                  NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 09a0593n.06

                                           No. 08-4026

                           UNITED STATES COURT OF APPEALS                               FILED
                                FOR THE SIXTH CIRCUIT                               Aug 21, 2009
                                                                              LEONARD GREEN, Clerk
MICHAEL T. USZAK,                                          )
                                                           )
         Plaintiff,                                        )
                                                           )
SIDNEY NEISSER FREEMAN,                                    )
                                                           )
         Appellant,                                        )
                                                           )
v.                                                         )      On Appeal from the Unite
                                                           )      States District Court for the
YELLOW TRANSPORTATION, INC., et al.,                       )      Northern District of Ohio
                                                           )
         Defendants,                                       )
                                                           )
and                                                        )
                                                           )
LOCAL 407 TRUCK DRIVERS UNION,                             )
INTERNATIONAL BROTHERHOOD OF                               )
TEAMSTERS, CHAUFFEURS,                                     )
WAREHOUSEMEN & HELPERS OF                                  )
AMERICA; INTERNATIONAL                                     )
BROTHERHOOD OF TEAMSTERS,                                  )
                                                           )
         Defendants-Appellees.                             )
     _______________________________________

BEFORE:          COLE and COOK, Circuit Judges; COHN, District Judge.*

         COHN, District Judge. This is a dispute over sanctions. In the underlying case, Appellee

Yellow Transportation (YT) terminated the employment of plaintiff Michael T. Uszak (Uszak) and

Curtis Castle (Castle) after they got into a fistfight at work. Uszak and his wife Judy (Mrs. Uszak)

         *
       The Honorable Avern Cohn, United States District Judge for the Eastern District of
Michigan, sitting by designation.
Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

(collectively, plaintiffs) sued YT, Appellees Truck Drivers Union Local 407 (Local 407) and the

International Brotherhood of Teamsters (the IBT) (collectively, the unions), and YRC Worldwide

(YRC). Plaintiffs made a hybrid claim against YT for wrongful termination under section 301 of

the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, and against Local 407 for violation

of its duty of fair representation in the grievance of his discharge (together, 301/dfr). Uszak’s theory

was that the union and the company targeted him for a beating and termination because he won

election as union steward against Castle, a member of the “ruling ‘Hoffa’ ticket.” The district court

disposed of the case on summary judgment against Uszak, a decision affirmed by this court in Uszak

v. Yellow Transp., Inc., No. 07-3918, 2009 WL 40002 (6th Cir. Jan. 7, 2009).

           While the case was still in the motion stage, the district court found plaintiffs’ attorney

Sidney Freeman (Appellant) liable to Appellees for sanctions under Federal Rules of Civil Procedure

11 and 37(a) in the form of attorney fees in the amount of $13,414.50. A magistrate judge (MJ)

recommended to the district court sanctions in the following amounts, displayed in tabular form, as

reasonable attorney fees in a Report and Recommendation (MJRR) adopted by the district court:

                               Attorney fees allowed
                                  on supplemental           Total fees before        LSSLD for Rule 11
                  Attorney        applications (for       finding least severe      violations found to be      FINAL
                fees allowed     sanctions hearings     sanction likely to deter   $10,000, split 50/50; no    AMOUNTS
                   on first      after unsuccessful     (LSSLD) for Rule 11              reasoning or             OF
                applications   settlement conference)          violations             breakdown given         SANCTIONS

 Rule 11
  Local 407      $ 3,781.25               $ 2,906.25                $ 6,687.50                  $ 5,000.00      $ 5,000.00
  The IBT          3,406.25                 2,550.00                  5,956.25                    5,000.00        5,000.00


 Rule 37
  YT               1,400.50                 2,014.00                  3,414.50         Not applicable            3,414.50




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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

 GRAND
 TOTAL                                                                                     $13,414.50


The record is not clear as to how the fees were apportioned between the Rule 11 issues.

       Appellant now appeals. Appellees have waived briefing and oral argument.

                                     I. ISSUES ON APPEAL

       Appellant raises three issues on appeal:

       (1)     Whether the district court erred in granting the unions $10,000 in sanctions
               where they jointly moved for Rule 11 fees based on plaintiffs’ inclusion of
               a claim under 301/dfr for Mrs. Uszak, a non-union employee, and naming of
               the IBT as a defendant, and where plaintiffs amended the complaint by a
               court-established deadline;

       (2)     Whether the district court erred in concluding that YT was entitled to
               $3,414.50 in attorneys fees under Rule 37(a), where plaintiffs’ refusal to sign
               medical releases resulted in the court’s granting a motion to compel
               discovery; and

       (3)     Whether the district court erred in considering supplemental applications for
               attorney fees for conferences that took place after Appellees turned down
               Appellant’s settlement offer of $7,500.

For the reasons that follow, we AFFIRM the district court’s Rule 37 sanctions, including

supplemental fees, totaling $3,414.50, and REVERSE the court’s Rule 11 sanctions, including

supplemental fees, totaling $10,000.00.

             II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

       The facts and procedural history are from Appellant’s brief and the record on appeal.

A.     The original complaint




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No. 08-4026

       The initial complaint was in two counts: (1) a 301/dfr count by Mr. and Mrs. Uszak against

Local 407, the IBT, and YT; and (2) a Wrongful Discharge count under Ohio law by Mr. and Mrs.

Uszak against YT.

B.     The unions jointly move for sanctions

       On June 8, 2006, the unions certified mailing of notice of their intention to move for

sanctions against plaintiffs and Appellant for violating Rule 11(b); they filed a joint motion eight

days later, June 16. The unions said that Mrs. Uszak could not bring a claim under 301/dfr because

she was not a union employee, and the IBT did not owe a duty of fair representation to Uszak

because it was not the certified bargaining representative of Uszak or any YT employee, nor a

signatory to the NMFA.

C.     The district court sets deadline for amending pleadings

       On June 16, 2006, the district court issued a case management order setting July 17, 2006,

as the cutoff date for amending pleadings and adding new parties.

D.     Plaintiffs move to amend complaint

       On July 17, 2006, plaintiffs moved to amend their complaint. The amended complaint:

       (1)     Dropped Mrs. Uszak from the 301/dfr claims in count 1;

       (2)     Elaborated on the claims against YT for wrongful discharge in count 2;

       (3)     Added count 3, a state claim by Mr. and Mrs. Uszak for assault against Curtis;

       (4)     Added count 4, a state claim by Mr. Uszak for intentional tort against YT;

       (5)     Added count 5, a state claim by Mrs. Uszak for loss of consortium, presumably

               arising from the assault and intentional tort claims; and

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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

       (6)     Added count 6 (mislabeled “Fifth Count”), a state claim by Mr. and Mrs. Uszak for

               punitive damages.

Three months later, the district court granted plaintiffs’ motion to amend.

E.     The district court imposes rule 37 sanctions upon granting YT’s motion to compel
       discovery

       Also in July YT made a written discovery request that plaintiffs sign medical releases.

Plaintiffs refused to sign the releases on the basis that no such provision exists under the Federal

Rules of Civil Procedure and the requirement for blanket releases would violate their right to

confidentiality under the physician-patient privilege. On September 20, 2006, YT filed a motion to

compel discovery. Thirty-five days later, plaintiffs responded in opposition. After a status

conference regarding outstanding discovery disputes, the district court granted the motion; its order,

issued in late October, read in relevant part:

               Because Plaintiffs have put the physical and mental condition of Michael T.
       Uszak and Judy C. Uszak at issue in this case, and since, pursuant to R.C.
       § 2317.02(B)(1)(a)(iii), the physician-patient privilege is waived by the filing of a
       civil action as to communications historically and causally related to claimed
       physical and mental injuries, Plaintiffs are ordered to immediately sign and return the
       medical authorization and releases served upon them by Defendant Yellow
       Transportation. This Court notes the authority cited by Plaintiffs in their tardy
       response to Defendant’s Motion to Compel, cited as Mann v. University of
       Cincinnati, 824 F. Supp. 1190 (S.D. 1993), is clearly distinguishable from the instant
       situation. In Mann, counsel for the University issued subpoenas to its own client
       seeking production of the plaintiff-student’s medical records, without an order of
       court or the patient’s releases. Here, Defendant, Yellow Transportation, provided the
       appropriate releases for Plaintiffs’ signatures, and sought a court order after the
       executed releases were not returned. If Plaintiffs’ counsel believed, after consultation
       with his clients, that certain information was privileged or beyond the scope of
       relevancy, he should have submitted a motion, rather than refuse to have his clients
       execute the documents. This Court agrees with the district judge in Mann, who
       opined that the existence of relevancy or privilege is not a unilateral determination

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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

       for the attorney seeking the discovery, nor for the attorney representing the patient.
       Mann, supra at 1201. It is the Court’s province to decide when a colorable privilege
       claim is asserted — upon consideration of an appropriately-filed motion to quash or
       motion for protective order.

The court found Appellant engaged in four months of unnecessary, obstructive delay in discovery

by refusing to provide medical releases without pursuing good faith discussions with opposing

counsel or raising the problem with the court pursuant to the Federal Rules and the court’s case

management order. The court said the existence of relevancy or privilege is not a unilateral

determination for the attorney seeking discovery, nor for the attorney representing the patient, and

Appellant could have filed a motion to quash or for protective order. The order went on to impose

Rule 37 sanctions against Appellant only.

F.     The district court grants the unions’ joint motion for rule 11 sanctions

       In the order that imposed Rule 37 sanctions, the district court dismissed the second count of

the amended complaint and imposed Rule 11 sanctions against Appellant only. The district court

did not state the form of the sanctions. The court identified the following as the two “most egregious

pleading infirmities”:

       (1)     Naming Mrs. Uszak as a plaintiff in a duty of fair representation claim when she is

not a union member and has no standing under existing federal law; and

       (2)     Naming the IBT as a defendant.

The district court offered no analysis of these issues nor any indication that it had considered

plaintiffs’ arguments from briefing or the status conference. The district court did note that although




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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

the two deficiencies were cured by the filing of the amended complaint in July,1 the original

complaint was filed three months earlier and the amendment was not made until after defendants

filed motions to dismiss and for sanctions.

        The district court identified several more reasons for sanctions, including that the complaint

was also brought against YRC, which was not the entity that employed Uszak.

G.      The district court dismisses Mrs. Uszak and the IBT

        On January 11, 2007, the district court dismissed all of Mrs. Uszak’s claims two months after

plaintiffs moved for her voluntary dismissal. On January 12, 2007, the court dismissed the case

against the IBT immediately after Uszak moved for voluntary dismissal following receipt of answers

to interrogatories.

H.      Appellant offers sanction settlement

        On May 9, 2007, Appellant offered Appellees $7,500 to resolve the matter of sanctions but

no settlement was reached.

I.      The magistrate judge rules on the attorney fee applications

        On June 6, 2007, under an order of referral from the district court, the MJ held an evidentiary

hearing on the fee applications submitted by attorneys for Appellees. The next month the MJ issued

a 28-page MJRR recommending sanctions as summarized in the table above. As noted, the record

is not clear as to how the MJ apportioned the awards of the sanctions between the two issues of Mrs.

Uszak’s 301/dfr claim and the naming of the IBT as a defendant.


        1
         The court said the amended complaint eliminated from count 1any allegations against
the IBT and any claims by Mrs. Uszak.

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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

       The MJRR stated that any fees related to “the naming of YRC Worldwide as a Plaintiff [sic]”

would be considered but there was no further discussion and no indication that Rule 11 fees were

assessed on this issue.

J.     The district court grants summary judgment to YT and Local 407

       On June 18, 2007, the district court, as noted above, granted Local 407 and YT’s motions for

summary judgment, declining to exercise jurisdiction over the pendant state claims. This court

affirmed.

K.     The district court adopts the MJRR

       In July 2007 Appellant filed objections to the MJRR. One year later, the district court issued

a two-paragraph order stating that it had reviewed de novo the MJRR and the issues raised in

Appellant’s objections, and it fully agreed with and adopted the MJRR.

                          III. BASIS FOR APPELLATE JURISDICTION

       The district court exercised jurisdiction under 28 U.S.C. § 1331 and section 301 of the

LMRA, 29 U.S.C. § 185. This court has jurisdiction under 28 U.S.C. § 1291. Notice of appeal was

timely filed under Federal Rule of Appellate Procedure 4(a).

                                          IV. ANALYSIS

A.     Standards of review

       The Court of Appeals reviews the district court’s Rule 11 and 37 determinations for abuse

of discretion. Apostolic Pentecostal Church v. Colbert, 169 F.3d 409, 417 (6th Cir. 1999) (Rule 11);

Nat’l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 642 (1976) (Rule 37); Taylor v.

Medtronics, Inc., 861 F.2d 980, 985 (6th Cir. 1988) (Rule 37).

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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

B.     The law on sanctions

       1.      Rule 11

       “By presenting to the court a pleading . . . an attorney . . . certifies that to the best of the

person’s knowledge . . . formed after an inquiry reasonable under the circumstances . . . . the claims

. . . are warranted by existing law or by a nonfrivolous argument for extending, modifying, or

reversing existing law or for establishing new law.” Fed. R. Civ. P. 11(b). If, after notice and a

reasonable opportunity to respond, the district court finds a violation of the rule, it may impose an

appropriate sanction on the attorney responsible. Id. 11(c)(1). The sanction, if imposed on motion

and warranted for effective deterrence, may be for reasonable attorney fees and expenses resulting

directly from the violation. Id. The order for sanctions “must describe the sanctioned conduct and

explain the basis for the sanction.” Id. 11(c)(6).

       Rule 11 sanctions may not be imposed for conduct related to discovery that is subject to the

provisions of, among others, Rule 37. Id. 11(d).

       2.      Rule 37

       If a motion to compel discovery is granted, the court must, after affording an opportunity to

be heard, require the party whose conduct necessitated the motion or the attorney advising such

conduct to pay the movant reasonable expenses incurred in the motion, including attorney fees,

unless the court finds that the motion was filed without the movant’s first making a good faith effort

to obtain the discovery, the opposing party’s objection was justified, or other circumstances would

make the award unjust. Fed. R. Civ. P. 37(a)(5)(A).

C.     Discussion

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Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

        1.      Rule 11 claims

        The parties do not dispute that after notifying Appellant of their intent to seek Rule 11

sanctions, the defendants inexplicably waited only eight days before filing the sanctions motion with

the district court. A motion for Rule 11 sanctions must be served under Rule 5 but “must not be filed

or be presented to the court if the challenged . . . claim . . . is withdrawn or appropriately corrected

within 21 days after service.” Fed. R. Civ. P. 11(c)(2). As the rule and our cases interpreting it make

clear, “sanctions under Rule 11 are unavailable unless the motion for sanctions is served on the

opposing party for the full twenty-one day ‘safe harbor’ period before it is filed with or presented

to the court.” Ridder v. City of Springfield, 109 F.3d 288, 297 (6th Cir. 1997). The district court

never addressed this procedural failing, despite Appellant's having fairly raised the issue, and no

basis exists for overlooking it. Irrespective of whether Appellant engaged in sanctionable conduct

by including arguably frivolous claims in the complaint, Rule 11 sanctions remained unavailable due

to the defendants’ failure to comply with the safe harbor provision, with which we require “strict

adherence.” Id. Accordingly, we reverse the district court's Rule 11 sanctions award.

        2.      Rule 37(a) and YT’s motion to compel

        Appellant says he should not have been sanctioned under Rule 37(a) because he was justified

in supporting his clients’ refusal to sign medical releases. He cites the physician-patient privilege

under section 2317.02 of the Ohio Revised Code. Appellant downplays the relevant subsection of

the Code—which the district court cited on the first page of the order granting the motion to compel

and sanctions—that reads:



                                                 - 10 -
Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

                 The testimonial privilege established under this division does not apply, and

       a physician or dentist may testify or may be compelled to testify . . . (a) In any civil

       action, in accordance with the discovery provisions of the Rules of Civil Procedure

       in connection with a civil action, or in connection with a claim under Chapter 4123.

       of the Revised Code, . . . (iii) If a medical claim, dental claim, chiropractic claim, or

       optometric claim, as defined in section 2305.113 of the Revised Code, an action for

       wrongful death, any other type of civil action, or a claim under Chapter 4123. of the

       Revised Code is filed by the patient.



Ohio Rev. Code Ann. § 2317.02(B)(1) (West 2004 & Supp. 2009). As the district court said in the

order granting YT’s motion to compel and sanctions, plaintiffs put their own mental and physical

conditions at issue. And as the court observed later in the same order, Appellant engaged in four

months of delay by refusing to provide medical releases without pursuing good faith discussions with

opposing counsel or raising the problem with the court. We find nothing to fault in the district

court’s conclusion that if Appellant believed that certain information was privileged or beyond the

scope of relevancy, he should have submitted a motion rather than refuse to have his clients execute

the documents.

       5.        Supplemental Fees

            Appellant challenges the awarding of supplemental attorneys’ fees for work done on

sanctions motions and conferences after an unsuccessful settlement conference in which he offered

$7,500 to Appellees.

                                                - 11 -
Uszak et al. v. Yellow Transportation, Inc., et al.
No. 08-4026

       Because we have found no abuse of discretion in the district court’s awarding of Rule 37

sanctions to YT, and because Appellant did not provide us with any information as to how much he

offered specifically to YT, the supplemental fees of $2,014.00 already permitted to YT by the district

court under Rule 37 are allowed.

       It is not clear from the record how much of the final $10,000 awarded on Rule 11 sanctions

represented supplemental fees but this question is now moot as we have reversed the entire amount.

                                        V. CONCLUSION

       For the foregoing reasons, the district court’s award of Rule 37 sanctions of $3,414.50, which

included $2,014.00 in supplemental fees, is affirmed, and the award of Rule 11 sanctions of $10,000

is reversed.




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