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Inherent Power Sanctions — Bad Faith Delay of Proceedings Is Sanctionable, As Is Recklessly Failing to Investigate Facts or Lying to Court

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Ass’n for Disabled Americans, Inc. v. Rodriguez, 2014 U.S. App. LEXIS 2273 (11th Cir. Feb. 6, 2014):

On appeal, Charouhis contends the district court failed to make the requisite bad-faith finding before imposing sanctions under its inherent authority. We review a district court's imposition of sanctions pursuant to its inherent powers for an abuse of discretion. Kornhauser v. Comm'r of Soc. Sec., 685 F.3d 1254, 1258 (11th Cir. 2012). "This means that unless we find that the district court has made a clear error of judgment, or has applied the wrong legal standard, we will not disturb its decision." Id.

"Invocation of a court's inherent power requires a finding of bad faith." In re Moz, 65 F.3d 1567, 1575 (11th Cir. 1995). Here, although the court could have been more detailed in its analysis, the transcript of the sanctions hearing shows it made a finding of bad faith "based upon a whole history of wrongdoing in this court and in the Middle District" of Florida. Throughout the hearing, the court explained that Charouhis either lied to the court or recklessly failed to investigate facts he asserted or that were essential to the legal positions he took. And, when Pebb filed a motion for sanctions, Charouhis repeatedly delayed a hearing on the matter. Pebb's counsel also pointed out -- and the court acknowledged -- that Charouhis has a documented history of misconduct in Florida federal courts. Together, these findings support the district court's imposition of sanctions against Charouhis. See Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991) (stating that sanctions are appropriate "when a party shows bad faith by delaying or disrupting" proceedings and noting that the "power [to punish] reaches both conduct before the court and that beyond the court's confines," including "disobedience to the orders of the Judiciary, regardless of whether such disobedience interfered with the conduct of the" proceedings before a particular court).

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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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