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

Sanctions — Sixth Circuit Standards for Sanctions under § 1927 (Something Less Than Bad faith But More Than Negligence) and Inherent Power (Bad Faith — Three-Pronged Test)

Download PDF

Jordan v. City of Detroit, 2014 U.S. App. LEXIS 23468 (6th Cir. Dec. 11, 2014):

Under 28 U.S.C. § 1927, an attorney who "multiplies the proceedings in any case unreasonably and vexatiously" may be sanctioned by the court. Such sanctions are appropriate when counsel "objectively falls short of the obligations owed by a member of the bar to the court and . . . , as a result, causes additional expense to the opposing party." Red Carpet Studios, 465 F.3d at 646 (citation omitted). Section 1927 sanctions "require a showing of something less than subjective bad faith, but something more than negligence or incompetence." Id. "Thus, an attorney is sanctionable when he intentionally abuses the judicial process or knowingly disregards the risk that his actions will needlessly multiply proceedings." Id.

The imposition of inherent-power sanctions requires a finding of bad faith or conduct tantamount to bad faith. Metz v. Unizan Bank, 655 F.3d 485, 489 (6th Cir. 2011). A district court must find "(1) that the claims advanced were meritless, (2) that counsel knew or should have known this, and (3) that the motive for filing the suit was for an improper purpose such as harassment." Id. (citation omitted). The simple fact that an action is without merit is not tantamount to bad faith; rather, [*7]  "the court must find something more than that a party knowingly pursued a meritless claim or action at any stage of the proceedings," such as by filing the suit for purposes of harassment or delay, or for other improper reasons. Id. (citation omitted).

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

RICO: Indirect Injury Unrecoverable — Indirect Purchaser Rule Imported from Antitrust

Rule 11 Sanctions: (1) Improper Purpose of Harassment Reasonably Determined Based on Past Tactics (25 Lawsuits, 14 Ethics Complaints, and 150 FOIA Requests) As Well As Present Behavior — (2) Hearings Are Not Only Not Required to Satisfy Due Process But, If The Record Is Otherwise Adequate, Are Affirmatively Discouraged

RICO and Probate Exception to Federal Jurisdiction: Federal Jurisdiction over RICO Claim Not Barred by Probate Exception Even If the Federal Judgment May Be Binding on the Probate Proceedings (Or Vice Versa) — Calculating Damages Based on Diminution of Value of Estate ≠ Administration of the Estate — Doesn’t Matter If RICO Misconduct Includes Defendants’ Actions with Respect to The Estate

RICO: No Causation Where Harm Flowed Several Steps After the Fraudulent Acts — RICO Causation Same As Antitrust Causation

Sanctions vs. Automatic Stay: Imposition of Sanctions (Here, Inherent Power Sanctions) Is Subject to the Police Power Exception to the Automatic Stay in Bankruptcy

The Word “Include” May Be A Word of Limitation As Opposed to a Word of Enlargement, Depending on the Context

RICO — Pleading Conspiracy — Plaintiffs Must Plausibly Allege That the Defendants Knowingly Joined the RICO Conspiracy — Sparse Allegations of Knowledge of Fraud Due to Participation in a Commercial Transaction Insufficient to State RICO Conspiracy Claim Where Allegations Not Inconsistent with Ordinary Commercial Behavior — While Knowledge May Be Pled “Generally” under Rule 9(b), It Cannot Be Alleged Conclusorily and Must Satisfy the Twiqbal Plausibility Standard

Depositions: Improper to Object to Form to Straightforward Questions (Not Compound, Vague, Leading or Speculative) — Lack of Foundation Objection Improper in 30(b)(6) Deposition — Improper to “Educate” Witness During Breaks of 30(b)(6) Deposition Through Witness Calls to Knowledgeable Corporate Colleagues — Magistrate Judge May Impose Financial Sanctions

Spoliation/Sanctions: “A Party Does Not Spoliate Evidence When, Without Notice Of The Evidence’s Potential Relevance, It Destroys The Evidence According To Its Policy Or In The Normal Course Of Its Business” (Good Quote)

RICO: Fraud on Government Entities Causing Plaintiffs to Pay More for Inmate Calls Actionable on Bridge v. Phoenix Bond Analysis — Fact That Governments Had Separate Injuries As Part of the Scheme (from Reduced Commissions) Irrelevant — Plaintiffs’ Injuries Not Derivative of Governments’ — The Fraud on the Governments Was Not Too Distinct From Plaintiffs’ Injuries But Rather Necessary to Injure Plaintiffs — No Risk of Duplicative Recoveries and No Plaintiff Better Situated to Sue for Plaintiffs’ Injuries

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