Stanley v. Woodford

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT GERALD F. STANLEY,  Petitioner-Appellant, JACK LEAVITT, No. 04-16255 Appellant, D.C. No. FEDERAL PUBLIC DEFENDER,  CV-95-01500- Intervenor-Appellee, FCD/GGH v. OPINION JEANNE WOODFORD, Respondent-Appellee.  Appeal from the United States District Court for the Eastern District of California Frank C. Damrell, District Judge, Presiding Submitted February 15, 2006* San Francisco, California Filed June 7, 2006 Before: Procter Hug, Jr., Arthur L. Alarcón, and M. Margaret McKeown, Circuit Judges. Opinion by Judge Hug *The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a)(2). 6253 STANLEY v. WOODFORD 6255 COUNSEL Jack Leavitt, Hayward, California, for the appellant. Mark E. Olive, Tallahassee, Florida, and Tim Schardl, Assis- tant Federal Defender, Sacramento, California, for the appel- lee. OPINION HUG, Circuit Judge: This is an interlocutory appeal from a sanctions order com- pelling attorney Jack Leavitt (“Leavitt”) to pay attorney’s fees 6256 STANLEY v. WOODFORD under 28 U.S.C. § 1927 and the district court’s inherent pow- ers. The Magistrate Judge sanctioned Leavitt for violating, twice and in bad faith, the Magistrate Judge’s order barring further appearances on behalf of a California prisoner in capi- tal habeas corpus proceedings under 28 U.S.C. § 2254. Dis- trict Judge Damrell affirmed, and Leavitt immediately appeals. We are called on to decide whether, after the Supreme Court’s unanimous opinion in Cunningham v. Ham- ilton County, 527 U.S. 198 (1999), this court has appellate jurisdiction to entertain a prejudgment appeal of an order imposing sanctions on a non-party attorney, no longer repre- senting any party in the underlying case, pursuant to 28 U.S.C. § 1927 and the court’s inherent powers. We find juris- diction to be absent and dismiss Leavitt’s appeal. I. FACTUAL AND PROCEDURAL BACKGROUND On January 14, 2002, Leavitt filed papers seeking to dis- qualify appointed counsel for capital habeas corpus petitioner Gerald F. Stanley (“Stanley”) and to substitute himself as counsel of record. This was Leavitt’s second attempt to sub- stitute himself in federal court; the first was denied in 1998. Multiple similar requests during state habeas proceedings were denied by the California Supreme Court in 2001. On October 22, 2002, the Magistrate Judge rejected the substitution, finding that on July 29, 2002, Stanley had in writing authorized his counsel to pursue habeas relief by fil- ing an amended petition. The court found that “petitioner Stanley has no present credibility on the issue of whether he authorized the most recent federal amended petition to be filed.” Over a seven-year period, Stanley did “nothing but change his mind back and forth” regarding his desire to pur- sue habeas proceedings. The Magistrate Judge concluded that Stanley “learned from his state trial court proceedings that expressing conflicting viewpoints on his competency, or in his instructions to his lawyers, could tie the courts in knots.” STANLEY v. WOODFORD 6257 The same tactic of repeatedly withdrawing and restating petitions worked in federal court for a time, proving disrup- tive. Because the Magistrate Judge found Stanley’s appointed counsel credible in his statements that Stanley did in fact desire to proceed, the Magistrate Judge ruled that the court would take Stanley’s most recent authorization as the final word and entertain no further requests to withdraw the peti- tion. Accordingly, the Magistrate Judge’s October 22, 2002 order prohibited Leavitt from entering any further appear- ances in the case on Stanley’s behalf. The Magistrate Judge warned that further filings would result in sanctions. Leavitt moved for reconsideration, which District Judge Damrell denied on November 4, 2002. Notwithstanding the District Court’s order, Leavitt filed two appearances in the case in May and October of 2003. On May 20, 2003, Leavitt wrote a letter to District Judge Damrell in which he identified himself as Stanley’s “retained (pro bono) attorney since 1998,” and asked for the same relief he had been denied in the October 22 order. Leavitt wrote a sec- ond letter to District Judge Damrell on October 23, 2003 requesting recognition as Stanley’s attorney and, once again, seeking the relief previously denied. The Magistrate Judge issued an order to show cause why sanctions should not be imposed. Leavitt admitted in his written response to willfully violating the October 22, 2002 order to provoke further litiga- tion over the matters decided therein. Under 28 U.S.C. § 1927 and the court’s inherent authority, the Magistrate Judge found Leavitt liable, not for either civil or criminal contempt, but for sanctions in the amount of $10,356.00 — the cost of approxi- mately eighty percent of the hours invested by the Federal Defender in responding to Leavitt’s filings. On May 7, 2004, District Judge Damrell denied reconsider- ation, refused Leavitt’s request for certification of the sanc- tions order for immediate appeal, and declined to stay the order pending appeal. Notwithstanding the ongoing habeas 6258 STANLEY v. WOODFORD proceedings in the district court, Leavitt undertook this imme- diate appeal. II. JURISDICTION A. [1] The jurisdiction of this court is ordinarily limited to appeals from “final decisions of the district courts.” 28 U.S.C. § 1291. District Judge Damrell’s May 7, 2004 affirmance of sanctions against Leavitt is not a final decision. It “neither ended the litigation nor left the court only to execute its judg- ment.” Cunningham, 527 U.S. at 204. However, the Supreme Court has interpreted the term “final decision” in § 1291 to permit jurisdiction over appeals from a small category of col- lateral orders that do not terminate the litigation. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545-47 (1949). Historically, we have permitted collateral-order appeal by attorneys ordered to pay fees for unreasonably and vexa- tiously multiplying proceedings under § 1927. See, e.g., Kanarek v. Hatch, 827 F.2d 1389, 1391 (9th Cir. 1987) (“order [under section 1927] compelling a non-party, such as [litigant’s attorney], to pay attorneys’ fees and costs is a final order reviewable under 28 U.S.C. § 1291”).1 After the Supreme Court’s decision in Cunningham, the propriety of this practice changed. Cunningham effectively overruled ear- lier Ninth Circuit decisions allowing immediate appeal by attorneys from orders imposing sanctions. B. [2] In Cunningham, the district court adopted a discovery 1 We have treated interlocutory orders imposing sanctions pursuant to other authorities similarly. See, e.g., Telluride Mgmt. Solutions, Inc. v. Tel- luride Inv. Group, 55 F.3d 463, 465 (9th Cir. 1995) (holding an order of Rule 37(a) sanctions against an attorney is immediately appealable under § 1291). STANLEY v. WOODFORD 6259 sanction recommended by the Magistrate Judge under Rule 37(a) and disqualified counsel because she was a material wit- ness in the case. 527 U.S. at 201. The Supreme Court disal- lowed the collateral-order appeal. Although the sanctions order was conclusive, Justice Thomas, writing for a unani- mous Court, reasoned that “appellate review of a sanctions order [cannot] remain completely separate from the merits.” Id. at 205. A Rule 37(a) sanctions order will frequently be “inextricably intertwined with the merits of the action.” Id. In addition, the court reasoned, there is no reason why a sanc- tioned attorney should be unable to appeal the order imposing sanctions after final resolution of the underlying case. Unlike civil contempt, which is “designed to force the contemnor to comply with an order of the court,” a Rule 37(a) sanctions order “lacks any prospective effect and is not designed to compel compliance.” Id. at 207 (internal quotation omitted). An attorney sanctioned for causing delay or costs to other liti- gants from inappropriate filings “by and large suffers no inor- dinate injury from a deferral of appellate consideration of the sanction.” Id. at 208. “[A]n attorney’s continued participation in a case does not affect whether a sanctions order is ‘final’ for purposes of § 1291” because “the efficiency interests served by limiting immediate appeals far outweigh any nomi- nal monitoring costs borne by attorneys.” Id. at 209. More- over, the Cunningham Court observed that immediate appeal “would undermine the very purpose of Rule 37(a), which was designed to protect courts and opposing parties from delaying or harassing tactics. . . .” Id. at 208. C. [3] There can be no doubt that Cunningham overruled cases addressing the immediate appealability of Rule 37(a) sanc- tions. The Ninth Circuit has yet to apply Cunningham to sanc- tions entered pursuant to § 1927 or the court’s inherent authority. However, the policies undergirding Rule 37(a) sanctions are not relevantly different from those justifying sanctions under § 1927 or a court’s inherent powers. Indeed, 6260 STANLEY v. WOODFORD the Ninth Circuit has already expanded Cunningham beyond Rule 37(a). [4] In Cato v. Fresno City, 220 F.3d 1073, 1074 (9th Cir. 2000), this court stated that the “reasons underlying Cunning- ham’s bar against immediate appeal from Rule 37(a) sanc- tions orders apply equally to Rule 16 sanctions orders.” Cato followed Cunningham, holding sanctions imposed under Rule 16(f) to be appealable only after final judgment has been entered, even when the attorney no longer represents any party in the case. Id. Similarly, in American Ironworks & Erectors, Inc. v. North American Constr. Corp., we inter- preted Cunningham to bar immediate appeal of an interlocu- tory order granting attorney’s fees as a condition of substituting counsel. 248 F.3d 892, 897 (9th Cir. 2001). We stated that “[a]lthough there are differences between sanctions under Rule 37(a) and substitution of counsel conditioned on payment of fees, the parallel considerations convince us that the Cunningham rationale applies here. Like Rule 37(a) sanc- tions, the present situation invokes concerns regarding final- ity, avoiding piecemeal appeals, and availability of effective appellate review.” Id. [5] Cases from the First, Second, Third, and Fifth Circuits further support interpreting Cunningham as applying more broadly than to Rule 37(a) sanctions alone. The First Circuit recognized in Empresas Omajede, Inc. v. Bennazar-Zequeira, 213 F.3d 6, 9 n. 4 (1st Cir. 2000), that Cunningham affirmed its precedents denying interlocutory appeals in the sanctions area. See, e.g., United States v. Kouri-Perez, 187 F.3d 1, 14 (1st Cir. 1999) (holding sanctions order pursuant to district court’s inherent powers not immediately appealable); Appeal of Licht & Semonoff, 796 F.2d 564, 573 (1st Cir. 1986) (hold- ing sanctions pursuant to Rule 26(g) not immediately appeal- able). The law in the Second Circuit prior to Cunningham had been that an attorney may immediately appeal an order STANLEY v. WOODFORD 6261 imposing sanctions under the collateral order exception. How- ever, in New Pacific Overseas Group (U.S.A.) Inc. v. Excal Int’l Dev. Corp., 252 F.3d 667, 669-70 (2d Cir. 2001), the Second Circuit acknowledged that Cunningham effectively reversed that rule. The New Pacific court dismissed for lack of appellate jurisdiction an appeal of sanctions imposed under 28 U.S.C. § 1927 and Rule 37(a). Like the Second Circuit, the Third Circuit extended the application of Cunningham, holding in Comuso v. Nat’l R.R. Passenger Corp., 267 F.3d 331, 338-39 (3d Cir. 2001), that Cunningham applied to sanctions imposed under a district court’s inherent powers for conduct that occurred outside the court, and rejecting the argument that Cunningham applied only to Rule 37(a) sanctions. The court held that earlier Third Circuit decisions allowing counsel to appeal sanctions imme- diately “are no longer good law to the extent that they conflict with Cunningham.” Id. at 339. Specifically, the Third Circuit observed in Comuso that Cunningham superseded Eavenson, Auchmuty & Greenwald v. Holtzman, 775 F.2d 535 (3d Cir. 1985), which approved immediate appeal of a sanctions order imposed under Rule 11 against the plaintiff’s attorney. See Comuso, 267 F.3d at 339. In Williams v. Midwest Employers Cas. Co., 243 F.3d 208, 208-09 (5th Cir. 2001), the Fifth Circuit dismissed for lack of jurisdiction an interlocutory appeal of monetary sanctions imposed against an attorney pursuant to Rule 11 and the dis- trict court’s inherent powers. In doing so, the Williams court acknowledged Cunningham’s effect and invoked the Fifth Circuit’s opinion in Click v. Abilene Nat’l Bank, 822 F.2d 544, 545 (5th Cir. 1987), which refused to distinguish between types of sanctions. Williams, 243 F.3d at 210 n. 10. III. CONCLUSION [6] The precedential effect of Cunningham is clear. We now expressly interpret Cunningham as extending to sanc- 6262 STANLEY v. WOODFORD tions under § 1927 and a district court’s inherent powers, and overrule prior conflicting cases. Accordingly, this court lacks jurisdiction to entertain Leavitt’s interlocutory appeal. DISMISSED for lack of jurisdiction.