Jensen v. Phillips Screw Co.

United States Court of Appeals
For the First Circuit

No. 07-2766

THOMAS R. JENSEN,

Plaintiff,

STEWART, ESTES & DONNELL, P.L.C.,

Appellant,

v.

PHILLIPS SCREW COMPANY ET AL.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]

Before

Boudin, Selya, and Dyk,*
Circuit Judges.

William C. Saturley, with whom Frank W. Beckstein III and
Nelson, Kinder, Mosseau & Saturley were on brief, for appellant.
Kevin T. Peters, with whom Christopher Weld, Jr., Raymond P.
Ausrotas, and Todd & Weld LLP were on brief, for appellees.

October 29, 2008

*
Of the Federal Circuit, sitting by designation.
 SELYA, Circuit Judge. There is a line between zealous

representation and abuse of the processes of litigation. Lawyers

who overstep it do so at their peril. In the case before us, the

district court found that a law firm had crossed the line by

unreasonably and vexatiously multiplying the proceedings in a class

action. See 28 U.S.C. § 1927. Accordingly, the court imposed

sanctions.

The law firm appeals from the sanctions order. It

argues, first, that the record fails to disclose any sanctionable

conduct and that, in all events, the district court made mistakes

both in finding the facts and in gauging their import. As a

fallback, the firm maintains that, even if its principal argument

does not carry the day, the district court nonetheless abused its

discretion in refusing to reconsider the sanctions order on a

supplemented record. The defendants, who moved for the imposition

of sanctions in the first place, offer rejoinders to each and every

aspect of this asseverational array.

On the record at hand, we well understand the district

court's frustration with the law firm's apparent carelessness.

Still, we do not think that it can be said, as a matter of law,

that sanctions either are or are not appropriate. In attempting to

proceed past that point, we find ourselves largely stymied by gaps

in the record. Consequently, we decide only one of the further

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questions presented, vacate the sanctions order, and remand for a

new round of proceedings consistent with this opinion.

I. THE UNDERLYING LITIGATION

The genesis of this case seemed ordinary enough; it began

with the filing of a class-action complaint by the law firm of

Stewart, Estes & Donnell, P.L.C. ("SE&D") on behalf of Thomas R.

Jensen and (unnamed) others similarly situated. The complaint

designated two related corporations, Phillips Screw Company and

Phillips Fastener Products, Inc. (collectively, "Phillips") as

defendants and alleged that screws manufactured and marketed by

them for use with pressure-treated wood suffered from an

undisclosed propensity for premature failure in certain relatively

commonplace circumstances.

As matters turned out, Jensen had previously contacted

Phillips about his claims and had received at least partial

satisfaction for them (the record is opaque as to whether SE&D knew

or should have known as much before filing suit). Given this

circumstance, Phillips raised an affirmative defense of accord and

satisfaction in its answer to the complaint. Along the same line,

it argued at an early scheduling conference with the district court

that Jensen's vulnerability to this defense rendered him an

inappropriate class representative.

The district court agreed; it gave SE&D six weeks (i.e.,

until January 30, 2007) to amend the complaint to add a new named

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plaintiff. The court subsequently granted SE&D's request for a

short extension of that deadline.

Within the allotted time, the law firm moved to file an

amended complaint adding a second plaintiff, Larry Vanlandingham.

SE&D implied that Vanlandingham would make a superior class

representative because he not only had encountered problems when he

used Phillips screws in the construction of a deck but also (unlike

Jensen) had eschewed a private settlement.

As a Scottish poet once warned, even the most carefully

contrived plans may sometimes implode.2 Six weeks after moving to

add Vanlandingham as its new champion and before the district court

ruled on that motion, SE&D abruptly retreated. This time, it moved

to forgo Vanlandingham's entry into the lists because, in the law

firm's words, "circumstances have arisen . . . which may compromise

the ability of [Vanlandingham] to act on behalf of the class."

Phillips opposed this motion and sought dismissal of the action.

It explained in an attached affidavit the nature of the

"circumstances" to which SE&D had alluded. The affiant, Gary M.

Sable, a Phillips executive, recounted that Vanlandingham's wife,

Gayle, had told him (Sable) that she and her husband did not wish

to sue but, rather, preferred to reach a private accommodation with

the company. According to Sable, Gayle Vanlandingham expressed

2
See Robert Burns, To a Mouse (1785) ("The best-laid schemes
o' mice and men [g]ang aft a-gley; [a]n' leave us nought but grief
an' pain [f]or promised joy.").

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surprise that her husband's name had been put forward in the class

action, noting that neither she nor he had engaged counsel.

Neither of them, she added, harbored any desire to become involved

in litigation. Sable went on to quote Gayle Vanlandingham as

saying that when she and her husband expressed their concerns to

SE&D, they were told that Phillips would not honor a warranty claim

in the absence of legal action.

At that juncture SE&D did not directly dispute Phillips's

allegations. In a responsive pleading, it argued instead that the

Sable affidavit constituted hearsay and attributed any change of

heart on the part of the Vanlandinghams to Phillips's influence.

In this exchange of pleadings, SE&D gave top billing to

the new candidate whom it had recruited to fill the named plaintiff

position: Emmett Cox. SE&D asserted that Cox would be an

appropriate class representative because an inspection of his deck

had "indicated substantial premature corrosion of fasteners

manufactured by [Phillips]." Although expressing some skepticism

about SE&D's methods, the district court allowed the motion — a

ruling that had the effect of shelving Vanlandingham and inserting

Cox as a named plaintiff and putative class representative.

Over the next several months, it became apparent that,

notwithstanding SE&D's prior assurances, Cox had used a brand of

screws not manufactured by Phillips in constructing his deck. When

that conclusion became irresistible, SE&D moved to drop Cox as a

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plaintiff and to amend the complaint yet again. This proposed

amendment sought to substitute Timothy Scott Damm in Cox's place

and stead.

Once burned is twice shy. This time the district court

gave SE&D two weeks (i.e., until September 13, 2007) within which

to file a detailed written statement describing Damm's

qualifications as a class-action plaintiff and putative class

representative. SE&D never proffered such a statement. At the end

of the two-week grace period, it withdrew its motion to amend and

terminated the class action in the federal court.

II. SANCTIONS

Throwing in the sponge on the class action did not end

the matter. Invoking 28 U.S.C. § 1927, Phillips moved for an award

of sanctions in the form of attorneys' fees and expenses. In

support of its motion, Phillips argued that SE&D had never

undertaken a reasonably thorough investigation into the bona fides

of any of its four proposed class representatives but had simply

plunged ahead with devil-may-care abandon.

SE&D demurred. The law firm posited that sanctions under

section 1927 were inappropriate vis-à-vis the initial filing of a

complaint; that two of the putative class representatives,

Vanlandingham and Damm, were withdrawn before any excess costs

accrued; and that if any shortcomings characterized its performance

— and it conceded none — those shortcomings were not of the

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magnitude required for the imposition of sanctions. In framing its

opposition, SE&D for the first time directly contradicted

Phillips's account of Vanlandingham's appearance on the scene.3 As

to Cox, SE&D pointed to his reputed statement that he had purchased

Phillips screws to justify its initial assertion that he was an

appropriate plaintiff.

Although SE&D had requested oral argument, the district

court rejected that request. Then, eschewing an evidentiary

hearing, it filed a written decision. See Jensen v. Phillips Screw

Co., Civ. No. 05-12117, 2007 WL 3104625 (D. Mass. Sept. 26, 2007)

("D. Ct. Op."). In that rescript, the court agreed with SE&D that

section 1927 does not authorize sanctions for the filing of an

initial complaint, even if that complaint is groundless. Id. at

*2-3. It determined, however, that SE&D had engaged in

sanctionable conduct vis-à-vis each of the other three erstwhile

plaintiffs. Id. at *3-4. To consummate this determination, the

court directed Phillips to file an itemized account of counsel fees

and expenses incident to those phases of the litigation. Id. at

*5.

SE&D moved for reconsideration, accompanying its motion

with copious if belated evidentiary submissions. Among other

3
SE&D's version derived from a telephone call between an SE&D
attorney, Robert M. Kirkpatrick, and Vanlandingham himself, in
which the latter reportedly recalled having given SE&D permission
to name him as a plaintiff.

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things, it proffered affidavits from two SE&D attorneys, Robert C.

Bigelow and M. Reid Estes, Jr., explaining SE&D's general

professionalism and the particular procedures followed by the firm

in recruiting Vanlandingham and Cox; an affidavit from

Vanlandingham vouchsafing that he had given SE&D permission to name

him as a plaintiff; and an affidavit from Cox asserting that he

repeatedly, though mistakenly, had told SE&D that he had used

Phillips screws to build his deck. Phillips opposed the motion for

reconsideration as too late and too little. The district court

summarily denied the motion.

In due course, Phillips filed its account. The district

court, as a sanction, awarded attorneys' fees and expenses totaling

$8,775. This timely appeal followed. In it, SE&D challenges the

appropriateness of sanctions and certain procedural aspects of the

district court proceedings. SE&D does not challenge the amount of

the award.

III. ANALYSIS

We subdivide our analysis into seven short segments. Our

starting point is a synopsis of the legal and evidentiary

principles attendant to appellate review of sanctions orders

imposed under 28 U.S.C. § 1927. We then briefly address a

procedural complaint advanced by SE&D. From there, we proceed to

consider the various phases of the litigation in chronological

order.

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 A. The Legal Landscape.

In awarding sanctions, the district court acted under 28

U.S.C. § 1927. The statute permits sanctions to be imposed against

lawyers who "multipl[y] the proceedings . . . unreasonably and

vexatiously."

In this circuit, courts use a mainly objective standard

for the purpose of determining when a lawyer's actions are

unreasonable or vexatious. See Cruz v. Savage, 896 F.2d 626, 632

(1st Cir. 1990) (explaining that "[b]ehavior is vexatious when it

is harassing or annoying, regardless of whether it is intended to

be so" (emphasis supplied)). This focus on objective measurement

comports with the majority view across the circuits. See, e.g.,

Amlong & Amlong, P.A. v. Denny's, Inc., 500 F.3d 1230, 1241 (11th

Cir. 2007); Salkil v. Mt. Sterling Police Dep't, 458 F.3d 520, 532

(6th Cir. 2006); Jolly Group, Ltd. v. Medline Indus., Inc., 435

F.3d 717, 720 (7th Cir. 2006); Julien v. Zeringue, 864 F.2d 1572,

1575 (Fed. Cir. 1989).

Garden-variety carelessness or even incompetence, without

more, will not suffice to ground the imposition of sanctions under

section 1927. Rather, an attorney's actions must evince a studied

disregard of the need for an orderly judicial process, see Jolly

Group, 435 F.3d at 720, or add up to a reckless breach of the

lawyer's obligations as an officer of the court, see Salkil, 458

F.3d at 532; Braley v. Campbell, 832 F.2d 1504, 1512 (10th Cir.

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1987). Bad faith is not an essential element, but a finding of bad

faith is usually a telltale indicium of sanctionable conduct. See,

e.g., FDIC v. Cooper, 20 F.3d 1376, 1385 (5th Cir. 1994); Cruz, 896

F.2d at 631.

Our standard of review is familiar. We review a district

court's imposition of sanctions for abuse of discretion. See Cruz,

896 F.2d at 632. This standard is not appellant-friendly, and "a

sanctioned litigant bears a weighty burden in attempting to show

that an abuse occurred." Young v. Gordon, 330 F.3d 76, 81 (1st

Cir. 2003). To shoulder that burden, the sanctioned litigant must

establish that the sanctioning court ignored "a material factor

deserving significant weight," or that its decision rested upon "an

improper factor," or that it considered all the appropriate factors

but made "a serious mistake in weighing them." Vélez v. Awning

Windows, Inc., 375 F.3d 35, 42 (1st Cir. 2004). Of course, if a

discretionary decision rests on an error of law, that is perforce

an abuse of discretion. See Torres-Rivera v. O'Neill-Cancel, 524

F.3d 331, 336 (1st Cir. 2008).

Before attempting to evaluate the district court's

sanctions order, we pause to clarify an evidentiary issue that is

pertinent here. A sanctions order must be evaluated on appeal in

light of the record that was before the district court at the time

the order issued. Cf. McMillan v. Mass. SPCA, 140 F.3d 288, 309

(1st Cir. 1998) (limiting appellate review of summary judgment

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decision to "only those facts that were available at the summary

judgment stage"). In defiance of this principle, SE&D has premised

many of its appellate arguments on an array of facts mined from

attachments to its motion for reconsideration. But those facts

were not before the district court when it issued the sanctions

order. Because a court's factual findings must be tested in light

of the information available to the court when it ruled, we reject

SE&D's back-door attempt to reconfigure the record.

B. Entitlement to Oral Argument.

Citing our decision in Media Duplication Services, Inc.,

v. HDG Software, Inc., 928 F.2d 1228 (1st Cir. 1991), SE&D contends

that the district court made an error that tainted every aspect of

its order when it declined to hear oral argument before imposing

sanctions. That contention is groundless.

In the first place, the case that SE&D cites holds only

that, as a matter of due process, a trial court ordinarily may not

impose sanctions on a party without giving that party notice and an

opportunity to be heard. See id. at 1238. Here, however, SE&D was

given ample notice; indeed, Phillips filed an aposematic motion.

As a result, SE&D had a full opportunity to set out its side of the

matter in a written response. Had it opted to do so, it could have

submitted additional affidavits or evidentiary materials as part of

that response. In the usual course, matters can adequately be

heard on the papers. See EEOC v. S.S. Clerks Union, Local 1066, 48

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F.3d 594, 609 (1st Cir. 1995) (holding that dispositive motions may

be "heard" on the papers because due process does not require "any

particular kind of hearing"); Domegan v. Fair, 859 F.2d 1059, 1065

(1st Cir. 1988) (explaining that "district courts have considerable

discretion in deciding whether or not to allow oral argument on a

dispositive motion"). So it is here.

C. Naming Jensen as a Plaintiff.

We begin our march through the ranks of the putative

class representatives with Thomas Jensen. SE&D's enlistment of

Jensen as the initial class representative proved to be

improvident. Nevertheless, the district court declined to impose

sanctions with respect to that phase of litigation. Reading the

unvarnished text of section 1927, the court determined that

sanctions were not available under that statute for activity

associated with the initial filing of a complaint. D. Ct. Op.,

2007 WL 3104626, at *2.

We agree with the district court's reasoning. The

touchstone of all statutory construction is the wording of the

statute under review. See Aguilar v. U.S. Immig. & Customs Enf.,

510 F.3d 1, 8 (1st Cir. 2007); Fed. Refin. Co. v. Klock, 352 F.3d

16, 25 (1st Cir. 2003). Here, the plain language of the statute

restricts its operation to acts that "multipl[y]" the proceedings.

28 U.S.C. § 1927. Commencing a proceeding is not the same as

multiplying a proceeding. In our view, then, Congress's use of the

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verb "multipl[y]" in the text of the statute clearly contemplates

that, to be sanctionable thereunder, conduct must have an effect on

an already initiated proceeding. Consequently, we join an unbroken

band of cases across the courts of appeals holding that a lawyer

cannot violate section 1927 in the course of commencing an action.

See, e.g., Steinert v. Winn Group, Inc., 440 F.3d 1214, 1224 (10th

Cir. 2006); MEMC Elec. Mat'ls, Inc. v. Mitsubishi Mat'ls Silicone

Corp., 420 F.3d 1369, 1382 (Fed. Cir. 2005); DeBauche v. Trani, 191

F.3d 499, 511 (4th Cir. 1999); Zul v. E. Pa. Psych. Inst., 103 F.3d

294, 297 (3d Cir. 1996); In re Keegan Mgmt. Co., 78 F.3d 431, 435

(9th Cir. 1996). We therefore affirm the district court's decision

that sanctions under section 1927 were not available for any

alleged failure on SE&D's part to vet Jensen or investigate the

bona fides of his claim.

Let us be perfectly clear about two related points.

First, we limit this holding to section 1927. Shoddy work related

to the commencement of an action may be sanctionable under other

approaches. See, e.g., Fed. R. Civ. P. 11. Second, to the extent

that SE&D knew or should have known of Jensen's weaknesses as a

lead plaintiff, those weaknesses may inform the question of whether

SE&D was guilty down the line of unreasonably and vexatiously

multiplying the proceedings. See Bowler v. U.S. INS, 901 F. Supp.

597, 605 (S.D.N.Y. 1995) (noting that section 1927 exists to punish

a course of conduct, not merely individual acts).

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 D. Naming Vanlandingham as a Plaintiff.

When it ruled on the motion for sanctions, the district

court had before it the parties' legal memoranda. It also had

before it four main sources of raw factual information anent

Vanlandingham: (i) its own observations concerning what had taken

place; (ii) the Sable affidavit; (iii) SE&D's response to the Sable

affidavit, which contained among other things a recitation of a

telephone conversation that supposedly had taken place with

Vanlandingham, see supra note 2; and (iv) the bare fact that

Vanlandingham's name was withdrawn six weeks after it was

proffered. The district court explicitly refused to accept "either

party's hearsay version of Mr. VanLandingham's statements," D. Ct.

Op., 2007 WL 3104625, at *3, which seemingly eliminated everything

except the first and fourth sources of information.4

On this slender predicate, the court concluded that SE&D

was either "unaware" of Vanlandingham's reluctance to litigate or

"persisted in naming him . . . regardless." Id. Either way, the

court believed that the naming of Vanlandingham was an act

deserving of sanctions. Id.

If the lower court had relied simply on Vanlandingham's

seeming unwillingness to proceed and reasonable inferences drawn

from the sequencing of the pleadings, that would have been too

4
The district court declined to bolster its conclusion anent
SE&D's carelessness by referring to SE&D's "course of conduct" vis-
à-vis Jensen.

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little to underpin a sanctions order. From that exiguous showing,

the court had no reliable way of knowing whether SE&D had

disregarded Vanlandingham's wishes from the start or,

alternatively, had been taken by surprise when he performed an

about-face. Furthermore, such an about-face, unexplained, could

not support a finding of sanctionable conduct. See McLane, Graf,

Raulerson & Middleton, P.A. v. Rechberger, 280 F.3d 26, 44 (1st

Cir. 2002) (noting that sanctions under section 1927 require a

showing that the conduct "be more severe than mere negligence,

inadvertence, or incompetence"). After all, a party can turn on a

dime, change his mind, and decide to pursue settlement rather than

litigation without any fault attaching to his counsel.

Presumably recognizing the need to fill this gap, the

district court appears (albeit implicitly) to have credited the

hearsay allegations limned in the Sable affidavit. The court did

so notwithstanding its avowed unwillingness to rely upon hearsay

accounts. While credibility determinations ordinarily are grist

for the district court's mill — the court, as trier of the facts,

can choose to believe one version of events and disbelieve the

other, see, e.g., Fed. Refin., 352 F.3d at 27 — the court must

apply its methodology uniformly. Thus, it cannot reject one side's

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evidence on hearsay grounds while overlooking the same defect in

the other side's proffer.5

We need not belabor the point. The short of it is that

the district court abused its discretion in reaching the sanctions

determination with respect to this phase of the litigation.

E. Naming Cox as a Plaintiff.

In an affidavit submitted prior to the sanctions

determination, an SE&D attorney, Robert Gore, swore that a pre-suit

inspection of Cox's deck showed corrosion of fasteners made by

Phillips. Notwithstanding this affidavit, the district court

declared that SE&D had conceded that it moved to name Cox as a

plaintiff without any such inspection having taken place. The

record contains no proof of such a concession.

The closet thing in the record is the following. In

opposing sanctions SE&D relied primarily on Cox's statements rather

than its own inspection. But the effect of this strategic choice

is tempered by the fact that SE&D was responding to Phillips's

motion — and Phillips had not challenged SE&D's performance of an

inspection but only the reasonableness of its overall inquiry.

Under the circumstances, we hardly think that this can be termed a

"concession" by SE&D that its earlier statement was false.

5
We do not suggest that the rules of evidence necessarily
apply to factfinding in the context of sanctions. That is not the
case. See, e.g., Cook v. Am. S.S. Co., 134 F.3d 771, 774 (6th Cir.
1998). But to the extent that a court applies those rules, it must
do so even-handedly.

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 That effectively ends this aspect of the matter. Where,

as here, a court relies explicitly on a non-fact to make a factual

determination, that reliance constitutes an abuse of discretion.

See Vélez 375 F.3d at 42. It follows that, insofar as the

sanctions order relates to SE&D's efforts in connection with

introducing Cox as the lead plaintiff, the order must be revisited.

F. Naming Damm as a Plaintiff.

The district court determined that SE&D had committed

sanctionable acts in connection with the abortive filing of the

motion to substitute Damm as the named plaintiff and putative class

representative. SE&D contends that this determination lacks any

factual or legal basis.

The unique position occupied by a trial judge gives her

an intimate familiarity with the ebb and flow of the cases on her

docket. Appellate courts recognize, therefore, that they must

defer in large measure to a trial judge's "first-line authority for

case-management decisions." Torres v. Puerto Rico, 485 F.3d 5, 10

(1st Cir. 2007). Orders granting or denying sanctions fall within

that taxonomy. See, e.g., Roasrio-Diaz v. González, 140 F.3d 312,

314 (1st Cir. 1998). Consequently, appellate courts "step softly"

when reviewing the imposition of sanctions. United States v. One

1987 BMW 325, 985 F.2d 655, 657 (1st Cir. 1993).

Given the trial judge's special coign of vantage, common

sense suggests that she must be accorded wide latitude in drawing

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inferences as to when multiplication of the proceedings crosses the

line between what is acceptable if tedious and what is unreasonable

and vexatious. The case law so indicates. See, e.g., Rosario-

Diaz, 140 F.3d at 315; Jones v. Winnepesaukee Realty, 990 F.2d 1,

5 (1st Cir. 1993). Distinguishing between what is a vigorous but

reasonable attempt to salvage a case that is going badly and a

stubbornly capricious attempt to gain advantage by prolonging

matters is not easy. There will be a certain class of cases in

which the facts may support either characterization. In that

middle ground, the abuse of discretion standard tips the balance in

favor of the trial court's view. See Anderson v. Beatrice Foods

Co., 900 F.2d 388, 393-94 (1st Cir. 1990); In re San Juan Dupont

Plaza Hotel Fire Litig., 859 F.2d 1007, 1019 (1st Cir. 1988). It

may well be that the proposed substitution of Damm and the

subsequent dismissal without explanation of the action under the

circumstances could support an imposition of sanctions.

Here, however, there is a rub. As we understand it, the

district court premised its finding of sanctionable conduct vis-à-

vis Damm at least in part on its findings that SE&D had engaged in

sanctionable conduct with respect to two other plaintiffs. See D.

Ct. Op., 2007 WL 3104625, at *4.; cf. Obert v. Repub. W. Ins. Co.,

398 F.3d 138, 146 (1st Cir. 2005) (acknowledging that sanctions

might be appropriate for a series of "hopeless motions," but

warning that imposing sanctions "routinely" for easy filing of such

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a motion "would tie courts and counsel in knots"). Because we have

set aside those precursor findings (at least for now), see supra

Parts III(D)-(E), we must set aside this cumulative finding as

well. See Local Div. 589, Amalg. Transit Union v. Massachusetts,

666 F.2d 618, 645 (1st Cir. 1981) (remanding preliminary injunction

order for reconsideration where order was predicated on

"uncontradicted affidavit" that appellate court found to be

disputed). The district court can, of course, revisit this aspect

of the matter on remand.

G. The Motion for Reconsideration.

SE&D's final plaint is that the district court abused its

discretion in denying its motion for reconsideration of the

sanctions order. Because we have determined that the order must be

vacated and the matter remanded for further proceedings, this

assignment of error has become moot.

In the interest of good practice, we add a coda. When a

motion for sanctions is made, the target has an obligation to put

its best foot forward. It cannot hang back and withhold evidence

helpful to its position merely because it hopes (or even

anticipates) that the district court will hold an evidentiary

hearing. Such hearings are matters of discretion, see, e.g., In re

Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire

Litig., 56 F.3d 295, 301-02 (1st Cir. 1995), and it will be rare

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that a court of appeals will meddle with a district court's

decision to forgo an evidentiary hearing on a motion for sanctions.

IV. CONCLUSION

To recapitulate, we affirm the district court's ruling as

to the inapplicability of 28 U.S.C. § 1927 to the initial pleading

herein. See supra Part III(C). But although the able district

judge had ample reasons to chafe at the way in which SE&D conducted

the plaintiffs' side of this litigation, we are constrained, for

the reasons elucidated above, to vacate the remainder of the

sanctions order. We remand to the district court for further

proceedings consistent with this opinion.

We envision that the district court, on remand, will

afford the parties a further opportunity to submit materials in

support of their respective positions. Whether to entertain oral

argument and/or convene an evidentiary hearing remains within the

informed discretion of the district court. Nothing that we have

seen in the record thus far convinces us that SE&D's actions are or

are not sanctionable. Consequently, we take no view on the

appropriate outcome of those incremental proceedings.

Although we need go no further, we think it advisable to

mention another possibility. The battle that is presently being

fought is obviously about principle, not money (experience suggests

that each side has spent more than the dollar amount of the

sanctions in briefing and arguing this appeal). As a matter of

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mutual interest, the time may have come for the protagonists to

call it quits. On the one hand, Phillips prevailed in the district

court and can credibly claim a moral victory. On the other hand,

SE&D has prevailed in large part on this appeal and, at this point,

has erased the stain on its escutcheon.

Affirmed in part, vacated in part, and remanded. All parties shall

bear their own costs.

- Concurring Opinion Follows -

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 BOUDIN, Circuit Judge (concurring). The sanction in this

case rested, it appears, not upon a single act but on a cumulative

course of conduct: the successive proffer and then abandonment of

four successive lead plaintiffs; an inference of inadequate and

arguably careless investigation in most or all of these four

instances; and the suspicious failure to explain at all why the

fourth plaintiff was withdrawn. That the result--a defunct law

suit--wasted court time and imposed litigation costs on the defense

can scarcely be doubted.

The record permits a finding of recurring negligence.

The first plaintiff had settled before the case was brought; the

second, even if he originally consented to proceed, does not seem

to have had any serious commitment to the case; the third had not

used Phillips screws; and the fourth was pulled without

explanation--the fair inference being that problems had again been

belatedly identified. True, the firm later offered new exculpatory

affidavits, but the district court permissibly declined to consider

them.

The law is thin as to whether the vexatious litigation

statute is violated by successive acts of negligence, doubtlessly

prolonging the litigation but aimed (however fumbling the efforts)

at success on the merits rather than harassment. The cases say

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that simple negligence is not enough6 but, where the facts involve

successive acts of negligence, the courts sometimes uphold

sanctions, using the phrase "bad faith" but without any indication

that it rests on more than repeated error.7 Here, the district

court's comment on the firm's affidavit about the deck inspection

suggests that the judge thought it worse than mere negligence.

Nevertheless, strictly speaking it is possible (if

unlikely) that the second plaintiff (VanLandingham)--was originally

on board with qualification and then simply reversed course; and

while the firm's initial affidavit on the suitability of Cox as the

third lead plaintiff is no model of clarity (e.g., as to who

supposedly did the deck inspection), it is hard to tell without

more facts whether it was also disingenuous--as the district judge

implied--or just what inquiries the firm had made.

There is a good deal of carelessness in litigation and,

where the trial judge thinks the situation is serious enough to

take the time for sanctions, the judge on the scene is entitled to

a healthy latitude in making the ultimate judgment. Still, the

stakes are high when a law firm is sanctioned for improper

behavior, Obert v. Republic Western Ins. Co., 398 F.3d 138, 143

6
See, e.g., United States v. Wallace, 964 F.2d 1214, 1219
(D.C. Cir. 1992); Cruz v. Savage, 896 F.2d 626, 632 (1st Cir.
1990); In re Ruben, 825 F.2d 977, 984 (6th Cir. 1987).
7
O'Rear v. American Family Life Assur. Co. of Columbus, Inc.,
144 F.R.D. 410, 413-14 (M.D. Fla. 1992); Stewart v. City of
Chicago, 622 F. Supp. 35, 37-38 (N.D. Ill. 1985).

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(1st Cir. 2005), and the risk remains that sanctions may be sought

for tactical reasons--for example, to discourage litigation.

There having been no evidentiary hearing, the lack of

clarity in the record can justify a remand, especially as our

precedents on fault-based lawyer sanctions have been fairly strict.

Obert, 398 F.3d at 146-47; Young v. City of Providence, 404 F.3d

33, 40-41 (1st Cir. 2005). It would be a different matter if,

after Cox had been withdrawn, the district court had held that

three strikes were enough and simply declined to allow any further

amendment.

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