(Puerto Rico Soccer League NFP Corp., et al. v. Federacion Puertorriquena de Futbol Inc., et al., No. 23-1203, D. Puerto Rico)
(Opinion available. Document #46-251001-058Z.)
The opinion was issued Sept. 23.
Puerto Rico Soccer League NFP Corp. and various others sued the Federacion Puertorriquena de Futbol Inc. (FPF) and directors alleging claims for violation of the Sherman Act Section 1, 15 U.S.C. § 1, and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c), 1962(b), 1962(d), tortious interference with contract, abuse of process and breach of fiduciary duty under Puerto Rico law. The plaintiffs claim that the defendants, in cooperation with others, restricted the market for soccer tournaments and other events in Puerto Rico.
The other plaintiffs are Marc Serralta Ives, Juan M. Cornejo, Maria Larracuento, Jose R. Olmo-Rodriguez and Futbol Boricua Inc. The other defendants are Ivan Rivera-Gutierrez, Jose “Cukito” Martinez, Gabriel Ortiz, Luis Mozo Canete, John Does 1-18, insurance companies A, B, C, Fédération Internationale de Football Association (FIFA) and Confederation of North, Central America and Caribbean Association Football (CONCACAF)
Problems Arise
In February 2025, the parties agreed to participate in settlement negotiations, and the case was referred to a magistrate judge in the U.S. District Court for the District of Puerto Rico. The court set a settlement conference for March 25. The defendants then moved to disqualify the plaintiffs’ counsel, for an order limiting discovery and for a protective order.
The court on March 7 placed all the motions in abeyance and ordered the plaintiffs to respond. On March 9, the plaintiffs responded to all three motions, and on March 13 they submitted a supplemental response to the motion for a protective order. On March 17, the defendants filed motions for leave to file replies. The replies note that each of the responses included nonexistent case law or erroneous authorities and appeared to have been drafted by AI. The court granted leave to file the replies and issued an order for the plaintiffs to show why they should not be sanctioned for violation of Federal Rule of Civil Procedure 11, Fed. R. Civ. P. 11, and Model Rule of Professional Conduct 1.1, Mod. R. Prof. C. 1.1
In an amended order to show cause filed March 19, Judge Raul M. Arias-Marxuach said his independent review of the responses revealed “multiple citations that are incorrect, do not contain the quotes or content cited to, and reference cases that cannot be located and thus presumably do not exist. While the use of generative artificial intelligence is not forbidden, attorneys have a duty of competence to their clients and a duty of candor to the tribunal.”
Magistrate Judge Marshal D. Morgan vacated the settlement conference in light of the show cause order.
Sanctions
In his resulting opinion filed April 10, Judge Arias-Marxuach held that the plaintiffs “failed to show cause and sanctions are warranted.” The judge said he was not persuaded by the plaintiffs’ argument that the errors were immaterial and the result of misspellings or other simple mistakes. Contrary to their contention, the “filings were rife with citations for content that did not exist in the underlying opinion and quotations allegedly summarizing or restating the case law, rather than the exact text of the opinion. The misuse of quotation marks was so prevalent that it was unusual for the Court to find a quotation provided by Plaintiffs within the case it was attributed to,” Judge Arias-Marxuach said.
He ordered the plaintiffs to pay the defendants’ attorney fees for time spent responding to the errors and gave the defendants 21 days to produce an itemized application for such fees. Judge Arias-Marxuach warned that future errors would result in the revocation of attorney Ibrahim Reyes’ pro hac vice status.
The plaintiffs moved for reconsideration on April 22. In a docket-only order issued the same day, Judge Arias-Marxuach denied the relief.
A fourth amended complaint was filed June 26.
CONCACAF and FIFA filed motions for attorney fees. Some of the briefing was restricted or redacted.
Experienced Litigators
After considering the submissions, Judge Arias-Marxuach granted the defendants’ motion for attorney fees in part. Judge Arias-Marxuach noted that CONCACAF sought $20,927.50 in attorney fees, FIFA sought $52,053.00 in attorney fees and FPF sought $14,992.50 in attorney fees. Judge Arias-Marxuach said he had no doubt that the defendants’ requests involved work on the case.
But because of their vagueness it is impossible to know whether the billed time was reasonable. “Most of the problematic entries involved block-billing, where so many tasks were logged for a single block of time such that the Court could not determine the reasonableness of time spent expended on these tasks. The Court will reduce each block-billed time entry by 30 percent,” Judge Arias-Marxuach said. Other blocks involved vague entries alongside more detailed descriptions, the judge said.
Judge Arias-Marxuach said the 16 defense attorneys have substantial litigation experience and are all employed by well known law firms. The rates of $250-300 per hour for the attorneys and $150-200 per hour for associates is appropriate, he said.
The initial lodestar calculation would have been a heavy burden for the plaintiffs’ attorneys, which describe themselves as solo practitioners, Judge Arias-Marxuach said. But neither is the lower end of attorney fees awarded as sanctions in similar cases appropriate.
Question Of Scale
“However, various factors counsel against imposing attorneys’ fees on the lower end of the scale. The problematic motions had significantly more errors than other cases located by the Court. Here, Plaintiffs’ motions included at least fifty-five defective citations, requiring hours of work on the Court’s end to check the accuracy of each citation. Plaintiffs’ counsel never offered a satisfactory explanation for why their citations in multiple motions were so severely flawed. Plaintiffs denied using generative artificial intelligence. But the sheer number of inaccurate or nonexistent citations suggests otherwise. And in any event, the violations of Fed. R. Civ. P. 11 and applicable ethical rules occurred regardless of whether they were caused by misuse of generative artificial intelligence or other means. This behavior stands in contrast to several of the cases cited . . . where various attorneys facing sanctions offered an explanation as to how they erred,” Judge Arias-Marxuach said.
The judge reduced the initial lodestar amount by 60%. “While not imposing an unreasonable and unnecessary sanction outside the bounds contemplated by Fed. R. Civ. P. 11, the Court hopes this sanction will deter Plaintiffs’ counsel, as well as other attorneys practicing in this District, from engaging in similar misbehavior in the future,” Judge Arias-Marxuach said.
The rulings left the plaintiffs’ counsel with $23,375.87 in attorney fees as a sanction. Judge Arias-Marxuach granted additional fees related to the use of legal research services, bringing the total sanction to $24,492.10. Of that, $6,732.73 is payable to CONCACAF, $12,401.67 is payable to FIFA and the remaining $5,357.70 is payable to FPF.
Counsel
The plaintiffs are represented by Reyes of Reyes Lawyers PA in Coral Gables, Fla., and Jose R. Olmo-Rodriguez of Olmo & Rodriguez-Matias Law Office in San Juan.
CONCACAF is represented by Salvador J. Antonetti-Stutts and Aníbal A. Román-Medina of O’Neill & Borges LLC in San Juan and John J. Kuster, Jon Muenz and Amanda M. Blau of Sidley Austin LLP in New York.
FPF is represented by Edwin J. Seda-Fernández, Eric Pérez-Ochoa, Alexandra Casellas Cabrera and Andrés D. Santiago-López of Adsuar Muñiz Goyco Seda & Pérez-Ochoa PSC in San Juan.
FIFA is represented by Roberto A. Camara-Fuertes and Suleicka Tulier-Vazquez of Ferraiuoli LLC in San Juan and H. Christopher Boehning of Paul, Weiss, Rifkind, Wharton & Garrison LLP in New York.
(Additional documents available: CONCACAF’s redacted application for attorney fees. Document #46-251001-059B. FIFA’s redacted application for attorney fees. Document #46-251001-060B. Plaintiffs’ motion for reconsideration. Document #46-251001-062B. Opinion and order on sanctions. Document #46-250507-045R. Plaintiffs’ response to order to show cause. Document #46-250507-008B. Defendants’ response to order to show cause. Document #46-250507-009B. Fourth amended complaint. Document #46-251001-061C.)