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RELIGIOUS TECHNOLOGY CENTER, Plaintiff-Appellant,
versus DELL LIEBREICH, as personal representative of the Estate of Lisa McPherson, Defendant - Appellee. _________________ Before GARWOOD, WIENER, and DeMOSS, Circuit Judges. OPINION: PER CURIAM: *
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* Pursuant to 5TH CIR. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R. 47.5.4.
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This appeal is just the latest skirmish in the protracted war between
these litigants. Consolidated before us are two appeals that are, in
effect, cross-appeals by the combatants and their respective attorneys,
each side seeking to shift attorney's fees and costs to the other in the
form of sanctions. Indeed, that is the sole issue remaining in the
instant appeal, the merits having long since been determined.
I. FACTS [*2] & PROCEEDINGS
This is the second time that the question of sanctions has been before
us in this ongoing dispute between the Plaintiff-Appellant, Religious
Technologies Center ("RTC") and the Defendant-Appellee, the estate of
Lisa McPherson (the "Estate"). In the first appeal ("RTC I"), we vacated
the entire judgment of the district court -- including its award of
sanctions in RTC's favor -- for lack of personal jurisdiction over the
Estate. n1 We heard RTC I after RTC prevailed in the merits trial of its
breach of contract claim.
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n1 See Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 376 (5th Cir.
2003), cert. denied, 157 L. Ed. 2d 899, 124 S. Ct. 1085 (2004).
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In addition to the compensatory damages awarded to RTC by the jury, the
district court had awarded RTC attorney's fees totaling $ 327,654 and
costs of $ 10,675 pursuant to the fee-shifting provision of the
underlying contract. In ruling on cross-motions for sanctions, the
district court found that counsel for [*3] the Estate, Thomas and
Kennan Dandar (the "Dandars"), had violated 28 U.S.C. § 1927 and ordered
them personally to pay $ 98,296, being 30 percent of the total
attorney's fees awarded to RTC. The district court declined to sanction
RTC's counsel. n2
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n2 Id. at 373.
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In RTC I, we did not address the merits of the Dandars' challenge to the
district court's award of sanctions, because the issue of personal
jurisdiction was dispositive. n3 In responding to a motion to clarify,
however, we explained that "the sanctions award is vacated and not
reversed. The vactur of the sanctions award is appropriate in light of
our determination that there is no jurisdiction against the Estate of
Lisa McPherson. The district court can reconsider the sanction issue in
light of said determination." n4 On remand following our ruling and
clarification, the district court summarily denied RTC's renewed motion
for sanctions and attorney's fees, stating only that its ruling was "in
[*4] accordance with the directions of the United States Court of
Appeals for the Fifth Circuit." The district court also denied the
Estate's post-remand motion for sanctions against RTC and its counsel.
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n3 Id. at 371 n.2.
n4 Emphasis added.
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In the instant appeal ("RTC II"), RTC contends that the district court
misconstrued our RTC I decision and subsequent clarification as
prohibiting the imposition of sanctions against the Dandars for the
conduct that the district court had previously adjudged to be
sanctionable. For its part, the Estate advances four challenges, viz.,
(1) the district court's refusal to award the Estate attorney's fees and
costs under the contractual fee-shifting provision; (2) the denial of
costs under 28 U.S.C. § 1919; (3) the denial of costs authorized under
the Federal Rules of Appellate Procedure for the RTC I appeal; and (4)
the district court's refusal to sanction RTC and its counsel under 28
U.S.C. § 1927, [*5] Federal Rule of Civil Procedure 11, and Florida
law.
II. ANALYSIS
A. STANDARD OF REVIEW
We review a district court's imposition or denial of sanctions for abuse
of discretion. n5 We review de novo a district court's interpretation of
the terms of a contract, including the interpretation and application of
a fee-shifting provision. n6
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n5 Mercury Air Group, Inc. v. Mansour, 237 F.3d 542, 548, 549 (5th Cir.
2001).
n6 See, e.g., L & A Contracting Co. v. So. Concrete Svcs., Inc. 17 F.3d
106, 109 (5th Cir. 1994).
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B. THE DISTRICT COURT'S RULINGS -- BEFORE AND AFTER REMAND
Before RTC I vacated the judgment and award of damages to RTC, the
district court, in ruling on RTC's motion for sanctions under § 1927,
had expressed the following findings:
The court finds that Plaintiff's request to have Defendant's attorneys
sanctioned pursuant to 28 U.S.C. § 1927 is well taken in [*6] part.
These proceedings were unnecessarily and vexatiously multiplied by
arguments repeated over and over again by the defense after their merit
was initially found lacking by the court early in the litigation. The
court finds the conduct of Thomas and Kennan Dandar in filing these
repeated, frivolous motions to be both unreasonable and vexatious.
However, the Court also finds that Plaintiff's litigation posture in
this case was overzealous and that Plaintiff advanced strident and
specious arguments in its characteristic "overkill" mode of conducting
this litigation. This action was also vexatious and unnecessarily
complicated this case. Accordingly, the court orders that 30% of the
attorney's fee award to be paid by Thomas and Kennan Dandar as a
sanction for their unreasonable and vexatious conduct.
In essence, the district court originally concluded that, even though
the Dandars had engaged in sanctionable litigation conduct on behalf of
the Estate, counsel for RTC likewise employed tactics that unnecessarily
multiplied the proceedings. Thus, as sanctions under § 1927, the court
ordered the Dandars to pay personally a 30 percent share of the
attorney's fees awarded under [*7] the fee-shifting provision in the
underlying contract. But, as we subsequently vacated the underlying
attorney's fee award in RTC I for lack of personal jurisdiction over the
Estate, we effectively vacated the quantum of the § 1927 sanction award
against the Dandars as well. We later clarified, however, that we were
not reversing the imposition of sanctions vel non, only the quantum of
the award because of the methodology employed by the district court in
assessing a portion of the contractual attorney's fees against the
Dandars.
We are admittedly puzzled by the district court's ruling on remand as to
RTC's renewed motion for § 1927 sanctions. We speculate that the
district judge either misconstrued our mandate n7 or, frustrated by the
contumacious conduct of both parties and their respective counsel, threw
up his hands and denied all of the parties' post-remand motions in an
effort to terminate this unseemly litigation once and for all. The
district court was certainly acting within its authority to reconsider
whether § 1927 sanctions were justified in light of our decision in RTC
I. n8 Our primary problem in dealing with that decision today, however,
is the court's [*8] failure to provide any explanation for denying
RTC's renewed motion for sanctions and attorney's fees. "Although an
award of attorney's fees, like an award of costs, is committed to the
discretion of the trial court and can only be reversed for an abuse of
discretion, the trial court must give reasons for its decisions
regarding attorney's fees; otherwise, we cannot exercise meaningful
review." n9
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n7 We are not sure what to make of the district court's notation that
its denial of RTC's renewed motion for sanction and attorney's fees was
"in accordance with the directions of" this
n8 For example, it is conceivable that the district court could have
determined on remand that our decision in RTC I significantly undermined
the justification for § 1927 sanctions. After all, we have explained
that a finding of "unreasonable" and "vexatious" multiplicative
proceedings necessitates "evidence of bad faith, improper motive, or
reckless disregard of the duty owed to the court." Mercury Air Group,
237 F.3d at 549 (quoting Edwards v. General Motors Corp., 153 F.3d 242,
246 (5th Cir. 1998)). [*9]
n9 Schwarz v. Folloder, 767 F.2d 125, 133 (5th Cir. 1985) (citations
omitted). See also Copeland v. Wasserstein, Perella & Co., Inc., 278
F.3d 472, 484-85 (5th Cir. 2002).
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The district court's denial of RTC's renewed motion for sanctions
without giving any explanation whatsoever is reversible Court. error.
Under normal circumstances, we would reverse and remand for more
detailed findings and a fuller explanation of the district court's
ruling. Tragically, though, the district judge who presided over this
action passed away shortly after the parties filed their notices of
appeal in RTC II. Thus, were we again to remand the sanctions issue to
the district court, any judge who would draw the assignment would have
no first-hand knowledge of the behavior at issue and, like us, would
have to consider the motion afresh on the basis of the cold record.
Given the history of this litigation, we have no doubt that a third
panel of this court would then be required to confront yet another
appeal (or cross-appeals) containing myriad assertions of error,
regardless of [*10] the district court's ruling.
Under these circumstances, we are no less capable of engaging in such a
record review than would be a newly assigned district judge. The
peculiar posture of this case has led us to eschew another remand and
instead to conduct our own independent review of the history of this
action as reflected by the record on appeal. Having done this as
carefully as practicable, we are led to the analysis and rulings that
follow.
C. RTC'S APPEAL: § 1927 SANCTIONS AGAINST THE DANDARS
Section 1927 of the Judicial Code authorizes the imposition of sanctions
in the form of attorney's fees and costs against an attorney who engages
in improper litigation conduct:
Any attorney or other person admitted to conduct cases in any court of
the United States or any Territory thereof who so multiplies the
proceedings 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. n10
"Underlying the sanctions provided in 28 U.S.C. § 1927 is the
recognition that frivolous appeals and arguments waste scarce [*11]
judicial resources and increase legal fees charged to parties." n11 The
Supreme Court has observed that " § 1927 does not distinguish between
winners and losers or between plaintiffs and defendants. The statute is
indifferent to the equities of a dispute and to the values advanced by
the substantive law." n12 As explained by the Fourth Circuit, the
statute is designed to curb litigation abuses by counsel, irrespective
of the merits of the client's claim:
An attorney who files a meritorious claim and wins a substantial verdict
may still be assessed sanctions under § 1927 if, during the case, he
"multiplies the proceedings ... unreasonably and vexatiously." Likewise,
an attorney who files a meritless claim may not be sanctioned under §
1927 if he does not engage in such conduct. Section 1927 focuses on the
conduct of the litigation and not on its merits. n13
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n10 28 U.S.C. § 1927 (2000).
n11 Baulch v. Johns, 70 F.3d 813, 817 (5th Cir. 1995).
n12 Roadway Express, Inc. v. Piper, 447 U.S. 752, 762, 100 S. Ct. 2455,
2462, 65 L. Ed. 2d 488 (1980). See also DeBauche v. Trani, 191 F.3d 499,
511 (4th Cir. 1999). [*12]
n13 DeBauche, 191 F.3d at 511.
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We nevertheless remain mindful that § 1927 sanctions are "penal in
nature, and in order not to dampen the legitimate zeal of an attorney in
representing his client, § 1927 is strictly construed." n14 Therefore,
sanctions against the Dandars are justified only if their conduct was
both "unreasonable" and "vexatious"; and even then, counsel may be
ordered to pay personally only the "excess" costs, expenses, and
attorney's fees generated by their conduct.
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n14 Travelers Ins. Co. v. St. Jude Hosp., 38 F.3d 1414, 1416 (5th Cir.
1994) (citations omitted).
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1. The Dandars Filed Numerous Motions Containing Frivolous and Redundant
Arguments
In its first order on the § 1927 issue, the district court found that "a
significant portion of the number of hours spent by Plaintiff's counsel
on this simple breach of contract case was due to the repeated,
frivolous [*13] arguments made by [the Dandars] in needless and
pointless motions." The record supports this conclusion: The Estate,
through pleadings signed by the Dandars, repeatedly filed motions that
reiterated many of the same assertions and arguments. The record makes
clear that the Estate frequently rehashed previously-rejected arguments,
and that the court issued several cautionary rebukes before imposing
sanctions. For example, in ruling against the Estate on one motion, the
district court remarked, "Defendant reargues several issues of law on
which the Court has previously ruled and provides no authority which
requires a revisit of those issues." The Dandars took no heed. In
another instance, the district court stated that "the Court has
addressed Defendant's arguments in its previous rulings. Defendant
presents no new arguments or newly discovered evidence showing the need
to correct manifest errors of law or fact."
It is expected and required that an attorney preserve error and
represent his client vigorously. And it is certainly true that courts
sometimes make legal and factual mistakes, which is what the appellate
process corrects, as illustrated in RTC I by our reversal of the [*14]
district court on the issue of personal jurisdiction. But attorneys do a
disservice to their clients as well as to the court and the judicial
system when they repeatedly file essentially identical motions that do
little more than waste their opponent's and the courts' time and
resources. Such tactics overburden the courts and frustrate the
administration of justice; they simply will not be tolerated.
We can never know precisely what motivated the Dandars to pursue such
contumacious tactics. n15 In any event, the Dandars' continued
engagement in improper motion practice after repeated warnings by the
district court was "reckless disregard" of the duty they owed to the
court. n16 Such conduct is unreasonable and vexatious beyond cavil, and
therefore warrants § 1927 sanctions.
2. The Proper Amount of the Sanctions
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n15 Perhaps the Dandars believed that their motion practice was the only
way to confront RTC, an affiliate of the Church of Scientology, which
has acquired a "reputation for extremely aggressive litigation
tactics." J.P. Kumar, "Fair Game": Leveling the Playing Field in
Scientology Litigation, 16 REV. LITIG. 747, 747-48 (1997). It goes
without saying, though, that this is no excuse for counsel's behavior.
[*15]
n16 Mercury Air Group, 237 F.3d at 549.
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In determining the appropriate quantum of sanctions against the Dandars,
the district court made the important observation that RTC itself was
not blameless in this respect. The court also concluded that the three
law firms representing RTC billed hours that were excessive:
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