Commercial Litigation and Arbitration

§ 1927 & Inherent Power Sanctions for Challenging Authenticity of Contract Counsel Has Copy Of — Bad Faith Silence to Admit Possession — Misconduct Aggravated Where Contract Electronic — $ Sanctions Not Limited to Loss

Dillon v. BMO Harris Bank, N.A., 2016 U.S. Dist. LEXIS 135219 (M.D.N.C. Sept. 30, 2016):

This is a civil RICO lawsuit arising out of online loans the plaintiff, James Dillon, received at predatory interest rates. One of the defendants, Generations Community Federal Credit Union, has moved to sanction plaintiff's counsel pursuant to 28 U.S.C. § 1927 and the Court's inherent authority. (Doc. 188). The Court finds and concludes that three of Mr. Dillon's lawyers acted in bad faith and vexatiously and violated their duty of candor by hiding a relevant and potentially dispositive document from the Court in connection with a long-running dispute over arbitrability. The Court further finds and concludes that [*3]  their actions multiplied the proceedings, wasted court resources, misled the Court, and caused Generations to incur unnecessary attorney's fees. In the Court's discretion, the Court will grant the motion.


According to the complaint, Mr. Dillon borrowed money at usurious rates from several online lenders between December 2012 and May 2013. He consulted counsel about these allegedly predatory loans and filed this lawsuit in October 2013 against non-lender banks involved in transferring the loaned amounts into, and repayments out of, Mr. Dillon'

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