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VENEZIANO v. LONG ISLAND PIPE FABRICATION & SUPPLY CORP.

December 31, 2002

STEVEN M. VENEZIANO, PLAINTIFF,
V.
LONG ISLAND PIPE FABRICATION & SUPPLY CORP., ROBERT MOSS AND AETNA U.S. HEALTHCARE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Stephen M. Orlofsky, United States District Judge

  OPINION

INTRODUCTION

Once again this Court is called upon to consider whether an attorney's conduct warrants a sanction pursuant to 28 U.S.C. § 1927, which requires an attorney to satisfy personally the excess costs, expenses and attorneys' fees caused by unreasonably and vexatiously multiplying the proceedings in a case in bad faith. See id.; see also Murphy v. Hous. Auth. & Urban Redevelopment Agency of the City of Atlantic City, 158 F. Supp.2d 438, 445-47 (D.N.J. 2001) (Orlofsky, J.), aff'd, 2002 WL 31313861 (3d Cir. Oct. 16, 2002).

Defendants, Long Island Pipe Fabrication & Supply Corp. ("Long Island Pipe"), Robert Moss ("Moss"), and Aetna U.S. Healthcare ("Aetna"), have filed motions for attorneys' fees as "prevailing defendants" in the action brought against them by Plaintiff, Steven M. Veneziano ("Veneziano"). I conclude that because Veneziano's claims against Aetna were "frivolous, unreasonable, or without foundation" under the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., and in "bad faith" under the New Jersey Law Against Discrimination, N.J.S.A §§ 10-5.1, et seq., Aetna is entitled to reimbursement of its reasonable attorneys' fees and costs incurred in defending against these claims. Veneziano's claims against Long Island Pipe and Moss, however, do not warrant the shifting of attorneys' fees.

I further conclude that the conduct of this case by Plaintiff's counsel, Diana Andreacchio, Esq., warrants a sanction under 28 U.S.C. § 1927. Ordinarily, a Plaintiff is responsible for his or her own attorney's fees and costs. Here, Ms. Andreacchio shall be ordered to personally compensate Aetna for its reasonable attorneys' fees and costs under Section 1927 because she unreasonably and vexatiously multiplied these proceedings in bad faith by pursuing frivolous claims.

II. FACTUAL AND PROCEDURAL BACKGROUND

On November 15, 1999, with leave of the Court, Long Island Pipe filed a Third-Party Complaint against its workers' compensation insurer, United States Fire Insurance Company ("U.S. Fire"), seeking indemnification and a declaration that U.S. Fire was obligated to provide a defense against Veneziano's claims. Long Island Pipe and U.S. Fire subsequently filed cross-motions for summary judgment. In another unpublished Opinion and Order of this Court, Veneziano v. Long Island Pipe Fabrication & Supply, Civ. A. No. 99-2753 (SMO), slip op. (D.N.J. May 17, 2001), I granted in part Long Island Pipe's Motion for Summary Judgment and declared that U.S. Fire was obligated to defend Long Island Pipe against Veneziano's ERISA Claims. Id. at 19.*fn1 I also granted in part U.S. Fire's Motion, dismissing Long Island Pipe's claim for a defense and indemnification against Veneziano's claims for punitive damages. I denied the Cross-Motions in all other respects.

On July 1, 2002, United States Magistrate Judge Joel B. Rosen granted the Plaintiff's motion to sever the third-party action from the underlying dispute, pursuant to Fed.R.Civ.P. 21 and administratively terminated the third-party action without prejudice until further order of the Court upon appropriate application by the parties. See Order, Veneziano v. Long Island Pipe Fabrication & Supply, Civ. A. No. 99-2753 (SMO)(JBR) (D.N.J. July 1, 2002).

Long Island Pipe, Moss, and Aetna moved for Summary Judgment on Veneziano's Complaint. In an Opinion issued from the bench on March 19, 2001, I granted Aetna's Motion in its entirety and granted the Summary Judgment Motion of Long Island Pipe and Moss on all of Veneziano's claims, except his ERISA claim (Count VI). See Tr. of Hr'g, 27:15-20, 45:12-15, Veneziano v. Long Island Pipe Fabrication & Supply, Civ. A. No. 99-2753 (SMO) (D.N.J. March 19, 2001). Additionally, because Veneziano did not oppose the Motions of Long Island Pipe and Moss to dismiss his claims for non-contractual or statutory damages under ERISA, I granted those Motions as well. See Tr. at 45:7-11.

Counsel for Veneziano, Ms. Andreacchio, appealed this Court's March 19, 2001 Orders to the Court of Appeals, even though no final order had yet been entered by this Court dismissing all claims as to all parties, nor had any certification been granted pursuant to Fed.R.Civ.P. 54(b). That appeal was dismissed by the Third Circuit on August 21, 2001 for lack of appellate jurisdiction. See Order, Veneziano v. Long Island Pipe Fabrication & Supply, No. 01-1977 (3d Cir. Aug. 21, 2001) (citing Shirey v. Bensalem Township, 663 F.2d 472 (3d Cir. 1981)).

Veneziano's remaining ERISA claims against Long Island Pipe and Moss were tried before this Court at a bench trial on February 4, 2002. In another unpublished Opinion, Veneziano v. Long Island Pipe Fabrication & Supply, Civ. A. No. 99-2753 (SMO) (D.N.J. April 10, 2002), I concluded that Long Island Pipe had failed to provide Veneziano with timely and meaningful notice of his rights under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), in violation of 29 U.S.C. § 1166. I also concluded that the Defendants failed to provide Veneziano with a Summary Plan Description upon his request, in violation of 29 U.S.C. § 1021(a) & 1022. For these violations, I ordered Long Island Pipe to pay Veneziano a total of $2,237.00. See Order, Veneziano v. Long Island Pipe Fabrication & Supply, Civ. A. No. 99-2753 (SMO) (D.N.J. April 10, 2002), ¶¶ 1-2.

The next step in the unending saga of this case was the filing of Plaintiff's Motion for Attorney's Fees, pursuant to 29 U.S.C. § 1132(g)(1). I granted Plaintiff's motion, in the reduced amount of $9,257.50, because Veneziano was not more than fifty percent successful on his ERISA claim. See Order, Veneziano v. Long Island Pipe Fabrication & Supply, Civ. A. No. 99-2753 (SMO) (D.N.J. May 28, 2002), at 7.

Defendants have now moved for attorneys' fees, and a "Stay of Entry and/or Enforcement of Judgment Pending Determination of Defendant's Application for Costs and Attorney's Fees and Expenses."

On May 9, 2002, Plaintiff filed a Notice of Appeal of this Court's Orders entered on: March 19, 2001; April 10, 2002; and May 29[sic], 2002. Even after the entry of a final judgment and the filing of a Notice of Appeal, however, a District Court retains the power to adjudicate collateral matters such as applications for counsel fees. See Budinich v. Becton Dickinson and Co., 486 U.S. 196, 199-200 (1988); Welch v. Bd. of Dirs. of Wildwood Golf Club, 904 F. Supp. 437, 438 (W.D.Pa. 1995) (citing West v. Keve, 721 F.2d 91, 95 n. 5 (3d Cir. 1983)). For the reasons that follow, Aetna's motion for attorneys' fees shall be granted, and Long Island Pipe and Moss's motion for attorneys' fees shall be denied.

III. DISCUSSION

FEE-SHIFTING UNDER THE AMERICANS WITH DISABILITIES ACT

Unless a statutory exception applies, "[i]t is the general rule in the United States that . . . litigants must pay their own attorney's fees," Alyeska Pipeline Co. v. Wilderness Soc'y, 421 U.S. 240, 247 (1975); see also Buckhannon Bd. and Care Home, Inc. v. West Va. Dep't of Health and Human Resources, 532 U.S. 598, 602 (2001). This is known as the "American Rule." Brytus v. Spang & Co., 203 F.3d 238, 241 (3d Cir. 2000). A statutory exception to the American rule exists in this case because Plaintiff's claims were brought under the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. ("ADA"), and are, thus, subject to the fee-shifting provision of the ADA, 42 U.S.C. § 12205, which provides:

In any action or administrative proceeding commenced pursuant to this chapter, the court or agency, in its discretion, may allow the prevailing party, . . ., a reasonable attorney's fee, including litigation expenses, and costs . . .

Id. (West 2002).

In Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n, 434 U.S. 412, 421 (1978), the United States Supreme Court held that "a district court may in its discretion award attorney's fees to a prevailing defendant in a Title VII case upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Id. The Christiansburg standard likewise applies to claims brought under the ADA, which contains a fee-shifting provision that uses substantially similar language as Title VII. See Parker v. Sony Pictures Entm't, Inc., 260 F.3d 100, 111 (2d Cir. 2001); Bercovitch v. Baldwin School, Inc., 191 F.3d 8, 11 (1st Cir. 1999); Bruce v. City of Gainesville, Ga., 177 F.3d 949, 951-52 (11th Cir. 1999). Although the United States Court of Appeals for the Third Circuit has not yet expressly adopted the Christiansburg standard for fee-shifting by prevailing defendants under the ADA, other Circuits have done so. See e.g., Parker, Bercovitch, and Bruce, supra. The Third Circuit generally treats case law under the ADA and Title ...


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