Sanctions — Ninth Circuit Declines to Resolve whether Finding of Bad Faith Must be Supported by Clear and Convincing Evidence - Joseph Hage Aaronson

Commercial Litigation and Arbitration

Commercial Litigation and Arbitration

Sanctions — Ninth Circuit Declines to Resolve whether Finding of Bad Faith Must be Supported by Clear and Convincing Evidence

From Lahiri v. Universal Music & Video Dist. Corp., 606 F.3d 1216 (9th Cir. 2010):

An attorney who unreasonably and vexatiously "multiplies the proceedings" may be required to pay the excess fees and costs caused by his conduct. 28 U.S.C. § 1927. Recklessness suffices for § 1927 sanctions, but sanctions imposed under the district court's inherent authority require a bad faith finding. See B.K.B. v. Maui Police Dep't, 276 F.3d 1091, 1107-08 (9th Cir. 2002) (attorney's knowing and reckless introduction of inadmissible evidence was tantamount to bad faith and warranted sanctions under § 1927 and the court's inherent power); Fink v. Gomez, 39 F.3d 989, 993-94 (9th Cir. 2001) (attorney's reckless misstatements of law and fact, combined with an improper purpose, are sanctionable under the court's inherent power).

The parties dispute whether a bad faith finding must be supported by clear and convincing evidence. This court has not addressed the burden of proof required for a sanctions award. See, e.g., In re Lehtinen, 564 F.3d 1052, 1061 n.4 (9th Cir. 2009) (declining to address burden because clear and convincing evidence of misconduct supported bad faith finding and imposition of sanctions under the court's inherent authority); F.J. Hanshaw Enters., Inc. v. Emerald River Dev., Inc., 244 F.3d 1128, 1143 n.11 (9th Cir. 2001) (same). The burden of proof issue need not be resolved here because the district court's bad faith finding is supported by clear and convincing evidence.

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