First Circuit Finds Excluded Trial Evidence Could Be Used to Determine Reasonableness of Suit, Reversing Fee Award; Reviewing Court Also Scaled Down Sanctions Against Plaintiffs’ Attorney.
In a civil rights political discrimination case, a district judge granted the defendants’ motion for judgment as a matter of law after a 15 day trial, in a ruling adverse to suing public employees. Plaintiff officers were then hit with an attorney’s fees award of $194,808 in favor of defendant mayor when the district judge found the suit was groundless and unreasonable. The district judge also ordered plaintiffs’ attorney to pay a third of the fee award ($64,936) for vexatious trial conduct under 28 U.S.C. § 1927, reducing the fee award against the plaintiffs to $129,872. The First Circuit, in Lamboy-Ortiz v. Ortiz-Velez, No. 09-1640 (1st Cir. Dec. 17, 2010), reversed the fee award against plaintiffs and scaled back the sanctions award against plaintiffs’ attorney.
Fee Award
The major problem with the district judge’s approach was putting too much weight on the ultimate failure of plaintiffs’ claims and ignoring excluded trial evidence that showed the reasonableness of the claims. Because the reasonableness compass focuses on circumstances existing at the time the complaint was filed, the fee order contravened the “non-hindsight” test of Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978).
Attorney Sanctions
F.R.Civ. P. 11 was out as a basis for sanctions, because the “safe harbor”
provisions were not satisfied and it only applies to misconduct in written papers filed with the district judge. The sanctions here were imposed for plaintiffs’ attorney’s trial conduct, meaning that they had to be gauged under 27 U.S.C. § 1927.
Although finding that § 1927 has both compensatory and punishment purposes (agreeing with the Seventh and Tenth Circuit versus the punitive goal singularly latched onto by the Second, Third, Sixth, and Federal Circuits), the sanctions were justified given the trial misconduct at issue. However, it was the amount of the sanctions that troubled the First Circuit. It found that the nearly $65,000 amount was “outside the mainstream in this circuit,” reducing the sanction to $5,000. (The federal court of appeals also noted the earlier sanctions would impose an unjustifiable hardship on plaintiff’s attorney, who operates a small law office with his son–a rationale we would label the “pocketbook mitigation rule.”)