Commercial Litigation and Arbitration

FRAP 38 and § 1927 Sanctions Should Not Be Imposed on Appellant Raising Issue of First Impression — It Is Not Multiplicitous to Raise A Single, Narrow Issue on Appeal

Suazo v. NCL (Bahamas), Ltd., 2016 U.S. App. LEXIS 8575 (11th Cir. May 10, 2016):

In this appeal, we address a question of first impression in the Circuit: whether a cruise ship employee who is injured on the job, and whose employment contract contains an arbitration agreement governed by the New York Convention and Chapter 2 of the Federal Arbitration Act, can bar arbitration by showing that high costs may prevent him from effectively vindicating his federal statutory rights in the arbitral forum. Our New York Convention precedent suggests (but does not hold) that a party may only raise this type [*2]  of public-policy defense in opposition to a motion to enforce an arbitral award after arbitration has taken place, and not in order to defeat a motion to compel arbitration. However, we need not definitively answer this question today because, even if we were to assume that the plaintiff-appellant Willman Suazo could raise a cost-based (public policy) defense in response to defendant-appellee NCL's motion to compel arbitration, on this record he has plainly failed to establish that the costs of arbitration would preclude him from arbitrating his federal statutory claims. Thus, we affirm the district court's order compelling the parties to arbitrate. We deny, however, the defendant's motion for sanctions.



After Suazo filed his opening appellate brief, NCL moved for sanctions pursuant to Fed. R. App. P. 38 and 28 U.S.C. § 1927, arguing that Suazo's appeal is frivolous because his "public policy defense has been repeatedly and expressly rejected by binding Eleventh Circuit precedent following Lindo," and seeking an award of double costs and reasonable attorneys' fees from Suazo or his counsel.

Fed. R. App. P. 38 provides:

   If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee.

"Rule 38 sanctions have been imposed against appellants who raise 'clearly frivolous claims' in the face of established law and clear facts." Farese v. Scherer, 342 F.3d 1223, 1232 (11th Cir. 2003). Where an appeal requires a court to decide an issue of first impression in a circuit court, it is not frivolous. See Albra v. Advan, Inc., 490 F.3d 826, 835 (11th Cir. 2007). Title 28 U.S.C. § 1927, in turn, provides:

   Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess [*32]  costs, expenses, and attorneys' fees reasonably incurred because of such conduct.

We have "consistently held that an attorney multiplies proceedings unreasonably and vexatiously within the meaning of the statute only when the attorney's conduct is so egregious that it is tantamount to bad faith." Amlong & Amlong, P.A. v. Denny's, Inc., 500 F.3d 1230, 1239 (11th Cir. 2006) (internal quotation marks omitted).

Sanctions are not appropriate in this case. To the extent that NCL's motion was based on its claim that we did not have jurisdiction to consider this appeal, we already decided that NCL was incorrect when we denied NCL's motion to dismiss. Moreover, Suazo's appeal was not frivolous. He raised a single argument on appeal relating to the effective vindication doctrine, which involved a question of first impression in our Court. Finally, Suazo's appeal did not unnecessarily multiply the proceedings in this case, since he raised only a single issue, and a narrow one at that. Accordingly, we deny NCL's motion for sanctions.


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