Smith Land Company, Inc v. City of Fairlawn, Ohio
5:21-cv-01848
| N.D. Ohio | May 14, 2024Background
- Plaintiffs, Smith Land Company and Robert G. Smith, owned property in Fairlawn, Ohio, which was subdivided and some parts designated as wetlands.
- Defendants, Herhold and Rassavong, purchased a parcel from Plaintiffs, later learning that it was not buildable without EPA permission due to its wetland status.
- In state court, Defendants sued Plaintiffs for breach of contract and fraud, alleging non-disclosure regarding the property's fill dirt and buildability; Defendants prevailed in a second trial.
- Plaintiffs subsequently filed suit in federal court, raising civil rights, conspiracy, takings, and trespass claims based on the property’s alleged mishandling and conduct by the Defendants and public entities.
- The federal court dismissed all claims against Defendants, primarily on res judicata grounds, and closed the case.
- Defendants then moved for attorneys’ fees against Plaintiffs’ counsel under 28 U.S.C. § 1927, alleging frivolous and vexatious litigation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to fees under 28 U.S.C. § 1927 | Motion lacks fee documentation; no vexatious actions after filing; only § 1927 invoked | Counsel knew claims were frivolous and barred; suit unnecessarily multiplied proceedings | Denied; filing alone does not suffice, conduct not objectively unreasonable |
| Compliance with Rule 54(d) for fee motions | Defendants did not meet Fed. R. Civ. P. 54(d)(2)(B)(iii) requirements | Requirements don’t apply because fees are sought under § 1927 as a sanction | Requirements inapplicable; not grounds for denial |
| Appropriateness of sanctions for res judicata | Claims had arguable basis that res judicata did not apply | Claims were clearly precluded and thus obviously frivolous | Argument not wholly unreasonable or frivolous; no sanction warranted |
| Court’s inherent power to sanction | No bad faith, no oppressive reasons for suit | Plaintiffs’ counsel enabled meritless litigation, justifying sanctions also under court's inherent authority | No evidence of bad faith conduct; inherent power sanctions not justified |
Key Cases Cited
- Salkil v. Mount Sterling Twp. Police Dep't, 458 F.3d 520 (objective standard for § 1927 sanctions; no subjective bad faith required)
- Ridder v. City of Springfield, 109 F.3d 288 (attorney’s fees may be sanctioned if claim is frivolous even absent bad faith)
- Holmes v. City of Massillon, 78 F.3d 1041 (sanctions under § 1927 require conduct objectively falling short of duties to the court)
- Chambers v. NASCO, Inc., 501 U.S. 32 (federal court may impose fee sanctions under its inherent authority for bad faith litigation)
- First Bank of Marietta v. Hartford Underwriters Ins. Co., 307 F.3d 501 (inherent authority for sanctions applies only if bad faith is found)