Merced Rojas v. Town of Cicero
775 F.3d 906
7th Cir.2015Background
- Rojas sued the Town of Cicero under 42 U.S.C. § 1983, alleging he was fired for supporting a political opponent (First Amendment claim); a jury awarded $650,000.
- District Judge Holderman granted defendants’ motion for a new trial, finding Rojas’s counsel Dana L. Kurtz committed serious trial misconduct (misleading statements, eliciting prejudicial hearsay, undermining a defense witness, and referencing excluded evidence).
- Before retrial, the case was reassigned to Judge Durkin and the parties settled: Rojas received $212,500 and Kurtz $287,500 (confidential amounts disclosed by agreement).
- Defendants pursued sanctions against Kurtz under 28 U.S.C. § 1927 (for multiplying proceedings by misconduct) and Fed. R. Civ. P. 26(g)(3) (for failing to disclose Rojas’s post-filing bankruptcy in discovery).
- Judge Durkin denied both sanctions motions: exercised discretion to deny § 1927 sanctions (concluding settlement and reputational injury sufficed) and denied Rule 26(g)(3) sanctions (viewing it as discretionary).
- The Seventh Circuit affirmed denial under § 1927 but held Rule 26(g)(3) mandates some sanction when a certification violates the rule without substantial justification, vacating that part and remanding for appropriate sanctions consideration (including non-monetary options and consideration of Kurtz’s disciplinary history).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of § 1927 sanctions was an abuse of discretion | Kurtz argued her misconduct need not result in monetary sanctions because she suffered reputational and financial loss via the settlement | Defendants argued Kurtz’s trial misconduct multiplied proceedings and warranted fee sanctions under § 1927 | Affirmed: denial not an abuse of discretion; district court reasonably weighed counterfactual outcomes and deterrence considerations |
| Whether Rule 26(g)(3) permits discretionary denial of sanctions | Kurtz implicitly asserted discretion and no sanction necessary given other consequences | Defendants argued Rule 26(g)(3) requires mandatory sanctions for certifications violating the rule without substantial justification (e.g., concealing the bankruptcy) | Reversed/vacated: Rule 26(g)(3) mandates imposition of an appropriate sanction when certification lacks substantial justification; district court must impose one |
| Scope of appropriate sanctions under Rule 26(g)(3) | Kurtz sought leniency, noting settlement and reputational consequences | Defendants sought attorneys’ fees as the necessary remedy | Held: monetary fees are not mandatory; district court may choose an appropriate sanction (including reprimand/censure) but must impose some sanction and consider Kurtz’s disciplinary history |
| Whether Kurtz’s disciplinary history affects sanction severity | Plaintiff likely minimized its relevance | Defendants argued prior discipline supports stronger sanctions | Held: Court instructed district court to consider counsel’s substantial disciplinary history when selecting an appropriate sanction under Rule 26(g)(3) |
Key Cases Cited
- Gross v. Cicero, 619 F.3d 697 (7th Cir. 2010) (court discussed counsel’s prior sanctionable conduct and struck portions of briefing)
- Gross v. Cicero, 528 F.3d 498 (7th Cir. 2008) (court imposed monetary sanctions on counsel for failure to file an opening brief promptly)