IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 97-11190
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WILLIAM P. EDWARDS,
Plaintiff-Appellant,
HOLLY CRAMPTON,
Appellant,
VERSUS
GENERAL MOTORS CORPORATION,
Defendant-Appellee.
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Appeal from the United States District Court
for the Northern District of Texas
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September 11, 1998
Before KING, SMITH, and PARKER, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
This appeal of attorney sanctions requires us to decide
whether a district court may sanction an attorney for filings made
in state court prior to removal. Because we conclude that district
courts are not authorized to do so, we reverse that portion of the
award that is based on pre-removal conduct. Because, however, the
sanctioned attorney continued to maintain her case in federal court
long after she realized it had no merit, we affirm that portion of
the award that is based on her vexatious multiplication of the
proceedings.
I.
Plaintiff William Edwards was employed by General Motors
Corporation (“GM”) at its plant in Wichita Falls, Texas, and was
a member of the United Auto Workers (“UAW”). As such, he was
subject to the collective bargaining agreement (“CBA”) between GM
and the UAW, which requires covered employees to bring grievances,
including discharge decisions, through union grievance procedures.
Appellant Holly Crampton is a lawyer who specializes in employment
litigation, often against GM, and has appeared before the district
judge a quo on several occasions.
In 1994, after receiving complaints that plant employees had
been selling and using drugs on the premises of its Wichita Falls
plant, GM arranged for Kevin Ray, an experienced undercover drug
agent, to investigate. He worked in the plant for almost a year,
observing and talking to employees, and identified six employees
whom he had observed using drugs. Among them was Edwards, whom Ray
had observed snorting cocaine at the plant in February 1995. Five
of the six charged employees were white; Edwards is black.
Pursuant to the disciplinary procedures of the CBA, GM charged
Edwards with using cocaine on the premises. Edwards was first
suspended and then discharged. Of the six drug-using employees Ray
2
identified, five were discharged and oneSSwho had used marihuana
rather than cocaineSSwas given a disciplinary layoff. The relative
severity of these penalties was based on previous arbitration
decisions involving similar or identical conduct. In all, four
whites and one black were discharged, and one white was given
lesser punishment.
Edwards filed a formal grievance with the UAW, claiming that
the discharge was an excessive penalty. The grievance mentioned
nothing about race discrimination or retaliation. Edwards never
prosecuted that grievance, and nothing became of it.
II.
In 1996, Crampton filed suit on behalf of Edwards in state
court, alleging that he had been unfairly targeted for his
involvement in matters surrounding a layoff in 1987-88, and for his
race. It alleged causes of action under Texas law for race
discrimination and retaliation, intentional infliction of emotional
distress, and defamation.
GM removed to federal court, answered the complaint, and
requested attorneys' fees under FED. R. CIV. P. 11. In November
1996, GM moved for summary judgment, again requesting attorneys'
fees. On December 7, the parties attended a mandatory mediation
session.
On that day, according to Crampton, she and Edwards concluded
that they could not win their case. They decided that instead of
3
pursuing it any further, Edwards would become the named plaintiff
in a new class action that Crampton was preparing to file. In the
district court and in her briefs filed with this court, Crampton
expressly conceded that after December 7, 1996, she anticipated and
desired that Edward’s suit be dismissed on the merits.1
Crampton did not seek a voluntary dismissal, however, nor did
she notify GM or the court that she no longer intended to pursue
the case. Instead, she continued to allow GM to incur attorneys'
fees as it prepared for trial. She filed no substantive motions,
but did request several extensions of time, and filed witness and
exhibit lists. She never filed an answer to GM's motion for
summary judgment, however, and on January 30, 1997, the court
issued a fourteen-page memorandum opinion and order granting
summary judgment for GM.
The court concluded that (1) Edwards put forth no evidence of
racial discrimination; (2) he put forth no evidence of retaliation;
(3) even if he had presented evidence, he had waived these claims
by failing to allege discrimination or retaliation in his labor
grievances; and (4) under Bagby v. General Motors Corp., 976 F.2d
919 (5th Cir. 1992),2 his state law claims were preempted by
federal labor law.
1
Crampton's willingness to accept a dismissal on the meritsSSwhich of
course precludes Edwards ever again from bringing his claimSSstands at odds with
the notion that she intended to refile Edwards's claim as part of a class action.
2
Crampton was undeniably aware of that case, for she herself had brought
that action, and lost in the Fifth Circuit.
4
Shortly after receiving summary judgment, GM moved for
attorneys' fees. Crampton filed a notice of appeal, though she had
never responded to the motion for summary judgment and had produced
no summary judgment evidence. This court dismissed the appeal for
want of prosecution.
In July 1997, the district court held a hearing on GM's motion
for attorneys' fees, at which it received evidence and heard
argument. The court granted GM's motion, awarding rule 11
sanctions of $46,820, representing the entire amount of attorneys'
fees incurred by GM in its defense of the lawsuit. Alternatively,
the court awarded $24,220 under 28 U.S.C. § 1927, representing GM's
fees incurred only after December 7, the date on which Crampton now
admits that she gave up on the suit.
III.
A.
There is no indication, in the text of the rule, that it
applies to filings in any court other than a federal district
court.3 Thus, it cannot apply to the petition Crampton filed in
state court that thereafter was removed. See Foval v. First Nat’l
Bank of Commerce, 841 F.2d 126, 130 (5th Cir. 1988) (“Rule 11 does
not apply to conduct in state court prior to removal.”). To be
3
We also note that FED. R. CIV. P. 1 states that the Federal Rules of Civil
Procedure “govern the procedure in the United States district courts.”
5
sure, we have upheld sanctions in removed cases. See, e.g., Childs
v. State Farm Mut. Auto Ins. Co., 29 F.3d 1018 (5th Cir. 1994).
But such sanctions are proper only insofar as they are based on
post-removal filings. Cf. id. at 1023 n.16 (specifying post-
removal filings upon which sanctions were imposed).
Moreover, rule 11 does not impart a continuing duty, but
requires only that each filing comply with its terms as of the time
the paper is signed. See Thomas v. Capital Sec. Servs., Inc., 836
F.2d 866, 874 (5th Cir. 1988) (en banc). Consequently, Crampton
cannot be sanctioned simply for her failure to withdraw pleadings
filed in state court that would have violated rule 11 had they been
filed in federal court.4
B.
To uphold sanctions under rule 11, we must be able to point to
some federal filing in which the sanctioned attorney violated that
rule. Rule 11 requires that attorneys certify that their claims
are well-grounded in fact and in law, and that their filings are
not being presented for any improper purpose. See rule 11(b).
Absent improper purpose, therefore, a rule 11 violation must be
4
Other circuits to have addressed this issue also have concluded that
plaintiffs cannot be sanctioned after removal under rule 11 for papers filed in
state court. See, e.g., Worthington v. Wilson, 8 F.3d 1253, 1257-58 (7th Cir.
1993); Hurd v. Ralph's Grocery Co., 824 F.2d 806, 808 (9th Cir. 1987); Stiefvater
Real Estate, Inc. v. Hinsdale, 812 F.2d 805, 809 (2d Cir. 1987). Cf. also
Schoenberger v. Oselka, 909 F.2d 1086, 1087 (7th Cir. 1990) (noting that all
circuits to have addressed the question agree).
6
predicated on the certification of some legal or factual claim.
From removal through December 7, Crampton made no such
certification. And no one has argued that she made any filing for
an improper purpose during that time. In fact, the only paper she
filed during that nine-month period was a designation of expert
witnesses. This filing made no legal or factual contentions and is
not alleged to have been made for an improper purpose. Therefore,
we cannot uphold the award of rule 11 sanctions for the period
through December 7, 1996.5
IV.
The district court also based a portion of the award on
28 U.S.C. § 1927. Specifically, the court awarded attorneys' fees
under that section for Crampton's continued maintenance of the
action after December 7, the date on which she admittedly
determined that her case was unwinnable, and on which she decided
not to pursue the claim any further.
Section 1927 provides that “[a]ny attorney . . . 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.” The adverbs being in the conjunctive, sanctions
5
We need not address whether sanctions would be maintainable under rule 11
for the period after December 7, for in the next section we conclude that an
award of post-December 7 attorneys' fees may be upheld under 28 U.S.C. § 1927.
7
under § 1927 must be predicated on actions that are both
“unreasonable” and “vexatious.” See Travelers Ins. Co. v. St. Jude
Hosp., Inc., 38 F.3d 1414, 1416-17 (5th Cir. 1994). This requires
that there be evidence of bad faith, improper motive, or reckless
disregard of the duty owed to the court. See id.; Baulch v. Jones,
70 F.3d 813, 817 (5th Cir. 1995).
Because of the punitive nature of § 1927 sanctions, and in
order not to chill legitimate advocacy, the provision must be
strictly construed. See id. We review the ruling only for abuse
of discretion, however, and we must be careful to avoid
substituting our own judgment for that of the district court. See
St. Jude, 70 F.3d at 817. “[T]he question we address is not
whether this Court, in its own judgment and as an original matter,
would have imposed any of these sanctions. Rather, we only ask
whether the district court abused its discretion in doing so.”
Topalian v. Ehrman, 3 F.3d 931, 934 (5th Cir. 1993).
The district court found that “Crampton's actions in refusing
to disclose to GM or to the Court her decision to abandon the
prosecution of this case were unreasonable and vexatious. The
Court also specifically finds that Crampton has acted in bad faith,
with improper motive, and with a reckless disregard of the duty
owed to the Court.” The court found that Crampton deliberately
kept her meritless case alive for no purpose other than to force GM
to settle or to defend it: “In eleven years on the bench, this
8
Court has never witnessed an attorney so willfully cause an
opposing party to needlessly incur attorney's fees.”
The record is littered with indications that Crampton
abandoned her suit, but willfully required GM to continue to defend
it, and required the court to continue to consider its merits. In
the sanctions hearing, Crampton admitted that after December 7, she
knew that she had no case as a matter of fact, stating that “[i]n
my opinion, I could not show intentional discrimination.” Nor did
she have a case as a matter of law: “[I]f we were successful at
trial, I don't think the Fifth Circuit would have affirmed it.”
Therefore, she admitted, “I really didn't want to save this case.”
Crampton, who represents herself on appeal, has made similar
admissions to this court. For example, in her opening brief, she
stated one of the issues as “[w]hether counsel is required to
inform the adverse party and/or the court of the party's decision
not to respond to a motion for summary judgment in anticipation
that the case will be dismissed as a result of the failure to
respond, which is the anticipated and desired result[.]” (Emphasis
added.) Perhaps most compelling is her pattern of conduct in the
district court: That she never filed any substantive motions,
never took any depositions, and never even responded to GM's motion
for summary judgment is strongly indicative that she had abandoned
the suit. The district court did not abuse its discretion in
finding that Crampton decided to abandon the suit on December 7.
9
There is also ample support for the finding that after that
date, Crampton deliberately acted so as to force GM to continue to
incur costs, preparing to defend her now-abandoned claim. Although
she “anticipated and desired” that the case should be dismissed on
the merits, Crampton filed witness and exhibit lists as if she were
gearing up for trial. Twice she moved for an extension of time to
respond to GM's summary judgment motion, though she never did
respond. Crampton even went so far as to move for a trial
continuance, though she admits she never intended to go to trial.
Crampton was not content to allow her suit to die on the vine.
Rather, she kept it alive, hoping to extort a nuisance-value
settlement. In so doing, she abused the judicial process to harass
an apparently innocent defendant into paying money to which her
client had no rightful claim. Her deliberate acts bespeak not
negligence, but bad faith: the willful continuation of a suit known
to be meritless, and conceded to have been abandoned. The district
court did not abuse its discretion in concluding that Crampton
unreasonably and vexatiously multiplied the proceedings by keeping
Edward's suit alive after she had decided to pursue it no further.
V.
In summary, because the district court had no authority to
impose rule 11 sanctions for the filings Crampton made in state
court, we REVERSE that portion of the sanctions attributable solely
to those filings. We AFFIRM the sanctions awarded under 28 U.S.C.
10
§ 1927 in the amount of $24,220, which is the amount of attorneys'
fees GM incurred after December 7, 1996.
11