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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-11983
Non-Argument Calendar
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D.C. Docket No. 1:08-cv-00155-KD-N
EARATON ADAMS,
ROBERT ADAMS,
MYRON BARNES,
NELSON BUMPERS,
FREDERICK A. CARTER, SR., et al.,
Plaintiffs-Appellees,
versus
AUSTAL, U.S.A., L.L.C.,
Defendant-Appellant.
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Appeals from the United States District Court
for the Southern District of Alabama
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(January 4, 2013)
Before CARNES, BARKETT and HULL, Circuit Judges.
PER CURIAM:
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In this employment discrimination lawsuit, Defendant-Appellant Austal
U.S.A., L.L.C. (“Austal”), an Australian shipbuilding company, appeals the district
court’s denial of its 22 motions for attorneys’ fees and sanctions against the
Plaintiffs-Appellees and their counsel. Austal filed its motions pursuant to Rule 11
of the Federal Rules of Civil Procedure, 42 U.S.C. § 1988, 42 U.S.C. § 2000e-5,
and 28 U.S.C. § 1927. After review, we find no abuse of discretion on the part of
the district court, and affirm the denial of Austal’s motions.
I. BACKGROUND
This appeal arises out of a lawsuit filed by 23 African-American employees
and former employees (collectively, “Plaintiffs”) against the Defendant Austal.
Plaintiffs alleged various claims against Austal under Title VII and 42 U.S.C.
§ 1981, including claims of racial discrimination, hostile work environment,
retaliation, and disparate impact, and at one point Plaintiffs sought to proceed as a
class and sought class certification. Generally, Plaintiffs’ claims concerned
(1) Austal’s hiring, promotion, and compensation procedures, (2) racially hostile
working conditions, and (3) unequal terms and conditions of employment. Some
of the claims were voluntarily dismissed or abandoned by Plaintiffs. Some claims
were decided in Austal’s favor at the summary judgment stage. The remaining
claims were decided by a jury in three separate trials, ending with verdicts in
Austal’s favor.
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After the conclusion of the final trial, the district court entered judgment in
Defendant Austal’s favor as to all of the claims brought by all Plaintiffs.
Thereafter, Austal filed 22 separate motions for attorneys’ fees and sanctions
against Plaintiffs and their counsel, arguing that each of Plaintiffs’ claims was
frivolous and that Plaintiffs’ attorneys knowingly pursued these claims after
learning of their frivolity.
In a single order, the district court denied all of Defendant Austal’s motions
for attorneys’ fees and sanctions. Turning first to the issue of attorneys’ fees, the
district court determined that Plaintiffs’ claims were not wholly groundless.
Specifically, the district court, “with the benefit of almost four (4) weeks of trial
testimony spanning three (3) trials . . . , hundreds of pages of briefing and
thousands of pages of deposition testimony,” found that Plaintiffs’ class action and
disparate impact claims were not frivolous. The district court noted that “there was
substantial testimony and other evidence” that: (1) “African-Americans as a whole
endured a significant amount of racial hostility from co-employees and
supervisors, particularly in Austal’s initial years in Mobile”; and (2) “Austal lacked
structure in determining pay and promotions for all of its employees, and that this
lack of structure most negatively affected the African-American employees.” The
district court observed that “the evidence presented at trial by Austal regarding its
effort in recent years to address racial issues was Austal’s strongest defense to the
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charges.” The district court concluded that “[t]he fact that these claims were not
pursued after extensive discovery and investigation does not mean that they were
initially groundless.”
The district court also stated that, as to the Plaintiffs’ claims dismissed at the
summary judgment stage, it had reviewed the claims and each summary judgment
order and determined that “the evidence that was found not to support the claims
on summary judgment was not so inadequate as to support a finding of
frivolousness.” As to the claims that Plaintiffs elected not to pursue after the
summary judgment phase, the district court determined that it had already found
many of these claims to be non-frivolous when it denied summary judgment on
them. Additionally, the district court determined that Austal failed to carry its
burden of showing that any of the remaining claims were frivolous. The district
court concluded by stating that “this case is simply not an appropriate case to
award attorneys’ fees . . . to Austal based on frivolity. While Austal was ultimately
successful with regard to all of the [P]laintiffs’ claims, it was not because Austal
had an airtight defense with settled law and facts securely on its side.”
Addressing the issue of sanctions, the district court stated that the evidence
did not support an initial finding under § 1927 of unreasonable or vexatious
conduct by Plaintiffs’ counsel. As to Rule 11, the district court found that there
was no basis to conclude that counsel filed any of the claims without substantial
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justification or that the claims were objectively frivolous. Accordingly, the district
court denied all 22 of Austal’s motions.
Austal now appeals the denial of its 22 motions for attorneys’ fees and
sanctions.
II. DISCUSSION
A. Austal’s Motions for Attorneys’ Fees
On appeal, Austal argues that the district court abused its discretion in
denying its motions for attorneys’ fees because all of Plaintiffs’ claims were
frivolous. Austal asserts that Plaintiffs’ voluntary dismissal of many of their
claims is further evidence that the claims were frivolous. Austal also contends that
the district court made clearly erroneous findings of fact as to the disparate impact
claims. Additionally, Austal argues that the district court did not enter an order
that allows for meaningful appellate review. 1
Pursuant to 42 U.S.C. § 1988, the prevailing party in an action brought under
§ 1981 and other civil rights statutes “may” recover a reasonable attorney’s fee. 42
U.S.C. § 1988(b). Similarly, Title VII provides that the district court, “in its
discretion, may allow the prevailing party . . . a reasonable attorney’s fee.” Myers
1
We review a district court’s decision regarding an award of attorneys’ fees for an abuse
of discretion. Smalbein ex rel. Estate of Smalbein v. City of Daytona Beach, 353 F.3d 901, 904
(11th Cir. 2003) (42 U.S.C. § 1988); Cullens v. Ga. Dep’t of Transp., 29 F.3d 1489, 1491 (11th
Cir. 1994) (42 U.S.C. § 2000e-5(k)). When reviewing for an abuse of discretion, we must affirm
the district court unless it has made a clear error of judgment, or has applied the wrong legal
standard. Norelus v. Denny’s, Inc., 628 F.3d 1270, 1280 (11th Cir. 2010).
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v. Cent. Fla. Invs., Inc., 592 F.3d 1201,1225 (11th Cir. 2010) (quotation marks
omitted); see 42 U.S.C. § 2000e-5(k).
For a defendant to obtain an award of attorneys’ fees under § 1988 or
§ 2000e-5(k), the defendant must show that a plaintiff’s claim “was frivolous,
unreasonable, . . . groundless, or that the plaintiff continued to litigate after it
clearly became so.” Hughes v. Rowe, 449 U.S. 5, 15, 101 S. Ct. 173, 178-79
(1980) (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422, 98 S.
Ct. 694, 701 (1978) (internal quotation marks omitted). It is important that courts
avoid concluding that an action was unreasonable or without foundation simply
because the plaintiff did not ultimately prevail, and frivolity determinations must
be made on a case-by-case basis. Head v. Medford, 62 F.3d 351, 355 (11th Cir.
1995). “Where plaintiffs introduced evidence sufficient to support their claim[s],
findings of frivolity generally do not stand.” Id. at 355-56.
In making a determination on frivolity, courts also should consider:
(1) whether the plaintiffs established a prima facie case; (2) whether the defendants
offered to settle; and (3) whether the claims were dismissed prior to trial or a trial
was held on the merits. Id. Allegations that prove legally insufficient to require a
trial are not per se groundless or without foundation. Hughes, 449 U.S. at 15-16,
101 S. Ct. at 179.
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Given the totality of the circumstances and the evidence in the record, we
cannot say that the district court abused its discretion in concluding that Plaintiffs’
claims were not frivolous and denying Austal’s motions for attorneys’ fees. Of the
23 Plaintiffs, 14 survived summary judgment with at least one claim remaining and
proceeded to trial. Further, Plaintiffs’ allegations of racial discrimination related to
their employment with Austal were not wholly groundless, even though some of
those allegations were legally insufficient to require a trial. See Hughes, 449 U.S.
at 15-16, 101 S. Ct. at 179. And Austal’s arguments regarding the district court’s
factual findings and the sufficiency of the district court’s order are not supported
by the record.
B. Austal’s Motions for Sanctions
On appeal, Austal further argues that the district court abused its discretion
in denying its motions for sanctions against Plaintiffs’ counsel because all of the
claims were based entirely on speculation, which counsel could have discovered
with a reasonable investigation. Austal also contends that Plaintiffs’ counsel
unreasonably and vexatiously multiplied the proceedings by pursuing the class
action and disparate impact claims, and by filing multiple motions to extend the
deadline to file an expert report. 2
2
We review the district court’s ruling on a motion for sanctions for an abuse of discretion.
Massengale v. Ray, 267 F.3d 1298, 1301 (11th Cir. 2001) (Federal Rule of Civil Procedure 11);
Peterson v. BMI Refractories, 124 F.3d 1386, 1390 (11th Cir. 1997) (28 U.S.C. § 1927).
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Section 1927 provides that an attorney who unreasonably and vexatiously
multiplies the proceedings in any case may be required by the court to pay for
excess costs incurred because of such conduct. 28 U.S.C. § 1927. Thus, this Court
has stated that an award of sanctions under § 1927 requires three elements: (1) the
attorney must engage in unreasonable and vexatious conduct; (2) that conduct must
multiply the proceedings; and (3) the dollar amount of the sanction must not
exceed the costs incurred by such conduct. Peterson v. BMI Refractories, 124 F.3d
1386, 1396 (11th Cir. 1997). An attorney “unreasonably and vexatiously”
multiplies proceedings “only when the attorney’s conduct is so egregious that it is
tantamount to bad faith.” Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d
1230, 1239 (11th Cir. 2007) (internal quotation marks omitted). The attorney must
knowingly or recklessly pursue a frivolous claim or engage in litigation tactics that
needlessly obstruct the litigation of a non-frivolous claim to warrant sanctions
under § 1927. Id. at 1242.
Rule 11 sanctions are properly assessed when a party files a pleading:
(1) “that has no reasonable factual basis”; (2) “that is based on a legal theory that
has no reasonable chance of success and that cannot be advanced as a reasonable
argument to change existing law”; or (3) “in bad faith for an improper purpose.”
Massengale v. Ray, 267 F.3d 1298, 1301 (11th Cir. 2001) (internal quotation
marks omitted). A court conducts a two-step inquiry when evaluating a motion for
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Rule 11 sanctions: (1) determining whether the non-moving party’s claims are
objectively frivolous; and (2) determining whether counsel should have been aware
that they were frivolous. Jones v. Int’l Riding Helmets, Ltd., 49 F.3d 692, 695
(11th Cir. 1995). In deciding whether the claims are objectively frivolous, the
court must “determine whether a reasonable attorney in like circumstances could
believe his actions were factually and legally justified.” Kaplan v.
DaimlerChrysler, A.G., 331 F.3d 1251, 1255 (11th Cir. 2003) (internal quotation
marks omitted).
As discussed above, the totality of the evidence does not support a
conclusion that any of Plaintiffs’ claims were objectively frivolous. See Amlong,
500 F.3d at 1242; Kaplan, 331 F.3d at 1255. Further, there is no evidence that
Plaintiffs’ counsel pursued any of the claims in bad faith. See Amlong, 500 F.3d at
1239. Plaintiffs’ delay in submitting the expert report that Austal complains about
was due, in part, to Austal’s failure to produce necessary evidence (pay data for
Austal’s employees, which Plaintiff’s expert needed for purposes of statistical
analysis). The district court ordered Austal to turn over the requested evidence and
granted Plaintiffs extensions of the time in which to file the report. Because the
record supports the district court’s conclusion that Plaintiffs’ claims were not
frivolous, the district court did not commit a clear error in judgment in denying
Austal’s motions for sanctions.
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Accordingly, we affirm the district court’s denial of Austal’s motions for
attorneys’ fees and sanctions.3
AFFIRMED.
3
We emphasize that nothing contained in this opinion should be viewed as passing on the
merits of Plaintiffs’ separate appeals concerning their underlying claims against Austal.
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