Beatrice Boyer v. BNSF Railway Company, 832 F.3d 699

Background

Plaintiff Stombaugh (attorney) filed a suit in Arkansas state court that was removed to federal court and transferred to the Western District of Wisconsin.
Defendant BNSF sought sanctions under 28 U.S.C. § 1927 for forum-shopping and for multiplying proceedings unreasonably and vexatiously.
Stombaugh argued (first time in petition for rehearing) that § 1927 applies only to conduct in federal court because it refers to attorneys admitted to practice in federal courts.
The panel originally imposed sanctions on Stombaugh; the question arose whether those sanctions could rest on § 1927 given the challenged conduct began in state court.
The court considered alternative grounds and invoked its inherent authority to sanction willful abuse of the judicial process as an independent basis for the sanctions.
The petition for rehearing was granted only to the limited extent of adding the inherent-authority ground; rehearing en banc was denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 1927 authorizes sanctions for counsel’s conduct that occurred in state court before removal	§ 1927’s reference to admission to practice in U.S. courts limits sanctions to conduct in federal court	§ 1927 can reach conduct that produced federal-court burdens (removal/transfer) even if initial act occurred in state court	Court treated argument as forfeited but considered it; uncertainty remains whether § 1927 alone covers pre-removal state-court filing, but subsequent federal burdens may be compensable
Whether the court may instead rely on its inherent authority to sanction counsel for forum-shopping and bad-faith litigation tactics	Stombaugh contended § 1927 was the only basis and challenged sanctions	BNSF argued the court also has inherent power to sanction abuse of process and bad-faith litigation	Court invoked inherent authority as an alternative and independent basis for sanctions
Whether lack of an evidentiary hearing deprived Stombaugh of due process	Stombaugh argued no hearing was held and he was deprived of due process	BNSF pointed to extensive briefing and opportunities to be heard	Court held no evidentiary hearing was required because Stombaugh had meaningful opportunity to be heard and no disputed material facts required one
Whether rehearing en banc should be granted	Stombaugh sought en banc review of sanctions authority and process	BNSF opposed en banc review	No active judge called for a vote; en banc rehearing denied

Key Cases Cited

Bender v. Freed, 436 F.3d 747 (7th Cir. 2006) (limits on § 1927 tied to conduct in federal court)
Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (federal courts’ inherent authority to sanction bad-faith litigation conduct)
Carr v. Tillery, 591 F.3d 909 (7th Cir. 2010) (inherent power is not limited by § 1927’s reach)
Claiborne v. Wisdom, 414 F.3d 715 (7th Cir. 2005) (inherent power to impose sanctions when statutes/rules are inadequate)
GRiD Sys. Corp. v. John Fluke Mfg. Co., 41 F.3d 1318 (9th Cir. 1994) (section 1927 does not authorize sanctions for separate state-court suit)
Smith v. Psychiatric Solutions, Inc., 750 F.3d 1253 (11th Cir. 2014) (affirming limits on § 1927 for pre-removal state-court conduct)
Robertson v. Cartinhour, 883 F. Supp. 2d 121 (D.D.C. 2012) (sanctions based solely on counsel’s conduct in the same case)
Shields v. Illinois Department of Corrections, 746 F.3d 782 (7th Cir. 2014) (procedural rule: arguments raised first in rehearing are typically forfeited)
Packer v. Indiana Univ. Sch. of Medicine, 800 F.3d 843 (7th Cir. 2015) (plain-error review standard in civil cases)
Jolly Group, Ltd. v. Medline Indus., Inc., 435 F.3d 717 (7th Cir. 2006) (no prejudice from change in legal basis for sanctions where parties had notice and opportunity to be heard)