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Wednesday, November 16, 2022


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Lawyer Hit With $1,000 Sanction Wins Relief in Ninth Circuit—Perhaps Only Reprieve

Reversal of Penalty for Misrepresentation Is Based on Notice Having Pinpointed Different Offense: Not Producing Client at Conference


By a MetNews Staff Writer


The Ninth U.S. Circuit Court of Appeals has reversed a $1,000 sanction imposed on a lawyer because the order to show cause was based on having failed to produce his client at a conference, as ordered, but the monetary penalty was predicated largely on having misstated the nature of the client’s medical condition that supposedly caused the nonappearance.

San Diego lawyer Michael Taibi is off the hook, for now, in connection with allegedly deceiving a magistrate judge in making excuses after having failed to secure the presence of client Dwight Banks at an Early Neutral Evaluation Conference (“ENE”). However, Monday’s memorandum opinion leaves open the possibility of the sanction being re-imposed on remand, after the procedural niceties are observed.

The opinion leaves undisturbed a $500 sanction imposed on Taibi for missing a previous ENE, himself, and leaves in place an order that he be reported for misconduct to the Standing Committee on Discipline of the District Court for the Southern District of California.

Medical Condition

In imposing the $1,000 sanction, District Court Judge Larry A. Burns did not reject Taibi’s representation that Banks was in the hospital on the day in question, but said that the lawyer “continued to claim Banks sustained critical head trauma in an attack well after he knew, or should have known, the medical records do not corroborate this claim.” In light of what he termed the “sensitive nature of these records,” the judge did not recite the actual nature of the medical condition and ordered that the records be sealed.

“A sanction is appropriate because Taibi’s statements are inaccurate, he has a history of his clients failing to appear for ENEs, and he has not offered an adequate reason for Banks not appearing at the December 18, 2020 ENE,” Burns wrote, adding:

“The Court further finds Taibi misrepresented Banks’ medical condition to excuse Banks from the ENEs.”

He noted that other judges in the Southern District “have previously found Taibi’s representations to the Court to be not credible.”

The order was also signed by Magistrate Judge Daniel E. Burcher, who conducted hearings in the case.

Three-Judge Panel’s Opinion

A three-judge panel, in reversing the $1,000 sanction, said in a memorandum opinion:

“If the sanction was for Banks’s nonappearance, the court did not explain why uncontested evidence that Banks was in a rehabilitation facility on the date of the scheduled ENE was not an adequate excuse for Taibi’s failure to produce him. And, the OSC did not put Taibi on notice before the hearing that the court was considering sanctions for any alleged misrepresentations.”

The panel—comprised of Circuit Judge Paul J. Watford, Senior Circuit Judge Andrew Hurwitz, and District Court Judge Eric N. Vitaliano of the Eastern District of New York, sitting by designation—continued:

“We thus vacate the $1,000 sanction and remand for the district court either to (1) explain why Banks being in a rehabilitation facility does not excuse Taibi’s failure to produce him; or (2) provide Taibi with notice and an opportunity to be heard on whether sanctions should be imposed for the alleged misrepresentations.”

Statutory Basis

Taibi was sanctioned under Rule 16(f)(1) of the Federal Rules of Civil Procedure which authorizing the penalizing of a lawyer for failing “to obey a scheduling or other pretrial order.” The panel pointed out:

“After notice and an opportunity to be heard, if the district court still wishes to sanction Taibi for his purported lack of candor, the court should indicate under what authority it is proceeding. Rule 16(f) does not authorize sanctions for lack of candor, but Rule 11, for example, would.”

In a footnote, the judges said that six orders “by other district judges imposing sanctions on Taibi for similar acts were a proper subject of judicial notice,” and, “in any event, as the court explained, the sanctions it imposed ‘redress[ed] only the conduct that occurred in this case.’ ” Addressing Taibi’s challenge to the referral of the lawyer for possible disciplinary action by the local committee, they said:

“We do not vacate the referral because, even in the absence of the $1,000 sanction, the original reason for the referral (Taibi’s filing  and settlement of lawsuits while he and Mr. Banks were purportedly not in  communication), as well as the $500 sanction and previous sanctions imposed on  Taibi, provide independent bases for the referral.”

ADA Case

Taibi brought the action on behalf of Banks against an Oceanside restaurant under the Americans With Disabilities Act. There is a widespread impression that many such actions are brought for the main purpose of gaining attorney fees for the plaintiff’s lawyer, with minimal remuneration to or participation by the plaintiff, and with an eye to quick settlements by intimidated small businesses.

Banks had declared that he gave Taibi “full authority to do what he can to win the case or dismiss the case” and the lawyer confirmed that Banks had “given me the authority to settle cases…if it’s possible.”

Burns said in the order that he shares two other judges’ stated “concerns about the involvement of Taibi’s clients in the cases brought in their names” but said that its up to the standing committee to look into the matter.

Taibi is primarily a criminal defense attorney. His website proclaims:

“Because of the respect he has earned in California State Courts and federal courts, Mr. Taibi is often able to get the charges dismissed or reduced so that his clients receive a lesser sentence.”

The case is Banks v. Whambo! Enterprises, LLC, 21-56222.


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