     11-1233-cv
     RICHARD WARE LEVITT, ESQ. V. DAVID H. BROOKS
 1
 2                    UNITED STATES COURT OF APPEALS
 3
 4                          FOR   THE   SECOND CIRCUIT
 5
 6
 7
 8                            August Term, 2011
 9
10   (Submitted: February 7, 2012              Decided: February 14, 2012)
11
12                           Docket No. 11-1233
13
14
15                         RICHARD WARE LEVITT, ESQ.,
16
17                                                       Plaintiff-Appellee,
18
19                                      –v.–
20
21                                DAVID H. BROOKS,
22
23                                                    Defendant-Appellant.
24
25
26
27   Before:
28                 PARKER, WESLEY, LOHIER, Circuit Judges.
29
30        Appeal from a judgment of the United States District
31   Court for the Eastern District of New York (Seybert, J.),
32   entered on March 15, 2011, granting Plaintiff-Appellee’s
33   motion to compel Defendant-Appellant’s payment of
34   outstanding legal fees owed to Plaintiff-Appellee for
35   representation he provided to Defendant-Appellant in a
36   federal criminal proceeding.
37
38        AFFIRMED.
39
40
41
42


                                     Page 1 of 13
 1             ANDREW J. GOODMAN, Garvey Schubert Barer, New
 2                  York, NY, for Plaintiff-Appellant
 3
 4             DEAN M. SOLOMON (Richard Ware Levitt, on the
 5                  brief), Levitt & Kaizer, New York, NY., for
 6                  Defendant-Appellant.
 7
 8
 9
10   PER CURIAM:

11        Appellant David H. Brooks appeals from a judgment of

12   the district court granting Richard Ware Levitt’s motion to

13   compel outstanding attorneys’ fees owed to Levitt by Brooks

14   in connection with Levitt’s representation of Brooks in a

15   federal criminal proceeding.    We hold that ancillary

16   jurisdiction existed over the fee dispute and that the

17   district court did not abuse its discretion in exercising

18   that jurisdiction.   We also hold that Brooks forfeited many

19   of the issues he raises on appeal by not raising them below,

20   and we find no merit in his arguments based on the

21   Constitution.   We therefore affirm the district court’s

22   March 15, 2011 judgment.

23                              Background

24        This appeal arises out of Brooks’s retention of Levitt

25   to represent him in connection with charges of securities

26   fraud, insider trading, and other criminal offenses.     These

27   charges resulted in an eight-month jury trial, after which

                                Page 2 of 13
 1   Brooks was found guilty.     According to Levitt, at some point

 2   prior to the close of trial, Brooks stopped paying Levitt’s

 3   bills.   Eventually, Brooks owed Levitt $224,956.16.

 4       In September 2010, subsequent to the jury verdict,

 5   Brooks moved for the release of certain restrained assets

 6   that the government contended were subject to forfeiture.

 7   In support of that motion, Brooks asserted that he had

 8   “depleted all funds available to pay for his ongoing

 9   defense,” that given the unexpected length of his trial, he

10   had “outstanding bills of approximately $1.5 million,” and

11   that he anticipated significant costs for the post-trial

12   forfeiture hearing and other proceedings.     In an attached

13   schedule of outstanding invoices, Brooks acknowledged that

14   he owed Levitt $265,000.     Levitt submitted an affidavit

15   alleging that when he informed Brooks that he would move to

16   withdraw if Brooks did not pay the outstanding fee, Brooks

17   became “belligerent,” and “hissed or spit at [Levitt] and

18   screamed” a vulgar remark.     The district court denied

19   Brooks’s motion.

20       Brooks failed to pay Levitt the money and hired two

21   attorneys to assist in his post-trial defense.     As a result,

22   Levitt moved: (1) to withdraw as counsel, and (2) for a


                                Page 3 of 13
 1   court order remitting to Levitt, from forfeited bail funds,

 2   $224,956.16 to satisfy the unpaid fees.      Levitt also asked

 3   for an accounting of how the bail funds previously released

 4   to Brooks for litigation expenses were expended; or,

 5   alternatively, that funds seized by the government for

 6   forfeiture be released to him to satisfy his unpaid fees.

 7   As a final alternative, Levitt asked that the district court

 8   exercise its ancillary jurisdiction and enter an order

 9   compelling Brooks to pay Levitt.

10       Brooks opposed Levitt’s motion.      He did not, however,

11   contest the amount he owed Levitt.      Instead, he argued that

12   Levitt’s motion to compel payment was premature and

13   prejudicial to his interests.   He asserted the following

14   arguments as defenses: (1) Brooks was not attempting to

15   evade his obligation to Levitt and had “acknowledged his

16   debt to Levitt before th[e district c]ourt, and made every

17   attempt to satisfy it;” (2) Levitt should not be permitted

18   to “jump the line” over Brooks’s other legal creditors who

19   provided services in connection with his case, or those

20   attorneys and staff who were currently working in

21   anticipation of (or would work on) Brooks’s upcoming

22   forfeiture proceedings, sentencing, and appeal; and (3)



                              Page 4 of 13
 1   Levitt’s conduct, in revealing the vulgar remark, violated

 2   Rule 1.6 of the New York Rules of Professional Conduct

 3   concerning the confidentiality of information.     In March

 4   2011, the district court directed the district clerk to open

 5   a new civil docket number concerning the fee dispute.

 6   Shortly thereafter, pursuant to its ancillary jurisdiction,

 7   the district court granted Levitt’s motion to compel

 8   payment.

 9                               Discussion

10       On appeal, Brooks argues that: (1) the district court

11   erred by exercising ancillary jurisdiction over the fee

12   dispute; (2) the district court failed to abide by the

13   Federal Rules of Civil Procedure; (3) the lack of any

14   evidentiary hearing or trial violated his due process

15   rights; and (4) he was deprived of his right to a jury

16   trial.     We find that the district court’s exercise of

17   ancillary jurisdiction was proper, that Brooks waived his

18   claims regarding the Federal Rules of Civil Procedure by not

19   raising those issues below, and that his Due Process and

20   jury trial claims are without merit.

21

22



                                 Page 5 of 13
 1   I.     The District Court’s Exercise of Ancillary

 2          Jurisdiction1

 3          In this case, ancillary jurisdiction existed and the

 4   district court did not abuse its discretion in exercising

 5   that jurisdiction to resolve the fee dispute between Brooks

 6   and Levitt.         “It is well settled that a federal court may,

 7   in its discretion, exercise ancillary jurisdiction to hear

 8   fee disputes . . . between litigants and their attorneys

 9   when the dispute relates to the main action.”                              Chesley v.

10   Union Carbide Corp., 927 F.2d 60, 64 (2d Cir. 1991)

11   (internal quotation marks and alteration omitted).

12   Ancillary jurisdiction over fee disputes is equally

13   available in criminal and civil cases.                          Garcia v. Teitler,

14   443 F.3d 202, 207 (2d Cir. 2006).

15          In Garcia, we explained that “[a]t its heart, ancillary

16   jurisdiction is aimed at enabling a court to administer

17   justice within the scope of its jurisdiction” and that

18   “[w]ithout the power to deal with issues ancillary or

19   incidental to the main action, courts would be unable to


            1
              We review questions of a court’s subject-matter jurisdiction de novo. See Bank Of India
     v. Trendi Sportswear, Inc., 239 F.3d 428, 436 (2d Cir. 2000). Once we determine that ancillary
     jurisdiction exists, we review a district court’s exercise of that jurisdiction for abuse of
     discretion. See Joseph Brenner Assocs., Inc. v. Starmaker Entm’t, Inc., 82 F.3d 55, 58 (2d Cir.
     1996).

                                              Page 6 of 13
 1   effectively dispose of the principal case nor do complete

 2   justice in the premises.”     Id. at 208 (internal quotation

 3   marks omitted).     Although Garcia dealt with a fee dispute

 4   following an attorney’s withdrawal after a Curcio hearing,

 5   Garcia should not be viewed as limited to just that

 6   situation.     Rather, we held that “[i]n order to guarantee a

 7   defendant’s right to choose his own counsel where, as here,

 8   his criminal case is ongoing, and to avoid the possibility

 9   of defendants becoming indigent and requiring the

10   appointment of counsel, a district court must be able to

11   exercise ancillary jurisdiction to resolve a fee dispute.”

12   Id. at 209; see also Novinger v. E.I. DuPont de Nemours &

13   Co., Inc., 809 F.2d 212, 217 (3d Cir. 1987).     In Novinger,

14   the Third Circuit explained that even though attorneys’ fees

15   arrangements are primarily a matter of state law, “the

16   federal forum has a vital interest in those arrangements

17   because they bear directly upon the ability of the court to

18   dispose of cases before it in a fair manner.”     Novinger, 802

19   F.2d at 217.

20       Under Garcia, ancillary jurisdiction existed over the

21   fee dispute between Levitt and Brooks.     Stein v. KPMG, LLP,

22   486 F.3d 753 (2d Cir. 2007), on which Appellant relies, is


                                 Page 7 of 13
 1   not to the contrary.    Stein distinguished Garcia on the

 2   basis that Stein involved a contract dispute between

 3   defendants and their non-party former employer.        Id. at 760-

 4   61.   In Stein, we emphasized the fact that the fee dispute

 5   involved a non-party and explained that:

 6         While we do not exclude the possibility of a
 7         legitimate ancillary proceeding involving a nonparty
 8         to the primary litigation, we believe that the
 9         requisite compelling circumstances will be rare, as
10         the need for such a proceeding generally will be far
11         less pressing than in cases involving parties
12         already before the court.
13
14   Id. at 761.    Here, the parties to the fee dispute are both

15   involved in the underlying action.        This case, therefore,

16   differs from Stein and is closer to Garcia.        Specifically,

17   Brooks put his legal fees in controversy by moving for

18   release of restrained assets for the purpose of paying his

19   legal bills.   And the underlying proceedings remained

20   ongoing (albeit post-trial), making defendant’s legal fees

21   relevant to the district court’s management of its case,

22   specifically its responsibility to ensure defendant does not

23   become indigent and that he has representation throughout

24   the proceedings.    Like Garcia, ancillary jurisdiction was

25   appropriate because it “enable[d the] court to function

26   successfully, that is, to manage its proceedings, vindicate


                                Page 8 of 13
 1   its authority, and effectuate its decrees.”                                Id. at 760

 2   (internal quotation marks omitted).

 3          Brooks claims that even if ancillary jurisdiction was

 4   available, the district court abused its discretion in

 5   deciding the fee dispute.                    We disagree.           We have held that

 6   several non-exhaustive factors can weigh in favor of

 7   exercising ancillary jurisdiction.                          These include: (1)

 8   familiarity with the subject matter of the suit, especially

 9   with the amount and quality of work performed by the

10   attorneys; (2) a court’s responsibility to protect officers

11   of the court in such matters as fee disputes; (3) the

12   convenience of the parties; and (4) judicial economy.

13   Cluett, Peabody & Co., Inc. v. CPC Acquisition Co., Inc.,

14   863 F.2d 251, 256 (2d Cir. 1988).                         All of these factors were

15   present here and weighed in favor of the court’s exercise of

16   ancillary jurisdiction.                  Having presided over the criminal

17   proceedings, the district court was undoubtedly the most

18   familiar with the subject matter and the amount and quality

19   of work performed by Levitt.                      Thus, the court’s deciding the

20   fee dispute promoted judicial economy.2                            The court’s

            2
              Brooks’s assertion that judicial economy weighed against exercising ancillary
     jurisdiction because Levitt had commenced a proceeding in state court against Brooks's brother
     as a guarantor of legal fees is unpersuasive. The district court's resolution of the dispute between
     Levitt and Brooks did not resolve any issues of liability relating to Brooks's brother, and no

                                                Page 9 of 13
 1   responsibility to officers of the court was also implicated.

 2   Moreover, before the court, Brooks acknowledged his debt to

 3   Levitt while contesting that it should be paid from funds

 4   held by the government.

 5          Brooks asserts that Levitt’s alleged violation of New

 6   York’s Rules of Professional Conduct made the district

 7   court’s exercise of ancillary jurisdiction an abuse of

 8   discretion.         We see no basis for such an argument.

 9   Furthermore, we disagree with Brooks’s contention that

10   Levitt violated the Rules of Professional conduct.                                 See

11   Matter of Priest v. Hennessy, 51 N.Y.2d 62, 69 (1980).                                   In

12   Priest the New York Court of Appeals held that “[a]

13   communication concerning the fee to be paid has no direct

14   relevance to the legal advice to be given.                            It is a

15   collateral matter which, unlike communications which relate

16   to the subject matter of the attorney’s professional

17   employment, is not privileged.”                     Id.     Although Rule 6.1 of

18   the Rules of Professional Conduct protects information

19   broader than the attorney-client privilege, it only goes so

20   far as to protect “information gained during or relating to

21   the representation of a client,” N.Y. Rules of Prof’l


     judicial economy would have been gained by the court refusing to resolve the fee dispute before
     it.

                                             Page 10 of 13
 1   Conduct R. 1.6(a), and Brooks’s remark contained no material

 2   information beyond the use of profanity directed at counsel.

 3   We find no merit in Brooks’s claim that ancillary

 4   jurisdiction was improper, and we therefore affirm.

 5   II. Application of the Federal Rules of Civil Procedure

 6       Brooks contends that the district court failed to

 7   comply with the Federal Rules of Civil Procedure in the

 8   civil action because: (1) the court did not require the

 9   filing of a complaint and service of process, (2) the

10   absence of any pleadings deprived Brooks of his ability to

11   assert affirmative defenses and counterclaims, and (3) the

12   court did not permit discovery.      Brooks failed to raise any

13   of these arguments in opposition to Levitt’s motion (which

14   expressly invoked the district court’s ancillary

15   jurisdiction) or alert the district court to any potential

16   issues that warranted the need for discovery.      Thus, they

17   are forfeited.   See Bogle–Assegai v. Connecticut, 470 F.3d

18   498, 504 (2d Cir. 2006).

19       To the extent Brooks asserts that the district court

20   “never had jurisdiction” over the fee dispute because there

21   was no filing and service of a complaint, this argument is

22   also forfeited because it relates to personal jurisdiction,


                                Page 11 of 13
 1   a waiveable defect, and Brooks failed to raise the issue

 2   below.    See Credit Lyonnais Secs. (USA), Inc. v. Alcantara,

 3   183 F.3d 151, 154 (2d Cir. 1999); see also Miss. Pub. Corp.

 4   v. Murphree, 326 U.S. 438, 444–45 (1946); In re DES Litig.,

 5   7 F.3d 20, 24 (2d Cir. 1993).

 6   III.       Constitutional Arguments

 7          Brooks’s argument that the district court violated his

 8   due process rights is also without merit.        He was not denied

 9   a sufficient opportunity to be heard, and in fact filed

10   three responsive memoranda to Levitt’s motion, none of which

11   requested (let alone established any need for) a hearing or

12   trial.    See United States v. Santiago, 495 F.3d 27, 29–30

13   (2d Cir. 2007); cf. Rein v. Socialist People’s Libyan Arab

14   Jamahiriya, 568 F.3d 345, 354 (2d Cir. 2009); In re Thirteen

15   Appeals Arising Out of San Juan Dupont Plaza Hotel Fire

16   Litig., 56 F.3d 295, 303 (1st Cir. 1995).        Furthermore,

17   Brooks failed to contest the amount owed to Levitt or raise

18   any contested factual issues below.        Thus, there were no

19   facts to be tried; his asserted right to a jury trial was

20   not implicated.

21

22



                                Page 12 of 13
1                             Conclusion

2       The district court’s judgment of March 15, 2011,

3   granting Plaintiff-Appellee’s motion to compel Defendant-

4   Appellant payment of outstanding legal fees owed to

5   Plaintiff-Appellee is hereby AFFIRMED.




                              Page 13 of 13
