Antitrust Law Daily Wrap Up, ADVERTISING—2d Cir.: Civil contempt judgment against an attorney filling a class action suit reversed, (Mar 18, 2026)

By Thomas K. Lauletta, J.D.

A fine for violation of Federal Rule 11 was also reversed.

The U.S. Court of Appeals for the Second Circuit in New York city reversed civil contempt and Rule 11 fines assessed by a federal district court against an attorney who had filed a class action lawsuit for a plaintiff against Starbucks Corporation for allegedly misrepresenting its Arabica coffee as containing no additives. The appellate court reversed the contempt order as erroneous, holding that it was not aware of any court order that the attorney violated, and that the district court failed to identify any such violation in its contempt adjudication. In reversing the Rule 11 fine the appellate court held that the district court had abused its discretion in that even if the attorney’s arguments were unpersuasive, they were not objectively frivolous or motivated by bad faith (Brownell v. Starbucks Corp., No. 25-189 (2d Cir. Mar. 17, 2026)).

Attorney Spencer Sheehan and his law firm appealed a November 30, 2023, order of the U.S. District Court for the Northern District of New York holding the attorney in civil contempt, and a January 2, 2025, order of that court directing him to pay $500 as a sanction for violating Federal Rule of Civil Procedure 11(b). The contempt and Rule 11(b) fine followed the district court’s dismissal of the plaintiff’s action alleging Starbucks mislabeled its Arabica coffee.

District Court action. Following the dismissal of the suit against Starbucks, the district court brought a sup sponte investigation of the plaintiff’s attorney, leading to the holding of him in civil contempt and fining him $500 for violation of Rule 11(b). In imposing its sanction against the attorney, the district court stated that the attorney had filed no fewer than 18 actions in the Northern District of New York since 2021, all of which were proposed class action lawsuits, and none of which had proceeded past the motion to dismiss phase of litigation. The district court also referenced recent cases from the Southern District of New York, in which at least one judge admonished the attorney for filing dozens of cases similar to the one in Brownell in the past several years throughout the Second Circuit, with numerous courts dismissing near-identical challenges.

For the reasons stated below, the appellate court reversed the sanctions against the attorney.

Contempt. The appellate court stated that a “court may hold a party in contempt if (1) the order the party failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the party has not diligently attempted to comply in a reasonable manner.” The appellate court stated that it was not aware of any court order that the attorney violated, and that the district court did not identify any such violation in its contempt adjudication. Accordingly, the appellate court dismissed the contempt order as erroneous.

Federal Rule 11. The appellate court stated that when a district court sanctions a litigant for bad faith, it must outline its factual findings with a high degree of specificity. Finding that the district court did not do so, the appellate court revered the district court’s sanctioning the attorney under Federal Rule 11. Here, the district court imposed sanctions both because the attorney relied on meritless legal theories, and because he failed to adequately verify the factual allegations in the plaintiff’s complaint.

Regarding the attorney’s legal theory in the case, the district court determined that there could be no consumer deception because no reasonable consumer would interpret the label “Ground 100% Arabica Coffee” to mean that Starbuck’s coffee does not contain added potassium. The appellate court opined that although the district court’s interpretation may be better than that of the attorney’s it is not so obviously correct that the lawsuit was frivolous. In fact, arguments similar to the attorney’s have been accepted in other Courts of Appeal.

With respect to the district court’s conclusion that the attorney’s pleadings of the plaintiff’s case were inadequate, the appellate court stated that the attorney “was not required to ‘plead evidence’ in the complaint as long as the underlying allegations in the complaint were not entirely devoid of support.

Court action. The appellate court reversed the district court’s orders holding the attorney in civil contempt and imposing sanctions under Federal Rule 11.

The Case is No. 25-189.

Judge: Raggi, R.

Attorneys: Daniel R. Rose (Costello, Cooney & Fearon, PLLC) for Spencer Sheehan. Paul W. Garrity (Richter & Hampton LLP) for Starbucks Corp.

Companies: Starbucks Corp.

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