UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-10969
IN THE MATTER OF: ROY E DRAGOO; BARBARA DRAGOO;
MARK THOMAS HALPIN; JOHN CECIAL MOORE,
Debtor.
JOAN MYERS and JAMES E. PORTER,
Appellants,
VERSUS
JOHN C AKARD, Bankruptcy Judge,
Appellee.
Appeal from the United States District Court
for the Northern District of Texas
August 18, 1999
Before DeMOSS and PARKER, Circuit Judges, and LAKE*, District
Judge.
ROBERT M. PARKER, Circuit Judge:
Appellants Joan Myers and James E. Porter appeal a sanction
order. We modify the order and, as modified, affirm.
*
District Judge of the Southern District of Texas, sitting by
designation.
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I. FACTS AND PROCEDURAL HISTORY
In January 1997, Appellants’ two-person, husband-wife law
firm, Myers & Porter, L.L.P., was retained as local counsel by a
Seattle law firm to file adversary proceedings in Chapter 7
bankruptcy proceedings in Texas involving consumer credit card
debt. The Bankruptcy Court in the Northern District of Texas
noticed a pattern in the cases handled by Myers & Porter. The firm
repeatedly sought default judgments on adversary complaints which
had never been served on the debtors and repeatedly failed to
appear for scheduled court appearances. The pleadings in question
were signed by Myers. In November 1997, the bankruptcy court
issued an order to show cause why sanctions should not be imposed
for these actions, and scheduled a hearing for February 23, 1998.
Prior to the hearing, Porter filed declarations asserting that he
was the principal of the law firm Myers & Porter who handled the
cases in question, attributing the problems in the cases to the
fact that he had suffered a mental collapse in November 1996, and
asking that any resulting liability be assessed solely against him.
At the show cause hearing, the Appellants developed the
factual background of Porter’s ongoing problems with depression,
acknowledged that sanctions were appropriate but asked for leniency
in view of Porter’s depression, specifically urging the court not
to impose monetary sanctions.
The court entered a sanction order suspending both Myers and
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Porter from practice in the United States Bankruptcy Court for the
Northern District of Texas for a period of four years and
conditioning readmission upon evidence of 1) mental stability of
both Appellants; 2) any grievance and malpractice claims filed
against them and disposition of those claims; and 3) 15 hours of
courses approved for certification in consumer bankruptcy law.
Appellants appealed the bankruptcy court’s order of suspension
to the United States District Court. It was affirmed.
II. DISCUSSION
We review the sanctions imposed in this case under the abuse
of discretion standard. See Cooter & Gell v. Hartmax Corp., 496
U.S. 384, 405 (1990). “Under Rule 11, the district court has broad
discretion to impose sanctions that are reasonably tailored to
further the objectives of Rule 11. Proper objectives of Rule 11
sanctions are to deter, to punish and to compensate opposing
parties. The court should use the least severe sanction that is
adequate to fulfill this purpose.” American Airlines, Inc. v.
Allied Pilots Ass’n, 968 F.2d 523, 533 (5th Cir. 1992).
Appellants take the position that the district court abused
its discretion because the sanctions imposed are not the least
severe of adequate sanctions and are against public policy.
Appellants contend that Porter was solely responsible for the
mishandling of the bankruptcy cases and that his bad behavior was
a direct consequence of his severe depression. They argue that
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public policy requires leniency to persons who admit they suffer
from depression to avoid a “chilling effect” which will discourage
mentally impaired attorneys and their law partners from pursuing
rehabilitation.
In support of their position, they cite a sampling of other
cases in which sanctions other than those imposed here were found
appropriate. This argument has no merit. Some of the alternative
sanctions imposed in the cited cases include one to three year
total suspensions from the practice of law. Appellants’
characterization of these sanctions as less severe than the
Bankruptcy Court’s order in this case is inaccurate. Myers and
Porter are precluded only from practicing before the Northern
District of Texas Bankruptcy Court. They can, and the record
indicates that they are, continuing to practice law in various
other Texas state and federal courts. Further, during the show
cause hearing, Appellants repeatedly urged the Bankruptcy Court not
to impose monetary sanctions. Although the evidence would have
supported such sanctions, the bankruptcy court imposed only non-
monetary sanctions closely tailored to deter the specific
misconduct involved and to protect future litigants from such
violations. We find no abuse of discretion based on public policy
or on severity of sanctions.
Next, Appellants portray Myers as without fault and therefore
deserving of less severe sanctions than Porter. The Bankruptcy
Court considered and rejected this allegation. Myers signed
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pleadings without complying with her responsibility under Federal
Rule of Bankruptcy Procedure 9011 to ascertain the truth of the
matters asserted, she had been previously sanctioned for similar
problems and she refused to take responsibility for her part in the
present problems. Based on the evidence of Myers’s personal
misconduct in these bankruptcy matters, and the moderate nature of
the sanctions imposed, we find no abuse of discretion in the four
year suspension from the practice before the Northern District of
Texas Bankruptcy Court, and the requirements to submit evidence of
her grievance and continuing legal education records for
readmittance.
However, we find merit in Myers’s objection to the requirement
that she demonstrate evidence of her mental stability as a
condition for readmittance to the Northern District of Texas
bankruptcy bar.** There is no evidence in the record that Myers
suffers from mental illness. We therefore conclude that the
bankruptcy court abused its discretion in imposing a requirement
that Myers submit evidence of mental stability as a sanction for
her part in mishandling of the bankruptcy cases.
III. CONCLUSION
With the exception of the “mental stability” requirement for
Myers’s readmission, we conclude that the sanctions are not against
public policy, and are not more severe than necessary. We
**
In light of Porter’s depression, appellants do not contest this
condition for readmittance as to Porter.
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therefore delete the mental stability requirement against Myers,
and, finding no other abuse of discretion, affirm the remaining
portion of the sanction order.
SANCTIONS MODIFIED, and as modified, AFFIRMED.
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