Dukas v. Koninklijke Luchtvaart Maatschappij, N.V.

Filing 53

OPINION & ORDER: Spencer Sheehan's continued pursuit of Dakus' claims after KLM notified him that the complaint contained critical false allegations is sanctionable under 28 U.S.C. § 1927 and Federal Rule of Civil Procedure 11.Und er § 1927, the Court imposes on Sheehan the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct. Within fourteen days of this opinion and order, KLM shall file an affidavit setting forth "the excess costs, expenses, and attorneys' fees reasonably incurred" after KLM filed its motion to dismiss. 28 U.S.C. § 1927. Sheehan shall file any response within seven days, and KLM may file a reply within seven days thereafter. In addition, u nder Rule 11, the Court imposes a $1,000 fine to be deposited with the Clerk of Court within fourteen days of this opinion and order.Finally, the Court expresses its hope that Sheehan has learned a valuable lesson herenot simply that he "sh ould [be] more precise," Dkt. 39, ex. 1 Paragraphs 52, 55, and "exacting," id. Para. 56-but that he, "as [an] officer[] of the court," must "properly temper[] [his] enthusiasm for a client's cause with careful regar d for the obligations of truth, candor, accuracy, and professional judgment," Oliveri v. Thompson, 803 F.2d 1265, 1267 (2d Cir. 1986). (Signed by Judge Ronnie Abrams on 9/23/2024) (vfr) Transmission to Finance Unit (Cashiers) for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

USDC-SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
DATE FILED:

KANDUS DAKUS,
Plaintiff,

No. 22-CV-7962 (RA)

v.

OPINION & ORDER

KONINKLIJKE LUCHTVAART
MAATSCHAPPIJ, N.V.,
Defendant.
RONNIE ABRAMS, United States District Judge:

In September 2017, Plaintiff Kandus Dakus filed this action against Defendant Dutch airline
Koninklijke Luchtvaart Maatschappij, N.V. (“KLM”) on behalf of consumers who had purchased
flight tickets. She alleged that KLM had enticed her and others’ purchases by misrepresenting its
commitment to climate goals. During the litigation, however, it became apparent that Dakus’ complaint
contained false allegations. She had not in fact relied on KLM’s representations in purchasing tickets
because she had used a third-party travel booking service and had not herself selected an airline.
Nonetheless, Dakus’ lawyer, Spencer Sheehan, continued to pursue her claims. This Court then ordered
Sheehan to show cause why it should not, on its own initiative, impose sanctions on him for filing the
complaint and continuing to pursue Dakus’ claims after he was on notice of the allegations’ falsity.
For the reasons that follow, the Court imposes sanctions on Sheehan under 28 U.S.C. § 1927 and
Federal Rule of Civil Procedure 11.
BACKGROUND
Spencer Sheehan is a highly prolific class action attorney who, according to a recent New
Yorker article, once “proudly” stated: “I’ve never been sanctioned by a court for filing anything
frivolous.” Dkt 41, ex. 1 at 1. He has since been subject to monetary sanctions, while a “chorus of
courts around this nation [have] warn[ed] [him] to abide by the standards and rules governing [the

legal] profession.” Durant v. Big Lots, Inc., No. 23-CV-561, 2024 WL 3321879, at *7 (M.D. Fla. July
3, 2024); see, e.g., Reyes v. Upfield US Inc., 694 F. Supp. 3d 408, 429 n.3, 430 n.4 (S.D.N.Y. Sept. 26,
2023); Brownell v. Starbucks Coffee Co., 681 F. Supp. 3d 27, 42 (N.D.N.Y. July 12, 2023); Lesorgen
v. Mondelēz Glob., LLC, 674 F. Supp. 3d 459, 466 (N.D. Ill. May 19, 2023); Turk v. Rubbermaid Inc.,
No. 21-CV-270, 2022 WL 836894, at *6 n.1 (S.D.N.Y. Mar. 21, 2022); Gordon v. Target Corp., No.
20-CV-9589, 2022 WL 836773, at *9 n.3 (S.D.N.Y. Mar. 18, 2022).
In September 2017, Sheehan filed a putative class action against KLM on behalf of his client,
Kandus Dakus. According to the complaint, KLM had enticed ticket purchases by misleading
consumers about its environmental commitments. See Dkt. 1. An amended complaint (the
“complaint”), filed in December 2022, asserted claims under New York General Business Law §§ 349
and 350 and other states’ similar consumer fraud statutes, as well as common law claims for breach of
contract and unjust enrichment. See Dkt. 13, ¶¶ 64–67. Like the original complaint, see Dkt. 1, ¶¶ 47–
49, the amended complaint alleged that
•

[Dakus] relied on the [certain] words, promises, commitments, plans, and pictures by
KLM about its efforts to limit the effects of climate change when she purchased her
flight;

•

[Dakus] chose between KLM and other airlines which did not tout their environmental
attributes; and

•

[Dakus] paid more for her flight on KLM than she would have paid absent its false and
misleading statements and omissions,

id. ¶¶ 54–56.
KLM filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6)
in January 2023. See Dkt. 19. Under Rule 12(b)(1), KLM challenged Dakus’ factual allegations
regarding jurisdiction and argued that she lacked constitutional standing. See Dkt. 20 at 9–11.
Supporting documentation revealed that Dakus had used a third-party travel booking service and had
not herself chosen KLM as her airline. See Dkt. 21, exs. 1, 3. In an attached declaration, a KLM senior
vice president represented that “KLM’s records reflect[ed] that Ms. Dakus did not purchase her ticket”

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and that a third-party organization, the American Council for INTL Studies (“ACIS”), had instead
booked her flight. See Dkt. 21, ex. 1 ¶ 5. ACIS’ Terms and Conditions, meanwhile, indicated that it
only provides airline information to customers after payment is remitted. See id., ex. 3. Dakus thus
could not have relied on KLM’s representations about its climate commitments in choosing to book a
KLM flight, as her complaint alleged.
Dakus’ opposition to KLM’s motion to dismiss did not directly address the factual challenge
and instead relied on the familiar Rule 12(b)(6) standard that a court “must accept all well pleaded
allegations as true.” Dkt. 24 at 2. It further argued that KLM had “offer[ed] no facts to support [the
proposition] that [Dakus] may not have known what airline she was flying until after she agreed to the
ACIS Terms and paid for her trip.” Dkt. 24 at 4.
In its reply brief, KLM rightly noted that Dakus’ opposition had not addressed its factual
challenge. It further filed multiple letters providing supplemental authority in support of its motion to
dismiss. The Court then ordered Dakus to file any additional materials or arguments rebutting KLM’s
factual challenge. See Dkt. 28.
In response, Dakus filed a two-page supplemental declaration containing statements that were
flatly inconsistent with the complaint. Contrary to her complaint’s assertion that she had relied on
KLM’s representations in booking a KLM flight, she admitted that she “was not initially aware that
the flights arranged by ACIS would be with KLM”—though she was allegedly “informed of this prior
to [her] travel.” Dkt. 29 at ¶ 10. According to her declaration, Dakus “learned about [KLM’s] promises
and commitments to limit its contributions to climate change” and then “relied, in part, on [them] in
deciding not to cancel [her] trip.” Id. ¶¶ 11, 13 (emphasis added). KLM then filed a letter outlining the
inconsistencies between the complaint and Dakus’ supplemental declaration. See Dkt. 32 at 2. At no
point did Sheehan withdraw the complaint or seek leave to amend it.
In September 2023, the Court dismissed Dakus’ complaint for lack of standing. See Dkt. 33.
In addition, it ordered Sheehan to show cause as to why it should not impose sanctions on him under

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Federal Rule of Civil Procedure 11. See id. at 13–14. The Court observed that allegations in Dakus’
complaint were “demonstrably false.” Id. at 13. It continued: “[B]y [Dakus’] own admission in her
supplemental declaration, her counsel’s certification to the Court with that filing appears to have
violated Rule 11(b)(3),” id., which provides that
[b]y presenting to the court a pleading, written motion, or any other paper, [an attorney]
certifies that to the best of the person’s knowledge, information, and belief, formed
after an inquiry reasonable under the circumstances [that] the factual contentions have
evidentiary support.
Fed. R. Civ. P. 11(b)(3).
In response, Sheehan submitted a declaration in which he maintained that when he drafted and
filed the complaint he reasonably believed that there was evidentiary support for the identified
allegations. See Dkt. 39 at 8–9; id., ex. 1 ¶¶ 57–58. He explained that he had sought a representative
plaintiff for an action against KLM by distributing an advertisement; Dakus responded to that
advertisement, after which he spoke with her by telephone. See Dkt. 39 at 7–8; id., ex. 1 ¶¶ 14–17, 21.
According to Sheehan, during that call, Dakus “confirmed [that] she [had] purchased” KLM tickets.
Id., ex. 1 ¶ 29. She further “told [him] that KLM’s claims about its environmental commitments [had
been] a factor in her decision to fly with KLM.” Id. ¶ 39. Sheehan “reviewed the outline of the
complaint,” id. ¶ 40, [with Dakus] before filing it, id. ¶ 46. After filing it, he provided her with a copy,
id., and she did not inform him that any allegations in it were false. See id. ¶ 47. Nevertheless, Sheehan
now admits that he “should have been more precise,” id. ¶¶ 52, 55, and “exacting,” id. ¶ 56, in
interviewing Dakus and expressed “[r]egret[],” id. ¶ 67, that he had not asked critical questions.
In January 2024, the Court issued another order to show cause, specifically seeking a response
as to why it should not impose sanctions under 28 U.S.C. § 1927 or Rule 11 for Sheehan’s continued
pursuit of Dakus’ claims. See Dkt. 46. 1 It explained that “[e]ven assuming counsel initially believed
The Court’s also ordered Sheehan to show cause why it should not sanction him under its inherent power. However,
where “there is bad-faith conduct . . . that could be adequately sanctioned under the Rules [or 28 U.S.C. § 1927], the
court ordinarily should rely on the Rules [and § 1927] rather than the inherent power.” Chambers v. NASCO, Inc., 501
U.S. 32, 50 (1991). The Court thus does not consider whether to sanction Sheehan under its inherent power.
1

4

that evidentiary support existed, he appears to have acted in bad faith once he was on notice of the
falsity of [Dakus’] allegations.” Id. In his response, Sheehan again emphasized that he did not know
the allegations were false when he filed the complaint. See Dkt. 47 at 4; id., ex. 1 ¶ 13. He also
underscored that, upon learning the true facts of Dakus’ purchase, she disclosed those facts in her
supplemental declaration, at which time he “advocated for an alternative theory of standing.” Id., ex.
1 ¶ 17.
DISCUSSION
The Court sua sponte—that is, by its own initiative—considers whether Spencer Sheehan’s
conduct is sanctionable under 28 U.S.C. § 1927 or Rule 11. It concludes that it is. Although the Court
does not have evidence sufficient to sanction Sheehan for his initial filing of the complaint, his
continued pursuit of the claims once he knew it contained false allegations is sanctionable under both
28 U.S.C. § 1927 and Rule 11.
I.

28 U.S.C. § 1927

Under 28 U.S.C. § 1927, a court maintains the discretion to order “[a]ny attorney . . . who so
multiplies . . . proceedings . . . unreasonably and vexatiously . . . to satisfy personally the excess costs,
expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. § 1927; see
Crown Awards, Inc. v. Trophy Depot, Inc., No. 15-CV-1178, 2017 WL 564885, at *14 (S.D.N.Y. Feb.
13, 2017) (collecting cases). 2 To impose sanctions, the “court must find clear evidence that (1) the
offending party’s . . . [actions] were entirely without color[] and (2) the . . . [party acted] in bad faith.”
Eisemann v. Greene, 204 F.3d 393, 396 (2d Cir. 2000); see also United States v. Int’l Bhd. of
Teamsters, 948 F.2d 1338, 1345 (2d Cir. 1991). An attorney’s actions are “without color” when they

Unless otherwise indicated, this opinion and order omits all internal quotations marks, citations, footnotes, omissions,
emphases, and alterations in quoted text.

2

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“lack[] any legal or factual basis.” Wolters Kluwer Fin. Servs. Inc. v. Scivantage, 564 F.3d 110, 114
(2d Cir. 2009).
Actions are in “bad faith,” meanwhile, when “improper purposes such as harassment or delay”
“motivate[]” them. Eisemann, 204 F.3d at 396. At times, “[an] attorney’s actions are so completely
without merit [that they] require the conclusion that they must have been undertaken for some improper
purpose.” Int’l Bhd. of Teamsters, 948 F.2d at 1345. Numerous courts have accordingly sanctioned
attorneys who continued to pursue claims after learning that a central allegation was false. In Baiul v.
NBC Sports, for example, the Second Circuit concluded that an attorney’s conduct was sanctionable
where he “advanced claims based on a written agreement for over a year after learning that [none]
existed.” 708 F. App’x 710, 715 (2d Cir. 2017). In addition, in Yi Mei Ke v. J R Sushi 2 Inc., the court
found that counsel had acted in bad faith by continuing to pursue labor law claims after testimony
established that the plaintiff had sued the wrong employer. No. 19-CV-7332, 2022 WL 1496576, at
*12 (S.D.N.Y. Feb. 7, 2022), report and recommendation adopted, 2022 WL 912231 (S.D.N.Y. Mar.
28, 2022); see also Ji Li v. New Ichiro Sushi, Inc., No. 14-CV-10242, 2020 WL 2094095, at *11
(S.D.N.Y. Apr. 30, 2020), aff’d, No. 20-1783-CV, 2021 WL 6105491 (2d Cir. Dec. 21, 2021)
(imposing sanctions where counsel continued to pursue claims after evidence at trial established that
the plaintiff had sued incorrect defendants). The court similarly imposed sanctions in Kaufman v.
Equifax Information Services, LLC, where counsel “continued to litigate . . . meritless claims even after
defendants provided documents clearly demonstrating that these claims were false.” No. 18-CV-7420,
2019 WL 3997461, at *3 (E.D.N.Y. Aug. 22, 2019).
As an initial matter, the Court does not find that Sheehan acted in “bad faith” when he initially
filed Dakus’ complaint. Eisemann, 204 F.3d at 396. According to Sheehan, he spoke with Dakus by
phone before he filed the complaint. See Dkt. 39, ex. 1 ¶ 21. During that call, Dakus purportedly
“confirmed [that] she [had] purchased” KLM tickets. Id. ¶ 29. She further “told [him] that KLM’s
claims about its environmental commitments were a factor in her decision to fly with KLM.” Id. ¶ 39.

6

Sheehan, moreover, maintains that he “reviewed the outline of the complaint,” id. ¶ 40, with Dakus
before filing it. When he provided her with a copy of it after its filing, Dakus, he says, did not inform
him that any allegations in it were false. See id. ¶¶ 46–47. As Sheehan rightly acknowledges, however,
he “should have been more precise,” Dkt. 39, ex. 1 ¶¶ 52, 55, and “exacting,” id. ¶ 56, in interviewing
Dakus. Regardless, the Court does not have reason to believe that his filing of the complaint was “so
completely without merit [that it] require[s] the conclusion that [it] must have been [done] for some
improper purpose.” Int’l Bhd. of Teamsters, 948 F.2d at 1345. The Court thus does not find his filing
of the complaint sanctionable under 28 U.S.C. § 1927. 3
By contrast, Sheehan’s continued pursuit of Dakus’ claims after KLM filed its motion to
dismiss is sanctionable. The Court first finds “clear evidence” that his actions “were entirely without
color.” Wolters Kluwer Fin. Servs. Inc., 564 F.3d at 114. Sheehan opposed KLM’s motion to dismiss
after it provided evidence demonstrating the allegations necessary to establish standing were false.
Contrary to Paragraphs 54 through 56 of the complaint, Dakus did not rely on KLM’s representations
about its environmental commitments in choosing to purchase KLM tickets: She had used a third-party
travel booking service and had not herself even chosen KLM as her airline. See Dkt. 21, exs. 1–4.
Declining to withdraw or amend the complaint, Sheehan ignored these truths and continued to maintain
that had Dakus “known that flying on KLM . . . would not limit the effects of climate change, she
would not have paid more for her flight.” Dkt. 24 at 2. At the same time, he improperly relied on the
Rule 12(b)(6) standard that a court “must accept all well pleaded allegations as true.” Id. The
allegations, of course, were not true, and Sheehan’s continued pursuit “lack[ed] any legal or factual
basis.” Wolters Kluwer Fin. Servs. Inc, 564 F.3d at 114.

In any event, the Court may not impose sanctions under 28 U.S.C. § 1927 for the filing of the complaint because it
initially notified Sheehan that it was considering sanctions for his filing of the complaint under Rule 11, not § 1927.
See Dkt. 33, at 13–14; Ted Lapidus, S.A. v. Vann, 112 F.3d 91, 97 (2d Cir. 1997) (“An attorney must be forewarned
of the authority under which sanctions are being considered, and [be] given a chance to defend himself against
specific charges.” (emphasis added)). The Court’s subsequent order to show cause, moreover—which referenced
both Rule 11 and 28 U.S.C. § 1927—focused exclusively on Sheehan’s continued advocacy of the complaint rather
than its initial filing. See Dkt. 46.
3

7

The Court further finds that Sheehan acted in “bad faith” in continuing to pursue Dakus’ claims.
Eisemann, 204 F.3d at 396. Similar to the counsel in Baiul, Yi Mei Ke, and Kaufman, Sheehan
continued to pursue his client’s claims after receiving clear notice—through KLM’s motion to
dismiss—that allegations central to those claims were false. And he continued to do so even after the
Court ordered him to “file any additional materials or arguments rebutting KLM’s factual challenge.”
Dkt. 28. This continued pursuit was “so completely without merit [that it] require[s] the conclusion
that [it] must have been undertaken for some improper purpose.” Int’l Bhd. of Teamsters, 948 F.2d at
1345.
Sheehan seeks to defend his actions on the basis that he “advocated for an alternative theory of
standing,” Dkt. 47., ex. 1 ¶ 17, when confronted with the truth—thereby suggesting his actions had a
“legal or factual basis,” Wolters Kluwer Fin. Servs. Inc, 564 F.3d at 114. This “advoca[cy]” apparently
refers to Dakus’ supplemental declaration—filed in response to the Court’s order—stating that, after
purchasing her ticket, she learned about KLM’s representations and relied on them “in deciding not to
cancel [her] trip.” Dkt. 29 ¶¶ 11, 13 (emphasis added). But these new facts—even assuming they would
be sufficient to establish standing—could not have supplanted the false allegations in the complaint.
“A party’s assertion of fact in a pleading is a judicial admission by which it normally is bound
throughout the course of the proceeding.” Bellefonte Re Ins. Co. v. Argonaut Ins. Co., 757 F.2d 523,
528 (2d Cir. 1985); see also Wright v. Ernst & Young LLP, 152 F.3d 169, 178 (2d Cir. 1998)
(recognizing that a party may not amend its complaint through statements made in opposition to a
motion to dismiss). His continued pursuit of the claims was thus still “entirely without color.”
Eisemann, 204 F.3d at 396.
Sheehan also suggests that he did not act in “bad faith,” Eisemann, 204 F.3d at 396, because
he still believed that Dakus had been offered various flight options and had chosen KLM as her airline
until he began preparing her supplemental declaration, Dkt. 47, ex. 1 ¶ 14. But the notice Sheehan
received through KLM’s motion to dismiss entirely undercuts his purported belief. In a declaration

8

supporting the motion, a KLM senior vice president noted that “KLM’s records reflect[ed] that Ms.
Dakus did not purchase her ticket” and that ACIS had booked her flight. See Dkt. 21, ex. 1 ¶ 5.
According to ACIS’ Terms and Conditions, moreover, “[t]he particular airline used [for a given trip]
[was to] be determined by ACIS,” id., ex. 3 at 1, which would provide airline information to customers
after payment was remitted. See id., ex. 3.
Sheehan nonetheless failed to directly address KLM’s factual challenge to the jurisdictional
allegations in opposing the motion to dismiss. Instead, he—incorrectly—asserted that the Court had to
“accept all well pleaded allegations as true.” Dkt. 24 at 2. As the Second Circuit explained in Carter
v. HealthPort Technologies, LLC, however, where a defendant proffers evidence “reveal[ing] the
existence of factual problems in the assertion of jurisdiction,” the plaintiff must “come forward with
evidence of [its] own to controvert” that evidence. 822 F.3d 47, 57 (2d Cir. 2016). Sheehan did no such
thing. To the contrary, he argued that KLM had “offer[ed] no facts to support [the proposition] that
[Dakus] may not have known what airline she was flying until after she agreed to the ACIS Terms and
paid for her trip.” Dkt. 24 at 4. In short, KLM’s notice, coupled with Sheehan’s litigation strategy in
the face of such notice, belies his assertion about when he came to believe the allegations were false.
Dkt. 47, ex. 1 ¶ 14. The Court thus remains convinced Sheehan’s continued pursuit was “so completely
without merit [that it] require[s] the conclusion that [it] must have been undertaken for some improper
purpose.” Int’l Bhd. of Teamsters, 948 F.2d at 1345.
In light of Sheehan’s sanctionable conduct, the Court awards KLM “the excess costs, expenses,
and attorneys’ fees reasonably incurred” after KLM filed its motion to dismiss. 28 U.S.C. § 1927.
II.

Rule 11

Like under § 1927, Sheehan’s continued advocacy of Dakus’ complaint—but not his initial
filing of it—is sanctionable under Federal Rule of Civil Procedure 11.
Rule 11(b) sets forth several certification requirements for attorneys’ representations to the
court. Under Rule 11(b)(3), for example, an attorney who “present[s]” a pleading to the court “whether

9

by signing, filing, submitting, or later advocating it . . . certifies that to the best of [his] knowledge,
information, and belief, formed after an inquiry reasonable under the circumstances . . . [that] the
factual contentions have evidentiary support.” Fed. R. Civ. P. 11(b)(3) (emphasis added). A court may
exercise its discretion to “impose an appropriate sanction on any attorney . . . that violated the rule”
upon “notice and a reasonable opportunity to respond,” Fed. R. Civ. P. 11(c)(1); see Savino v.
Computer Credit, Inc., 164 F.3d 81, 88 (2d Cir. 1998)—although it may not award attorneys’ fees sua
sponte, see Nuwesra v. Merrill Lynch, Fenner & Smith, Inc., 174 F.3d 87, 94 (2d Cir. 1999). In doing
so, it must “resolve all doubts in favor of the signer.” Cross & Cross Props., Ltd. v. Everett Allied Co.,
886 F.2d 497, 504 (2d Cir. 1989).
Typically, “liability for Rule 11 violations requires only a showing of objective
unreasonableness on the part of the attorney or client signing the papers.” ATSI Commc’ns, Inc. v.
Shaar Fund, Ltd., 579 F.3d 143, 150 (2d Cir. 2009). “When a court initiates Rule 11 sanctions sua
sponte and the opportunity to correct or withdraw the challenged submission is unavailable,” however,
a heightened standard applies: “[T]he court must make a finding of [subjective] bad faith on the part
of the attorney before imposing the sanctions.” Kyros L. P.C. v. World Wrestling Ent., Inc., 78 F.4th
532, 543 (2d Cir. 2023), cert. denied, 144 S. Ct. 822 (2024); see In re Pennie & Edmonds LLP, 323
F.3d 86, 87, 91–92 (2d Cir. 2003); see also Cameron Int’l Trading Co. v. Hawk Imps., Inc., 486 F.
App’x 963, 964 (2d Cir. 2012) (applying the “bad faith” standard where the court issued an order to
show cause alongside the dismissal of a complaint).
“[C]ourts in this Circuit have found subjective bad faith in a variety of [circumstances].”
Cardona v. Mohabir, No. 14-CV-1596, 2014 WL 1804793, at *3 (S.D.N.Y. May 6, 2014). Among
those are cases in which an attorney had “actual knowledge” that he was advocating a pleading that
relied on falsehoods. Braun ex rel. Advanced Battery Techs., Inc. v. Zhiguo Fu, No. 11-CV-4383, 2015
WL 4389893, at *14 (S.D.N.Y. July 10, 2015); see also Mata v. Avianca, Inc., 678 F. Supp. 3d 443,
464 (S.D.N.Y. 2023) (imposing sanctions where the respondents “advocated for . . . fake cases and

10

legal arguments . . . after being informed by their adversary’s submission that their citations were nonexistent and could not be found”). In Chien v. Skystar Bio Pharm. Co., for instance, the court imposed
sanctions on an attorney who “continued to advocate for [a] . . . complaint” that he knew contained
falsehoods rather than amend or withdraw it. 256 F.R.D. 67, 75 (D. Conn. 2009), aff’d, 378 F. App’x
109 (2d Cir. 2010). Similarly, in Adams v. New York State Education Department, the court imposed
a “substantial monetary sanction” on an attorney who “willful[ly] persiste[d]” in advocating claims
“despite warnings that those claims lacked evidentiary support.” No. 08-CV-5996, 2010 WL 4970011,
at *12 (S.D.N.Y. Dec. 8, 2010), report and recommendation adopted as modified sub nom. Adams v.
N.Y. State Dep’t of Educ., 855 F. Supp. 2d 205 (S.D.N.Y. 2012), aff’d sub nom. Hochstadt v. N.Y. State
Educ. Dep’t, 547 F. App’x 9 (2d Cir. 2013).
For the same reasons articulated above, the Court does not find that Sheehan acted with
subjective bad faith when initially filing Dakus’ complaint. Sheehan affirms that he spoke with Dakus
before filing the complaint and reviewed an outline of it with her. See Dkt. 39, ex. 1 ¶¶ 21, 40. During
their conversation, Dakus confirmed her purchase of KLM tickets, see id. ¶ 29, and “told [him] that
KLM’s claims about its environmental commitments” factored into her flight choice, see id. ¶ 39.
“[R]esolv[ing] all doubts” in Sheehan’s “favor,” Cross & Cross Props., Ltd., 886 F.2d at 504, the Court
does not have reason to believe that he had “actual knowledge” that the complaint’s “factual
contentions” lacked “evidentiary support,” Fed. R. Civ. P. 11(b)(3), at the time of filing.
By contrast, the Court finds that Sheehan did act with “subjective bad faith” in continuing to
advocate Dakus’ complaint once KLM filed its motion to dismiss. Sheehan freely admits that he knew
her allegations were false once Dakus filed her supplemental declaration. See Dkt. 47, ex. 1 ¶¶ 14–15.
And, as discussed earlier, KLM’s notice, coupled with Sheehan’s litigation strategy in the face of that
notice, leaves the Court without any doubt that he had “actual knowledge” that the allegations were
false even before that point. Braun ex rel. Advanced Battery Techs., Inc., 2015 WL 4389893, at *14.

11

Despite this knowledge, Sheehan declined to withdraw or amend the complaint, leaving KLM to file a
reply brief and letters addressing a variety of arguments, and the Court to rule on the motion to dismiss.
The Court accordingly imposes a $1,000 fine to be deposited with the Clerk of Court.
CONCLUSION
Spencer Sheehan’s continued pursuit of Dakus’ claims after KLM notified him that the
complaint contained critical false allegations is sanctionable under 28 U.S.C. § 1927 and Federal Rule
of Civil Procedure 11.
Under § 1927, the Court imposes on Sheehan the excess costs, expenses, and attorneys’ fees
reasonably incurred because of such conduct. Within fourteen days of this opinion and order, KLM
shall file an affidavit setting forth “the excess costs, expenses, and attorneys’ fees reasonably incurred”
after KLM filed its motion to dismiss. 28 U.S.C. § 1927. Sheehan shall file any response within seven
days, and KLM may file a reply within seven days thereafter. In addition, under Rule 11, the Court
imposes a $1,000 fine to be deposited with the Clerk of Court within fourteen days of this opinion and
order.
Finally, the Court expresses its hope that Sheehan has learned a valuable lesson here—not
simply that he “should [be] more precise,” Dkt. 39, ex. 1 ¶¶ 52, 55, and “exacting,” id. ¶ 56—but that
he, “as [an] officer[] of the court,” must “properly temper[] [his] enthusiasm for a client’s cause with
careful regard for the obligations of truth, candor, accuracy, and professional judgment,” Oliveri v.
Thompson, 803 F.2d 1265, 1267 (2d Cir. 1986).
Dated:

September 23, 2024
New York, New York
Ronnie Abrams
United States District Judge

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