Commercial Litigation and Arbitration

No Rule 11 Sanctions for Derogatory Language in Brief Not Unfounded Legally or Factually — No § 1927 Sanctions for Failure to Grant Extension to File Brief — Local Rules, Judicial Discretion Determine Due Date

Waite v VCG Clark Cnty. Collection Serv., LLC, 2015 U.S. App. LEXIS 4934 (9th Cir. Mar. 26, 2015):

Waite also contends that the district court erred in denying her motion for sanctions pursuant to Federal Rule of Civil Procedure 11. That motion was premised on the contention that CCCS made false, unfounded, and offensive allegations in its opposition to Waite's [*5]  fee petition. We agree with the district court that the derogatory language in CCCS's opposition was inappropriate and irrelevant to the issues. We also agree, however, that CCCS had a legitimate basis for opposing Waite's fee petition and the factual allegations in CCCS's opposition were not unfounded. The district court did not abuse its broad discretion under Rule 11 by denying Waite's sanctions motion. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990).

The district court did abuse its discretion by awarding CCCS its attorneys' fees incurred in opposing Waite's second sanctions motion. The district court ordered fees under 28 U.S.C. § 1927 because Waite and her counsel purportedly failed to grant CCCS an extension of time in which to oppose Waite's second sanctions motion and instead "requir[ed] defense counsel to file [a timely] opposition." That logic is confounding. It is the local rules, not opposing counsel, that require a timely opposition, and only the district court, not opposing counsel, may extend the deadline for filing an opposition. D. Nev. R. 7-2(b). In addition, an award of sanctions under § 1927 requires a finding of recklessness or bad faith, and the district court made no such finding. See Sneller v. City of Bainbridge Island, 606 F.3d 636, 640 (9th Cir. 2010). The district court's award of fees [*6]  to CCCS is reversed.

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