Timothy Blixseth v. Yellowstone Mountain Club, LLC, 796 F.3d 1004

Background

Timothy Blixseth, dissatisfied with adverse rulings in the Yellowstone Mountain Club bankruptcy, filed a recusal motion accusing the bankruptcy judge of extensive misconduct; the judge issued a 47‑page opinion finding the accusations meritless.
The district court and this Court affirmed the bankruptcy court, characterizing the recusal effort as an attempt to evade an unfavorable decision by attacking the judge.
The Ninth Circuit issued an order to show cause why Blixseth and his counsel should not be sanctioned for bringing a frivolous appeal.
Michael Flynn (lead appellate attorney) persisted in relying on facts outside the record, proffering disputed documents, and advancing conspiracy‑style accusations without credible evidence.
Four other attorneys (Fox, Conant, Ferrigno, Stillman) had varying involvement; they distanced themselves from Flynn and Blixseth but had allowed their names on briefs containing the allegations.
The panel concluded sanctions were appropriate for Blixseth and Flynn, but declined to sanction the other attorneys after considering their responses and lack of bad faith.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the appeal was frivolous such that Rule 38 sanctions are warranted	Blixseth contends the recusal claims had arguable merit showing judicial bias	Appellees argue the recusal motion and appeal were wholly without merit and merely attacks on adverse rulings	Court held the appeal was frivolous and awarded Rule 38 sanctions against Blixseth
Whether Flynn should be sanctioned under 28 U.S.C. § 1927 for multiplying proceedings	Flynn argues his arguments had merit and relied on record evidence	Appellees argue Flynn knowingly/recklessly advanced frivolous claims, used facts outside the record, and breached candor obligations	Court found subjective bad faith (knowingly/recklessly frivolous conduct) and imposed § 1927 sanctions on Flynn
Whether other counsel (Fox, Conant, Ferrigno, Stillman) should be sanctioned	These attorneys argued they acted in good faith, had limited roles, and some withdrew or criticized Flynn’s approach	Appellees argued all counsel allowed frivolous, inflammatory arguments on filed briefs	Court exercised discretion not to sanction them, finding insufficient evidence of bad faith and accepting their corrective responses
Whether evidentiary or Rule 46 hearings were required on sanctions or authenticity issues	Blixseth/Flynn sought hearings and evidentiary proceedings regarding disputed emails and Rule 46 process	Appellees contended hearings were unnecessary and disputed evidence irrelevant to sanction determination	Court denied requests for Rule 46 and evidentiary hearings as unnecessary; authenticity disputes did not excuse failure to disclose contested provenance

Key Cases Cited

Glanzman v. Uniroyal, Inc., 892 F.2d 58 (9th Cir. 1989) (Rule 38 sanctions appropriate where appeal is frivolous)
New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298 (9th Cir. 1989) (§ 1927 requires finding of subjective bad faith)
In re Becraft, 885 F.2d 547 (9th Cir. 1989) (bad faith not required for Rule 38 but may aggravate sanctions)
Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (federal courts’ inherent power to sanction abusive conduct)
Lasar v. Ford Motor Co., 399 F.3d 1101 (9th Cir. 2005) (discussing scope of sanctions and court authority)
United States v. Associated Convalescent Enters., Inc., 766 F.2d 1342 (9th Cir. 1985) (duty of candor and good faith to the judiciary supports sanctions)
Blixseth v. Yellowstone Mountain Club, LLC, 742 F.3d 1215 (9th Cir. 2014) (prior opinion finding recusal claims meritless and describing appellants’ conduct)