A federal appeals court has upheld a $1 million default judgment won by a New Jersey lawyer who claimed he was the target of a smear campaign by a client’s adversary.
Bruce Baldinger’s award included $537,500 in punitive damages, and he was also granted injunctive relief, all of which the U.S. Court of Appeals for the Third Circuit affirmed on Sept. 27.
According to the court’s opinion in Baldinger v. Ferri, the suit alleged that Matteo Patisso, of Huntington Station, N.Y., sent emails and regular mail with false statements to Baldinger’s clients and posted some of them online.
The dispute originated from litigation in New York over an alleged loan default against JMB Group LLC and other Baldinger clients, who filed a third-party complaint against Patisso and his company, Liquid Brick, for allegedly brokering the $300,000 loan.
Baldinger, of Morristown, claimed in his suit that Patisso targeted his clients to gain an advantage in the New York case and, when he did not succeed, used the same tactic against Baldinger.
An email from Patisso copied to third parties referred to Baldinger’s “chicanery, abuse of his law license” and “unethical role” in his “client’s criminal conduct,” and said Baldinger had nearly been disbarred.
Baldinger’s New Jersey ethics history in fact consists of a 2008 reprimand for entering into a business arrangement with a client without advising of the need to run it past another lawyer and for continuing to represent multiple clients in a matter after their interests diverged.
Among other remarks, Patisso allegedly said Baldinger was under criminal investigation, had committed fraud, embezzlement and obstruction of justice and has a “pathological desire to lie and steal from others.”
The suit, filed in June 2010, failed to stop Patisso, who allegedly told the parenting coordinator in Baldinger’s divorce proceeding that he was a danger to his children and published a “Racketeering Family Tree” that accused Baldinger of being part of a criminal conspiracy.
In September 2010, U.S. District Judge Peter Sheridan in Trenton issued a $195,000 default judgment — $97,500 each in compensatory and punitive damages — against Patisso and his National Fraud Constable website. Sheridan permanently enjoined Patisso from making derogatory comments.
Sheridan vacated the judgment in February 2011 and imposed a preliminary injunction that he dissolved four months later, in June 2011. The Third Circuit reversed in May 2012, finding the judge had not sufficiently explained his holding.
While that appeal was pending, Patisso was again found in default, this time by U.S. Magistrate Judge Douglas Arpert on Jan. 27, 2012, for failure to comply with discovery.
After a damages hearing on July 10, 2012, Sheridan awarded $537,500 in compensatory damages, the same amount in punitive damages and $14,497 in legal fees.
Sheridan also reinstated the permanent injunction, which bars Patisso from contacting Baldinger, his firm and his family. Sheridan later modified that proviso to allow contact with Baldinger and his firm as necessary for litigation.
The judgment gave Patisso seven days to remove from the Internet all Baldinger-related content he had posted.
Patisso, who represented himself throughout the case, appealed, in part on the ground that he was physically unable to attend the July 2012 hearing as the result of a car accident a month earlier.
In their affirmance, U.S. Circuit Judges Thomas Ambro, Thomas Hardiman and Ruggero Aldisert found no abuse of discretion by Sheridan.
They noted Patisso’s “pattern of delay and his wait until the last minute to inform the judge he could not make it” to the hearing.
They rejected Patisso’s arguments that some of the offending comments were protected by litigation privilege, that the punitive damages were excessive and that Sheridan should have considered his financial circumstances and placed findings on the record.
Patisso said in a telephone interview on Monday he will seek rehearing en banc and, if that fails, petition the U.S. Supreme Court for certiorari. His motion to vacate the injunction is pending.
Patisso admitted saying some but not all the things alleged by Baldinger, adding some of what he said was contained in a series of grievances, all dismissed by New Jersey ethics authorities.
He said the Third Circuit failed to address his claim that the damages award was due to what he called a “fraud on the court” by Baldinger, and also ignored other issues he raised.
Baldinger said Monday that the false statements online have harmed his practice and the time spent on the case has been a serious distraction. He even hired a search-engine optimization company to counteract the negative postings.
He called the ruling a “vindication of my position and of my right to recover substantial damages and judicial enforcement of the existing injunction against this behavior. I would also hope that this sends a message to others that this type of behavior will not be tolerated by the courts.”