RUHEL et al v. S.N.M. ENTERPRISES, INC.

Filing 99

MEMORANDUM OPINION re: sanctions litigation relating to the Plaintiffs expert witness, Michael Panish. In accordance with the accompanying Memorandum Opinion, IT IS ORDERED that Panish shall pay the following as sanctions in this case to the Plaintiffs counsel: 1. $20,953.00 in attorneys fees. 2. $1,317.30 in costs. TOTAL: $22.270.30. Signed by Magistrate Judge Martin C. Carlson on July 20, 2018. (kjn)

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
EDWARD RUEHL, Individually
and as Administrator of the Estate
of Shirley T. Ruehl, deceased,

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Plaintiff
v.
S.N.M. ENTERPRISES, INC.,
Defendant

Civil No. 1:15-CV-168

(Magistrate Judge Carlson)

MEMORANDUM OPINION
I.

Factual Background

We now write a final, melancholy chapter in this lawsuit as we conclude
sanctions litigation relating to the Plaintiffs’ expert witness, Michael Panish. The
background of these sanctions proceedings were thoroughly outlined by the court
in its prior decision finding that Panish engaged in sanctionable misconduct. Ruehl
v. S.N.M. Enterprises, Inc., No. 1:15-CV-168, 2017 WL 5749560, (M.D. Pa. Nov.
28, 2017). Briefly, though, Panish was retained as a critical liability expert by the
Ruehl family following a mishap at a motel in which Mrs. Ruehl, an elderly motel
patron was allegedly struck by a sliding door, suffering a severe fall which the
Plaintiffs alleged ultimately caused her death.

1 

With the issues framed in this fashion, the Plaintiffs sought out Michael
Panish as an expert witness in this case. At the time that the Plaintiffs contacted
Panish he held himself out as an expert in multiple construction and building
disciplines, and specifically asserted that he was a premier expert witness in the
field of automated sliding glass door technology. Panish also asserted that he had
served as an expert witness in over 1,000 cases, an attestation which meant that
Panish was thoroughly conversant with his legal and ethical obligations as an
expert witness.
As discovery proceeded the defendant sought to take a videotaped
deposition of Panish, a commonplace practice that is specifically authorized by the
Federal Rules of Civil Procedure. Panish refused, citing a matter which he had
obliquely alluded to in his expert witness contract with Plaintiffs’ counsel, his odd,
idiosyncratic view that the video could be manipulated by third parties. Following
a conference with counsel on March 17, 2017, we entered an order in this matter
which provided in clear and precise terms as follows:
Recognizing that the defendant has a right to record Mr. Panish’s
deposition by video, and finding that the plaintiff has not
demonstrated sufficient good cause for the issuance of a protective
order, IT IS ORDERED THAT the plaintiff’s request for a protective
order to preclude the video recording of Mr. Panish’s deposition is
DENIED. The defendant shall be permitted to record Mr. Panish’s
deposition by video and stenographic means.
2 

In order to address Mr. Panish’s concerns, however; and to
memorialize the defendant’s representations regarding the intended
use of the video recording of the deposition, IT IS FURTHER
ORDERED THAT the parties shall use Mr. Panish’s recorded
deposition only for purposes of defending or prosecuting the claims in
this litigation, and shall not disseminate the recording outside of these
proceedings in the absence of a Court order.
(Doc. 57, p. 6.)
Thus, our order directed a videotaped deposition of Mr. Panish, but
thoroughly addressed Panish’s odd and speculative concern that his visage and
words would be digitally altered by unknown sinister actors by setting strict
limitations on the dissemination of the video.
Our March 17 order gave Mr. Panish a few clear choices. He could comply
with the order. He could seek timely reconsideration of the order. He could through
separate counsel file his own motion for protective order, or motion to quash the
deposition subpoena that the defendant was attempting to serve upon him. The one
thing he could not do, however, was to engage in some unilateral passiveaggressive course in which he ostensibly agreed to schedule a deposition, while
privately evading his basic obligation owed by all witnesses by failing to appear
for that deposition.
Yet this is precisely the path that Panish chose.

3 

Mr. Panish responded to this clear direction from this court, and the plain
dictates of the Federal Rules of Civil Procedure, in a fashion which was deceptive,
occasionally profane, highly unprofessional, contumacious and sanctionable. At
the outset, according to the testimony and contemporaneous notes of Plaintiffs’
counsel which we find to be entirely credible, when notified by Plaintiffs’ counsel
following the court’s conference call with the parties that the court had denied his
request for a protective order which would have forbidden this videotaped
deposition Mr. Panish replied: “I don’t care about you or her [the decedent
Plaintiff, Shirley Ruehl] or some asshole judge.” (Doc. 86-1.)1 Indeed, when
Plaintiffs’ counsel appealed to Panish’s conscience by noting that the family of the
deceased plaintiff, Shirley Ruehl, was counting upon his testimony and assistance,
Panish responded in a manner that was cold, calculating and cruel, reportedly
stating that: “ Nothing will bring her back so who gives a shit.” (Id.) Furthermore,
while casting his position as a matter of principle, Panish was willing to surrender
his principles for a price and told Plaintiffs’ counsel that he would surrender his

1

 Panish’s

ability to engage in this profane exchange with Plaintiffs’ counsel
following the entry of our March 17 order is itself something of a mystery since
Panish cancelled the deposition that was scheduled in this case for March 20, 2017,
claiming that he had suddenly contracted laryngitis, but apparently felt well
enough to contemporaneously tell Plaintiffs’ counsel over the telephone that he did
not “give[] a shit” about his client, Shirley Ruehl, who had allegedly died as a
result of injuries suffered in this accident.
4 

principles if they provided him a $10,000,000 indemnity bond from Lloyds of
London.
Yet at the same time that Panish was privately voicing his complete disdain
for this court’s order and his own client, he was ostensibly complying with the
order by making scheduling arrangements for this deposition in April of 2017.
Panish also retained a $3,050 advance he had received from the defendant as
payment for this deposition, keeping and using those funds for his own benefit for
some eight months before surrendering these funds which he had obtained on the
pretext that he would undergo a deposition on the eve of the sanctions hearing set
in this case. On April 18, 2017, Panish failed to appear for this deposition without
any prior explanation or excuse from the court, or counsel. Panish’s failure to
appear, and his apparent disregard of this court’s explicit instructions, had a series
of adverse consequences for the Plaintiffs who had retained him. First, the
Plaintiffs were placed in the difficult position of trying to defend Panish’s
indefensible conduct, filing pleadings seeking to set aside our March 17 order, an
order Panish had effectively ignored. (Docs. 62 and 63.) The Plaintiffs were also
compelled to negotiate a settlement of this lawsuit from a highly disadvantageous
position, since Panish’s abandonment of the plaintiffs and refusal to cooperate in
this deposition greatly undermined their case. Panish’s course of conduct also had
5 

an adverse impact upon the defendants, who were denied information relevant to
their defense of this case, expended thousands of dollars to schedule this
deposition, and paid $3,050 to Panish for his services, money that Panish retained
for months despite never living up to his obligations as a witness.
It was against this backdrop that the Defendant moved to sanction Panish.
(Doc.64.) The Plaintiffs also joined in this motion, (Doc. 76), and following a
hearing we concluded that Panish had indulged in sanctionable misconduct. We
granted the defendant’s sanctions motion and awarded a sum certain in sanctions to
the defendant. We further instructed the plaintiff and Panish to submit briefs and
argument in support of the Plaintiffs’ request for sanctions. The parties have fully
briefed this issue and this matter is now ripe for resolution.
For the reasons set forth below, in the exercise of our discretion, we will
award sanctions of $22,270.30 in favor of the Plaintiffs against Panish.
II.

Discussion

It is well-settled that a district court has the inherent power to sanction
persons appearing before it for refusing to comply with its orders and to control
litigation before it. See, e.g., Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d
212, 242 (3d Cir. 2007). Indeed, the inherent power of the Court to act in this area
has long been recognized by the United States Supreme Court, which has held that:
6 

It has long been understood that “[c]ertain implied powers must
necessarily result to our Courts of justice from the nature of their
institution,” powers “which cannot be dispensed with in a Court,
because they are necessary to the exercise of all others.” United States
v. Hudson, 7 Cranch 32, 34, 3 L.Ed. 259 (1812); see also Roadway
Express, Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 2463, 65
L.Ed.2d 488 (1980) (citing Hudson ). For this reason, “Courts of
justice are universally acknowledged to be vested, by their very
creation, with power to impose silence, respect, and decorum, in their
presence, and submission to their lawful mandates.” Anderson v.
Dunn, 6 Wheat. 204, 227, 5 L.Ed. 242 (1821); see also Ex parte
Robinson, 19 Wall. 505, 510, 22 L.Ed. 205 (1874). These powers are
“governed not by rule or statute but by the control necessarily vested
in courts to manage their own affairs so as to achieve the orderly and
expeditious disposition of cases.” Link v. Wabash R. Co., 370 U.S.
626, 630-631, 82 S.Ct. 1386, 1388-1389, 8 L.Ed.2d 734 (1962).
Chambers v. NASCO, Inc. 501 U.S. 32, 43 (1991).
Decisions regarding how to exercise this inherent power to sanction
misconduct rest in the sound discretion of the court and, if a district court awards
sanctions pursuant to its inherent authority, such an award may only be reviewed
for abuse of discretion, which will be found only where “the court’s decision rests
upon a clearly erroneous finding of fact, an errant conclusion of law or an improper
application of law to fact.” In re Prudential Ins. Co. Am. Sales Practice Litig.
Actions, 278 F.3d 175, 181 (3d Cir. 2002) (quoting In re Orthopedic Bone Screw
Products Liability Litig., 193 F.3d 781, 795 (3d Cir. 1999)).
7 

Yet while this court doubtless has the discretion to order imposition of
sanctions in appropriate cases, the exercise of this discretion is guided by certain
basic principles. Foremost among these principles is the tenet that sanctions should
always be narrowly tailored to meet the misconduct, and should entail no greater
punishment than is reasonably necessary to address the specific wrongdoing that
confronts the court. See Klein v. Stahl, GMBH & Co., Maschinefabrik, 185 F.3d
98 (3d. Cir. 1999).This basic, but pivotal, aspect of the exercise of discretion in this
area, has been voiced in many ways. Thus, it is well established that, “[b]ecause of
their very potency, inherent powers must be exercised with restraint and discretion.
A primary aspect of that discretion is the ability to fashion an appropriate sanction
for conduct which abuses the judicial process.” Chambers v. NASCO, Inc. 501
U.S. at 44-45 (citation omitted). Therefore, in exercising this authority we are
cautioned that:
[A] district court must ensure that there is an adequate factual
predicate for flexing its substantial muscle under its inherent powers,
and must also ensure that the sanction is tailored to address the harm
identified. In exercising its discretion under its inherent powers, the
court should be guided by the same considerations that guide it in the
imposition of sanctions under the Federal Rules. First, the court must
consider the conduct at issue and explain why the conduct warrants
sanction.
Republic of Philippines v. Westinghouse Elec. Corp. 43 F.3d at 74.
8 

Moreover:
[H]aving evaluated the conduct at issue, the district court must
specifically consider the range of permissible sanctions and explain
why less severe alternatives to the sanction imposed are inadequate or
inappropriate. Although the court need not “exhaust all other
sanctioning mechanisms prior to resorting to its inherent power”
(Landon v. Hunt, 938 F.2d at 450, 454 (3d Cir.1991)), the court must
explain why it has chosen any particular sanction from the range of
alternatives it has identified. See Poulis, 747 F.2d at 868 (sanctions
under Fed.R.Civ.P. 16 and 37).
Id.
Likewise, Rule 37 of the Federal Rules of Civil Procedure also recognizes
and permits imposition of sanctions upon parties and deponents who shirk or
unjustifiably ignore their responsibility to appear as witnesses in civil proceedings.
See Fed. R. Civ. P. 37, Rule 37(b) and (d). Thus, “under Federal Rule of Civil
Procedure 37(b)(1), a deponent may be sanctioned for failure to comply with a
court order. Id. 37(b)(1) (‘If the court where the discovery is taken orders a
deponent to be sworn or to answer a question and the deponent fails to obey, the
failure may be treated as contempt of court.’). The Third Circuit has explained
Rule 37(b)(1) ‘grants a district court the authority to punish a nonparty for failing
to follow the court's directions.’ Gen. Ins. Co. of Am. v. E. Consol. Utilities, Inc.,
126 F.3d 215, 220 n. 3 (3d Cir.1997) (citing Miller v. Transamerican Press, Inc.,
709 F.2d 524 (9th Cir.1983) for the proposition that that Rule 37(b)(1) sanctions
9 

may be available against a nonparty deponent who failed to appear at a deposition
in violation of a court order).” Yarus v. Walgreen Co., No. CIV.A. 14-1656, 2015
WL 4041955, at *3 (E.D. Pa. July 1, 2015). Further, settled case law acknowledges
that “sanctionable misconduct by . . . non-party witnesses can take many forms,
including: failures to appear, General Ins. Co. Of America v. Eastern Consolidated
Utilities, Inc., supra; destruction of evidence; Helmac Products Corporation v.
Roth Corporation, supra; or giving false, misleading and materially incomplete
testimony. Black Horse Lane Assoc., LP v. Dow Chemical Corp., 228 F.3d 275,
300–305 (3d. Cir.2000). In all of its varied forms, this misconduct by non-parties
and witnesses may, and properly should, be the subject of sanctions. Id.” Bartos v.
Pennsylvania, No. CIV.1:08-CV-0366, 2010 WL 1816674, at *5 (M.D. Pa. May 5,
2010).
Here we have found that Panish indulged in sanctionable misconduct. Our
task, therefore, is to exercise our discretion and fashion a monetary sanction for
these misdeeds that is sufficient, but not greater than necessary, to redress this
misconduct.
In this phase of sanctions litigation, where an aggrieved party seeks the
recovery of costs, expenses or attorney’s fees, typically “[t]he starting point for a
determination of attorney’s fees, the lodestar calculation, is the product of the
10 

number of hours reasonably expended in responding to the frivolous paper times
an hourly fee based on the prevailing market rate.” Doering v. Union County Bd.
of Chosen Freeholders, 857 F.2d 191, 195 (3d Cir. 1988); see also Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983). The party seeking fees bears the burden of
producing “sufficient evidence of what constitutes a reasonable market rate for the
essential character and complexity of the legal services rendered . . . .” Knight v.
Drye, 2009 U.S. Dist. LEXIS 82369 (M.D. Pa. Sept. 10, 2009) (quoting
McCutcheon v. America’s Servicing Co., 560 F.2d 143, 150 (3d Cir. 1990). See
also Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S.
546, 564 (1986) (party seeking fees has the initial burden of presenting evidence
that the claimed rates and time expended are reasonable).
In the more familiar setting of fee-shifting awards, the Third Circuit has
instructed that determining a reasonable hourly rate generally “is calculated
according to the prevailing market rates in the relevant community.” Loughner v.
Univ. of Pittsburgh, 260 F.3d 173, 180 (3d Cir. 2001); see also Interfaith Cmty.
Org. v. Honeywell Int’l, Inc., 426 F.3d 694, 705 (3d Cir. 2005) (in most cases, the
relevant market rate is the prevailing rate in the forum of the litigation). A court
must not make a finding of reasonableness based on its own “generalized sense” of
appropriateness, but instead “must rely on the record.” Evans v. Port Auth. of
11 

N.Y. and N.J., 273 F.3d 346, 361 (3d Cir. 2001) (quoting Smith v. City of Phila.
Housing Auth., 107 F.3d 223, 225 (3d Cir. 1997)). Courts are to “assess the
experience and skill of the prevailing party’s attorneys and compare their rates to
the rates prevailing in the community for similar services by lawyers of reasonably
comparable skill, experience, and reputation.” Maldonado v. Houstoun, 256 F.3d
181, 184 (3d Cir. 2001);
1990).

Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir.

The party seeking fees “bears the burden of establishing by way of

satisfactory evidence, ‘in addition to [the] attorney’s own affidavits,’ . . . that the
requested hourly rates meet this standard.” Washington v. Philadelphia Cty. Ct. of
Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996) (citing Blum v. Stenson, 465
U.S. 886, 895 n.11 (1984)).
With respect to calculating the number of hours reasonably expended, the
court “should review the time charged, decide whether the hours set out were
reasonably expended for each of the particular purposes described and then
exclude those that are ‘excessive, redundant, or otherwise unnecessary.’” Public
Int. Research Group of N.J., Inc. v. Windall, 51 F.3d 1179, 1188 (3d Cir. 1995)
(internal citation omitted); see also Dellarciprete, 892 F.2d at 1183 (“The district
court should exclude hours that are not reasonably calculated.”). In general, hours
are not considered to have been reasonably expended “if they are excessive,
12 

redundant, or otherwise unnecessary.” Id. The court may permissibly deduct
hours from the fee award if the attorney inadequately documents the hours
claimed. Id.
Once the petitioning party has made the preliminary showing described
above, “the resulting product is presumed to be the reasonable fee to which counsel
is entitled.” Id. The burden then shifts to the party opposing the claimed fees by
making specific objections to the proposed fee by way of an affidavit or brief.
Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). Upon consideration of
the opposing party’s objections, the district court enjoys substantial discretion to
adjust the lodestar and ultimate fee downward. Id.
One other consideration guides us when calculating attorneys’ fees as
monetary sanctions for alleged litigation misconduct. In addition to the traditional
lodestar analysis, we note that in the context of sanctions – unlike in the more
familiar fee-shifting context where a party is entitled to reasonable attorneys’ fees
and costs as a prevailing party – the court may only impose a sanction that
represents “the minimum that will serve to adequately deter the undesirable
behavior” that precipitated the sanction.

Doering, 857 F.2d at 194 (citation

omitted). Therefore, it is both necessary and appropriate to consider the various
factors identified in Doering when considering a suitable monetary sanction in this
13 

case. Indeed, the Third Circuit has made clear that district courts must consider
these factors when determining the appropriate amount of attorney’s fees to charge
as sanctions. Id. at 195 (“We . . . direct the district courts to consider various
mitigating factors in their calculation of the total monetary compensation owed by
lawyers who have been found to have violated Rule 11.”). The reason for these
additional considerations is that fees imposed as a sanction implicate different
policies than those that support fee shifting in favor of a prevailing party. See
Doering, 857 F.2d at 196 (“The policy considerations behind fee awards to
prevailing plaintiffs under civil rights statutes, however, are different from the
policies underlying sanctions under Rule 11”). One particularly important
consideration in determining an appropriate sanction is the violating party’s ability
to pay. Id. at 195. Other considerations that courts are expected to evaluate in
assessing an appropriate attorney’s fee as a sanction include: (1) the public’s
interest in encouraging certain types of lawsuits; (2) the sanctioned individual’s
history of alleged misconduct; (3) the opposing party’s need for compensation; (4)
the degree of frivolousness of the action; and (5) whether the frivolousness
indicated that a less sophisticated or expensive response was required. Id. at 197
and n.6.

14 

Guided by these legal tenets we turn to an evaluation of the Plaintiffs’
claimed monetary sanctions. Those monetary sanctions begin with an itemized list
of expenses relating to the litigation of this sanctions matter. (Doc. 94-2.) These
itemized expenses included travel expenses, processing service expenses, and costs
associated with online legal research. (Id.) According to the Plaintiffs these
expenses, which were directly related to litigation of Panish’s misconduct, totaled
$1,317.30. (Id.) For his part, Panish has objected to these expenses, alleging that
the travel expenses are excessive, and the service and online research expenses
were unnecessary. (Doc. 95.)
We disagree. The travel costs claimed by Plaintiffs’ counsel were plainly
necessary and appropriate, since we had ordered the parties to appear for a hearing
to address Panish’s sanctionable misconduct. As for Panish’s argument that the
process server expenses were unnecessary, we have already found that: “Mr. and
Mrs. Panish deny evading service of process. . . but the facts belie these
assertions.” Ruehl v. S.N.M. Enterprises, Inc., No. 1:15-CV-168, 2017 WL
5749560, at *5 n. 3 (M.D. Pa. Nov. 28, 2017). Given Panish’s history of evading
process, these expenses were both necessary and appropriate.
Finally, Panish argues that that the online legal research costs enumerated by
the Plaintiffs’ counsel should be disallowed as unnecessary. Online legal research
15 

costs can be recovered as sanctions in appropriate instances, Envtl. Mfg. Sols.,
LLC v. Peach State Labs, Inc., 274 F. Supp. 3d 1298, 1329 (M.D. Fla. 2017), and
we find that the unprecedented scope, nature and extent of Panish’s misconduct as
well as the unusual circumstance of a party seeking to sanction its own witness
made such research prudent and proper. Therefore, Panish’s objection to this
element of the Plaintiffs’ request for sanctions will be denied, and we will award
$1,317.30 in costs as sanctions.
In addition to these direct costs, the Plaintiffs’ counsel have also itemized
attorneys’ fees totaling $35,425.00, as a result of litigating the issues thrust upon
the Plaintiffs by Panish’s wholesale abandonment of his clients. These attorneys’
fees represent 68.75 hours of work by Attorney Smith, billed at an hourly rate of
$350, and an additional 25.25 hours of work by Attorney Regan, billed at an hourly
rate of $450. (Doc. 94-1.) Panish has challenged this fees calculation on two
grounds, arguing both that the hourly rate and the number of hours expended by
counsel on this matter were excessive. (Doc. 95.)
Turning first to an assessment of the appropriate lodestar hourly rate, we
note that:
In determining a reasonable hourly rate for attorneys' fees analysis,
that rate generally “is calculated according to the prevailing market
rates in the relevant community.” Loughner v. Univ. of Pittsburgh,
260 F.3d 173, 180 (3d Cir. 2001)(emphasis added). In most cases, the
16 

relevant market rate is the prevailing rate in the forum of the
litigation, in this case the Middle District of Pennsylvania. See
Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 426 F.3d 694, 705 (3d
Cir. 2005).
United States ex rel Sharon McKinney v. DHS Techs., LLC, No. 3:11-CV-146,
2015 WL 11675668, at *6 (M.D. Pa. Oct. 27, 2015), report and recommendation
adopted sub nom. United States v. DHS Techs., LLC, No. 3:11-CV-146, 2016 WL
4592175 (M.D. Pa. Feb. 4, 2016).
Furthermore, when focusing on this regional legal market:
Applying this benchmark, we find that our own assessment of fee
award hourly rates approved by the courts in this district within the
past two years in complex litigation suggests that highly experienced
attorneys of plaintiff counsels' background in this particular legal
marketplace typically command a fee rate of between $250 and $325
per hour in such complicated cases. See e.g., Evankavitch v. Green
Tree Servicing, LLC, No. 3:12CV2564, 2014 WL 4437645, at *2
(M.D. Pa. Sept. 9, 2014), appeal dismissed (Sept. 29, 2015) ($315);
Summit Sheet Metal, LLC v. Sheet Metal Workers' Int'l Ass'n, No.
3:CV-13-1623, 2015 WL 163342, at *1 (M.D. Pa. Jan. 13, 2015)
reconsideration denied sub nom. Summit Sheet Metal, LLC v. Sheet
Metal Workers' Int'l Ass'n, Local Union No. 44, No. 3:CV-13-1623,
2015 WL 672398 (M.D. Pa. Feb. 17, 2015) ($305 per hour); Wallace
v. Powell, 301 F.R.D. 144, 167 (M.D. Pa. 2014) ($300); Beattie v.
Line Mountain Sch. Dist., No. 4:13-CV-02655, 2014 WL 3400975, at
*9 (M.D. Pa. July 10, 2014)($250 to $325 per hour); J.S. ex rel.
Snyder v. Blue Mountain Sch. Dist., No. 3:07CV585, 2014 WL
1321116, at *2 (M.D. Pa. Mar. 31, 2014)(hourly rate of $300);
Lukawski v. Client Servs., Inc., No. 3:12-CV-02082, 2013 WL
6154544, at *3 (M.D. Pa. Nov. 22, 2013)($300 per hour rate).
Id.
In this case, we believe that Plaintiffs’ counsel were exceptionally skilled
and able. Therefore, we will apply an hourly rate of $325, a sum which is at the
17 

high end of the reasonable, customary lodestar regional hourly rate range
previously determined by this court when making lodestar calculations.
Having found some merit to Panish’s concerns regarding the hourly rate
billed by Plaintiffs’ counsel, we turn to the second aspect of the lodestar
calculation, the evaluation of the number of hours billed by counsel. In this regard,
Panish objects to the number of hours counsel claim to have expended in this
sanctions litigation, arguing that the total of 94 hours billed by Plaintiffs’ counsel
addressing the issues created by their own expert witness’ duplicity was excessive.
We disagree. On this score, we believe that Panish simply fails to recognize
the chaos created by his deceitful conduct. As we have previously observed,
Panish’s actions constituted a shocking, and fundamental dereliction of his duty to
Mrs. Ruehl. This conduct severely undermined the Plaintiffs’ case, created a
nightmarish host of difficulties for Plaintiffs’ counsel, compelled extensive
motions practice, and required an evidentiary hearing. Given the discord caused by
his actions, it is hardly surprising that Plaintiffs’ counsel were put to considerable
time trying to address the incalculable damage done by their own expert witness to
their case. Moreover, the time devoted to that effort, 94 hours, seems entirely
appropriate given the gravity of Panish’s misdeeds.

18 

Having concluded that the number of hours expended here was fitting given
the extraordinary scope and impact of Panish’s misconduct, we conclude that a
straightforward lodestar assessment yields a potential attorneys’ fee of $30,550.
(94 hours x $325 per hour). We are required, however, in this setting to go beyond
a simple lodestar calculation and evaluate whether there are any mitigating
circumstances which warrant a reduction in these fees. In fact, are cautioned that
we should only impose a sanction that represents “the minimum that will serve to
adequately deter the undesirable behavior” that precipitated the sanction. Doering,
857 F.2d at 194 (citation omitted).
Taking this final factor into consideration, we conclude that there are some
mitigating factors in this case which justify a reduction in this attorneys’ fee award.
Specifically, as we observed in our prior decision on this sanctions motion,
Panish’s contract with Plaintiffs’ counsel foreshadowed some of these issues, since
that contract indicated that “Mr. Panish retains the right to approve video
deposition.” Ruehl v. S.N.M. Enterprises, Inc., No. 1:15-CV-168, 2017 WL
5749560, at *2 (M.D. Pa. Nov. 28, 2017). Panish previously invited us to wholly
exonerate him, and instead sanction Plaintiffs’ counsel, based upon this contractual
provision which he argued placed the blame entirely upon counsel for his
professional shortcomings. We have refused, however, to wholly excuse Panish’s
19 

misconduct since Panish clearly disobeyed unambiguous orders of this court.
Nonetheless, in our prior decision we recognized that this consideration was a
mitigating factor, stating that:
Finding that Panish’s conduct was wholly unjustified, and that no
counsel could have anticipated the level of unreasonable, intemperate
behavior exhibited by Panish, we decline this invitation [to excuse
Panish’s conduct]. We will, however, consider Panish’s observations
regarding the terms of his contract and the prior notice he provided to
plaintiffs' counsel of his refusal to submit to videotape depositions as
a mitigating factor when assessing sanctions against Panish.
Ruehl v. S.N.M. Enterprises, Inc., No. 1:15-CV-168, 2017 WL 5749560, at *8 n. 5
(M.D. Pa. Nov. 28, 2017).
Taking this mitigating factor into consideration, we now conclude that this
prior, albeit incomplete, notice which Panish provided to Plaintiffs’ counsel
regarding his reluctance to submit to videotape depositions warrants some
significant mitigation of the attorneys’ fees sanction otherwise called for in this
case through a strict application of the lodestar analysis. In particular, we find that
the appropriate amount of an attorneys’ fee sanction in this case should be capped
at $20,953.00, a sum which corresponds with the total amount paid by Plaintiffs’
counsel to Panish in connection with this case. Mitigating the attorneys’ fees
sanction in this fashion is fair and just on several scores. First, it takes into account
the unusual mitigating factor that Panish had to some degree foreshadowed to
Plaintiffs’ counsel his idiosyncratic fear of videotaped depositions at the outset of
20 

his retention as an expert. However, this sanction, which equals the amounts paid
to Panish by Plaintiffs’ counsel, also ensures that Panish does not profit from his
contumacious refusal to obey this court’s order. Furthermore, the sanction imposed
here reimburses the Plaintiffs’ counsel for a significant proportion of their fees and
all of their costs associated with Panish’s ethical lapses. Finding that this sanction
is fair, just, and no greater than necessary to achieve the objects of this sanctions
litigation, we will impose an award of attorneys’ fees in the amount of $20,953.00
in addition to the costs of $1,317.30, for a total sanction of $22,270.30.
An appropriate order follows:
III.

Order

In accordance with the accompanying Memorandum Opinion, IT IS
ORDERED that Panish shall pay the following as sanctions in this case to the
Plaintiffs’ counsel:
1.

$20,953.00 in attorneys’ fees.

2.

$1,317.30 in costs.

TOTAL:

$22.270.30.

So ordered this 20th day of July, 2018.
/s/ Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
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