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Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Inherent Power Sanctions — Appeal Dismissed for Appellant’s Failure to Pay Sanction Imposed in Prior Action

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From Smith v. United States, 2009 U.S. App. LEXIS 14736 (10th Cir. July 6, 2009):

We dismiss the matter for Mr. Smith's failure to pay the sanctions we imposed in Smith v. C.I.R., 160 Fed. Appx. 666, 670 (10th Cir. 2005).

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This court ... previously imposed sanctions for Mr. Smith's "blatant waste of judicial time and resources" in pursuing a frivolous appeal.... We ordered Mr. Smith to pay $6,000 to the Commissioner of Internal Revenue for costs incurred in defending against a frivolous appeal.... The brief filed in this case by the Tax Division, Department of Justice, states that its records do not reflect payment of this amount. Mr. Smith does not contend otherwise. Rather, he asserts that he listed the sanction amount in his bankruptcy case as a disputed claim, but the Commissioner failed to pursue the claim. He also argues that tax-collection procedures have interfered with his ability to pay the sanction.

***

"Courts have inherent power to dismiss actions for nonpayment of costs in prior actions. This power also extends to a litigant's failure to pay previously imposed sanctions." Hymes v. United States, 993 F.2d 701, 702 (9th Cir. 1993), on reconsideration, 2 F.3d 1157, 1993 WL 259483 (9th Cir. 1993) (citations omitted). As the Second Circuit has explained, sanctions act as "a warning to a vexatious litigant (and others contemplating frivolous appeals) that the processes of a court may not be abused with impunity in the future." Schiff v. Simon & Schuster, Inc., 766 F.2d 61, 62 (2d Cir. 1985) (per curiam). "To make the sanction effective and thereby protect the processes of a court from abuse, a litigant against whom . . . sanctions have been imposed must comply with those sanctions before being permitted to pursue new matters in that court." Id.; see also Mann v. Boatright, 477 F.3d 1140, 1150 (10th Cir. 2007) (precluding litigant from pursuing additional appeals until providing proof of compliance with previously imposed sanctions).

Because Mr. Smith has not complied with our order requiring him to pay $6,000 to the Commissioner, we DISMISS this appeal.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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