UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 94-30272
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TRAVELERS INSURANCE COMPANY,
Plaintiff-Appellee,
VERSUS
ST. JUDE HOSPITAL OF KENNER, LA., INC., ET AL.,
Defendants,
KENNETH C. FONTE,
Defendant-Appellant.
____________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(CA-90-1983-I c/w 90-2601-I)
_____________________________________________________
(November 21, 1994)
Before HIGGINBOTHAM, JONES, and BARKSDALE, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
Kenneth C. Fonte, counsel for defendants, appeals the district
court's imposition of sanctions against him under 28 U.S.C. § 1927
(multiplying proceedings "unreasonably and vexatiously"). We
AFFIRM.
I.
More than a year after judgment for Travelers Insurance
Company (based on a jury verdict) was entered, see Travelers Ins.
Co. v. St. Jude Hosp. of Kenner, La., Inc., 21 F.3d 1107 (5th Cir.
1994) (No. 92-9579; unpublished), defendants (Liljebergs)1 moved to
vacate it pursuant to Fed. R. Civ. P. 60(b)(6), claiming that,
because of his membership in The Boston Club of New Orleans and
other clubs, and other social contacts, the district judge had
violated 28 U.S.C. § 455(a) by failing to disqualify himself from
the underlying litigation, although he knew, or should have known,
that his impartiality might reasonably be questioned.2 In denying
the 60(b)(6) motion, the district court awarded sanctions, to
include attorneys' fees, against Fonte, the Liljebergs' attorney,
1
Defendants were the St. Jude Medical Office Building Limited
Partnership; St. Jude Hospital of Kenner, Louisiana, Inc. (SJH);
Liljeberg Enterprises, Inc. (LEI); Krown Drugs, Inc. (Krown); John
A. Liljeberg, Jr.; and Robert Liljeberg. SJH, Krown, and LEI are
related companies, each formed, owned and controlled by the
Liljebergs. Accordingly, references to the Liljebergs include not
only John and Robert Liljeberg, but also their entities.
2
Again, our court finds itself with another issue arising out
of the continuing disputes between John A. Liljeberg, Jr., and
Robert Liljeberg and Travelers. Today, we affirmed the denial of
the 60(b)(6) motions in this and two related actions. Travelers
Ins. Co. v. Liljeberg Enters., Inc., Nos. 93-3832, 93-3833, 93-3891
(5th Cir. Nov. 21, 1994). (Oral argument for this appeal was
consolidated with that for the three appeals from the denial of the
60(b)(6) motions, as well as for the appeal from the judgment in
the third action.) We have also addressed the two related actions
in Travelers Ins. Co. v. Liljeberg Enters., Inc., 7 F.3d 1203 (5th
Cir. 1993), aff'g in part 799 F. Supp. 641 (E.D. La. 1992); and
Travelers Ins. Co. v. St. Jude Hosp. of Kenner, La., Inc., No. 93-
3731, slip op. 581 (5th Cir. Oct. 25, 1994).
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pursuant to 28 U.S.C. § 1927.3 The district court subsequently
quantified the sanctions at $22,123.75.4
II.
Fonte does not challenge the amount of sanctions, only their
imposition.
A.
By order entered on December 1, 1993, the district court
amended its denial of the 60(b)(6) motion to include attorneys'
fees as part of the § 1927 sanctions. The order did not state that
those sanctions were against Fonte. After Travelers moved to
quantify the sanctions, the district court did so on March 30,
1994.
Fonte appealed only after the March order. Travelers suggests
that, because Fonte did not appeal from the December 1993 order
imposing sanctions, he can appeal only the amount, as set by the
March 1994 order. Fonte replies that the December 1993 order was
3
28 U.S.C. § 1927 provides:
Any attorney or other person admitted to
conduct cases in any court of the United States ...
who so multiples the proceedings in any case
unreasonably and vexatiously may be required by the
court to satisfy personally the excess costs,
expenses, and attorneys' fees reasonably incurred
because of such conduct.
4
As noted, in two separate, but related, actions, the
Liljebergs filed similar 60(b)(6) motions. See Travelers, Nos. 93-
3832, 93-3833, 93-3891 (5th Cir. Nov. 21, 1994). The district
court awarded costs and attorneys' fees under § 1927 in all three
instances; but this appeal concerns only the sanctions imposed in
this action. On September 9, 1994, the district court entered an
order in one of the related cases, quantifying the sanctions at
$740. Travelers Ins. Co. v. St. Jude Hosp. of Kenner, La., Inc.,
No. 93-0173 (E.D. La. Sept. 9, 1994).
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not directed "exclusively" to him; that only the March 1994 order
directing him to pay Travelers obligated him to pay the sanctions.
Unlike Fed. R. Civ. P. 11, § 1927 sanctions are, by the
section's plain terms, imposed only on offending attorneys; clients
may not be ordered to pay such awards. E.g., Browning v. Kramer,
931 F.2d 340, 344 (5th Cir. 1991). Therefore, when the district
court referred solely to § 1927 in its December 1993 order,
sanctions were being imposed on Fonte, not the Liljebergs. This
raises, however, the issue of whether that order was appealable.5
Although Fonte incurred sanctions under the December 1993 order,
their amount was not determined until the March 1994 order. Thus,
the December 1993 order was not an appealable order. Southern
Travel Club, Inc. v. Carnival Air Lines, Inc., 986 F.2d 125, 131
(5th Cir. 1993) ("an order awarding attorney's fees or costs is not
reviewable on appeal until the award is reduced to a sum certain").
Accordingly, we have jurisdiction to consider not only the amount,
but also the underlying imposition, of sanctions. (As noted, Fonte
does not challenge the former.)
B.
Because § 1927 sanctions are penal in nature, Monk v. Roadway
Express, Inc., 599 F.2d 1378, 1383 (5th Cir. 1979), aff'd in
relevant part sub nom. Roadway Express, Inc. v. Piper, 447 U.S. 752
(1980), and in order not to dampen the legitimate zeal of an
5
It goes without saying that, although the parties do not
address this issue directly, we may address, sua sponte, the
question of our jurisdiction. Oswalt v. Scripto, Inc., 616 F.2d
191, 192 (5th Cir. 1980).
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attorney in representing his client, § 1927 is strictly construed.
Browning, 931 F.2d at 344. Therefore, before imposing such
sanctions, a court must ensure that, pursuant to the plain terms of
§ 1927, the offending attorney's multiplication of the proceedings
was both "unreasonable" and "vexatious", Federal Deposit Ins. Corp.
v. Conner, 20 F.3d 1376, 1384 (5th Cir. 1994); evidence of
recklessness, bad faith, or improper motive must be present. Hogue
v. Royse City, Tex., 939 F.2d. 1249, 1256 (5th Cir. 1991).
Despite the strict limitations for imposing § 1927 sanctions,
their imposition and quantification are committed to the sound
discretion of the court imposing them; we review only for abuse of
that discretion. E.g., Topalian v. Ehrman, 3 F.3d 931, 934 (5th
Cir. 1993); Trevino v. Holly Sugar Corp., 811 F.2d 896, 907-08 (5th
Cir. 1987). In sum, in reviewing the imposition of sanctions, we
do not substitute our judgment for that of the district court in
enforcing acceptable standards of conduct. Topalian, 3 F.3d at
935.
1.
The district court did not abuse its discretion in finding
that the 60(b)(6) motion unreasonably and vexatiously multiplied
the proceedings. The court's findings upon which it based the
imposition of sanctions are well grounded.6 Additionally, the
6
The district court recognized that, in order to award § 1927
sanctions, Fonte's conduct must have unreasonably and vexatiously
multiplied the proceedings. See 28 U.S.C. § 1927. In its March
30, 1994 order, the district court gave the following reasons for
finding that Fonte had done so:
1) There is nothing whatsoever in the record
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evidencing a lack of appearance of impartiality of
the judge.
2) This case was tried to a jury. During
voir dire there was no questioning as to club
membership by defense counsel, nor has there ever
been questioning as to club membership before this
Court.
3) The Motions were blatantly untimely,
filed almost a year after final amended judgment
was entered. Defendants' pleadings that the
judge's club membership was "secret" and discovered
only in July of 1993 was at the least patently
disingenuous. The judge's Boston Club membership
has been of public record since 1984, readily
discoverable by anyone who can read.
4) Furthermore, since the rendering of the
jury verdict and the amended judgment in this case,
defense counsel has badgered the Court with these
various motions without basis in fact or law, in an
attempt to intimidate the Court and retard the
progress of the litigation. Significantly, so far
two defendants in this case have filed for
reorganization in bankruptcy court since entering
the amended judgment.
5) The Court interprets defendants' filing
of The Motions to be a scurrilous variation on a
weak form of advocacy: wait until the case is lost
and post-trial motions are denied, then proceed to
question the impartiality of the Court, almost a
year after the amended judgment is rendered, with
allegedly "newly discovered" information, in fact
available to the public for years. Moreover,
defendants were not satisfied with an attempt to
impugn the integrity of the Court, but elected to
malign by innuendo the character and
professionalism of two attorneys unrelated to the
trial of this case.
These findings reflect that the district court, by implication,
found evidence of bad faith and improper motive.
In his brief, instead of focusing on the issue and standard of
review, Fonte attempts primarily to reargue the merits of the
60(b)(6) motion and Judge Mentz's refusal to recuse himself. It
goes without saying that if the district court had erred in denying
the 60(b)(6) motion, its submission would naturally not have been
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background and context of this litigation illuminate the district
court's experience in dealing with Fonte.7
2.
Fonte maintains that the district court exceeded its authority
under § 1927 by considering bankruptcy proceedings undertaken by
two Liljeberg entities. See note 6, supra (findings ¶ 4). In
Matter of Case, 937 F.2d 1014 (5th Cir. 1991), we stated that §
1927
limits the court's sanction power to attorney's
actions which multiply the proceedings in the case
before the court. Section 1927 does not reach
conduct that cannot be construed as part of the
proceedings before the court issuing § 1927
sanctions.
Id. at 1023. Fonte's reliance upon Case is misplaced. There, we
prohibited the district court from awarding fees incurred in a
collateral state court proceeding. Here, the district court did
not award Travelers fees it may have incurred in the bankruptcy
proceedings. The references to those proceedings contributed to
the district court's implicit determination that the 60(b)(6)
motion was in bad faith, or undertaken with an improper motive.
unreasonable or vexatious. In light of the fact that the denial of
all three 60(b)(6) motions was before us in separate appeals, Fonte
could have stated this simple truism, and then moved on to the
merits of this appeal. Instead, as noted, he elected to inundate
his brief with arguments on the merits of the 60(b)(6) motions.
7
The March 1994 order supplemented the court's earlier order
denying the 60(b)(6) motion. The earlier order, which contained
findings included in the district court's calculus for determining
whether to impose sanctions, is an appendix to Travelers Ins. Co.
v. St. Jude Medical Office Bldg., Ltd. Partnership, 843 F. Supp.
138, 155-58 (E.D. La. 1994).
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3.
Next, Fonte asserts that the 60(b)(6) motion did not protract
the appeal on the underlying judgment, see note 6, supra (district
court findings ¶ 4); and that, therefore, sanctions were not in
order. Needless to say, the motion "multiplie[d] the proceedings".
28 U.S.C. § 1927. Section 1927 is not limited to dilatory tactics;
the issue for the district court is whether counsel unreasonably
and vexatiously multiplied the proceedings.
4.
Fonte contends also that, before imposing sanctions, the
district court denied him notice and an opportunity to be heard,
thus denying him due process. See Roadway Express, 447 U.S. at 767
("attorney's fees should not be assessed lightly or without fair
notice and an opportunity for a hearing on the record").
Despite his assertions, Fonte received notice that the court
was considering sanctions. Before requesting them, Travelers
notified Fonte by certified letter, with copy to the district
judge, that it considered the 60(b)(6) motion to be in violation of
both Fed. R. Civ. P. 11 and § 1927. And, in its opposition to the
60(b)(6) motion, Travelers requested sanctions. This satisfied the
notice requirements of due process. In re Perry, 918 F.2d 931, 935
(Fed. Cir. 1990), cert. denied, ___ U.S. ___, 112 S. Ct. 49, 50
(1991).
Nor did the district court's failure to hold a hearing violate
Fonte's due process rights. "[T]he right to a hearing ... is
limited to cases where a hearing would assist the court in its
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decision." Hill v. Norfolk & W. Ry., 814 F.2d 1192, 1201 (7th Cir.
1987). "Where the sanctionable conduct occurred in the presence of
the court, there are no issues that a hearing could illuminate and
hence the hearing would be pointless." Kapco Mfg. Co. v. C & O
Enters., Inc., 886 F.2d 1485, 1495 (7th Cir. 1989); accord Hill,
814 F.2d at 1202. Fonte does not contend that any factual dispute
exists with respect to his actions for which § 1927 sanctions were
imposed; those actions appear in the record and briefs before the
district court. A hearing would not have developed or clarified §
1927 issues. Furthermore, by having presided over the underlying
action, as well as related actions, the district court was most
familiar with Fonte, the parties, and the litigation. See
Travelers Ins. Co. v. St. Jude Medical Office Bldg., Ltd.
Partnership, 843 F. Supp. 138, 156 n.6 (E.D. La. 1994). See also
United States v. Nesglo, Inc., 744 F.2d 887 (1st Cir. 1984)
("another factor that militates towards finding that a hearing was
unnecessary is the degree of familiarity the court had with the
parties and the litigation").
5.
Finally, Fonte maintains that the district court should have
employed Rule 11, not § 1927, thus entitling him to the Rule's
procedural safeguards. There is nothing in the sanctioning
provisions which mandates that a court must consider Rule 11 before
§ 1927. See Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991) (a
court is not forbidden from sanctioning bad-faith conduct under its
inherent powers simply because that conduct could also be
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sanctioned under § 1927 or the Federal Rules of Civil Procedure).
The decision whether to use § 1927, or Rule 11, or both, is within
the discretion of the district court; no abuse of that discretion
is present.8
III.
For the foregoing reasons, the district court's imposition of
sanctions, to include their amount, is
AFFIRMED.
8
Travelers seeks appellate sanctions. We decline to impose
them.
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