Judge Ryskamp's 1927 Sanctions By Default Upheld by 11th Circuit!

After granting summary judgment on a discriminatory housing claim against the city of Jupiter, the city sought fees under both sections 1988 and 1927.  Judge Ryskamp allocated $82k in sanctions under section 1927 against both the plaintiff and its attorneys.

The 11th Circuit upheld in an unpublished decision, with visiting MD FL Judge Whittemore dissenting:

After receiving notice of what conduct was alleged to be vexatious, in bad faith, and multiplicitous, Plaintiff’s Counsel did not respond at all to this April 29 motion within the time limits prescribed by the Local Rule governing motions practice in the Southern District of Florida, thereby placing Counsel in default and providing the district court with a sufficient basis for granting the April 29 motion as to the entitlement issue. See S.D. Fla. L.R. 7.1(c) (stating that “[e]ach party opposing a motion shall serve an opposing memorandum of law no later than fourteen (14) days after service of the motion. Failure to do so may be deemed sufficient cause for granting the motion by default.”).

And Plaintiff’s Counsel, by their default, admitted the factual allegations of vexatious conduct, bad faith, and multiplicity of proceedings contained in the 18-page, April 29 motion for attorneys’ fees under § 1927 against Plaintiff and its counsel. .... By virtue of their default, Plaintiff’s Counsel admitted the allegations in the April 29 motion, which were that they pursued a baseless claim knowing no evidence supported it, that this was vexatious conduct that amounted to bad faith, and that as a direct result of their unwillingness to abandon the clearly baseless claim, the Defendants had to defend themselves in the second summary judgment proceedings and the Young II appeal. The April 29 motion clearly alleged that all of the post-remand proceedings amounted to a bad faith pursuit of a baseless claim against Defendants Lukasik and Lecky without any evidence. Since that factual basis of the § 1927 motion was admitted by default, there was no factual dispute for the district court to resolve as to entitlement.

Ouch!

But Judge Whittemore says you need more than that to impose sanctions against counsel:

The district court’s initial fee award was only against Plaintiff Young Apartments. Indeed, in its October 12, 2011 order, the district expressly declined to award fees against Tedards and Weeks. In response, Defendants sought clarification, seeking a joint and several award of a portion of the fees against both attorneys under § 1927. Notwithstanding that the time to respond to the motion had not expired, the district court essentially reversed itself, modified its order, and imposed the challenged sanction against the attorneys. Counsel’s timely response in opposition to the motion was therefore rendered moot. Their motion to amend/correct the order was denied by the district court on the basis of the “prior default.”

This sounds like a nightmare scenario.

Judge Whittemore concludes as follows:

I agree with the majority that Tedards and Weeks were on notice that they faced potential liability under § 1927. Defendants’ initial motion for attorney’s fees cited 28 U.S.C. § 1927 and expressly sought a joint and several award against the attorneys. The district  court, with which the majority agrees, essentially concluded that by failing to respond to the initial motion seeking attorney's fees, the attorneys defaulted on the issue of entitlement and waived the right to be heard. While the term “default” may accurately describe the posture Tedards and Weeks put themselves in initially, I do not believe that under the circumstances they waived the right to be heard on joint and several liability or, just as importantly, on the amount of the sanction.

En banc time?