Commercial Litigation and Arbitration

Sanctions — Appellate Review of Joint-and-Several Liability Determination — Sixth Circuit Ambiguity on § 1927 Standards

From Garner v Cuyahoga County Juvenile Court, 2009 U.S. App. LEXIS 1289 (6th Cir. Jan. 22, 2009):

[De Novo Review of Joint and Several Liability Determination.] A district courtt's determination that plaintiffs are liable to pay attorney fees for bringing frivolous lawsuits, and the court's calculation of the total amount owed, are actions that are reviewed on appeal under the abuse-of-discretion standard…. But the question of whether a district court has appropriately apportioned fees among multiple parties arguably raises a legal issue to be reviewed de novo. See Turner v. D.C. Bd. of Elections and Ethics, 359 U.S. App. D.C. 332, 354 F.3d 890, 896 (D.C. Cir. 2004) (deciding the criteria for the apportionment of attorneys fees as a legal issue); Matter of Petroleum Servs., Inc., 3 F.3d 889, 896 (5th Cir. 1993) ("The question whether the harm . . . is capable of apportionment among two or more causes is a question of law.") (citation omitted). We need not settle the question in this case, however, because we would reach the same conclusion regarding apportionment under either the abuse-of-discretion or de novo standard of review.

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[Sixth Circuit §§ 1927 Standards.] There is tension within this court's jurisprudence as to the proper standard to apply in determining whether sanctions are warranted under § 1927. The district court relied upon the following standard set forth in Wilson-Simmons v. Lake County Sheriff's Department, 207 F.3d 818 (6th Cir. 2000):

Sanctions under § 1927 are warranted when an attorney has engaged in some sort of conduct that, from an objective standpoint, falls short of the obligations owed by a member of the bar to the court and which, as a result, causes additional expense to the opposing party. . . . [W]hen an attorney knows or reasonably should know that a claim pursued is frivolous, or that his or her litigation tactics will needlessly obstruct the litigation of nonfrivolous claims, a trial court does not err by assessing fees attributable to such actions against the attorney. Bad faith is not required to support a sanction under § 1927.

Id. at 824 (citations and internal quotation marks omitted).

A more recent case, however, states that sanctions are appropriate under § 1927 only where the attorney "intentionally abuses the judicial process or knowingly disregards the risk that his actions will needlessly multiply proceedings." Red Carpet Studios, 465 F.3d at 646. [ Red Carpet Studios, Div. of Source Advantage, Ltd. v. Slater, 465 F.3d 642, 646 (6th Cir. 2006).] This language suggests a higher standard than the one described above in Wilson-Simmons. But we need not reconcile this apparently conflicting language because the district court found that Attorney Frost "intentionally pursued meritless claims," a finding that would satisfy either standard.

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