Summary
The Supreme Court considered whether federal courts may impose attorney's fees directly against attorneys who unreasonably and vexatiously multiply proceedings. It held that 28 U.S.C. § 1927 did not authorize recovery of attorney's fees beyond the taxable costs defined by 28 U.S.C. § 1920, but recognized that fees may be imposed under Federal Rule of Civil Procedure 37 or the courts' inherent powers in appropriate circumstances. The judgment was remanded for consideration of sanctions under Rule 37 and the inherent-power bad-faith exception.
Topics
Practice areas
Questions Presented
- Whether 28 U.S.C. § 1927 authorizes a federal court to assess attorney's fees directly against counsel as part of the excess costs caused by vexatious multiplication of proceedings.
- Whether Federal Rule of Civil Procedure 37 authorizes sanctions, including attorney's fees, against counsel for failure to comply with discovery orders.
- Whether federal courts possess inherent power to assess attorney's fees against counsel who willfully abuse judicial processes.
Holdings
- Section 1927 does not authorize recovery of attorney's fees based on incorporating the fee provisions of 42 U.S.C. §§ 1988 and 2000e-5(k) into the definition of taxable costs. The costs recoverable under § 1927 are those defined by the federal costs statutes, principally 28 U.S.C. §§ 1920 and 1923.
- Federal Rule of Civil Procedure 37(b) authorizes sanctions against parties and counsel, including reasonable expenses and attorney's fees caused by failure to comply with discovery orders, and may support dismissal or other severe sanctions.
- In narrowly defined circumstances, federal courts possess inherent power to assess attorney's fees directly against counsel who willfully abuse judicial processes, including conduct undertaken in bad faith during litigation.
Key quotations
“The bad-faith exception for the award of attorney’s fees is not restricted to cases where the action is filed in bad faith. “'Bad faith' may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation.”” (765-766)
“Like other sanctions, attorney’s fees certainly should not be assessed lightly or without fair notice and an opportunity for a hearing on the record. But in a proper case, such sanctions are within a court’s powers.” (767)
Factual background
Counsel for plaintiffs in a civil-rights class action failed to answer Roadway's interrogatories despite a court order, failed to produce one plaintiff for deposition, and failed to submit a court-ordered brief. The District Court characterized counsel's conduct as deliberate inaction and dismissed the action with prejudice. It then ordered counsel to pay Roadway's costs and attorney's fees for the entire litigation, totaling more than $17,000.
Procedural history
Plaintiffs filed a civil-rights class action in the Western District of Louisiana. After plaintiffs' counsel failed to comply with discovery obligations and court orders, the District Court dismissed the action with prejudice and ordered counsel to pay more than $17,000 in costs and attorney's fees. The Fifth Circuit found a § 1927 violation but held that attorney's fees were not recoverable under that statute. The Supreme Court granted certiorari and remanded for further proceedings concerning Rule 37 and inherent-power sanctions.
Remand instructions
The case was remanded to the Court of Appeals with directions to return it to the District Court. The District Court was instructed to consider Roadway's request for costs and attorney's fees under Rule 37 and to determine whether counsel's conduct constituted or was tantamount to bad faith before imposing any sanction under the court's inherent powers.