Roth v. Green

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
October 30, 2006
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT

STEPHEN C. ROTH and JEAN E.
GUMESON,

Plaintiffs,
No. 05-1129
v.

MICHAEL F. GREEN; DENNIS
SPRUELL; MATT BUFFINGTON;
BROOKS BENNETT; HUGH
RICHARDS; DANNY DUFUR; JEFF
COLEMAN; TIM ROWELL; TOM
HALPER; MIKE MEUER; KEN
BRACKETT; SAM HAGER; ROY C.
LANE; JERRY MARTIN; JOEY M.
CHAVEZ; AL BELL; SYDNEY DUKE
SCHIRARD; DALE WOOD,
individually and in their official
capacities; CITY OF CORTEZ, a public
corporation; CITY OF DURANGO, a
public corporation; TOWN OF
MOUNTAIN VILLAGE, a public
corporation; DOLORES BOARD OF
COUNTY COMMISSIONERS, reads as
The Board of County Commissioners for
the County of Dolores, a public
corporation; LA PLATA COUNTY
BOARD OF COUNTY
COMMISSIONERS, reads as The Board
of County Commissioners for the County
of La Plata, a public corporation;
MONTEZUMA COUNTY, BOARD OF
COUNTY COMMISSIONERS, reads as
The Board of County Commissioners for
the County of Montezuma, a public
corporation; BILL OWENS; RAYMOND
SLAUGHTER, individually and in their
official capacities; and unknown Doe
defendants 1 through 50,

Defendants-Appellees.

and

ROBERT J. MULHERN,

Attorney-Appellant.
__________________________________
STEPHEN C. ROTH and JEAN E.
GUMESON,

Plaintiffs-Appellants,

v. 05-1272

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COMMISSIONERS, reads as The Board
of County Commissioners for the County
of La Plata, a public corporation;
MONTEZUMA COUNTY, BOARD OF
COUNTY COMMISSIONERS, reads as
The Board of County Commissioners for
the County of Montezuma, a public
corporation; BILL OWENS, individually
and in his official capacity; RAYMOND
SLAUGHTER, individually and in his
official capacity; and unknown Doe
defendants 1 through 50,

Defendants-Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 02-CV-1116-LTB-CBS)

Robert J. Mulhern, Telluride, Colorado, for Plaintiffs-Appellants.

Katherine Taylor Eubank of Fowler, Schimberg & Flanagan, Denver, Colorado, (Daniel
M. Fowler of Fowler, Schimberg & Flanagan; Jonathan A. Cross and Sean J. Lane of
Cross Sands and Sares, Glendale, Colorado; Earl G. Rhodes, Jodie L. Behrmann and
Jeffrey A. Wells of Younge & Hockensmith, Grand Junction, Colorado; David R.
Brougham of Hall & Evans, Denver, Colorado; Danielle Moore, Assistant Attorney
General, Colorado Attorney General’s Office, Denver, Colorado; Gordon L. Vaughan of
Vaughan & DeMuro, Colorado Springs, Colorado, with her on the brief), for the
Defendants-Appellees.

Sean J. Lane of Cross Sands and Sares, Glendale, Colorado; Gordon L. Vaughan of
Vaughan and DeMuro, Colorado Springs, Colorado, for Defendants-Appellees, City of
Cortez, Dennis Spruell, Danny Dufur and Roy C. Lane.

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Before BRISCOE, McCONNELL, Circuit Judges, and SILER, Circuit Judge.*

BRISCOE, Circuit Judge.

These appeals challenge a sanction award against counsel pursuant to Federal Rule

of Civil Procedure 11 and 28 U.S.C. § 1927, as well as a fee award against two individual

plaintiffs pursuant to 42 U.S.C. § 1988. Both appeals arise out of the same ill-fated §

1983 action.

Plaintiffs Stephen Roth and Ellen Gumeson, represented by attorney Robert

Mulhern, filed suit under 42 U.S.C. § 1983 against various Colorado municipalities,

counties, and local and state employees, arguing that the stop and search of their car, as

well as their ensuing arrest, was unconstitutional. The district court granted defendants’

motions to dismiss and/or for summary judgment. Plaintiffs appealed. While the appeal

was pending the district court granted defendants’ motions for sanctions and fees against

attorney Mulhern. Thereafter, this court affirmed the district court’s decision on the

merits, granted a motion by one group of defendants for attorneys fees on appeal, and

remanded the case to the district court for a determination of the proper amount of fees.

In Appeal No. 05-1129, attorney Mulhern appeals the district court’s award of

sanctions and fees against him and in favor of defendants. In Appeal No. 05-1272,

plaintiffs Roth and Gumeson appeal the fee determination made by the district court on

remand. We exercise jurisdiction over both appeals pursuant to 28 U.S.C. § 1291. In

*
The Honorable Eugene E. Siler, Jr., Circuit Court Judge, Sixth Circuit, sitting by
designation.

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Appeal No. 05-1129, we reverse the district court’s order granting Rule 11 sanctions

against Mulhern and remand to the district court for a determination of the proper amount

of fees to be assessed against Mulhern pursuant to 28 U.S.C. § 1927. In Appeal No. 05-

1272, we vacate the district court’s fee award and remand for further proceedings to

include the district court’s consideration of the ability of Roth and Gunneson to pay

whatever fee amount the court may assess against them.

Factual history

On June 15, 2000, officers associated with the Twenty-Second Judicial Drug Task

Force in Colorado set up a narcotic “ruse” checkpoint on Highway 145 just north of the

town of Rico, in Dolores County, Colorado. As part of this “ruse” checkpoint, the

officers placed a sign on the highway that stated a narcotics checkpoint was being

conducted one mile ahead. A second sign was placed further down the highway stating

that a drug dog was in use as part of the narcotics checkpoint. The statements made on

the signs, however, were false. No narcotics checkpoint existed. Instead, officers were

stationed in inconspicuous areas along the highway in the area of the signs watching for

any illegal or suspicious activity. No stops were to be made unless officers observed or

otherwise had reasonable suspicion of some type of illegal activity associated with a

particular vehicle.

At approximately 4:30 p.m. on June 15, 2000, Deputy Hugh Richards of the

Montezuma County Sheriff’s Department was stationed between the two signs on

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Highway 145. Richards observed a female passenger in a blue Toyota throw an object

out of the window. Based upon his observations, Richards radioed ahead and the blue

Toyota was stopped for littering by task force member Dennis Spruell, a sergeant with the

Cortez (Colorado) Police Department. After initially radioing Spruell, Richards retrieved

the object, which turned out to be a wooden pipe with burnt residue and a screen. The

pipe smelled of marijuana. Richards again radioed Spruell to advise him of what he had

found. The driver of the vehicle, Stephen Roth, was advised that he had been stopped

because his passenger had been observed throwing an object out the window. Roth stated

that the object was a pop can. Roth was then asked if he would consent to a search of his

vehicle. Roth declined to give consent. Spruell informed Roth and the passenger, Ellen

Gumeson, that he suspected that marijuana contraband had been thrown from the vehicle,

and thus he had reasonable suspicion that further evidence of contraband would be found

in the vehicle. During the ensuing search, Spruell and Jeff Coleman, another member of

the task force from the Durango (Colorado) Police Department, found a wooden

marijuana pipe with burnt residue under the front driver’s seat. Inside a cooler located in

the back seat, officers found plastic baggies containing psilocybin mushrooms, a

Schedule I controlled substance. Both Roth and Gumeson were arrested.

During the ensuing criminal proceedings in Dolores County, Roth unsuccessfully

moved to suppress the evidence seized during the search of the vehicle. Gumeson

subsequently pled guilty to littering. On December 11, 2001, Roth was found guilty at

trial of possession of drug paraphernalia and fined $100.00. Roth appealed his conviction

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to the Colorado Court of Appeals (CCA), arguing that the evidence seized from his

vehicle should have been suppressed because it was the fruit of an unconstitutional

checkpoint employed by law enforcement officers, and because Deputy Richards could

not reasonably have observed Gumeson throw anything out of the vehicle window and/or

likely searched the incorrect area after observing Gumeson’s actions. The CCA affirmed

Roth’s conviction on August 14, 2003. People v. Roth, 85 P.3d 571 (Colo. App. 2003).

In doing so, the CCA held that the use of the fictitious drug checkpoint did not violate

Roth’s rights under the Fourth Amendment because the stop of his car was based on the

officers’ individualized suspicion of unlawful activity, and the officers had probable

cause to believe the car contained evidence of a crime and thus were justified in searching

the car and its contents. Although Roth filed petitions for writs of certiorari with the

Colorado Supreme Court and the United States Supreme Court, those petitions were

denied. Roth v. People, No. 03SC641, 2004 WL 423074 (Colo. Mar. 8, 2004), cert.

denied, 543 U.S. 932 (2004).

The original district court proceedings

On June 12, 2002, while Roth’s state criminal appeal was still pending, Roth and

Gumeson initiated this 42 U.S.C. § 1983 action by filing a complaint in federal district

court against seventy-six defendants, including various state and county officials (e.g., the

governor of the State of Colorado and the heads of at least three municipal police

departments whose employees participated in the narcotics task force), several Colorado

municipalities, and approximately fifty “unknown Doe defendants.” In their complaint,

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Roth and Gumeson alleged that the defendants “created, established, and executed an

unconstitutional drug checkpoint on . . . June 15, 2000,” that ultimately resulted in Roth

and Gumeson being unlawfully stopped, detained, searched and arrested. ROA, Vol. 1,

Doc. 1 at 8. The complaint, which alleged four separate causes of action under § 1983

arising out of the general allegations, sought general, special and punitive damages,

attorneys’ fees and costs, and declaratory relief.

Defendants moved to dismiss the complaint and/or for summary judgment. Rather

than responding directly to those motions, Roth and Gumeson asked the district court to

stay the case “until the appellate process, including any writs,” in Roth’s state criminal

case was “completed.” ROA, Vol. 1, Doc. 46 at 1. The district court denied the motion

to stay and ordered Roth and Gumeson to respond to the defendants’ pending motions.

Id., Doc. 51. After responding to defendants’ motions, Roth and Gumeson filed a motion

asking the district court to stay all pretrial proceedings. Id., Vol. 2, Doc. 72. That motion

was granted by the magistrate judge on February 5, 2003.

On December 5, 2003, after allowing the parties to complete their briefing on the

pending motions to dismiss and/or for summary judgment, the district court granted the

motions and dismissed the action in its entirety. In doing so, the district court concluded:

(1) it was precluded by the Rooker-Feldman doctrine 1 from considering Roth’s claims

1
The Rooker-Feldman doctrine, based on two United States Supreme Court cases,
Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16 (1923), and District of Columbia
Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983), “prevents the lower federal
courts from exercising jurisdiction over cases brought by state-court losers challenging
state-court judgments rendered before the district court proceedings commenced.” Lance

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because the identical issues were decided against Roth in his state criminal proceedings;

(2) Roth was precluded under the doctrine of collateral estoppel from challenging the

constitutionality of the ruse checkpoint and his stop, detention and arrest; (3) both Roth

and Gumeson were precluded, pursuant to the Supreme Court’s decision in Heck v.

Humphrey, 512 U.S. 477 (1994), from pursuing their § 1983 claims until such time, if

ever, that they had successfully challenged their Colorado state convictions arising from

the stop, search and arrest; (4) the claim of civil conspiracy asserted by Roth and

Gumeson under § 1983 failed as a matter of law because they did not allege any “specific

facts showing any agreement or collaboration between [the] Defendants to undertake an

improper, illegal, or unconstitutional activity,” ROA, Vol. 3, Doc. 121 at 13; and (5) in

addition to these various bases for dismissal, defendants were entitled to summary

judgment because the undisputed facts established that the “ruse checkpoint” was

constitutional in light of the decision in United States v. Flynn, 309 F.3d 736 (10th Cir.

2002), which the district court concluded involved “virtually identical facts and [wa]s

dispositive,” ROA, Vol. 3, Doc. 121 at 16. Judgment was entered in the case on

December 11, 2003.

Roth and Gumeson filed a notice of appeal on January 5, 2004. On that same date,

Roth and Gumeson filed a motion asking the district court for permission to proceed on

appeal in forma pauperis. The district court denied that motion on February 2, 2004,

concluding “th[e] appeal [wa]s not taken in good faith because plaintiffs ha[d] not shown

v. Dennis, 126 S.Ct. 1198, 1199 (2006) (internal quotation marks omitted).

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the existence of a reasoned, nonfrivolous argument on the law and facts in support of the

issues raised on appeal.” Id., Doc. 148 at 2.

The motions for sanctions and/or fees and costs

In late December 2003 (after the district court entered judgment but before Roth

and Gumeson filed their notice of appeal) and in early January 2004, defendants filed

motions for sanctions against Robert Mulhern, the attorney for Roth and Gumeson, and/or

for attorney fees and costs pursuant to 28 U.S.C. § 1927. Mulhern filed a lengthy

response to those motions on January 14, 2004. According to Mulhern, he filed the

complaint on June 12, 2002, out of concern “that the Statute of Limitations was about to

expire on June 15, 2002 . . . .” Id., Doc. 138 at 1. Mulhern argued that the case was

meritorious because: (1) the “case should have been stayed, not dismissed,” until the

conclusion of Roth’s state criminal proceedings, id. at 4; (2) the holding in Heck was not

applicable “to this search and seizure case,” id.; (3) he was not allowed to engage in

discovery; (4) “all [defendants] were at least personally involved,” id.; (5) the case

“should have been analyzed using checkpoint law, not individualized suspicion,” id.; and

(6) “[t]he Flynn case [wa]s in conflict with decisions from not only the Supreme Court of

the United States, but also a decision from the United States Court of Appeals for the

Tenth Circuit, among other courts.” Id. In addition, Mulhern argued that the defendants

failed to meet and confer with him prior to filing their motions, as required by the district

court’s local rules, and also failed to comply with the procedures outlined in Rule 11 by

providing him with copies of their motions at least twenty-one days prior to filing those

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motions.

On February 13, 2004, Roth and Gumeson filed a motion for sanctions pursuant to

Rule 11 and/or attorney fees and costs pursuant to 28 U.S.C. § 1927 against the

defendants’ attorneys. The only ground offered in support of the motion was that “the

defendants’ attorneys did not meet and confer with the plaintiffs, through their attorney of

record, prior to filing the[ir] motions [for sanctions and/or fees and costs] and did not

follow the required procedure for Rule 11 sanctions.” Id., Doc. 156 at 2.

On June 15, 2004, the district court granted the defendants’ motion for sanctions

and/or fees and costs, and denied the plaintiffs’ similar motion. Id., Doc. 171. In its

order, the district court concluded that Rule 11 sanctions were appropriate because (1) the

defendants’ respective letters to Mulhern satisfied Rule 11’s “safe harbor” requirement,

(2) Mulhern’s pursuit of the lawsuit, despite numerous Rule 11 “safe harbor” warnings

from defendants, “created unnecessary delay and needlessly increased the cost of this

litigation,” id. at 5, (3) the plaintiffs’ claims and legal contentions “were not warranted by

existing law or by a non-frivolous argument for the extension, modification, or reversal of

existing law or the establishment of new law,” id. (internal quotation marks omitted), and

(4) “the allegations and other factual contentions contained in Plaintiffs’ claims lacked

evidentiary support and would not have gained evidentiary support after further

investigation or discovery.” Id. Although the district court stated it “ha[d] no

information on Mulhern’s ability to pay sanctions,” or on his “history, experience, or

ability,” it “consider[ed] his offense severe in terms of wasted time and wasted money,”

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and that “despite many opportunities to change his conduct–including a failed appeal in

the Colorado Court of Appeals, and the Rule 11 safe-harbor letters here–Mulhern failed to

do so.” Id. at 5-6. In short, the district court concluded that Mulhern “acted in bad faith,”

and thus “Rule 11 sanctions [we]re appropriate.” Id. at 6.

The district court also concluded that “charging fees and costs personally to . . .

Mulhern was appropriate” under 28 U.S.C. § 1927. Id. “In suing twenty-six named

Defendants and Does 1-50,” the district court concluded, “Mulhern engaged in shotgun

litigation, and ignored the realities of the Defendants’ non-involvement in the

circumstances applicable to his clients.” Id. In other words, the district court concluded,

“Mulhern unreasonably and vexatiously multiplied the Defendants in this case, thereby

recklessly increasing the amount of attorney and paralegal time spent on litigation, and

the costs associated therewith.” Id. The district court also noted that “[d]efendants who

clearly had no liability under the circumstances were forced to obtain counsel and defend

against specious claims,” and that “Mulhern refused to withdraw claims or dismiss

various Defendants against whom claims could not be maintained.” Id.

In light of this vexatious conduct, “coupled with the need for Rule 11 sanctions,”

the district court “conclude[d] that Mulhern should be personally liable for the fees and

costs associated with [the] . . . Defendants’ defense under § 1927.” Id. Together, these

fees and costs totaled $92,044.77.

As for the plaintiffs’ cross-motion for sanctions and/or fees and costs, the district

court characterized it as “audacious,” id. at 8, and concluded that by filing it “Plaintiffs

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ha[d] further increased the litigation costs of their fully unsubstantiated lawsuit.” Id. at 9.

The district court also rejected the plaintiffs’ arguments that defendants had failed to meet

and confer as required by the local rules, or to provide plaintiffs with “safe-harbor”

warnings under Rule 11. Id.

This court’s award of fees and costs to defendants

On February 3, 2005, this court issued an order and judgment affirming the district

court’s order dismissing the action on its merits, affirming the district court’s order

denying plaintiffs’ motion for sanctions, and dismissing for lack of jurisdiction Mulhern’s

own appeal of the district court’s order granting defendants’ motions for sanctions and/or

fees and costs against him.2 Roth v. Green, 123 Fed. Appx. 871 (10th Cir. 2005).

On February 17, 2005, one group of defendants (Dennis Spruell, Danny Dufur,

Roy Lane, and the City of Cortez, Colorado) filed a motion for an award of attorney fees

and costs pursuant to Fed. R. App. P. 38 and 28 U.S.C. § 1912. In their motion, these

defendants asked that the fees and costs be assessed against plaintiffs’ attorney, Mulhern.

Mulhern filed a response to the motion on behalf of himself, as well as on behalf of Roth

and Gumeson. In his response, Mulhern argued that he had a reasonable basis for

pursuing the appeal, sanctioning him would effectively result in the loss of his ability to

practice law, and that “Roth and . . . Gumeson . . . ha[d] no money and c[ould] not pay

2
This court concluded it lacked jurisdiction over the district court’s order granting
defendants’ motions for sanctions and/or fees and costs against Mulhern because, at the
time of its decision, the district court had not entered an order determining the amount to
be awarded to one group of defendants (the district court ultimately issued an order in that
regard on February 15, 2005).

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costs.” Add. 10 to Aplt. Br., Resp. at 10. On March 28, 2005, this court granted the

defendants’ motion in part. Joint App. at 59. Rather than relying on Fed. R. App. P. 38

or § 1912, however, this court awarded costs “in the amount of $363.20 pursuant to Fed.

R. App. P. 39,” and, “[p]ursuant to 42 U.S.C. § 1988,” “award[ed] the defendants

attorney’s fees on appeal, in an amount to be determined by the district court on remand.”

Id.

On remand, the defendants who prevailed on their motion for fees and costs filed a

pleading and supporting documentation asking the district court to award them fees in the

amount of $12,049.00. Roth and Gumeson responded, arguing in pertinent part that the

requested fees were unreasonable and, as they had in their response filed with this court,

that they were “paupers” who could not afford to pay any amount of fees. Id. at 148. On

May 12, 2005, the district court issued an order granting defendants’ motion and directing

Roth and Gumeson to pay fees in the requested amount ($12,049.00).

II.

Appeal No. 05-1129

In Appeal No. 05-1129, Mulhern challenges, on various grounds, the district

court’s decision to award sanctions against him and in favor of all the defendants pursuant

to Rule 11 and 28 U.S.C. § 1927. We review for abuse of discretion the district court’s

decision to impose Rule 11 sanctions against Mulhern. Dodd Ins. Servs., Inc. v. Royal

Ins. Co. of Am., 935 F.2d 1152, 1155 (10th Cir. 1991). Likewise, we review a district

court’s award of § 1927 sanctions for an abuse of discretion. Resolution Trust Corp. v.

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Dabney, 73 F.3d 262, 265 (10th Cir. 1995). Notably, this abuse of discretion standard

does “not preclude [our] correction of a district court’s legal errors . . . .” Cooter & Gell

v. Hartmarx Corp., 496 U.S. 384, 402 (1990). In other words, a district court will be

deemed to have abused its discretion if its decision to impose sanctions under either Rule

11 or § 1927 “rest[ed] on an erroneous view of the law . . . .” Id. (internal quotation

marks omitted).

a) Did the “law of the case” preclude the district court from issuing sanctions?

In his first issue on appeal, Mulhern contends that this court, in deciding the first

set of appeals, concluded he should not be sanctioned, thereby establishing the “law of the

case” and precluding the district court from deciding the issue again.

The law of the case doctrine “posits that when a court decides upon a rule of law,

that decision should continue to govern the same issues in subsequent stages in the same

case.” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816 (1988) (internal

quotation marks omitted). Thus, “when a case is appealed and remanded, the decision of

the appellate court establishes the law of the case and ordinarily will be followed by both

the trial court on remand and the appellate court in any subsequent appeal.” Rohrbaugh

v. Celotex Corp., 53 F.3d 1181, 1183 (10th Cir. 1995).

Applying those principles to the case at hand, the question is whether this court

previously decided, as a matter of law, that Mulhern was not subject to sanctions under

either Rule 11 or § 1927. After this court resolved the three prior appeals (by affirming

the district court’s rulings in two of those appeals and dismissing the third appeal for lack

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of jurisdiction), one group of defendants (Dennis Spruell, Danny Dufur, Roy Lane, and

the City of Cortez, Colorado) filed a motion asking this court to assess attorney fees and

costs against Mulhern pursuant to Fed. R. App. P. 38 and 28 U.S.C. § 1912. This court

ultimately granted the motion in part, but instead of assessing fees and costs against

Mulhern pursuant to Fed. R. App. P. 38 or § 1912, assessed fees against Roth and

Gumeson pursuant to § 1988.

There are several reasons why this court’s prior order did not decide the issue of

Mulhern’s liability for sanctions under Rule 11 or § 1927. To begin with, neither the

defendants’ motion nor this court’s order mentioned or otherwise cited either Rule 11 or §

1927, the two authorities relied upon by the district court in sanctioning Mulhern. And

for good reason. Rule 11, which “focuses only on a challenged pleading or written

motion,” Steinert v. Winn Group, Inc., 440 F.3d 1214, 1223 (10th Cir. 2006), “is

generally employed in the district court, whereas Rule 38 [the rule cited in defendants’

appellate motion] is used to sanction groundless appeals.” In re 60 East 80th Street

Equities, Inc., 218 F.3d 109, 118 n.4 (2d Cir. 2000). Although § 1927 is “available to an

appellate court,” most appellate sanctions are imposed under Rule 38. Id. Second, and

relatedly, this court’s rejection of sanctions under Rule 38 or costs under § 1912 could

have no bearing on the issue of the propriety of the district court’s sanctions, both because

the statutes differ in their focus, and because at issue before this court in the prior appeals

was Mulhern’s conduct in pursuing those appeals, whereas the question at issue before

the district court in imposing sanctions was Mulhern’s conduct in filing and pursuing the

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§ 1983 claims in the district court. Third, the issue of sanctions under Fed. R. App. P. 38

is a matter of discretion. The fact that this court chose not to exercise that discretion and

impose sanctions against Mulhern has no relevance to, and thus no impact on, the district

court’s decision to impose sanctions under Rule 11 and § 1927. E.g., Wasko v. Moore,

172 Fed. Appx. 791, 792 (10th Cir. 2006) (affirming district court’s award of Rule 11

sanctions, but denying appellee’s motion for sanctions pursuant to Fed. R. App. P. 38).

Fourth, and finally, this court’s ruling on the motion for sanctions occurred after the

district court granted the defendants’ motions for sanctions, and thus could not have

established the “law of the case” for purposes of the motion that was before the district

court.

In sum, we conclude that this court’s prior ruling on the motion for sanctions had

no bearing on the district court’s order sanctioning Mulhern under Rule 11.

b) Did the § 1983 claims have merit?

Mulhern next contends that sanctions should not have been imposed against him

because the § 1983 claims asserted in the complaint had merit. More specifically,

Mulhern argues that (a) “the legal contentions [we]re warranted by existing law and by

non-frivolous arguments for the reversal of existing law,” including “the Flynn case,” (b)

“the allegations and other factual contentions ha[d] evidentiary support,” and (c) “the

claims [we]re not being presented to harass, cause unnecessary delay, or for the needless

increase in the costs of the litigation in this case.” Aplt. Br. at 23. In addition, Mulhern

argues, the district court should have granted his request to stay the case pending the

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outcome of Roth’s state criminal proceedings and, had the district court done so, “very

little time, effort, and/or money would have been expended by the Court and/or [the

defense] attorneys in this case.” Id. at 27.

The district court noted, and we agree, that there were a host of legal impediments

to Roth and Gumeson prevailing on their claims. To begin with, the majority of the

defendants named in the complaint had, at best, only tangential relationships to the “ruse”

checkpoint, and thus were not properly named as defendants in the complaint. For

example, defendant Bill Owens, the Governor of the State of Colorado, was not alleged to

have had any direct connection with, or participation in, the “ruse” checkpoint.

Even with respect to the named defendants who directly participated in the “ruse”

checkpoint, it is clear that their conduct was entirely legal. Although Mulhern continues

to maintain that the claims asserted in the complaint were not controlled by our decision

in Flynn, he is mistaken. In Flynn, the defendant (Mack Flynn), while driving on I-40 in

Muskogee County, Oklahoma, encountered two road signs nearly identical to those

encountered by plaintiffs Roth and Gumeson in this case (the first said “Drug Checkpoint

1/3 mile ahead” and the second said “Drug Dogs in Use”). The defendant, upon seeing

the signs, “made an abrupt lane change and immediately took the [nearest] exit ramp” off

of I-40. 309 F.3d at 737. At the top of the exit ramp, the defendant briefly stopped his

car while his passenger “opened the door and dropped a large sack from the car.” Id.

Officers who were surveilling the highway examined the sack and determined it

contained narcotics (it was later verified to be methamphetamine). The defendant was

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then stopped, placed under arrest, and charged with various federal offenses in connection

with the incident. After the district court denied his motion to suppress, the defendant

entered a conditional guilty plea to four drug-related offenses. On appeal, the defendant

argued, in pertinent part, that his arrest was the result of “law enforcement’s illegal

conduct in operating a narcotics checkpoint.” Id. at 738 (internal quotation marks

omitted). We rejected that argument, concluding that “[t]he posting of signs to create a

ruse does not constitute illegal police activity,” and that the defendant “never reached a

drug checkpoint.” Id.; see also id. at 739 (“The creation of a ruse to cause the defendant

to abandon an item is not illegal.”).

If there were any doubts about the legality of the ruse utilized by defendants in this

case (and it appears that, even prior to Flynn, the legality of such a ruse was clear), those

doubts should have ceased when we issued Flynn. Mulhern, in turn, upon receiving

notice of the Flynn decision (and the record indicates he was repeatedly advised of the

decision by the defendants in their respective letters to him), should have voluntarily

dismissed the complaint. Stated differently, it was unreasonable, and a violation of his

obligations as a licensed attorney, to continue to pursue the claims after the issuance of

Flynn. Although Mulhern now argues that a reasonable basis exists for overruling the

Flynn decision, he fails to offer any such basis.

Mulhern’s assertion that he “had” to file the complaint to avoid the running of the

statute of limitations, and that, in turn, the district court had an obligation to stay the case

pending the outcome of Roth’s state criminal proceedings, is simply wrong. “A plaintiff

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may not bring a civil rights suit if a favorable result in the suit would necessarily

demonstrate the invalidity of an outstanding criminal judgment against the plaintiff.”

Smith v. Gonzales, 222 F.3d 1220, 1222 (10th Cir. 2000) (citing Heck, 512 U.S. at 487).

As correctly noted by the district court, that was precisely the situation here: by asserting

that they were the victims of an unconstitutional drug checkpoint, Roth and Gumeson

were effectively questioning the validity of their arrests and convictions. Thus, to recover

damages based on their allegations, Roth and Gumeson were first obligated to “‘prove

that the[ir] conviction[s] . . . ha[d] been reversed on direct appeal, expunged by executive

order, declared invalid by a state tribunal authorized to make such determination, or

called into question by a federal court’s issuance of a writ of habeas corpus.’” Id.

(quoting Heck, 512 U.S. at 486-87). Not until they successfully did so would their § 1983

claims have arisen. Id. In other words, “‘[b]ecause the[ir] cause[s] of action d[id] not

accrue until such time, the applicable statute of limitations d[id] not begin to run until the

same time.’” Id. (quoting Heck, 512 U.S. at 489-90). Thus, Mulhern was in no way

obligated to file suit against defendants, and indeed clearly should have waited until such

time, if ever, as the Colorado state courts granted relief to Roth and Gumeson from their

convictions.

In sum, the district court did not abuse its discretion in concluding that Mulhern

violated the provisions of both Rule 11 and § 1927 in filing and pursuing the § 1983

claims on behalf of Roth and Gumeson.

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c) Did the defendants fail to meet and confer with Mulhern?

Mulhern contends that sanctions were improperly imposed against him because the

defendants failed to first “meet and confer” with him prior to filing their motions for

sanctions, as required by Rule 7.1 of the district court’s local rules. We review a district

court’s application of its local rules for abuse of discretion. Hernandez v. George, 793

F.2d 264, 268 (10th Cir. 1986).

District of Colorado Local Rule 7.1 provides, in pertinent part, as follows:

A. Duty to Confer. The court will not consider any motion, other than a
motion under Fed. R. Civ. P. 12 or 56, unless counsel for the moving party
or a pro se party, before filing the motion, has conferred or made
reasonable, good-faith efforts to confer with opposing counsel or a pro se
party to resolve the disputed matter. The moving party shall state in the
motion, or in a certificate attached to the motion, the specific efforts to
comply with this rule.

D.C. Colo. L. Civ. R. 7.1.

In its order granting defendants’ motions for sanctions, the district court rejected

Mulhern’s assertion that defendants failed to comply with Local Rule 7.1. Specifically,

the district court noted that each set of defendants sent Mulhern a “warning or ‘safe-

harbor’” letter outlining the deficiencies of each claim asserted in the complaint, asking

that Mulhern voluntarily dismiss the complaint, and warning that Mulhern’s failure to do

so would result in the filing of motions for sanctions and fees. ROA, Vol. 3, Doc.171 at

9. In the district court’s view, these letters “substantially satisf[ied] . . . the local rule.”

Id.

Mulhern offers four reasons why the defendants’ letters should not be deemed

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sufficient to satisfy Rule 7.1’s “meet and confer” requirement. First, he argues that if

defense counsel “did meet and confer [with him], they would have stated and were

required to state in their sanctions motions and/or certify their specific efforts.” Aplt. Br.

at 10. Second, he argues that the letters “did not say anything about Rule 7.1 A or that the

letters were meet and confer letters.” Id. Third, he argues that the letters failed to address

each of the grounds ultimately asserted by defendants in their respective motions to

dismiss and/or for summary judgment. Fourth, he argues that the defendants’ letters were

sent to him “up to eleven (11) months prior to [defendants’] filing the motions for

sanctions,” and thus did not meet the spirit of Rule 7.1. Id. at 12.

We reject Mulhern’s arguments and conclude that the district court did not abuse

its discretion in applying Rule 7.1. As noted, each letter advised Mulhern that, in the

defendants’ view, the claims asserted in the complaint were, for various reasons, meritless

and should therefore be voluntarily dismissed. Further, each letter provided Mulhern with

notice that, should he fail to voluntarily dismiss the complaint, defendants would move

for sanctions against him. In short, each letter effectively complied with Local Rule 7.1

by attempting to seek a resolution of the issue (i.e., the frivolousness of the plaintiffs’

claims) without first seeking resort to the district court’s intervention. Although Mulhern

complains that defendants failed to outline, in their motions, their efforts to meet and

confer, he acknowledges that defendants attached to their motions copies of the letters

they sent to him. In our view, the district court did not abuse its discretion in concluding

that this “substantially satisfied” the requirements of Rule 7.1. Lastly, Rule 7.1 is silent

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with regard to precisely when the parties must meet and confer prior to the filing of a

related motion. Thus, it was not a violation of Rule 7.1 for defendants to wait several

months after sending their letters to Mulhern before filing their motions for sanctions

(indeed, it arguably favored Mulhern by providing him with a considerable period of time

in which to voluntarily dismiss the complaint).

d) Did defendants follow the procedures outlined in Rule 11?

Finally, Mulhern contends the district court should not have granted the

defendants’ motions for Rule 11 sanctions because defendants “did not serve [him] with

their Rule 11 motions prior to filing the motions,” and thus violated the so-called “safe

harbor” provision of Rule 11. Aplt. Br. at 17. Mulhern also contends that “Rule 11

required that the motions for sanctions were to be served and filed before the conclusion

of the civil rights case.” Id. at 18.

Federal Rule of Civil Procedure 11 provides, in pertinent part, as follows:

(c) Sanctions. If, after notice and a reasonable opportunity to respond, the
court determines that subdivision (b) has been violated, the court may,
subject to the conditions stated below, impose an appropriate sanction upon
the attorneys, law firms, or parties that have violated subdivision (b) or are
responsible for the violation.
(1) How Initiated.
(A) By Motion. A motion for sanctions under this rule shall
be made separately from other motions or requests and shall describe
the specific conduct alleged to violate subdivision (b). It shall be
served as provided in Rule 5, but shall not be filed with or presented
to the court unless, within 21 days after service of the motion (or
such other period as the court may prescribe), the challenged paper,
claim, defense, contention, allegation, or denial is not withdrawn or
appropriately corrected. If warranted, the court may award to the
party prevailing on the motion the reasonable expenses and

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attorney’s fees incurred in presenting or opposing the motion. * * *

Fed. R. Civ. P. 11(c).

The first question raised by Mulhern is whether defendants complied with the

“safe harbor” provisions outlined in Rule 11(c)(1)(A). As noted, that subsection states

that motions for sanctions “shall be served . . . but not filed with or presented to the court

unless, within 21 days after service of the motion” the challenged pleadings or claims

have not been “withdrawn or appropriately corrected.” Although defendants all sent

Mulhern warning letters well in advance of filing their motions for sanctions, it is

uncontroverted that they did not, as required by subsection (c)(1)(A), serve him with

copies of their actual motions for sanctions twenty-one days prior to filing those motions.

Indeed, it appears from the record on appeal that the motions were served on Mulhern at

the same time as, or after, the motions were actually filed.

As they did in the district court, however, defendants contend that the warning

letters they sent to Mulhern months in advance of filing their motions for sanctions

effectively satisfied the requirements of subsection (c)(1)(A) by providing Mulhern with

notice of their intent to seek sanctions and an opportunity to withdraw the complaint prior

to them filing their motions. Although the district court agreed with defendants, we

conclude, for the reasons discussed below, that defendants’ letters were not sufficient to

satisfy the requirements of subsection (c)(1)(A), and thus the district court abused its

discretion in granting defendants’ motions for Rule 11 sanctions.

Contrary to defendants’ arguments, nothing in subsection (c)(1)(A) suggests that a

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letter addressed to the alleged offending party will suffice to satisfy the safe harbor

requirements. Rather, the plain language of subsection (c)(1)(A) requires a copy of the

actual motion for sanctions to be served on the person(s) accused of sanctionable

behavior at least twenty-one days prior to the filing of that motion. This conclusion is

bolstered by the Advisory Committee’s Notes to the 1993 amendment to Rule 11 (which

added the safe harbor provision):

The rule provides that requests for sanctions must be made as a separate
motion, i.e., not simply included as an additional prayer for relief in another
motion. The motion for sanctions is not, however, to be filed until at least
21 days (or such other period as the court may set) after being served.
These provisions are intended to provide a type of “safe harbor” against
motions under Rule 11 in that a party will not be subject to sanctions on the
basis of another party’s motion unless, after receiving the motion, it refuses
to withdraw that position or to acknowledge candidly that it does not
currently have evidence to support a specified allegation. * * *
To stress the seriousness of a motion for sanctions and to define
precisely the conduct claimed to violate the rule, the revision provides that
the “safe harbor” period begins to run only upon service of the motion. In
most cases, however, counsel should be expected to give informal notice to
the other party, whether in person or by a telephone call or letter, of a
potential violation before proceeding to prepare and serve a Rule 11 motion.

Fed. R. Civ. P. 11, advisory committee notes, 1993 Amendments (emphasis added). In

other words, the Advisory Committee’s Notes clearly suggest that warning letters, such as

those sent by defendants to Mulhern, are supplemental to, and cannot be deemed an

adequate substitute for, the service of the motion itself.

The reason for requiring a copy of the motion itself, rather than simply a warning

letter, to be served on the allegedly offending party is clear. The safe harbor provisions

were intended to “protect[] litigants from sanctions whenever possible in order to mitigate

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Rule 11’s chilling effects, formaliz[e] procedural due process considerations such as

notice for the protection of the party accused of sanctionable behavior, and encourag[e]

the withdrawal of papers that violate the rule without involving the district court . . . .”

5A Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure § 1337.2,

at 722 (3d ed. 2004). Thus, “a failure to comply with them [should] result in the rejection

of the motion for sanctions . . . .” Id. at 723.

To be sure, the Seventh Circuit has, as noted by defendants, held that a letter sent

to an offending party, rather than a copy of the actual motion, can constitute substantial

compliance with Rule 11(c)(1)(A). See Nisenbaum v. Milwaukee County, 333 F.3d 804,

808 (7th Cir. 2003). We find this decision unpersuasive, however, because it contains no

analysis of the language of Rule 11(c)(1)(A) or the Advisory Committee Notes, cites to

no authority for its holding, and indeed is the only published circuit decision reaching

such a conclusion. See Wright and Miller, supra, § 1337.2, at 726 (citing cases).

Mulhern also contends that the motions for sanctions should have been denied

because they were not filed until after the district court had dismissed the complaint. We

agree. “The addition of the safe harbor provision in the 1993 amendment [to Rule 11]

dramatically changed the effect that a final judgment or the dismissal of the claim has on

the possibility of a Rule 11 proceeding.” Wright and Miller, supra, § 1337.2, at 727.

“[S]ervice of a sanctions motion after the district court has dismissed the claim or entered

judgment prevents giving effect to the safe harbor provision or the policies and

procedural protections it provides, and it will be rejected.” Id.; see Brickwood

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Contractors, Inc. v. Datanet Eng’g, Inc., 369 F.3d 385, 389 (4th Cir. 2004) (“Because the

rule requires that the party submitting the challenged pleading be given an opportunity to

withdraw the pleading, sanctions cannot be sought after summary judgment has been

granted.”); Tompkins v. Cyr, 202 F.3d 770, 788 (5th Cir. 2000) (affirming denial of

motion for Rule 11 sanctions made after completion of trial); Barber v. Miller, 146 F.3d

707, 710 (9th Cir. 1998) (holding that a party cannot wait until after summary judgment

to move for sanctions, even if that party informally warned the offending party about the

potential of Rule 11 sanctions); Ridder v. City of Springfield, 109 F.3d 288, 297 (6th Cir.

1997) (holding that “a party cannot wait until after summary judgment to move for

sanctions under Rule 11”); see also Aerotech, Inc. v. Estes, 110 F.3d 1523, 1528-29 (10th

Cir. 1997) (concluding that Rule 11 sanctions were unavailable to defendant who moved

for sanctions after plaintiff moved to voluntarily dismiss its claims against defendant).

For these reasons, we conclude the district court abused its discretion in granting

defendants’ motions for sanctions under Rule 11. Because, however, the district court

also awarded defendants fees under § 1927, we conclude the proper course is to reverse

and remand to the district court to determine the proper amount of fees and costs to be

assessed under § 1927 (i.e., “the excess costs . . . and attorneys’ fees reasonably incurred

because of” his unreasonable and vexatious conduct).

Appeal No. 05-1272

In Appeal No. 05-1272, Roth and Gumeson challenge the district court’s May 12,

2005 order directing them to pay attorney fees in the amount of $12,049.00. “We review

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both the court’s decision to award attorney’s fees and the reasonableness of the amount

awarded for an abuse of discretion.” Houston v. Norton, 215 F.3d 1172, 1174 (10th Cir.

2000).

a) Inability to pay

In the first of their two arguments on appeal, Roth and Gumeson contend that the

district court, in determining the reasonableness of the fee award, abused its discretion by

failing to take into account their inability to pay. In support of this argument, Roth and

Gumeson state that they are paupers who simply cannot afford to pay any award. Roth

and Gumeson assert that the district court’s fee award will effectively penalize them by

forcing them “into financial ruin and bankruptcy . . . .” Aplt. Br. at 5. Thus, they argue,

the district court’s fee award violates their due process rights.

In deciding this issue, it is necessary to begin with the statute under which the fee

award was issued. As noted, the fee award originated at the conclusion of the prior set of

appeals, when a group of defendants moved for costs and fees and we granted their

motion in part and awarded them fees pursuant to 42 U.S.C. § 1988. Section 1988

provides, in pertinent part, that “[i]n any action or proceeding to enforce a provision of . .

. 1983 . . . of this title, . . . the court, in its discretion, may allow the prevailing party . . . a

reasonable attorney’s fee as part of the costs . . . .” 42 U.S.C. § 1988(b). Construing this

statute, the Supreme Court has held that the prevailing party in a civil rights case “should

ordinarily recover an attorney’s fee unless special circumstances would render such an

award unjust.” Newman v. Piggie Park Enterp., 390 U.S. 400, 402 (1968). Although we

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have not addressed the issue, “[a]ll the courts of appeals which have addressed the issue

have concluded that a nonprevailing plaintiff’s ability to pay is not a proper factor to

consider in determining whether to award attorneys’ fees against [the plaintiff], but may

be considered when determining the amount of the attorneys’ fees to be awarded against

that party.” 3 Wolfe v. Perry, 412 F.3d 707, 723-24 (6th Cir. 2005) (italics in original;

internal quotation marks omitted); see id. (citing cases); Alizadeh v. Safeway Stores, Inc.,

910 F.2d 234, 238-39 (5th Cir. 1990) (holding that a party’s financial condition is not a

proper factor to consider in determining whether to award fees against that party, but is a

factor that should be considered in fixing the amount of such an award); Miller v. Los

Angeles County Bd. of Educ., 827 F.2d 617, 621 (9th Cir. 1987) (holding that the amount

of an award should not subject the non-prevailing “plaintiff to financial ruin”). We adopt

and proceed to apply that same rule here.

Roth and Gumeson argued to the district court, prior to its determining the amount

of the fee award, that they were paupers who could not afford to pay any amount of fees.

Joint App. at 148 (detailing each plaintiff’s monthly income and expenses). The district

court, in its order establishing the amount of the fee award, rejected this argument on the

grounds that the plaintiffs’ ability to pay “may be a factor when determining whether to

3
In response, defendants “concede that the Tenth Circuit has held that a district
court should consider the plaintiff’s ability to pay in determining the amount of fees.”
Aplee. Br. at 3. In support of this concession, defendants cite to White v. Gen. Motors
Corp., 908 F.2d 675 (10th Cir. 1990). White, however, did not deal with an award of fees
under § 1988, but rather with the appropriate amount of sanctions under Rule 11. Thus,
White is not controlling.

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award fees–which has already been decided by the Tenth Circuit–not when assessing the

proper amount of the award, which is my charge here on remand.” Id. at 171. In light of

the above-cited authority, however, just the opposite is true, i.e., the plaintiffs’ ability to

pay was not a relevant factor in determining whether to award fees against them, but was

a relevant factor for the district court to consider in determining the amount of the fee

award. Thus, the district court abused its discretion in failing to take into account the

plaintiffs’ ability to pay, and the fee award must be vacated and the case remanded for

further proceedings on the fee issue.

b) Reasonableness of amount of fee award

In their second argument, Roth and Gumeson argue that the amount of fees

assessed by the district court was unreasonable (and thus an abuse of discretion) because

it represented the fees incurred by the defendants’ attorneys in responding to all three of

the prior appeals (i.e., the appeal of the dismissal of the complaint on the merits, the

appeal of the sanction award against Mulhern, and the appeal of the denial of plaintiffs’

cross-motion for sanctions), rather than just the fees incurred in responding to the appeal

by Roth and Gumeson of the district court’s dismissal of their § 1983 claims.

Roth and Gumeson asserted this same argument below. The district court rejected

it, stating:

The three appeals in this matter were consolidated for oral argument in front
of the Tenth Circuit. Defendants’ counsel did not separate out the time
attributable to the other appeals – which related solely to my award of
sanctions, fees, and costs – when preparing for oral argument. I agree with
Defendants that it is reasonable to include all of the time spent preparing for
the argument to the appellate court, despite the fact that the argument

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included other related appeals.

Joint App. at 171.

Roth and Gumeson fail to offer any rational arguments, let alone any authority,

establishing that the district court abused its discretion in including in the fee award

amounts related to work spent by defense counsel on all three appeals. As the relevant

facts establish, all three of the prior appeals arose out of plaintiffs’ filing, and ultimately

the dismissal, of their § 1983 claims. This includes the two appeals that pertained to the

sanctions issues, since those issues directly pertained to whether or not Mulhern had a

reasonable basis for filing the claims in the first place, and for continuing to maintain

those claims after receiving the various warning letters from defense counsel. Moreover,

the defendants were the “prevailing party” with respect to all of those related issues, and

thus appear to have been entitled to the full amount of the fees incurred pursuant to §

1988(b). Thus, the district court did not abuse its discretion in taking into account all of

the fees incurred by defendants in responding to the three related appeals. Cf. Hensley v.

Eckerhart, 461 U.S. 424, 435 (1983) (holding that fees cannot be awarded under § 1988

for “unrelated claims”).

In Appeal No. 05-1129, we REVERSE the district court’s order granting Rule 11

sanctions against Mulhern and in favor of defendants, and REMAND to the district court

for a determination of the proper amount of fees to be assessed against Mulhern pursuant

to 28 U.S.C. § 1927. In Appeal No. 05-1272, we VACATE the district court’s fee award

and REMAND for further proceedings to include the district court’s consideration of the

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ability of Roth and Gumeson to pay whatever fee amount the court may assess against

them.

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