Civil Procedure

Zuk v. EPPI
CHAPTER 3: Describing and Defining the Dispute
B. Describing and Testing the Plaintiffs Claim
2. Consistency ad Honesty in Pleading
B. Certification by Signing Rule 11
NAME:

FACTS:

Zuk v. Eastern Pennsylvania Psychiatric Institute of the Medical College of

Pennsylvania, United States Court of Appeals, Third Circuit, 1996, 103 F.3d 294
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PROCEDURE:

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(Dr. Zuk, Lipmann) v. (EPPI) re: rental of films developed in s 1970s

family therapy sessions
1975 registered book (derivative work) with transcripts of sessions with US
Copyright Office
1980 EPPI furloughed Zuk, films continued to be rented out until Zuk
attempt recover 1994
1995 Zuk counsel filed suit on his behalf, infringing his copyright
June 19, 1995 EPPI file 12(b)(6), opposed, and EPPI gave notice of
intention to move for sanctions 11(c)(2) on failure to establish factual
predicate/conduct inquiry into facts
Court found Zuk had no copyright rights to film, EPPI ownership was not
infringement, and that Zuks claims barred by SOL anyways
Aug. 16 EPPI filed motion for attorneys fees under 17 USCA 505; Aug. 31
opposed
Sept. 15 EPPI file Rule 11 motion for sanctions; opposed
Nov. 1 Court order show cause why Rule 11 sanctions should not be
imposed for (a) filing the complaint and failing to withdraw it; (b) signing and
filing each and every document presented
Dec. 1 respond with declaration reciting facts of case as viewed
Feb. 19, 1996 s liable to fees of $15,000; Zuk settled for $6,250,
Lipmann ($8,750) appeals; court uses 28 USCA 1927 and Rule 11 to justify
court-imposed sanctions

ISSUE:

Procedural Issue(s):
1. Did dist. ct. abuse discretion in awarding sanctions under 28 USCA 1927
and FRCP Rule 11?
a. Type of sanction and amount sanctioned applied correct?

HOLDING:

Yes. No.

REASONING:

Rule: (28 USCA 1927) Any attorney or person admitted to conduct cases who so
multiplies the proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs, expenses, and
attorneys fees reasonably incurred because of such conduct.
o Principle purpose is deterrence of intentional and unnecessary delay in
proceedings
Sanctioned not for delaying proceedings, but for failure to make inquiry
into facts and law before filing the case
o Before a court can order the imposition of attorneys fees under 1927, it

Civil Procedure
must find willful bad faith on the part of the offending attorney
no express or implicit finding of bad faith, only (maybe) negligence of
Lipmann
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Type and sanction under FRCP 11: purpose of 11 is to deter, not compensate,
encourages nonmonetary sanctions; Doering v. Union County Bd. Of Chosen
Freeholders discretion in setting sanction fees must be developed on ability
to pay; but Lipmann did not expressly ask for sanctions to be mitigated;
looking at non-punitive purpose of FRCP 11 = error to invoke with comment
a severe penalty ***re: safe harbor under 11(c)(3) see notes

DISPOSITION:

Affirmed only to imposition of sanctions, vacated to type and amount of

sanctions imposed under FRCP 11 and all vacated under 1927. Remanded for
further proceedings consistent to Doering.

NOTES:

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Suas ponte: of own accord; actions by judge taken w/o prior motion or request
from parties
Just deserts: punishment or reward that is considered to be what recipient
deserved
Copyright Act fee awards to prevailing party but, in this case, can only be
entered against a party w/ no fee-shifting awards against lawyer, had to be
justified with 28 USCA 1927 or rule 11
SCOTUS Chambers v. NASCO - federal courts have inherent power to sanction
bad faith litigant
FRCP 12(b)(6) failure to state a claim upon which relief can be granted
FRCP 8(c) SOL is affirmative defense only applies if raises it (party must
state)
FRCP 11 operational elements: (a) signature requirement, (b) factual inquiry
claim evidentiary support (no fishing expedition), (c) legal inquiry, (d)
harassment 11(b)(1) prohibits actions that needlessly increase cost of
litigation, (e) later advocating legit basis for filing, later becomes
unjustified?, (f) safe harbor violator must be warned and invited to desist,
11(c)(2), postjudgment sanctions okay if comply with safe harbor requirement

No issues of fact in this case; only issues of law:

Rule: (FRCP 11(b)(2)) claims, defenses, and other legal contentions be warranted
by existing law or by a nonfrivolous argument for the extension, notification, or
reversal of existing law or the establishment of new law
o Lipmann does not contend new law so, implicit warranted by existing law
ruled no
o Fault in registration issue: copyright law
(17 USCA 106(b)) The copyright in a derivative work does not affect
of enlarge the scope, duration, ownership, or subsistence of, any
copyright protection in the preexisting material the copyright in a
compilation of derivative work extends only to the material
contributed by the author of such work, as distinguished from the
preexisting material employed in the work, and does not imply any
exclusive right in the preexisting material

Civil Procedure
Usually applies to material created by a different author
Same Au for derivative work, need to explicitly state extension
of law to apply
(17 USCA 411(b)) no action for infringement of the copyright in any
US work shall be instituted until registration of the copyright claim
has been made
Zuk never registered copyright in films?
ownership issue: personal property law
(17 USCA 109) If EPPI owns films, then can rent out films
Penn. SOL on replevin is 2 years; Zuk demanded in 1980 and EPPI
refused
EPPI raise adverse possession argument too late for consideration

Fault in

21-day safe harbor under FRCP 11(c)(2): appellant said wasnt given 21-day safe
period before court dismissed action and before he had chance to withdraw
action. 11(c)(3) on courts own initiative has no safe harbor provision court
asked for a show cause anyways, so irrelevant defense
o 1993 amendment made imposition of sanctions discretionary, introduced safe
harbor, reoriented choice of sanction toward deterrence, away from
compensation