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§ 1927 Sanctions — Due Process — Failure to Grant Oral Argument = Abuse of Discretion Where Different Judges Presided over Case, Significant Sanction Imposed and Given Unspecified “Particulars of This Action”

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Smith v. Banner Health Sys., 2015 U.S. App. LEXIS 10191 (9th Cir. June 17, 2015):

Smith appeals from the district court's order granting summary judgment in favor of defendants Banner Health Systems and its employee Dr. Scott Elton (collectively "Banner"), and the order granting summary judgment in favor of the State of Arizona, the Arizona Department of Economic Security, Arizona Child Protective Services, and state employees Bonnie Brown, Tammy Hamilton-MacAlpine, and Laura Pederson. Consolidated with these appeals is an appeal of the district court's order awarding fees to Banner Health under 42 U.S.C. § 1988 and imposing sanctions against Smith and her counsel pursuant to Federal Rule of Civil Procedure 37 and 28 U.S.C. § 1927. We have jurisdiction under 28 U.S.C. § 1291 and we affirm in part, vacate in part, and remand.

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8. Smith and her counsel challenge the imposition of $33,588 in Rule 37 sanctions against them jointly and severally. We review the awarding of fees pursuant to Rule 37 for abuse of discretion. Sigliano v. Mendoza, 642 F.2d 309, 310 (9th Cir. 1981). The district court did not abuse its discretion by concluding that Smith and her counsel violated its scheduling and discovery orders by failing to diligently attempt to obtain records from the juvenile court and failing to properly comply with Rule 26 disclosure requirements. Such conduct is sanctionable under Rule 37. And we hold the district court's limited findings in support of its sanction were not error where Rule 37 and the law of this circuit do not require more. Accordingly, we affirm the district court's imposition of Rule 37 sanctions against Smith and her counsel.

9. Smith's counsel challenges the imposition of 28 U.S.C. § 1927 sanctions against him in part due to the failure of the district court to grant his request for oral argument prior to entering its order. Sanctions imposed pursuant to 28 U.S.C. § 1927 are "reviewable for abuse of discretion." United States v. Assoc. Convalescent Enters., Inc., 766 F.2d 1342, 1345 (9th Cir. 1985) (internal citation omitted). Notice and an opportunity to be heard should be provided before sanctions are imposed under § 1927. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 638 (9th Cir. 1987). Granting a request for oral argument ensures "that: (1) the attorneys [*12]  will have an opportunity to prepare a defense and to explain their questionable conduct at a hearing; (2) the judge will have time to consider the severity and propriety of the proposed sanction in light of the attorneys' explanation for their conduct; and (3) the facts supporting the sanction will appear in the record, facilitating appellate review." Miranda v. S. Pac. Trans. Co., 710 F.2d 516, 522-23 (9th Cir. 1984); see also Malhiot v. S. Cal. Retail Clerks Union, 735 F.2d 1133, 1138-39 (9th Cir. 1984) (Boochever, J., dissenting). Counsel's request for oral argument was made in conformance with the District of Arizona local rules by including the phrase "oral argument requested" in the caption of his response brief. See Ariz. LRCiv. 7.2(f). In light of the significant sanction imposed, the different judges that presided in this matter, and the particulars of this action and related actions known to the district court, we hold that the district court abused its discretion when it failed to grant the request for oral argument prior to imposing 28 U.S.C. § 1927 sanctions. Accordingly, we vacate the sanctions imposed upon Smith's counsel pursuant to that statute and remand to the district court for oral argument.2

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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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