Commercial Litigation and Arbitration

§ 1927 Sanctions for Failing to Comply with Settlement Agreement — Extrajudicial Misbehavior

From Hubbard v. Yardage Town, Inc., 2008 U.S. App. LEXIS 20896 (9th Cir. Sept. 8, 2008):

The district court did not abuse its discretion in awarding sanctions in this case because Peters needlessly multiplied the litigation by refusing to comply with the parties' settlement agreement. See 28 U.S.C. § 1927 (permitting the district court to sanction an attorney who "multiplies the proceedings in any case unreasonably and vexatiously"); B.K.B. v. Maui Police Dep't., 276 F.3d 1091, 1107 (9th Cir. 2002) ("[S]ection 1927 sanctions must be supported by a finding of subjective bad faith, which is present when an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent.") (internal citation, quotation marks, and emphasis omitted).

The opinion does not specify whether the settlement was formally approved by the court or was otherwise before the court. Arguably, it does not matter.

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