In the United States Court of Appeals For the Second Circuit ________

AUGUST TERM 2022

ARGUED: JANUARY 19, 2023 DECIDED: AUGUST 28, 2023

No. 21-2084

ANDREA ROSSBACH, Plaintiff-Appellant,

DEREK SMITH LAW GROUP, PLLC, DANIEL ALTARAS, Appellants,

v.

MONTEFIORE MEDICAL CENTER, NORMAN MORALES, PATRICIA VEINTIMILLA, Defendants-Appellees. ________

Appeal from the United States District Court for the Southern District of New York. ________

1 Before: WALKER, RAGGI, and PARK, Circuit Judges. ________

Plaintiff-Appellant Andrea Rossbach sued her employer, Defendant-Appellee Montefiore Medical Center, and two of its employees, Defendants-Appellees Norman Morales and Patricia Veintimilla, asserting claims of sexual harassment during, and retaliatory discharge from, her employment.

The principal evidence in support of Rossbach’s sexual harassment claims was a series of sexually suggestive text messages that she alleged were from Morales. Following the district court’s (Cote, J.) grant of partial summary judgment in their favor, Defendants-Appellees moved to dismiss Rossbach’s remaining claims and sought sanctions against Rossbach and her counsel, Appellant Daniel Altaras and his firm, Appellant Derek Smith Law Group, PLLC (“DSLG”), contending that these text messages were a forgery. Following the submission of forensic expert reports, an evidentiary hearing, and briefing on the motion, the district court found by clear and convincing evidence that Rossbach had fabricated the text messages, falsely testified about their production, and spoliated evidence in an attempt to conceal her wrongdoing. The district court also found that Altaras had facilitated Rossbach’s misconduct. The district court dismissed Rossbach’s remaining claims with prejudice pursuant to its inherent power and Federal Rule of Civil Procedure 37(e), and, under its inherent power and 28 U.S.C.

2 § 1927, imposed a monetary sanction of attorneys’ fees, costs, and expenses incurred by Defendants-Appellees against Appellants.

On appeal, Appellants challenge various aspects of the district court’s conduct prior to, during, and following the evidentiary hearing, its dismissal of the action and imposition of a monetary sanction, and the amount of that sanction. These arguments are meritless, except for one: We hold that in sanctioning Rossbach’s counsel the district court applied the incorrect legal standard. Accordingly, we VACATE the portion of the district court’s judgment imposing a sanction on Altaras and DSLG and REMAND for further proceedings consistent with this Opinion. We AFFIRM the judgment of the district court in all other respects.

________

DANIEL J. ALTARAS, Derek Smith Law Group, PLLC, New York, NY, for Plaintiff-Appellant Andrea Rossbach and Appellants Derek Smith Law Group, PLLC and Daniel Altaras.

JEAN L. SCHMIDT (Joseph E. Field, on the brief) Littler Mendelson, P.C., New York, NY, for Defendants-Appellees Montefiore Medical Center, Norman Moral