A Firm Law for Sanctions: Taking a Stance on Whether 28 U.S.C. § 1927 Should Apply to Law Firms

By Winn, Jessica A. | Washington and Lee Law Review, Fall 2016 | Go to article overview

A Firm Law for Sanctions: Taking a Stance on Whether 28 U.S.C. § 1927 Should Apply to Law Firms


Winn, Jessica A., Washington and Lee Law Review


Table of contents

I. Introduction.2136

II. The History of Sanctions for Frivolous Litigation.2141

A. 28 U.S.C. § 1927 Sanctions.2143

B. Federal Rules of Civil Procedure.2154

C. Inherent Authority to Issue Sanctions.2158

D. Lawyers and Law Firms in the Context of § 1927.2159

III.Circuit Split Regarding § 1927's Application to Law Firms. 03 05 to to to fli tC GO CO

A. Circuits Not Applying § 1927 to Law Firms....2163

B. Circuits Applying § 1927 to Law Firms....2168

IV. Strategies for Resolving the Application of § 1927 to Law Firms.2176

A. Judicial Resolution.2176

1. Clear Circuit Court Interpretation.2177

2. Supreme Court Ruling.2179

B. Legislative Solutions.2180

1. Add a Note to the Statute.2180

2. Amend Title 28 with Clearer Language.2182

V. Recommendation that § 1927 Should Apply to Law Firms.2184

VI.Conclusion.2192

I. Introduction

Attorneys and law firms know that the consequences for submitting meritless pleadings and pursuing frivolous claims in federal court can be serious.1 When attorneys bring frivolous claims or act to delay or otherwise impede litigation, they violate the code of professional legal ethics and courts may sanction them according to federal district court local rules.2 Both attorneys and firms may also face sanctions under the Federal Rules of Civil Procedure,3 28 U.S.C. § 1927,4 and the court's inherent authority.5 This Note examines the circuit split regarding whether 28 U.S.C. § 1927 authorizes district courts to sanction law firms and argues that, in the context of today's legal landscape, the statute should apply to law firms to satisfy its original purpose of deterring frivolous litigation.6

Section 1927 provides that

[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceeding in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.7

Frivolous litigation is not a new issue; federal courts have long had the authority under § 1927 and its predecessor statutes to sanction attorneys who bring unreasonable or vexatious lawsuits.8 Historically, courts and litigants rarely relied on § 1927 because it did not include attorney's fees.9 Following the amendment of § 1927 in 1980 and the revision of Rule 1110 in 1993, however, courts and parties have more frequently sought sanctions under § 1927.11

Courts award sanctions against lawyers and law firms for conduct that impedes the judicial process and frustrates judges and opposing parties.12 This conduct can take many forms.13 Attorneys may vexatiously file and withdraw motions or appeals, creating unnecessary work for the opposing party and the court.14 Law firms may knowingly bring or prolong meritless suits.15 By allowing their attorneys to pursue unethical schemes, law firms may prolong and delay litigation, contest decisions agreed by the parties to be final, and fail to follow basic rules of civil procedure.16 Not all sanctions mechanisms, however, apply equally to both lawyers and law firms.17

For example, different interpretations of § 1927 have resulted in an unresolved split among the federal circuit courts of appeals on the question of whether courts may apply § 1927 sanctions to law firms.18 The U.S. Courts of Appeals for the Sixth, Seventh, and Ninth Circuits have held that § 1927 applies only to individual attorneys.19 Conversely, the U.S. Courts of Appeals for the Second, Third, Eighth, Eleventh, and D.C. Circuits have upheld § 1927 sanctions against law firms.20 The U.S. Supreme Court has not addressed this issue, although it has stated that § 1927 does not apply to a non-lawyer party who is represented by counsel.21

Both the legal landscape and the use of § 1927 have changed substantially since the provision's original enactment, calling into question the adequacy of limiting its traditional application to individual attorneys. …

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