Peter R. Ginsberg and his law firm appeal a decision by the district court that upheld sanctions imposed by the bankruptcy court due to Ginsberg's actions related to a Recusal Motion. Ginsberg presents three issues on appeal: (1) the district court's alleged abuse of discretion in affirming the bankruptcy court's Sanctions Order; (2) the district court's abuse of discretion in not allowing discussion regarding a complaint of judicial misconduct; and (3) the denial of Ginsberg's motion to transfer the Sanctions Motion. The appeals stem from an adversary proceeding involving Evergreen Security, Ltd., a company identified as operating a Ponzi scheme, which filed for Chapter 11 bankruptcy. The court ultimately affirmed the district court's ruling.
R.W. Cuthill was appointed as the Chapter 11 trustee for Evergreen to recover funds for its creditors. He initiated an adversary proceeding (the 'Mataeka AP') to reclaim $6.5 million fraudulently transferred from Evergreen Trust to Mataeka and others. Judge Briskman presided over both the bankruptcy case and the Mataeka AP, where Cuthill won a judgment against Knight, Huggins, and Mataeka for nearly $8 million, and against Atlantic Portfolio Analytics Management, Inc. (APAM) for $2.5 million. To enforce the judgment, Cuthill filed involuntary Chapter 7 bankruptcy petitions against Knight, Huggins, and APAM, leading to the appointment of interim trustees.
During the final evidentiary hearing on the involuntary petitions on July 26, 2006, the defendants (Knight, Huggins, Mataeka, and APAM) filed a Recusal Motion the following day, seeking the court's recusal and the disqualification of Latham, among other requests. Less than a month later, Ginsberg filed a Petition for Writ of Mandamus, which was denied, seeking a stay on proceedings until the Recusal Motion was resolved. Ginsberg was identified as the principal drafter of the Recusal Motion.
On October 10, 2006, Evergreen sought sanctions against attorneys Ginsberg, Spradley, and Vitucci. Ginsberg subsequently filed a third Petition for Writ of Mandamus concerning Judge Briskman's exclusion as a witness, which was also denied. Hearings for the Recusal Motion took place in late 2006 and early 2007, culminating in the bankruptcy court's denial of the Recusal Motion on February 27, 2007. Following this, Judge Briskman issued an Order to Show Cause regarding sanctions, leading to a hearing on August 28, 2007. The Sanctions Motion was granted on January 2, 2008, imposing $371,517.69 in monetary sanctions against Ginsberg and barring him from practicing in the bankruptcy court for five years. Ginsberg appealed these orders, but on June 17, 2008, District Court Judge Anne C. Conway affirmed the bankruptcy court’s rulings.
Federal courts, including bankruptcy courts, have inherent authority to impose sanctions on attorneys and clients to maintain order and efficiency in case management, as established in In re Walker and Sunshine Jr. Stores, Inc. This authority is also supported by 11 U.S.C. § 105(a), which allows courts to act to enforce orders and prevent abuse of process. The review of such sanctions is conducted under an abuse of discretion standard, focusing on whether the court applied the correct legal standards or made clearly erroneous factual findings.
Ginsberg appeals the bankruptcy court’s sanctions related to the Recusal Motion, arguing the district court wrongly upheld these sanctions on three grounds: (1) the Recusal Motion was justified; (2) the bankruptcy court should have disclosed a complaint regarding judicial misconduct; and (3) the bankruptcy court should not have presided over the Sanctions Motion.
Under 28 U.S.C. § 455(a), a judge must recuse themselves if their impartiality could reasonably be questioned. This assessment is based on an objective standard aimed at maintaining public confidence in judicial integrity. Ginsberg raised three points suggesting the appearance of impartiality: a prior complaint against Judge Briskman, acceptance of Shuker’s ex parte filings, and Shuker’s violations of professional conduct rules. The bankruptcy court determined that Ginsberg did not provide sufficient legal or factual support for these claims, finding the Recusal Motion to be filed for improper purposes. The appeal court upheld this decision, agreeing the bankruptcy court's findings were not clearly erroneous and that proper legal standards were applied. Ginsberg's main argument for recusal was linked to a judicial misconduct complaint filed by Phil Hudson against Judge Briskman in an unrelated case.
Shuker represented ATN in a case against defendants/creditors Daniel and David Allen, with Judge Briskman presiding. Cuthill was a witness, but there were no overlapping parties or issues with the current bankruptcy proceedings. Shuker filed an ex parte motion in ATN, leading to a hearing where concerns were raised about the Allens potentially hiding assets. Judge Briskman agreed to remove the motion from the docket to prevent the Allens from being forewarned. ATN had previously obtained contempt rulings against the Allens regarding asset disclosure. Hudson, representing the Allens, later filed an Emergency Motion to Disqualify Opposing Counsel after learning of the ex parte proceedings. Subsequently, the case was transferred to Bankruptcy Judge Jenneman, who denied the disqualification motion, stating that ex parte hearings, while generally discouraged, can be appropriate under certain circumstances, and found no impropriety in the proceedings. Ginsberg learned of Hudson's Complaint related to ATN from Spradley and began researching the Recusal Motion, although he had not directly communicated with Hudson. Ginsberg noted parallels between the ATN case and the current case, expressing concerns over potential threats made by Shuker. He filed the Recusal Motion, alleging Judge Briskman was under investigation for inappropriate communications with Shuker, which raised questions of partiality. Ultimately, the bankruptcy court determined that Ginsberg's claims regarding the existence of the Complaint did not warrant recusal.
Filing a complaint of judicial misconduct does not automatically warrant a judge's recusal. Expert witness Lubet emphasized that allowing recusal based solely on the filing of complaints could disrupt the judicial system, enabling parties to manipulate outcomes by simply filing complaints. The Rules governing complaints within the Eleventh Circuit include a screening process, wherein 98% of complaints undergo a 'limited inquiry' and do not proceed to formal investigation. Recusal should only occur if a formal investigation is imminent, which was not evidenced in this case. The Recusal Motion incorrectly characterized the pending complaint as an 'investigation' multiple times and implied that the complainant, Shuker, was a significant figure in this supposed investigation, despite no actual investigation being underway. Testimony revealed that Hudson, the complainant, had not been informed of any changes regarding his complaint's status, which was inaccurately interpreted by Ginsberg as indicative of an ongoing investigation. Additionally, the presence of ex parte hearings does not constitute grounds for recusal, as such hearings can be legitimate under various circumstances. The bankruptcy court found the Recusal Motion lacked legal foundation, and Ginsberg's reliance on a single case, United States v. Garrudo, to support his argument was deemed insufficient.
In the case of Garrudo, a district court judge was investigated by the United States Attorney’s Office for accepting substantial gratuities while presiding over criminal cases. After being informed that he was a 'subject' of the investigation and later elevated to a 'target,' the judge recused himself from all pending criminal matters. Defendants convicted by the judge prior to his recusal challenged their convictions, arguing he had an incentive to favor the government. The district court deemed recusal appropriate in that context.
Ginsberg draws a parallel between the Garrudo investigation and a current judicial misconduct complaint but notes that unlike in Garrudo, there is no evidence of an ongoing investigation into Judge Briskman. The distinction is made that a civil complaint does not equate to a criminal investigation, as the former had only a minimal chance of leading to further action. In Garrudo, the public was aware of the investigation, which could sway public confidence in the judiciary, unlike the confidential nature of the current complaint until Ginsberg filed the Recusal Motion.
Additionally, Ginsberg alleged inappropriate ex parte communications between Shuker and Judge Briskman during the Mataeka AP proceeding regarding a discovery motion and proposed findings. However, the bankruptcy court found no factual basis for Ginsberg's claims regarding an ex parte emergency motion filed by Shuker. The record indicated that Shuker's emergency motion was filed shortly before a trial, and due to Spradley's unavailability, the court held a hearing and issued an order, thereby supporting the bankruptcy court's conclusion that Ginsberg's assertions were unfounded.
The Emergency Motion was not filed ex parte, as evidenced by Shuker’s prior email to Spradley requesting expedited discovery, which Spradley denied while copying Ginsberg. Both were informed of the Motion's filing through formal notice, and the certificate of service confirmed electronic, fax, and mail delivery to GrayRobinson and Ginsberg. The Order issued did not match Shuker's proposed order and only granted partial relief. Judge Briskman effectively addressed the evidentiary concerns, countering allegations in the Recusal Motion.
Regarding the Findings of Fact and Conclusions of Law, Ginsberg's claim that the court mandated ex parte FOFCOL submissions was unsupported. An email from Judge Briskman’s assistant invited the parties to submit FOFCOL with a 15-page limit but did not address service. Both parties submitted these documents without serving each other, with Shuker's submission exceeding the limit. Spradley later raised concerns about this non-compliance, prompting Shuker to revise his submission to meet the 15-page requirement, which was acknowledged by Spradley.
At trial's conclusion, the court permitted further FOFCOL submissions. Shuker suggested not exchanging these, which Spradley and Ginsberg initially objected to but later withdrew their objection. Shuker submitted a compliant 15-page document while Spradley and Ginsberg submitted a combined 23-page filing using smaller font and margins, exceeding local rules. There was no evidence that ex parte filing was court-ordered. Spradley indicated uncertainty regarding directives from Ms. Coberly about not sharing documents, while Ginsberg claimed he was told by Spradley that the court ordered ex parte submissions but could not provide any transcript or proof of such an order.
Shuker testified that the FOFCOL filings were made ex parte based on an agreement among lawyers, not on a court order. He explained that during the initial filing, he aimed to prevent opposing witnesses from altering their testimony by accessing his clients' FOFCOL. The second filing was motivated by the high costs of formal exchanges and objections. While Ginsberg indicated some understanding among attorneys about not serving each other, there was no evidence that the court mandated ex parte submissions or was aware of them. Furthermore, there is no indication that Judge Briskman reviewed or relied on Evergreen’s 46-page FOFCOL, which overlaps with the court's FOFCOL. Ginsberg and Spradley argued that the lack of disclosure or rejection of the oversized filing was significant, yet they had no basis to believe the judge or his clerk had reviewed it. Emails suggested Judge Briskman did not read the 46-page document, rendering it a moot issue.
At the time of the Motion's filing, Ginsberg and Spradley had not seen Evergreen's 15-page submissions, which contained similar content to the 46-page FOFCOL. Shuker's expert testified that even if Judge Briskman read the oversized submission, he could disregard it, as judges frequently do. Additionally, while Ginsberg and Spradley accused Shuker of submitting an oversized FOFCOL, their own submission also violated page limits.
The Recusal Motion also criticized Shuker's conduct, alleging violations of the Florida Rules of Professional Conduct. It claimed Shuker threatened Knight and Huggins with incarceration, but this allegation was contradicted by Knight's testimony, which indicated that Shuker's comments were directed to others and not made directly to Knight or Huggins. The bankruptcy court concluded that Shuker's behavior did not constitute a disciplinary violation or compromise the court's impartiality, supported by the record.
The appeals by Ginsberg concerning sanctions and the Recusal Motion lack sufficient merit to reverse the bankruptcy and district court decisions. Ginsberg's factual claims were deemed inadequate, and the legal standards applied were appropriate. Knight reported overhearing threats made by Shuker to Spradley regarding settlement, but Huggins was not present to receive any threats, undermining the credibility of the allegations. Shuker characterized his comments as warnings rather than threats.
Additionally, an incident during Knight's deposition was described, where Shuker allegedly threatened Spradley with arrest for trespassing. However, Shuker clarified that the deposition was private, and he did not believe Spradley had the right to be present. Shuker later acknowledged his behavior was improper and apologized to Spradley.
Shuker also threatened Ginsberg with a bar grievance during a deposition due to Ginsberg's disruptive behavior, which Shuker aimed to curtail. Ginsberg did not dispute these allegations. Lastly, the Motion claimed that Judge Briskman's endorsement of Shuker's conduct suggested an appearance of impropriety, as Shuker felt empowered to make threats against the Movants, which was criticized as inappropriate.
Shuker has seemingly been allowed by the court to disregard the automatic stay, leading him to threaten imprisonment, which he believed was a court-endorsed right. Witnesses Spradley and Ginsberg indicated that Shuker acted with the impression that he could involve Judge Briskman to secure arrests, reflecting a sense of empowerment. Ginsberg later retracted his earlier claims regarding the court's endorsement of Shuker's behavior in a letter dated January 19, 2007, asserting that while Shuker’s actions were inappropriate, there was no evidence of a relationship that indicated court endorsement. Ginsberg clarified that for recusal, only the appearance of impropriety needed to be established, not actual endorsement. The court found that Ginsberg’s Recusal Motion, despite lacking evidence of endorsement, improperly accused the court of supporting Shuker’s actions, thus the bankruptcy court's findings were deemed not clearly erroneous.
On appeal, Ginsberg contended that the Motion was justified and not sanctionable. However, the court noted that the content and timing of the Motion suggested bad faith. The bankruptcy court imposed sanctions under Federal Rule of Bankruptcy Procedure 9011 and 11 U.S.C. § 105. Although Ginsberg argued that the Motion violated the twenty-one-day safe harbor provision, the district court ruled that it need not decide on that issue since the sanctions were valid under § 105, which allows courts to take necessary actions to enforce orders and prevent abuse of process.
Ginsberg's Recusal Motion was not withdrawn within the required twenty-one days of filing but he contended that the Sanctions Motion violated the safe harbor provision due to being filed before the additional three-day period for mailings had expired. Sanctions were imposed under the bankruptcy court's inherent authority, which is unaffected by the safe harbor provision of Rule 9011, necessitating a finding of bad faith. Bad faith is established when an attorney knowingly or recklessly presents a frivolous argument or uses a meritorious claim to harass an opponent, as well as through delays or disruptions in litigation. The pursuit of claims without reasonable inquiry into facts can also indicate bad faith, as can the advancement of baseless litigation.
The bankruptcy court deemed Ginsberg's Recusal Motion an offensive litigation strategy, noting that challenges to adverse rulings are typically grounds for appeal rather than recusal. A judge's rulings are not sufficient for recusal unless pervasive bias is demonstrated. Ginsberg's Recusal Motion contained significant criticism of unfavorable rulings, including objections to the appointment of an interim trustee, enforcement of the automatic stay, and the handling of discovery orders. However, the court found that utilizing a recusal motion to contest adverse rulings constituted an abuse of the pleading process.
Ginsberg requested the revocation of over 250 orders related to the Mataeka AP and Evergreen case, but provided no evidence of extraordinary circumstances justifying such action, as required by precedent (Liljeberg v. Health Servs. Acquisition Corp.). The Recusal Motion included claims that a March 22, 2006 judgment in favor of Evergreen was factually inaccurate and criticized the damages awarded, alleging they were incorrectly calculated based on unreliable testimony. The bankruptcy court concluded that Ginsberg's actions, including filing the Recusal Motion, were intended to delay the involuntary bankruptcy proceedings against his client and hinder Evergreen's nearly $8 million judgment collection efforts. The Recusal Motion was filed immediately after Evergreen completed its prima facie case, and significant delays were noted, including postponements of hearings and attempts to continue the trial shortly before it was set to occur. Ginsberg also sought to delay the filing of an appeal, leading the district court to express concern over his varied justifications for these delays.
Ginsberg's actions were characterized by delaying tactics that indicated bad faith, as affirmed by the bankruptcy court. The court highlighted Ginsberg's aggressive litigation strategies, reliance on factual inaccuracies, and disrespect towards judges and attorneys, which are contrary to the legal standards of conduct. Citing Supreme Court precedent, it noted that judges must be presumed to administer justice impartially, with the expectation that counsel maintain respect for the judiciary. Ginsberg's behavior, including making unfounded allegations against the court and misrepresenting the nature of judicial communications, demonstrated a lack of respect and fact-based reasoning. Specifically, Ginsberg incorrectly claimed bias in Judge Briskman’s actions and criticized the court for not addressing Shuker’s lengthy filing without substantiating evidence. Additionally, Ginsberg's comparison of the judge's conduct to criminal misconduct lacked factual basis, as he had no direct knowledge of any alleged wrongdoing. Although Ginsberg claimed that expert advice from Justice Harding supported his actions, the record contradicted this assertion, indicating that Harding was not engaged until after the Recusal Motion was filed and lacked comprehensive information to form an opinion.
Ginsberg did not reassess his allegations following the evidentiary hearing regarding the Recusal Motion. He persisted in claiming that there were court-ordered ex parte filings, despite the hearing disproving this. Ginsberg continued to argue that Judge Briskman relied on a specific 46-page FOFCOL, ignoring evidence that indicated this submission was not considered and that relevant information could be found elsewhere. He also maintained that the Judicial Council had initiated an "investigation" into Judge Briskman’s conduct, even after learning that such a notification would have been sent to Hudson if true.
Despite Knight testifying that he only overheard threats from Shuker, Ginsberg still claimed that Shuker directly threatened Knight and Huggins. He further disputed Knight’s testimony regarding Huggins’ absence during the alleged threat. Evidence presented at the hearing was compelling enough for Spradley and GrayRobinson to withdraw from the Recusal Motion, yet Ginsberg continued to pursue it against increasing evidence to the contrary.
Ginsberg's demeanor was problematic, as he was disrespectful to the court, refused to answer questions, and made inflammatory statements. He exaggerated the implications of Judge Briskman’s actions, alleging they compromised judicial integrity and due process rights. Ginsberg opened the Recusal Hearing with claims regarding his health being compromised by the judge's actions.
His petitions for writ of mandamus were filled with unsupported accusations, suggesting severe consequences for Judge Briskman and alleging attempts to conceal issues of judicial conduct. Ginsberg publicly pursued recusal without first seeking a private resolution or filing the motion under seal, violating the confidentiality preferred under Judicial Council Rules. His initial motion was accusatory and referenced the term "investigation" multiple times. Ginsberg's persistent pursuit of what appeared to be a frivolous claim was interpreted as indicative of bad faith.
The Supreme Court remarks that mandamus, prohibition, and injunction against judges are extraordinary remedies that should only be used in exceptional cases where an appeal is evidently inadequate, emphasizing that these remedies should not serve as a substitute for appeal.
The bankruptcy court's decision to keep the existence of the Complaint confidential was appropriate and consistent with the strict confidentiality requirements of the Judicial Council Rules. Judicial Council Rule 16 mandates that complaints related to judicial misconduct or disability remain confidential, while Rule 15(f) permits disclosure only with the written consent of both the involved judge and the Chief Judge. This confidentiality is essential to maintaining public confidence in the judiciary and prevents the Complaint from undermining perceptions of impartiality.
Ginsberg's actions contradicted his claims of concern for public confidence; he persistently attempted to compel Judge Briskman to disclose details about the Complaint in public forums, undermining the very confidence he claimed to protect. His efforts included listing Judge Briskman as a witness, seeking to compel his testimony, and filing multiple motions requesting disclosures regarding the Complaint, all of which were made in public view.
Additionally, Federal Rule of Evidence 605 prohibits a presiding judge from testifying in their own court, and there is no obligation for a judge to recuse themselves solely to provide testimony. Ginsberg's argument for Judge Briskman's recusal was misplaced, as Section 455(a) places the decision for recusal on the judge involved, a practice supported by precedents showing judges often preside over their own recusal motions.
The judge targeted by an affidavit of bias is responsible for assessing its sufficiency. In Bonner v. City of Prichard, the Eleventh Circuit established that earlier Fifth Circuit decisions are binding if made before October 1, 1981. Ginsberg should have waited to address any potential errors made by Judge Briskman on appeal, as adverse rulings are typically grounds for appeal rather than recusal. The district court, through Judge Antoon, advised Ginsberg to await a ruling on the Recusal Motion before appealing, which Ginsberg disregarded. His persistent pursuit of Judge Briskman’s testimony indicated bad faith, supporting the bankruptcy court's findings.
Regarding the Sanctions Motion, Ginsberg argued that Judge Briskman was too emotionally involved and should have transferred the matter. While certain personal criticisms may necessitate a judge's recusal, not every critique warrants disqualification. Judges are expected to manage resistance to their authority without bias, and requiring recusal for all dissenting commentary would weaken the judiciary's integrity. The court found that Judge Briskman properly oversaw the Recusal Motion and was well-placed to impose sanctions on Ginsberg for his behavior. Although some of the judge’s comments during the sanctions hearing were found to be immoderate, they did not reflect a level of bias that would compromise fair judgment. Ginsberg's disruptive conduct justified Judge Briskman’s admonishments, and the transcripts indicated that the judge exhibited considerable patience despite Ginsberg's health issues.
Ginsberg's baseless allegations and improper motives indicate bad faith, justifying the imposition of sanctions under Section 105(a) and the court's inherent authority. Civil penalties must either compensate or coerce compliance, and it is unnecessary to determine the minimal deterrent value of sanctions. The district court did not abuse its discretion in crafting sanctions aimed at deterring litigation abuse. The bankruptcy court's imposition of both monetary sanctions and a suspension was appropriate, given Ginsberg's continued pursuit of a Recusal Motion despite a lack of factual support. A monetary sanction alone would likely be insufficient to deter future misconduct. As Ginsberg is a non-bankruptcy attorney who appeared pro hac vice, a five-year suspension from the Bankruptcy Court in Florida is deemed reasonable. The monetary sanctions reflect the attorneys’ fees incurred by the appellees, supported by the record. Consequently, the district court's affirmation of the bankruptcy court's sanctions is upheld.
