In Re: Ziad Akl ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
ZIAD AKL, )
)
Appellant, )
)
v. ) Civil Action No. 11-1449 (ABJ)
)
VIRGINIA HOSPITAL CENTER, )
)
Appellee. )
____________________________________)
MEMORANDUM OPINION
Appellant Dr. Ziad Akl brings this appeal from a final judgment in the United States
Bankruptcy Court for the District of Columbia. Akl has filed twelve unsuccessful actions against
appellee Virginia Hospital Center (“VHC,” “hospital”), and individuals associated with it, in
state and federal courts in Virginia, Maryland, and Washington, D.C. stemming from his loss of
medical privileges at the hospital. In three of those cases, which were consolidated before the
Arlington Circuit Court, the court awarded VHC costs and attorneys’ fees. Part 1 of Bankr.
Record (“BR I”) [Dkt. # 2] at 558–81. Akl subsequently filed for Chapter 7 bankruptcy, and
VHC filed an action in the bankruptcy court alleging that the fee award constituted an award of
sanctions that should not be automatically discharged in Akl’s bankruptcy proceedings under the
United States Bankruptcy Code. The bankruptcy court denied VHC’s motion for summary
judgment on its complaint, and VHC subsequently moved to voluntarily dismiss its action.
However, shortly after the court dismissed the case, Akl filed a motion in the bankruptcy court
requesting sanctions against the hospital and its attorneys for filing the complaint and the motion
for summary judgment in the first place. After granting in part and denying in part a motion to
“dismiss, strike, or otherwise deny” the sanctions motion, the bankruptcy court ultimately
granted summary judgment for the hospital as to sanctions and denied the sanctions motion in
full. Part 4 of Bankr. Record (“BR IV”) [Dkt. # 2-3] at 975.
Akl now appeals the bankruptcy court’s orders granting summary judgment and denying
the motion for sanctions. He also appeals a separate order of the bankruptcy court granting
appellee’s motion for protective order and denying Akl’s motion to compel discovery in
connection with the sanctions motion. Because the Court finds that the bankruptcy court did not
abuse its discretion in determining that appellee’s conduct did not warrant sanctions and in
denying discovery, the Court will deny Akl’s appeal.
BACKGROUND
Appellant Ziad Akl was a physician at VHC until 2004, when his medical staff
appointment was revoked. Appellant’s Brief (“Appellant’s Br.”) at 2. Since that time, Akl has
filed twelve actions against the hospital, and individuals associated with the hospital, as well as
judges and court staff who played roles in those cases. See Appellee’s Brief (“Appellee’s Br.”)
at 4–5, 5 n.4. The motion underlying this appeal arose out of the resolution of three of those
cases, which Akl refers to as “Akl I–III.” See Appellant’s Br. at 3–4; accord Appellee’s Br. at 4–
5. These cases were all filed in the Arlington Circuit Court and consolidated before Judge Alfred
Swersky, and later Judge Benjamin Kendrick. See BR I at 250–51. The complaint in Akl I
named as defendants VHC, its CEO, and six physicians involved in the hospital’s peer review
process, and it alleged denial of due process, breach of contract, tortious interference with
economic relationships, defamation and civil conspiracy arising from the termination of his
hospital privileges. Id. at 189–206. The complaint in Akl II named as defendants two nurses who
had filed complaints against Akl that led to the termination of his hospital privileges, and it
2
alleged defamation, tortious interference with economic relationships, and civil conspiracy. Id.
at 211–26. The complaint in Akl III named as a defendant the president of the firm with which
Akl was previously employed, and it alleged similar claims. Id. at 231–45.
The Arlington Circuit Court dismissed all of Akl’s claims except for breach of contract
and defamation. After a period of discovery during which Akl took nineteen depositions and
obtained extensive document production, Appellant’s Br. at 5, and after several unfavorable
rulings, Akl voluntarily dismissed the remaining claims. Id. at 5; accord Appellee’s Br. at 5;
BR I at 139–41. 1
The defendants in those cases subsequently filed a motion to recover the legal fees and
costs incurred in the defense of the actions and certain others that Akl had filed arising from the
same series of events. BR I at 67–68. The motion advanced two grounds for VHC’s entitlement
to fees: (1) Virginia Code 8.01-271.1 – which authorizes the imposition of sanctions for
frivolous submissions to the court made with an improper purpose; and (2) the terms of the
contract between Dr. Akl and the hospital. At an oral hearing on the motion, Judge Kendrick of
the Arlington Circuit Court stated on the record:
The contract that Dr. Akl entered into with Virginia Hospital Center is a legal and
sufficient basis for the attorneys to seek sanctions against the doctor. Virginia
Code [8.01-271.1], which was designed to protect litigants from the mental
anguish and the expense of frivolous assertions of unfounded factual and legal
claims[,] against the assertions of claims for improper purposes, and to protect
courts against those who would abuse the judicial process, is also a legal and
sufficient and legitimate basis to award sanctions against this litigant [Akl]. The
Court finds after an exhaust[ive] review of this record that he [Akl], in fact, has
violated the very nature and basis for which this code section was designed and
implemented . . . .
1 Those claims were subsequently re-filed in the Virginia federal court and were dismissed
on the merits. Part 2 of Bankr. Record (“BR II”) [Dkt. # 2-1] at 855–58; see also Part 3 of
Bankr. Record (“BR III”) [Dkt. # 2-2] at 564–65 (statement by appellee’s counsel at motions
hearing on motion to quash protective order in bankruptcy proceeding).
3
BR I at 70–71. However, the written order signed by the court made no mention of Virginia
Code 8.01-271.1 or sanctions, and it stated that defendants’ motion for costs and reasonable
attorney’s fees was granted “pursuant to the contract entered into between Plaintiff and
Defendant Virginia Hospital Center-Arlington.” BR I at 34–35, 133–35. 2
Approximately seven months after the Arlington court issued this Order, Akl filed a
Chapter 7 bankruptcy petition with the United States Bankruptcy Court for the District of
Columbia. VHC proceeded to file a complaint with the bankruptcy court pursuant to section
523(a)(6) of the U.S. Bankruptcy Code, 11 U.S.C. § 101 et seq., seeking to prevent Akl from
receiving an automatic discharge of the fees and costs award. The hospital moved for summary
judgment, arguing that the Arlington Circuit Court’s award constituted a sanctions judgment, that
the bankruptcy court should apply collateral estoppel to the judgment to prevent re-litigation of
the issues giving rise to it, and that the bankruptcy court should except the judgment from Akl’s
bankruptcy discharge under the bankruptcy code and applicable case law. See BR I at 178–86.
The bankruptcy court denied the hospital’s motion for summary judgment. BR IV at 912.
It found that notwithstanding the Judge Kendrick’s comments on the record, the fee award was
based on Akl’s contract, and therefore, it was not an award of sanctions. Id. at 64–65. It
therefore declined to find that the hospital was entitled to judgment as a matter of law. Id. at 67.
The hospital then filed a motion to voluntarily dismiss its action, which the bankruptcy court
2 The order was amended on May 18, 2007 – a day after Akl filed for Chapter 7
bankruptcy – to correct a clerical mistake. BR I at 136–38.
4
granted. 3 Part 2 of Bankr. Record (“BR II”) [Dkt. # 2-1] at 541. That was the end of the
hospital’s participation in the bankruptcy proceeding.
Shortly after the bankruptcy court dismissed the hospital’s action, Akl filed a motion for
sanctions invoking 28 U.S.C. section 1927 and the court’s inherent power to sanction the
hospital and its counsel. 4 Id. at 545. Akl argued that the nondischargeability action and the
motions filed in furtherance of it were without merit and intended to harass him. Id. at 1–2. He
asserted that the filing of the complaint, motion for summary judgment, and motion to quash
were each sanctionable conduct by the hospital and its attorneys. Id.VHC filed a motion to “strike, dismiss, and otherwise deny” the motion, BR II at 869,
which the court granted as to one attorney for the hospital, but denied as to the hospital and its
other attorneys. Part 3 of Bankr. Record (“BR III”) [Dkt. # 2-2] at 182–95. 5 The court also
ordered the hospital to file an opposition to Akl’s motion for sanctions. Id. at 194. While the
hospital did eventually file an opposition, id. at 297–311, it first filed a motion to partially
reconsider, alter, amend, and alternatively clarify the Court’s memorandum decision and order.
Id. at 196–218.
The bankruptcy court granted the motion for reconsideration in part and denied it in part.
BR III at 586–606. It modified its original order to dismiss the claims against another of the
3 Akl also moved to defer ruling on the motion to dismiss until he had an opportunity to
file a counterclaim, moved for leave to file a counterclaim, and moved to have the court issue an
order to show cause why the plaintiff should not be held in criminal contempt. The bankruptcy
court denied all three motions. BR I at 542; BR II at 542–43; see also BR III at 587–88.
4 Akl also filed separate actions in another court in this district as well as in the D.C.
Superior Court challenging appellee for having filed the complaint and summary judgment
motion in the bankruptcy court. See BR III at 400–01.
5 Akl also filed at least three supplements to the motion for sanctions. See Supps. To
Def.’s Mot. for Sanctions, Va. Hosp. Ctr. v. Akl, No. 07-20026 (Bankr. D.D.C. 2007) [Dkt. #
132, 134, 179].
5
hospital’s attorneys, dismiss Akl’s section 1927 claim for the filing of the complaint, and dismiss
Akl’s section 1927 and inherent authority sanctions claims for the motion to quash. Id. at 604–
05. It identified the remaining issues as:
(1) sanctions under the court’s inherent authority for the filing of the complaint
against Potter [VHC’s attorney] and Virginia Hospital; (2) sanctions under § 1927
against Potter for the filing of the motion for summary judgment, except to the
extent Akl argues the motion is sanctionable merely because it was in furtherance
of the adversary proceeding; and (3) sanctions under the court’s inherent authority
against Potter and Virginia Hospital for the filing of the motion for summary
judgment.
Id. at 605.
While the motion for reconsideration was pending, Akl attempted to initiate discovery.
BR III at 401–02. In response, VHC moved for a protective order preventing Akl from
conducting discovery pending further order of the court. Id. at 398–454. Akl opposed VHC’s
motion and filed a motion to compel discovery. Id. at 472. The bankruptcy court granted the
motion for protective order and denied Akl’s motion to compel discovery. Id. at 950–51; BR IV
at 149–150.
VHC next filed what it labeled a motion for summary judgment as to sanctions. BR III at
739. Once the motion was fully briefed, the bankruptcy court issued an order granting VHC’s
motion in full, accompanied by a 55-page memorandum opinion explaining its decision. BR IV
at 922–80. It subsequently issued an order denying Akl’s motion for sanctions. It is those
6
orders, as well as the order denying Akl discovery on the sanctions issue, that Akl now appeals.
Akl filed this appeal on August 10, 2011, and the Court held oral argument on May 16, 2012. 6
The appeal presents the questions whether the bankruptcy court erred in: 1) denying
appellant’s motion for sanctions under 28 U.S.C. § 1927 and the court’s inherent authority;
6 The Court began the oral argument, as it often does, with an introductory statement
summarizing the procedural posture of the case, enumerating the issues before the Court to
resolve and the standards governing those issues, and identifying certain issues that were not
properly for the Court. Transcript of Oral Argument (“Tr.”) at 1:15–7:5 (May 16, 2012). Akl
filed a supplemental memorandum the next day, arguing that at the oral argument the Court
unfairly framed the issues that were before it and therefore denied him the opportunity to “delve
into” relevant issues and parts of the record. [Dkt. # 15]. Notwithstanding the fact that the
memorandum was filed without leave of the Court, in violation of Federal Rule of Bankruptcy
Procedure 8009(a)(3) and Federal Rule of Civil Procedure 15(d), the Court did not strike it, but
considered it in connection with all of the other pleadings in the matter. See Minute Order (May
17, 2012). In connection with the complaints voiced in the memorandum, though, the Court
notes the following: First, appellant was not automatically entitled to an oral hearing in this case
at all. See LCvR 78.1 (The allowance of an oral hearing “shall be within the discretion of the
court.”). Second, appellant has filed a brief and a reply brief, both of which the Court had
thoroughly read and considered in advance of the hearing. Third, at the hearing, the Court
specifically invited the parties to weigh in if they believed that the Court had not accurately
framed the issues. Tr. at 7:1–5 (Court: “Obviously, if I have incorrectly framed the issues, you
should let me know that . . . .”). Counsel for appellee accepted this invitation and offered a
minor correction to the Court’s framing of the issues. Id. at 21:12–16 (Ms. Baum: “I had one
minor observation with respect to Your Honor’s framing of the issues . . . . The Court: Feel free
to correct me, it’s okay.”). But appellant’s counsel did not dispute the Court’s framing of the
issues, either during his argument or his rebuttal. Indeed, he thanked the Court. Id. at 7:7–8 (Mr.
Troy: “Thank you for that. It will save a lot of time.”). Finally, after the Court finished asking
its prepared questions, it gave appellant’s counsel an opportunity to go back to his notes and
raise any issues that he had not yet had an opportunity to address. Still, appellant’s counsel did
not raise the issues that he complains the Court denied him the opportunity to discuss. Id. at
16:14–16 (The Court: “Okay. All right. I’ve asked you a lot of questions. So if there’s things
on your outline that you wanted to cover, I want to make sure that I hear them.”); id. at 20:4 (The
Court: “Okay. All right. Is there anything else that you need to tell me that we haven’t
covered? Mr. Troy: Not at this time.”). Nonetheless, the Court will address the issues Akl
raises in his supplemental memorandum, most of which repeat arguments that appellant already
made in his brief and reply.
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2) granting appellee’s motion for protective order and denying appellant’s motion to compel
discovery. 7
ORDER GRANTING APPELLEE’S MOTION FOR SUMMARY JUDGMENT AS TO
SANCTIONS AND DENYING APPELLANT’S MOTION FOR SANCTIONS
I. Standard of Review
On appeal, a court reviews the decision whether to award sanctions under an abuse of
discretion standard. LaPrade v. Kidder Peabody & Co., Inc., 146 F.3d 899, 904 (D.C. Cir. 1998)
(section 1927); In re Johnson, 236 B.R. 510, 518 (D.D.C. 1999) (“The standard of review
concerning a Bankruptcy Court’s denial of sanctions is abuse of discretion.”); see also In re
Downs, 103 F.3d 472, 478 (6th Cir. 1996) (district court reviews a bankruptcy court’s sanctions
decision under a “clear abuse of discretion” standard). Orders on motions for summary
judgment, however, are reviewed de novo. United States v. Spicer, 57 F.3d 1152, 1159 (D.C.
Cir. 1995). Here, while the appeal is taken on the bankruptcy court’s decision regarding a
motion for sanctions, the parties briefed, and the court decided, the sanctions issue on a motion
for summary judgment. 8 So the parties now disagree on what level of deference the Court
should accord the bankruptcy court’s decision.
While neither side has provided the Court with any precedent that is squarely on point,
the Court finds the bankruptcy court’s decision to be more akin to an order on a motion for
7 Appellant frames the appeal as raising a separate issue of whether the bankruptcy court
erred in granting appellee’s motion for summary judgment as to sanctions, but this Court will
treat the summary judgment order as a sub-issue under the first question presented.
8 Although the bankruptcy court disposed of parts of Akl’s motion for sanctions on VHC’s
motion to dismiss, strike, or otherwise dispose of the motion for sanctions, and on VHC’s motion
to reconsider the court’s order on the motion to dismiss, Akl appeals only the order on VHC’s
motion for summary judgment and the order denying defendant’s motion for sanctions, not the
order on the motion to dismiss. Notice of Appeal [Dkt. # 1] at 5.
8
sanctions than on a motion for summary judgment. The issue that the bankruptcy court was
considering was not dispositive, but was merely collateral to the claims raised in the complaint.
Furthermore, the Supreme Court has found that appellate courts must defer to the trial court’s
legal findings in proceedings for sanctions, not just their factual findings. Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 399–405 (1990) (Rule 11 sanctions); 9 Chambers v. NASCO, Inc.,
501 U.S. 32, 55 (1991) (inherent authority sanctions); Shepherd v. American Broadcasting Cos.,
Inc., 62 F.3d 1469, 1475 (D.C. Cir. 1995) (inherent authority sanctions). Therefore, the Court
will review the bankruptcy court’s decision under an abuse of discretion standard. 10
A. Abuse of Discretion
A trial court has abused its discretion if it “did not apply the correct legal standard or
misapprehended the underlying substantive law” or if its ruling was not “within the scope of
permissible alternatives in light of the relevant factors and the reasons given to support it.”
Smalls v. United States, 471 F.3d 186, 191 (D.C. Cir. 2006). The court “necessarily abuse[s] its
9 The Court finds it irrelevant that the Cooter decision concerned Rule 11 sanctions while
this case concerns Section 1927 and inherent authority sanctions. In Cooter, the Court put
significant emphasis on considerations that apply equally to the section 1927 and inherent
authority sanction context: the legal questions rely heavily on the factual circumstances of the
case; the court must make determinations about whether particular legal arguments appeared
“plausible” or were “reasonable” at the time they were made; the legal questions presented are
not easily generalizeable to other factual scenarios; deference to the determination of courts “on
the front lines of litigation” will enhance those courts’ ability to control the litigants before them
and deter baseless filings before them. Id. at 401–04. In addition, the Court emphasized the
significance that an abuse of discretion standard would not preclude an appellate court from
correcting a district court’s legal errors since a trial court “would necessarily abuse its discretion
if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the
evidence.” Id. at 405. Also, the Supreme Court has expressly ruled that sanctions under the
court’s inherent power are reviewed for abuse of discretion. Chambers v. NASCO, Inc., 501 U.S.
32, 55 (1991) (“We review a court’s imposition of sanctions under its inherent power for abuse
of discretion.”).
10 The Court notes, however, that even if it were to review the bankruptcy court’s decision
de novo, it would reach the same decision.
9
discretion if it base[s] its ruling on an erroneous view of the law.” Cooter, 496 U.S. at 405.
However, “[i]f the court’s account of the evidence is plausible in light of the record viewed in its
entirety, the court of appeals may not reverse it even though convinced that had it been sitting as
the trier of fact, it would have weighed the evidence differently.” Anderson v. Bessemer City,
470 U.S. 564, 573–74 (1985).
B. Summary Judgment
As discussed above, this Court must determine whether the lower court applied the
correct legal standard. And since the bankruptcy court decided the sanctions motion on
summary judgment, it is appropriate at this juncture to set out the standard for summary
judgment.
Summary judgment is appropriate “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The party seeking summary judgment bears the “initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat
summary judgment, the non-moving party must “designate specific facts showing there is a
genuine issue for trial.” Id. at 324 (internal quotation marks omitted). The existence of a factual
dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247–48 (1986). A dispute is “genuine” only if a reasonable fact-finder could find for the
non-moving party; a fact is only “material” if it is capable of affecting the outcome of the
litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). In
10
addition, the moving party is entitled to a judgment as a matter of law when “the nonmoving
party has failed to make a sufficient showing on an essential element of her case with respect to
which she has the burden of proof.” Celotex, 477 U.S. at 323. In assessing a party’s motion,
“[a]ll underlying facts and inferences are analyzed in the light most favorable to the non-moving
party.” N.S. ex rel. Stein v. District of Columbia, 709 F. Supp. 2d 57, 65 (D.D.C. 2010), citing
Anderson, 477 U.S. at 247.
II. Analysis
At the outset, the Court observes that appellant challenges “every aspect” of the
bankruptcy court’s memorandum opinion and order granting summary judgment for VHC as to
sanctions. Appellant’s Supp. Mem. [Dkt. # 15] at 7; Tr. at 14:17–15:4. 11 In his briefs and at the
oral argument, counsel for Akl urged the Court to overturn every single legal and factual
determination in the bankruptcy court’s fifty-five page opinion. Id.Since many of Akl’s arguments rely on the assumption that appellee was engaged in
fraud, the Court will address Akl’s fraud allegations before turning to his specific arguments. 12
Akl asserts throughout his brief and supplemental memorandum that in the sanctions
11 The Court: Is there anything that you think [the bankruptcy judge] was right about? You
have said that he was wrong about every single thing.
Mr. Troy: No, I don’t think he was right about one thing.
The Court: You don’t think he was right about one thing?
Mr. Troy: No.
12 In addition, this is one of the issues that appellant argues the Court denied him the
opportunity to address at the oral argument. Again, the Court notes that the decision whether to
hold an oral argument was entirely within the discretion of the Court, and the Court was
similarly entitled to limit arguments to whichever issues it was most concerned with.
Nonetheless, the Court will consider the additional arguments that he provides on this point in
his supplemental memorandum.
11
proceedings, he presented evidence that appellee perpetrated fraud on the courts by submitting
falsified documents, and that the hospital and its attorneys fraudulently colluded with the judges
on the Arlington Circuit Court – Judges Swersky and Kendrick. However, the bankruptcy court
rejected Akl’s allegations of fraud, finding that Akl presented nothing more than mere
conclusory assertions, and that the issue of fraud was barred by the Rooker-Feldman doctrine in
any event. BR IV at 945–46.
This Court finds that the bankruptcy court did not err in rejecting Akl’s allegations of
fraud. Like the bankruptcy court, this Court has gone through the entire record in this case and
found no facts that would suggest that appellee engaged in collusion with judges on the
Arlington Circuit Court or submitted anything fraudulent to the Arlington court. The only
specific evidence that Akl submitted to the bankruptcy court in his opposition to the motion for
summary judgment as to sanctions – invoices submitted by hospital counsel to the court – do not
support Akl’s claims of fraud. See BR IV at 81–83. 13 Furthermore, appellant’s brief, reply brief,
and supplemental memorandum in this case all fail to point to any facts in the record that could
be construed as evidence of fraud, even giving Akl the benefit of all inferences in his favor. The
pleadings frequently refer to Akl’s “evidence” of fraud, but nowhere does he actually identify
13 Akl argues that redactions in the invoices show evidence of fraud and ex parte
communications between the hospital or its attorneys and the Arlington Circuit Court. However,
the bankruptcy court found no evidence of fraud in the record, and this Court cannot find that its
determination was in error, let alone an abuse of discretion, based on the hospital invoices that
are attached as appendices to Akl’s opposition.
12
what that evidence is. 14 Moreover, Akl’s conspiracy allegations are barred by the Rooker-
Feldman doctrine. 15 Therefore, this Court agrees with the bankruptcy court that Akl failed to
14 See, e.g., Appellant’s Br. at 19 (“Even worse, basing a complaint on what a judge said
with the knowledge that the statement was extracted through corruption and conspiracy with the
judge is actually criminal contempt.”); id. at 21 (“In its motion for sanctions, Akl argued that
Judge Alfred Swersky, who presided over Akl I, II, and III, was clearly in league with the
defendants in the actions and was intent on dismissing the case on summary judgment. . . . Akl
also argued that VHC, along with Judge Swersky, corrupted Judge Kendrick who entered the
monetary judgment against Akl. Akl offered substantial evidence to that effect.” The evidence
that Akl submitted in support of his allegations that VHC, its counsel, and Judges Swersky and
Kendrick were in cahoots with each other is extensive and damning . . . .”); id. at 22 (the
bankruptcy court’s ruling was made “in the face of allegations and evidence of misconduct by
that Judge with VHC’s and its counsel’s knowledge.” “[T]here are two aspects to Akl’s
allegations of fraud. Allegations of fraud by VHC and its counsel upon the Arlington Court, and
allegations of fraud through a conspiracy with the court. The former was accomplished through
the submission of fabricated documents and through false representations to the Arlington
Court.” “VHC and its counsel committed fraud upon the Arlington Court and caused it, by
submitting false documents to it and making misrepresentations to it that the peer-review process
was spotless, to reach a conclusion that Akl violated Va. Code § 8.01-271.1 . . . .”); id. at 23
(“Appellees knew that Judge Kendrick’s statement was made pursuant to an extra-judicial
agreement with VHC and its counsel, . . . they knew that Judge Kendrick did not believe what he
said when he said it, and they knew that Judge Kendrick was merely stating what he and his co-
conspirators had agreed upon.”); id. at 29 (“[VHC and its counsel] knew that the judgment they
obtained from the Arlington Court was fraudulent.”); id. at 34 (“Appellant provided ample
evidence that the Arlington Court proceedings were corrupted, Opp. at 65–70 . . . .”); id. at 35
(“As stated above, the Appellees corrupted the Arlington Court . . . .”); id. at 36–37
(“[Appellees] were the ones who corrupted the Arlington Court . . . .”); id. at 37 (“It is as if the
Bk. Court has hard time (sic) believing that a judge could be corrupt or be corrupted. This was
evidenced by the Bk. Court’s clear irritation when Akl mentioned the issue at the January 11,
2011 hearing on the motion for protective order.”); id. at 41 (“The mere fact that he issued the
Judgment Order in violation of the stay supports the evidence presented by Akl that he was in
league with VHC . . . .”); id. at 49 (“Akl alleged that the judgment used to initiate this suit was
obtained through fraud – thus, the filing of the Complaint constitutes fraud upon the Bk.
Court.”); Appellant’s Reply at 5 (“It is further clear from the large amount of evidence that Akl,
contrary to what Appellees assert, did submit in conjunction with his opposition to the motion for
summary judgment as to sanctions.”); Appellant’s Supp. Mem. at 3 (“The Court seemed
unconcerned with Appellant’s allegations of fraud in previous proceedings and the use in this
Court of a judgment obtained by fraud).
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present any evidence of fraud that would raise a genuine dispute of material fact. Accordingly,
in the following discussion of Akl’s arguments for why the bankruptcy court erred by finding no
evidence of bad faith, the Court will not further consider any basis sounding in fraud.
A. Sanctions under the court’s inherent authority for the filing of the complaint
Courts have an inherent power “to protect their integrity and prevent abuses of the
judicial process.” Shepherd v. Am. Broad. Cos., Inc., 62 F.3d 1469 (D.C. Cir. 1995), citing
Chambers, 501 U.S. at 46. This includes the authority to assess attorney’s fees against a party
who has “acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Alyeska Pipeline
Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258–59 (1975). The bankruptcy court correctly
recited the standard for imposing sanctions under the court’s inherent authority: First, the court
“‘must find some connection between the sanctioned conduct and a process of the court in the
litigation before it.’ . . . Second, the court ‘must make an explicit finding that [the target of the
15 Akl passionately asserts that his claims are not barred by the Rooker-Feldman doctrine
because Akl did not ask the bankruptcy court to reject the Arlington Circuit Court’s judgment,
but only “to examine the process by which it was obtained.” Appellant’s Br. at 25; Appellant’s
Reply at 8–10; Appellant’s Supp. Mem. at 3–4. The Rooker-Feldman doctrine bars a federal
court from exercising jurisdiction over “cases brought by state-court losers complaining of
injuries caused by state-court judgments rendered before the district court proceedings
commenced and inviting district court review and rejection of those judgments.” Exxon Mobil
Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). The bankruptcy court cited Akl v.
Swersky, No. 1:06-cv00964 (E.D. Va. Dec. 22, 2006) as support for the applicability of the
Rooker-Feldman doctrine. BR IV at 946. In that case, a court in the Eastern District of Virginia
held that Akl’s section 1983 due process and equal protection claims, which asserted the same
fraud and conspiracy allegations that Akl asserts here, were barred by Rooker-Feldman. The
court noted that Rooker-Feldman is inapplicable if the people involved in the state court decision
violated some independent right of the litigant, but it found that “Akl’s conclusory allegations
simply do not articulate an independent right, nor do they constitute an independent claim,
capable of being redressed by this court. In the end, his allegations before this court equate to an
attack on the decisions of the state court.” Mem. Op., No. 1:06cv00964 (E.D. Va. Dec. 22,
2006). It was not an abuse of the bankruptcy court’s discretion to find that Akl’s allegations in
the case before it were similarly mere attempts to invite federal court review and rejection of the
Arlington Circuit Court’s judgments against him and that they were similarly barred by Rooker-
Feldman. See also Richardson v. Dist. of Columbia, 711 F. Supp. 2d 115, 120–23 (D.D.C. 2010)
(explaining how Rooker-Feldman applies after the Exxon Mobil decision).
14
sanctions] acted in bad faith.’” BR IV at 933 (alterations in original), citing Alexander v. FBI,
541 F. Supp. 2d 274, 303 (D.D.C. 2008); see also Roadway Express, Inc. v. Piper, 447 U.S. 752,
767 (1980) (the court must make a specific finding of bad faith before imposing any sanction
under its inherent powers); United States v. Wallace, 964 F.2d 1214, 1217 (D.C. Cir. 1992)
(same). Only the second part – the showing of bad faith – is at issue here.
The bankruptcy court looked for bad faith both “indirectly through evidence of objective
actions that lead to an inference of subjective [improper motive] – such as filing a document with
the court that is plainly frivolous, lacking even a colorable basis in law or fact,” and “directly
through evidence of subjective [improper motive].” BR IV at 935, citing In re Greater Se. Cmty.
Hosp. Corp., I, No. 02-02250, 2010 WL 3123086, at *3 (Bankr. D.D.C. Aug. 9, 2010); see also
Weinberger v. Kendrick, 698 F.2d 61, 80 (2d Cir. 1982) (“[T]here must be clear evidence that the
challenged actions are entirely without color and are taken for reasons of harassment or delay or
for other improper purposes.”) (internal quotation marks omitted). It found no objective or
subjective indications of bad faith. Rather it found that Judge Kendrick’s ruling alone provided a
colorable basis for appellee’s nondischargeability arguments, and that Akl presented no evidence
of subjective bad faith other than conclusory statements. Akl’s arguments in the instant case all
seek to persuade the Court that Akl presented enough evidence to at least create a genuine factual
dispute over whether appellee was aware that Akl had not actually injured it willfully and with
malice, and was thereby aware that its fees and costs award did not satisfy the conditions for
nondischargeability. But since this Court cannot find any evidence to support Akl’s contention,
the Court declines to overturn the bankruptcy court’s well-reasoned decision.
15
i. Appellee was not required to foreclose the possibility that Akl’s
allegations were true or that Akl acted without malice in his previous
suits.
Akl first argues that the bankruptcy court erred because VHC failed to foreclose the
possibilities that his allegations were true and that he did not act with the malice required for an
award to be nondischargeable. But the bankruptcy court did not need to foreclose those
possibilities. Under section 523(a)(6) of the United States Bankruptcy Code, an award incurred
by willful and malicious injury by the debtor is nondischargeable in a Chapter 7 bankruptcy
proceeding. 11 U.S.C. § 523(a)(6). Therefore, the bankruptcy court simply needed to find that
appellee had a colorable basis for thinking that its fees and costs award in the Arlington Circuit
Court was granted based on that court’s finding that Akl engaged in willful and malicious
actions.
The bankruptcy court found that the mere fact that “an independent trier of fact found
Akl’s conduct in the Circuit Court sanctionable and was a basis for banning him from filing
further suits in that court” provided the lawyers with a good faith factual basis for instituting the
lawsuit in the bankruptcy court. It also provided a good faith basis for “having the bankruptcy
court determine whether Akl’s actions in those proceedings warranted a finding that the
attorneys’ fee award was nondischargeable on a broader evidentiary basis than just Judge
Kendrick’s oral ruling and order.” 16 BR IV at 940. The bankruptcy court rightfully
distinguished between a colorable argument and a winning argument. Id. In other words, Judge
Kendrick’s ruling provided a sufficient basis for appellee to think that sufficient evidence existed
16 Akl also argues that appellee knew that it did not meet the standard for
nondischargeability because it provided false information to the court and colluded with the
Court, but the Court has already rejected Akl’s allegations of fraud and conspiracy and will not
take them up again here.
16
on which the bankruptcy court could find that Akl engaged in willful and malicious conduct,
even if the court ultimately were to find that he did not. In making that determination, the
bankruptcy court did not have to decide whether Akl’s allegations against appellee in the
Virginia Courts were actually false or whether Akl actually acted with malice when he brought
his lawsuits there, so this Court cannot find that the bankruptcy court abused its discretion in
failing to foreclose the possibility that Akl’s allegations were true or that he did not act with
malice.
ii. The bankruptcy court did not err in ruling that if the complaint were
limited solely to Judge Kendrick’s ruling, it would still be colorable.
Akl next argues that the bankruptcy court erred in finding that even if the complaint were
limited solely to Judge Kendrick’s ruling, it would still be colorable; but this Court cannot find
that determination to be in error either. In appellee’s motion for summary judgment on
nondischargeability, appellee cited several cases applying collateral estoppel to state-court
sanction determinations made under rules or statutes similar to Va. Code § 8.01-271.1, and
thereby finding the award to be nondischargeable without re-litigating the merits of whether
there was actual willful and malicious injury. 17 BR I at 182. So it was reasonable for appellee to
argue that the bankruptcy court should do the same, even though it ultimately did not prevail on
that point. Furthermore, the bankruptcy court correctly found that it was reasonable for appellee
to have believed, based on the combination of Judge Kendrick’s oral statements and the wording
17 Akl argues that “a lawsuit cannot be brought based on what another judge said, but [must
be based] on what the plaintiff actually believed . . . .” Appellant’s Br. at 19; see also
Appellant’s Supp. Mem. at 4–5. While the Court does not disagree in principle, the doctrine of
collateral estoppel requires a court to adopt the final judgment of another court on the same
issue. See Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992). So
appellee could have reasonably brought its nondischargeability claim based solely on Judge
Kendrick’s ruling alone. Akl is correct that if appellee had known that Judge Kendrick’s ruling
was tainted by fraud, then appellee could be sanctioned for filing the nondischargeability
complaint; however, this Court already considered and rejected Akl’s fraud allegations.
17
of the written order, that its award of fees and costs was a sanctions award. See BR IV at 939–
40.
iii. The bankruptcy court did not err in finding that appellee’s stance that
in suing others Akl intended to injure VHC does not create a material
factual dispute as to appellee’s motives for filing its complaint.
Akl next argues that the fact that the hospital sought to have all of the fees it paid
declared nondischargeable – including fees incurred defending agents and contractors it was not
legally obligated to defend – is evidence of the hospital’s bad faith, and a circumstance that
creates a factual dispute. See Appellant’s Br. at 39. The bankruptcy court rejected this
contention. It found, and this Court agrees, that the hospital had both ethical and economic
reasons for defending those parties, and that the fact that it chose to do so does not taint the
complaint filed in the bankruptcy court in any way. 18
The Court further notes that to the extent that VHC was planning to rely on collateral
estoppel as the basis for nondischargeability, it had good faith grounds to ask for all of the fees
that Judge Kendrick awarded. Since Judge Kendrick awarded appellee costs and fees for the
cases that it paid to defend – even the ones in which it was not a party – the Court cannot find
that its request that those fees be nondischargeable indicated bad faith.
18 Akl makes a further unavailing argument that the bankruptcy court wrongly raised these
arguments sua sponte. However, this argument misconstrues the burdens on a motion for
summary judgment. Once the moving party sets out the basis for its motion, the non-moving
party bears the burden of “designat[ing] specific facts showing there is a genuine issue for trial”
in order to defeat the motion. Celotex, 477 U.S. at 324 (internal quotation marks omitted).
Accordingly, it was Akl’s burden to present evidence that would establish a material factual
dispute, so the bankruptcy court was free to explain why it found Akl’s evidence insufficient. In
addition, the bankruptcy court found, and this Court agrees, that appellee’s general denials of
Akl’s allegations coupled with several defenses was sufficient, particularly given the length of
Akl’s pleadings. See BR IV at 956; see also BR IV at 752 (“[Akl’s] efforts to manufacture
material disputes by making wild and unsupported accusations that have already been rejected by
other courts over and again, must be rejected by the Court.”). BR IV at 752.
18
iv. The bankruptcy court did not err in ruling that there were no
inconsistencies in what appellee indicated to be the basis for its action,
and that even if there were inconsistencies, they do not create a
material factual dispute as to appellee’s motives for filing its
complaint.
At the oral argument on this appeal, Akl asserted that an alleged change of position was
the strongest “evidence” he presented of the hospital’s and its attorneys’ bad faith. Tr. at 15:5–6.
He argued that the hospital’s attorneys originally stated in the bankruptcy complaint that the
claim that Dr. Akl acted with malice (giving rise to the debt – the attorneys fee award – that
should therefore be non-dischargeable) was based on the “entire record.” But later, according to
Akl, they took the contrary position that they were relying solely on Judge Kendrick’s ruling.
See Appellant’s Br. at 29–35 (describing what Akl calls the “empty head/pure heart defense”).
At the oral argument, Akl’s counsel pointed out that by filing the complaint in the bankruptcy
court, which was subject to Federal Rule of Civil Procedure 11, counsel “certified” that the
factual contentions had evidentiary support. Tr. at 7:15–23, 8:19–9:7, 18:2–14. But since the
entire record included some lawsuits in which VHC allegedly knew that Dr. Akl had not acted
with malice, then VHC’s attorneys must have acted with malice in predicating their action that
record. Id. at 29:9–20. And, to follow his logic, the fact that the hospital’s attorneys retreated
from that allegation shows that they knew it was flawed all along.
The bankruptcy court found that appellee had never actually changed its position
regarding the basis for its action. BR IV at 937–38. Moreover, it found that even if appellee had
shifted positions, that shift would not lead to a reasonable inference of bad faith. Id. at 938. This
Court agrees with both determinations.
As to the claimed change of position, the Court notes that from the start, the hospital
clearly indicated that Judge Kendrick’s statements were the centerpiece of the complaint and that
19
the hospital was not alleging that every single thing Dr. Akl had ever done was activated by
malice. BR I at 1–4. The complaint is only three pages long. 19 It sets out the background facts
– that Dr. Akl had filed eight lawsuits in connection with the medical privileges, id. at 1 ¶ 6; that
all seven in Virginia were dismissed and the one in Maryland was still pending, id. at 1 ¶ 7; that
Dr. Akl was enjoined from filing any more lawsuits in Virginia, id. at 1 ¶ 8; that “in most of
these cases,” the hospital was forced to defend against baseless and malicious allegations, id. at 1
¶ 9; that “in one of the actions,” the hospital sought to recover the fees it paid for the defense of
“various baseless and harassing lawsuits, id. at 1 ¶¶ 10–11; and that the court granted the motion,
id. at 1 ¶ 12, making the comments quoted in paragraph 13 (emphasis added). There is nothing
about the complaint that is not fairly based on the record the attorneys were summarizing at the
time.
In other words, from the moment it filed its action, appellee intended to rely primarily on
Judge Kendrick’s ruling, but it was ready to rely on the entire record if its collateral estoppel
argument were rejected. This is also supported by the Rule 26 disclosures, which Akl cited
before the bankruptcy court and cites again here. See BR IV at 67 (quoting from appellee’s Rule
26 disclosure: “This case is predicated upon a multitude of final, non-appealable orders from
various state and federal courts, including a Virginia Circuit Court order and transcript awarding
sanctions in favor of the Hospital and against Dr. Akl”; “This case is predicated upon a multitude
of final, non-appealable orders from various state and federal courts, including a Virginia Circuit
Court order and transcript awarding sanctions in favor of the Hospital and against Dr. Akl.”).
In his opposition to the motion for summary judgment as to sanctions filed in the
bankruptcy court, Akl did not identify any evidence of the hospital’s alleged “amended
19 The fourth page just contains a signature.
20
position.” See id. at 51–56. Now, Akl identifies statements by the hospital’s attorneys, made in
pleadings and hearings, as his evidence. First, Akl asserts that counsel for the hospital admitted,
after the bankruptcy court denied his motion for summary judgment on nondischargeability, that
he needed time to “regroup” before he could identify the underlying evidence that he would rely
on at an evidentiary hearing on sanctions. Akl argues that is proof that counsel had never
intended to rely on the entire record. However, Akl fails to acknowledge that when the attorney
made those statements, he had been preparing for a hearing that was to focus solely on the legal
issue of collateral estoppel. So it was reasonable for him to request additional time to review the
factual evidence. The fact that he was unable to identify the factual evidence underlying his case
20
at that exact moment is not the same as a concession that the action had no basis in fact.
Similarly, the statement Akl quotes from the hospital’s opposition to Akl’s motion to defer ruling
on defendant’s pending motions pending discovery does not show a change in appellee’s
position. The hospital clearly explained its theory that: “[A] substantial body of case law stands
for the proposition that a sanctions judgment can be excepted from discharge in bankruptcy [and]
the record supported a finding that Arlington County Circuit Judge Kendrick entered a sanctions
judgment against Akl.” BR III at 398–99. This statement makes clear that appellee believed that
the entire record supported its action.
Furthermore, even if appellee did shift positions, Akl has presented nothing that indicates
that the reason for the shift was bad faith. The refinement of a litigation position from broad to
narrow is not evidence of bad faith and neither is an argument “in the alternative,” which is a
20 Indeed, the Court agrees with the observation of the bankruptcy court that if statements
made by VHC counsel at the sanctions hearing – which occurred three years after the complaint
was filed – were inconsistent with the complaint, “[a]t most, it shows that this proceeding has
wound on for too long.” BR IV at 939.
21
formulation that attorneys use frequently in litigation. Accordingly, the Court does not find
sufficient grounds to reverse the bankruptcy court’s decision.
v. The bankruptcy court did not err in ruling that a statement in
appellee’s Rule 26 disclosure stating that “there are no fact issues”
does not create a material factual dispute as to appellee’s motives for
filing its complaint
Akl quotes a statement in appellee’s Rule 26 disclosure to the bankruptcy court:
Because . . . this case involves a question of law, the Hospital believes that there
are no fact issues. If, however, the Hospital is required to go beyond the court’s
above-referenced rulings to prove anything, then the public record alone in this
litigation with Dr. Akl would demonstrate that he acted maliciously in prosecuting
his claims against the hospital.
Appellant’s Br. at 39. The bankruptcy court rightfully rejected Akl’s arguments that this
statement (1) contradicts itself, and (2) shows that appellee filed the complaint intending to reach
only the summary judgment stage because, contrary to its claims, it knew it had no factual
evidence. As the bankruptcy court clearly explained, the statement leads to exactly the opposite
conclusion: it shows that appellee intended to rely primarily on Judge Kendrick’s ruling using
its theory of collateral estoppel, but that it believed it could win even if the court determined that
it had to look beyond Judge Kendrick’s ruling. See BR IV at 947. Appellee believed that the
totality of the proceedings presented a sufficient basis on which to find that Dr. Akl acted
maliciously. The Court cannot find anything in that statement that would give reason to think
that it believed otherwise. Nor has Akl presented the Court with any additional evidence that
would suggest appellee did not believe that it had sufficient support for its claim, other than his
theories of fraud, which the Court has already rejected.
It is entirely unexceptional that litigants would advance the position that a matter can be
resolved on legal grounds alone, while being prepared to pursue an action on the merits if
summary disposition fails. It is also unremarkable that a party might elect to abandon an action
22
altogether once it has seen the reasons why the court denied the motion for summary judgment.
There is nothing about the motion for voluntary dismissal in and of itself that suggests that
VHC’s attorneys acted in bad faith when they filed their complaint in bankruptcy court to begin
with.
vi. The bankruptcy court did not err in ruling that the Arlington Court’s
issuance of judgment despite an automatic stay does not create a
material factual dispute as to appellee’s motives for filing its
complaint
Akl next argues that the bankruptcy court should have found a material factual dispute as
to appellee’s motives for filing the complaint based on evidence he presented showing that the
Arlington Circuit Court issued a clerical order in the matter there even though the proceedings
had been stayed due to the commencement of Akl’s bankruptcy proceedings the day before. The
bankruptcy court found that the issuance of the order did not reflect bad faith on the part of
VHC’s attorneys because Akl made no showing that the clerical order “was signed at the
Hospital’s urging.” BR IV at 949. Akl now argues that the bankruptcy erred because his
conspiracy allegations establish the link between the Arlington court’s action and the hospital.
However, since the Court already found that Akl failed to present any evidence that would
support his conclusory allegations of a conspiracy, the Court rejects this argument.
vii. The bankruptcy court did not err in finding that the events that
preceded the filing of the adversary proceeding do not create a
material factual dispute as to appellee’s motives for filing its complaint
Akl also claims that the bankruptcy court should have found a material factual dispute as
to appellee’s motives for filing the complaint because he recalls his attorney reporting that VHC
requested his consent to an extension of time before the filing of the nondischargeability
complaint. Akl insists that the extension request was designed to coerce him to drop his pending
actions by threatening him with legal action. But a mere request from one attorney to another for
23
an extension of time is not evidence of bad faith. In fact, it is required by the local rules. LCvR
7(m) (“before filing any nondispositive motion in a civil action, counsel shall discuss the
anticipated motion with opposing counsel . . . .”). In addition, Akl provides no evidence of
improper motive for the extension request, and, as the bankruptcy court noted, he provides no
evidence from a person with knowledge that the request was actually made. See BR IV at 950.
Therefore, the Court finds that the bankruptcy court did not err in rejecting this argument.
viii. The bankruptcy court did not err in ruling that VHC’s failure to submit
a declaration with the summary judgment motion as to sanctions does
not create a material factual dispute as to appellee’s motives for filing
its complaint
Before the bankruptcy court, Akl argued that the fact that the hospital did not submit a
declaration denying Akl’s allegations with its summary judgment motion was evidence of the
hospital’s bad faith. He now argues that the bankruptcy court erred in rejecting that theory. But
because Akl misconstrues the burdens on the parties, this Court must again uphold the
bankruptcy court’s ruling.
To defeat the hospital’s motion for summary judgment, Akl bore the burden of coming
forth with specific evidence showing that the hospital’s nondischargeability complaint was filed
in bad faith. That is why, for example, the Court found that Akl failed to support his assertion
regarding the request for an extension of time between counsel for appellee and his own counsel.
Conversely, to succeed on its motion for summary judgment, the hospital needed only to point
out where Akl failed to meet his burden, an effort that did not require the support of affidavits. 21
21 As the bankruptcy court noted, even if Akl was correct that no hospital agent was willing
to serve as the responsible spokesperson for the hospital’s actions, that does not show that the
action was commenced in bad faith. Given the long list of actions that Akl had filed against
hospital agents, the agents of the hospital were most likely trying to protect them themselves
from becoming the next defendant.
24
B. Sanctions under the court’s inherent authority for the filing of the motion for
summary judgment
In challenging the bankruptcy court’s ruling that Akl failed to raise any genuine dispute
of material fact regarding whether appellee filed their motion for summary judgment in bad faith,
Akl merely repeats his argument that appellee’s collateral estoppel argument was so “tortuous”
as to constitute bad faith. Appellant’s Br. at 44. This Court has already rejected that argument
as to the filing of appellee’s complaint, and it rejects it here for the same reasons.
C. Sanctions under 28 U.S.C. Section 1927 for the filing of the motion for
summary judgment
28 U.S.C. section 1927 states:
Any attorney . . . 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.
Thus, sanctions should be assessed against an attorney only when he (1) has multiplied the
proceedings, and (2) the multiplication of proceedings was unreasonable and vexatious. “A
showing that counsel’s behavior has been unreasonable and vexatious requires more than a
showing of negligence. Instead, it requires a showing of deliberate action in the face of a known
risk, the likelihood or impact of which the actor inexcusably underestimates or ignores.” Healey
v. Labgold, 231 F. Supp. 2d 64, 68 (D.D.C. 2002), citing United States v. Wallace, 964 F.2d
1214, 1219 (D.C. Cir. 1992). Although there is some controversy over whether section 1927
sanctions require a showing of deliberate intent or whether recklessness is sufficient, the D.C.
Circuit requires a showing that the attorney’s conduct that was “at least reckless.” Wallace, 964
F.2d at 1217.
VHC filed a single complaint in the bankruptcy court, moved for summary judgment on
the complaint, and then dismissed it. At the oral argument in this appeal, when the Court asked
25
counsel for Akl how it could find that the hospital and its counsel thus “multiplied” pleadings
unreasonably and vexatiously, he said he had no answer. 22 Tr. at 16:6–9 (The Court: “So how
does that so multiply the pleadings unreasonably and vexatiously? Mr. Troy: Your Honor, I
don’t have an answer for that question.”). Even when he explained the vexatiousness prong
during his rebuttal, counsel could not come up with a single argument that supported a finding
that VHC “multiplied” the proceedings. Tr. at 17:15–18:1. 23 In the statute, the adverbs
“unreasonably” and “vexatiously” modify the verb “multiply,” so in the absence of some
“multiplication,” the statute has no application. 24
In any event, Akl has also failed to show that the hospital’s filings were unreasonable or
vexatious. Akl’s only arguments on this point are the same ones that he made in attempting to
demonstrate appellee’s “bad faith” for inherent authority sanctions. The court rejects those
22 Counsel was clear, however, that Akl was not “conceding” the lack of a statutory basis
for sanctions. Tr. at 16:10–13 (“The Court: All right. So are you conceding that the statutory
basis for sanctions really doesn’t apply? Mr. Troy: No, I won’t concede it. I don’t have an
answer to your question.”)
23 Mr. Troy: . . . [W]ith respect to the multiple and vexatious filings, they shouldn’t have
brought the case in the first part, so the first one becomes vexatious
The Court: But how does that – I realize that one times one is one, but how do we get to
multiplication –
Mr. Troy: Well, there were more –
The Court: – out of filing a complaint –
Mr. Troy: There were more – that’s the argument I’m going to make, Your Honor.
24 Moreover, as counsel for appellee pointed out at the same oral argument, it seems ironic
that Akl accuses the hospital of “multiplying” the proceedings when the hospital’s motion for
summary judgment was docket number thirteen in the early phases of the bankruptcy proceeding,
and their motion to voluntarily dismiss the case was docket number twenty eight, yet Akl’s
motion for sanctions dragged the proceeding on for three years and a total of 212 docket entries
(fifteen additional docket entries are attributable to Akl’s appeal). U.S. Bankr. Ct. for the Dist.
of Columbia, No. 07-100256.
26
arguments here for the same reasons that it rejected them earlier. Since Akl presented no
evidence that the summary judgment motion was unreasonable or vexatious, the section 1927
sanction standard cannot be satisfied, even under the subjective recklessness standard.
Because the bankruptcy court was correct in finding no genuine disputes of material fact
as to Akl’s motion for sanctions, it did not abuse its discretion by finding that the motion fails as
a matter of law. Its decision denying the sanctions motion will therefore be affirmed.
ORDER GRANTING VHC’S MOTION FOR PROTECTIVE ORDER AND DENYING
AKL’S MOTION TO COMPEL DISCOVERY REGARDING THE SANCTIONS
MOTION
I. Standard of Review
An appellate court reviews the trial court’s decision whether to permit discovery under an
abuse of discretion standard. See United Presbyterian Church in the USA v. Reagan, 738 F.2d
1375, 1382 (D.C. Cir. 1984) (A trial court’s “discovery rulings are reversed only on a clear
showing of abuse, and it is unusual to find abuse of discretion in these matters.”); Porter v. Shah,
606 F.3d 809, 814 (D.C. Cir. 2010) (“[The plaintiff] was not entitled to discovery or an
evidentiary hearing as a matter of right; whether to afford him either one was a matter within the
trial court’s discretion.”); Ikossi v. Dept. of Navy, 516 F.3d 1037, 1040 (D.C. Cir. 2008) (denial
of discovery is reviewed for abuse of discretion); see also Indianapolis Colts v. Mayor and City
Council of Balt., 775 F.2d 177, 183 (7th Cir. 1985) (applying abuse of discretion standard to
review district court decision denying discovery in connection with a motion for sanctions under
Rule 11 and section 1927).
II. Analysis
The protective order that the bankruptcy court issued stated:
Pursuant to the hearing of January 11, 2011, the motion for a protective order will
be granted. The discovery sought in this proceeding will be moot if the court
27
grants the motion for summary judgment to be filed by this date. Even if a trial
proves necessary, the defendant’s sanctions motions are satellite litigation that
ought not be allowed to require great time and effort. Factual inquiries if any are
needed, can more efficiently be kept within appropriate limits by requiring such
inquiries to be made at trial.
Order Granting Mot. for Protective Order at 1, Va. Hosp. Ctr. v. Akl, No. 07-10026 (Bankr.
D.D.C. Jan. 25, 2011) [Dkt. # 194]. 25 Given: (1) that Akl sought discovery primarily to
vindicate his theories of fraud and conspiracy, see Appellant’s Br. at 48–49; Def.’s Opp. to Mot.
for Protective Order/ Mot. to Compel Disc. and to Declare the Peer-Review Process Non-
Privileged at 6–7, 10–11, 13–14, Va. Hosp. Ctr. v. Akl, No. 07-10026 (Bankr. D.D.C. Jan 15,
2010) [Dkt. # 156]; (2) that another court had already found those allegations meritless and
barred by the Rooker-Feldman doctrine, see BR I at 352–90; and (3) that two additional courts
had already held that he was barred from reasserting those allegations by the Rooker-Feldman
doctrine, see id. at 396–497, 499–530, the bankruptcy court correctly found that the motion for
summary judgment might render the discovery requests moot. The other information Akl sought
through discovery – information about the peer-review process that led to his discharge from the
hospital – was irrelevant for purposes of his motion for sanctions. See Def.’s Opp. to Mot. for
Protective Order/ Mot. to Compel Disc. and to Declare the Peer-Review Process Non-Privileged
at 15–20, Va. Hosp. Ctr. v. Akl, No. 07-10026 (Bankr. D.D.C. Jan. 15, 2010). Finally, the
25 Akl argues that the bankruptcy court relied on an incorrect standard in deciding to grant
the motion for protective order. According to Akl, the bankruptcy court found that discovery in
connection with satellite litigation should be permitted only in “extraordinary circumstances.”
This, Akl argues, is the standard for granting discovery in connection with Rule 11 sanctions, but
not, he argues, for inherent authority sanctions. Tr. Hearing on Mot. for Protective Order
(“Protective Order Tr.”) at 62, Va. Hosp. Ctr. v. Akl, No. 07-10026 (Bankr. D.D.C. Jan. 11,
2011) [Dkt. # 201]. Although at the hearing on the protective order, the Court did indicate that it
believed “the principles applicable to Rule 11, and also to Section 1927, apply as well to inherent
authority sanctions,” this Court will review the reasons that the Court gave for denying discovery
in its written order granting the motion for protective order and denying defendant’s motion to
compel discovery. And it finds those reasons alone provided an appropriate basis for the court to
deny discovery.
28
bankruptcy court did not block Akl from making relevant factual inquiries, it simply required
that those inquiries be made at trial, if the litigation advanced that far, rather than through
discovery.
Accordingly, the Court finds that the bankruptcy court did not abuse its discretion in
granting the hospital’s motion for a protective order and denying Akl’s motion to compel
discovery and to declare the peer-review process non-privileged.
CONCLUSION
Because the bankruptcy court did not abuse its discretion by granting appellee’s motion
for summary judgment as to sanctions, denying appellant’s motion for sanctions, granting
appellee’s motion for protective order, and denying appellant’s motion to compel discovery and
to declare the peer-review process non-privileged, the Court will affirm all three of the
bankruptcy court’s rulings. A separate order will issue.
AMY BERMAN JACKSON
United States District Judge
DATE: May 25, 2012
29