5,000. (Woodlock, Douglas)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IRWIN INDUSTRIAL TOOL CO.
d/b/a LENOX,

)
)
)
Plaintiff/
)
Counterclaim Defendant
)
)
v.
)
)
BIBOW INDUSTRIES, INC., and
)
CHRISTOPHER W. BIBOW,
)
)
Defendants/
)
Counterclaim Plaintiffs. )

CIVIL ACTION NO.
11-30023-DPW

MEMORANDUM AND ORDER
March 31, 2014
Substantively, this matter revolved around disputed claims
to inventorship of three patents, U.S. Patent Numbers 7,373,947,
7,415,988, and 7,195,031.

Now before me is a request for

sanctions and attorney’s fees based upon allegations of
vexatiousness in the conduct of the litigation by defendants’
counsel.
The Plaintiff, Irwin Industrial Tool Co. d/b/a Lenox
(“Lenox”) filed its complaint in this case seeking a declaratory
judgment establishing the validity of the patents in the face of
a simmering dispute with the defendants.

The Defendants, Bibow

Industries, Inc. and Christopher W. Bibow (collectively referred
to as “Bibow”) counterclaimed, seeking to have Christopher W.
Bibow named as an inventor of the patents, or to invalidate the
patents due to fraud on the patent office.

After the denial of their motion to dismiss, Bibow filed an
answer and counterclaims--which were amended multiple times.
Upon Lenox’s motion, I dismissed all but two of Defendants’
counterclaims.

Lenox thereafter moved for summary judgment on

its claim for declaratory relief and on Bibow’s remaining
counterclaims.

On November 6, 2012, I granted Lenox’s motion for

summary judgment in full and entered judgment in its favor.
Bibow appealed to the United States Court of Appeals for the
Federal Court.

The Federal Circuit affirmed the judgment of this

court in a summary order issued on September 23, 2013.

See Irwin

Industrial Tool Co., 530 Fed.Appx. 965 (Fed. Cir. 2013).
Prior to the resolution of Bibow’s appeal, Lenox moved for
sanctions in the form of an award of attorney’s fees and costs.
In support of its motion, the Plaintiff has invoked Federal Rule
of Civil Procedure 11(c)(3), 28 U.S.C. § 1927, the inherent power
of this court to impose sanctions, and, in response to an inquiry
by me, 35 U.S.C. § 285.

Lenox seeks to hold the Defendants,

Christopher Bibow and Bibow Industries, Inc., their counsel,
Peter D. Prevett, and his firm, Prevett and Prevett, LLP, liable
for these sanctions.
I.
A.

DISCUSSION

The Standard for Imposing Sanctions
1.

Federal Rule of Civil Procedure 11

The imposition of sanctions under Federal Rule of Civil
Procedure 11 is subject to significant hurdles, both procedural
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and substantive, which, in this case, preclude relief under that
rule.
Section (c)(2) of that Rule (which the Plaintiff does not
invoke) provides that a “motion for sanctions must be made
separately from any other motion and must describe the specific
conduct that allegedly violates Rule 11(b).

The motion must be

served under Rule 5, but it must not be filed or be presented to
the court if the challenged paper, claim, defense, contention, or
denial is withdrawn or appropriately corrected within 21 days
after service or within another time the court sets.”
Civ. P. 11(c)(2).

Fed. R.

Lenox has not--or at least has not shown--that

it has satisfied these procedural prerequisites: consequently it
is precluded from seeking the requested relief under that rule.
See Lamboy-Ortiz v. Ortiz-Velez, 630 F.3d 228, 245 (1st Cir.
2010) (“Among other factors disqualifying Rule 11 as a basis for
the sanctions here, the court and defendant Ortiz–Vélez failed to
satisfy the Rule’s procedural requirements.”).
Section (c)(3), which the Plaintiff does invoke, governs
sanctions imposed “on the Court’s initiative.”
11(c)(3).

Fed. R. Civ. P.

On its face, it is not a rule which may be invoked by

a litigant.

Moreover, as a precondition to the imposition of

sanctions, that subsection requires a court to issue an order to
show cause prior to the imposition of sanctions.

Id.

No such

order has been sought or issued, nor will I issue one at this
point--in part because, as described below, if sanctions are
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warranted by the conduct of Bibow’s counsel, other rules provide
a sufficient mechanism to impose them.
The procedural prerequisites necessary to impose sanctions
under Federal Rule of Civil Procedure 11 have not been satisfied,
and so I find that this section does not provide a basis for me
to impose sanctions upon Bibow or its counsel.
2.

28 U.S.C. § 1927

28 U.S.C. § 1927 provides that:
Any attorney or other person admitted to conduct cases
in any court of the United States or any Territory
thereof who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the
court to satisfy personally the excess costs, expenses,
and attorneys’ fees reasonably incurred because of such
conduct.
The First Circuit has explained that “[l]itigation qualifies
as ‘vexatious’ if it is ‘harassing or annoying, regardless of
whether it is intended to be so.’”

Lamboy-Ortiz v. Ortiz-Velez,

630 F.3d 228, 245 (1st Cir. 2010) (quoting Cruz v. Savage, 896
F.2d 626, 632 (1st Cir. 1990)).

“[S]ection 1927 does not apply

to ‘[g]arden-variety carelessness or even incompetence,’ but
instead requires that the ‘attorney’s actions ... evince a
studied disregard of the need for an orderly judicial process, or
add up to a reckless breach of the lawyer’s obligations as an
officer of the court.’” Id. at 245-46 (citing Jensen v. Phillips
Screw Co., 546 F.3d 59, 64 (1st Cir. 2008).

Imposition of

sanctions does “not require a finding of subjective bad faith

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. . . nor repeated sanctions.”

Northwest Bypass Group v. U.S.

Army Corps of Engineers, 569 F.3d 4, 6 (1st Cir. 2009) (internal
citations omitted).

Examples of the type of litigation conduct

found sanctionable by the First Circuit include “attempting to
introduce evidence on irrelevant matters in the face of numerous
admonitions to desist, and ‘engag[ing] in obfuscation of the
issues, hyperbolism and groundless presumptions.’” Lamboy-Ortiz,
630 F.3d at 246 (citing Cruz, 896 F.2d at 634).

I find such

conduct to have taken place here.
3.

35 U.S.C. § 285

Under 35 U.S.C. § 285, a “court in exceptional cases
[involving patent disputes] may award reasonable attorney fees to
the prevailing party.”

Once it is determined that a party

seeking fees is a prevailing party--which Lenox undoubtedly is
here--“determining whether to award attorneys’ fees under 35
U.S.C. § 285 is a two-step process” under current Federal Circuit
law.

Highmark, Inc. v. Allcare Health Management Systems, Inc.,

687 F.3d 1300, 1308 (Fed. Cir. 2012).

First, the prevailing

party must demonstrate by “clear and convincing evidence” that
the case is “exceptional.”

Id. (citation omitted).

If the case

is indeed “exceptional,” the court then proceeds to determine
whether an award is appropriate, and, if so, what amount to
award.

Id. (citations omitted).

A case may be deemed exceptional when there has been
some material inappropriate conduct related to the
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matter in litigation, such as willful infringement,
fraud or inequitable conduct in procuring the patent,
misconduct during litigation, vexatious or unjustified
litigation, conduct that violates Fed. R. Civ. P. 11,
or like infractions . . . Absent misconduct in conduct
of the litigation or in securing the patent, sanctions
may be imposed against the patentee only if both (1)
the litigation is brought in subjective bad faith, and
(2) the litigation is objectively baseless.
Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d
1378, 1381 (Fed. Cir. 2005).
Although the test, in the absence of litigation misconduct,
requires a finding of “subjective bad faith,” the Federal Circuit
has explained that such bad faith may be shown by “a wide variety
of proofs,” taking into account the “totality of the
circumstances.”

Highmark, 687 F.3d at 1311.

An “[o]bjective

baselessness alone can create a sufficient inference of bad faith
to establish exceptionality.”

Kilopass Technology v. Sidesense

Corp., 738 F.3d 1302, 1314 (Fed. Cir. 2013).

“Factors such as

the failure to conduct an adequate pre-suit investigation,
vexatious or unduly burdensome litigation tactics, misconduct in
procuring the patent, or an oppressive purpose are factors which
can be indicative of bad faith.”

Id. at 1311.

In establishing

“objective baselessness,” the prevailing party must show “that
lack of objective foundation for the claim was either known or so
obvious that it should have been known by the party asserting the
claim.”

Highmark, 687 F.3d at 1309 (citations omitted).

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The appropriate standard for evaluating when to award
attorney’s fees under 35 U.S.C. § 285 is currently sub judice
before the United States Supreme Court, which granted certiorari
both in Highmark, cert. granted, No. 12-1163, 134 S.Ct. 48 (Oct.
1, 2013) and in Octane Fitness, LLC v. Icon Health & Fitness,
Inc., 496 Fed.Appx. 57 (Fed. Cir. 2012), cert. granted, No. 121184, 134 S.Ct. 49 (Oct. 1, 2013).

In light of the pendency of

this litigation and given the likelihood it will result in some
significant refinement to the scope of § 285, I am not inclined especially after review of the oral argument transcripts in those
matters - to rely directly on § 285 where other serviceable
mechanisms for evaluating the sanctions claims made here are
available.

I note only that in my view this case has been

demonstrated by clear and convincing evidence to be exceptional
within the meaning of § 285.
4.

The Court’s Inherent Authority

When sanctions are not otherwise authorized by rule or
statute, a district court may invoke its inherent power to award
attorney’s fees and costs against parties or attorneys who “act
in bad faith, vexatiously, wantonly, or for oppressive reasons.”
Chambers v. NASCO, Inc., 501 U.S. 32, 33 (1991).

See also Peer

v. Lewis, 606 F.3d 1306, 1314–15 (11th Cir. 2010) (“When rules
alone do not provide courts with sufficient authority to protect
their integrity and prevent abuses of the judicial process, the

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inherent power fills the gap.”) (citations omitted).

Such

sanctions
serv[e] the dual purpose of vindicating judicial
authority without resort to the more drastic sanctions
available for contempt of court and making the
prevailing party whole for expenses caused by his
opponent’s obstinacy.
Chambers, 501 U.S. at 46.
B.

The Challenged Conduct
In its motion for sanctions, Lenox describes a course of

conduct which it contends merits sanctions, including: (i) filing
and re-filing frivolous counterclaims and affirmative defenses;
(ii) filing a frivolous notice of appeal; and (iii) engaging in
“vexatious discovery tactics designed to harass Lenox and
multiply the proceedings.”

I will address each in turn and

consider whether the conduct either individually or together
warrants sanctions under the standards set forth above.
1.

Filing Frivolous Counterclaims and Affirmative
Defenses.

After Lenox filed its complaint in this matter on January
27, 2011, Bibow moved to dismiss pursuant to Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(6).

Judge Ponsor denied the

motion on June 29, 2011; Bibow then filed their first answer,
setting forth three affirmative defenses, together with
counterclaims asserting six separate counts against Lenox on July
10, 2011.

Before any further motion practice, Bibow amended its

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answer and counterclaims, asserting seven counts in a first
amended counterclaim.
In its motion for sanctions, Lenox reports that both before
and after the filing of the first amended answer and
counterclaims, counsel for Lenox explained to Bibow’s counsel the
deficiencies in the pleading.

Bibow did not withdraw their

counterclaims or affirmative defenses and so Lenox moved on
August 10, 2011 to dismiss the counterclaims and affirmative
defenses it viewed as legally deficient.1

After the filing of

the motion to dismiss, by separate motions filed on August 12 and
August 26, respectively, Bibow moved to join additional parties
as counter-claim defendants and to amend its counterclaims again.
Following a hearing on October 6, 2011, I granted
Plaintiff’s motion to dismiss and denied Bibow’s motion to amend
and motion to join additional counterclaim-defendants.

During

the hearing on that matter, I described the counterclaims
asserted by Bibow as “imaginative, I guess” and said that “they
make no sense to me.”

I further explained that “[f]or all of the

reasons that are asserted in the plaintiff’s Memorandum in
support of its Motion to Dismiss, each one of which is valid
. . . I am going to allow the Motion to Dismiss Counts Three
through Seven.”

1

On August 1, 2011, the case was transferred to me from Judge
Ponsor.
9

Finally, I instructed the parties about how the pleading
would be carried out going forward:
Then there is this motion to Amend the Counterclaim
. . . I think that the way in which I am going to deal
with it is to direct the defendant here to respond to
the amended complaint that the plaintiff will be filing
. . . Really, the “Delete” function on your word
processor is going to do what you need to do, I think
. . . I will want an answer from the defendant that
does not include Counts Three through Seven . . . The
answer to that amended complaint will be filed October
19. It will not include Counterclaim counts Three
through Seven because I have denied them.
Despite what I viewed (and still view) as clear
instructions, in response to the First Amended Complaint, Bibow
filed an Answer and Counterclaim asserting essentially the same
counterclaims as those I had dismissed, albeit garnished very
slightly with modified factual allegations.

Following a letter

from Lenox’s counsel, which included a warning of possible
sanctions under Rule 11 and Section 1927, Bibow again amended its
response, removing a counterclaim for conversion, but continuing
to assert claims that I had already deemed deficient.
After further additional letters and emails from counsel for
Lenox--including service of a motion for sanctions pursuant to
Rule 11--on November 7, 2011 (the date that Lenox’s response to
Bibow’s counterclaims were due), Bibow once again withdrew and
amended its counterclaim and answer.

Despite both my clear

instructions and warnings from opposing counsel, however, even
this amended response contained a third count for infringement

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which I had deemed deficient.

After Lenox filed another motion

to dismiss, I explained at a hearing dated January 19, 2012:
I have before me the motion to dismiss amended
counterclaim count 3 . . . It’s apparent that the
defendant simply didn’t understand what I had done at
the last scheduling conference. I’m going to allow
that motion. This case needs to be focused on things
that are adequately pled and supported, and continuing
to revive in theme [and] variation matters that simply
are not appropriate before the Court is a distraction.
2.

Filing a Frivolous Notice of Appeal

In response to dismissal of its counterclaims, on November
7, 2011, Bibow attempted to file an interlocutory appeal to the
Federal Circuit purporting to appeal not only the grant of
Lenox’s motion(s) to dismiss, but also sundry other rulings such
as a rejection of a motion to compel filed by Bibow.2

As I

explained during the January 19, 2012 hearing, the appeal of this

2

To explain this conduct, Bibow’s counsel appears to contend
that the filing of a notice of appeal was a result of a
misapprehension regarding the law of the Federal Circuit, which
he perceives differs from that of the First Circuit. In both the
Federal Circuit and the First Circuit the law is clear that,
absent certain extraordinary circumstances not present here, no
appeal lies until the entry of final judgment. See 28 U.S.C.
§ 1291; 28 U.S.C. § 1295. The appeal was inappropriate under
either statute. I note that counsel who prosecuted the appeal on
behalf of Bibow, Edward P. Dutkiewicz, has filed an affidavit on
behalf of Bibow suggesting that some strategic decisions made by
Bibow and his trial counsel, Mr. Prevett, were the result of
consultation with him. Mr. Dutkiewicz, however, did not file an
appearance in this court in this matter. To the degree that
Bibow and his trial counsel relied on improvident advice from a
stranger to this litigation at the trial level, they are the
parties who must stand to answer for it. The Dutkiewicz
affidavit adds nothing meaningful by way of mitigation.
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non-final matter was “frivolous,” unwarranted and unjustified
under any potentially governing law.
3.

Engaging in Vexatious Discovery Tactics.

Lenox sets forth three categories of conduct related to the
discovery process which it considers “vexatious”: (i) serving and
re-serving an unwarranted expert report; (ii) unreasonably
refusing to agree to a protective order governing the exchange of
confidential documents; and (iii) filing a “bevy” of discovery
motions.

I will not chronicle each in chapter and verse, rather

I set out only the basic events.
a.

The Expert Report

At the October 6, 2011 hearing, the parties and I discussed
the schedule for the completion of discovery and for the filing
of dispositive motions.

In the course of this discussion, I

asked the parties whether expert reports would be necessary-given my rulings regarding which asserted claims remained viable.
Both parties confirmed that there was no need for expert reports:
The Court:

Now, I do not see the need for experts. Is
there under the nature of the pleadings as so
far [have] been defined?

Counsel for Lenox:

I agree, your honor. No need for experts
from our perspective.

The Court:

Mr. Prevett?

Counsel for Bibow:

Under your ruling, your Honor, I don’t see
any need for it either.

Nevertheless, counsel for Bibow served upon Lenox an expert
report dated January 17, 2012.

During the January 19, 2012
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hearing, the issue of this expert report was raised.

Bibow’s

counsel described the report as currently constructed as
“speculative.”

Lenox’s counsel explained that, because the

counterclaim for infringement (which as described above had been
dismissed and then re-pleaded) was once again dismissed, there
would be no need for a damages expert: “[I]t’s based upon the
infringement claim that you just struck . . . it pertains to an
infringement claim that is not an issue.”
that: “Right.

I responded by saying

It probably should be revised then and as a result

of this probably will disappear.”
Rather than recognize that a damages expert report was
unwarranted given the absence of a claim for monetary damages,
counsel for Bibow filed a “supplemental” expert report dated
February 6, 2012.

Upon motion by Lenox--and after multiple email

communications from Lenox to Bibow urging withdrawal of the
expert report--I struck the expert report, recognizing that a
claim for damages was unwarranted and discovery upon such matters
was rife with the opportunity to interfere with another’s
business.
b.

The Protective Order

As exhibits to its motion for sanctions, Lenox has attached
the email chains which document its attempts to reach an
agreement regarding a protective order to govern the exchange of
confidential material during discovery.

My review of these

emails confirms what Lenox contends regarding this process.
13

Mr.

Prevett’s conduct was irresponsible, unproductive, and
unbecoming.

While Lenox’s counsel tried diligently to find

common ground, including seeking input from Mr. Prevett and
making edits in response to his requests, Mr. Prevett was
unattentive to the point of writing that he did not “have time to
go through all those pages in your PO.”
The result of Mr. Prevett’s refusal to engage meaningfully
in this process was that both parties filed motions requesting
that this court enter protective orders to protect confidential
information exchanged during discovery.

Those filings involved a

waste of the resources of this court and the parties, which
directly resulted from the conduct of Bibow’s counsel.

This was

unnecessary, as even Mr. Prevett conceded when, in response to my
inquiry whether he had an actual issue with the entry of a
protective order, he responded “No, there’s no dispute about
that.”
c.

The Discovery Motions

I will not recite all of the discovery motions, including
motions to compel, for protective orders, for extensions of time,
and for other miscellaneous relief sought by Bibow.
requests were almost uniformly denied.

These

Moreover, their

multiplicity, along with their often frivolous nature, suggests
that Bibow’s counsel was unwilling to engage in meaningful
discussions with opposing counsel, as is necessary to resolve
litigation efficiently and expeditiously; that he demonstrated an
14

instinct to engage in motion practice on issues as a first,
rather than last resort; and, more generally, that he lacked a
firm grasp of the rules and responsibilities of attorneys
practicing before this court.
The filing of so many motions, which taken together
demonstrate so little merit, was vexatious and impeded the
efforts required to resolve this matter fairly and expeditiously.
*

*

*

Taken together as a whole, I find Mr. Prevett’s conduct, as
counsel to Bibow, to have been vexatious.

Looking for the root

of this irresponsible and inappropriate conduct, I find its
source in Mr. Prevett’s resistance to advice and admonition.
After Bibow’s counterclaims were first dismissed, both this Court
and opposing counsel explained to Mr. Prevett that those
counterclaims were not legally viable and no longer a part of
this case.

Despite this, Mr. Prevett insisted, on multiple

occasions, not only on re-filing those claims, but also serving
expert reports and discovery requests, and filing motions to
compel discovery, that were predicated on the dismissed claims.
At each step, Mr. Prevett was warned that his pleadings and
filings were unwarranted, frivolous, and potentially
sanctionable.

Nevertheless, having been warned, he persisted in

his wrongheaded conduct.

That conduct is sanctionable both

because it involves “attempt[s] to introduce evidence on
irrelevant matters in the face of numerous admonitions to
15

desist,” and because it demonstrates “studied disregard of the
need for an orderly judicial process.”

Lamboy-Ortiz, 630 F.3d at

246.
In making this determination, I recognize that Mr. Prevett
appears at least initially to have misunderstood the import of
some of my orders--including the import of my October 6, 2011
order dismissing Bibow’s counterclaims numbered three through
seven.

This “misunderstanding” persisted long after it

reasonably should have and infected his subsequent litigation
tactics.

Although lack of understanding or perhaps subcompetence

may provide some explanation, it does not provide an excuse.

It

will, however, factor into my calculus of the appropriate
sanction.
C.

The Proper Sanction
In determining the appropriate sanction under 28 U.S.C.

§ 1927, which I find to be the most appropriate rule of decision
here, the amount of a sanction can be set either to deter
inappropriate conduct or to compensate a party whose fees and
expenses have been unnecessarily increased by the conduct of an
adversary.

Thus, unlike under Rule 11, sanctions are not limited

to the minimum level necessary to deter repeated or similar
conduct.

See Lamboy-Ortiz, 630 F.3d at 247.

At the same time,

any sanction imposed under Section 1927 should be “carefully
crafted to avoid dampening the legitimate zeal of an attorney in

16

representing his client.”

Id. (citations and alterations

omitted).
Although I recognize that Mr. Prevett’s conduct has imposed
significant costs upon Lenox (some $237,000 in attorneys fees and
costs by Lenox’s calculation), I also observe that Lenox chose to
commence this litigation as a preemptive declaratory judgment
action in the first place.

Under the circumstances, I will limit

my sanction, as I have discretion to do, to that which I believe
necessary to deter the sort of conduct that Mr. Prevett has
engaged in on behalf of Bibow.
In outlining the appropriate approach to calibrating the
amount of such a sanction, the First Circuit has found the
factors listed in the Advisory Committee notes to Federal Rule of
Civil Procedure Rule 11 to be instructive.
F.3d at 247.

See Lamboy-Ortiz, 630

Those factors include:

Whether the improper conduct was willful, or negligent;
whether it was part of a pattern of activity, or an
isolated event; ... whether the person has engaged in
similar conduct in other litigation; whether it was
intended to injure; what effect it had on the
litigation process in time or expense; whether the
responsible person is trained in the law; what amount,
given the financial resources of the responsible
person, is needed to deter that person from repetition
in the same case; [and] what amount is needed to deter
similar activity by other litigants.
Id.
Here a significant sanction is warranted.

Mr. Prevett’s

conduct, although perhaps at times arising from a lack of the

17

necessary competence, also involved a “failure to obey direct
instructions by the judge, . . . behavior that was undeniably
willful and disrespectful to the court and its processes . . .
[Mr. Prevett] appeared unable or unwilling to learn from his
mistakes, as his pattern of misconduct continued unabated despite
numerous warnings.”

Id. at 249.

I note also two factors which impose some limitation upon
the appropriate amount of an award here.

First, the First

Circuit has explained that sanctions imposed for purposes of
deterring inappropriate litigation conduct “typically amount to
less than $10,000.”

Id. at 249 and n. 33 (gathering cases).

Second, I am aware that Mr. Prevett, again like the sanctioned
attorney in Lamboy-Ortiz, operates a small law office and that
the imposition of a large sanction could “threaten financial
disaster.”

Id.

In light of these considerations, I will impose a sanction
of $5,000 which I consider sufficient both to deter Mr. Prevett
in his future conduct and to warn other similarly situated
attorneys of the consequences of such conduct.

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III.

CONCLUSION

For the foregoing reasons, Plaintiff’s Motion for Sanctions
(Dkt. No. 110) is GRANTED to the degree Mr. Prevett is ordered to
pay to the Plaintiff the amount of $5,000.

/s/ Douglas P. Woodlock
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT

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