The court order regarding Trump's IRS/slush fund case is a big deal!

[Ocelot II]

10. Here's a condensed version of the court's order relating to sanctions.

To summarize, the judge ordered non-monetary sanctions under Federal Rule 11, and referred Trump attorney Alejandro Brito to the Florida Bar for its determination regarding disciplinary action, and prohibited Trump attorney Daniel Z. Epstein for applying for admission pro hac vice in the Southern District of Florida one year or until further order of the court, and also prohibited the parties from calling the so-called "settlement agreement" an actual settlement of the matter (meaning that the "slush fund" is dead). The court also awarded monetary damages to the non-party amici curiae and referred the matter to the State Bar of New York, of which Acting AG Blanche is a member, and to the DC Bar, of which Associate AG Woodward is a member.

Federal Rule of Civil Procedure 11 (“Rule 11”) governs the filings of pleadings, motions, and other papers with the Court. “The purpose of Rule 11 is to deter baseless filings in [the] district court and thus streamline the administration and procedure of federal courts.” As relevant here, when an attorney files a pleading in federal court, he certifies that, among other things, the pleading is not being presented for an improper purpose. Because this question strikes at the heart of the integrity of the judicial process, the Court may raise the improper purpose inquiry sua sponte and at any time. ...

An improper purpose under Rule 11 includes filing suit to force a settlement....This case concerns whether Plaintiffs’ conduct, as described supra, satisfies Rule 11’s improper purpose standard. The Court concludes that it does. ... These efforts cannot be allowed in this Court.... As aptly summarized by the non-party movants, Plaintiffs acted in bad faith and for an improper purpose by “collusively filing a lawsuit with claims subject to multiple dispositive defenses solely to provide cover for a collusive settlement.” ...

The Court recognizes that Rule 11(c)(5)(B) limits a court’s ability to impose monetary sanctions on its own initiative where the show cause order follows a voluntary dismissal or settlement. .... Nonetheless, the Court need not decide whether the circumstances of this case permit monetary sanctions notwithstanding the language of Rule 11(c)(5)(B). That limitation applies only to monetary sanctions and does not prevent the Court from determining whether Rule 11 has been violated or whether appropriate non-monetary sanctions are appropriate...

Thus, after considering the totality of the circumstances, including the record, the relevant law, the written submissions, and the factors identified by the Eleventh Circuit, the Court concludes that Rule 11 sanctions are appropriate here. ... In fashioning an appropriate sanction, the Court is guided by Rule 11’s deterrent purpose. ... The Court therefore imposes non-monetary sanctions under Rule 11 as follows:

1. Plaintiffs’ Attorney Alejandro Brito is REFERRED to The Florida Bar for its consideration, review, and determination as to whether any disciplinary action is appropriate in light of the findings and rulings made in this Order. The Clerk of Court is DIRECTED to mail a copy of this Case Order to The Florida Bar, of which Attorney Alejandro Brito is a member .

2. All future applications by Daniel Z. Epstein for admission pro hac vice in the Southern District of Florida will be DENIED for one year or until further order of this Court.

3. The Parties are prohibited from referring to the purported “settlement agreement,” or using, offering, admitting, or citing any of its provisions in any judicial, administrative, regulatory, arbitration, or any other official proceeding as evidence of a “settlement” reached in this matter. ...

Having concluded that sanctions are warranted under Rule 11, the Court will now address whether sanctions are likewise appropriate under the Court’s inherent authority. Although Rule 11 limits imposing monetary sanctions following a voluntary dismissal, the Court’s inherent authority remains available to address conduct that abuses the judicial process. ... Independent of Rule 11, federal courts possess inherent authority to protect the integrity of judicial proceedings. .... Thus, while “the court ordinarily should rely on the Rules rather than the inherent power . . . if in the informed discretion of the court, neither the statute nor the Rules are up to the task, the court may safely rely on its inherent power.” The Court does so here. The conduct of the Parties triggers the Court’s inherent authority. As to Plaintiffs, they filed a multibillion-dollar lawsuit asserting claims that they knew, or should have known, were time-barred and for an amount of damages unsupported by facts or law. Plaintiffs could make no connection between the billions of dollars they sought, and the recovery authorized under the governing statute. ... This lawsuit was not brought to vindicate rights; it was brought to manipulate the judicial process to pursue benefits unavailable in litigation because the Parties were not adverse.

Defendants’ conduct is equally untenable. It is telling that the DOJ, which is tasked with enforcement of United States law, has remained conspicuously absent and silent when serious questions about this matter have been raised. ... And when representatives did choose to expound on the Department’s conduct, they offered misleading explanations of the facts and the law. In abdicating its responsibility to zealously defend the interests of the United States, the Government entered into a “settlement” that deviated from its litigation posture in similar actions, disregarded DOJ policies, and accomplished objectives beyond those authorized, as well as those specifically prohibited, by law. Under these circumstances, the Court may reasonably infer that the Government failed to defend this lawsuit or to respond to the Court’s jurisdictional inquiry because its position would not withstand judicial scrutiny and because resolution of the threshold issues identified by the Court would not have favored its preferred outcome to this case. .... The Parties used the existence of federal litigation as a means of conferring legitimacy upon a course of action that they were unwilling to subject to judicial review. The context of the “settlement,” the relationships of the people involved in negotiating and approving it, the ethical implications of their conduct, and the Parties’ swift efforts to dismiss this case after the Court raised fundamental jurisdictional questions all support this conclusion. Accordingly, the Court expressly finds that Plaintiffs acted in bad faith.

The Court finds monetary sanctions appropriate under its inherent authority and prerogative to police the matters and litigants who avail themselves of its jurisdiction. ...These monetary sanctions would include the attorneys’ fees incurred by Court-appointed amici. ... Nevertheless, the Court-appointed amici have declined any reimbursement for their important service to the Court. There remain the initial amici—whose appearance was not contested by any Party—and the thirty-five former Federal Judges, whose briefing precipitated this Order. Accordingly, these amici, if they wish, may file, within fourteen (14) days of this Order, a memorandum regarding any appropriate reimbursement. Plaintiffs may file any response seven (7) days thereafter. Finally, the Clerk of Court is DIRECTED to mail a copy of this Order to the State Bar of New York, of which Acting Attorney General Blanche is a member, AND to the District of Columbia Bar, of which Associate Attorney General Woodward is a member, where disciplinary proceedings are currently ongoing.