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17-228

Case 17-228, Document 30, 04/26/2017, 2020451, Page1 of 47

United States Court of Appeals


for the Second Circuit

FREDERIC D. OSTROVE,
Appellant,

JEFFREY MALKAN,
Plaintiff,
v.

UNITED STATES DISTRICT COURT FOR


THE WESTERN DISTRICT OF NEW YORK,
Appellee,

MAKAU W. MUTUA, CHARLES P. EWING,


Defendants.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT


FOR THE WESTERN DISTRICT OF NEW YORK (Buffalo)
APPELLANTS BRIEF

LEEDS BROWN LAW, P.C.


Attorneys for Appellant
One Old Country Road, Suite 347
Carle Place, New York 11514
(516) 873-9550

DICK BAILEY SERVICE (212) 6087666 (718) 5224363 (516) 2222470 (914) 6820848 Fax: (718) 5224024
18005312028 Email: appeals@dickbailey.com Website: www.dickbailey.com
Case 17-228, Document 30, 04/26/2017, 2020451, Page2 of 47

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................................................................................... iii

JURISDICTIONAL STATEMENT .......................................................................... 1

STATEMENT OF THE ISSUES PRESENTED FOR REVIEW ............................. 1

SUMMARY OF THE ARGUMENT ........................................................................ 1

STATEMENT OF FACTS ........................................................................................2

Plaintiff-Appellants Motion for Sanctions ........................................................ 3

Court Decisions Regarding the Sanctions Motion and Counter-Motion ............ 5

ARGUMENT .............................................................................................................7

I. STANDARD OF REVIEW.............................................................................. 7

II. THE AMENDED ORDER IS PREMISED UPON AN ERONEOUS


ASSESSMENT OF FACT AND LAW............................................................... 7

III. IT WAS NOT FRIVOLOUS FOR THE FIRM TO ARGUE THAT


MUTUA COMMITTED PERJURY AND THAT COUNSEL KNOW
ABOUT IT ...........................................................................................................8

A. It was not frivolous to argue that Mutua committed perjury.................... 9

1. The Sanctions R&R mischaracterized Plaintiffs argument that


Mutua lied, and when Plaintiffs argument is properly cast it is
not frivolous...........................................................................................10

a. Mutuas testimony strongly implies he did not


misremember what occurred at the CCPR meeting and it
was therefore not frivolous to argue it was a lie. ...........................11

i
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b. Mutuas version of events is contradicted by eight non-


party witnesses, and supported by nobody. ...................................14

c. Mutuas version of events is contradicted by


contemporaneously taken notes of the CCPR Meeting. ................ 16

d. Mutua inconsistently testified regarding the significance


of the vote. ......................................................................................17

2. Even accepting the Sanctions R&Rs mischaracterization of


Plaintiffs argument, that argument still is not frivolous. .....................18

3. At least nine other lawyers believe that Mutua lied, evidencing


that such argument is not frivolous. ......................................................20

B. It was not frivolous to argue that Mutuas perjury was material. ........... 22

IV. IT WAS NOT FRIVOLOUS FOR PLAINTIFF TO ARGUE


COUNSEL KNEW THAT MUTUA COMMITTED PERJURY ................. 28

A. Counsels knowledge is assessed using an objective test. .................. 29

B. Applying the objectively reasonable standard, it was not frivolous


to argue that Counsel knew about Mutuas lies. ......................................32

V. DEFENDANTS DID NOT PROVIDE SAFE HARBOR


PURSUANT TO RULE 11 AND THEREFORE RULE 11
SANCTIONS CANNOT BE IMPOSED ..........................................................35

VI. THERE IS NO EVIDENCE OF BAD FAITH, THUS THE FIRM


SHOULD NOT BE SANCTIONED UNDER THE COURTS
INHERENT POWER OR 28 U.S.C. 1927. .....................................................37

CONCLUSION ........................................................................................................41

CERTIFICATION PURSUANT TO Fed. R. App. P. 32(a)(7)(B) and (C) ............ 42

ii
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TABLE OF AUTHORITIES

Cases Page(s)

C.W. v. Capistrano Unified Sch. Dist.,


784 F.3d 1237, 1245 (9th Cir. 2015) ..................................................................32

Eastway Constr. Corp. v. New York,


637 F. Supp. 558, 565 (E.D.N.Y. 1986) .............................................................10

Exantus v. Metro. Prop. & Cas. Ins. Co,


582 F. Supp. 2d 239 (D. Conn. 2008)...........................................................37, 38

Hooda v. W.C.A. Serv. Corp.,


2013 U.S. Dist. LEXIS 71809, *29 (W.D.N.Y. 2013) .......................................32

In re Doe,
847 F.2d 57 (2d Cir. 1988) .....................................................................29, 30, 31

In re Pennie & Edmonds LLP,


323 F.3d 86 (2d Cir. 2003) .................................................................................30

International Bhd. of Teamsters, Local 631 v. Silver State Disposal Serv.,


109 F.3d 1409, 1412 (9th Cir. 1997) ..................................................................32

Mackler Prods., Inc. v. Cohen,


146 F.3d 126, 128 (2d Cir. 1998) ......................................................................... 7

Malkan v. Mutua,
2012 U.S. Dist. LEXIS 143311, *10-12 (W.D.N.Y. 2012)..........................23, 26

Malkan v. Mutua,
2016 U.S. Dist. LEXIS 174754 (W.D.N.Y. 2016) ............................................... 1

McCracken v. R.E. Ginna Nuclear Power Plant, LLC,


2010 U.S. Dist. LEXIS 31319, *7 (W.D.N.Y. 2010) ........................................... 9

Patsys Brand, Inc. v. I.O.B. Realty, Inc.,


2002 U.S. Dist. LEXIS 491 (S.D.N.Y. 2002).....................................................30

iii
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Schlaifer Nance & Co. v. Estate of Warhol,


194 F.3d 323, 333-34 (2d Cir. 1999) ................................................................7, 8

Star Mark Mgmt. v. Koon Chun Hing Kee Soy & Sauce,
682 F.3d 170,176 (2d. Cir. 2012). ................................................................35, 37

Turner v. Temptu Inc.,


2013 U.S. Dist. LEXIS 114298 (S.D.N.Y. 2013)...............................................38

U.S. v. Percell,
526 F.2d 189, 190 (9th Cir. 1975) ......................................................................23

United States ex. rel. Mikes v. Straus,


274 F.3d 687 (2d Cir. 2001) ................................................................................. 9

United States v. Dunnigan,


507 U.S. 87, 94 (1993)........................................................................................22

United States v. Masters,


484 F.2d 1251, 1254 (10th Cir. 1973) ................................................................23

United States v. Slutzky,


79 F.2d 504, 506 (3d Cir. 1935). ........................................................................23

Statutes/Regulations/Miscellaneous

18 U.S.C. 1621 ......................................................................................................22


18 U.S.C. 1621(2) .................................................................................................24
8 NYCRR 335.10 ..................................................................................................23
NYCLA Committee on Professional Ethics Formal Opinion No. 741
(March 1, 2010)........................................................................................................31

iv
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JURISDICTIONAL STATEMENT

This is an appeal from an amended order (Amended Order), entered

December 18, 2016, in the United States District Court for the Western District of

New York (J. Telesca), which, inter alia, adopted a magistrate judges report and

recommendation to the extent a verbal sanction was imposed on Ostrove for

seeking sanctions against defendant Makau Mutua and his counsel. Malkan v.

Mutua, 2016 U.S. Dist. LEXIS 174754 (W.D.N.Y. 2016) (Appellants Appendix,

A.238-43).1 Judgment was entered on December 20, 2016. (Index to the Record

on Appeal, Doc. 52).2 Appellant timely filed a Notice of Appeal on January 13,

2017. (A.244).

STATEMENT OF THE ISSUES PRESENTED FOR REVIEW

Did the District Court abuse its discretion in adopting the Report &

Recommendations description of counsels behavior and its imposition of verbal

sanctions against counsel and all comments and findings related thereto?

SUMMARY OF THE ARGUMENT

On December 1, 2015, Magistrate Judge Kenneth Schroeder issued a Report

and Recommendation (Sanctions R&R) (I.40), imposing a $10,000 sanction

1
Hereinafter, citation to Appellants Appendix will be as follows: A.[#]. We note a joint
appendix was not filed, as Appellees have voluntarily waived their opportunity to submit a brief.
See General Docket, Doc. No. 27.
2
In a few instances, to less significant information, to save expense we cite to the Index to
the Record on Appeal will be as follows: I.[Doc. #].

1
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upon Ostrove in connection with Ostroves filing of a Rule 11 motion against

opposing counsel and the defendant. Objections were timely filed. While the

District Court rejected the Sanctions R&R to the extent it imposed a monetary

sanction against Ostrove, but it imposed a verbal sanction upon Ostrove based on

its finding that Ostrove had behaved inappropriately in filing the Rule 11 motion,

which the court deemed frivolous. However, as set forth herein, the Rule 11

motion was not frivolous. Moreover, separate and apart from the filing of the Rule

11 motion, the Sanctions R&R describes no sanctionable or otherwise

inappropriate behavior by Ostrove. Thus, reversal is warranted.

STATEMENT OF FACTS

On February 11, 2011 Malkan retained Leeds Brown Law, P.C. (the Firm)

in connection with an employment matter. Rick Ostrove, a partner of the Firm,

was assigned to work on the mater. The Firm commenced this action on Malkans

behalf, by the filing of a complaint, dated March 23, 2012. (I.1). The complaint

alleged causes of action against the Defendant-Appellee, Makau W. Mutua, for,

inter alia, damages resulting from Defendants violations of Plaintiffs rights as

guaranteed him by the Fourteenth Amendment to the Constitution of the United

States pursuant to 42 U.S.C. 1983. (Id.). On May 8, 2012, Defendants filed a

motion to dismiss the complaint for failure to state a claim, which was denied in

part by the Honorable Richard J. Arcara on October 3, 2012. (I.2). Discovery was

2
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completed, and on June 7, 2014, Defendant-Appellee moved for summary

judgment on all claims. (I.7).

Plaintiff-Appellants Motion for Sanctions

On April 14, 2015, the Firm, on Malkans behalf, filed a motion for

sanctions (Sanctions Motion) against Defendant Makau Mutua (Mutua) and

his counsel, David Sleight (Counsel). (I.16). The basis for the Sanctions Motion

was that Mutua perjured himself and Counsel did not take steps to correct the

perjury, instead citing to it in submissions to the court. The Sanctions Motion

argued as follows: Mutua falsely testified at a Public Employee Relations Board

(PERB) hearing, and later during his deposition in this action. Mutua testified

that during a faculty meeting, no vote was held regarding whether to grant Plaintiff

Malkan tenure. Mutuas testimony had been controverted by eight non-party

professors who were present at this meeting, all of whom testified that a vote was

held, and that Malkan was granted a full clinical professorship. Some of these

professors kept detailed contemporaneous notes evidencing the vote and had post-

vote discussions about the results. All of these witnesses were tenured professors

with no reason to give false testimony. Moreover, there was not one witness who

supported Mutuas testimony. Thus, the Sanctions Motion argued that mountain of

evidence demonstrated that Mutua lied about the vote, and no reasonable person

could conclude otherwise. Notwithstanding, Counsel utilized Mutuas perjurious

3
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testimony within his 56.1 Statement of Facts and implicitly relied upon it within

his Memorandum of Law in Support of Summary Judgment. Moreover, Counsel

did not correct Mutuas Answer. Instead, Counsels response to Malkans

allegation that a tenure vote was held remained a denial of knowledge or

information sufficient to form a belief. This should have been converted to an

admission. Equally disturbing, the response could not have been a denial of

knowledge or information. At the time Counsel filed his Answer, his client had

previously testified at the PERB hearing that the vote did not occur. Thus,

counsels denial of knowledge or information could not possibly be a proper

response.

As an attorney and officer of the Court, Mutua should obviously not have

committed perjury. As a professor and dean of a public law school, Mutuas

conduct should have been above reproach. It is outrageous that Mutua twice

perjured himself in an effort to subvert the judicial process, and clung to his

obvious lie instead of correcting his testimony. Further, Counsel, as an officer of

the court and a representative of the Attorney Generals office, presented Mutuas

perjurious testimony as if it were legitimate and did not take steps to correct the

situation. Thus, the Sanctions Motion argued that sanctions against Mutua and

Counsel were warranted.

4
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Defendant-Appellees Counter-Motion for Sanctions

In response to the Sanctions Motion, the Defendant-Appellee filed

opposition (I.75), as well as a motion for sanctions against Malkan, Ostrove, and

the Firm (Counter-Motion). (I.83). The Counter-Motion incorporated many of

the arguments set forth in the opposition, alleging that the Sanctions Motion was

itself frivolous, and that Plaintiff, acting by himself individually, engaged in other

sanctionable conduct. (I.83)

Court Decisions Regarding the Sanctions Motion and Counter-Motion

On December 1, 2015, without oral argument, Magistrate Judge Kenneth

Schroeder, Jr. issued the Sanctions R&R, denying the Sanctions Motion in its

entirety, and partially granting the Counter-Motion. (I.40). Judge Schroeder

recommended that the Firm be sanctioned in the amount of $10,000. (Id.). Judge

Schroeder declined to recommend a monetary sanction against Malkan based on

Malkans financial circumstances. (Id.). On the same date the Sanctions R&R was

filed, Judge Schroeder recommended dismissal of Malkans case on the merits.

(I.37). Malkan and the Firm filed separate objections 3 on December 14, 2015 and

December 15, 2015, respectively, which Defendant-Appellant opposed. (I.41-49).

After full briefing, the objections sat waiting for a decision for over 10 months.

(I.49-50). On November 16, 2016, Judge Arcara recused himself, and Judge

3
In July 2015, prior to the date objections were filed, Malkan had terminated the Firm as
counsel. (A.93-94; I.26-27).

5
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Telesca was assigned to the case. (12-CV-00236, Dkt. 111). One month later, by

Order dated December 16, 2016 (Original Order), the Honorable Michael A.

Telesca held as follows:

The Court declines to adopt the recommendation of a monetary


sanction in the amount of $10,000.00 against plaintiffs former
counsel. In declining to adopt the monetary sanction as provided in
the R&R, the Court emphasizes that the reasons Judge Schroeder gave
for imposing such a monetary sanction are well-supported by this
record. Counsels actions and unduly contentious behavior, as
described in extensive detail in the second R&R, are worthy of verbal
sanctions as stated by Judge Schroeder.

(A.236). Judge Telesca concluded as follows:

The Court declines to adopt the second R&R addressing sanctions


(doc. 97) and the parties cross-motions for sanctions (docs. 70, 83)
are therefore denied. Plaintiffs objections (docs. 99, 100) and former
counsels objections (doc. 98) are overruled to the extent stated in this
Decision and Order. The Clerk of the Court is directed to close this
case.

(A.237). Seeming to recognize the apparent inconsistency between the Original

Orders holding and conclusion, Judge Schroeder issued the Amended Order two

days later, amending the conclusion as follows:

The Court modifies the second R&R (doc. 97) to the extent that
monetary sanctions will not be imposed by the Court against
plaintiffs counsel, but in all other respects the sanctions as stated by
Judge Schroeder are accepted and adopted. Defendants motion for
sanctions (doc. 83) is, therefore, granted in part and plaintiffs motion
for sanctions (doc. 70) is denied. Plaintiffs objections (docs. 99, 100)
and former counsels objections (doc. 98) are overruled to the extent
stated in this Decision and Order. The Clerk of the Court is directed to
close this case.

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(A.242-43). Thus, the Amended Order makes clear that the Court granted the

Counter-Motion to the extent Ostrove was, in fact, verbally sanctioned.

ARGUMENT

I. STANDARD OF REVIEW

A District Courts decision to impose sanctions is assessed under an abuse of

discretion standard, but [a] troublesome aspect of a trial courts power to impose

sanctions, either as a result of a finding of contempt, pursuant to the court's

inherent power, or under a variety of rulesis that the trial court may act as

accuser, fact finder and sentencing judge, not subject to restrictions of any

procedural code and at times not limited by any rule of law governing the severity

of sanctions that may be imposed. Schlaifer Nance & Co. v. Estate of Warhol,

194 F.3d 323, 333-34 (2d Cir. 1999) (citing Mackler Prods., Inc. v. Cohen, 146

F.3d 126, 128 (2d Cir. 1998). Thus, this Court must ensure that the sanctions

decision was made with restraint and discretion. Id. (citing cases). For the

reasons set forth below, the District Court should not have imposed any sanctions

on Ostrove, verbal or otherwise, and the Sanctions R&R should not have

recommended same.

II. THE AMENDED ORDER IS PREMISED UPON AN ERONEOUS


ASSESSMENT OF FACT AND LAW

Where a judgment imposing sanctions is based upon a clearly erroneous

factual or legal assessment, reversal is warranted. Schlaifer Nance & Co. v. Estate

7
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of Warhol, 194 F.3d 323, 327 (2d Cir. 1999). Here, the Amended Order devotes

less than one full page to the issue of whether Ostrove should be sanctioned.

(A.241-42). It contains no legal or factual analysis, and entirely defers to the facts

set forth in the Sanctions R&R. The Amended Order merely states that verbal

sanctions against Ostrove were warranted based on Ostroves actions and unduly

contentious behavior, as described in extensive detail in the [Sanctions R&R].

(A.242). However, as set forth herein, Ostroves conduct was not unduly

contentious.4 It appears that in determining a verbal sanction against Ostrove was

warranted, the District Court improperly imputed Malkans conduct to Ostrove.

(A.199-206; 242). Even if the District Courts reference to Ostroves actions and

unduly contentious behavior solely related to the conclusion set forth in the

Sanctions R&R that the Sanctions Motion was frivolous, reversal is still warranted

because, as set forth below, that conclusion was clearly erroneous.

III. IT WAS NOT FRIVOLOUS FOR THE FIRM TO ARGUE THAT


MUTUA COMMITTED PERJURY AND THAT COUNSEL KNOW
ABOUT IT

The gravamen of the Firms alleged sanctionable conduct was its

advancement of the argument that Mutua engaged in perjury and Counsel failed to

4
The Sanctions R&R never described counsels behavior as unduly contentious, and
Defendants never even argued same. While Defendants argued that Malkan, independent of
counsel, behaved contentiously, their only argument to sanction the Firm was that it filed the
Sanctions Motion, which Defendants claimed was frivolous. (A.192-230; I.21, 83).

8
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correct same. The Sanctions R&R found that it was frivolous for the Firm to

advance those arguments. The Sanctions R&Rs central finding in this regard was:

As there is no evidence before the court to suggest anything other than


differing recollections of a meeting of tenured faculty on April 28, 2006,
there is no basis for the accusation of perjury against Dean Mutua.
Concomitantly, there is no evidence to suggest that AAG Sleight possesses
actual knowledge that Professor Mutua is lying about his recollection of that
meeting.

(A.217). Thus, the Magistrate found that the Firm advanced a frivolous argument,

purportedly because there was no factual or legal basis for the accusations of

perjury. (A.225).

A. It was not frivolous to argue that Mutua committed perjury.

An argument is frivolous when: (1) the factual contentions are clearly

baseless, or (2) the claim is based on an indisputably meritless legal theory.

McCracken v. R.E. Ginna Nuclear Power Plant, LLC, 2010 U.S. Dist. LEXIS

31319, *7 (W.D.N.Y. 2010); United States ex. rel. Mikes v. Straus, 274 F.3d 687

(2d Cir. 2001) (a claim is frivolous when, viewed objectively, it may be said to

have no reasonable chance of success, and present no valid argument to modify

present law). The term frivolous has been defined according to its dictionary

definition:

Frivolous is of the same order of magnitude as less than a


scintilla. It is defined in Websters Third New International
Dictionary (1967) as of little weight or importance: having no
basis in law or fact: light, slight, sham, irrelevant, superficial.
The Oxford English Dictionary (1971) defines it as of little or

9
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no weight, value or importance; paltry; trumpery; not worthy of


serious attention; having no reasonable ground or purposeIn
pleading: Manifestly insufficient or futile.

Eastway Constr. Corp. v. New York, 637 F. Supp. 558, 565 (E.D.N.Y. 1986).

The Sanctions R&Rs conclusion that it was frivolous for Plaintiff to argue

Mutua committed perjury was erroneous because (1) the R&R mischaracterized

Plaintiffs argument; (2) even accepting the mischaracterization, Plaintiffs

argument still was not frivolous; and (3) nine other lawyers have also

independently concluded Mutua perjured himself, thus evidencing Plaintiffs

argument was reasonable and non-frivolous.

1. The Sanctions R&R mischaracterized Plaintiffs argument that


Mutua lied, and when Plaintiffs argument is properly cast it is
not frivolous.

The Sanctions R&R found that the Firms argument was frivolous by first

mischaracterizing Plaintiffs argument. Magistrate Schroeder characterized

Plaintiffs argument as follows:

Essentially, plaintiff argues that because eight non-party


witnesses testified that a vote was held to grant plaintiff a full
clinical professorship, Dean Mutuas testimony before PERB
and at his deposition that no such vote was taken must have
been a lie.

(A.215).

This is a gross oversimplification of Plaintiffs argument. Contradictory

witness testimony was only one among many pieces of evidence supporting

10
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Plaintiffs argument. In addition to the fact that eight unbiased witnesses

contradicted Mutuas testimony, the conclusion that Mutua lied is further

supported by the fact that (a) Mutuas testimony evidences that he did not

misremember what occurred; (b) Mutuas version of events is supported by

nobody, despite 19 people being in attendance at the meeting; (c) Mutuas version

is contradicted by contemporaneous notes; and (d) Mutua inconsistently testified

regarding the significance of the vote. Additionally, the manner in which Counsel

answered the complaint and the interrogatories (discussed below), further

evidences that Mutua intentionally lied.

Whereas there is a theoretical possibility that Mutua misremembered, given

the totality of the circumstances, it appears highly likely that he intentionally lied.

Certainly there is more than a scintilla of evidence that Mutua lied, and thus it

was not frivolous to advance the argument. The Sanctions R&R is clearly

erroneous in concluding that there is no basis for the accusation of perjury.

(A.216).

a. Mutuas testimony strongly implies he did not


misremember what occurred at the CCPR meeting and
it was therefore not frivolous to argue it was a lie.

The Sanctions R&R states there was no evidence that Mutua did not simply

misremember what occurred at the CCPR meeting. However, Mutuas own

testimony evidences that Mutua did not misremember. Mutua repeatedly denied

11
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what occurred and swore that he remembers [the vote] very clearly. (A.115).

Mutua insists that his version is correct, even after he was presented with a

mountain of contradictory evidence. His failure to acknowledge the possibility

that he is misremembering strongly indicates that he is lying.

Additionally, as noted by the Magistrate, Mutua testified as follows: I can

say that I have not been in many faculty meetings where emotions ran so high.

(A.196). A fact is less likely to be misremembered when the situation is unusual

and emotional, as is the case here. Further, Mutua described the vote in such

exacting detail that it would be highly unlikely to be a product of

misremembering. (A.194-97). For example, Mutua testified:

The meeting was very heated and emotional from its inception, and that
faculty members questioned whether a vote to promote Malkan from
Associate Clinical Professor to full Clinical Professor was appropriate,
allegedly because Malkan did not teach in clinics. (A.57-58, 60; I.18,
5).

Mutua, Lucinda Finley, James Gardner, and others felt Malkans initial
appointment to the line of Associate Clinical Professor was in error and
[it would be a mistake] to compound that error [by promoting Malkan].
(A.106-07).

The consensus was that that Malkan was terrible for the job, and a full
scale discussion of the bad shape of the program was held. (A.108-
10). Mutua testified that after these concerns were raised, the promotion
issue was tabled, and no vote was ever held. (A.58, 81, 196-97; I.18,
5).

The meeting then focused on whether Malkan was the appropriate person
to lead the program. (A.58; 196-97; I.18, 5).

12
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Mutua was against Malkans leadership of the program, and argued that
Malkan should be terminated immediately, but that the faculty voted to
recommend Malkan for a one-year terminal contract so that Malkan
would have time to look for a job elsewhere and a suitable replacement
could be found. (A.59-60, 196-97; I.18, 5).

The faculty then voted to recommend that a committee be formed to


study the program Malkan led, and reconstruct the program from the
ground up. (A.59-60, 196-97).

After the votes were counted, it was so close that someone at the meeting
questioned whether abstentions should be counted as negative votes.
(A.114).

The detail and self-assuredness of Mutuas testimony belies any inference

that he may have misremembered whether a tenure vote occurred, especially since

this was a unique, emotional situation. His testimony strongly supports the

inference that he invented a story and is sticking to it, likely because Malkan has

been broadcasting to the world his belief that Defendant Mutua intentionally

testified falsely (I.30, 3). Indeed, even after being shown all the evidence

that contradicts Mutuas version of events, Mutua will not even acknowledge that

there is a possibility that he misremembered. He still insists he is correct. (A.52,

3). Accordingly, based on this testimony, combined with the evidence discussed

below, it was not frivolous for Plaintiff to argue that Mutua committed perjury, as

opposed to misremembering.

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b. Mutuas version of events is contradicted by eight non-party


witnesses, and supported by nobody.

It was not frivolous for Plaintiff to argue Mutua perjured himself because (a)

eight non-party witnesses all consistently testified in detail about the vote5; and (b)

not one of the eleven other witness support Mutuas version, despite the fact that

presumably most (if not all) of the professors worked under Mutua when his

veracity was challenged. Witness testimony is summarized below.

Witness Testimony

Susan Mangold The outcome [of the vote to promote Malkan]


was that he was appointed and, you know, to the
reappointed recommendation for
reappointment to full clinical professor.
(A.120, 122; see also A.149-50).
Dianne Avery We then had a vote on [Malkans] candidacy for
clinical full professor for an appointment to
promotion to the position of a clinical full
professor from his position as clinical associate
professor. That vote I can see I remember at
the time the vote passed by a majority vote and I
can see from my contemporaneous notes that the
vote was nine yes, seven no and three
abstentions. (A.133; see also A.141-42).

Robert Steinfeld There was a vote in favor of Professor Malkans


promotion to clinical professor. (A.139).
Rebecca The topic of his tenure as a clinical professor
French- was brought up and we voted on itIt was not
Redwood unanimous, as I recall, but it was a majority or a
significant percentage was pro, granting

5
Lynn Mather was not present for the vote, but testified extensively about post-vote
discussions.

14
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Professor Malkan [full clinical professor


status]. (A.140; see also A.143-44).

Shubha Ghosh On April 28, 2006, I attended a meeting of the


Committee on Clinical Promotion and Renewal
at the Law School. At that meeting, the
Committee discussed the promotion of Jeffrey
Malkan from Clinical Associate Professor to
Clinical Professor. Following the discussion,
the Committee voted by secret ballot at that
meeting to recommend that Jeffrey Malkan be
promoted to clinical professor. (A.145-45).
Alfred On April 28, 2006, I attended a meeting of the
Konefsky Committee on Clinical Promotion and Renewal
at the Law School. At that meeting, the
Committee discussed the promotion of Jeffrey
Malkan from Clinical Associate Professor to
Clinical Professor. Following the discussion,
the Committee voted by secret ballot at that
meeting to recommend that Jeffrey Malkan be
promoted to clinical professor. (A.147-48).

Lynn Mather On April 28, 2006, I was unable to attend a


meeting of the Committee on Clinical
Promotion and Renewal at the Law School
regarding the promotion of Jeff Malkan to
Clinical Full Professor because that day was the
last session of my seminarAs soon as my
class was over (in 406 OBrian), I stopped at my
office and then went up the back stairs to see if
the faculty meeting was still in progress on the
5th floor. In the stairwell I ran into my colleague
Professor Jim Gardner as he was coming down
the stairs at the conclusion of the meeting. I
clearly recall my conversation with Jim about
the meeting. Jim had been against the
promotion of Malkan and had circulated a
detailed and forceful letter of opposition just a
day or two before the meeting. Jims letter had
surprised me since I thought that everyone was

15
Case 17-228, Document 30, 04/26/2017, 2020451, Page21 of 47

in favor of Jeff. In the stairwell when I asked


Jim what had happened at the meeting, he was
upset. He told me that the Committee had voted
to promote Jeff. He reported that he and
Professor Lucinda Finley thought this was a
mistake but they were outvoted. The majority
of the faculty supported Jeff Malkan and voted
for his promotion at the meeting. (A.153-54).

Isabel Marcus On April 28, 2006, I attended a meeting of the


Committee on Clinical Promotion and Renewal
at the Law School. At that meeting, the
Committee discussed the promotion of Jeffrey
Malkan from Clinical Associate Professor to
Clinical Professor. Following the discussion,
the Committee voted by secret ballot at that
meeting to recommend that Jeffrey Malkan be
promoted to clinical professor. (A.151-52).

This testimony is overwhelmingly consistent. It is supported by other

evidence and is not controverted by anybody, except Mutua (who vividly recalls

that these witnesses version is false). The above testimony unequivocally

establishes what happened at the meeting. Mutuas version is directly contrary.

Given this contradiction and Mutuas insistence that his version is correct, it was

not frivolous to argue that the reason that Mutuas testimony was vastly different

was because he lied.

c. Mutuas version of events is contradicted by


contemporaneously taken notes of the CCPR Meeting.

Avery and Mangold took notes at the CCPR meeting. Averys notes

indicate that a vote on whether to grant Malkan tenure was held, and that the vote

16
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was nine yes, seven no, and three abstentions. (A.133, 157). Mangolds notes

reflect the same vote count. (A. 121, 158). Thus, notes were taken

contemporaneously with the vote by two different professors, and which are

consistent with one another, further evidencing that Mutua perjured himself.

Again, Mutua has since seen these notes (and the testimony about the notes), yet he

still maintains his certainty. This constitutes more than a scintilla of evidence to

support Plaintiffs argument that Mutua perjured himself.

d. Mutua inconsistently testified regarding the significance of


the vote.

While Mutua has always maintained that the vote never occurred, Mutuas

testimony regarding the significance of such a vote has been inconsistent. During

his deposition, Mutua claimed the CCPR could submit a recommendation to the

dean, but that it was not binding on the deans decision, and the dean did not need

to seek a recommendation before making his decision. (A.116-18). However,

Mutua testified at PERB that after the meeting, he believed Malkan was not going

to be given tenure, since the CCPR would have been required to vote on the matter,

and he claimed a vote was not held. (A.160). Thus, Mutua was implying that

Dean Olsens grant of tenure to Malkan was illegitimate because the CCRP did not

vote on it. That Mutua has changed his story about the significance of the vote

further bolsters his lack of truthfulness with respect to the vote, and therefore it

was not frivolous for Plaintiff to argue same.

17
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2. Even accepting the Sanctions R&Rs mischaracterization of


Plaintiffs argument, that argument still is not frivolous.

Even if the Sanctions R&Rs mischaracterization of Plaintiffs argument is

accepted as true (that is, the evidence of Mutuas lie is confined to the fact Mutuas

testimony directly conflicts with eight witnesses), it still would not have been

frivolous to argue Mutua committed perjury. The Sanctions R&R illogically

concluded the existence of such a voluminous amount of contradictory testimony

constitutes no evidence before the Court to suggest anything other than differing

recollections. (A.216). This holding is based on the below false syllogism:

If: Eight witnesses say X


John says Y
Then: John must be
misremembering and it is
frivolous to argue that
John intentionally lied.

This logic is clearly erroneous. The Sanctions R&R found as a matter of law that

Y must be a product of faulty memory and no one can reasonably argue

otherwise.

Even if the Magistrate believed that the falsehood may be due to faulty

memory, it was clearly erroneous to find that it was frivolous to argue otherwise.

One of the most common reasons for a factual dispute is because someone is

intentionally lying. That someone has intentionally lied becomes even more likely

when their version of events is contradicted by a consistent version of events from

18
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many other witnesses, in addition to conflicting documentary evidence. The lie

becomes more apparent when the witness refuses to relent in his position, will not

acknowledge that he may be wrong, staunchly maintains his stance after being

shown ample evidence to contradict it and no one else supports his position despite

a total of 19 witnesses to the event. It was not frivolous to argue that the testimony

was intentionally false. The Sanctions R&R viewed the evidence in a vacuum and

failed to consider any context whatsoever.

The Sanctions R&R should have considered the context, as the Magistrate

understood that this was not a run-of-the-mill vote. The Magistrate cited Mutuas

testimony that he had not been in many faculty meetings where emotions ran so

high. (A.196). The Sanctions R&Rs description of the events reveals that the

Magistrate understood that this was an unusual meeting, which was described by

attendees, including Mutua as long and contentious, heated and rancorous, and

unique. (A.193-97, 202). Whereas it may be more likely that a typical vote could

be forgotten, given the circumstances, it is unlikely that Mutua would have

misremembered. While the Magistrate recounted the unique and heated details of

the meeting, the Magistrate then analyzed the situation in a complete vacuum,

ignoring all context.

Nonetheless, even without any context, the basic logical premise upon which

the Sanctions R&R found the Firms conduct to be frivolous is a flawed syllogism

19
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that is clearly erroneous. Thus, it was not frivolous to argue that Mutua lied, and

the court erred in so finding.

3. At least nine other lawyers believe that Mutua lied, evidencing


that such argument is not frivolous.

On August 8, 2014, Mutuas co-defendant, former Vice Dean Charles Ewing

(via his counsel, Randolph Oppenheimer of Damon Morey LLP), filed a motion

for a separate trial. (A.38-51). Oppenheimer noted that Mutuas version of events

was contradicted by documentary evidence and the testimony of every witness in

this case, and argued if this case is tried against both defendants, the strength of

the evidence against Mutua will indelibly stain Ewing because the jury will

improperly impute Mutuas bad acts to Ewing. (A.46). Oppenheimer criticized

Counsels 56.1 Statement, saying:

Only Mutua and no one else subscribes to his narrative. By


stipulating this sharp disagreement, Mutuas counsel attempts to
finesse the obvious and uncomfortable truth that not only is there a
conflict in the testimony, but that Mutuas version of events is
uncorroborated by either other witnesses or documents. Indeed, the
notion of a sharp disagreement is a conceit since Mutua is the only
person with a different version of events.

(A.43) (emphasis added). Oppenheimers brief concludes by noting that a jury will

readily conclude that Mutua ... has twice offered false testimony under oath

(A.51). If Oppenheimer believed that Mutuas false testimony was due to a

faulty memory, he would not fear an indelible stain on Ewing, nor would he be

worried that the jury will [readily] impute Mutuas bad acts to Ewing. The bad

20
Case 17-228, Document 30, 04/26/2017, 2020451, Page26 of 47

acts to which Oppenheimer refers are Mutuas lies about the vote. That

Oppenheimer came to this conclusion evidences that he believed that Mutua

perjured himself, and that perjury will be readily obvious to a jury. In making

this motion, Oppenheimer thoroughly investigated the falsity of Mutuas

testimony, and compiled 99 pages of documents supporting his belief Mutua lied

about the vote. (I.8). Oppenheimer reviewed discovery and deposition testimony,

and obtained affidavits from eight witnesses that supported his belief that Mutuas

testimony was false and that Mutua had thereby committed bad acts. (I.8). It

was reasonable for Oppenheimer to conclude Mutua intentionally lied, a jury will

believe that Mutua lied, and that such bad acts may stain Ewing. It was not a

frivolous argument when Oppenheimer made it, and was not frivolous when the

Firm made the same argument.

Additionally, on August 19, 2014, eight faculty members filed a complaint

against Mutua with the Fourth Department Attorney Grievance Committee,

alleging that Mutua testified falsely in the PERB hearing and deposition of this

case. (A.55). All eight law professors that signed the grievance did not believe

their grievance was frivolous (i.e. not supported by any reasonable argument).

This further evidences that Plaintiffs allegation that Mutua perjured himself was

non-frivolous. The people closest to the situation believe that Mutuas testimony

was an intentional falsehood. The fact that these eight professors believed it was a

21
Case 17-228, Document 30, 04/26/2017, 2020451, Page27 of 47

grievable lie means that at least eight other professionals also believed Mutua

perjured himself, thus rendering it highly unlikely for it to be frivolous for this

Firm and Oppenheimer to advance that same argument.

B. It was not frivolous to argue that Mutuas perjury was material.

The Sanctions R&R held that Plaintiff advanced his argument that Mutua

perjured himself regarding the tenure vote solely for vexatious purposes, stating:

[G]iven that there was never any dispute that Mr. Malkan was
promoted to the position of Clinical Professor, the Court can
fathom no reason to fixate on Professor Mutuas recollection of
this meeting other than to harass Professor Mutua, needlessly
increase the costs of this litigation and unduly burden the court.
Neither plaintiff nor his attorney has ever articulated how
plaintiffs claim would be strengthened if Professor Mutuas
recollection aligned with the recollection of the other faculty
members present at the CCPR meeting on April 28, 2006 nor
have they articulated how Professor Mutuas differing
recollection compromises plaintiffs claim.

(A.225). As noted by the Sanctions R&R, in determining what constitutes

perjury, courts rely upon the definition that has gained general acceptance and

common understanding under the federal criminal perjury statute, 18 U.S.C.

1621. (A.216, citing United States v. Dunnigan, 507 U.S. 87, 94 (1993)). In

relevant part, this statute is as follows:

Whoever, in any declaration, certificate, verification, or


statement willfully subscribes as true any material matter
which he does not believe to be trueis guilty of perjury

22
Case 17-228, Document 30, 04/26/2017, 2020451, Page28 of 47

18 U.S.C. 1621(2). For testimony to be material, it must be capable of

influencing the tribunal on the issue before it. the actual effect of the false

testimony is not the determining factor, but rather its capacity to affect or influence

the trial judge in his judicial action on the issue before him. United States v.

Masters, 484 F.2d 1251, 1254 (10th Cir. 1973); see also United States v. Slutzky,

79 F.2d 504, 506 (3d Cir. 1935). The evidence need not be material to the main

issue and it need not be directed to the primary subject of the investigation. It is

material if it is relevant to any subsidiary issue then under consideration. U.S. v.

Percell, 526 F.2d 189, 190 (9th Cir. 1975). There is ample proof that this issue

could have affected the outcome of the proceeding.

First, Mutuas testimony that no vote was held regarding Malkans tenure is

material, because it impliedly raises the possibility that Malkan did not acquire a

property interest in his position as a tenured professor, and thus no due process

claim could exist. Judge Acara explicitly held in his decision on Defendants

motion to dismiss that the policies and practices applicable to the faculty

appointment were relevant. Malkan v. Mutua, 2012 U.S. Dist. LEXIS 143311,

*10-12 (W.D.N.Y. 2012).6

6
Judge Schroeders summary judgment R&R holds that 8 NYCRR 335.10 (the
Regulation) was dispositive, thus rendering the vote (and every other fact) immaterial. (I.39).
Even if the R&R is correct, which it is not, this finding was not made until after the Sanctions
Motion was filed. Materiality must be assessed based on the facts known when we made our
motion. See United States v. Percell, 526 F.2d 189 (9th Cir. 1975).

23
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Second, Mutuas motion for summary judgment argued that Malkan was not

deprived of due process because Malkan had available to him multiple avenues to

challenge his non-renewal, including the PERB charge. (I.7, pp. 5-6). At trial,

Mutua would likely have attempted to undercut Malkans credibility by noting that

PERB found against Malkan. 7 Malkan would likely have responded by arguing

that the main witness at PERB was Mutua, who lied during the proceeding.

Third, at a bare minimum, the issue is relevant background information that

would have been elicited at trial. Judge Acara thought the information was

significant enough to include it in his decision on the motion to dismiss, stating:

On April 28, 2006, plaintiff Malkan was promoted by the dean


at the time, R. Nils Olsen, upon the recommendation of the
faculty Promotion and Tenure Committee, to the position of
Clinical Professor.

Malkan at *3 (emphasis added). This Court would not have included this fact if it

was irrelevant, even if only as background information. At trial, this could have a

strong influence on the fact-finder, as Mutuas credibility on all other matters

might be called into question.

Fourth, it is material to the issue Mutuas likeability and punitive damages.

Judge Acara already held:

7
It is easy to envision defense counsels closing statement including words to the effect of:
Malkan filed a grievance and lost, then he went to PERB and lost, then he went to the court of
claims and lost twice, and now hes trying to take another bite at the apple. (See details
described in A.198, FN 1; see also I.18, p. 8, FN 5).

24
Case 17-228, Document 30, 04/26/2017, 2020451, Page30 of 47

allegations of defendant Mututas stonewalling of the


plaintiffs various attempts to seek redress, together [with
allegations of broken promises] support a reasonable inference
that defendant Mutua was determined to resist mandatory Law
School faculty consultation and review of plaintiffs
termination in order to dismiss the plaintiff from the faculty no
matter what

Malkan at *26. Whether Mutua lied about the vote at PERB and during his

deposition speaks directly to Mutuas determination to see Malkan terminated no

matter what. If a jury determined that Mutua was lying to affect the outcome of

the PERB proceeding (and/or undercut Malkans credibility in that proceeding),

that is highly relevant to the issue of punitive damages, as well as Mutuas

credibility generally. Even if the issue did not affect the PERB proceeding, or

affect this proceeding, if the jury felt Mutua lied in an effort to affect the outcome,

that could affect the jurys determination on punitive damages, or any other issue

in the case that relies on Mutuas testimony. It could also affect Mutuas

likeability generally, which can have an influence on the outcome.

Fifth, Magistrate Schroeder recommended dismissal of Malkans due

process claim based on his finding that the five-year term appointment did not

confer a property interest because the state limits term appointments to three years,

which Magistrate Schroeder found dispositive. (I.39, pp. 7-10). Judge Schroeders

finding that the Regulation was dispositive is what allowed him to conclude the

vote was immaterial. However, when Judge Acara ruled on Defendants motion to

25
Case 17-228, Document 30, 04/26/2017, 2020451, Page31 of 47

dismiss, it explicitly held that the Regulation was not dispositive, and that further

discovery was warranted.8 Judge Arcara held:

Key issues in both the federal civil rights action and state breach
of contract action will depend upon the construction of plaintiff
Malkans employment contract. The state law reading of the
contracts duration will obviously be a critical factor in
assessing the extent of the plaintiffs property interest in
continued employment with the State an essential predicate
for this action but it will not be dispositive.

When considering whether plaintiff Malkans employment


contract gave him a property interest in continuing employment
with the State sufficient to merit due process protection, this
Court will look both to the express terms of the contract, and to
the underlying policies and unwritten common law applicable
to the faculty appointment. The Court will assess evidence of
the relevant employment policies and practices of the Law
School and SUNY, including, among other evidence, the
plaintiff's November 16, 2006 contract

There will be witnesses and documentary evidence relevant to


the property interest

Malkan v. Mutua, 2012 U.S. Dist. LEXIS 143311, *10-12 (W.D.N.Y. 2012)

(emphasis added; internal citations omitted). As the underlying policies and

unwritten common law applicable to faculty appointment require that the CCRB

vote on whether to recommend a faculty members appointment, and also require

that recommendation to be submitted to the dean (A.116-19, 131-32, 161-65),

whether this occurred (and, by implication, whether Mutua was lying about it) is

8
Magistrate Schroeders recommendation to dismiss this case solely based on the Regulation
appears to directly contradict Judge Arcaras order on the motion to dismiss.

26
Case 17-228, Document 30, 04/26/2017, 2020451, Page32 of 47

material. That the Magistrate disagreed with Judge Acara in this regard does not

alter the fact that at the time the Sanctions Motion was filed, this issue was in play,

notwithstanding the Magistrates subsequent finding, which was also incorrect and

the subject of Malkans current appeal. (See Malkan v. Mutua, 17-CV-38).

Sixth, as discussed above, Ewing and Oppenheimer, felt it was material as

evidenced by their motion for a separate trial. (A.38-51). Ewing feared he could

not receive a fair trial because a jury would impute Mutuas lies to him. The fact

Ewing and Oppenheimer filed this motion further evidences that the vote, and

Mutuas lies regarding same, were material.

Finally, Counsel viewed the vote as material enough for him to fixate on this

topic. When Counsel deposed Malkan, he devoted over 17% 9 of his time to

questioning Malkan about the CCPR meeting. Counsel inquired about where

Malkan was during the meeting, what happened at the meeting, how Malkan

learned of the outcome, discussions Malkan had with others regarding the meeting,

and whom Malkan speculated voted for/against him. (A.166-71). Malkans

attorney objected to Counsels questions regarding Malkans speculation, and

Counsel argued at length over the objections and resumed questioning. (A.168-

69). During former Dean Olsens deposition, Counsel asked questions directed at

9
Malkans deposition transcript is 170 pages. 116 pages relate to questions posed by
Counsel. 20 pages of the transcript relate to Counsels vote related questions, amounting to
17.24% (I.34, Ex. 12).

27
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establishing that Olsen did not have knowledge of the vote because Olsen was not

present during the meeting. (A.161-62). Counsel also questioned Avery and

Mangold about the vote. (A.123-30, 134-38). Finally, Counsels Rule 56.1

Statement of Undisputed Material Facts mentions the vote although he

downplayed its significance since he knew by that time that the testimony

regarding same was unfavorable to his client. (I.6, 29). The discovery Counsel

took and his identification of this as a disputed material issue shows that Counsel

felt it was material.

In sum, there is ample evidence that the vote was material. More to the

point, it was not frivolous for Plaintiff to argue it was material, as the issue would

likely be explored at trial and could have an influence on the fact finder. Thus, the

Magistrate was clearly erroneous in finding that the Court can fathom no reason

to fixate on Professor Mutuas recollection of this meeting other than to harass

Professor Mutua, needlessly increase the costs of this litigation and unduly burden

the court, and the District Court was clearly erroneous in adopting this finding.

(A. 225, 236).

IV. IT WAS NOT FRIVOLOUS FOR PLAINTIFF TO ARGUE


COUNSEL KNEW THAT MUTUA COMMITTED PERJURY

The Sanctions R&R held that Plaintiffs argument that Counsel knowingly

submitted Mutuas perjured testimony was frivolous, based on its predicate finding

that Plaintiffs underlying allegation that Mutua perjured himself was frivolous.

28
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(A.216-17, 219) (there is no evidence before the court to suggest that Dean

Mutua testified falsely as to his recollection of events on April 28, 2006, let alone

that AAG Sleight possesses actual knowledge that Dean Mutua testified falsely).

As discussed above, a plethora of evidence supports Malkans argument that

Mutua perjured himself, and thus it was not frivolous for Malkan to so argue.

Additionally, it was not frivolous for Plaintiff to argue that Counsel knew about

Mutuas perjury.

A. Counsels knowledge is assessed using an objective test.

Under the Rules of Professional Conduct (RPC), a lawyers duty to correct

a clients false testimony attaches once the lawyer knows of its falsity. RPC

1.0(k) defines knowledge as actual knowledge of the fact in question, which

may be inferred from the circumstances. While there is no known precedent

interpreting the standard of knowledge set forth in the RPC, some guidance is

provided by authorities decided under the prior rules. In In re Doe, 847 F.2d 57

(2d Cir. 1988), the court articulated the standard of knowledge under former DR 7-

102:

[T]he drafters intended disclosure of only that information


which the attorney reasonably knows to be a fact and which,
when combined with other facts in his knowledge, would
clearly establish the existence of a fraud on the tribunal.

[An attorney need not] wait until he has proof beyond a moral
certainty that fraud has been committed. Rather, we simply
conclude that he must clearly know, rather than suspect, that a

29
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fraud on the court has been committed before he brings this


knowledge to the court's attention.

Id. at 63 (emphasis added). Thus, the courts use of the term reasonably knows

applied an objective test to whether a lawyer has actual knowledge.10 The

objective portion of the knowledge rule is necessary, otherwise everyone would

just say they believe their client, regardless of how unreasonable that belief may

be. See RPC 3.3 n.8 (stating although a lawyer should resolve doubts about the

veracity of testimony or other evidence in favor of his client, the lawyer cannot

ignore an obvious falsehood). Likewise, in Patsys Brand, Inc. v. I.O.B. Realty,

Inc., 2002 U.S. Dist. LEXIS 491 (S.D.N.Y. 2002), the court stated:

Rule 11 sanctions are appropriate where the attorney has


negligently or recklessly failed to perform his responsibilities as
an officer of the court. Few responsibilities of an attorney, as
an officer of the court, are more important than the duty to
insure that his client does not commit perjury or obstruct
justice. It is, therefore, appropriate to apply an objectively
reasonable standard to determine whether counsel has been
negligent or reckless in this regard.

Id. at 14-14 (internal quotations and citations omitted). While Patsys was vacated

in In re Pennie & Edmonds LLP, 323 F.3d 86 (2d Cir. 2003), in a Rule 11 finding

10
The Sanctions R&R notes that in Doe the attorney was found to not have had actual
knowledge and that the Doe court indicated that lawyers cannot be obligated to report when they
strongly suspect a witness lied. (A.218). Although Doe contains that language, it still
endorsed the objective test, as does RPC 3.3 n.8 and In re Pennie & Edmonds LLP, 323 F.3d 86
(2d Cir. 2003), both of which were ignored by the R&R. Even if the Firm was wrong about the
objective test or incorrect in its assessment that applying the objective test evidences that
Counsel knew of the perjury, it was not frivolous to advance the argument.

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initiated by motion (like the present case), the objectively reasonable standard

remains good law -- Pennie holds:

The mental state applicable to liability for Rule 11 sanctions


initiated by motion is objective unreasonableness, i.e., liability
may be imposed if the lawyers claim to have evidentiary
support is not objectively reasonable That standard is
appropriate in circumstances where the lawyer whose
submission is challenged by motion has the opportunity,
afforded by the safe harbor provision, to correct or withdraw
the challenged submission.

323 F.3d at 90 (emphasis added). The reason Rule 11 sanctions were vacated in

Pennie was because the sanctions were not initiated by motion, but rather by the

court, sua sponte:

We conclude that where, as here, a sua sponte Rule 11 sanction


denies a lawyer the opportunity to withdraw the challenged
document pursuant to the safe harbor provision of Rule
11(c)(1)(A), the appropriate standard is subjective bad faith. In
this case, the District Court accepted the firms assertion that it
acted in subjective good faith. We therefore vacate the sanction
ruling.

Id. at 87. Thus, for purposes of motion-based Rule 11 sanctions, Pennie applied

the objective reasonableness standard.

Further, in NYCLA Committee on Professional Ethics Formal Opinion No.

741 (March 1, 2010) (A.172-77), the Committee held that when a lawyer learns

after the fact that his client lied about a material issue in a deposition, he is

obligated to correct the false testimony or withdraw the false statement. This

opinion cites In re Doe for the actual knowledge standard which triggers the

31
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reporting obligation, noting that actual knowledge may be inferred

circumstantially, and a lawyer cannot rely on his clients statements if it is

unreasonable to do so. Thus, this opinion confirms the objectively reasonable

standard. Accordingly, objectively reasonable is the standard. At least, it was

not frivolous to argue this is the proper standard.11

B. Applying the objectively reasonable standard, it was not frivolous


to argue that Counsel knew about Mutuas lies.

Under the objectively reasonable standard, it was not frivolous for Plaintiff

to argue Counsel knew that Mutua lied. Given the overwhelming evidence, it is

not frivolous to argue that a reasonable person in Counsels shoes would find

Mutuas testimony to be an intentional falsehood. Again, eight tenured professors

believe it was a lie and filed a grievance about same. Oppenheimer believed the

same. It is not frivolous to argue that it is objectively reasonable to believe that

this was an intentional lie.

Further, there is evidence to suggest that Counsel actually knew this to be a

lie when he filed his Answer. The Complaint was filed on March 23, 2012; the

11
The Counter-Motion states there is very little case law that discusses the concept of
knowledge in the context of Rule 11 and/or RPC 3.3. (I.21, p. 4). This lack of case law
precludes a finding that Plaintiffs argument was frivolous. Hooda v. W.C.A. Serv. Corp., 2013
U.S. Dist. LEXIS 71809, *29 (W.D.N.Y. 2013) (plaintiffs claims were not frivolous and his
litigation conduct was not unreasonable because there was very little case law interpreting the
statute); International Bhd. of Teamsters, Local 631 v. Silver State Disposal Serv., 109 F.3d
1409, 1412 (9th Cir. 1997) (an appeal is less likely to be considered frivolous when there is
very little case law directly apposite); C.W. v. Capistrano Unified Sch. Dist., 784 F.3d 1237,
1245 (9th Cir. 2015) (noting when there is very little case law on point and a claim raises a
novel question, the claim is much less likely to be considered frivolous).

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Answer was not filed until October 23, 2012; thus, Counsel had seven months to

investigate. (I.1; A.36). As a zealous advocate, Counsel must have read Mutuas

PERB testimony during this investigatory period. Thus, when Counsel answered

the complaint, he should have denied the allegation. Instead, Counsel denied

knowledge or information sufficient to form a belief. (I.1, 11; A.37, 11).

Counsel explained this by asserting that certain words in the allegation were vague

and he did not know all the information. (I.18, 20). This would not have

precluded him from, denying that there was any vote, and responding otherwise to

the remaining allegations.12 Regardless, Counsels denial of knowledge or

information sufficient to form a belief may further evidence that he did not

believe Mutuas PERB testimony about the vote. On this basis alone, it was not

frivolous to believe that Counsel knew it to be false.13

Further, during discovery, in Interrogatory #22, Counsel was asked for the

names of witnesses who can corroborate Mutuas testimony about the vote.

(A.181). Rather than respond, Counsel asserted numerous frivolous objections,

12
Counsel is well aware of his ability to deny part of an allegation, while denying knowledge
or information as to the remaining allegations in a given paragraph. (See, e.g., A.36-37, 6-7).
13
The Sanctions R&R found that Counsels failure to amend was not sanctionable under
Rule 11. Even if it is not sanctionable under Rule 11, it was not frivolous for the Firm to
advance that argument, and such sanctions are available elsewhere (See argument detailed in
I.33, pp. 12-14). It is unclear whether the R&Rs sanctions against the firm is based on this
issue, but to the extent the Court considers this issue, we explained our position and incorporate
said arguments by reference. (Id).

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including a claim that this information was irrelevant, and not reasonably

calculated to lead to the discovery of admissible evidence. (Id.). If Counsel

contacted other professors and they refused to support Mutua on this point, or

worse, confirmed that Mutua lied,14 that would have added further reason for

Counsel not to believe Mutua (not that additional evidence is needed). The fact

that Counsel avoided addressing this issue in both the Answer and the

Interrogatory Responses bolsters the belief that he thought Mutua lied, that Mutua

did lie, and that a reasonable person in Counsels situation would objectively

believe it was a lie. At a minimum, those facts constitute a scintilla of evidence

that Counsel had knowledge, and it was therefore not frivolous for the Firm to

argue that he knew based on these facts, as well as the fact it is not frivolous to

believe a reasonable person fairly assessing the entirety of the circumstances would

believe that the testimony was intentionally false.

Given the staggering amount of evidence disputing the veracity of Mutuas

statements, and the fact that Mutua knows of this evidence and unwaveringly

insisted that he remembers very clearly, it is not frivolous to argue that a

reasonable person would conclude that Mutuas statements were an intentionally

14
In response to Interrogatory #1, Mutua identified 14 individuals who possessed knowledge
of Plaintiffs allegations as described in the Complaint. (A.179-80). It must be assumed Counsel
questioned these witnesses and likely others, and was aware that they did not support Mutuas
version. Counsels declarations did not indicate whether he spoke to these witnesses (I.18, 30),
but it is impossible to believe that as a zealous advocate, he (or his client) did not speak to some,
if not all, of the witnesses, especially since the witnesses were employees of the University of
which Mutua was Dean.

34
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false. See RPC 3.3 n.8 (stating although a lawyer should resolve doubts about the

veracity of testimony or other evidence in favor of his client, the lawyer cannot

ignore an obvious falsehood). Counsel argues that Mutua misremembered. But,

it is not objectively reasonable for him to so believe. More to the point, it is not

frivolous for the Firm to argue so, thereby presenting the issue to the judgment of

the court. In sum, it was not frivolous for Plaintiff to argue Counsel knew about

Mutuas lie under the objectively reasonable standard of knowledge, and the lower

court abused its discretion in so finding.

V. DEFENDANTS DID NOT PROVIDE SAFE HARBOR PURSUANT


TO RULE 11 AND THEREFORE RULE 11 SANCTIONS CANNOT
BE IMPOSED

The Sanctions R&R erroneously held that Defendants complied with Rule

11s safe harbor requirement, stating as follows:

Mr. Ostrove argues that defendant failed to follow the


appropriate procedure for filing a Rule 11 motion because he
failed to provide him or plaintiff with a copy of his
memorandum of law or declaration in support of the motion
before filing it and the motion did not describe the specific
conduct that allegedly violated Rule11.[However], [t]he law
is clear that Rule 11(c)(2) requires only the service of a motion;
it does not require the service of a memorandum of law or
affidavits. Star Mark Mgmt. v. Koon Chun Hing Kee Soy &
Sauce, 682 F.3d 170,176 (2d. Cir. 2012). So long as the party
subject to the sanctions motion receives notice of the specific
conduct that allegedly violated Rule 11(b), the requirements of
Rule 11(c) are satisfied.

35
Case 17-228, Document 30, 04/26/2017, 2020451, Page41 of 47

(A.222-23). That is an exceptionally narrow view of the argument we advanced to

the Magistrate. We agree that we had notice that Counsel intended to move for

sanctions regarding our argument that Counsel knew of Mutuas perjury.

However, we did not have notice of the vast majority of the other arguments that

Counsel advanced in his motion. Counsels June 19, 2015, safe harbor letter,

stated:

Enclosed please find Defendants Motion for Sanctions against


Fredric D. Ostrove, Leeds Brown Law, P.C. and Jeffrey D.
Malkan. The Motion will be filed after the expiration of the
safe harbor provision provided under Rule 11(C)(2) of the
Federal Rules of Civil Procedure, unless you withdraw
Plaintiffs Motion for Sanctions. The basis for the portion of
the Motion seeking sanctions pursuant to Rule 11 is described
in prior correspondence sent to you on March 12, 2015 and
June 3, 2015 by Assistant Attorney General David Sleight. For
your convenience, a copy of this correspondence is enclosed.

(A.90, 21; A.183). While the letter indicated that the Motion for Sanctions was

enclosed, only the Notice of Motion was enclosed. (A.90, 19-21). The Notice

of Motion did not describe the specific conduct that allegedly violates Rule

11(b). (A.184-86). Instead, the safe harbor letter said that the basis for the motion

was set forth in Counsels letters, but neither of the letters, nor any prior

communication identified many of the issues Defendant raised in the Counter-

Motion. (A.85-90, 5-21; A.102-03, 56-60; A.183, 187-91). Thus, Defendant

did not provide proper notice of most of the arguments in the Counter-Motion.

36
Case 17-228, Document 30, 04/26/2017, 2020451, Page42 of 47

(Id.).15 The Sanctions R&R relies on Star Mark to establish that the notice need

not include a formal, fully supported motion. (A.223). However, Star Mark

rejected that argument because in Star Mark, the notice of motion gave [counsel]

notice of the alleged sanctionable conduct, and [counsel] thus had the opportunity

to determine whether there was a non-frivolous basis for the pleading. Id. at 176-

77. Thus, in Star Mark, the court held that the plaintiff complied with the safe

harbor requirement because the notice of motion provided notice of the specific

conduct that allegedly violated Rule 11(b). Here, this is not the case, except with

regard to Mutuas perjury and Counsels knowledge thereof. That said, it appears

that the Sanctions R&R is based exclusively on those grounds, but the Sanctions

R&R used Counsels other arguments to support its findings of bad faith, which it

should not have done given the lack of notice.

VI. THERE IS NO EVIDENCE OF BAD FAITH, THUS THE FIRM


SHOULD NOT BE SANCTIONED UNDER THE COURTS
INHERENT POWER OR 28 U.S.C. 1927.

Bad faith means more than mere negligence; it involves a dishonest

purpose. Exantus v. Metro. Prop. & Cas. Ins. Co, 582 F. Supp. 2d 239 (D. Conn.

15
The Sanctions R&R did not address Defendants argument that they provided notice in
their opposition to the Sanctions Motion. However, the Firm had no notice that the arguments
raised therein since the safe harbor letter specifically said that the motion was based on the
arguments in Counsels March 12 and June 3 letters. (A.183, 187-191). Moreover, the Firm had
no reason to read the opposition papers until after the Counter-Motion was filed. (A.86-95, 8-
34).

37
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2008); see also Turner v. Temptu Inc., 2013 U.S. Dist. LEXIS 114298 (S.D.N.Y.

2013) (negligence or recklessness insufficient).

Without identifying the legal standard, the Sanctions R&R applied, it found

bad faith for two reasons. First, the Sanctions R&R states, the same factors which

establish the frivolousness of the plaintiffs motion for sanctions also demonstrate

bad faith. (A.226). For the reasons set forth above, the motion was not frivolous.

Moreover, a finding of bad faith requires more than frivolousness, otherwise there

is no meaning to the additional requirement of bad faith. Regardless, our

arguments were not brought in bad faith. As explained in the Ostrove declaration,

referencing Ostroves emails and other communications with Counsel, the Firm

never took this lightly and multiple attorneys in the office were consulted before

the final decision to proceed was made. (A.85-89, 4-17). The Firm provided

Counsel with multiple non-hostile, well-reasoned and researched warnings,

advising Counsel that we preferred not to move for sanctions and wanted to resolve

the matter informally. (See, e.g., A.85-86, 4-10; A.204-06). The firm held a

genuine belief that it was not frivolous to argue that Mutua intentionally lied and

that it is objectively unreasonable for Counsel to think otherwise.

Second, the only other support the Sanctions R&R found for its finding that

the Firm acted in bad faith was various citing errors. (A.226). However, as set

forth in Ostroves declaration, such errors were inadvertent, and the Firm would

38
Case 17-228, Document 30, 04/26/2017, 2020451, Page44 of 47

have corrected them had they been brought to the Firms attention during the safe

harbor period or before. (A.88-89). While safe harbor applies only to sanctions

under Rule 11, the fact the Firm did not have prior notice militates against a

finding that the Firm made the errors in bad faith, especially given that when the

Firm realized the errors, and it acknowledged same in a forthright and genuine

manner. (A.88-89; I.33, p. 21).

Third, it would have been appropriate for the Magistrate to provide the Firm

an opportunity to address some of the Sanctions R&Rs concerns in person at oral

argument, if he was inclined to find bad faith and/or issue sanctions. The

genuineness of an action is often hard to ascertain based exclusively on papers.

Considering the severity of the punishment and the reputational damage, as a

courtesy the Magistrate should have called counsel before him to provide an

opportunity to stand before the Court so that the demeanor of counsel can be

judged and so that counsel has an opportunity to address any issues that may have

been overlooked.

Finally, the Firm notes that the Sanctions R&R discusses many of Malkans

communications. No one ever argued that the Firm endorsed any such

communications, nor has anyone identified any legal authority to indicate that the

Firm had a duty to stop same, nor is there any power that the Firm had to stop same

if the Firm was inclined to do so. Indeed, Counsel affirmed, that it has been clear

39
Case 17-228, Document 30, 04/26/2017, 2020451, Page45 of 47

to me for some time now that Mr. Ostrove and Mr. Arbeit had little control over

Plaintiffs conduct. (I.30, 55).16 While not specifically saying so, the tenor of

the Sanctions R&R appears to attribute some of Malkans conduct to the Firm. It

is clear from the Amended Orders statement that verbal sanctions against Ostrove

were warranted based on Ostroves actions and unduly contentious behavior, as

described in extensive detail in the [Sanctions R&R] that the District Court did so.

(A.242). We request that the Court evaluate the Firms conduct independently. In

sum, even if the Court disagrees with some of the Firms arguments, it was not

frivolous to advance same. Indeed, there was more than a scintilla of evidence

to support our arguments, and the lower court abused its discretion in so finding.

16
Counsel also raised in that paragraph the $25,000 payment (and the R&R cited same at p.
14, FN 4), but that was incorrect and the Firm offered the Magistrate the opportunity to inspect
all bills in camera. (A.96-99, 38-48). The Firm also squarely addressed the statement that the
motion was against the Firms wishes. (A.99-100, 49-51).

40
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CONCLUSION

For the reasons discussed herein, the District Courts imposition of a verbal

sanction upon Ostrove should be reversed.

Dated: Carle Place, New York


April 26, 2017
Respectfully submitted,

LEEDS BROWN LAW, P.C.


Attorneys for Appellant
One Old Country Road, Suite 347
Carle Place, N.Y. 11514
(516) 873-9550

Rick Ostrove
By: _______________________
RICK OSTROVE

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CERTIFICATION PURSUANT TO
Fed. R. App. P. 32(a)(7)(B) and (C)

The undersigned hereby certifies that the foregoing brief complies with the
type-volume limitation of Fed. R. App. P. 32(a)(7)(B) and (C) because the brief
contains 10,121 words of text.

The brief complies with the typeface requirements of Fed. R. App. P.32(a)
(5) and the type style requirements of Fed.R.App.P.32(a)(6) because this brief was
prepared in a proportionally spaced typeface using Microsoft Word 2003, Times
New Roman, Size 14.

Dated: April 26, 2017


/s/
Rick Ostrove

db