Transamerica Life Ins. Co. v. Arutyunyan, 2025 U.S. App. LEXIS 1394 (9th Cir. Jan. 22, 2025):

ORDER^*

Having reviewed the parties' responses to the February 22, 2024 order to show cause (Dkt. No. 37),¹ the court hereby imposes monetary sanctions under Federal Rule of Appellate Procedure 38 ("Rule 38") in the amount of $5,000.00 against Defendants-Appellants' counsel, Ara Joseph Keropian and the AJK Law Firm ("Defense Counsel"), jointly and severally. The court declines to refer this matter to the State Bar of California.

Under Rule 38, the court may impose sanctions upon determining that the appeal is frivolous. See In re Girardi, 611 F.3d 1027, 1065-66 (9th Cir. 2010). "An appeal is frivolous if the results are obvious, or the arguments of error are wholly without merit." Id. at 1065 (citation omitted). We held that it was "abundantly clear" that Defendants-Appellants' appeal satisfied both criteria and that the appeal was therefore "objectively frivolous." [*2]  Transamerica Life Ins. Co. v. Arutyunyan, 93 F.4th 1136, 1149 (9th Cir. 2024) (simplified). Defendants-Appellants' responses to the order to show cause do not offer any persuasive reason to question that conclusion. We therefore hold that we may properly impose sanctions under Rule 38.

We conclude further that sanctions against Defense Counsel are appropriate in this case. Rule 38 authorizes sanctions "to deter frivolous appeals and to conserve limited federal judicial resources." In re Becraft, 885 F.2d 547, 548 (9th Cir. 1989). Defense Counsel's conduct throughout this appeal—his decision to bring this wholly meritless appeal, his pressing of objectively frivolous arguments, and his "multiple misstatements" at oral argument—has been inconsistent with those values. Transamerica, 93 F.4th at 1149. Defense Counsel's assertion that his conduct on appeal was due to his "failure to recognize the dispositive issue" and to prepare accordingly is no excuse. (Dkt. No. 46 at 16.) The district court clearly explained its decisions and the reasoning behind them. "Counsel must realize that the decision to appeal should be a considered one, taking into account what the district judge has said, not a knee-jerk-reaction to every unfavorable ruling." Libby, McNeill, & Libby v. City Nat'l Bank, 592 F.2d 504, 515 (9th Cir. 1978) (emphasis added) (citation omitted).

Rule 38 authorizes the court to award "just damages," which "may include attorneys' fees [*3]  incurred in defending against the frivolous issues or frivolous portions of an appeal." Blixseth v. Yellowstone Mountain Club, LLC, 854 F.3d 626, 630 (9th Cir. 2017). However, despite our instruction to provide "sufficient documentation to support any claims made by [Plaintiff-Appellee] concerning the appropriate amount of any potential sanctions" (Dkt. No. 37 at 2), Plaintiff-Appellee submitted only a declaration summarizing the claimed fees, without sufficient documentation to support the claimed amounts (Dkt. No. 49 at 23-24, 32-35). Therefore, instead of awarding Plaintiff-Appellee's claimed attorneys' fees, we exercise our authority to "issue [a] general award[] under Rule 38" against Defense Counsel jointly and severally in the amount of $5,000.00, payable to Plaintiff-Appellee. Lyddon v. Geothermal Props., Inc., 996 F.2d 212, 215 n.2 (9th Cir. 1993). We impose this award against Defense Counsel only, not against Defendants-Appellants. See Becraft, 885 F.2d at 548.

Accordingly, the court hereby imposes monetary sanctions under Rule 38 against Ara Joseph Keropian and the AJK Law Firm, jointly and severally, in the amount of $5,000.00, payable to Plaintiff-Appellee Transamerica Life Insurance Company.

^* The Honorable David F. Hamilton, United States Circuit Judge for the U.S. Court of Appeals for the Seventh Circuit, sitting by designation.

¹ The court grants Defendants-Appellants' motion to file an oversized reply brief. (Dkt. No. 52.)