Sanctions — Sua (Nostra) Sponte Order to Show Cause for Vexatious and Frivolous Appeal Contemplates Joint and Several Liability on Client and Counsel, Leaving It to Them to Sort Out

From Gallop v. Cheney, 2011 U.S. App. LEXIS 8554 (2d Cir. April 27, 2011):

[W]hile the government has not moved for sanctions, the record on appeal leaves no doubt that this appeal, to say nothing of the original complaint, was "brought without the slightest chance of success," and therefore should not have been brought at all, even if authorized by the client. Bankers Trust Co. v. Publicker Indus., Inc., 641 F.2d 1361, 1367 (2d Cir. 1981). Pursuant to the terms of Federal Rule of Appellate Procedure 38, 28 U.S.C. § 1927, and the inherent authority of the Court to consider sanctions on parties who pursue patently frivolous appeals and force this Court to consider — and the government to defend — vexatious litigation, we may, with adequate notice and opportunity to be heard, impose sanctions nostra sponte. See Fed. R. App. P. 38 ("If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee."); 28 U.S.C. § 1927 ("Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof 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."); Chambers v. NASCO, Inc., 501 U.S. 32, 45-46, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991) (discussing the "inherent power" of the court to impose sanctions on a party who has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons") (quotation marks omitted); Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 408, 110 S. Ct. 2447, 110 L. Ed. 2d 359 (1990) (discussing the authority of appellate courts to impose sanctions under Rule 38); Revson v. Cinque & Cinque, P.C., 221 F.3d 71, 78-79 (2d Cir. 2000) (discussing the authority of appellate courts to impose sanctions under 28 U.S.C. § 1927 and under their inherent power to sanction parties and their attorneys); In re JC's East, Inc., 84 F.3d 527, 532 (2d Cir. 1996) (discussing the authority of appellate courts to impose sanctions under Rule 38); DeLuca v. Long Island Lighting Co., 862 F.2d 427, 430 (2d Cir. 1988) (discussing same); DLC Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124, 136 (2d Cir. 1998) (discussing the "inherent power" of appellate courts to impose sanctions).

As in United States v. Potamkin Cadillac Corp., 689 F.2d 379 (2d Cir. 1982), this appeal was an unnecessary imposition "on the government which is forced to defend against the appeal and on the taxpayers who must pay for that defense." Id. at 382. Accordingly, Gallop and her counsel are hereby ordered to show cause in writing within thirty days from the date of entry of this order why they should not pay double costs and damages in the amount of $15,000, for which they would be jointly and severally liable, under Rule 38, 28 U.S.C. § 1927, and the inherent power of this Court. See, e.g., Knipe v. Skinner, 999 F.2d 708, 711 (2d Cir. 1993) (ordering nostra sponte that counsel show cause why he should not pay double costs and fees under Rule 38). The government shall file a letter-brief within three days of Gallop's counsel's submission stating its views, if any, on the question of sanctions.

[Footnote] 3. As we have previously stated, "since attorney and client are in the best position between them to determine who caused this appeal to be taken," the prudent course for this Court is to impose joint and several liability. Potamkin, 689 F.2d at 382; see also In re JC's East, Inc., 84 F.3d at 532 (ordering that "appellants and their attorney, who are in the best position to allocate responsibility for bringing this appeal, show cause within thirty days why they should not be sanctioned, with joint and several liability") (citation omitted).

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