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.

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.
Commercial Litigation and Arbitration
« Back to Complex Lit Blog

§ 1927 Sanctions — Meaning of “Unreasonably and Vexatiously” — “A case may be weak, but as long as it is not without circumstantial foundation, it is not frivolous” (Good Quote)

Download PDF

§ 1927 Sanctions — Meaning of “Unreasonably and Vexatiously” —  "A case may be weak, but as long as it is not without circumstantial foundation, it is not frivolous" (Good Quote)

Barnhart v. Lamar Advertising Co., 2013 U.S. App. LEXIS 14174 911th Cir. July 15, 2013):

Section 1927 provides, in relevant part, that "[a]ny attorney . . . 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." 28 U.S.C. § 1927. Congress designed § 1927 "to sanction attorneys who 'willfully abuse the judicial process by conduct tantamount to bad faith.'" Schwartz v. Millon Air, Inc., 341 F.3d 1220, 1225 (11th Cir. 2003) (quoting Malautea v. Suzuki Motor Co., 987 F.2d 1536, 1544 (11th Cir. 1993)). For a court to justify an award of sanctions under § 1927, three conditions must be satisfied: (1) the attorney must engage in unreasonable and vexatious conduct, (2) that conduct must have multiplied the proceedings, and (3) the amount of sanctions must bear a financial nexus to the excess proceedings. Peterson v. BMI Refractories, 124 F.3d 1386, 1396 (11th Cir. 1997).

***[T]he district court did not clearly err in finding that Barnhart and his counsel had "good grounds" to pursue this claim. (Id. at 4.) That is, counsel did not engage in unreasonable and vexatious conduct because this claim was not frivolous, and this claim did not become frivolous during the course of the litigation.

An attorney engages in unreasonable and vexatious conduct when the conduct is "so egregious that it is tantamount to bad faith." Norelus v. Denny's, Inc., 628 F.3d 1270, 1282 (11th Cir. 2010) (quoting Amlong & Amlong, P.A. v. Denny's, Inc., 500 F.3d 1230, 1239 (11th Cir. 2007)) (internal quotation marks omitted). An attorney acts in bad faith when he "knowingly or recklessly pursues a frivolous claim." Peer, 606 F.3d at 1314. Negligent conduct is not enough. Amlong & Amlong, 500 F.3d at 1241-42. "Determinations regarding frivolity are to be made on a case-by-case basis." Sullivan v. Sch. Bd. of Pinellas Cnty., 773 F.2d 1182, 1189 (11th Cir. 1985). A case may be weak, but as long as it is not "without circumstantial foundation," it is not frivolous. Hudson v. Int'l Computer Negotiations, Inc., 499 F.3d 1252, 1265 (11th Cir. 2007) (quoting Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1187 (11th Cir. 2005)). When deciding if a claim is frivolous, we ask "whether th[e] evidence was so obviously deficient that [the party] and her counsel should be forced to pay . . . attorney's fees and expenses." Cordoba, 419 F.3d at 1180. Moreover, whether an attorney acts in bad faith is a question of fact that we review for clear error. See Malautea, 987 F.2d at 1544 (concluding that the district court did not clearly err in finding that the attorney had acted in bad faith).

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

Rule 41(b): Five Factors to Be Weighed in Deciding Whether Dismissal Is Appropriate (Second Circuit) — Is A Finding of Bad Faith or Fault Required if Dismissal Is Without Prejudice? — Undecided If Truly Without Prejudice But It Is Required If the Without Prejudice Dismissal Will Act as a Dismissal on the Merits (Here, Because of the Statute of Limitations) — Failure To Consider A Lesser Sanction Than Dismissal Is Generally An Abuse Of Discretion

Spoliation Sanctions/Mootness: Stipulation Resolving “All Pending Discovery Disputes,” Which Are Enumerated, Does Not Moot Subsequent Sanctions Motion for ESI Spoliation — Postjudgment Sanctions Order Is Appealable When District Court Has Finally Disposed of Both Liability and Amount

Rule 37 Default Judgment Sanction: (1) Default Judgment Appropriate Only As a Last Resort, When Less Drastic Sanctions Would Not Ensure Compliance with the Court’s Orders — (2) Default Judgment Sanction Requires Willful or Bad Faith Failure to Obey Discovery Order — (3) Fugitive Defendant’s Failure to Appear at Court-Ordered, Remote Deposition Despite Court Warning That Sanctions Could Follow Disobedience Warrants Default Judgment — (4) District Court Afforded Wide Discretion in Interpreting Its Own Orders — (5) Filing a Notice of Appeal from a Non-Appealable Order (Here, a Discovery Order) Does Not Deprive the District Court of Jurisdiction over the Case

RICO and Injunctions: (1) State Court Actions Designed to Perpetuate and Monetize a RICO Violation Are Enjoinable under RICO, Even Though They Are Not Themselves Alleged to Be Predicate Acts [Note: Noerr Pennington Applies in RICO Actions] — (2) Although Civil RICO’s Text and Legislative History Fail to Reveal Any Intent to Override the Provisions of the Federal Arbitration Act, Arbitrations Are Enjoinable Under the “Effective Vindication” Doctrine Where They Operate As a Prospective Waiver of a Party’s Right to Pursue Statutory RICO Remedies — (3) Arbitration Findings May Be Given Collateral Estoppel Effect in a Civil RICO Action — (4) Injunction of Non-Corrupt State Court Litigations That Furthers a RICO Violation Are Enjoinable Under the Anti-Injunction Act’s “Expressly Authorized” Exception — (5) “The Irreparable Harm Requirement Is The Single Most Important Prerequisite For The Issuance Of A Preliminary Injunction” (Good Quote) — (6) When Injunction Is Based on “Serious Questions on the Merits” Rather Than “Likelihood of Success,” Court May Rely on Unverified Pleadings and Attached Exhibits to Assess the Merits, Unless the Opponent Has Raised Substantial Questions (Here, the Opponent Failed to Request an Evidentiary Hearing) — (7) Whether Amended Pleading Moots An Appeal Turns on Whether It Materially Changes the Substantive Basis for the Appeal — (8) Meaning of “In That” (“Used To Introduce A Statement That Explains Or Gives More Specific Information” About A Prior Statement)

RICO: Fraudulent Concealment Must Prevent Discovery of the Injury to Toll Statute of Limitations

Rule 37 Default Judgment Sanction: (1) Abuse of Discretion Review = Legal Conclusions De Novo. Factual Findings for Clear Error — (2) Client May Be Sanctioned for Misconduct of Its Counsel, Though Here Client Was Directly Involved in Bad Faith Misbehavior — (3) Is There A Difference, Under Rule 11 As Opposed to Rule 37, Concerning Whether A Client Can Be Sanctioned for Its Counsel’s Misconduct? — (4) While Sanctions of Last Resort (Dismissal/Default) Are Apt Only If Lesser Sanctions Wouldn’t Ensure Compliance, Rule 37 Doesn’t Require the Vain Gesture of First Imposing Lessert Sanctions When It Is Clear They Would be Ineffective — (5) Court’s Reconsideration of Non-Final Orders Is Governed by Rule 54(b), And Court’s Discretion under That Rule Is Governed by the Law-of-the-Case-Doctrine

RICO: (1) Special Pleading Requirements? — (2) Although Enterprise Must Be More Than a Summation of the Predicate Acts, The Predicate Acts Can Demonstrate the Existence of the Enterprise — (3) Requirement That Association-in-Fact Exist For Purposes Other Than Just to Commit Predicate Acts Merely Requires Continuity — (4) To State an Association-in-Fact Enterprise Consisting of One Natural Person and Collection of Legal Fictions Requires Factual Detail As to How They Acted Together — (5) “A § 1962(c) Enterprise Must Be More Than An Association of Individuals Or Entities Conducting the Normal Affairs of a Defendant Corporation” (Good Quote)

RICO: (1) Fee Award May Exceed Amount Recovered — Strict Proportionality Not Required — (2) Nonmonetary Benefits and Injunctive Relief Recovered Also Relevant Factors — (3) Loss on Some Claims Need Not Result in Lowered Fees, Especially When Both Arise Out of The Same Nucleus of Operative Facts

RICO: Indirect Purchasers (Car Buyers/Renters) Lack Standing to Sue Manufacturers for RICO Violations Even Though Intermediaries (Auto Dealer Direct Purchasers) Lack Any Damages

RICO: Statutory Requirement that RICO Be Liberally Construed Does Not Establish a More Liberal Pleading Standard for RICO Claims — “To Be Sure, Adequately Pleading a RICO Claim Can Be Challenging” (Good Quote) — Court May Dismiss Action Pursuant to Rule 41(b) Absent A Motion

Archives
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.

New York Office

© 2024 Joseph Hage Aaronson LLC  
Disclaimer | Attorney Advertising Notice | Legal Notice