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

May a Pro Se Litigant Be Sanctioned under 28 U.S.C. § 1927? — Case Law Split — Counsel for Opposing Party Ethically Must Disclose Adverse Authority to the Court

Download PDF

Phillips v. Austin Diagnostic Surgery Ctr., 2018 U.S. Dist. LEXIS 33329 (W.D. Tex. Mar. 1, 2018):

ORDER

BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendant Austin Diagnostic (Austin Diagnostic) Clinic Association (Austin Diagnostic)'s1 Motion for Attorneys' Fees and Supporting Brief [#17, #18] and Plaintiff Amanda Kaye Phillips's Response [#20] in opposition. Having reviewed the documents, the governing law, the arguments of counsel, and the file as a whole, the Court now enters the following opinion and orders.

Background

On February 2, 2018, this Court entered an amended order adopting Magistrate Judge Andrew W. Austin's Report and Recommendation advising the Court dismiss Plaintiff's pro se complaint as frivolous under 28 U.S.C § 1915(e)(2). Am. Order of Feb. 2, 2018 [#14]. This Court agreed Plaintiff's complaint was frivolous, concluding Plaintiff failed to allege she was discriminated on a basis that would fit under either the Equal Pay Act or Title VII and failed [*2]  to claim she exhausted her administrative remedies as required under Title VII. Id. After reviewing Plaintiff objections to the Magistrate Judge's Report and Recommendation, the Court overruled Plaintiff's objections and dismissed Plaintiff's complaint with prejudice. Id. On February 20, 2018, Plaintiff filed a notice of appeal.

Austin Diagnostic moves for attorneys' fees under 28 U.S.C. § 1927. Mot. Att'y Fees [#17]. Plaintiff does not contest Austin Diagnostic's right to a fee award. Instead, Plaintiff argues she cannot afford to pay Austin Diagnostic's request for attorneys' fees and she should be compensated for her time in bringing this lawsuit. Austin Diagnostic's pending motion for attorneys' fees is now ripe for review.

Analysis

I. Legal Standards

A. Attorneys' Fees Under 28 U.S.C. § 1927

28 U.S.C. § 1927 provides that, "[a]ny 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 costs, expenses, and attorneys' fees reasonably incurred because of such conduct." To find a party multiplied proceedings "unreasonably" and "vexatiously," there [*3]  must "be evidence of bad faith, improper motive, or reckless disregard of the duty owed to the court." Procter & Gamble Co. v. Amway Corp., 280 F.3d 519, 525 (5th Cir. 2002). But § 1927 only authorizes "shifting fees that are associated with the persistent prosecution of a meritless claim." Id. (quotation omitted).

B. Sanctions under Federal Rule of Civil Procedure 11

Rule 11 permits the Court to impose an appropriate sanction if a pleading, motion, or other paper is presented for any improper purpose, such as to harass or needlessly increase the cost of litigation, or if the claims or arguments therein are frivolous. See FED. R. Crv. P. 11(b). "[T]he central purpose of Rule 11 is to deter baseless filings in district court and thus... streamline the administration and procedure of federal court." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). The Court must carefully choose sanctions that further the purpose of the Rule and should impose the least severe sanctions that would adequately deter its violation. See Thomas v. Capital Security Servs., Inc., 836 F.2d 866, 875-76 (5th Cir. 1988). When warranted, sanctions may include an order directing payment to an opposing party of some or all of the reasonable attorney's fees or costs incurred as a result of the violation. See Merriman v. Security Ins. Co. of Hartford, 100 F.3d 1187, 1191 (5th Cir. 1996); Fed. R Civ. P. 11(c)(2).

The Court also possesses inherent power to "protect the efficient and orderly administration of justice . . . to command respect for the court's orders, judgments, procedures, [*4]  and authority." In re Stone, 986 F.2d 898, 902 (5th Cir. 1993). Included in this inherent power is "the power to levy sanctions in response to abusive litigation practices." See Mendoza v. Lynaugh, 898 F.2d 191, 195-97 (5th Cir. 1993). No pro se litigant has the "license to harass others, clog the judicial machinery with meritless litigation, and abuse already overloaded court dockets." Farguson v. MBank Hous., N.A., 808 F.2d 358, 360 (5th Cir. 1986).

In addition to monetary sanctions, "[a] district court has jurisdiction to impose a pre-filing injunction to deter vexatious, abusive, and harassing litigation." Baum v. Blue Moon Ventures, 513 F.3d 181, 187 (5th Cir. 2008). In determining whether to impose such an injunction, the Court must weigh all of the relevant circumstances, including the following four factors: (1) the party's history of litigation, in particular whether she has filed vexatious, harassing, or duplicative lawsuits; (2) whether the party had a good faith basis for pursuing the litigation, or simply intended to harass; (3) the extent of the burden on the courts and other parties resulting from the party's filings; and (4) the adequacy of alternative sanctions. See id. at 189. A pre-filing injunction must be "tailored to protect the courts and innocent parties, while preserving the legitimate rights of litigants." Id. at 187.

II. Application

Austin Diagnostic's motion for attorneys' fees requests a total fee [*5]  award of $13,938.00 under 28 U.S.C. § 1927. Supp. Br. [#18] at 1. But the Fifth Circuit has not determined whether a pro se litigant can be sanctioned under § 1927.2See Simmons v. Methodist Hosps. of Dallas, 632 F. App'x 784, 787 n.5 (5th Cir. 2015) ("We note that this court has not yet addressed whether a pro se litigant can be subject to sanctions under section 1927 and need not do so today."). District courts within the Fifth Circuit are split on "whether a pro se litigant can be subject to sanctions under § 1927, with the majority finding they cannot." Barcroft v. Gibbs, No. 416CV00562ALMCAN, 2017 WL 1499247, at *5 (E.D. Tex. Apr. 5, 2017), report and recommendation adopted, No. 4:16-CV-562, 2017 WL 1498532 (E.D. Tex. Apr. 25, 2017) (collecting district court cases evaluating if a pro se litigant can be sanction under § 1927). Given the lack settled authority, this Court denies Austin Diagnostic's request to impose § 1927 sanctions on Plaintiff.

Instead, the Court applies Rule 11 of the Federal Rules of Civil Procedure. In dismissing Plaintiff's suit against Austin Diagnostic, this Court agreed with Magistrate Judge Austin Plaintiff's claims were frivolous. Moreover, in commencing this suit, Plaintiff filed a complaint identical to a petition Plaintiff had filed in a state court case non-suited with prejudice. See Mot. Dismiss [#8-1] Ex. A (State Litigation R.).

In addition to this lawsuit, Plaintiff has filed at [*6]  least seven cases in the Western District of Texas since the beginning of 2017, two of which have been dismissed. See Phillips v. Hunter Warfield, Inc., No. A-17-CV-939 (W.D. Tex. Jan. 19, 2018) (dismissing claims as frivolous); Phillips v. Christus Santa Rosa Healthcare Corporation, No. SA-17-CA-0421-FB (W.D. Tex. Sept. 29, 2017) (dismissing claims for failure to state a claim). Sanctions under Rule 11 are necessary to deter Plaintiff's baseless filings as well as compensate Austin Diagnostic for the costs of defending against Plaintiff's second suit in this court.

However, the amount requested by Austin Diagnostic is excessive. At most, Austin Diagnostic filed a motion to dismiss in defending this lawsuit.3 Given the minimal amount of work necessary to defend this lawsuit, the Court estimates approximately ten hours of work were required to draft Austin Diagnostic's seven-page motion to dismiss. The Court adopts the reasonable hourly rate provided by Austin Diagnostic for an associate lawyer, $250 per hour. Supp. Br. [#18] at 3. As a result, the Court awards Austin Diagnostic $2,500 in attorneys' fees and costs. Until Plaintiff pays Austin Diagnostic, Plaintiff shall not file additional lawsuits [*7]  within the Western District of Texas without first obtaining leave.

Conclusion

Accordingly,

IT IS ORDERED that Defendant Austin Diagnostic Clinic Association's Motion for Attorneys' Fees [#17] is GRANTED IN PART and DENIED IN PART as described in this opinion;

IT IS FURTHER ORDERED that Plaintiff Amanda Phillips SHALL PAY TWO THOUSAND AND FIVE HUNDRED DOLLARS to Austin Diagnostic Clinic Association for attorneys' fees or costs incurred as a result of this litigation;

IT IS FURTHER ORDERED that Austin Diagnostic Clinic Association SHALL NOTIFTY this Court when Amanda Phillips tenders the TWO THOUSAND AND FIVE HUNDRED DOLLARS; and

IT IS FINALLY ORDERED that Plaintiff Amanda Phillips, in any capacity, is BARRED from filing additional lawsuits in the Western District of Texas without first obtaining leave from a Federal District Judge in the Western District of Texas, Austin Division, or a Judge of the United States Court of Appeals for the Fifth Circuit until she pays the sanctions against her.

SIGNED this the 1st day of March 2018.

/s/ Sam Sparks

SAM SPARKS

SENIOR UNITED STATES DISTRICT JUDGE

 

 

1 Austin Diagnostic Clinic Association was incorrectly names as Austin Diagnostic Clinic Surgery Center in this lawsuit.

2 Austin Diagnostic failed to highlight the fact the Fifth Circuit has yet to endorse § 1927 sanctions for pro se litigants or the fact that district courts within the Fifth Circuit are split on whether § 1927 can be applied to pro se litigants. In a case where Austin Diagnostic's counsel is the only counsel of record and Plaintiff is unrepresented, Austin Diagnostic's failure to highlight adverse authority comes perilously close to violating the Texas Disciplinary Rules of Professional Conduct. See Tex. Disciplinary Rules Prof 1 Conduct R. 3.03(a)(4), reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G, app. A, art. 10, § 9 (West 2013). Rule 3.03(a)(4) prohibits a lawyer from "fail[ing] to disclose to the tribunal authority in the controlling jurisdiction known by the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel." Id. The local rules of the Western District of Texas require attorneys practicing before it to "comply with the standards of professional conduct set out in the Texas Disciplinary Rules of Professional Conduct." Local Rule AT-7(a).

3 The Court is not convinced Austin Diagnostic's motion to dismiss was necessary as it was filed after Judge Austin entered his report and recommendation advising this Court to dismiss Plaintiff's suit as frivolous.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

Criminal Spoliation Can Be A Due Process Violation — Defendant Must Show That (1) The Evidence Had Exculpatory Value Before It Was Destroyed, (2) Defendant Is Unable to Obtain Comparable Evidence by Reasonable Means, and (3) Bad Faith Failure to Preserve

1) Rule 11 Sanctions: “No First Amendment Exception to a Rule 11 Violation” — “[T]he First Amendment Covers Novel, Nonfrivolous Arguments, But Many Frivolous Arguments Are Also Novel” (Good Quotes) — Frivolous To Continue To Make Rejected Novel Arguments; (2) FRAP 38 Sanctions: District Court In Best Position to Set Sanctions, Attorney’s Fees and Costs

3 Prerequisites for Inherent Power and § 1927 Sanctions in Second Circuit: (1) Bad Faith, (2) Conduct That Is Entirely Without Color [Thus, An Ill-Motivated Colorable Position Appears to Be Protected in the Second Circuit], and (3) Improper Purpose— “To Gain A Strategic Advantage” Is An Improper Purpose — Due Process Satisfied by Opponent’s Motion and Multiple Court Conferences, After Which Target Was Allowed to Submit Additional Letters

Inherent Power Sanctions — Untimeliness as Laches — Laches Properly Applied to Deny Sanctions Motion — Note Waived Defenses to Laches

Rule 37(c)(1) Sanctions: Substantial Justification or Harmless Error (Ninth Circuit Factors) — Erie: When State Supreme Court Has Not Squarely Addressed an Issue, Circuit Must Predict How It Would Rule, Using Intermediate Appellate Decisions, Decisions from Other Jurisdictions, Statutes, Treatises And Restatements for Guidance

(1) Appellate Review of Inherent Power Sanctions (7th Circuit): Factual Findings Reviewed for Clear Error, Choice of Sanction for Abuse of Discretion — 4-Element Test for Reversal; (2) Sanctions and Class Actions: Monetary Sanctions Properly Imposed on Defendants for Improper Communications with Class Members (Represented Parties) — “[I]f The Class And The Class Opponent Are Involved In An Ongoing Business Relationship, Communications From The Class Opponent To The Class May Be Coercive” (Good Quote); (3) Monetary Sanctions under Goodyear v. Haeger: If Same Fact-Gathering Would Have Been Conducted Absent The Misconduct, No But-For Causation — But Only “Rough Justice” Required, “Not Accountant-Like Precision” (Good Quote) — Once Misconduct Is Clear, Time Spent Ferreting It Out Compensable under Goodyear; (4) Goodyear Did Not Overrule Long-Standing Rule That Courts May Impose Modest Civil Monetary Sanctions to Curb Litigation Abuse; (5) Appellate Jurisdiction Lacking Where Sanctioned Attorney Fails to File Notice of Appeal and Lawyer’s Intent to Appeal Not Apparent from Client’s Notice; (5) Rule 11 Improper Purpose — Party May Have Many Purposes for Pursuing Claim — As Long As Claim Is Supported by Good Faith Belief in the Merits, “A Parallel Reason Does Not Violate Rule 11” — To Deny A Motion for Sanctions, The District Court Need Not Address Every Argument: “Arguments Clearly Without Merit Can, And For The Sake Of Judicial Economy Should, Be Passed Over In Silence” (Good Quote); Non-Monetary Sanction on Counsel: Complete Twice The Required Amount Of Professional Responsibility Hours For Her Next Continuing Legal Education Cycle Imposed By The State Bar

(1) Spoliation: Sanctions Are Warranted Only If the Movant Establishes That A Reasonable Trier of Fact Could Find That The Destroyed Evidence Would Support A Claim Or Defense — § 1927 Sanctions: “Courts Often Refuse to Award Sanctions When Both Parties Contributed to the Waste of Judicial Resources” (Good Quote)

No Sanctions Imposed on Counsel Who Submitted A.I.-Generated Phony Cases Without Checking Them in Good Faith on The Mistaken Assumption They Had Been Provided by Highly Respected Co-Counsel Rather Than His Criminally-Convicted, Disbarred Client — No Sanctions on Client Who Had No Access to LEXIS or Westlaw to Check the Phony Cases and Submitted Them in Good Faith: “It Would Have Been Downright Irrational For Him To Provide Fake Cases For [His Lawyer] To Include In The Motion Knowing They Were Fake —

(1) Electronic Spoliation — Rule 37(e)(2) Dismissal Sanction — Temporal Proximity of Spoliation to Production Due Date = Circumstantial Evidence of Intent; (2) While Discovery Sanctions Are Reviewed For Abuse Of Discretion, Findings Of Fact Related To Discovery Sanctions Are Reviewed For Clear Error; (3) Dismissal under Rule 37(e)(2) Plus Attorney’s Fees under Inherent Power Appropriately Combined [But see 2015 Advisory Committee Note: “New Rule 37(e) … authorizes and specifies measures a court may employ if information that should have been preserved is lost, and specifies the findings necessary to justify these measures. forecloses reliance on inherent authority or state law to determine when certain measures should be used.”]; (4) Compensatory Sanctions under Goodyear v. Haeger Appropriately Include Fees and Costs Resulting from Attempts to Settle Spoliation Motion

(1) FRAP 38 Sanctions Inapt for Appeal That Is Weak — “Borderline Frivolous” — Test Is Whether Appellant Should Have Known the Appeal Had Absolutely No Chance of Success — (2) Lay Opinion Testimony under Rule 701: Nub of Helpfulness Requirement Is to Exclude Testimony When the Witness Is No Better Suited Than the Jury to Assess the Issue; (3) Appeals: No Appeal from Denial of Motion for Judgment As a Matter of Law Unless Appellant Made That Motion Before Case Was Submitted to Jury

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