Petitioners Brief — Roadway Express, Inc. v. Piper

Supreme Court, U.S.

age ay, le aaa tk

FEB 20 1980

IMICHAEL RODAK, JR., CLERK

IN THE

Supreme Cowt of the United States

OCTOBER TERM, 1979

No. 79-701

ROADWAY EXPRESS, INC.,

Petitioner

V.

J. D. MONK, ET AL.,

Respondents

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR THE PETITIONER

MILES CURTISS MCKEE

ARMIN J. MOELLER, JR.

FUSELIER, OTT, MCKEE &

FLOWERS, P.A.

2100 Deposit Guaranty Plaza

Jackson, Mississippi 39201

(601) 948-2226

Counsel for Petitioner

TABLE OF CONTENTS

Page

Table of Cases and Authorities |... ii

ER Te ee 1

RE A I es Re Se 2

a ene 2

Question Presented 0.0.0.0... ccccccccccccccececccsececesecececeees 3

sptatement of the Came... ccc ccccccccccccccececes. 3

Summary of Argument... 6

(i EE ESD SE a oa a ee Ue 7

I. 28 U.S.C. § 1927, 42 U.S.C. § 2000e-5(k)

AND 42 U.S.C.-§ 1988 SHOULD BE EN-

FORCED ACCORDING TO THEIR

SRM EY MMMM scence ccaiecsccednssdeveserences 7

II. ASSUMING THAT SECTIONS 706(k

AND 1988 ARE INAPPLICABLE T

SECTION 1927, COURTS POSSESS IN-

HERENT POWER TO INCLUDE AT-

TORNEYS’ FEES AS COSTS UNDER

PMI III 6s cussesaseprenonscictbon pssiaceconce 19

ii

TABLE OF CASES AND AUTHORITIES

me

Page(s)

Acevedo v. Immigration & Naturalization Serv.,

te Re 0 CRP BCD oaccsess cc ssecceseseecciseascssness: 11

Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421

i goss ah alla va syanstdasenisanraars 13,15,19

Browning Debentures Holders’ Comm. v. DASA

Corp., 560 F.2d 1078 (2d Cir. 1977).................00. 19

Caminetti v. United States, 242 U.S. 470 (1917) ..... 8

Christiansburg Garment Co. v. EEOC, 434 US.

Ne ele Ugo cade exdoubceretannbconsddieheansaies> 9,10

17,18

Field v. United States, 34 U.S. (9 Pet.) 182 (1834) 13

Flaska v. Little River Marine Constr. Co., 389

F.2d 885 (5th Cir.), cert. denied, 392 U.S. 928

(RDI Set DR Goer ues cop selina dene ef oO 20

Fleischmann Distilling Corp. v. Maier Brewing

ee a Pe I oo iecsststaisrnticns pavteesvanensoisias er

18,19

Flora v. Moore, 461 F. Supp. 1104 (N.D. Miss.

ES EIS rate 0 i epve hey OP One Canes ee SPOR 10

Gamble v. Pope & Talbot, Inc., 307 F.2d 729 (3d

Cir.) (en banc), cert. denied, 371 U.S. 888

ie Roatan sets seavsesadisa tan birreitriceecsinsivs 20

Bat o. Cote, O13 UD: 8 (IG TB) 000... 0cccccccccsesccscse.s. 19

Huddleston v. United States, 415 U.S. 814 (1974)... 16

Huntington v. Attrill, 146 U.S. 657 (1892) .............. 16

Hutto v. Finney, 4387 U.S. 678 (1978) .........0. 6,15

In re Sutter, 543 F.2d 1030 (2d Cir. 1976) ............... 20

Link v. Wabash R.R., 370 U.S. 626 (1962) ............... 10,19

Mills v. Electric Auto-Lite Co., 396 U.S. 375

iia Mectc le atl Lineups gn vslnumdncisieveaneviven’ 19

iil

Page(s)

Motion Picture Patents Co. v. Steiner, 201 F. 63

LR RU enbr RAR enema coe ene tect se 6,14

15,19

National Hockey League v. Metropolitan Hockey

Club, Inc., 427 U.S. 639 (1976) (per curiam) ...... 7,20

Newman v. Piggie Park Enterprises, 390 U.S. 400

Ry CIO IID avian css cescirssvcnvvensesenvncesssnaseceess 17

Prate v. Freedman, 583 F.2d 42 (2d Cir. 1978) ....... 9,10,18

Sprague v. Ticonic Natl Bank, 307 U.S. 161

IN sha veducelcccrtustka tasne tases hea eae me 7,19

St. Louis, Iron Mt. & S. Ry. v. United States, 251

SN I Soo elas scree cheteahs a peruiastic 18

Toledo Metal Wheel Co. v. Foyer Bros. & Co., 223 F.

I sca csatesacesesssseecoce Ven vaskidesyrautiecs 16

United States v. American Trucking Ass’ns., 310

Pn I oars scauzdons vudics ded sites vonsotinnvsasudiaee nage 8,9

United States v. Missouri Pac. R.R., 278 U.S. 269

GR ER AI A RRC EC Rep PN TEL ARE Ai wks opal OIE 8

United States v. Ross, 535 F.2d 346 (6th Cir. 1976) 15

Vaughan v. Atkinson, 369 U.S. 527 (1962) 000000000... 19

Act of July 22, 1818, 3 Stat. 21 ....................0c0000c00.0.. 12,la

Act of Feb. 26, 1853, 10 Stat. 162.000.000.000... 14,1la

Po eS 14,2a

Be ee ii oe oer coidthareeaSecsmverr ccc 18

Be Ws Oe cg csi es ts cose scevisce coe vdeiocarxacss passim

42 U.S.C. § 1988 (as amended 1976) 2.00.00... passim

te Se |S eee passim

H.R. Rep. No. 50, 32d Cong., ‘st Sess. (1852) ......... 14

H.R. Rep. No. 308, 80th Cong., 1st Sess. (1947) ..... 6,14

S. Rep. No. 94-1011, 94th Cong., 2d Sess. (1976) ... 15

iv

H.R. Doc. No. 25, 27th Cong., 3d Sess. (1842) .........

Antitrust Procedural Act of 1979: Hearings on S.

390 Before the Subcommittee on Antitrust and

Monopoly, 96th Cong., Ist Sess. (1979) ................

47 Annals of Cong. 29, 48, 45, 54, 57, 60-61, 446,

Fs) RR re ORLA IS oon Bos

Cong. Globe, 32d Cong., 2d Sess. App. 207-09

IS NINE «csv iusaietencicibiedeediel pdeintsinrcenueemecaacelas ees nL ame

122 Cong. Rec. 31882, 35117, 35124 (1976)..............

125 Cong. Rec. $1343-68 (daily ed. Feb. 8, 1979)...

a Statutory Construction (C. Sands ed.

|, | RR DRINA RCO rena AN MORE le Pia y re OS 52K P

Brief of the NAACP Legal Defense Fund, Inc., as

Amicus Curiae, Christiansburg Garment Co. v.

BOC, 484 U.S. 432 (IGE) ...cusccccccccrsecricccssecceessens

Note, Attorney’s Fees and the Federal Bad Faith

Exception, 29 Hastings L.J. 319 (1977) ...............

Comment, Financial Penalties Imposed Directly

Against Attorneys in Litigation Without Resort

re the Contempt Power, 26 U.C.L.A. L. Rev. 855

POE bis sdesiavinic line dcoaiceoen alae een ee

Comment, Sanctions Imposed by Courts on At-

torneys Who Abuse the Judicial Process, 44 U.

CA Ts FRR Re CI CED vasecshchsssanasepcceeena

Page(s)

13

16

13

13

12

16

8,16,18

10

11

IN THE

Supreme Court of the United States

OCTOBER TERM, 1979

No. 79-701

ROADWAY EXPRESS, INC.,

Petitioner

Vv.

J. D. MONK, ET AL.,

Respondents

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR THE PETITIONER

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. A, pp.

la-8a) is reported at 599 F.2d 1378. The opinion of the

district court on rehearing (Pet. App. C, pp. lla-18a) is

not reported. The opinion of the district court (Pet. App.

D, pp. 14a-96a) is reported at 73 F.R.D. 411.

2

JURISDICTION

The judgment of the court of appeals was entered on

August 3, 1979. The petition for a writ of certiorari was

filed on October 31, 1979, and was granted on January 7,

1980. The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

STATUTES INVOLVED

28 U.S.C. § 1927 provides:

Any attorney or other person admitted to

conduct cases in any court of the United States

or any Territory thereof who so multiplies the

proceedings in any case as to increase costs

unreasonably and vexatiously may be required

by the court to satisfy personally such excess

costs.

Section 706(k) of Title VII of the Civil Rights Act of

1964, 42 U.S.C. § 2000e-5(k), provides:

In any action or proceeding under this

subchapter the court, in its discretion, may allow

the prevailing party, other than the Commission

or the United States, a reasonable attorney’s fee

as part of the costs, and the Commission and the

United States shall be liable for costs the same as

a private person.

42 U.S.C. § 1988 (as amended 1976) provides in part:

In any action or proceeding to enforce a

provision of sections 1981, 1983, 1985, and 1986 of

this title,... the court, in its discretion, may

allow the prevailing party, other than the

United States, a reasonable attorney’s fee as

part of the costs.

3

QUESTION PRESENTED

Whether attorneys who unreasonably and vexatiously

multiplied proceedings in an action under Title VII of the

Civil Rights Act of 1964 and 42 U.S.C. § 1981 may be

personally assessed, pursuant to 28 U.S.C. § 1927, with

attorneys’ fees as part of the “excess costs” incurred by an

opposing party as a result of such conduct?

STATEMENT OF THE CASE

I. Facts

On June 3, 1975, attorneys Robert E. Piper, Jr., Frank

E. Brown, Jr., and Bobby Stromile filed a class action on

behalf of three individuals against Roadway Express, Inc.,

the International Brotherhood of Teamsters, and Team-

sters Local No. 194. The complaint alleged violations of

Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e

to -17 (as amended 1972), and the Civil Rights Act of

1866, 42 U.S.C. § 1981 (R. 1).

Roadway subsequently moved to dismiss the com-

plaint because of the plaintiffs’ failure to make discovery

and failure to comply with an order of the court (R. 343).

On June 30, 1976, the district court dismissed the com-

plaint,’ without prejudice, pursuant to Rule 37 of the

Federal Rules of Civil Procedure (R. 704). The district

court retained jurisdiction, however, to determine wheth-

er further sanctions, namely Roadway’s costs, would be

imposed (J/d.).

II. The Decision of the District Court

On January 6, 1977, after an evidentiary hearing,

the district court awarded Roadway a portion of its costs,

'No appeal was taken from the district court’s dismissal of

the complaint.

4

including attorneys’ fees, and assessed those costs person -

ally against attorneys Piper, Brown, and Stromile (Pet.

App. D, at pp. 15a-28a). In support of the assessment, the

district court found that the three attorneys’ misconduct’

during the case had unreasonably and vexatiously multip-

lied the proceedings, and thereby had “escalated defend-

ants’ costs substantially” (Pet. App. D, at p. 19a).

The assessment was made pursuant to 28 U.S.C.

§ 1927, which the district court viewed as providing for

“an equitable shifting of responsibility for unreasonable

and vexatious costs from a party to his counsel” (Pet. App.

D, at p. 24a). The term “costs” was read by the district

court as including “only such costs as normally would be

allowed to the prevailing party” (Pet. App. D, at p. 23a).

This reading thus encompassed the language of Title VII’s

section 706(k), 42 U.S.C. § 2000e-5(k), and 42 U.S.C.

§ 1988 (as amended 1976), both of which provide that the

court may “allow the prevailing party...a reasonable

attorney’s fee as part of the costs” in actions under the

1866 and 1964 civil rights acts.

2 As later summarized by the court of appeals, the district

court

found that the forced dismissal of the plaintiffs’

claims were caused by the total and deliberate failure

of their counsel to properly prosecute them, as evi-

denced by their failure to answer Roadway’s inter-

rogatories as ordered; their failure to produce [plain-

tiff} McPherson for his deposition as previously

agreed; their failure to advise their clients of their

denomination as class representatives and the pos-

sible consequences of class representation; and their

failure to file briefs twice requested by the court

concerning this case’s relation to a class certification

entered in the Western District of Texas.

(Pet. App. A, at p. 4a)

5

On April 13, 1977, the district court denied a motion

for rehearing’ filed on behalf of the three attorneys by

their malpractice insurer (Pet. App. C, at pp. 12a-13a). On

May 5, 1977, the district court entered a judgment in

favor of Roadway against attorneys Piper, Brown and

Stromile (R. 790). On May 25, 1977, the judgment was

amended to reflect the district court’s dismissal, with

prejudice, of Roadway’s claim for costs, including at-

torneys’ fees, against the individual plaintiffs. (Pet. App.

B, at pp. 9a-10a).

III. The Decision of the Court of Appeals

A panel of the United States Court of Appeals for the

Fifth Circuit concluded that the district court’s findings of

fact were not clearly erroneous, and agreed that under

section 1927 the three attorneys “are subject to personal

liability for the excess costs generated by their unreason-

able and vexatious multiplication of the proceedings”

(Pet. App. A, at pp. 4a-5a). The court of appeals dis-

agreed, however, with the district court’s inclusion of

attorneys’ fees in the assessment.

First, recognizing that “[t]he general American rule

is that attorneys’ fees are not ordinarily recoverable as

costs” (Pet. App. A, at p. 5a), the court of appeals observed

that “[s]ection 1927’s reference to ‘costs’ neither specific-

ally includes nor specifically excludes attorneys’ fees as

allowable costs under the statute” (Jd.). Additionally,

since the statute was considered penal in nature, the court

held that section 1927 should be strictly construed (Jd.).

Relying on Fleischmann Distilling Corp. v. Maier Brewing

Co., 386 U.S. 714 (1967), the court of appeals stated that it

would not imply what was termed “an extraordinary

* Although the district court denied the motion, the court’s

January 6, 1977, opinion was amended to reflect that the

plaintiffs’ attorneys had filed a brief which the court incorrectly

had stated was not filed (Pet. App. C, at pp. 12a-13a).

° 6

remedy” (Pet. App. A, at p. 7a) from section 1927 in the

absence of statutory language or legislative history in-

dicating that the costs provided for in the statute were

intended to include attorneys’ fees.

Second, the court of appeals held that the costs provi-

sions of Title VII’s section 706(k) and 42 U.S.C. § 1988 are

inapplicable to attorneys. “Those sections provide for

attorneys’ fees awards against unsuccessful parties to a

suit, and they focus on actions which are frivolous, unrea-

sonable, and baseless in allowing awards against

unsuccessful plaintiffs” (Pet. App. A, at p. 8a) (emphasis

in original). Finally, the court of appeals concluded that

‘(njeither could the district court combine the provisions

of those statutes with those of § 1927 to produce a hybrid

result contemplated by none of the statutes” (Id.). The

judgment of the district court was vacated insofar as it

included attorneys’ fees in the section 1927 assessment

and the case was remanded for a determination of a

“proper award” (Jd.).

SUMMARY OF ARGUMENT

I.

Sections 1927, 706(k) and 1988 should be enforced

according to their plain meaning. Section 1927 provides

that “in any case” attorneys may be assessed with “costs.”

H.R. Rep. No. 308, 80th Cong., Ist Sess. A164 (1947 ) (1948

amendments to section 1927), citing Motion Picture Pat-

ents Co. v. Steiner, 201 F. 63, 64-65 (2d Cir. 1912) (section

1927 “costs” are limited to expenses “taxable as costs”).

Sections 706(k) and 1988 provide that attorneys’ fees may

be allowed to the prevailing party “as part of the costs” in

Title VII and 42 U.S.C. § 1981 actions. Hutto v. Finney,

437 U.S. 678, 696-97 (1978) (attorneys’ fees awarded

pursuant to section 1988 are “taxable costs’). Con-

case .compels the

> result reached

Section 1927 provides that “costs”

attorneys “in any case.”

7

sequently, attorneys’ fees may be incl

ment of “costs” pursuant t

42 U.S.C. § 1981 actions.

) uded in an assess-

0 section 1927 in Title VII and

II.

Assuming that the attorneys’ fees provisions in sec-

anne oes ; — are inapplicable to section 1927, an

uaa dal costs. under section 1927 may nevertheless

pa — fees. First, courts possess inherent

ee inte to assess “costs of litigation other than

Bouk ter “it taxable costs.” Sprague v. Ticonic Nat!

inherent mane Hagin (1939). Second, courts possess

sancti power ‘to impose reasonable and appropriate

ons on attorneys. In all cases the choice of sanctions

: ites = the sound discretion of the district court

pct ockey League v. Metropolitan Hockey Club, I

S. 639 (1976) (per curia Asap

m), and, parti i

pai involving attorneys, the eek of prised =

ccorded the district court must be wide. The district

7 - ironaeer of attorneys’ fees in the sanctions im

e attorneys in the instant ca

se was -

able and appropriate exercise of its discretion iia

ARGUMENT

I,

28 U.S.C. § 1927, 42 U.S.C. §

; S.C. § 2000e-5(k

a: aA U.S.C. § 1988 SHOULD BE ENFORCED

ORDING TO THEIR PLAIN MEANING

The plain meaning of the statutes involved in this

by = district court.

: may be assessed against

Sections 706(k) and 1988 provide

8

that attorneys’ fees may be allowed to the prevailing

party “as part of the costs” in actions under Title VII and

42 U.S.C. § 1981. Therefore, since attorneys fees were

“nart of the costs” in this case, the district court's in-

clusion of counsel fees in the assessment of “costs” against

the three attorneys was correct.

Statutes should be enforced according to their plain

meaning. E.g., United States v. American Trucking

Ass’ns., 310 U.S. 534, 548 (1940); United States v. Missourt

Pac. R.R., 278 U.S. 269, 277 (1929); Caminetti v. United

States, 242 U.S. 470, 485 (1917). See generally 2A Suther-

land Statutory Construction § 46.01 (C. Sands ed. 1973).

The court of appeals ignored this rule, and thereby

reached a result which defies logic, substantially neutral-

izes the deterrent effects of section 1927, and does serious

violence to the spirit and congressional intent underlying

sections 706(k) and 1988.

The best argument for adhering to the plain meaning

rule in this case is found in the exception to the rule. That

is, statutes will not be enforced according to their plain

meaning when to do so would produce “absurd or futile

results” or “merely an unreasonable one ‘plainly at vari-

ance with the policy of the legislation as a whole.’ ” United

States v. American Trucking Ass’ns., supra, 310 U.S. at

548. The exception is clearly absent from this case, and an

analysis of the reasons for its absence provides valuable

insight into the infirmities of the court of appeals’ hold-

ing.

The net result of the district court’s enforcement of

the plain meaning of the statutes was to require the three

attorneys to reimburse Roadway for the attorneys fees

incurred in defending itself against patently frivolous,

unreasonable and vexatious proceedings. But for the

district court’s findings that the three attorneys were

responsible for the abuses, Roadway’s costs, including

9

counsel fees, could have been assessed against the individ-

ual plaintiffs. Christiansburg Garment Co. v. EEOC, 434

U.S. 412 (1978).‘ Far from “absurd” or “unreasonable,”

the district court’s decision reached the eminently sensible

result of holding the perpetrators rather than the victims

of the misconduct accountable for the economic con-

sequenées of the vexatious conduct. The court of appeals’

holding, on the other hand, restricts attorneys’ fees

assessments to innocent litigants which, under the facts of

this case, would indeed have been an absurd and unrea-

sonable result.

Nor did the district court’s decision produce a result

plainly at variance with the policy of the legislation as a

whole.’” United States v. American Trucking Ass’ns.,

supra, 310 U.S. at 543. Congress intended for attorneys’

fees to be allowed “as part of the costs” to employers

forced to defend themselves against frivolous, unreason-

able and vexatious actions filed under Title VII and 42

U.S.C. § 1981. Christiansburg Garment Co. v. EEOC, supra,

434 US. at 420-21.° Yet, at the same time, Congress also

intended for such fees to be allowed only in exceptional

eee

‘Indeed, the district court might have correctly assessed

the fees against the individual plaintiffs in spite of its findings

concerning the attorneys’ responsibility for the misconduct.

Prate v. Freedman, 583 F.2d 42, 48 (2d Cir. 1978).

* Restitution and deterrence, however, are not the only

principles supporting attorneys’ fees awards to employers.

Discouraging frivolous or vexatious litigation .. . is

wholly consistent with congressional purpose, both

because no valid purpose would be furthered by such

litigation, and by discouraging it the courts would be

free to focus their attention on substantial cases

which present substantial issues arising under the

civil rights laws.

Brief of the NAACP Legal Defense Fund, Inc., as Amicus Curiae

at 15 (footnote omitted), Christiansburg Garment Co. v. EEOC,

supra.

10

cases, in order to diminish the chilling effects of potential

fee liability on the willingness of persons of limited means

to vindicate their rights. Jd. at 422. Such an intent is

totally at odds with holding plaintiffs of limited means

responsible for substantial sums of money properly

awarded to a defendant because of plaintiffs’ counsel’s

misconduct.’ It is submitted, however, that utilizing

‘ The specter of incurring attorneys’ fees liability because of

counsel’s misconduct has perhaps even a greater “chilling”

effect than simply knowing that such liability may be imposed

because of one’s own misconduct. See Note, Attorneys’ Fees and

the Federal Bad Faith Exception, 29 Hastings L.J. 319, 341-42

n.153 (1977) (noting such effects and arguing that the ABA

Code of Professional Responsibility is “not a sufficient safeguard

to deter bad faith litigation”).

* Compare Flora v. Moore, 461 F. Supp. 1104, 1122 (N.D.

Miss. 1978) (defendant’s attorneys’ fees in vexatious employ-

ment discrimination suit assessed against Legal Services Corpo-

ration representing plaintiffs where plaintiffs were “personally

unaware of the irresponsible and vexatious manner in which

their counsel were pursuing their action. ... Although § 706(k)

might be read to make plaintiffs legally liable, it would, we

think, be unjust to impose personal liability upon the plaintiffs

on a theory of vicarious responsibility under such circum-

stances.”) with Prate v. Freedman, supra, 583 F.2d at 48

(plaintiffs’ attorneys’ responsibility for frivolous Title VII ac-

tion, if anything, merely mitigates the amount of fees awarded

against the plaintiffs), citing Link v. Wabash R.R., 370 U.S. 626,

633-34 (1962) (“each party is deemed bound by the acts of his

lawyer-agent”).

The Prate result is objectionable on at least two equitable

grounds. First, the individual plaintiff is saddled with a

financial obligation which he or she is only constructively

charged with incurring. The real culprit, the attorney, would,

unless the district court’s holding in this case is reinstated,

probably escape all economic consequences. Alternatively, the

plaintiff might hire yet another lawyer and proceed with some

attempt at obtaining indemnification from the attorney, such as

(footnote continues )

1]

alternatives to direct assessments against individual

plaintiffs, such as assessments against culpable attorneys,

is totally consistent with congressional intent.’

(footnote continued )

a malpractice action. See generally Comment, Financial Penal-

ties Imposed Directly Against “ttorneys In Litigation Without

Resort to the Contempt Power, 26 U.C.L.A. L. Rev. 855, 867-68

(1979). This course often would be economically prohibitive to

Title VII plaintiffs and is certainly inefficient if responsibility

for the fees can be otherwise assessed in the proceeding relating

to the original action. See Acevedo v. Immigration & Natural-

ization Serv., 538 F.2d 918, 921 (2d Cir. 1976) (noting the

client s inability to pay costs of misconduct and “modest educa-

tion” In assessing costs against attorney under $1927). Second

reducing the fee award ignores the other victim of the mis-

conduct, the employer. If employers are prohibited from recov-

ering “excess costs,” including attorneys’ fees, under § 1927, and

are awarded “mitigated” fees against individual plaintiffs who

: srg = _ not page for the vexatious suit in the

ace, the fee award wi i i i

sc Pn thy of little aid to the employer in

*The Senate debates on § 1988 in particular re

Congress certainly did not intend for ian legislation ~anallesn

unscrupulous lawyers or encourage attorney misconduct. as

shown by the following exchange between two of the bill’s floor

managers in the Senate.

Mr. Abourezk. There has been a great deal made

here on the floor by opponents of this legislation that

it would encourage frivolous lawsuits. It has been the

lawyers’ relief bill,” as every bill has been called

when it has come up and there has been opposition to

it. But, according to the provisions of the bill itself. is

it not true that the legislation says the court, in its

discretion, may award attorneys’ fees to the pre-

vailing party, so that if the defendant in a civil rights

suit were to prevail the court could prevent a frivolous

lawsuit by having that provision available?

Mr. Hathaway. The Senator is absolutely correct.

There is adequate safeguard in the bill to protect

against frivolous lawsuits.

(footnote continues)

12

The result reached by the district court is also con-

sistent with Congress’ intent in section 1927. Passed in

1813 as part of “An Act concerning suits and costs in

courts of the United States,” Act of July 22, 1813, 3 Stat.

21,° section 1927 was apparently designed to remedy

abuses by United States Attorneys, at that time com-

pensated by statute on a per-service basis, who multiplied

proceedings in order to increase their fees.” Thus, from

the very beginning, attorneys’ fees were within the pur-

view of section 1927.

(footnote continued )

Mr. Abourezk. So if somebody thought, some

lawyer thought, he was going to make a lot of money

by bringing civil rights suits he would be subject to

being penalized himself; is that not correct?

Mr. Hathaway. The Senator is correct.

122 Cong. Rec. 31832 (1976). See also id. at 35124 (remarks of

Rep. Drinan) (“This bill is not intended, nor are the other 52

similar provisions in Federal law, to encourage groundless and

frivolous litigation or to allow lawyers or litigants or their

clients to recover unjustly from a defendant.’’). There is no

indication that Congress intended to foreclose other available

procedures under Federal law which might arise out of enforce-

ment or assessment of an attorneys’ fees award. Cf. id. at 35117

(“the defendant can take every legal remedy available to him to

reach the essence of the plaintiff’). ely

*The full text of the original provision is reproduced in

Appendix A, infra. Also‘included in Appendix A are the texts of

the provision from enactment to its current codification.

© Materials on the legislative history of § 1927 are limited.

On June 18, 1813, the Senate appointed a committee

to inquire what legislative provision is necessary to

prevent multiplicity of suits or processes, where a

single suit or process might suffice for the adminis-

tration of jusiice in any cause to which the United

States may be a party, or before any court of the

United States, and that the committee have leave to

report by bill or otherwise.

(footnote continues)

13

The statute existed in relative obscurity" until the

general recodification of the Judicial Code in 1948, when

(footnote continued )

47 Annals of Cong. 29 (1813). <A bill was reported by the

committee on July 7, 1813, id. at 43, read a second time the next

day, id. at 45, and ordered to a third reading as amended on July

15, 1813. Jd. at 54. The bill was read a third time and passed in

the Senate on July 16. Jd. at 57. The bill was submitted to the

House on July 16, id. at 446, read twice and referred for further

consideration by designated members of the House on July 17.

Id. at 456. The bill was reported with amendments and passed

the House on July 20, id. at 469, and the amendments were

concurred in by the Senate on the same day. Jd. at 60-61.

Counsel for Roadway has been unable to locate any documents

(committee reports, debates, Senate and House documents, or

any other legislative publications) strictly contemporaneous

with the enactment.

A letter from the Secretary of the Treasury to the Speaker

of the House in 1842, however, clearly suggests the purpose

outlined in the text. H.R. Doc. No. 25, 27th Cong., 3d Sess.

(1842). Other congressional materials also support this inter-

pretation, as the abuses apparently continued well into the

century. See, e.g., Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,

421 U.S. 258, 250-54 & nn. 23-26 (1975) (citing and quoting

congressional materials concerning the 1842 and 1853 fee bills).

For a summary of the abuses, see Cong. Globe, 32d Cong., 2d

Sess. App. 207-09 ( 1853) (remarks of Sen. Bradbury). The

Secretary of the Treasury’s comments on § 1927 provide an

interesting view of the statute, a view not unlike that of a

modern observer. Compare H.R. Doc. No. 25, 27th Cong., 3d Sess.

21 (1842) (“The statute...to restrain the increase of costs

unreasonably and vexatiously, has been disregarded in practice;

or it is defective in its provisions, if insufficient to prevent the

abuses and mischiefs which have occurred, and which it ought to

prevent, if it [does] not.”) with Comment, Sanctions Imposed by

Courts On Attorneys Who Abuse the Judicial Process, 44 U. Chi. L.

Rev. 619, 623-29, 640 (1977) (noting the statute’s disuse and

arguing for its frequent application).

"Shortly after its enactment, this Court was presented

with a case involving § 1927. Field v. United States, 34 U.S. (9

Pet.) 182 (1834). Chief Justice Marshall, however, found it

(footnote continues)

14

the most succinct statement of congressional intent, apart

from the language of the statute itself, occurred. In 1948

Congress made minor changes in the phraseology of sec-

tion 1927 and, more importantly, inserted the word “per-

sonally” under the authority of Motion Picture Patents Co.

v. Steiner, 201 F. 63 (2d Cir. 1912). H.R. Rep. No. 308, 80th

Cong., lst Sess. A164 (1947). Steiner sets forth generally

the operative language of the statute, 201 F. at 64, and

describes with great precision both the “evident purpose

of the statute and the expenses includable in an assess-

ment of “costs” under section 1927.

The evident purpose of this section is to punish

the lawyer who vexatiously increases costs, by

making him, and not his client, liable for the

increase occasioned by his improper conduct. It

recognizes that such costs should not have been

incurred and places their payment on the person

who is responsible for them.

Id.

If, on the other hand, the defendant's expenses

are not taxable as costs, it is obvious that the

(footnote continued ) : | a

nnecessary to reach the issue: “With the question of cos

pee has nothing to do; and as the judgment is reversed for

another cause, it becomes immaterial to be considered.” Jd. at

202. .

i it i hanges in

The language of § 1927 was included with minor c

phraseology, see Appendix A, infra, in the 1853 fee bill. Act of

Feb. 26, 1853, 10 Stat. 162. The House Report on the fee bill,

tains

H.R. Rep. No. 50, 32d Cong., 1st Sess. (1852), however, con

no Seat reference to the provision. The provision thereafter

became § 982 of the Revised Statutes, again with minor

changes. See Appendix A, infra. The statute apparently was

not changed in the 1911 amendments to the Judicial Code.

15

complainant’s conduct did not increase costs to

the extent of these expenses.

Id. at 65 (emphasis added). The policies stated by the

Steiner court, of course, parallel those articulated by the

district court in the instant case. Similarly, the “costs”

assessed in this case were specifically limited to “only such

costs as normally would be allowed to the prevailing

party” (Pet. App. D, at p. 23a); that is, taxable costs.

Again, the exception to the plain meaning rule does not

surface.

There remains, of course, the argument advanced in

United States v. Ross, 585 F.2d 346, 350-51 (6th Cir. 1976),

and expanded upon by the court of appeals below, “that

the ‘costs’ provided by § 1927 should be limited to taxable

costs [and] that attorneys’ fees cannot be part of those

costs” (Pet. App. A, at p. 6a). Since the general American

rule excludes attorneys’ fees from taxable costs, e.g.,

Alyeska Pipeline Serv. Co. v. Wilderness Soc Y, 421 U.S. 240,

247 (1975), the argument is generally valid. Attorneys’

fees ordinarily may not be assessed against attorneys

under section 1927 because, in the absence of one of the

exceptions to the American rule, counsel fees are not

“taxable costs” which can be assessed against the client.

Motion Picture Patents Co. v. Steiner, supra, 201 F. at 64-

65. This general rule, however, is inapplicable to the

instant case. In this case, attorneys’ fees are taxable

costs which can be assessed against the client under

“This Court has specifically held that attorneys’ fees

awarded pursuant to § 1988 are “taxable costs,” Hutto v.

Finney, 487 U.S. 678, 696-97 (1978), noting in the process that

statutes such as § 706(k) and § 1988 are among those statutes

which “define attorneys’ fees as an element of costs, while others

separate fees from other taxable costs.” Jd. at 697 n.28, citing

Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, supra, 421 U.S. at

260-61 n.33. See also S. Rep. No. 94-1011, 94th Cong., 2d Sess. 5

(1976) (attorneys’ fees awards against state and local officials

pursuant to § 1988 should be treated “like other items of costs”’).

16

statutory exceptions to the American rule, namely sec-

tions 706(k) and 1988."

Finally, the court of appeals’ reliance on the “penal

nature” of section 1927 and on this Court’s opinion in

Fleischmann Distilling Corp. v. Maier Brewing Co., 386

U.S. 714 (1967), is misplaced. First, the fact that section

1927 may be arguably penal in nature“ does not warrant a

construction of the statute which ignores its plain mean-

ing. E.g., Huddleston v. United States, 415 U.S. 814, 831

'’Congress is presently considering an amendment to

§ 1927 which would specifically include attorneys’ fees as “costs”

available under the statute in all cases. Senate Bill 390, which

includes the amendment, was passed on July 20, 1979, and, since

July 26, 1979, when the bill was referred to a House subcom-

mittee, no further action on the legislation apparently has been

taken. See generally 125 Cong. Rec. $1343 to $1368 (daily ed.

Feb. 8, 1979); Antitrust Procedural Act of 1979: Hearings on S.

390 Before the Subcommittee on Antitrust and Monopoly, 96th

Cong., 1st Sess. (1979). The current version of § 1927 has been

described in this process as limited to “taxable costs.” E.g.,

Senate Antitrust Hearings, supra, at 27 (statement of Hon.

Charles B. Renfrew).

“4 Viewed from the client’s position, § 1927 is far from

“penal,” since it protects the client from the results of the

attorneys’ misconduct. Toledo Metal Wheel Co. v. Foyer Bros. &

Co., 223 F. 350, 358 (6th Cir. 1915). Cf. Huntington v. Attrill,

146 U.S. 657, 676-77 (1892) (statute rendering corporate offi-

cers liable for debts arising from falsification of stock certificate

penal as to officers but “clearly remedial” as to defrauded

creditors). Accordingly, § 1927 should be construed liberally,

particularly in cases where the result of a liberal construction

would further enforcement of the civil rights acts by protecting

plaintiffs while at the same time allowing the defendant to

recover its attorneys’ fees. See also 3 Sutherland Statutory

Construction, supra, § 70.01 (“One of the historic functions of

the law is to protect ind*iduals from harms inflicted by fraud,

deception and exploitativi: of unfair advantage. ... Legislation

of this character generally is construed in the way that max-

imizes its remedial effects as much as the legislative text

reasonably permits.”).

17

(1974). Furthermore, the authority for the basic award of

attorneys’ fees in this case is not section 1927. Section

1927 simply provides for a shifting of responsibility for

the payment of costs authorized by other statutes appli-

cable to the case or other authority available to the court

Consequently, whatever the result of a strict construction

of section 1927 may be, that result can have absolutely no

Impact on the question of whether a particular item is a

taxable cost” and thus whether it may be assessed

against an attorney under section 1927. That question is

answered exclusively and independently by other statutes

such as sections 706(k) and 1988. The construction ac-

corded these statutes, of course, can hardly be classified as

strict,” even when applied to defendants, see Christians-

burg Garment Co. v. EEOC, supra, 434 U.S. at 423 n.20 (“In

short, there are equitable considerations on both sides of

this question.”), and the nature of attorneys’ fees statutes

such as sections 706(k) and 1988 is far from “penal.” See

Newman v. Piggie Park Enterprises, 390 U.S. 400, 402

(1968) (per curiam) (attorneys’ fees provisions of civil

rights acts not intended as penalties but as aids to

co of public interest served by such legisla-

ion).

'* Attorneys’ fees awards to defendants

are as much a part

S —— enforcement of the civil rights acts as pret to

aintiffs.

[ W jhile it was certainly the policy of Con

Title VII plaintiffs should vindlaate “- Ay a

Congress considered of the highest priority,” Piggie

Park, supra, 390 U.S., at 402, it is equally certain that

Congress entrusted the ultimate effectuation of that

policy to the adversary process, Occidental Life Ins. Co.

v. EEOC, 482 U.S. 355. A fair adversary process

presupposes both a vigorous prosecution and a vigor-

ous defense. It cannot be lightly assumed that in

enacting § 706(k), Congress intended to distort that

process by giving the private plaintiff substantial

(footnote continues)

18

Second, the court of appeals’ reliance on Fleischmann

Distilling Corp. v. Maier Brewing Co., supra, is misplaced.

That case involved the question of whether attorneys’ fees

were properly awarded to a plaintiff as “costs of the

action” pursuant to section 35 of the Lanham Act. 15

U.S.C. § 1117 (amended 1975). Recognizing the general

American rule that “attorneys’ fees are not ordinarily

recoverable in the absence of a statute or enforceable

contract providing, therefor,” 386 U.S. at 717, this Court,

finding no exception present, id. at 720, declined to award

attorneys’ fees “without either statutory language or

legislative history to support the unusual construction.”

Id. In the instant case, of course, attorneys’ fees are

svecifically provided for by sections 706(k) and 1988,

thereby creating an express exception to the American

rule adhered to in Fleischmann Distilling Corp. Again,

section 1927 simply provides the court with a vehicle to fix

the responsibility for costs properly allowed under other

statutes and other authority available to the court.”

(footnote continued )

incentives to sue, while foreclosing to the defendant

the possibility of recovering his expenses in resisting

even a groundless action unless he can show that it

was brought in bad faith.

Christiansburg Garment Co. v. EEOC, supra, 434 US. at 419.

See also Prate v. Freedman, supra, 583 F.2d at 48 (“The

consequences of [plaintiffs’] attorneys’ mistakes should not be

visited upon the [defendant], whose participation in these suits

helped to further the salutary purposes of Title VII.”).

‘The court of appeals’ characterization of the district

court’s holding as a “hybrid result” (Pet. App. A, at p. 8a),

ignores the fact that § 706(k), § 1988 and § 1927 all concern the

same subject: “costs.” The three statutes should, therefore, be

construed in pari materia. See generally 2A Sutherland Statu-

tory Construction, supra, §§ 51.01-.04. See also St. Louis, Iron

Mt. & S. Ry. v. United States, 251 U.S. 198, 207 (1920) (“But,

Congress must be presumed to have known of its former

legislation ..., and to have passed the new laws in view of the

provisions of the legislation already enacted. These statutes

must be construed together and effect given to all of them.”).

19

II.

ASSUMING THAT SECTIONS 706(k) AND 1988

ARE INAPPLICABLE TO SECTION 1927, COURTS

POSSESS INHERENT POWER TO INCLUDE

ATTORNEYS’ FEES AS COSTS UNDER SECTION 1927

Courts possess inherent power “to manage their own

affairs so as to achieve the orderly and expeditious dis-

position of cases.” Link v. Wabash R.R., 370 U.S. 626. 630

(1962). Since courts also possess inherent equitable power

to assess “costs of litigation other than conventional

taxable costs,” Sprague v. Ticonic Nat! Bank, 307 U.S. 161

166 (1939), the district court’s award of attorneys’ fees to

Roadway was supported by the “bad faith” exception to

the American rule. E.g., Hall v. Cole, 412 US. 1 (1973);

Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970); Vau-

ghan 0. Atkinson, 369 U.S. 527 (1962). See Alysska

Pipeline Serv. Co. v. Wilderness Soc Yy, supra, 421 U.S. 240

258-59 (1975). Again, once awarded, the responsibility

for payment was properly shifted from the individual

plaintiffs to the three attorneys pursuant to section 1927

Motion Picture Patents Co. v. Steiner, 201 F. 63 (2d Cir.

1912); see Browning Debentures Holders’ Comm. v. DASA

Corp., 560 F.2d 1078, 1088-89 (2d Cir. 1977) (‘Bad faith is

personal. ...”) (citation omitted).

The assessment against the three attorneys also falls

well within the district court’s inherent power to impose

sanctions on the members of its bar.

The power of a court to discipline members

of its own bar can scarcely be doubted seriously.

An attorney is under no obligation to seek

admission to the bar of a United States district

Thus, the court of appeals’ reliance on Fleischmann Dis-

tilling Corp. v. Maier Brewing Co. : -

misplaced. & Co., 386 U.S. 714 (1967), is again

20

court. He is at liberty to abstain from member-

ship in that or any other bar. But when he does

apply and is admitted he secures certain privi-

leges and also assumes definite obligations.

-The power of a court to impose appropriate

and reasonable sanctions upon those admitted to

its bar is a familiar phenomenon and lies within

the inherent power of any court of record.

Gamble v. Pope & Talbot, Inc., 307 F.2d 729, 735 (8d Cir.)

(en banc) (Biggs, C.J., dissenting), cert. denied, 371 U.S.

888 (1962); accord, In re Sutter, 543 F.2d 1030, 1036-38 (2d

Cir. 1976); Flaska v. Little River Marine Constr. Co., 389

F.2d 885, 888 (5th Cir.), cert. denied, 392 U.S. 928 (1968)."*

The plain language of section 1927 recognizes this author-

ity. An assessment of sanctions is generally committed to

the sound discretion of the district court, National Hockey

League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 642-

43 (1976) (per curiam), and it is submitted that when

sanctions are imposed on attorneys, officers of the court,

the district court’s discretion must be accorded even

greater deference.

In light of the Fifth Circuit’s statement in Flaska that

“(t]he inherent power of a court to manage its affairs neces-

sarily includes the authority to impose reasonable and appropri-

ate sanctions on errant lawyers practicing before it,” 389 F.2d

at 888, the court’s opinion in the instant case is puzzling.

Although Roadway argued cases such as Flaska as an alterna-

tive ground for affirmance of the district court’s assessment, the

court of appeals did not discuss the issue in its opinion in this

case.

ee

21

CONCLUSION

The judgment of the court of a i i

ppeals, insofar as it

vacated that portion of the district court’s judgment

which included attorneys’ fees in the section |

ction 192 -

ment, should be reversed. —

Respectfully submitted,

MILES CurRTISS MCKEE

ARMIN J. MOELLER, JR.

JEFFREY A. WALKER

FUSELIER, OTT, MCKEE &

FLOWERS, P.A.

2100 Deposit Guaranty Plaza

Jackson, Mississippi 39201

(601) 948-2226

Counsel Petiti

February, 1980 a i

Appendices

la

APPENDIX A

An Act concerning suits and costs in courts of the United

States. ,;

Sec. 3. And be it further enacted, That whenever

causes of like nature, or relative to the same question shall

be pending before a court of the United States or of the

territories thereof, it shall be lawful for the court to make

such orders and rules concerning proceedings therein as

may be conformable to the principles and usages belong-

ing to courts for avoiding unnecessary costs or delay in the

administration of justice, and accordingly causes may be

consolidated as to the court shall appear reasonable. And

if any attorney, proctor, or other person admitted to

manage and conduct causes in a court of the United States

or of the territories thereof, shall appear to have multi-

plied the proceedings in any cause before the court so as to

increase costs unreasonably and vexatiously, such person

may be required by order of court to satisfy any excess of

costs so incurred.

Act of July 22, 1813, 3 Stat. 21.

Whenever two or more indictments, suits or proceed -

ings, are or shall be prosecuted, which should be joined, the

district attorney prosecuting them shall be paid but one

bill of costs for all of them; and if any attorney, proctor, or

other person admitted to manage or conduct causes in any

court of the United States, or of the Territories thereof,

shall appear to have multiplied the proceedings in any

cause before such court, so as to increase costs unreason-

ably and vexatiously, such person may be required, by

order of the court, to satisfy any excess of costs so

increased.

2a

Act of Feb. 26, 1853, 10 Stat. 162.

If any attorney, proctor, or other person admitted to

conduct causes in any court of the United States, or any

Territory, appears to have multiplied the proceedings in

any cause before such court, so as to increase costs unrea-

sonably and vexatiously, he shall be required, by order of

the court, to satisfy any excess of costs so increased.

Revised Stats. § 982.

Any attorney or other person admitted to conduct

cases in any court of the United States or any Territory

thereof who so multiplies the proceedings in any case as to

increase costs unreasonably and vexatiously may be re-

quired by the court to satisfy personally such excess costs. ~

28 U.S.C. § 1927.