The opinion of the court was delivered by: Walls, District Judge.
This matter is before the Court on the objections of Michael P.
Malakoff, Esq., to the Report & Recommendation of Magistrate
Judge Joel A. Pisano filed July 15, 1999 ("July R & R"). Pursuant
to Fed. R.Civ.P. 78 and 72 and Local Rule 72.1(c)(2), this Court
considers these objections without oral argument. The Court
adopts Magistrate Judge Pisano's report and dismisses Mr.
Michael P. Malakoff, Esq., represents class action
representatives in two state court proceedings against Prudential
Insurance Company ("Prudential"). These cases were removed to
federal court, where they were assigned to Judge Wolin in the
District of New Jersey by the Judicial Panel on Multi-District
Litigation. In October, 1995, the District Court appointed lead
counsel for a nationwide class of plaintiffs.*fn1
According to Judge Wolin, Malakoff commenced "bombard[ing] the
Court with paper" soon after the transfers. See In re Prudential
Ins. Co. of Am. Sales Practices Litig., 962 F. Supp. 450, 479,
479 n. 14 (D.N.J. 1997) (listing 24 motions filed by Mr.
Malakoff). In April, 1996, Malakoff's motion to remand his cases
back to their respective states' courts was denied. Eventually,
Malakoff was permitted to continue as counsel for his two
cases.*fn2 On October 28, 1996, the parties filed a final
Stipulation of Settlement. The district court then issued an
order conditionally certifying a national settlement class,
directing issuance of class notice, enjoining overlapping
litigation and scheduling a fairness hearing.
On December 3, 1996, Mr. Malakoff filed a motion to recuse
Judge Wolin. In the motion, he argued that the judge had engaged
in unauthorized ex parte communications with lead counsel, the
parties, and potential fact witnesses. Two days later, Judge
Wolin signed an order to show cause, returnable on December 13,
1996. On December 10, 1996, Mr. Malakoff requested that the court
postpone the order to show cause hearing by more than a month.
Judge Wolin denied this motion. The same day, lead counsel filed
a cross motion ("December 1996 cross motion") requesting that Mr.
Malakoff be sanctioned pursuant to 28 U.S.C. § 1927. Judge Wolin
denied Mr. Malakoff's recusal motion and stayed the sanctions
motion until further order of the court. Mr. Malakoff then filed
a petition for mandamus relief which was denied by the Third
Circuit without opinion on April 4, 1997.
On March 14, 1997, Mr. Malakoff filed his first motion for
sanctions. In his moving papers, Mr. Malakoff argued that lead
counsel's December 1996 cross motion for sanctions violated
28 U.S.C. § 1927 because it was "unreasonable" and "frivolous." On
April 9, 1997, Mr. Malakoff filed another sanctions motion (his
second), this time seeking to impose Rule 11 sanctions on lead
counsel. On April 28, 1997, the Third Circuit granted a stay of
the sanctions proceedings pending an anticipated appeal of
settlement and fee issues.*fn3
On November 16, 1998, lead counsel moved for an interim fee
award of $48 million. Four days later, Mr. Malakoff filed papers
in opposition to the request. In their reply brief, lead counsel
sought Rule 11 sanctions against Mr. Malakoff for factual
assertions he made in his opposition papers. In response, Mr.
Malakoff served his own Rule 11 motion (his third
sanctions motion). On January 4, 1999, lead counsel withdrew its
Rule 11 motion, stating that it did not want to delay an ultimate
resolution of all of the other outstanding sanctions motions. On
January 11, 1999, Mr. Malakoff filed a final sanctions motion
(his fourth), this time claiming that lead counsel's reply brief
of December 2, 1998, submitted in response to his motion opposing
the fee request, violated § 1927. Judge Wolin referred this
motion to Magistrate Judge Pisano along with the additional
outstanding sanctions motions.
On July 15, 1999, Magistrate Judge Pisano recommended that,
pursuant to 28 U.S.C. § 1927, sanctions be imposed against Mr.
Malakoff in the sum of $100,000 and that, pursuant to its
inherent power, the court require Mr. Malakoff to attach the July
R & R and a certification that he has paid the monetary sanction
to any application for pro hac vice admission to this district
(the "non-monetary penalty"). On August 2, 1998, Mr. Malakoff
filed his objections ("Obj.") to the July R & R.
Mr. Malakoff argues, in opposition to Magistrate Judge Pisano's
July R & R, that (1) the motion for sanctions was procedurally
defective for seeking § 1927 sanctions against a law firm; (2)
Mr. Malakoff's motion to recuse had a colorable basis in fact and
was not filed in bad faith; and (3) Magistrate Judge Pisano
failed to set out any specifically determined violations and
resulting damages. He further alleges that the court imposed
sanctions not authorized by § 1927 or the inherent power of the
court and that these sanctions were imposed without adequate
Non-dispositive motions decided by a magistrate judge may only
be set aside by the District Court if the "order is found to be
clearly erroneous or contrary to law." Fed.R.Civ.P. 72(a).
Conversely, dispositive motions heard by magistrate judges are
subject to de novo review by the district court. Fed.R.Civ.P.
72(b). Pursuant to Fed.R.Civ.P. 72(b), any party may object to a
Magistrate Judge's report recommending the disposition of a such
a motion within 10 days of receipt of the report. Fed.R.Civ.P.
72(b). The objections must "specifically identify the portions of
the proposed filings . . . to which the objection is made and the
basis of such objection." Local Rule 72.1(c)(2). Local Rule
72.1(c)(2) adds that the district court "need not normally
conduct a new hearing and may consider the record developed
before the Magistrate Judge."
The circuits are divided as to whether the imposition of
sanctions is considered a dispositive motion. See generally
Alpern v. Lieb, 38 F.3d 933, 935 (7th Cir. 1994) ("The power to
award sanctions, like the power to award damages, belongs in the
hands of the district court judge."); Bennett v. General Caster
Serv. of N. Gordon, 976 F.2d 995 (6th Cir. 1992) (same); but
see Maisonville v. F2 America, Inc., 902 F.2d 746, 747-48 (9th
Cir. 1990) (sanctions requested before disposition on the merits
are nondispositive). While these decisions indicate that
post-discovery sanctions may be dispositive under Fed.R.Civ.P.
72, see David A. Bell, The Power to Award Sanctions: Does It
Belong in the Hands of Magistrate Judges?, 61 Alb. L.Rev. 433,
450-52 (1997), this Court need not resolve this issue.
Here, Magistrate Judge Pisano did not levy sanctions but merely
filed a report recommending their imposition. Moreover, all
parties have apparently acquiesced to this option. See
Lancellotti v. Fay, 909 F.2d 15, 16 (1st Cir. 1990) (subjecting
recommended sanctions to de novo review); Plante v. Fleet
National Bank, 978 F. Supp. 59, 64 (D.R.I. 1997) (concluding that
report and recommendation imposing sanctions should be reviewed
de novo). Accordingly, this Court will apply a de novo
standard of review to Magistrate Judge Pisano's report.
Any attorney or other person admitted to conduct
cases in any court of the United States or any
Territory thereof 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.
Plaintiff argues that "the motion for sanctions should have
been stricken because it was procedurally defective for seeking §
1927 sanctions against" a law firm because § 1927 "does not apply
to law firms." Obj. at 10-11. Section 1927, however, applies to
law firms as well as individual attorneys. See Lightning Lube,
Inc. v. Witco Corp., 144 F.R.D. 662, 669 (D.N.J. 1992) (citing
Brignoli v. Balch Hardy & Scheinman, Inc., 735 F. Supp. 100, 102
(S.D.N.Y. 1990).) Additionally, it has been clear since at least
March 27, 1997, when lead counsel filed a reply brief in support
of their motion for § 1927 sanctions, that lead counsel sought
sanctions against Mr. Malakoff personally. Mr. Malakoff's
objection that the sanctions motion is procedurally defective is
The primary purpose of 28 U.S.C. § 1927 is to deter intentional
and unnecessary delay. See Zuk v. Eastern Pennsylvania
Psychiatric Inst., 103 F.3d 294, 297 (3d Cir. 1996). To impose
sanctions under § 1927, a court must find (1) a multiplication of
proceedings by an attorney; (2) by conduct that can be
characterized as unreasonable and vexatious; with (3) a resulting
increase in the cost of proceedings; and (4) bad faith or
intentional misconduct. See Williams v. Giant Eagle Markets,
Inc., 883 F.2d 1184, 1191 (3d Cir. 1989).
Mr. Malakoff argues that his motion to recuse the district
court, which prompted lead counsel's first motion for sanctions,
had a colorable basis in fact and was not filed in bad faith.
Upon a review of Magistrate Judge Pisano's recommendation and Mr.
Malakoff's specific objections (and supporting citations) that
(1) the motion to recuse was objectively reasonable and (2) the
motion was factually supported because he had never consented to
ex parte communications, this ...