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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.
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Filing Second Action to Avoid Seeking Leave of Court to Amend Is Subject to § 1927 Sanction in First Action (Despite General Rule that Filing a Complaint Doesn’t Violate § 1927 Because It Isn’t Multiplicative)

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From Thurmond v. Wayne County, 2011 U.S. App. LEXIS 11817 (6th Cir. June 10,2011):

On March 8, 2007, Thurmond filed a complaint in the Wayne County Circuit Court, which Wayne County removed to the U.S. District Court for the Eastern District of Michigan. After almost one year and a litany of discovery motions from both parties, Thurmond filed a motion for default judgment against all defendants, claiming deliberate withholding of evidence and various abuses of the discovery process. The parties continued in their discovery battle and, meanwhile, Troopers Bunk and Crawford filed a motion to dismiss and a motion for summary judgment, respectively, and Wayne County along with Wayne County Deputy Sheriffs Linda Rodgers, Matthew Mears, and Linda Jones also filed a motion for summary judgment. Thurmond did not respond to the merits of these motions, but instead recounted his allegations of discovery abuses and argued that further discovery was necessary before granting summary judgment. The district court held oral argument on these motions, at which time it considered Thurmond's objections to a magistrate judge's order that purported to deny Thurmond's motion for default judgment. The district court granted Bunk's motion to dismiss, Crawford's motion for summary judgment, and the motion for summary judgment by Wayne County, Mears, Jones, and Rodgers, and denied Thurmond's motion for default judgment. Thurmond filed a motion for reconsideration of the district court's grant of Bunk's motion to dismiss, which the district court also denied.

During this time, approximately two weeks before discovery was set to close, Thurmond informed Wayne County of his intent to file a third amended complaint, or, alternatively, a new action. Wayne County objected to the proposed amendment and asked Thurmond to seek leave of the court before filing the third amended complaint. Thurmond did not do so, and instead filed a new action, creating the second of the cases consolidated for appeal here.

As a result, Wayne County filed a motion for sanctions under Rule 11 and also a motion to dismiss the new action. Thurmond did not respond to either motion, despite the district court's order to do so. At the district court's hearing on the outstanding motions pending in the first suit, Thurmond voluntarily dismissed the second suit, whereupon the district court ordered Thurmond's counsel, Martin, to pay Wayne County's attorney fees, but specifically declined to impose further sanctions under Rule 11. ***

After Thurmond's counsel, Martin, orally stipulated to dismiss the second lawsuit at the district court's hearing, the district court sanctioned Martin for his "contumacious conduct," which the district court stated to include: (1) Martin unreasonably refusing to dismiss this "unviable action;" and (2) Martin's "initial failure to respond to [defendants'] motions . . . in disregard of the Court's direct orders." (Order Dismissing Case, Case 08, Dist. Ct. Docket No. 12, at 4.) However, the district court failed to identify or otherwise reference the legal basis for its imposition of sanctions. Although 28 U.S.C. § 1927 may support the imposition of sanctions in this case, the district court failed to make any reference to any legal authority under which it imposed sanctions. This omission is problematic. If, for instance, the district court awarded attorney fees against Martin under 42 U.S.C. § 1988(b), this would be error because such fees may only be charged against a party, not the party's attorney. See Smith v. Detroit Fed'n. of Teachers, 829 F.2d 1370, 1374 n.1 (6th Cir. 1987) (citing Roadway Express, Inc. v. Piper, 447 U.S. 752, 761 & n.9 (1980)). Nor is a proper legal basis found in Wayne County's request for fees. Indeed, the legal authority relied upon by Wayne County in its motion concerns awards under 42 U.S.C. § 1988(b), which, as explained above, would be error if applied here. While the district court summarized Martin's conduct that it found "contumacious," it did not mention--even in passing--any potential basis for the imposition of fees. Without more, the district court has deprived us of the opportunity to meaningfully review its order.

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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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