958 F.3d 396
5th Cir.2020Background
- Conrad, an employee subject to an arbitration agreement, obtained a clause-construction award from the arbitrator permitting class arbitration under the FLSA.
- Sun Coast challenged the arbitrator’s award in district court and appealed to the Fifth Circuit.
- Sun Coast’s appellate theory conflicted with the arbitration agreement’s plain language and had not been presented to the arbitrator or the district court, raising forfeiture concerns.
- Sun Coast cited a Third Circuit Opalinski case to the arbitrator but relied on the wrong Opalinski decision and failed to disclose that distinction.
- After the panel determined oral argument was unnecessary and denied Sun Coast’s request for it, Conrad moved for sanctions under Fed. R. App. P. 38 for a frivolous appeal.
- The Fifth Circuit denied Conrad’s Rule 38 motion, concluding the record showed incompetence or poor litigation choices rather than bad faith or malice, and exercised discretion not to award sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal was frivolous such that Rule 38 sanctions are warranted | Conrad: Appeal frivolous; seek damages and costs under Rule 38 | Sun Coast: Appeal arguable; not frivolous | Denied; court found arguments meritless but attributable to incompetence, not malice, and declined sanctions on discretional grounds |
| Whether Sun Coast forfeited the appellate argument by failing to present it earlier | Conrad: Sun Coast forfeited by not raising the issue to arbitrator or district court | Sun Coast: Claimed it preserved the issue via citation to Opalinski to the arbitrator | Held forfeited as a record matter; court characterized Sun Coast’s reading of the record as poor but did not impose sanctions |
| Whether Sun Coast misrepresented its reliance on Opalinski | Conrad: Sun Coast cited the wrong Opalinski and failed to disclose the distinction | Sun Coast: Implicitly treated the citation as adequate; did not disclose the two Opalinski decisions | Court found Sun Coast cited the wrong decision and “badly misread” the record; treated as incompetence rather than bad faith |
| Whether oral argument was warranted | Conrad: Oral argument unnecessary; part of dilatory tactics | Sun Coast: Argued oral argument is normal and necessary | Court denied oral argument; stated the motion misunderstood appellate practice and oral argument is not the norm |
Key Cases Cited
- Sun Coast Res., Inc. v. Conrad, 956 F.3d 335 (5th Cir. 2020) (Fifth Circuit opinion addressing appeal, forfeiture, oral-argument motion, and Rule 38 request)
- DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015) (discussing arbitration’s potential to advantage powerful parties; cited for context)
- Coghlan v. Starkey, 852 F.2d 806 (5th Cir. 1988) (defining frivolous appeals and Rule 38 sanction standards)
- Hill v. Norfolk & W. Ry. Co., 814 F.2d 1192 (7th Cir. 1987) (noting Rule 38 may sanction inadvertent as well as intentional misconduct)
- Gurule v. Land Guardian, Inc., 912 F.3d 252 (5th Cir. 2018) (discussing attorney-driven litigation churning)