Case: 18-40846 Document: 00515139246 Page: 1 Date Filed: 10/01/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 18-40846 United States Court of Appeals
Fifth Circuit
FILED
October 1, 2019
STELLA MORRISON,
Lyle W. Cayce
Plaintiff–Appellant, Clerk
JOHN STEPHEN MORGAN,
Appellant,
v.
LAYNE WALKER; JEFFERSON COUNTY, TEXAS; DEPUTY ANTHONY
BARKER; THOMAS MANESS,
Defendants–Appellees.
Appeals from the United States District Court
for the Eastern District of Texas
Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges.
DON R. WILLETT, Circuit Judge:
Litigation abuse is nothing new. Since 1813, when James Madison was
president, a one-sentence federal statute has authorized monetary sanctions
against attorneys who misuse the litigation process. 1 The penalty started off
light. For the first 167 years, lawyers who “vexatiously and unreasonably”
1 Ch. 14, § 3, 3 Stat. 21 (1813). The original statute stated that any person who
“multiplied the proceedings in any cause . . . so as to increase costs unreasonably and
vexatiously” could be held liable for “any excess of costs so incurred.”
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multiplied legal proceedings were liable only for excess costs. 2 But since 1980,
28 U.S.C. § 1927 has taken a harder line against abusive litigation tactics,
broadening lawyers’ personal financial exposure to include “expenses and
attorneys’ fees.” 3 Incentives matter. For more than a generation now, pocket-
conscious parties have sought hefty § 1927 sanctions, and docket-conscious
courts have granted them.
In this appeal, attorney John Morgan appeals the § 1927 sanctions
imposed against him for advancing a meritless, immunity-barred claim against
Judge Layne Walker. Reviewing for abuse of discretion, we cannot conclude
that the district court, which was best positioned to assess the propriety of
Morgan’s litigation misconduct, erred in sanctioning him under § 1927. We
AFFIRM.
I
In 2006, Stella Morrison represented a criminal defendant, Peter Tran,
in a case before Judge Walker. 4 During this proceeding, Judge Walker averred
that Morrison suborned perjury by enticing her client to make a false
statement and then filing that statement with the court. Judge Walker
allegedly reported this to the district attorney and to the State Bar of Texas. A
grand jury hearing and State Bar grievance correspondence ensued. 5
2 This modest exposure doubtless explains why, in the 150 years following its
enactment, “§ 1927 was invoked in only seven reported cases.” Seth Katsuya Endo, The
Propriety of Considering an Attorney’s Ability to Pay Under § 1927, 61 DRAKE L. REV. 291,
292–93 (2013).
3 Section 1927 in its current form reads: “Any attorney or other person admitted to
conduct cases in any court of the United States or any Territory thereof who so multiples
proceedings in any case unreasonably and vexatiously may be required by the court to satisfy
personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such
conduct.”
4 State of Tex. v. Peter Tran, No. 96185 (Tx. Dist. Ct., April 9, 2007).
5 Morrison filed two grievance responses that describe the Peter Tran case and were
publicly available.
2
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Seven years later, Morrison, through her attorney Morgan, sued Judge
Walker, 6 alleging in part that Judge Walker fabricated the perjury charge
against her. 7 Although Morrison didn’t specify what prompted Judge Walker’s
accusation, she stated it was unrelated to any “pending proceeding lawfully
assigned to” Judge Walker’s court. This assertion was critical: If Judge
Walker’s allegedly false charge arose from actions taken in his judicial
capacity, he enjoyed judicial immunity. 8
A few other details about Morrison’s suit merit mention. Morgan
concedes that the original complaint was light on details, a deficiency he
attributes to Morrison’s self-described memory deficits. Also, as supporting
evidence, Morrison attached an affidavit by Bailiff Rodney Williams that
mentioned Morrison’s 2006 representation of Peter Tran before Judge Walker.
Morrison’s complaint also referenced grievance documents that Judge Walker
had filed against her with the State Bar of Texas.
Judge Walker filed a motion to dismiss based almost entirely on judicial
immunity. The court granted the motion for most of Morrison’s claims, but it
declined to dismiss the falsified-perjury claim. The court stated this claim was
6 Morrison’s claims against then-Judge Walker are all predicated by events that
occurred while he was a 252nd District Court judge in Jefferson County, Texas. As such, this
opinion refers to him simply as Judge Walker.
7 After effective consent, pursuant to 28 U.S.C. § 636(c) and the local rules, two
magistrate judges presided over the Morrison–Walker proceedings, exclusive of appeals. In
this opinion, the magistrate judges’ conclusions and findings will be attributed to the “district
court” or “court” because the magistrate judges had jurisdiction to enter final judgments. 28
U.S.C. § 636(c)(1) (“Upon the consent of the parties, a . . . United States magistrate judge . .
. may conduct any or all proceedings in a jury or nonjury civil matter and order the entry of
judgment . . . .”).
8 Our 2005 decision in Ballard v. Wall sets forth a four-factor test for determining
whether a judge’s actions were judicial in nature: “(1) whether the precise act complained of
is a normal judicial function; (2) whether the acts occurred in the courtroom or appropriate
adjunct spaces such as the judge’s chambers; (3) whether the controversy centered around a
case pending before the court; and (4) whether the acts arose directly out of a visit to the
judge in his official capacity.” 413 F.3d 510, 515 (5th 2005).
3
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not patently frivolous and could proceed if Morrison amended her complaint to
include specific facts showing why judicial immunity was inapplicable. The
court instructed Morrison to answer seven specific questions in her amended
complaint, including clarifying where, specifically, the event spurring the
perjury charge occurred.
In January 2014, Morrison, through her attorney Morgan, filed an
amended complaint, relying largely on her own testimony. The amended
complaint partially responded to the court’s questions and doubled-down on
the assertion that Judge Walker’s perjury accusation “had nothing to do with
a case that was pending or had been adjudicated in Walker’s Court.” In May
2014, Morrison filed a second amended complaint, adding additional
defendants, with the same factual contentions.
Judge Walker’s response included a transcript from the Peter Tran case.
Contrary to Morrison’s previous assertions and re-assertions that Judge
Walker’s perjury charge was unrelated to any matter in his court, the
transcript proved that to be untrue. It removed any doubt that the falsified-
perjury claim arose from Morrison’s representation of Peter Tran in Judge
Walker’s court. Days later, Morgan, on Morrison’s behalf, filed a sur-reply,
promising to show Morrison the transcript and inform the court of her
response. Six months passed.
In August 2015, the court ordered Morrison to detail the event that led
to the perjury charge and state whether it occurred in Judge Walker’s court.
Morrison admitted the transcript was accurate. Her falsified-perjury claim
arose from events in the Peter Tran case and, since Judge Walker presided over
that case, her claim had been barred by judicial immunity the whole time.
Morgan filed a motion to dismiss Judge Walker from the lawsuit on August 28,
2015.
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Judge Walker moved under 28 U.S.C. § 1927 for attorney fees and
expenses totaling $167,232.40. After conducting an extensive hearing where
Morrison showed “no memory deficit” regarding the Peter Tran case, the court
issued a 28-page order imposing § 1927 sanctions of $29,592.50. The court
found that these sanctions were justified beginning in January 2014 but, in its
discretion and “choosing to dispense mercy graciously,” only imposed sanctions
for Morgan’s conduct between May 20, 2014 and August 28, 2015. Morgan
appealed.
II
Under § 1927, a federal court may award attorney fees, costs, and
expenses that were “reasonably incurred” because of the attorney’s
misconduct. 9 We review § 1927 sanction awards for abuse of discretion. 10 We
do not substitute our judgment for that of the district court, and we will not
alter a sanction award unless the court “award[ed] sanctions based on an
erroneous view of the law or on a clearly erroneous assessment of the
evidence.” 11
Although § 1927 sanctions are discretionary, they cannot be imposed for
mere negligence. 12 As the statute makes clear, § 1927 sanctions are reserved
9 28 U.S.C. § 1927 (permitting a court to award “the excess costs, expenses, and
attorneys’ fees reasonably incurred because of [the sanctionable] conduct”); see Browning v.
Kramer, 931 F.2d 340, 346 (5th Cir. 1991) (“[Section 1927] authorizes awards only for actual
fees and costs which proscribed conduct has caused.”).
10 Procter & Gamble Co. v. Amway Corp., 280 F.3d 519, 526 (5th Cir. 2002) (citing
Mercury Air Grp., Inc. v. Mansour, 237 F.3d 542, 549 (5th Cir. 2001)).
11 Id. (citation omitted); Edwards v. Gen. Motors Corp., 153 F.3d 242, 246 (5th Cir.
1998); see also Bryant v. Military Dep’t of Miss., 597 F.3d 678, 694 (5th Cir. 2010) (“[A]n abuse
of discretion only occurs where no reasonable person could take the view adopted by the trial
court.”) (citation omitted); Walker v. City of Bogalusa, 168 F.3d 237, 240 (5th Cir. 1999) (“The
district court is in the best position to assess the propriety of a party's conduct.”) (citation
omitted).
12 See Baulch v. Johns, 70 F.3d 813, 817 (5th Cir. 1995); see also Procter, 280 F.3d at
525–26 (citation omitted) (stating that a district court “may” impose § 1927 sanctions if the
requirements are met).
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for situations where counsel “unreasonably” and “vexatiously” multiplies legal
proceedings. 13 Conduct is “unreasonable and vexatious” if there is evidence of
the “persistent prosecution of a meritless claim” and of a “reckless disregard of
the duty owed to the court.” 14 An attorney acts with “reckless disregard” of his
duty to the court when he, without reasonable inquiry, advances a baseless
claim despite clear evidence undermining his factual contentions. 15
For its sanction to be affirmed, the district court must have made
detailed factual findings, including (1) identifying the sanctionable conduct as
distinct from the case’s merits, (2) linking the sanctionable conduct and the
sanction’s size, and (3) identifying the legal basis for each sanction. 16
III
Viewing the district court’s 28 pages of detailed fact-finding and analysis
through the deferential “abuse of discretion” lens, we hold that the district
court did not abuse its discretion in levying a § 1927 sanction against Morgan
for his conduct from May 2014 through August 2015.
13 28 U.S.C. § 1927; Procter, 280 F.3d at 525–26. We sometimes require § 1927
sanctions be justified by “clear and convincing evidence” that every aspect of the litigation
was meritless. Compare Lawyers Title Ins. Corp. v. Doubletree Partners, L.P., 739 F.3d 848,
872 (5th Cir. 2014) and Bryant, 597 F.3d at 694 with Mercury Air Grp., Inc., 237 F.3d at 549
and Cambridge Toxicology Grp., Inc. v. Exnicios, 495 F.3d 169, 180 (5th Cir. 2007). But we
have not been clear on when this “clear and convincing” standard should be applied. We’ve
explained that “[t]o shift the entire cost of defense, the claimant must prove, by clear and
convincing evidence, that every facet of the litigation was patently meritless . . . .” Procter,
280 F.3d at 526 (emphasis added) (citation omitted); see also Walker, 168 F.3d at 240
(requiring the clear and convincing standard to recover “all costs associated with an action”).
Therefore, when § 1927 sanctions are shifting only the partial cost of defense—anything less
than “all costs associated with an action”—the clear and convincing standard should not be
applied. See Walker, 168 F.3d at 240; Browning, 931 F.2d at 344–45 (distinguishing between
awarding partial defensive fees and entire defensive fees). That is the case here.
14 Procter, 280 F.3d at 525–26 (stating that “repeated filings despite warnings from
the court, or other proof of excessive litigiousness” support the imposition of § 1927 sanctions).
15 See FED. R. CIV. P. 11 (imposing a duty on attorneys to reasonably inquire into the
evidentiary support for their factual contentions filed with the court); Mercury Air Grp., Inc.,
237 F.3d at 548–49; Walker, 168 F.3d at 240.
16 Procter, 280 F.3d at 526; Cambridge Toxicology Grp., 495 F.3d at 180–81.
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A
It cannot be seriously disputed that Morgan multiplied the proceedings.
The record shows that he repeatedly made filings based only on the meritless
falsified-perjury claim. 17 Nor can it be denied that Morgan’s multiplication of
the proceedings was unreasonable and vexatious. He pursued a baseless claim
with reckless disregard for his duty to the court.
The district court found, and the record irrefutably verifies, that
Morrison’s claim that Judge Walker fabricated a perjury charge against her
was baseless. As the predicate event was action taken within the scope of Judge
Walker’s judicial capacity, it was barred by judicial immunity throughout the
litigation. 18
The district court held, as of the January 2014 amended complaint, that
Morgan recklessly disregarded his duty to the court because he “failed to
comply with his Rule 11(b) duty” and he “baselessly represented that the
[falsified-]perjury claim resulted from conduct in [another judge’s] court.” In
support, the court stated that a “reasonable lawyer” would have discovered the
complete lack of factual support for Morrison’s final allegation given Morrison’s
“sketchy memory” of her falsified-perjury claim’s details, her clear memory of
the Peter Tran case, the district court’s pointed questions, and the readily
available cache of contradictory evidence.
17 See, e.g., Mercury Air Grp., Inc., 237 F.3d at 549 (finding counsel’s litigation activity,
including filings, multiplied the proceedings).
18 Id. at 549 (holding the district court did not err in finding a claim meritless when
there was evidence that there “was no suit to pursue”); Walker, 168 F.3d at 240 (finding a
claim “clearly meritless” when there was no evidence of an essential element of the asserted
claim).
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A reasonable person could certainly adopt the district court’s view. 19 The
record is replete with support for the district court’s conclusion that Morgan
advanced a meritless position in reckless disregard of his duty to investigate:
1. Morrison’s “memory deficits” surrounding the falsified-perjury
allegation;
2. the lack of supporting evidence for Morrison’s factual
contentions;
3. the district court’s unheeded questions;
4. the public grievance-proceeding documents referencing the
Peter Tran case;
5. the Williams affidavit referencing the Peter Tran case; and
6. Morrison’s uninhibited recollection of the Peter Tran case
displayed at the sanctions hearing. 20
Given the robust factual support for the district court’s holding, it is easy to
conclude the court did not abuse its discretion. 21
Citing an unpublished case, Vanderhoff, Morgan argues that the district
court erred because he was entitled to rely on his client’s representations. 22
The nonprecedential Vanderhoff case affords Morgan no help. Here, the
district court painstakingly compiled a 28-page factual record justifying its
award of § 1927 sanctions. 23 And, unlike in Vanderhoff, it was unreasonable
19 Bryant, 597 F.3d at 694.
20 See Mercury Air Grp., Inc., 237 F.3d at 549 (holding that the district court did not
err in finding unreasonable and vexatious multiplication of the proceedings when counsel
pursued the “lawsuit in the face of such bald evidence that there was no suit to pursue” and
despite the “lack of extrinsic evidence” to support the claim); F.D.I.C. v. Calhoun, 34 F.3d
1291, 1299 (5th Cir. 1994) (stating that when a defense is “so obvious a bar,” Rule 11 requires
opposing counsel to reasonably inquire).
21 See Walker, 168 F.3d at 240.
22 344 F. App’x 22, 27–28 (5th Cir. 2009).
23 See Vanderhoff, 344 F. App’x at 27 (“[T]here are no findings of fact . . . to give
deference under clear error review; [the court] simply concluded as a matter of law that [§
1927 sanctions were justified] . . . .”).
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for Morgan to rely on his client’s dubious factual allegations when there were
glaring red flags that Morgan needed to investigate further. 24
Morgan also cites Calhoun, arguing that Judge Walker’s belated
mention of the Peter Tran case makes sanctions unwarranted. 25 But in
Calhoun, the defendant failed completely to pursue the allegedly obvious
defense. 26 Here, Judge Walker raised judicial immunity in his dispositive
motion to dismiss, highlighting this obvious bar, and Morgan disregarded
overwhelming evidence that the bar applied. 27 Morgan’s contentions get marks
for audacity, if not veracity.
B
We have no quarrel with the district court’s award of Judge Walker’s
legal expenses from May 2014 through August 2015. The court satisfied the
Procter factors by (1) finding that the sanctionable conduct was the stubborn
pursuit of the legally baseless falsified-perjury claim, (2) correlating the
sanction’s size to such conduct, and (3) clearly imposing sanctions only under
§ 1927. 28 And the record supports that Judge Walker’s “costs, expenses, and
attorneys’ fees” incurred between May 20, 2014 and August 28, 2015 had a
financial nexus with the excess proceedings as they were incurred solely
because of Morgan’s sanctionable conduct. 29
24 See id. (asserting that counsel can rely on their client until such reliance is
“unreasonable or . . . in bad faith”).
25 Calhoun, 34 F.3d at 1299–300 (finding that defendant’s failure to “bring any
dispositive motions” was evidence that the plaintiff’s claim was not “so obvious[ly]” barred as
to support § 1927 sanctions).
26 Calhoun, 34 F.3d at 1300 (reasoning that, since the defendant did not pursue an
allegedly obvious defense, the plaintiff should not be sanctioned for failing to research that
defense as it apparently was not “so obvious and meritorious” as the defendant claimed).
27 Calhoun, 34 F.3d at 1300; Mercury Air Grp., Inc., 237 F.3d at 549.
28 280 F.3d at 526 (requiring specific findings of the three factors for a § 1927 sanction
award to be upheld on review).
29 See Browning, 931 F.2d at 344 (“Under § 1927, only those fees and costs associated
with ‘the persistent prosecution of a meritless claim’ may be awarded.”).
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Morgan insists the sanctioned amount was erroneous because the
awarded legal fees were not “segregated” based on subject matter. For
example, Morgan asserts that the district court could not award Judge Walker
legal fees for his counsel’s “review of briefing[s] that related solely to Morrison’s
claims against other defendants.” But Morgan’s continued maintenance of the
baseless falsified-perjury claim was the only reason Walker remained a
defendant from May 2014 through August 2015. 30 Morgan’s argument thus
rings hollow because, without Morgan’s sanctionable conduct, Morrison’s suit
against Walker would have been dismissed before May 2014, and Walker
would not have incurred any legal expenses during this period. 31
* * *
Since 1980, federal courts have awarded stiff sanctions under modern
§ 1927 to punish the wrongful prolongation of litigation. Here, Morgan
persistently pursued a meritless case barred by judicial immunity. The district
court was best positioned to assess Morgan’s abusive tactics; its sanctions
award was not an abuse of discretion; and we AFFIRM.
30Browning, 931 F.2d at 344.
31Id.; see Greer v. Richardson Indep. Sch. Dist., 471 F. App'x 336, 342 (5th Cir. 2012)
(affirming non-segregated sanctions when the sanctioned amount was less than the total
amount of legal fees incurred and the amount was “attributable” to sanctionable conduct).
10