Ninth Circuit Awards Fees Under Appellate Rule 38 and Section 1927


Rule 38 allows a court to award sanctions for a frivolous appeal. In this case, the Ninth Circuit ordered the plaintiff and his attorney to pay the legal fees the defendants incurred in defending what it found to be a frivolous appeal. The court held that Rule 38 allows the court to award “just damages” for a frivolous appeal. Rule 38 does not allow a court to award the fees incurred in preparing the motion for sanctions or in preparing the attorney affidavits required to obtain sanctions.

The explanation:

The award of fees and costs under Rule 38 thus must be limited to appellees’ direct fees and costs for defending against the frivolous appeal, and may not include the fees and costs incurred regarding the imposition of sanctions. See Cooter & Gell, 496 U.S. at 406-07; Sunbelt, 608 F.3d at 466-67 & n.4; Lyddon, 996 F.2d at 214; Lockary, 974 F.2d at 1178; see also Haeger, 813 F.3d at 1242, 1254(affirming award of attorneys’ fees and costs incurred after a misleading discovery response as a sanction under court’s inherent power to compensate party for losses sustained as a result of misconduct).

However, the Ninth Circuit also awarded fees against the attorney under 28 USC Section 1927, under which the court may sanction an attorney who vexatiously multiplies the proceedings. Under 1927 the Ninth Circuit awarded the legal fees for preparing the sanctions motions and attorney bills that it could not award under Rule 38.

In sum, this case is unusual because it awarded fees and sanctions under Rule 38 and 28 USC § 1927. The ruling allowed the defendants to recover almost all of their costs in defending the appeal and in seeking sanctions and proving up attorney fees.

Source: BLIXSETH v. YELLOWSTONE MOUNTAIN CLUB, LLC, Court of Appeals, 9th Circuit 2017 – Google Scholar

Rule 11 Sanctions Denied Where Court Loses Subject Matter Jurisdiction


The case was dismissed for lack of subject matter jurisdiction. Despite the dismissal, the Defendant sought to have plaintiff held in contempt because the plaintiff allegedly violated a protective order. A protective order is an order of the court that keeps certain documents secret pending the resolution of the litigation. Documents that are protected from public disclosure can include trade secrets and other confidential company information.

The magistrate denied the motion to enforce the protective order and denied the motion for sanctions on the ground that the court had no subject matter jurisdiction. The court held that it lacked jurisdiction to sanction plaintiff for violating a court order.

Comment: other courts have ruled that they had jurisdiction to take up sanctions motion after a case was dismissed for lack of jurisdiction. This ruling is unusual and may be the subject of further appeals.

Source: Giese v. BOSTIK, INC., Dist. Court, SD California 2017 – Google Scholar

You should not rehash old arguments in a motion for reconsideration


In this case, the court previously ordered the parties to arbitration. The plaintiffs then moved to reconsider that decision, but they advanced no new argument. They merely restated old arguments in slightly different language. That is not permitted in a motion for reconsideration.

Legal Standard:

“The Court may a grant Rule 59(e) motion to alter or amend the judgment if the movant presents newly discovered evidence that was not available at the time of trial, points to evidence in the record that clearly establishes a manifest error of law or fact, or if the Court previously misunderstood a party’s arguments. Miller v. Safeco Ins. Co. of Am., 683 F.3d 805, 813 (7th Cir. 2012); United States v. Ligas,549 F.3d 497, 501 (7th Cir. 2008).”

The reasoning:

“First, Pioneer argues that the arbitration language in Menard’s Conditions of Order is procedurally unconscionable under Illinois law. Pioneer contends that the purchase order only refers to the “current terms and conditions issued by Midwest Manufacturing” and does not refer to a document entitled “Conditions of Order,” and that Pioneer did not receive a copy of the Conditions of Order. [48, at ¶¶ 20-25.] Thus, in Pioneer’s view, the arbitration language was “hidden” in the Conditions of Order and not conspicuous. [Id. at ¶ 39.] Pioneer asserts that reconsideration is warranted because the Court misunderstood that Pioneer did not have a meaningful opportunity to negotiate the terms within the Conditions of Order and did not consider whether the inclusion of the arbitration clause in a separate document was procedurally unconscionable. [Id. at ¶ 46; 62, at 3.]

This argument fails because it is merely a thinly-veiled attempt to advance an argument that the Court previously rejected. See Caisse Nationale de Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1270 (7th Cir. 1996) (“Reconsideration is not an appropriate forum for rehashing previously rejected arguments or arguing matters that could have been heard during the pendency of the previous motion.”).”

Source: Gonzalez v. PIONEER INDUSTRIAL SYSTEMS, LLC, Dist. Court, ND Illinois 2017 – Google Scholar

Federal Courts Can Award Sanctions Sua Sponte


This very short opinion informs a lawyer that he may be sanctioned under Rule 11 because he allegedly made a false statement of fact to a district judge. The opinion does not contain any findings of fact, but it suggests that the attorney retain counsel for the sanctions hearing.

Source: SEDILLO ELECTRIC v. COLORADO CASUALTY INSURANCE COMPANY, Dist. Court, D. New Mexico 2017 – Google Scholar

To get sanctions you need to file a separate motion


This case is a reminder that a party cannot request sanctions in a reply brief. Rule 11 Sanctions can only be sought in a written motion after the party seeking sanctions complies with the text of the Rule, including the safe harbor. Source: Gonzalez v. PIONEER INDUSTRIAL SYSTEMS, LLC, Dist. Court, ND Illinois 2017 – Google Scholar

Court Dismisses Campaign Donor’s Lawsuit Against former Congressman Schock – But Sanctions Are Denied


Howard Foster made a campaign contribution to former Congressman Aaron Schock. After Schock resigned, Foster sued Schock under RICO and other legal theories. Foster claimed that he was defrauded because Schock claimed to be an honest politician, but was not honest. Foster also alleged theories of common law fraud and promissory estoppel. Schock moved to dismiss on the ground that the statements were mere puffery in campaign literature and that Foster did not allege the elements of fraud. The district court agreed and dismissed the complaint.

However, because Foster’s theory of liability was “novel,’ no sanctions were awarded. The Court explains:

Finally, Schock asks that Foster be sanctioned pursuant to Rule 11 of the Federal Rules of Civil Procedure for filing his amended complaint. Rule 11(b) provides that the filing of any pleading, motion, or other paper constitutes a certification that the filing is not being presented for an improper purpose, such as harassment or delay, and that its legal contentions are warranted by existing law or a nonfrivolous argument for modifying or reversing existing law or establishing new law. A party or attorney violating this rule is subject to sanctions under Rule 11(c).

Schock argues that Foster’s amended complaint suffers from the same deficiencies as the original complaint, and that there was no proper purpose for Foster to replead the same allegations previously found to be insufficient. But Foster’s amendment did add specificity not present in the original complaint: rather than generalized assertions of misleading statements, the amended complaint identified parties, dates, and transmission methods of six specific communications. As described above, while the Court’s determination that the prior complaint was insufficient turned on a lack of specificity, the present ruling addresses the non-actionable substance of the communications. Both parties have described the theory underlying Foster’s claims as novel, and Schock has cited no authority rejecting similar allegations that would have alerted Foster that his claims were futile. Because Rule 11 “is not intended to chill an attorney’s enthusiasm or creativity in pursuing factual or legal theories,” an attorney need not advance a winning argument to avoid Rule 11 sanctions. LaSalle Nat’l Bank of Chicago v. Cty. of DuPage, 10 F.3d 1333, 1338 (7th Cir. 1993) (quoting Brubaker v. City of Richmond, 943 F.2d 1363 (4th Cir. 1991)). Foster’s filing of an amended complaint is not a proper basis for Rule 11 sanctions here and that request is denied.

Source: Foster v. Schock, Dist. Court, ND Illinois 2017 – Google Scholar

Pro se litigant sanctioned for filing carbon copy cases


This is an ERISA case filed by a medical doctor. Because he filed the same (or nearly the same case) before and lost, his case was dismissed and he was sanctioned. Source:

If you lose, you can appeal. You should not file the same case again in the same court. The second filing is barred by a doctrine known as res judicata – latin words for “we have already dealt with this case before.”

Source: Griffin v. Publix Super Markets, Inc., Dist. Court, MD Florida 2017 – Google Scholar