Commercial Litigation and Arbitration

Sanctions — § 1927 Standards — Third Circuit

From In re Beers, 2010 U.S. App. LEXIS 22475 (3d Cir. Oct. 29, 2010):

Beers contends that the District Court erred in concluding that the legal standard for 28 U.S.C. § 1927 sanctions includes a required element of bad faith. We find no such error. Both the District Court and the Bankruptcy Court thoroughly reviewed the applicable law and reasoned appropriately that there is an element of bad faith as part of the controlling standard. It has been well settled in the Third Circuit that 28 U.S.C. § 1927 requires a finding of four elements for the imposition of sanctions: "(1) multiplied proceedings; (2) unreasonably and vexatiously; (3) thereby increasing the cost of the proceedings; (4) with bad faith or with intentional misconduct." LaSalle Nat'l Bank v. First Connecticut Holding Group, 287 F.3d 279, 288 (3d Cir. 2002). See Also In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 278 F.3d 175, 180 (3d Cir.2002); Hackman v. Valley Fair, 932 F.2d 239, 242 (3d Cir. 1991); Williams v. Giant Eagle Markets, Inc., 883 F.2d 1184, 1191 (3rd Cir. 1989); Baker Industr. Inc.v. Cerberus, Ltd., 764 F.2d 204, 208 (3d Cir. 1985).

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