A federal district court “cannot become a de facto collection agency for plaintiffs,” and therefore sanctions requiring a defendant to pay more than $30 million was improper, the U.S. Court of Appeals for the Second Circuit said Monday.
Although Rule 11 sanctions in Universitas Education v. Nova Group, 11-cv-08726, were “appropriate and necessary” given the defendant’s “persistent and abusive litigation conduct,” the appeals panel said “a district court abuses its discretion in imposing sanctions when the sanctions are used for enforcing or collecting damages.”
