On Demand Direct Response, LLC et al v. McCart-Pollak

Filing 463

ORDER that Pollak's motion for sanctions (ECF No. 393 ) is denied; Tony Abbatangelo may file a renewed motion to withdraw as counsel by 9/10/2019. Signed by Judge Miranda M. Du on 8/26/2019. (Copies have been distributed pursuant to the NEF - LH)

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1 2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA *** 5 6 7 ON DEMAND DIRECT RESPONSE, LLC AND ON DEMAND DIRECT RESPONSE III, LLC, Plaintiffs, 8 9 10 11 Case No. 2:15-cv-01576-MMD-GWF ORDER v. SHANA LEE MCCART-POLLAK D/B/A LOL BUDDIES ENTERPRISES, Defendant. AND ALL RELATED CASES 12 13 I. SUMMARY 14 Broadly, this is a dispute about who invented an internet enabled stuffed animal 15 that allowed parents to communicate with their children through the toy. Before the Court 16 is Defendant and Third Party Plaintiff Shana Lee McCart-Pollak’s (“Pollak”) motion for 17 sanctions against Plaintiffs On Demand Direct Response, LLC and On Demand Direct 18 Response III, LLC’s local counsel Tony L. Abbatangelo.1 (ECF No. 393 (“Motion”).) 19 Because the Court does not find Abbatangelo has acted in bad faith, and as further 20 explained below, the Court will deny the Motion and grant Abbatangelo leave to file a 21 renewed motion to withdraw. 22 II. RELEVANT BACKGROUND 23 A more thorough discussion of the background facts appears in the Court’s prior 24 orders. (ECF Nos. 191, 215, 275, 406.) The Court refers to its prior orders for those facts, 25 and does not repeat them here. As relevant here, Abbatangelo serves as local counsel for 26 27 28 1Abbatangelo filed a response (ECF No. 397), and Pollack filed a reply (ECF No. 398). In addition, Pollack requested oral argument on her Motion. (ECF No. 393 at 1.) The Court finds argument to be unnecessary and denies that request. LR 78-1 (“All motions may be considered and decided with or without a hearing.”). 1 Plaintiffs. He has moved to withdraw as local counsel for Plaintiffs twice, but both times 2 his motions were denied. He first moved to withdraw on January 3, 2018, stating that his 3 co-counsel Jeffery Miller was no longer an active attorney in California, that Plaintiffs were 4 about to file for bankruptcy, and could thus no longer pay to retain counsel in this case. 5 (ECF No. 301.) Magistrate Judge Nancy J. Koppe denied Abbatangelo’s motion, finding 6 he had not shown the good cause necessary to be able to withdraw, noting that Plaintiffs 7 did not file for bankruptcy, Abbatangelo had not presented any competent evidence as to 8 Plaintiffs’ inability to pay, and that allowing Abbatangelo to withdraw would result in delays 9 to discovery and contempt proceedings in this case. (ECF No. 343.) 10 At a hearing on June 19, 2018, Abbatangelo asked the Court to reconsider Judge 11 Koppe’s decision, and the Court directed him to file another motion on the issue. (ECF No. 12 361.) He did. (ECF No. 367.) Abbatangelo’s second motion to withdraw was nearly 13 identical to his first motion, but he added that he “has attempted to communication [sic] 14 with Mr. Jeffrey Miller on several occasions and through several mediums without 15 success[.]” (Compare ECF No. 301 with ECF No. 367.) Judge Koppe denied that motion 16 without prejudice because it was “not supported by a memorandum of points and 17 authorities that identifies the applicable legal standards and explains how they have been 18 met such that relief can be granted.” (ECF No. 375 at 2.) 19 Plaintiffs otherwise stopped prosecuting their case or defending themselves against 20 Pollak’s claims. The two law firms that initially assisted in Plaintiffs’ representation were 21 permitted to withdraw after Plaintiffs stopped paying them. (ECF No. 99.) Plaintiffs’ other 22 counsel, Jeffery Anthony Miller, was terminated following the Court’s review of a sealed 23 order signed by Chief Judge Gloria M. Navarro. (ECF No. 400.) Meanwhile, after repeated 24 failures to respond to the Court’s orders, the Court issued a default judgment against 25 Plaintiffs. (ECF Nos. 362, 363.) The Court also ordered Plaintiffs and Miller to respond to 26 Pollak’s discovery requests, and reimburse Pollak for the fees she incurred in bringing the 27 motions leading to these sanctions. (ECF No. 362 at 2-3.) All of this left Abbatangelo on 28 his own to represent clients that he maintains he is unable to contact. (ECF No. 397.) 2 1 III. LEGAL STANDARD 2 Federal courts have the inherent power to punish conduct that abuses the judicial 3 process when a party has “acted in bad faith, vexatiously, wantonly, or for oppressive 4 reasons.” Chambers v. NSDCO, Inc., 501 U.S. 32, 45-46 (1991) (citation omitted). When 5 imposing sanctions under its inherent authority, a court must make an explicit finding of 6 bad faith or willful misconduct. See In re Dyer, 322 F.3d 1178, 1196 (9th Cir. 2003). Mere 7 negligence cannot sustain a sanction under a court’s inherent authority. See Zambrano v. 8 City of Tustin, 885 F.2d 1473, 1485 (9th Cir.1989). In addition, “[b]ecause of their very 9 potency, inherent powers must be exercised with restraint and discretion.” Chambers, 501 10 U.S. at 44. 11 IV. DISCUSSION 12 Pollack argues Abbatangelo should be held in contempt or otherwise sanctioned 13 any way the Court deems appropriate because he did not update his address and has 14 been difficult to contact. (ECF No. 393 at 4-5.) Abbatangelo responds that he has been 15 available for Pollak to contact, has been unable to communicate with Miller or Plaintiffs 16 despite reasonable effort, and he should not be sanctioned or found in contempt because 17 the circumstances here do not warrant a finding of bad faith. (ECF No. 397 at 2-4.) The 18 Court agrees with Abbatangelo because his conduct does not rise to the level of willful 19 misconduct required to impose sanctions on him. 20 The Court will thus exercise restraint and decline to sanction Abbatangelo. See 21 Chambers, 501 U.S. at 44 (“[b]ecause of their very potency, inherent powers must be 22 exercised with restraint and discretion.”). Abbatangelo appears trapped between a rock 23 and a hard place—unresponsive clients who may no longer exist, and former co-counsel 24 who was terminated after apparently being disbarred. (ECF No. 397 at 2.) It has been a 25 year and a half since Abbatangelo first attempted to withdraw, and there is no evidence in 26 the record that he has been able to reestablish meaningful contact with either Plaintiffs or 27 Miller. (ECF No. 301.) There is also no evidence that Abbatangelo has acted in bad faith 28 here; to the contrary, and as an example, he filed a response on Plaintiffs’ behalf 3 1 explaining that he was unable to take a meaningful position because of his inability to 2 contact his former co-counsel and his clients. (ECF No. 433 at 3 (“It appears that the 3 Plaintiffs have, for whatever reason(s), abandoned this case. Undersigned can only do so 4 much on the case. Therefore, undersigned cannot oppose or concede the Defendant’s 5 Motion.”).) The Court will therefore decline to sanction Abbatangelo. See Yagman v. 6 Republic Ins., 987 F.2d 622, 628-29 (9th Cir. 1993) (holding that a “sanction based upon 7 the court’s inherent power [was] not sustainable” where there was “no indication in the 8 record before us that [plaintiff acting as his own counsel] acted in bad faith or intended to 9 mislead the court[.]”). 10 Further, the Court will grant leave to Abbatangelo to file a renewed motion to 11 withdraw as counsel because forcing him to remain involved in this case is futile. The last 12 year and a half of this litigation has revealed that keeping Abbatangelo in this case has 13 not helped Pollak obtain documents or otherwise get responses from Plaintiffs. The Court 14 is therefore willing to let Abbatangelo withdraw if he files a motion properly supported by 15 points and authorities that detail his attempts to contact his clients and former co-counsel. 16 The Court additionally advises Abbatangelo to file updated contact information, including 17 his email and physical addresses, if those addresses have changed since his last filing in 18 this case. See LR IA 3-1. 19 V. CONCLUSION 20 The Court notes that the parties made several arguments and cited to several cases 21 not discussed above. The Court has reviewed these arguments and cases and determines 22 that they do not warrant discussion as they do not affect the outcome of the Motion. 23 It is therefore ordered that Pollak’s motion for sanctions (ECF No. 393) is denied. 24 It is further ordered that Tony Abbatangelo may file a renewed motion to withdraw 25 26 as counsel within 15 days of the date of entry of this order. DATED THIS 26th day of August 2019. 27 MIRANDA M. DU UNITED STATES DISTRICT JUDGE 28 4

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