MARIO ALBERTO LOPEZ GARZA, The Executor of the estate of Hans Jorg Schneider Sauter
CITIGROUP INC, Appellant
September 27, 2017
Appeal from the United States District Court for the District
of Delaware (Civil Action No. 1-15-cv-00537) District Judge:
Honorable Sue L. Robinson
Barton, Esquire Bruce A. Birenboim, Esquire (Argued) Paul
Weiss Rifkind Wharton & Garrison Stephen P. Lamb, Esquire
Paul Weiss Rifkind Wharton & Garrison Counsel for
L. Burke, Esquire (Argued) Thomas G. Macauley, Esquire
Counsel for Appellee
Before: AMBRO, KRAUSE, Circuit Judges, and CONTI, [*] Chief District
CHIEF DISTRICT JUDGE.
Federal Rule of Civil Procedure 41(d), a district court may
order a plaintiff who voluntarily dismisses an action and
files a second action against the same defendant based upon a
claim asserted in the first action to pay the
"costs" incurred by the defendant in the first
action. The issue presented (one of first impression in this
Court) is whether a district court may award attorneys'
fees as "costs" under Rule 41(d). We conclude that
attorneys' fees may only be awarded as "costs"
under Rule 41(d) when the substantive statute under which the
lawsuit was filed defines costs to include attorneys'
fees. Because no such statute is involved here, and no other
basis upon which attorneys' fees may be awarded was
properly raised with the United States District Court for the
District of Delaware,  we will affirm the decision of the
District Court denying the request for attorneys' fees.
FACTUAL AND PROCEDURAL HISTORY
The lawsuit filed in the Southern District of New
29, 2014, the estate of Mexican national Hans Jorg Schneider
Sauter (the "Estate") filed a complaint in the
United States District Court for the Southern District of New
against Citigroup Inc. ("Citigroup"), El Banco
Nacional De Mexico S.A. ("Banamex") and Banamex
U.S.A. The complaint contained various claims,  and the Estate
requested, among other things, the following relief:
"That the Court order Citibank, Banamex, and Banamex USA
to turn over information pertaining to all accounts of Hans
Jorg Schneider Sauter immediately…." (S.D.N.Y.
Civ. Action No. 14-5812 (ECF No. 1 at 13).)
Estate filed an amended complaint that added Grupo Financiero
Banamex, S.A. De C.V. ("Grupo Financiero") as a
defendant and added a claim for "Racketeer Influenced
and Corrupt Organizations Act ('RICO') Infractions,
18 U.S.C. §§ 1961-1968." (S.D.N.Y. Civ. Action
No. 14-5812 (ECF No. 13 at 1, 21).) Citigroup, Banamex,
Banamex U.S.A., and Grupo Financiero filed a motion to
dismiss the amended complaint. The Estate did not respond to
that motion; rather, on November 10, 2014, it filed a motion
to amend/correct the amended complaint.
York District Court held a hearing, denied the Estate's
motion to amend/correct the amended complaint, and ordered
the Estate to advise whether it intended to withdraw any of
the claims in the amended complaint. On December 12, 2014,
the Estate filed a notice of voluntary withdrawal pursuant to
Estate's current counsel entered her appearance on behalf
of the Estate in substitution for its former counsel.
Citigroup, Banamex, Banamex U.S.A., and Grupo Financiero
filed a motion to vacate the notice of voluntary dismissal
and to dismiss the case with prejudice. They also requested
sanctions against the Estate pursuant to: (1) 28 U.S.C.
§ 1927, which allows a court to tax excess costs to an
attorney who "multiplies the proceedings in any case
unreasonably and vexatiously[, ]" 28 U.S.C. § 1927;
and (ii) the court's "inherent powers to impose
sanctions as a deterrent against continued vexatious
litigation[, ]" (S.D.N.Y. Civ. Action No. 14-5812 (ECF
No. 63 at 2)). The Estate filed a declaration from its former
counsel in which he averred that he represented the Estate
because he was asked to do so by a "long-time friend[,
]" and that litigation "had not been a major focus
of…[his] practice." (S.D.N.Y. Civ. Action No.
14-5812 (ECF No. 72 ¶¶ 1, 2).)
motion to vacate was denied and the notice of voluntary
dismissal was held to be valid. The request for sanctions was
denied because the Estate's conduct did "not rise to
the level of bad faith." Estate of Sauter v.
Citigroup, Inc., No. 14 Civ. 05812, 2015 WL 3429112, at
*4 (S.D.N.Y. May 27, 2015). The New York District Court
[T]he Federal Rules of Civil Procedure provide safeguards for
Defendants if Plaintiff does commence a second action,
including by barring Plaintiff from voluntarily dismissing
the case without prejudice a second time and by permitting
the court in the subsequent action to order Plaintiff to pay
all of Defendants' costs and fees in this dismissed
action. Fed.R.Civ.P. 41(a)(1)(B), (d).
Id. at *5.
The Lawsuit Filed in the ...