                                                                                   PUBLISH

                  IN THE UNITED STATES COURT OF APPEALS
                         FOR THE ELEVENTH CIRCUIT
                              _______________           FILED
                                                                     U.S. COURT OF APPEALS
                                       No. 97-5483                     ELEVENTH CIRCUIT
                                                                           MAR 03 2000
                                     _______________
                                                                        THOMAS K. KAHN
                                                                             CLERK
                          D. C. Docket No. 92-01600-CV
                   Bankruptcy Court Nos. 91-14561-SMW/92-578A

IN RE: SOUTHEAST BANKING CORPORATION,
                               Debtor.

JEFFREY H. BECK, as Trustee of Southeast Banking Corporation
                                        Plaintiff-Appellant,

       versus

FLORENCE S. BASSETT, as Personal Representative of the Estate of Harry Hood
Bassett, DONALD N. BOYCE, et al.,
                                     Defendants-Intervenor-
                                     Defendants-Appellees.
                   ______________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                        ______________________________

                                      (March 3, 2000)


Before EDMONDSON and BIRCH, Circuit Judges, and OWENS*, Senior District
Judge.



   *
     Honorable Wilbur D. Owens, Jr., Senior U.S. District Judge for the Middle District of
Georgia, sitting by designation.
BIRCH, Circuit Judge:

       Plaintiff-Appellant Jeffrey H. Beck ("Beck"), as Trustee of Debtor Southeast

Banking Corporation ("Debtor" or "Southeast"), appeals the district court's order

dismissing the complaint against Defendants-Appellees ("Defendants"), who were

directors and/or officers of Debtor. Beck argues that the district court erred in

dismissing this case as a sanction for discovery violations. We REVERSE and

REMAND for consideration and implementation of less harsh sanctions.

                                       I. Background

       On June 17, 1992, William A. Brandt (“Brandt”), then Trustee of Debtor, filed

an adversary proceeding against Defendants in bankruptcy court pursuant to a

bankruptcy reference of all cases related to Debtor's estate. See R1-1-2 at ¶¶ 1-2. On

June 24, 1992, Brandt filed a motion to withdraw the reference as to the adversary

proceeding against Defendants. See R1-1. On September 22, 1992, the district court1

granted Brandt's motion to withdraw the reference as to the adversary proceeding

against Defendants (“September 1992 Order”). See R2-32-2 (stating that the district



   1
      The late Judge Sidney Aronovitz had this case from its filing until May 4, 1994, when it
was transferred to Judge Edward Davis, as part of a Multi-District Litigation (“MDL”)
consolidation. Judge Davis referred the case to Magistrate Judge Linnea R. Johnson, who
recused herself on October 10, 1995. See R14-349 (vacating any oral statements that she had
made indicating that sanctions were appropriate). The case was referred to Magistrate Judge
Barry L. Garber, who ultimately recommended that the case be dismissed for discovery
violations.

                                                2
court withdraws the reference and “hereby takes jurisdiction of this alleged non-core

jury case”). This adversary proceeding is the case now before us. On July 22, 1993,

the district court granted Defendants' motions to dismiss, see R5-117, but gave Brandt

leave "to amend his Complaint to state more specifically and succinctly" his direct

claims, i.e., claims not founded on derivative liability, R5-117-4. As part of the order

dismissing Brandt's initial complaint (“July 1993 Order”), the district court stated:

"Until the Amended Complaint is filed, and attacks on the Amended Complaint, if

any, are heard, discovery is hereby STAYED, so that the proper scope of discovery

may be first determined." R-1-17.

      On July 26, 1993, less than a week after the district court dismissed the initial

complaint and stayed discovery, Brandt issued Bankruptcy Rule 2004 subpoenas "on

two likely third party witnesses in the present action --- Southeast's former lawyers,

Steel Hector & Davis . . . and former accountants, Deloitte & Touche" (collectively,

“July 1993 Subpoenas”). R5-119-3-4. Defendants filed a motion to compel Brandt

to comply with the court's September 23, 1992 and July 22, 1993 orders; this motion

argued that the Rule 2004 subpoenas "represent an obvious attempt by the Trustee to

circumvent the Court's Omnibus Order which explicitly stayed discovery and

dismissed the derivative claims related to the Bank" and that the subpoenas likewise

were "in contravention of the September 23, 1992 Order of this Court assuming


                                           3
jurisdiction of this non-core jury case." R5-119-5. On August 16, 1993, the district

court issued an “Order Again Staying Discovery” (“August 1993 Order”).2 R6-123.

In the August 1993 Order, the district court stated that it “reinforces its July 21, 1993

Omnibus Order staying all discovery,” and that “[a]ny and all notices of any kind of

discovery whatsoever shall be stayed, nunc pro tunc, effective July 21, 1993.” R6-

123-2. The district court reserved ruling on the question of sanctions. R6-123-2.

       On September 23, 1993, the district court held a hearing about the July 1993

Subpoenas. At this hearing, J. Joseph Bainton ("Bainton"), counsel for Brandt, stated

that Brandt had filed a separate lawsuit against Deloitte & Touche. See R20-26; see

also R20-6 (district court's noting that a number of other cases had been filed,

including a suit against Deloitte & Touche).3 Bainton conceded that the Rule 2004

subpoena as to Deloitte & Touche was "inappropriate by reason of the commencement

of the action in this Court," R20-29, and withdrew that subpoena, see R20-31-32.

Additionally, the court noted that "there is already on record a stipulation between

Steel, Hector and Davis and the Trustee to allow the taking of a 2004 deposition,"

R20-4, and Bainton stated that Brandt and Steel, Hector, and Davis would work out


   2
      Judge Aronovitz handwrote the word “Again” into the Order's caption and underscored it
for emphasis. See R6-123.
   3
     Brandt requested that the court take judicial notice of eleven related actions. See R6-134;
R6-135; R6-136; R6-137; R6-138; R6-139; R6-140; R6-141; R6-144.

                                                4
the discovery issues, see R20-32. Finally, Bainton asked the court "not to tie the

Trustee's hands and not to deprive the Estate of the use of bankruptcy rule 2004 as a

discovery tool, only on the basis that that which we might discover through 2004

discovery is potentially relevant to the claims in this case" and requested that the court

clarify its orders related to discovery. R20-40. The court then orally requested that

the parties work together "to categorize the documents that should be discovered

under the 2004 subpoenas issued and before the Court at this time, and get that all

organized and ready." R20-55. On October 12, 1993, the district court issued a

written order (“October 1993 Order”) regarding the July 1993 Subpoenas. In that

order, the court stated that the withdrawal of the Deloitte & Touche subpoena

rendered moot Defendants' motion to compel as to that subpoena. See R6-146-2.

Addressing the other subpoena, he noted the interests of both parties; while

encouraging the parties to cooperate in preparing to produce relevant materials, he

reiterated that the stay in discovery remained in place:

      The Court further notes that a First Amended Complaint was filed
      recently by the Plaintiff Trustee on September 20, 1993. As the parties
      are aware, the Court has twice stayed discovery, until the objections, if
      any, to the Amended Complaint are filed and heard, so that the Court
      may be better able to define the scope of discovery. This stay of
      discovery remains in effect; however, such stay does not affect the
      aforementioned alternative means of discovery now in place.




                                            5
R6-146-3-4. The alternative means included stipulations between the parties that had

already been made. See R6-146-3.

      On January 4, 1994, Brandt served a Rule 2004 subpoena (“January 1994

Subpoena”) on Lazard Freres & Company, Debtor's former investment bankers. See

R8-186-2. On February 22, 1994, Brandt served a Rule 2004 subpoena (“February

1994 Subpoena”) on Shearman & Sterling, Defendants' counsel in this action and

special counsel to the Defendant outside directors from May 1991 until Debtor failed

in September 1991. See R8-189-2. On February 28, 1994, Defendants filed an

emergency motion to compel Brandt to comply with the September 1992, July 1993,

and October 1993 Orders; this motion addressed the January 1994 Subpoena. See R8-

186. On March 7, 1994, the Defendant outside directors filed a second motion to

compel; this motion addressed the February 1994 Subpoena. See R8-189. On March

9, 1994, Defendants withdrew their motion as to the January 1994 Subpoena, on the

ground that Lazard Freres had withdrawn its objection to producing the requested

documents; Defendants emphasized that they would “welcome the opportunity” to

address the larger issues raised in the motion, namely their request that the court

“enjoin[ ] the Trustee from taking any further action in contravention of this Court's

orders staying discovery. . . .” R8-191-3.




                                             6
      On March 14, 1994, the district court conducted a hearing on Defendants'

motions regarding the January 1994 and February 1994 Subpoenas. At the end of that

hearing, the court noted that its intent had always been to stay discovery until there

was a viable complaint. See R21-41. The court then stated:

      Now, I consider the effort to proceed with the 2004 discovery methods
      really to be an end run. It's designed to cause the stay for discovery to
      be rendered ineffectual. . . . In the view of the Court, it is causing this
      Court to be hamstrung in its ability to proceed this case toward trial.
      And I consider the use of the 2004 proceeding to be in violation of the
      original order that I entered taking back the jurisdiction in this case. . .
      . [T]here are at least two other orders that I entered subsequently, which
      reaffirm the original order and which reaffirm the stay that had been
      entered.

R21-42 (alterations added). The district court then reaffirmed the stay “on all

discovery except as specifically authorized by an order of this Court. And that

includes any discovery attempted under Rule 2004.” R21-42-43. Defendants

emphasized that they did not seek to stay discovery not related to this case. See R21-

44. At the end of the hearing, Bainton stated: “Maybe I'm not smart enough. I

honestly, Your Honor, don't understand. If I thought that I shouldn't have served 2004

. . . in light of Your Honor's order, I wouldn't have.” R21-46-47. On March 17, 1994,

the district court issued an order which “again” stayed discovery (“March 1994

Order”). See R9-199. This order stated that the January and February 1994




                                           7
Subpoenas violated the September 1992, July 1993, August 1993, and October 1993

Orders. See R9-199-3 & n.3, 5. The order again reaffirmed the stay:

      [U]ntil the Motion to Dismiss the Second Amended Complaint is ruled
      upon, the stay on discovery shall remain in effect. The scope of this stay
      encompasses any and all discovery relating to the allegations made
      against the named defendants as set forth in the Second Amended
      Complaint, including discovery initiated under Bankruptcy Rule 2004 or
      otherwise, except as specifically authorized by this Court. The Court
      will entertain motions for contempt and/or for sanctions should any party
      to this action violate this stay as reaffirmed and clarified herein.

R9-199-4-5 (footnote omitted).

      On June 10, 1994, the Defendant outside directors filed a motion to compel

Brandt to obey the September 1992, July 1993, August 1993, October 1993, and

March 1994 Orders. See R11-264. This motion asserts that Brandt had sought to

enforce the February 1994 Subpoena by filing motions to enforce the subpoena

against Shearman & Sterling and to hold Shearman & Sterling in contempt for failure

to obey the subpoena. In his recommendation of dismissal, the magistrate judge

found that, on April 29, 1994, Brandt filed a motion in bankruptcy court (“April 1994

Motion”) to hold Shearman & Sterling in contempt for failing to obey the February

1994 Subpoena. See R16-380-4 (citing R11-264); R11-264-7. Beck disputes this

claim, noting: “On April 14, 1994, the Bankruptcy Court granted a motion by Mr.

Brandt, as trustee, to stay enforcement of the Rule 2004 subpoena that the trustee had

served on Shearman & Sterling in February” until the district court either vacated the

                                          8
March 1994 Order or gave Brandt permission “'to take discovery of Shearman &

Sterling.'” Brief of Appellant at 20-21; see also Brief of Appellant at Ex. D (order

staying enforcement of subpoena). The record does not include a copy of the April

1994 Motion but does include correspondence showing that Brandt was seeking in

May 1994 to enforce a Rule 2004 subpoena against Shearman & Sterling. See R11-

270-Ex. 4, Ex. 5.

       On May 3, 1994, the district court granted in part and denied in part Defendants'

motion to dismiss Brandt's Second Amended Complaint.4 See R10-243-15-16 (listing

surviving claims), In re: Southeast Banking Corp., 855 F. Supp. 353, 361 (S.D. Fla.

1994), aff'd, 69 F.3d 1539 (11th Cir. 1995) (“May 1994 Order”).5 Because claims

from the Second Amended Complaint had survived the motion to dismiss, the district

court lifted the stay of discovery that had been in effect since the September 1992

Order. See R11-266-2 (“June 15, 1994 Order”). In the June 15, 1994 Order that

lifted the stay, the district court denied the Defendant outside directors' motion to

compel as moot. See R11-266-2-3. On reconsideration, the district court enjoined

Brandt “from seeking discovery through the use of Rule 2004 subpoenas on matters

   4
      On February 2, 1994, Brandt filed the Second Amended Complaint, see R7-163, which was
the operative complaint when the district court dismissed the case for discovery violations.
   5
      The portions of this order that dismissed certain averments of the Second Amended
Complaint were appealed by Brandt; addressing only those findings appealed, we affirmed in
part and reversed in part. See In re Southeast Banking Corp., 69 F.3d 1539 (11th Cir. 1995).

                                               9
that relates or may relate to the allegations made by the Trustee in the Second

Amended Complaint.” R11-271-2 (“June 21, 1994 Order”). The district court applied

that injunction to the February 1994 Subpoena. See R11-271-2. The district court

emphasized that “[a]ll discovery that relates or may relate to the allegations made by

the Trustee in the Second Amended Complaint shall be governed by the Federal Rules

of Civil Procedure and shall take place in the District Court.”           R11-271-2.

Subsequently, the district court denied an emergency motion to expedite discovery of

Shearman & Sterling filed by Brandt on the ground that “no good faith basis exists for

taking discovery of Shearman & Sterling.” R12-284-3 (“August 1994 Order”).

      On October 28, 1994, Brandt, through Bainton, served a Fed. R. Civ. P. 30

subpoena (“October 1994 Subpoena”) on Shearman & Sterling. See R13-297-Ex. G.

This subpoena was filed in the Southern District of New York, rather than in the

Southern District of Florida. See R13-297-Ex. G. On November 14, 1994, the

Defendant Outside Directors filed a motion for sanctions and fines against both Brandt

and Bainton and for rescission of Bainton's pro hac vice admission “for failure to

comply with courts orders and for discovery abuses.” R13-297-1. This motion

alleged that the October 1994 Subpoena violated the August 1994 Order. See R13-

297-2. The Defendant Outside Directors emphasized that they sought “sanctions

against the Trustee and his counsel” – but that “[i]n order that the creditors of


                                         10
[Debtor's] bankruptcy estate should not suffer from the misconduct of the Trustee and

his counsel . . . any sanctions imposed shall not be reimbursed, directly or indirectly,

through application to the Bankruptcy Court.” R13-297-9-10.6

       On April 1, 1996, Brandt moved to file a Third Amended Complaint; in his

memorandum in support of this motion, Brandt stated that the majority of the

materials underlying the additions to the complaint came from materials produced by

the FDIC and by Steel Hector & Davis. See R15-357- 2 n.2. In opposition to this

motion, Defendants noted that the FDIC was challenging Brandt's right to possess a

number of documents produced by the FDIC. See generally R15-361. The FDIC's

motion to require Brandt to return “Inadvertently Produced, Privileged Documents”

was filed in a separate action, 92-2602-CIV-DAVIS. See R15-361-Ex.A. In response

to that motion, the magistrate judge ordered:

       The plaintiff Trustee, his employees and counsel shall not utilize,
       directly or indirectly, any of the Post-Closing Privileged Documents or
       the information contained therein for any purpose whatsoever until
       further Order of this Court. Such documents or the information
       contained therein shall not be made available, directly or indirectly, to
       any third parties including but not limited to the media. Any violation
       of this provision shall result in the imposition of sanctions.

R15-361-Ex. B at 2 (“April 1996 Order”).



   6
     We note with interest that Defendants, while arguing before us that the creditors' interests
were not raised in the district court, did, in fact, raise that very argument themselves.

                                                11
      On May 2, 1996, Brandt and Bainton were quoted in a Miami Daily Business

Review article entitled “Trustee: I'd love to show smoking gun.” See R16-367-Ex. H.

The article addresses the disputed FDIC documents, which Brandt likened to the

“'Pentagon Papers'” and which Bainton likened to “'the gun in a murder

investigation.'” R16-367-Ex. H at 1. Brandt noted his disagreement with the April

1996 Order barring him from using the documents. See R16-367-Ex. H at 2. Based

on Brandt's use of the FDIC documents in preparing the Third Amended Complaint

and on the Miami Daily Business Review article, Defendants filed an Emergency

Motion to Dismiss the Action and for Monetary Sanctions. See R16-366.

      The magistrate judge held a hearing on Defendants' motion to dismiss. At this

hearing, Defendants' counsel focused on the fact that Brandt “isn't an ordinary

opponent. . . . This is the Court's trustee, you, meaning the Southern District, [are]

responsible for this person, you appointed him. . . . [T]his is the Southern District's

appointee. He's a fiduciary.” R25-10; see also R25-18 (“The trustee just doesn't get

it. He is a fiduciary. His lawyer's an officer of the Court. He's an officer of the

Court.”). Defendants argued that it would be insufficient merely to remove Bainton

because “the trustee is responsible for [Bainton's]” conduct and because “we have here

not only a pattern of the misconduct, we have a pattern of approval and ratification.”




                                          12
R25-24. Bainton argued both that he and Brandt had not engaged in misconduct and

that there were innocent creditors who deserved their day in court:

      I don't think we've done anything wrong other than being overzealous in
      our representation of a client who's got important people to protect.
      Judge, you've lived in Miami all your life. People who bought Southeast
      Bank stock didn't think they were buying Alaskan gold mining stock.
      There's been a catastrophe here and the people who are responsible for
      it should be held accountable.

R25-59-60.

      The magistrate judge recommended dismissal. See R16-380. Specifically, the

magistrate judge found:

      that Plaintiff [Brandt] and his counsel [Bainton] have willfully violated
      orders of this Court on six separate occasions:
      1.     Plaintiff and his counsel, on August 12, 1993, served Bankruptcy
             Rule 2004 subpoenas on Steel, Hector & Davis and Deloitte &
             Touche contrary to an order of this Court [September 1992
             Order].
      2.     Plaintiff and his counsel violated this Court's original order
             staying discovery [July 1993 Order], as well as two subsequent
             orders staying discovery [the August 1993 and October 1993
             Orders] when Plaintiff and his counsel served a Bankruptcy Rule
             2004 subpoena on Shearman & Sterling.
      3.     Plaintiff and his counsel violated this Court's order of March 17,
             1994 staying discovery by their continued efforts to use Rule 2004
             subpoenas.
      4.     Plaintiff and his counsel violated this Court's past orders by filing
             in Bankruptcy Court a Motion to Enforce Bankruptcy Rule 2004
             subpoena on Shearman & Sterling.


                                          13
        5.     Plaintiff and his counsel again violated this Court's past discovery
               orders when on October 28, 1994 they served another Bankruptcy
               Rule 2004 subpoena on Shearman & Sterling in direct violation of
               this Court's [June 21, 1994 Order] enjoining the use of Rule 2004
               subpoenas.
        6.     Plaintiff and his counsel violated this Court's [April 1996 Order]
               restricting the utilization of privileged FDIC documents within the
               possession of Plaintiff and his counsel when Plaintiff and his
               counsel made various prejudicial statements relating to documents
               whose use had been barred by the Court and which appeared in
               the May 2, 1996 edition of the Miami Daily Business Review.

In re Southeast Banking Corp. Sec. & Loan Loss Reserves Litig., 212 B.R. 397, 405

(S.D. Fla. 1997) (alterations added). After discussing Brandt's and Bainton's history,

the court concluded “that [Brandt's] and [Bainton's] misconduct was willful, that it

was unfairly prejudicial to Defendants in this cause, that they had been amply warned

by this Court to comply with court orders, and that lesser sanctions would be

unavailing.” Id. at 407 (alterations added). Accordingly, the magistrate judge

recommended dismissing the case with prejudice and awarding Defendants attorneys'

fees and costs caused by Brandt's and Bainton's misconduct. See id..

        The district court held a hearing on Brandt's objections to the recommendation.

Brandt's new counsel7 argued that the remedy for discovery abuses should not fall on

the innocent creditors of Debtor:

        [Brandt's] not a man who represents his own interest in this proceeding.

   7
       Bainton withdrew from all of the cases that were part of the MDL. See R26-52.

                                               14
      What he does is he's a fiduciary [sic] for literally thousands of
      shareholders and creditors and many others, all of whom suffered, in
      some cases, catastrophically, when Southeast Holding Corporation when
      into Chapter 7 proceedings.
      ...
      [T]he question is more what is the remedy. And if there are possible
      sanctions that could involve money, then why would it be fashioned or
      recommended that the remedy ought to fall devastatingly upon the rights
      of everyone who is represented by that estate.

R26-9-10 (alterations added); see also R26-36-37 (“The collapse of Southeast Bank,

Your Honor, was a tragedy to this community. . . . Maybe it's a truth that people don't

want to know, but I think there has to be the right for that story to be told. And

whatever mistakes were made, they can be remedied.”).

      On August 1, 1997, the district court issued the order at issue in this appeal.

See In re Southeast Banking Corp. Sec. and Loan Loss Reserves Litig., 212 B.R. 397

(S.D. Fla. 1997) (“August 1997 Order”). In the August 1997 Order, the district court

found that:

      Plaintiff [Brandt] and his counsel [Bainton] willfully violated this Court's
      orders through the following actions:
      1.      On July 26, 1993, Plaintiff and his counsel served Bankruptcy
              Rule 2004 subpoenas on Steel Hector & Davis and Deloitte &
              Touche, in violation of [the July 1993 Order] (staying discovery).
      2.      On January 5, 1994, Plaintiff and his counsel served Bankruptcy
              Rule 2004 subpoenas on Lazard Freres, in violation of the [July
              1993, August 1993, and October 1993 Orders] (staying
              discovery).


                                          15
        3.      On February 24, 1994, Plaintiff and his counsel served
                Bankruptcy Rule 2004 subpoenas on Shearman & Sterling, in
                violation of the [July 1993, August 1993, and October 1993
                Orders] (staying discovery).
        4.      On April 29, 1994, Plaintiff and his counsel continued to pursue
                discovery through the enforcement of Bankruptcy Rule 2004
                subpoenas against Shearman & Sterling, in violation of the [July
                1993, August 1993, October 1993, and March 1994 Orders]
                (staying discovery).
        5.      Plaintiff and his counsel made various prejudicial statements
                relating to documents whose use had been barred by this Court
                and which appeared in the May 2, 1996 edition of the Miami
                Daily Business Review, in violation of the [April 1996 Order]
                (restricting Plaintiff and his counsel's use of these documents,
                including disclosure, directly or indirectly, to the media).

Id. at 399(bracketed text added; parenthetical text in original). The district court held

that Brandt and Bainton had otherwise “engaged in abusive litigation practices”

including “pursu[ing] discovery with no good faith basis for doing so” and

“improperly obtain[ing] certain privileged documents from the FDIC, but continu[ing]

to litigate the turnover proceedings and conceal[ing] their actions.”8 Id.(alterations

added; emphasis in original). The district court noted that Brandt and Bainton had

received “numerous warnings throughout this litigation” about the risk of sanctions,

id., and then concluded that “Plaintiff and his counsel's misconduct in this case and

other litigation gives no indication to this Court that lesser sanctions would be


   8
      In support of this latter “abusive litigation practice,” the district court cites to an order
issued in a separate but related case. In re Southeast Banking Corp., 212 B.R. at 399.

                                                   16
effective,” id. at 399-400. After finding that the misconduct had both prejudiced

Defendants “in that they have suffered delay in attempting to clear their names” and

had “interfered with this Court's ability to effectively resolve this litigation, as well

as the other cases the Court is charged with overseeing,” the court dismissed the action

with prejudice. Id. at 400.

                                              II. Analysis

        The district court adopted the magistrate judge's recommendation that this case

be dismissed pursuant to Fed. R. Civ. P. 41(b).9 “An appellate court reviewing the

exercise of this power is constrained by the abuse of discretion standard.” State Exch.

Bank v. Hartline, 693 F.2d 1350, 1352 (11th Cir. 1982) (citing Rule 41(b) and the

“inherent . . . authority [of the trial court] to enforce its orders and ensure prompt

disposition of legal actions”).

        The district court's order addressed seven acts of alleged misconduct: Issuance

of the July 1993 Subpoenas; issuance of the January 1994 Subpoena; issuance of the

February 1994 Subpoena; filing of the April 1994 Motion in bankruptcy court;


   9
       Rule 41(b) states, in relevant part:

        For failure of the plaintiff to prosecute or to comply with these rules or any order
        of court, a defendant may move for dismissal of an action or of any claim against
        the defendant. Unless the court in its order for dismissal otherwise specifies, a
        dismissal under this subdivision . . . operates as an adjudication upon the merits.

(alterations added).

                                                   17
attempts to engage in discovery of Shearman & Sterling with “no good faith basis” for

such discovery; obtaining and retaining the disputed FDIC documents; and the

comments made by Brandt and Bainton in the May 2, 1996 edition of the Miami Daily

Business Review. Beck does not dispute the district court's finding in the March 1994

Order that issuance of the January 1994 and February 1994 Subpoenas violated the

July 1993, August 1993, and October 1993 Orders staying discovery, see Appellant's

Brief at 32, but argues that the district court erred (1) in finding that the issuances of

the July 1993, January 1994, and February 1994 Subpoenas were willful violations,

(2) in finding that Brandt had attempted to enforce the Rule 2004 subpoena against

Shearman & Sterling on April 29, 1994, (3) in considering the comments from the

Miami Daily Business Review article, and (4) in dismissing the case rather than

issuing lesser sanctions that would not have injured innocent creditors. We consider

these arguments in turn.

A.    July 1993, January 1994, and February 1994 Subpoenas

      Beck argues that it was inappropriate for Judge Davis to rule in 1996 that

Brandt's issuances of the July 1993, January 1994, and February 1994 Subpoenas were

willful. Beck notes that Judge Aronovitz, who had the case at the time that those

subpoenas were issued, did not find that Brandt acted willfully in issuing the




                                           18
subpoenas. Beck argues that it was wrong for Judge Davis to decide, years after the

fact, that Brandt acted willfully where Judge Aronovitz made no such a finding.

        An interesting question not discussed by Beck is whether Beck would view

such a belated finding as inappropriate if Judge Aronovitz had been the judge to make

it. Beyond terming Judge Davis's ruling as “ex post facto,” Appellant's Brief at 46,

Beck's argument is based on the fact that Judge Aronovitz never found that Brandt's

actions were willful but, instead, issued new orders clarifying his rulings. Beck did

not offer, nor did we find, any case law to support the conclusion that a judge cannot

consider the entire history of a case – even conduct that occurred two years before –

to determine if a litigant's conduct was willful. Accordingly, mere passage of time

does not bar a district court from considering whether particular conduct amounted to

willful violation of court orders.10 We also reject any intimation that a judge who

replaces another judge on a case cannot address whether conduct committed prior to

the transfer was willful.11

   10
      We do not discount the fact that passage of time without further wrongdoing is relevant to
the question of whether dismissal is an appropriate remedy for wrongful conduct.
   11
        Beck argues (without case support) that the standard of review should be different for a
“judge who 'inherited' this case well after four of the five events that were alleged to have been
violations of court orders had occurred.” Appellant's Brief at 32. While Beck argues that the
timing of Judge Davis's receiving the case means that he “was not in any position superior to that
of this Court,” id., we are concerned that such a rule would provide a windfall to the fortunate
malfeasant litigant whose case is transferred due to the retirement, recusal, or death of the initial
judge or by the confirmation of new judges on the district court. Because we find that the
district court erred in dismissing the case, rather than using a lesser sanction, we need not

                                                 19
       Having rejected the broader interpretations of Beck's argument, we are left with

two subtler, more case-specific questions: First, did Judge Aronovitz's failure to find

that Brandt's issuances of the July 1993, January 1994, and February 1994 Subpoenas

were willful bar Judge Davis's later finding of willfulness? Second, does the fact that

Judge Aronovitz's issued orders “clarifying” his prior orders bar a finding of

willfulness on the ground that the prior orders were unclear? The answer to each of

these questions is “No.” As to the first question, we agree with Defendants that Judge

Aronovitz was never asked to determine whether Brandt's issuances of the July 1993,

January 1994, and February 1994 Subpoenas were willful. Thus, Judge Davis's later

findings of willfulness do not contradict prior findings. As to the second question,

we find that the fact that Judge Aronovitz issued orders “clarifying” his prior orders

does not mean that Judge Davis was incorrect in finding that Brandt willfully violated

those prior orders. It is true that a finding of willfulness is inappropriate where a

litigant's “[v]iolation of a discovery order [is] caused by simple negligence,

misunderstanding, or inability to comply.” Malautea v. Suzuki Motor Co., 987 F.2d

1536, 1542 (11th Cir. 1993); see also E.E.O.C. v. Troy State Univ., 693 F.2d 1353,

1357 (11th Cir. 1982) (“A party's simple negligence or other action grounded in a

misunderstanding of a court order does not warrant dismissal.”). Sanctions, like a


address Beck's novel argument regarding standard of review.

                                             20
finding of contempt, for violation of an order are only appropriate if “the order stated

in specific and clear terms what acts were required or prohibited.” E.E.O.C. v.

General Dynamics Corp., 999 F.2d 113, 116 (5th Cir. 1993). That said, the fact that

Judge Aronovitz chose to state in his subsequent orders that he was clarifying the prior

orders staying discovery did not bar Judge Davis from concluding that the prior orders

were sufficiently clear to justify a finding of willfulness. The July 1993, August 1993,

and October 1993 Orders made clear that all discovery related to this case was stayed

until a viable complaint survived a motion to dismiss; these orders also made clear

that this case was to be ruled by the Federal Rules of Civil Procedure, not by the

Bankruptcy Rules. Beck has proffered no explanation for why these orders were

unclear, nor has he given any justification for why the subpoenas where not covered

by the stay in the July 1993, August 1993, and October 1993 Orders. If the Orders

were unclear or unduly impeded Brandt's duties as trustee to investigate other cases

against other defendants, Brandt could have sought clarification of the prior orders –

but he never did. This situation is similar to that of Malautea, where we affirmed a

finding of willfulness and the granting of a default judgment under Rule 37 because:

      [n]either defendant has provided a credible explanation of how it
      interpreted the discovery orders not to encompass the General Motors
      information. Neither defendant asked Judge Edenfield to clarify the
      orders, as a genuinely confused litigant, twice-threatened with the
      sanction of a default judgment, would have done. In particular, the
      defendants never asked Judge Edenfield to explain whether the orders

                                          21
      covered the plaintiff's interrogatory that requested the General Motors
      information.

987 F.2d at 1543. Accordingly, we find that the district court did not err in holding

that the issuances of the July 1993, January 1994, and February 1994 Subpoenas were

willfully in violation of the July 1993, August 1993, and October 1993 Orders staying

discovery and reaffirming the district court's jurisdiction over this case.

B.    April 1994 Motion

      Beck argues that the finding regarding the April 1994 Motion is unsupported.

We have been unable to find any documentation of the April 1994 Motion despite a

thorough search of the record. However, Brandt filed a motion in the district court

that appended correspondence between Bainton's law firm and Shearman & Sterling

about a hearing to be held in June 1994 in the bankruptcy court regarding a motion to

compel production of documents, see R11-270-Ex.4, Ex.5; while the brief in support

of that motion is dated March 11, 1994, see R11-270-Ex. 6, the correspondence

regarding the hearing is dated May 1994, see R11-270-Ex. 4, Ex. 5. Taken together,

the correspondence and brief in support support the finding that Brandt was

attempting in May 1994 to enforce a Rule 2004 subpoena against Shearman &

Sterling in bankruptcy court. See R11-270-Ex.4, Ex. 5, Ex. 6. Thus, while there is

no record support for the specific finding that Brandt moved on April 29, 1994 to

enforce a Rule 2004 subpoena against Shearman & Sterling, there is record support

                                          22
for a finding that Brandt moved to enforce a Rule 2004 subpoena against Shearman

& Sterling at some point in time after issuance of the March 1994 Order. We find

that, to the extent that the district court erred in its finding that Brandt filed a motion

on April 29, 1994 to enforce a Rule 2004 subpoena, that error was harmless.

C.        Miami Daily Business Review article

          The impetus for the imposition of sanctions was the Miami Daily Business

Review article. Beck argues that it was inappropriate for the district court to sanction

the estate for the article where (1) the order allegedly violated by the article was from

another case and (2) the article was published two years after the last discovery

violation occurred in this case. We find that it is not error for a district court to

consider violation of an order from a separate case where that wrongdoing is related

to the case at hand.12 Cf. Chambers v. NASCO, Inc., 501 U.S. 32, 57, 111 S. Ct. 2123,

2139, 115 L. Ed. 2d 27 (1991) (affirming sanctions imposed by district court “for

conduct before other tribunals, including the FCC, the Court of Appeals, and this

Court”; “As long as a party receives an appropriate hearing . . . the party may be


     12
       The Ninth Circuit has held that prior incidents of wrongdoing may be considered in
assessing later incidents of wrongdoing but, where the later incidents are not “a continuation” of
the earlier incidents, it is error to use the prior incidents “as a fulcrum to elevate the final
incident of misconduct to a level that would allow dismissal of the action with prejudice.”
United States v. National Med. Enters., Inc., 792 F.2d 906, 913 (9th Cir. 1986). Similarly, we
find that the district may “consider . . . the long pattern of conduct [including] . . . several
failures by plaintiffs to obey court rules and orders.” Jones v. Graham, 709 F.2d 1457, 1462
(11th Cir. 1983).

                                                23
sanctioned for abuses of process occurring beyond the courtroom, such as disobeying

the court's orders.”). Here, in a related case, Brandt and Bainton received disputed

documents. They were told not to use the documents in any way – including direct

or indirect contact with the media. Brandt and Bainton used the documents (1) to

draft a complaint in this case and (2) to comment publicly on Defendants' liability.

While the order was issued in another case, the wrongdoing affected this case. We

need not answer the question of whether the district court erred in dismissing the case

based on the article where no misconduct occurred in this case for a substantial period

of time, because we find that lesser sanctions should have been levied in this case.13

D.        Failure to utilize lesser sanctions

          We find that the district court should have used lesser sanctions to resolve the

problems caused by Brandt's and Bainton's misconduct without barring innocent

creditors from pursuing their claims against Defendants. As Defendants themselves

emphasized throughout the proceedings in this case, Brandt was a trustee of a

bankruptcy estate, while Bainton was serving pro hac vice as attorney to Brandt in his

role as trustee. This situation raises the concern that innocent parties who were unable

to choose their own representatives might be injured through no fault of their own.



     13
      We also need not address Beck's claim that the district court erred in dismissing this case
when the case in which the April 1996 Order was issued was not similarly dismissed.

                                                24
“We have viewed dismissal as particularly harsh when the parties whose interests are

at stake are not the named plaintiffs who have complete control of the litigation.”

Hartline, 693 F.2d at 1353. This principle is compatible with the Third Circuit's

requirement that a district court consider whether a party has had personal

responsibility for the wrongdoing of its attorney. See Adams v. Trustee of the New

Jersey Brewery Employees' Pension Trust Fund, 29 F.3d 863, 873 (3d Cir. 1994)14;

see also Rogers v. Kroger Co., 669 F.2d 317, 322 (5th Cir. 1982) (treating “direct

plaintiff culpability” as an “aggravating circumstance” that may justify dismissal as

a sanction for misconduct). This emphasis on the personal responsibility of the

parties-in-interest is reasonable, not only to preserve the rights of truly innocent

parties, but also because, where a party is personally involved in malfeasance, the

likelihood that alternative sanctions will resolve the misconduct is lower. See, e.g.,

Gratton v. Great American Communications, 178 F.3d 1373, 1375 (11th Cir. 1999)

(affirming sanction of dismissal where “the district court found that plaintiff was

culpable, and found that no other sanction would cure the harm”). Additionally, cases

that have found that dismissal was appropriate despite the lack of personal

   14
      The Third Circuit notes that, “[w]here . . . a party is personally responsible for
[misconduct], the effect of dismissal on third parties cannot be dispositive.” Adams, 29 F.3d at
873. Our conclusion does not contradict the Third Circuit but states that where, as here, the
misconduct is attributed to a representative party or its attorney, the district court should consider
the malfeasance (if any) of the represented party, as well as the availability of alternative
remedies caused by the fact of the representation.

                                                 25
wrongdoing on the part of the client have focused on the fact that the attorney

engaging in misconduct was the “freely selected agent” of the client. Link v. Wabash

R.R. Co., 370 U.S. 626, 633-34 & n.10, 82 S. Ct. 1386, 1390 & n.10, 8 L. Ed. 2d 734

(1962). Here, as emphasized by Defendants in the hearing before the district court,

Brandt was appointed by the district court to act as trustee for Debtor's estate.

       The fact that Brandt was an appointed trustee and Bainton was acting pro hac

vice raises the possibility of alternative sanctions. Specifically, the district court could

have replaced Brandt as trustee to Debtor's estate and/or revoked Bainton's pro hac

vice status. While these sanctions are harsh, they may be used “[i]f the conduct at

issue threatens disruption of the court proceedings or is a deliberate challenge to the

authority of the district court.” Schlumberger Techs., Inc. v. Wiley, 113 F.3d 1553,

1561 (11th Cir. 1997) (addressing disqualification of an attorney admitted pro hac

vice) (citations omitted); see also 11 U.S.C. § 324(a) (“The court, after notice and a

hearing, may remove a trustee, other than the United States trustee, or an examiner,

for cause.”). Where, as here, there is no evidence that the represented parties, i.e., the

creditors, were involved in misconduct, removal of the trustee and/or the trustee's




                                            26
attorney are viable sanctions, short of dismissal, that may resolve misconduct and

permit the litigation to continue without further disruption.15

        In finding that the district court abused its discretion in dismissing this case, we

emphasize the limited nature of our holding. We do not hold that it is per se

inappropriate to use dismissal to sanction misconduct by a bankruptcy trustee (or other

representative party). Rather, in such a case, the district court should consider

whether the represented parties are innocent and whether lesser sanctions, such as

removal of the representative party, exist that could remedy the misconduct without

injuring the represented parties. We also do not belittle the strong interests that a

court has in protecting itself and litigants from abusive, contumacious conduct.

Sanctions, including dismissal or issuance of a default judgment, must be available “to

protect the ability of district courts to police discovery simply and speedily.” Phipps

v. Blakeney, 8 F.3d 788, 790 (11th Cir. 1993). “No litigant and no attorney, even if

motivated by misguided perceptions of constitutional [or statutory] privilege, may be

permitted to exhibit . . . contumacious conduct without risk of sanctions under Rule


   15
        Prior cases involving Brandt and Bainton have also resulted in sanctions. See Brandt v.
Schal Assocs., 960 F.2d 640, 646-47 (7th Cir. 1992) (affirming Fed. R. Civ. P. 11 sanctions
against Brandt's counsel for “an egregious and unjustified abuse of the judicial process”);
Warner Bros. v. Dae Rim Trading, Inc., 877 F.2d 1120, 1128 (2d Cir. 1989) (dismissing
Bainton's appeal of Rule 11 sanctions against him and imposing double costs for the appeal; “In
short, in this Court, as well as in the district court, Attorney Bainton has demonstrated a blatant
disregard of the rules and regulations which permit the judicial machinery to function
smoothly.”).

                                                27
37 [or Rule 41(b)].” Adolph Coors Co. v. Movement Against Racism & the Klan, 777

F.2d 1538, 1543 (11th Cir. 1985). We do not foreclose the possibility that, in a future

case, dismissal will be justified as a sanction for violation of court orders. We find

that, on the facts of this case, dismissal is not justified.

                                    III. Conclusion

       The district court's August 1997 Order is REVERSED insofar as it ordered

dismissal of this case. We REMAND this case for imposition of appropriate

sanctions in accordance with this opinion.




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