Indiana federal judge sanctions attorneys

A federal judge in Hammond has sanctioned two Detroit attorneys who filed what he calls a frivolous claim demonstrating a pattern of misconduct, fining each lawyer and their client in a sharply worded ruling.

In a 21-page order issued July 31 in Cheryl Janky v. Batistatos, et al., No. 2:07-cv-339, U.S. District Judge Philip P. Simon in the Northern District of Indiana unleashed a written assault against attorneys Gregory Reed and Stephanie L. Hammonds, attorneys on the case that began almost five years ago as a copyright-infringement suit. They represent Cheryl Janky, an Indiana woman who'd sued the Lake County Convention and Visitors Bureau about a doo-wop song she wrote and copyrighted called "Wonders of Indiana," which the bureau used without permission in promotional videos and albums sold at its welcome center. That case culminated with a $100,000 verdict in Janky's favor in 2007; but it wasn't the end of the litigation, and the case resulted in further disputes about procedural issues.

As the District judge on the case, Judge Simon has written about this issue before. In April 2008, he described this as "one of those cases that gives lawyers a bad name," and said what began as a routine copyright-infringement dispute "deteriorated into a nuclear arms race of costly litigation tactics and the worst kind of mean spirited attorney game-playing."

This action came in September 2007 based on claims the defendants made when defending the earlier suit, with Hammonds and Reed contending that the defenses used previously were frivolous and groundless – despite Magistrate Judge Andrew Rodovich's previous rulings to the contrary.

In the latest sanction ruling, Judge Simon takes note of everything from their "flimsy" and "spurious" arguments that had already been dismissed and found to have been supported by law; grammatical and spelling errors in their filings; and a lengthy history of past sanctions in at least four other cases in the Detroit-based Eastern District of Michigan. He notes they'd been warned before in this case and also been sanctioned on the litigation, as well.

"Respondents say that this history of sanctions 'does not establish a pattern of litigation misconduct …' But a pattern of misconduct is precisely what I see," Judge Simon wrote. "Attorney sanctions are a rare enough event that the presence of even one would be a source of concern. But Reed and Hammonds have been sanctioned on multiple occasions over the past five years, to the point where it almost looks as though they are now flaunting their inappropriate conduct."

He points out that the attorneys' conduct demonstrates a pattern and proof that they're using redundant claims as a leverage and harassment tactic, as opposed to just overzealous advocacy or a failure to understand pertinent legal concepts.

"Enough is enough. It is apparent that neither side can take the hint, and I am half convinced that both parties are treating matters as a joke," the judge wrote. "But the best medicine will be to just end things. Respondents will be sanctioned for their bringing of the current lawsuit, pursuant to the Court's Rule 11 powers. It was the filing of the second federal suit that opened Pandora's Box and is the action most in need of court response in order to prevent further conduct."

Judge Simon fined Reed $10,000, Hammonds $5,000, and client Janky $1,000. The judge also prohibited the attorneys from filing any civil complaints on behalf of Janky in the Northern District without posting a $5,000 bond to cover the "high probability" of additional sanctions.

That verdict appeal reached the 7th Circuit Court of Appeals, which today issued a separate ruling in Cheryl Janky v. Lake County Convention and Visitors Bureau, Nos. 07-2350, 07-2762, and 08-1606, that remands the case to the District Court for summary judgment in favor of the bureau. But this appellate decision isn't directly a part of Judge Simon's sanctions, and it's not immediately clear what impact it might have. The appellate ruling does point to various issues about the counsels' work, particularly unfocused briefs, and a previous $2,500 fine Reed received on the case that he sought to pay off using the verdict money.

Reached by phone this morning, Hammonds told Indiana Lawyer that she needed to more fully review Judge Simon's ruling before making any comments. Reed didn't immediately respond to a message left at his law office.