Timothy Blixseth v. Yellowstone Mountain Club, LLC
854 F.3d 626
| 9th Cir. | 2017Background
- Appellant Timothy L. Blixseth and his counsel Michael J. Flynn appealed; the Ninth Circuit found the appeal frivolous and ordered sanctions: awards of attorneys’ fees and costs under Fed. R. App. P. 38 (against Blixseth and Flynn) and 28 U.S.C. § 1927 (against Flynn), plus $500 damages each to the Clerk.
- The panel referred determination of specific fee amounts to the Appellate Commissioner, who issued orders awarding specified sums to multiple appellees (joint-and-several and individual allocations against Blixseth and Flynn).
- Flynn moved for reconsideration of the Commissioner’s orders and objected to awarding fees for work litigating the sanctions (i.e., fees-on-fees) for joint statements responding to the court’s order to show cause.
- The panel denied Flynn’s motions, declined recusal/new panel/ criminal referral/abeyance requests, and refused en banc reconsideration.
- The court explained that Rule 38 authorizes “just damages” for defending against a frivolous appeal but, as a damages-type provision, does not permit recovery of fees incurred in litigating the imposition of sanctions; by contrast, § 1927 is a fee-shifting provision and may include fees-on-fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fees incurred litigating sanctions (fees-on-fees) can be awarded under Rule 38 | Flynn: Rule 38 cannot include fees spent litigating the sanctions proceeding | Appellees: Fees for work defending the appeal and related proceedings should be recoverable | Held: Rule 38 is a damages provision; only direct fees/costs defending the frivolous appeal are awardable, not fees-on-fees |
| Whether fees-on-fees can be awarded under 28 U.S.C. § 1927 | Flynn: § 1927 should not cover fees spent obtaining sanctions | Appellees: § 1927 permits recovery of costs, expenses, and attorneys’ fees ‘‘incurred because of such conduct,’’ including fees-on-fees | Held: § 1927 is a fee-shifting provision; it allows fees-on-fees for work incurred obtaining sanctions against counsel |
| Whether the Appellate Commissioner correctly apportioned and awarded the specific fee amounts | Flynn: Commissioner erred by awarding fees for the joint statements relating to the show-cause responses | Appellees: Award reflects reasonable fees incurred defending the appeal and responding to Flynn’s conduct | Held: Commissioner correctly declined Rule 38 fees-on-fees but correctly awarded § 1927 fees against Flynn for preparing statements about his response; awards affirmed |
| Whether additional extraordinary relief should issue (recusal, criminal referral, abeyance, en banc) | Flynn sought recusal/new panel/criminal referral/abeyance and en banc reconsideration | Appellees opposed further delay or new proceedings | Held: All such requests denied; no further filings in the closed appeal absent court order |
Key Cases Cited
- Haeger v. Goodyear Tire & Rubber Co., 813 F.3d 1233 (9th Cir. 2016) (discussing scope of fees recoverable as sanctions under court’s inherent power)
- In re S. Cal. Sunbelt Developers, Inc., 608 F.3d 456 (9th Cir. 2010) (distinguishing fee-shifting provisions from sanctions/damages provisions; permitting fees-on-fees under fee-shifting statutes)
- Business Guides, Inc. v. Chromatic Commc’ns Enters., Inc., 498 U.S. 533 (1991) (distinguishing fee-shifting statutes from sanctions statutes)
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (Rule 11 limits and the principle that sanctions may not include costs beyond those directly caused by the improper filing)
- Comm’r, INS v. Jean, 496 U.S. 154 (1990) (treating fee-shifting awards as covering the litigation as a whole)
- Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010) (treatment of § 362(k) prior to later en banc revision)
- In re Schwartz-Tallard, 803 F.3d 1095 (9th Cir. 2015) (en banc change in treatment of § 362(k) as fee-shifting)
- Lyddon v. Geothermal Props., Inc., 996 F.2d 212 (9th Cir. 1993) (declining Rule 38 recovery for fees related to computation or pursuit of sanctions)
- Lockary v. Kayfetz, 974 F.2d 1166 (9th Cir. 1992) (limiting sanctions to direct costs of opposing offending pleading)
- Norelus v. Denny’s, Inc., 628 F.3d 1270 (11th Cir. 2010) (holding § 1927 permits recovery of fees incurred obtaining sanctions)
- Haynes v. City & County of San Francisco, 688 F.3d 984 (9th Cir. 2012) (purpose of § 1927 is compensation for victims of attorney misconduct)
- Lewis v. Brown & Root, Inc., 711 F.2d 1287 (5th Cir. 1983) (§ 1927-like relief can shift the entire defense burden when proceedings were unwarranted)
- Sun-Tek Indus. v. Kennedy Sky-Lites, Inc., 865 F.2d 1254 (Fed. Cir. 1989) (Rule 38 damages limited to fees actually incurred defending frivolous appeal)