Commercial Litigation and Arbitration

Inherent Power, But Not §1927, Sanctions Appropriate for Pre-Litigation Misconduct — §1927 Sanctions Imposable on Pro Se Lawyer Representing Self

From Carr v. Tillery, 2010 U.S. App. LEXIS 685 (7th Cir. Jan. 12, 2010):

Turning now to the cross-appeal, we think the defendants' motion for sanctions should not have been denied. ***

The motion complained that [plaintiff] Carr is harassing the defendants with repetitive litigation, including a suit — this suit — that borders on the frivolous, even though he is an immensely successful lawyer represented on appeal by one of the nation's premier law firms … as well as by his son …, which the plaintiff formed after the break-up of his old firm.

Section 1927 of the Judicial Code, on which the motion was based, provides that a lawyer "who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." The statute is applicable not only to lawyers who represent clients but also to a lawyer who represents himself, as Carr did in the district court. Sassower v. Field, 973 F.2d 75, 80 (2d Cir. 1992). (Whether a pro se litigant who is not a lawyer can be sanctioned under section 1927 is an open question in this circuit. Alexander v. United States, 121 F.3d 312, 315-16 (7th Cir. 1997).)

But we have held that section 1927 is inapplicable to "misconduct that occurs before the case appears on the federal court's docket," or in other words to "improper conduct in the run up to litigation." Bender v. Freed, 436 F.3d 747, 751 (7th Cir. 2006); see also In re Case, 937 F.2d 1014, 1023 (5th Cir. 1991). This interpretation does not leave victims of unreasonable and vexatious litigation remediless, and should not: a litigant can't be allowed to file repeated meritless suits with impunity just so long as he does not protract any one of them unreasonably. A court has inherent power, which is to say a common law power, to punish by an award of reasonable attorneys' fees or other monetary sanction, or to prevent for the future by an injunction, misconduct by lawyers appearing before it. Chambers v. NASCO, Inc., 501 U.S. 32, 43-46, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991); Mach v. Will County Sheriff, 580 F.3d 495, 502 (7th Cir. 2009); Alexander v. United States, supra, 121 F.3d at 316. The limitations of section 1927 do not apply to the exercise of that power. ***

Although the suit is not frivolous, or at least not utterly so, it is so lacking in merit (most clearly because of res judicata and the one-refiling rule) that its pursuit by the plaintiff indicates a motive to harass. The indication is made conclusive by the vitriolic tone of the complaint, which was drafted by Carr himself, and by the character of his lawyers' briefs and oral argument in this court. We note the failure of his lawyers in this court to cite the Schrager case in their opening brief, the disingenuous efforts at distinguishing Schrager and Eskridge in the reply brief, the false statement in the opening brief that "Carr does not seek to relitigate issues from the 2004 litigation," and the improper attempt to raise issues in the reply brief that had not been mentioned in the opening brief. The failure to even attempt to rebut the cross-appeal on sanctions is also telling.

Two years ago we sanctioned Carr under Rule 38 for filing a frivolous appeal—in a suit in which he was not a party but into which he had tried to inject himself by filing a lien on fees that the district court had ruled were due to his former partners. The district court correctly dismissed the filing for lack of subject-matter jurisdiction and this court dismissed Carr's appeal as improper, noting his "refus[al] to accept adverse judicial decisions." Cooper v. IBM Personal Pension Plan, 240 Fed. App'x 133, 135 (7th Cir. 2007) (per curiam). The complaint in the present case asserts wildly that we sanctioned Carr because we had been taken in by the defendants' lies.

The filing of four lawsuits in the Illinois state courts and their abandonment upon the filing of a fifth lawsuit that sought to circumvent the absence of diversity jurisdiction by recharacterizing a breach of contract action (the only thing not barred by res judicata—yet even it was barred by the one-refiling rule) as a violation of RICO was an abuse of the patience of the courts.

This litigation is groundless. The plaintiff is out of control and his lawyers are neglecting their duties as officers of the state and federal courts by failing to rein him in. The district court is directed to assess a proper monetary sanction. (The defendants have not asked us to impose sanctions for misconduct in the proceedings in this court.)

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