Scott Meide v. Pulse Evolution Corporation, et al.

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-13404
Non-Argument Calendar
____________________
SCOTT MEIDE,
Plaintiff-Appellant,
versus
PULSE EVOLUTION CORPORATION,
JOHN TEXTOR,
GREGORY CENTINEO,
JULIE NATALE,
DANA TEJEDA, et al.,
Defendants-Appellees.
____________________
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2 Opinion of the Court 22-13404
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 3:18-cv-01037-MMH-MCR
____________________
Before L AGOA , BRASHER , and H ULL , Circuit Judges.
PER CURIAM:
Plaintiff Scott Meide, proceeding pro se, appeals the district
court’s orders imposing sanctions under the Private Securities
Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4(c)(1). The
sanctions were attorneys’ fees in different amounts in favor of three
separate groups of defendants. On appeal, Meide contends that the
district court abused its discretion in awarding attorneys’ fees as
sanctions and in calculating the amount of fees as sanctions. After
careful review, we affirm.
I. FACTUAL BACKGROUND
A. Initial Complaint, Dismissal, and Amended Complaint
On August 27, 2018, plaintiff Meide, proceeding pro se, sued
these 12 defendants: (1) Laura Anthony and Michael Pollaccia
a/k/a Michael Anthony (“Anthonys”); (2) Gregory Centineo,
Agnes King, John King, and Julie Natale (“Centineo Defendants”);
(3) Jordan Fiksenbaum, Frank Patterson, John Textor, Evolution
AI Corporation, and Pulse Evolution Corporation (“Pulse
Defendants”); and (4) Dana Tejeda. Meide’s 36-page complaint
alleged seven counts, including a federal securities fraud claim
against all the defendants.
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22-13404 Opinion of the Court 3
All the defendants moved to dismiss. As relevant here, the
Centineo and Pulse Defendants asserted that (1) Meide purchased
securities from the defendants in his capacity as a representative of
the Jacksonville Injury Center (“JIC”), (2) JIC owns the securities,
and (3) therefore, Meide lacked standing to assert his claims. The
Pulse Defendants submitted three security agreements showing
that the company JIC purchased shares of Evolution AI
Corporation and Pulse Evolution Corporation.
On July 24, 2019, the district court held a hearing on the
motions to dismiss. The district court determined that (1) Meide’s
complaint was a shotgun pleading because it contained conclusory,
vague, and immaterial facts, and (2) Meide’s securities fraud claim
lacked the particularity required by Federal Rule of Civil Procedure
9(b) and the PSLRA’s heightened pleading standards. The district
court also noted that, if JIC was the proper plaintiff, Meide needed
to obtain counsel because JIC was a corporate entity that “must be
represented by legal counsel.”
In a separate written order, the district court stayed
discovery and dismissed the complaint but granted Meide leave to
amend his complaint. The district court warned Meide that, under
15 U.S.C. § 78u-4(c)(1), it was required to impose sanctions if he did
not correct the deficiencies in his complaint.
On September 24, 2019, Meide filed a 31-page amended
complaint against the same defendants except for Michael
Anthony.
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4 Opinion of the Court 22-13404
On October 4, 2019, the district court sua sponte struck the
amended complaint because Meide (1) did not “utilize numbered
paragraphs, each limited as far as practicable to a single set of
circumstances,” and (2) failed to specify which facts supported each
claim. (Quotation marks omitted). The district court warned
Meide that he had “one final opportunity to properly state his
claims.”
On October 22, 2019, Meide filed a motion to recuse the
district court judge, which the district court denied on November
18, 2019.
B. Second Amended Complaint and Motions for Leave to
Amend and to Substitute
On November 1, 2019, Meide filed his 37-page second
amended complaint against all the defendants except Michael
Anthony. Meide’s second amended complaint alleged six counts
against the defendants: (1) a federal securities fraud claim (“Count
I”), and (2) state law claims for breach of good faith and fair dealing,
breach of fiduciary duty, fraud, civil conspiracy, and “Right of
Rescission” (“Counts II-VI”).
In response, the remaining defendants except Tejada moved
to dismiss, asserting that Meide’s complaint failed to comply with
the pleading requirements of Rule 9(b) and the PSLRA. Meide
responded to these motions but did not identify any allegations in
his complaint that satisfied these requirements.
On June 11, 2020, William McLean entered a notice of
appearance as Meide’s counsel. On June 29, 2020, Meide, through
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22-13404 Opinion of the Court 5
counsel, filed (1) a motion to substitute JIC as the proper plaintiff
and real party in interest, (2) a motion for leave to amend his
complaint, and (3) a copy of his 39-page proposed third amended
complaint.
C. Dismissal of Second Amended Complaint
On September 4, 2020, the district court dismissed Meide’s
second amended complaint, finding that he still failed to plead his
Count I securities fraud claim with particularity, as required by the
PSLRA. Thus, the district court (1) dismissed Meide’s Count I
securities fraud claim with prejudice and (2) dismissed his state law
claims in Counts II-VI without prejudice so that Meide could refile
these claims in state court.
Next, the district court denied Meide’s counseled motion for
leave to amend because (1) the motion to amend did not comply
with the district court’s local rules, (2) Meide’s proposed third
amended complaint was a shotgun pleading, and (3) Meide failed
to show good cause for his delay in requesting leave to amend. The
district court denied as moot Meide’s motion to substitute because
(1) the motion was untimely, and (2) even if JIC was substituted as
the plaintiff, Meide’s complaint still failed to properly state a claim
for securities fraud.
On September 8, 2020, the district court entered judgment
against plaintiff Meide but reserved jurisdiction to determine
whether sanctions were appropriate. Meide did not file a notice of
appeal at this time.
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6 Opinion of the Court 22-13404
The district court referred the parties to mediation,
presumably to give them an opportunity to resolve the case before
Meide refiled his state law claims in state court and before the
parties submitted further briefing on sanctions.
D. Sanctions
On December 10, 2020, the parties attended mediation but
reached an impasse.
Following mediation, all of the defendants except Tejada
moved for sanctions against Meide. The Anthonys also moved for
sanctions against McLean, Meide’s counsel, for filing the June 2020
motions for leave to amend and to substitute.
On September 29, 2021, the district court granted the
Anthonys’ motion for sanctions against Meide and McLean. The
district court determined that Meide’s claims against the Anthonys
were frivolous because (1) Meide’s initial complaint did not “set
forth any relevant factual allegations regarding these two
[d]efendants,” and (2) Meide failed to correct the deficiencies in his
complaint, even after the district court explained the pleading
requirements for securities fraud claims at the July 24, 2019
hearing. The district court also determined that (1) Meide named
the Anthonys as defendants “for the improper purpose of
harassment,” and (2) McLean failed to conduct a reasonable
investigation before filing the June 2020 motions for leave to
amend and to substitute.
In the same order, the district court granted in part the
motions for sanctions filed by the Centineo and Pulse Defendants.
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22-13404 Opinion of the Court 7
The district court determined that (1) Meide reasonably could have
believed the claims in his initial complaint were not frivolous, but
(2) Meide’s amended securities fraud claims against those
individual defendants were frivolous and were brought “for the
improper purpose of harass[ment].” The district court observed
that (1) Meide continued to assert securities fraud claims in his own
name without explaining why JIC was not the proper plaintiff, and
(2) he made no attempt in his responses to the defendants’ motions
to dismiss to identify which allegations in his second amended
complaint satisfied the pleading standards for securities fraud
claims. The district court also noted that the PSLRA contained a
mandatory sanctions provision, and it directed the parties to file
supplemental motions regarding the appropriate amount of
sanctions.
The Anthonys, Centineo Defendants, and Pulse Defendants
filed supplemental motions for attorneys’ fees. In their motion, the
Centineo Defendants argued that Meide could not rebut the
PSLRA’s presumption in favor of awarding attorneys’ fees as
sanctions because (1) the burden of paying attorneys’ fees was not
unreasonable, and (2) Meide’s violations of Federal Rule of Civil
Procedure 11(b) were not de minimis.
Meide responded to the supplemental motions, but he did
not argue that the proposed sanctions would pose an unreasonable
burden or that his violations of Rule 11 were de minimis. Instead,
Meide argued that some of the attorneys’ fees requested by the
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8 Opinion of the Court 22-13404
defendants did not have a direct causal link to his sanctionable
conduct.
On August 23, 2022, the magistrate judge issued a Report
and Recommendation (“R&R”) recommending that the
defendants be awarded attorneys’ fees as sanctions. As to the
Anthonys, the magistrate judge determined that these defendants
were entitled to attorneys’ fees for the entire action.1 As to the
Pulse and Centineo Defendants, the magistrate judge determined
that they were entitled to attorneys’ fees for work completed after
the filing of the first amended complaint because (1) Meide’s Rule
11 violations were “substantial,” (2) Meide failed to rebut the
PSLRA’s presumption in favor of awarding attorneys’ fees as
sanctions, and (3) the requested attorneys’ fees were reasonable.
The magistrate judge warned that if a party did not object to
the R&R within fourteen days, that party would waive the right to
challenge on appeal any unobjected-to factual and legal
conclusions. Meide did not file any objections to the R&R.
1 The magistrate judge recommended that the Anthonys’ motion for sanctions
be denied in two respects: (1) the hourly rate for one of the Anthonys’
attorneys was excessive and should be lowered from $700 to $500; and
(2) $1,098.58 in costs should be disallowed because the Anthonys “d[id] not
state the legal basis for the costs.”
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22-13404 Opinion of the Court 9
On September 14, 2022, the district court adopted the R&R
and granted the defendants’ motions for sanctions.2 On September
15, 2022, the district court entered these four judgments for
attorneys’ fees: (1) a $12,620.00 judgment in favor of the Anthonys
against Meide; (2) a $11,019.50 judgment in favor of the Anthonys
against Meide and attorney McLean, jointly and severally; (3) a
$43,215.00 judgment in favor of the Centineo Defendants against
Meide; and (4) a $68,387.00 judgment in favor of the Pulse
Defendants against Meide.
This appeal followed.
II. DISCUSSION
A. October 11, 2022 Notice of Appeal
Meide filed his notice of appeal on October 11, 2022. His
appeal is not timely as to the district court’s July 24, 2019 order
staying discovery, its November 22, 2019 denial of his motion to
recuse, or its September 4, 2020 dismissal of his complaint. See Fed.
R. App. P. 4(a)(1)(A) (providing that an appellant in a civil case must
file a notice of appeal within 30 days after the entry of judgment).
Thus, to the extent Meide challenges these orders on appeal, we
lack jurisdiction to review them. See Green v. Drug Enf ’t Admin., 606
F.3d 1296, 1300–02 (11th Cir. 2010) (observing that, in civil cases,
2 The district court made a minor modification to the R&R, finding that $12.50
in paralegal fees should be assessed against Meide and McLean jointly and
severally, not Meide individually.
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10 Opinion of the Court 22-13404
the timely filing of a notice of appeal is a mandatory prerequisite
to the exercise of appellate jurisdiction).
Generally, a sanction order is not final unless the award of
attorneys’ fees is reduced to a specific sum. Santini v. Cleveland
Clinic Fla., 232 F.3d 823, 825 n.1 (11th Cir. 2000). Therefore, Meide’s
October 11, 2022 notice of appeal is timely as to (1) the district
court’s September 29, 2021 order awarding sanctions, (2) its
September 14, 2022 order reducing the award of attorneys’ fees to
specific sums, and (3) its September 15, 2022 judgments awarding
those specific attorneys’ fees as sanctions. See id.; Fed. R. App.
P. 4(a)(1)(A). We address each order in turn.
B. September 29, 2021 Sanctions Order
As to the September 29, 2021 order, Meide’s brief on appeal
merely asserts that no sanctions were warranted and that his claims
against the Anthonys were not frivolous. Meide’s brief, however,
does not contain any supporting arguments explaining why
sanctions were inappropriate or why his claims were not frivolous.
Therefore, Meide has abandoned this issue on appeal. See Sapuppo
v. Allstate Floridian Ins., Co., 739 F.3d 678, 681 (11th Cir. 2014) (“We
have long held that an appellant abandons a claim when he either
makes only passing references to it or raises it in a perfunctory
manner without supporting arguments and authority.”); Timson v.
Sampson, 518 F.3d 870, 874 (11th Cir. 2008) (“While we read briefs
filed by pro se litigants liberally, issues not briefed on appeal by a
pro se litigant are deemed abandoned.” (citation omitted)).
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22-13404 Opinion of the Court 11
This leaves the September 14, 2022 order and September 15,
2022 judgments that reduced the September 29, 2021 sanctions
order to specific sums of attorneys’ fees. We first set forth the
standards of review and general legal principles and then explain
why the sanctions award was appropriate here.
C. Standards of Review
We review a district court’s award of Rule 11 sanctions for
abuse of discretion. Massengale v. Ray, 267 F.3d 1298, 1301 (11th
Cir. 2001). A district court’s award of sanctions under the PSLRA
is reviewed under the same standard. See Thompson v. RelationServe
Media, Inc., 610 F.3d 628, 636 (11th Cir. 2010). We also review the
amount of sanctions awarded by the district court for abuse of
discretion. See Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182,
1195–97 (11th Cir. 2002).
Further, under our Rule 3-1, a plaintiff who fails to object to
a factual or legal conclusion in a magistrate judge’s R&R after being
informed of the time period for objections and the consequences
of not objecting waives his right to challenge the unobjected-to
determination on appeal. 11th Cir. R. 3-1. In the absence of a
proper objection, however, this Court may review an issue in a
civil appeal “for plain error if necessary in the interests of justice.”
Id.
Once this Court determines that reviewing an unobjected-
to error in a R&R is necessary in the interests of justice, then it
applies the heightened civil plain-error standard. Roy v. Ivy, 53
F.4th 1338, 1351 (11th Cir. 2022). Under the civil plain error
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12 Opinion of the Court 22-13404
standard, this Court “will consider an issue not raised in the district
court if it involves a pure question of law, and if refusal to consider
it would result in a miscarriage of justice.” Id. (quotation marks
omitted).
D. PSLRA Sanctions
The PSLRA “mandate[s] [the] imposition of sanctions for
frivolous litigation.” Merrill Lynch, Pierce, Fenner & Smith Inc. v.
Dabit, 547 U.S. 71, 81, 126 S. Ct. 1503, 1511 (2006). The PSLRA
requires the district court to make findings as to each party and
attorney’s compliance with Rule 11(b). 15 U.S.C. § 78u-4(c)(1). If
a court finds that a party or attorney has violated any requirement
of Rule 11(b), then the court shall impose sanctions in accordance
with Rule 11. Id. § 78u-4(c)(3).
In turn, Rule 11(b) requires an attorney or pro se party
presenting a pleading to certify:
(1) [the pleading] is not being presented for any
improper purpose, such as to harass, cause
unnecessary delay, or needlessly increase the cost of
litigation;
(2) the claims, defenses, and other legal contentions
are warranted by existing law or by a nonfrivolous
argument for extending, modifying, or reversing
existing law or for establishing new law; [and]
(3) the factual contentions have evidentiary support
or, if specifically so identified, will likely have
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22-13404 Opinion of the Court 13
evidentiary support after a reasonable opportunity
for further investigation or discovery . . . .
Fed. R. Civ. P. 11(b)(1)–(3). This Court has instructed that Rule 11
sanctions are properly assessed when a party files a pleading that
(1) “has no reasonable factual basis,” (2) “is based on a legal theory
that has no reasonable chance of success and that cannot be
advanced as a reasonable argument to change existing law,” or
(3) is made “in bad faith for an improper purpose.” Massengale, 267
F.3d at 1301 (quotation marks omitted).
If a complaint substantially fails to comply with Rule 11(b),
the presumptive sanction is attorneys’ fees and expenses. 15 U.S.C.
§ 78u-4(c)(3)(A)(i), (ii). This presumption may be rebutted, but
only upon proof by the party against whom sanctions are to be
imposed that (i) the award of attorneys’ fees and other expenses
will impose an unreasonable burden on that party and would be
unjust, and the failure to make such an award would not impose a
greater burden on the party in whose favor sanctions are to be
imposed, or (ii) the violation of Rule 11(b) was de minimis. Id.
§ 78u-4(c)(3)(B)(i), (ii).
Even if a party rebuts the presumption of attorneys’ fees, the
court is still required to award sanctions that it deems appropriate
under Rule 11. Id. § 78u-4(c)(3)(C).
E. Analysis
As an initial matter, Meide in his pro se brief does not argue
that the district court erred in imposing sanctions on McLean,
Meide’s former counsel. Attorney McLean has not filed his own
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14 Opinion of the Court 22-13404
brief. Therefore, the only issue on appeal is whether the district
court abused its discretion in calculating the amount of attorneys’
fees as sanctions against Meide.
Here, at the time of the R&R, Meide was represented by
counsel. Although the R&R sufficiently informed Meide and his
counsel of the time period for objecting and the consequences for
failing to object, Meide and his counsel did not challenge the
magistrate judge’s recommendation that the defendants be
awarded sanctions under Rule 11 and the PSLRA. Accordingly, we
may review Meide’s argument—that the district court abused its
discretion in calculating the amount of sanctions—for plain error
only. See 11th Cir. R. 3-1.
Further, Meide does not raise any supporting arguments
explaining why the district court erred in awarding attorneys’ fees
(or even identify which of the four judgments he is challenging on
appeal). He thus has abandoned any claim related to the district
court’s September 14, 2022 order and September 15, 2022
judgments awarding attorneys’ fees as sanctions. See Roy, 53 F.4th
at 1351 (explaining that a pro se appellant forfeits an issue when he
fails to present a substantive argument on appeal).
In any event, there was no abuse of discretion here. First, a
review of the record supports the district court’s finding that
Meide’s Rule 11(b) violations were substantial. Among other
things, Meide (1) failed to assert any relevant allegations against the
Anthonys in his initial complaint, (2) failed to correct the
deficiencies in his complaint, even after the district court explained
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the heightened pleading requirements of Rule 9(b) and the PSLRA
to Meide at the July 24, 2019 hearing, and (3) continued to assert
securities fraud claims in his own name without explaining why JIC
was not the proper plaintiff. These Rule 11(b) violations were
substantial and triggered the PSLRA’s presumption in favor of
awarding attorneys’ fees as sanctions. See 15 U.S.C. § 78u-
4(c)(3)(A)(i), (ii).
Second, Meide did not meet his burden to rebut the PSLRA’s
presumptive award of attorneys’ fees. Indeed, Meide did not offer
any argument in the district court or in this Court that the burden
of these sanctions was unreasonable or that his Rule 11(b)
violations were de minimis. See id. § 78u-4(c)(3)(B)(i), (ii). Meide
also does not contend on appeal that the amount of attorneys’ fees
awarded to the defendants was unreasonable. Under these
circumstances, we conclude that the district court did not abuse its
discretion in awarding reasonable attorneys’ fees as sanctions.
III. CONCLUSION
For all these reasons, we AFFIRM the district court’s
sanctions award against Meide. We DISMISS his appeal to the
extent that he challenges the final judgment dismissing his second
amended complaint.
AFFIRMED IN PART AND DISMISSED IN PART.
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