Edson Arneault v. Kevin O'Toole, 16-4375

In 2001 Arneault and Rubino contracted with MTR/Tecnica relating to development of Presque Isle Downs; disputes later arose involving the Pennsylvania Gaming Control Board and alleged misconduct by private actors.
Plaintiffs sued Ambrose, Nicholas Scott, Scott’s Bayfront, and government defendants asserting § 1983 conspiracy and state-law defamation claims, among others.
The District Court dismissed all claims; this Court affirmed the dismissal on appeal.
Defendants moved for attorneys’ fees and costs; a Special Master recommended fees, and Magistrate Judge Baxter adopted and referred the parties to a settlement conference.
Magistrate Judge Mitchell found Arneault and Rubino participated in the settlement conference in bad faith and awarded additional fees/costs for that conduct; Magistrate Judge Baxter later awarded specified fee amounts for the main litigation.
Plaintiffs appealed only the monetary awards and sanctions; the Third Circuit affirmed both the fee awards for the litigation and the sanctions for bad-faith settlement participation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendants were entitled to attorneys’ fees for the main litigation under 42 U.S.C. § 1988	Arneault & Rubino: claims were not frivolous; district court applied wrong fee standard and misanalyzed evidence of threatened injury	Defendants: plaintiffs’ § 1983 claims were frivolous/unreasonable and fees are proper for prevailing defendants	Court: no abuse of discretion; Special Master and district court properly applied prevailing-defendant standard and relied on Barnes factors to find frivolousness
Whether plaintiffs could be sanctioned under Rule 16(f) and the court’s inherent authority for bad-faith participation at the settlement conference	Plaintiffs: they had timely communicated fixed positions and were willing to negotiate with some defendants; sanctions were unwarranted	Defendants: plaintiffs attended but refused to negotiate, wasting the conference and court resources	Court: affirmed sanctions—record supports finding plaintiffs were unprepared/not negotiating in good faith

Fox v. Vice, 563 U.S. 826 (2011) (prevailing defendants in § 1983 cases may recover fees when plaintiff’s action is frivolous, unreasonable, or without foundation)
Barnes Found. v. Twp. of Lower Merion, 242 F.3d 151 (3d Cir. 2001) (factors to consider when assessing frivolousness in § 1983 fee awards)
Raab v. City of Ocean City, 833 F.3d 286 (3d Cir. 2016) (standard of review: abuse of discretion for fee awards and sanctions)
Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212 (3d Cir. 2007) (abuse-of-discretion review for fee awards)
Republic of the Philippines v. Westinghouse Elec. Corp., 43 F.3d 65 (3d Cir. 1994) (courts’ inherent authority to sanction abuses of the judicial process)
Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (scope of inherent sanctioning power)
Ellison v. Shenango Inc. Pension Bd., 956 F.2d 1268 (3d Cir. 1992) (discussion of discretionary nature of fee awards)