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
In a six-count Complaint, filed on June 15, 1999, Veneziano alleged the
following causes of action: (Count I) Violation of the Americans with
Disabilities Act ("ADA") by Long Island Pipe and Moss; (Count II)
Discrimination Under the New Jersey Law Against Discrimination ("LAD") by
Long Island Pipe and Moss; (Count III)
Intentional Infliction of
Emotional Distress ("IIED") by Long Island Pipe and Moss; (Count IV)
Violation of the ADA by Aetna; (Count V) Discrimination under the LAD by
Aetna; and (Count VI) Violation of the Employee Retirement Income
Security Act ("ERISA") by Long Island Pipe and Moss. See Complaint,
Veneziano v. Long Island Pipe Fabrication Co., Civ. A. No. 99-2753 (SMO)
(D.N.J. June 15, 1999). The detailed factual background in this case is
set forth in an earlier unpublished Opinion and Order of this Court,
Veneziano v. Long Island Pipe Fabrication Co., Civ. A. No. 99-2753 (SMO)
(D.N.J. April 10, 2002), and will not be repeated here, except where
necessary to provide context for the resolution of the pending motions.
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
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
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 VII
interchangeably when there is no material difference in the question
being addressed. See Newman v. GHS Osteopathic, Inc., Parkview Hosp.
Div., 60 F.3d 153, 157 (3d Cir. 1995). Thus, I shall rely on the Supreme
Court's Christiansburg decision in analyzing the Defendants' motions for
SUFFICIENCY OF PLAINTIFF'S CLAIMS
In considering whether a plaintiff's claim is "frivolous,
unreasonable, or without foundation," Christiansburg, 434 U.S. at 421,
the Court may assess, on a case-by-case basis: (1) whether the plaintiff
established a prima facie case; (2) whether the defendant offered to
settle; and (3) whether the trial court dismissed the case prior to trial
or held a full-blown trial on the merits. See E.E.O.C. v. L.B. Foster
Co., 123 F.2d 746, 751 (3d Cir. 1997). The Court may also consider: (4)
whether the issue was one of first impression requiring judicial
resolution; and (5) whether the controversy is based sufficiently upon a
real threat of injury to the plaintiff. See Barnes Found. v. Township of
Lower Merion, 242 F.3d 151, 158 (3d Cir. 2001).
In deciding whether Veneziano's action was frivolous, unreasonable, or
without foundation, this Court must refrain from engaging in post hoc
reasoning and concluding that, because the plaintiff did not ultimately
prevail, that his action must have been unreasonable or without
foundation. See L.B. Foster, 123 F.2d at 751 (citing Christiansburg, 434
U.S. at 421-22). Generally, fee-shifting in favor of prevailing
defendants under the Christiansburg standard is not routine and is only
to be sparingly exercised. See L.B. Foster, 123 F.3d at 751.
1. Veneziano's Claims Against Aetna
Veneziano brought two claims against Aetna, one under the ADA and one
under the LAD. See Complaint (Counts IV and V). During the hearing on
March 19, 2001, this Court concluded that Veneziano did not establish
claims for retaliation under either statute. See Tr. of 3/19/01 H'rg
("Tr.), 49:11-25; 50:1-9.
Veneziano's claim under the ADA failed because he could not demonstrate
that Aetna was his employer, which I concluded was "simply not a
realistic characterization of the relationship between Aetna and Long
Island Pipe, and Veneziano has not referred to any evidence in the
summary judgment record to support such a characterization." Tr.
49:16-20. Ms. Andreacchio, Plaintiff's counsel, argued that Aetna was
Veneziano's "constructive employer" based on an agency theory, but she
was unable to demonstrate any control over Aetna by Long Island Pipe to
argument. Id. at 49:14-25; Cf. Krouse v. American Sterilizer
Co., 126 F.3d 494, 505 (3d Cir. 1997); Merritt v. Med. Disability Ins.
Plan, Civ. A. No. 96-4495, 1998 WL 1110694 (D.N.J. Aug. 28, 1998), at *7
(benefits plan not an "employer" unless shown to be an agent of the
In considering the pending motions for attorneys' fees, I take heed of
the policy behind fee-shifting in favor of prevailing defendants. "The
Christiansburg test is intended to strike a balance between the need to
eliminate the possible chilling effect on civil rights plaintiffs, who
may decide not to pursue a meritorious suit for fear of suffering a fee
award, and the goal of deterring plaintiffs from filing frivolous
claims." Hamer v. Lake County, 819 F.2d 1362, 1367 (7th Cir. 1987)
(internal quotations omitted). The United States Court of Appeals for the
Seventh Circuit has explained: "There is a significant difference between
making a weak argument with little chance of success . . . and making a
frivolous argument with no chance of success. . . . [I]t is only the
latter that permits defendants to recover attorney's fees." Khan v.
Gallitano, 180 F.3d 829, 837 (7th Cir. 1999).
Here, the factual record could not support an agency theory against
Aetna, a national and well-known insurance company, and I conclude that
Ms. Andreacchio's "agency argument" is "frivolous, unreasonable, or
without foundation," 434 U.S. at 421, within the meaning of
Christiansburg, id. I do not reach this conclusion based solely on the
outcome of the summary judgment motion. See Batteast Constr. Co., Inc.
v. Henry County Bd. of Comm'rs, 202 F. Supp.2d 864, 867 (S.D.Ind. 2002)
("Attorney[`s] fees will rarely be awarded where . . . the district court
grants the defendants' motion for summary judgment because of the absence
of legally sufficient evidence."). Rather, I conclude that Veneziano's
retaliation claim against Aetna should never have been brought in the
It is no secret that the anti-retaliation provisions of the ADA do not
apply to any person, but apply only to employers and other covered
entities. See 42 U.S.C. § 12203(c). As this Court explained at the
March 19, 2001 hearing:
42 U.S.C. § 12203(c) directs a person alleging a
retaliation claim in the employment context of
42 U.S.C. § 12117 to find the remedies available
to him or her for a violation of Section 12203.
Section 12117, in turn, refers to the remedial
provision of Title VII. Those provisions of Title VII
do not permit an action against any person, but do
permit an action against an employer, and a few other
entities which are not relevant to this particular
case. To hold that the anti-retaliation provision of
the ADA applies to any person . . . would render
superfluous 42 U.S.C. § 12203(c).
Tr. 48:7-17. For Veneziano's anti-retaliation claim to survive, he had to
show that Aetna was his employer under the statute. Because it was
obvious from the summary judgment record that Long Island Pipe, not
Aetna, was Veneziano's employer, I held that "Veneziano's arguments are
simply unsupportable and Aetna is entitled to summary judgment upon
Veneziano's ADA claim because under [the] undisputed facts, Aetna is not
subject to the ADA's anti-retaliation provision." Tr. 47:25 to 48:3.