Lowenstein Sandler and Paul Weiss Escape Sanctions in Perelman Case
“These documents should have alerted plaintiffs that there was no longer a good faith basis to pursue the promise claim,” wrote Judges Paulette Sapp-Peterson, William Nugent and Michael Haas.
Nor did they fault Koblitz for holding that in setting the size of the sanctions, the billing rates for the New York lawyers defending Robert Cohen should be cut to reflect the New Jersey forum.
In reversing the counsel fee award, however, the panel found Koblitz improperly relied on such factors as the firms’ aggressive trial strategy, especially their questioning of the elderly and fragile Robert Cohen, who suffered from Parkinson’s disease and died in 2012 at age 86.
The panel said Koblitz could not base a sanction on conduct she did not try to rein in as it occurred, noting that she never interrupted the questioning or admonished the lawyers.
Another inappropriate factor was what Koblitz saw as the firms’ lack of remorse, evidenced by their intent to appeal the sanctions. Had they shown contrition by admitting the promise claim was frivolous, they would have waived their right to challenge the frivolous litigation determination, the appeals court said.
Additional improper factors were the lawsuit’s disruption of family relations and the apparent manipulation of Perelman’s then-minor daughter, Samantha, who was also a plaintiff.
Despite the incorrect factors, the panel thought sanctions might still be warranted and therefore provided “additional guidance” for the remand.
The judge — who will not be Koblitz, since she is now on the Appellate Division — must consider mitigating circumstances disregarded the first time: the firms’ good reputation and lack of a history of frivolous suits, as well as Lowenstein’s 2009 establishment of a committee to guard against future frivolous litigation.
Lowenstein managing partner Gary Wingens said in a statement he is pleased that the appeals court vacated the sanctions.
Brad Karp, managing partner at Paul Weiss, did not return a call.