FM Industries, Inc. v. Citicorp Credit Services, Inc.
United States Court of Appeals for the Seventh Circuit
614 F.3d 335 (2010)
FM Industries (plaintiff) sued Citicorp and its outside counsel (defendants) for copyright infringement over licensed software, with attorney Wayne Rhine seeking over $15 billion in statutory damages despite a $150,000 statutory cap, pursuing an unrelated deposition of Citicorp's chairman, filing noncompliant third-party discovery demands, and demanding $815 million in sanctions over the defendants missing a single deadline by one day, all while FM itself repeatedly missed discovery deadlines. After the district court dismissed FM's damages claims for lack of proof and timely registration, Rhine repeatedly failed to properly prepare a court-ordered pretrial order despite warnings, leading the court to dismiss FM's remaining claims, award the defendants' attorneys' fees, and hold Rhine personally liable for a portion of those fees while also holding a second attorney, McGrath, jointly and severally liable for most of Rhine's share; FM appealed.
Whether a court may dismiss a party's suit and hold its attorney personally responsible for the opposing side's excess legal fees where the attorney egregiously flouts pretrial-order rules and files a multitude of vexatious proceedings.