Jessica Curtis v. Norfolk Southern Railway Compa
Filing
UNPUBLISHED PER CURIAM OPINION filed. Motion disposition in opinion--denying Motion to strike [998780793-2] Originating case number: 1:05-cv-00115-MBS Copies to all parties and the district court. [998984897].. [10-1829, 11-1365]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-1829
DARRYL MCKENZIE; MORRIS LAWN AND LANDSCAPE; BENNY W.
HYDRICK; DONALD SUELL; RG, through his Guardian ad Litem
Wilber Calhoun Jr; Guardian ad Litem Wilber Calhoun, Jr; JC,
through his Guardian ad Litem Wilber Calhoun Jr; Guardian ad
Litem Wilber Calhoun, Jr; GREGORY HALL; BEVERLY JEAN ALLEN;
JOHN
ELLA
COLEMAN;
VALLEY
FAIR
BAPTIST
CHURCH;
K&B
PROPERTIES; JS, through his Guardian ad Litem Wilber Calhoun
Jr; Guardian ad Litem Wilber Calhoun, Jr; TORINA LORENZO
COLEMAN,
Plaintiffs – Appellants,
WILLIAM HALL; ROOSEVELT WALKER; DW1, through her Guardian ad
Litem
Darlene
Champagne;
Guardian
ad
Litem
Darlene
Champagne; DW2, through her Guardian ad Litem Della Mae
Jones; Guardian ad Litem Della Mae Jones,
Movants – Appellants,
and
TIMOTHY ARD; BETHLEHEM BAPTIST CHURCH OF GRANITEVILLE,
INCORPORATED; TINA BEVINGTON, individually and on behalf of
others similarly situated; JESSICA CURTIS; JAMES SPLAWN;
ELIZABETH R. CUTRIGHT, individually and on behalf of others
similarly
situated;
MIKE
WILLIAMS
CONSTRUCTION
LLC;
CHRISTINE GREEN,
Plaintiffs,
CHRISTY T. DALTON,
Petitioner,
ROBERT M. BELL; ERWIN J. LEIZERMAN; MICHAEL J. LEIZERMAN;
PATRICK J. PEROTTI; STEPHEN K. SURASKY,
Movants,
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v.
NORFOLK SOUTHERN RAILWAY COMPANY,
Defendant – Appellee,
and
NORFOLK SOUTHERN CORPORATION; JOHN DOES 1-10,
Defendants.
No. 11-1365
DARRYL MCKENZIE; MORRIS LAWN AND LANDSCAPE; TIMOTHY ARD;
BENNY W. HYDRICK; DONALD SUELL; BETHLEHEM BAPTIST CHURCH OF
GRANITEVILLE, INCORPORATED; RG, through his Guardian ad
Litem Wilber Calhoun Jr; Guardian ad Litem Wilber Calhoun,
Jr; JS, through his Guardian ad Litem Wilber Calhoun Jr;
Guardian ad Litem Wilber Calhoun, Jr; JC, through his
Guardian ad Litem Wilber Calhoun Jr; Guardian ad Litem
Wilber
Calhoun,
Jr;
GREGORY
HALL;
TINA
BEVINGTON,
individually and on behalf of others similarly situated;
JOHN ELLA COLEMAN; BEVERLY JEAN ALLEN; VALLEY FAIR BAPTIST
CHURCH; K&B PROPERTIES; JESSICA CURTIS; ELIZABETH R.
CUTRIGHT, individually and on behalf of others similarly
situated; JAMES SPLAWN; MIKE WILLIAMS CONSTRUCTION LLC;
TORINA LORENZO COLEMAN,
Plaintiffs – Appellants,
WILLIAM HALL; DW1, through her Guardian ad Litem Darlene
Champagne; Guardian ad Litem Darlene Champagne; ROOSEVELT
WALKER; DW2, through her Guardian ad Litem Della Mae Jones;
Guardian ad Litem Della Mae Jones,
Movants – Appellants,
and
CHRISTINE GREEN,
Plaintiff,
2
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CHRISTY T. DALTON,
Petitioner,
ROBERT M. BELL; ERWIN J. LEIZERMAN; MICHAEL J. LEIZERMAN;
PATRICK J. PEROTTI; STEPHEN K. SURASKY,
Movants,
v.
NORFOLK SOUTHERN RAILWAY COMPANY,
Defendant – Appellee,
and
NORFOLK SOUTHERN CORPORATION; JOHN DOES 1-10,
Defendants.
Appeals from the United States District Court for the District
of South Carolina, at Aiken.
Margaret B. Seymour, District
Judge. (1:05-cv-00115-MBS)
Argued:
September 19, 2012
Decided:
November 20, 2012
Before GREGORY, SHEDD, and AGEE, Circuit Judges.
Affirmed in part, dismissed in part, and reversed in part by
unpublished per curiam opinion.
ARGUED: Paul Allen Dominick, NEXSEN PRUET, Charleston, South
Carolina, for Appellants. Ronald K. Wray, II, GALLIVAN, WHITE &
BOYD, PA, Greenville, South Carolina, for Appellee. ON BRIEF:
Stephen P. Groves, Sr., NEXSEN PRUET, Charleston, South
Carolina; Douglas M. Schmidt, DOUGLAS SCHMIDT LAW FIRM,
Graniteville,
South
Carolina,
for
Appellants.
Thomas
E.
Vanderbloemen, GALLIVAN, WHITE & BOYD, PA, Greenville, South
Carolina, for Appellee.
3
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Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Appellants challenge the district court’s orders enjoining
their state court actions and imposing attorneys’ fees against
their counsel.
For the reasons that follow, we dismiss in part
and affirm in part the injunctions, and reverse the imposition
of attorneys’ fees.
I.
The underlying facts arise from a Norfolk Southern Railway
Company (“Norfolk Southern”) train derailment and collision that
occurred in January 2005, in Graniteville, South Carolina.
The
collision caused the release of chlorine from a ruptured train
car tank.
physical
property,
The release of the chlorine gas led to death and
injury
to
economic
individuals,
loss,
and
damage
evacuation
to
real
and
expenses.
personal
Multiple
federal court actions ensued, were consolidated, litigated, and
settled in the U.S. District Court of South Carolina.
Of import
to this appeal is the Curtis class action that covered harm
suffered by individuals and businesses located in the area close
to the derailment site.
See Curtis v. Norfolk S. Ry. Co., No.
1:05-CV-115, 2010 WL 2560679, at *1 (D.S.C. June 21, 2010).
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Affected
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class
members
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could
opt
out
settlement agreement by August 1, 2005. 1
members
had
to
mail
a
written
request
of
the
Curtis
To opt out, class
to
the
Class
Notice
Administrator, Epiq Systems (“Epiq”)--a neutral party appointed
by the district court to handle this matter.
Upon receipt of an
opt-out form, Epiq stamped the form with a barcode and datestamp indicating the receipt date.
passed,
the
district
court
After the time to opt out
approved
the
Joint
Class
Action
Settlement for the Curtis class.
In 2007, Appellants 2 sued Norfolk Southern in South Carolina
state court to recover for injuries they sustained as a result
of
the
train
derailment.
The
state
court
actions
proceeded
through the normal course of litigation until discovery.
While
discovery in state court was ongoing, Norfolk Southern filed in
the District Court of South Carolina several motions for orders
to show cause and to enjoin the pending state court actions.
1
Appellants contend that the opt-out date was extended to
September 15, 2005. However, the record supports the conclusion
that the deadline was August 1, 2005.
2
Appellants are as follows: (1) Darryl McKenzie; (2)
Morris Lawn & Landscape (“Morris Lawn”); (3) Benny W. Hydrick;
(4) Donald Suell; (5) Wilber Calhoun Jr., as guardian ad litem
for RG, JS, and JC; (6) Gregory Hall; (7) Beverly J. Allen;
(8) John E. Coleman; (9) Valley Fair Baptist Church (“Valley
Fair”);
(10)
K&B
Properties;
(11)
William
Hall;
(12) Roosevelt Walker; (13) Darlene Champagne, as guardian ad
litem for DW I; and (14) Della Mae Jones as guardian ad litem
for DW II.
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Norfolk
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Southern
argued
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that
the
Curtis
class
settlement
agreement foreclosed the state court actions.
Following
a
hearing
at
which
Appellants’
counsel,
Douglas Schmidt, was absent, the district court informed Norfolk
Southern that it would enjoin the state court actions and grant
Norfolk Southern’s request for attorneys’ fees associated with
the motions.
entered
On February 8 and 9, 2010, the district court
orders
granting
Norfolk
Southern’s
motions
for
injunctions.
The district court directed Norfolk Southern to
file
and
motions
affidavits
supporting
and
specifying
its
motions
for
attorneys’ fees request.
Subsequently,
Schmidt
filed
separate
reconsideration or new trial on behalf of all Appellants except
Walker
and
attend
the
K&B
Properties,
hearing
due
explaining
to
that
illness.
he
was
unable
Additionally,
to
Norfolk
Southern filed several motions for attorneys’ fees, specifying
the actual amounts incurred in litigating each action.
On
April
14,
reconsideration
and
2010,
the
at
a
hearing
motions
for
on
the
motions
for
fees,
the
attorneys’
district court denied the motions for reconsideration and took
the motions for attorneys’ fees under advisement.
On June 21,
2010, the district court issued an order awarding attorneys’
fees to Norfolk Southern.
pursuant
to
28
U.S.C.
The district court determined that
§ 1927,
the
7
fees
should
be
borne
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individually by Appellants’ counsel, Schmidt, because the state
court actions were filed and maintained as a result of counsel’s
errors
and
omissions.
On
July
20,
2010,
Appellants
filed
notices of appeal in this Court appealing the February 8 and 9
orders issuing the injunctions, the denial of the motions for
reconsideration, and the June 21 order awarding attorneys’ fees.
On
October
26,
2010,
pursuant
to
Federal
Rule
of
Civil
Procedure 60(b), Appellants moved the district court to vacate
or
modify
the
Specifically,
injunctions
three
on
the
grounds
Appellants--Coleman,
of
new
Hydrick,
evidence.
and
Valley
Fair--moved the district court to vacate the injunctions issued
against their state actions on the basis that Epiq mishandled
and mismanaged their forms.
Appellants also moved the court to
vacate or modify the June 21 order on attorneys’ fees on the
basis that Schmidt’s actions were not a result of bad faith.
The district court denied the motion for reconsideration, with
one exception--the court reduced the attorneys’ fees award by
the
amount
attributable
to
obtaining
the
injunction
against
Valley Fair because the court determined that Valley Fair’s optout
form
was
timely
filed,
although
8
it
was
filed
under
a
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different name.
On April 19, 2011, Appellants appealed the Rule
60(b) decision.
We consolidated the first and second appeals. 3
II.
A.
Appellants first challenge the district court’s injunctions
enjoining their state court actions.
no
jurisdiction
over
certain
We conclude that we have
untimely
filed
appeals
of
the
injunctions, and the remaining appeals are without merit.
We
address both points in turn.
3
While these appeals were pending, Appellants filed a
motion in this Court to strike objectionable portions of Norfolk
Southern’s Response Brief. As the Seventh Circuit has noted:
The Federal Rules of Appellate Procedure provide a
means to contest the accuracy of the other side’s
statement of facts:
that means is a brief (or reply
brief, if the contested statement appears in the
appellee’s brief), not a motion to strike. Motions to
strike sentences or sections out of briefs waste
everyone’s time. . . . Motions to strike words,
sentences, or sections out of briefs serve no purpose
except to aggravate the opponent--and though that may
have been the goal here, this goal is not one the
judicial system will help any litigant achieve.
Motions to strike disserve the interest of judicial
economy.
The aggravation comes at an unacceptable
cost in judicial time.
Redwood v. Dobson, 476 F.3d 462, 471 (7th Cir. 2007). In their
Reply Brief, Appellants had the opportunity to object or rebut
objectionable portions of Norfolk Southern’s Brief but failed to
do so. Hence, we deny the motion to strike.
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i.
“[T]he timely filing of a notice of appeal in a civil case
is a jurisdictional requirement.”
205, 214 (2007).
Bowles v. Russell, 551 U.S.
Federal Rule of Appellate Procedure 4(a)(1)(A)
allows parties thirty days to file an appeal after the entry of
the district court’s final judgment or order.
When a party
files a Rule 59 motion for new trial or reconsideration, or a
Rule 60 motion within 28 days after judgment, the time to file
an appeal runs from the entry of the district court’s order
disposing of such motion.
With
the
exception
Fed. R. App. P. 4(a)(4)(A).
of
the
injunction
appeals
filed
by
Coleman, Hydrick, and Valley Fair, all the other challenges to
the
injunctions
are
untimely.
Specifically,
Appellants
K&B
Properties and Walker did not move for reconsideration of the
February 8 and 9 district court orders enjoining their state
court actions.
Consequently, their appeals filed on July 20,
2010--more than five months after the injunctions issued against
their
state
dismiss
court
their
actions--are
appeals
of
time-barred.
the
Accordingly,
injunctions
for
lack
we
of
jurisdiction.
Further, the appeals of the injunctions filed by Appellants
McKenzie,
Morris
Lawn,
Suell,
Gregory
Hall,
William
Hall,
Calhoun, Allen, Champagne, and Jones are also dismissed for lack
of
jurisdiction.
Although
these
10
Appellants
moved
for
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reconsideration, their time to appeal the denial of the request
for reconsideration lapsed thirty days from the district court’s
denial of the motions on April 14, 2010.
Thus, their appeals
filed on July 20, 2010, were untimely.
Appellants contend that because the district court took the
attorneys’ fees matter under advisement, the district court’s
decision on the motions for reconsideration was not final.
disagree.
28
U.S.C
§ 1291
confers
on
courts
of
We
appeals
jurisdiction over “final” decisions of federal district courts.
A district court’s order is “final” for purposes of 28 U.S.C.
§ 1291 if it “‘ends the litigation on the merits and leaves
nothing
for
the
court
to
do
but
execute
the
judgment.’”
Carolina Power & Light Co. v. Dynegy Mktg. & Trade, 415 F.3d
354, 358 (4th Cir. 2005) (quoting Catlin v. United States, 324
U.S.
229,
233
(1945)).
“[A]n
unresolved
motion
to
assess
attorneys[’] fees as costs to the prevailing party generally
does
not
because
prevent
it
merits.”
does
a
judgment
not
call
on
into
the
merits
question
a
from
being
decision
final
on
the
Carolina Power & Light Co., 415 F.3d at 358; see Fed.
R. Civ. P. 58(e). If, however, the “substantive law requires
[attorney’s
damages,”
fees]
then
“a
to
be
proved
judgment
on
at
trial
liability
damages is not a final judgment.”
as
that
an
element
does
not
of
fix
Fed. R. Civ. P. 54(d)(2)(A);
Carolina Power & Light Co., 415 F.3d at 358.
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Here,
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Norfolk
Southern’s
Pg: 12 of 18
motion
for
attorneys’
fees
is
collateral and does not call into question the district court’s
decision to enjoin the state court actions.
The only condition
precedent to recovering attorneys’ fees is Norfolk Southern’s
successful
litigation
of
the
injunctions. 4
See
Budinich
v.
Becton Dickinson & Co., 486 U.S. 196, 198-203 (1988) (holding
that a motion for attorneys’ fees was collateral and did not
prevent the district court’s order from being a final judgment).
Thus, the district court’s denial of the motions to reconsider
the
injunctions
attorneys’ fees.
was
appealable
before
the
determination
of
Accordingly, these appeals of the injunctions
are untimely and dismissed for lack of jurisdiction.
ii.
The only injunction appeals that survive the jurisdictional
time-bar are those filed by Appellants Coleman, Hydrick, and
Valley Fair because the district court ruled on their subsequent
Rule 60(b) motion on March 29, 2011, and they timely filed their
appeals
on
April
19,
2011.
We
review
a
district
court’s
decision to enjoin state court actions for abuse of discretion.
4
The district court’s decision to set aside Norfolk
Southern’s
fees
attributable
to
Valley
Fair
upon
its
determination that Valley Fair properly opted out evinces this
point.
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In re Am. Honda Motor Co., Inc., 315 F.3d 417, 434 (4th Cir.
2003).
We
conclude
that
the
district
court
did
not
abuse
its
discretion in finding that Appellants Hydrick and Coleman failed
to
opt
out
of
the
Curtis
class
settlement.
The
record
demonstrates that Coleman submitted an opt-out form but later
participated in the settlement and received payments.
Hydrick
produced a copy of an opt-out form without a barcode and datestamp to prove receipt by Epiq, and the affidavit submitted by
Schmidt’s
office
manager
claiming
that
the
opt-out
form
was
timely submitted fails to indicate who mailed the form or that
the form was sent before the deadline.
did
not
abuse
its
discretion
in
Thus, the district court
denying
the
motion
for
reconsideration filed by Hydrick and Coleman.
Regarding Valley Fair, we read the district court’s March
29, 2011 opinion as lifting the injunction against Valley Fair.
Therefore,
Valley
Fair’s
dismissed as moot.
challenge
of
the
injunction
is
For all these reasons, the appeals of the
injunctions are dismissed in part and affirmed in part.
B.
Appellants
next
challenge
the
district
court’s
entry
attorneys’ fees against Schmidt under 28 U.S.C. § 1927.
to
addressing
the
merits
of
the
§ 1927
determine whether we have jurisdiction.
13
sanctions,
we
of
Prior
must
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i.
Federal
Rule
of
Appellate
Procedure
3(c)(1)(A)
requires
that a notice of appeal “specify the party or parties taking the
appeal by naming each one in the caption or body of the notice.”
Schmidt is not a named party in the notice of appeal of the
attorneys’ fees.
As a result, Norfolk Southern contends that we
lack jurisdiction over the appeal of the attorneys’ fees because
there is a “risk of ambiguity and confusion” as to who the
appellant is and what matter is appealed.
See Newport News
Holdings Corp. v. Virtual City Vision, Inc., 650 F.3d 423, 443
(4th Cir. 2011) cert. denied, 132 S. Ct. 575, 181 L. Ed. 2d 425
(2011).
We find that there is no ambiguity or confusion because the
attorneys’ fees were assessed individually against Schmidt, and
only Schmidt was entitled to bring the appeal of this sanction.
As
such,
we
have
jurisdiction
to
address
the
merits
of
the
appeal of attorneys’ fees.
ii.
On the merits, Appellants contend the district court erred
in
issuing
§ 1927.
We
attorneys’
review
a
fees
against
district
Schmidt
court’s
under
decision
28
U.S.C.
to
impose
sanctions pursuant to § 1927 for abuse of discretion.
v. Beorn, 896 F.2d 848, 855 (4th Cir. 1990).
14
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Pursuant to § 1927, “Any attorney . . . who so multiplies
the proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs,
expenses,
and
attorneys’
such conduct.”
fees
reasonably
incurred
because
of
We have repeatedly stated that “[b]ad faith on
the part of the attorney is a precondition to imposing fees
under § 1927.”
E.E.O.C. v. Great Steaks, Inc., 667 F.3d 510,
522 (4th Cir. 2012) (citing Chaudhry v. Gallerizzo, 174 F.3d
394, 411 n.14 (4th Cir. 1999); Brubaker v. City of Richmond, 943
F.2d 1363, 1382 n. 25 (4th Cir. 1991).
Relying on Sanford v. Virginia, 689 F. Supp. 2d 802 (E.D.
Va.
2010),
Norfolk
Southern
contends
require a finding of bad faith.
that
§ 1927
does
not
Sanford discusses our line of
cases which clearly state the proposition that bad faith is a
precondition to sanctions under § 1927.
808.
689 F. Supp. 2d at 806-
Sanford asserts, however, that our decisions merely state
this proposition in dicta because a finding of bad faith was not
necessary
to
reach
disagree.
In
Great
our
conclusions
Steaks,
our
most
in
those
recent
cases.
decision
Id.
on
We
this
issue decided after Sanford, we restated the proposition that
bad
faith
is
required
for
§ 1927
sanctions
and
affirmed
the
district court’s denial of the defendant’s motion for attorneys’
fees where the district court expressly found that the plaintiff
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had not acted in bad faith.
this
Circuit
requires
a
Pg: 16 of 18
667 F.3d at 522-23. 5
finding
of
bad
faith
Accordingly,
prior
to
the
imposition of sanctions pursuant to § 1927.
Here,
in
awarding
attorneys’
fees,
the
district
court
stated:
having observed Plaintiff’s counsel and judged his
credibility, and having listened to his arguments in
justification for his actions, finds that Plaintiffs’
counsel’s errors and omissions are the result of
inefficiency and lack of competence in dealing with an
5
We recognize that our sister circuits have come to
differing conclusions on whether bad faith is a precondition to
imposing sanction under § 1927. The First, Fifth, Sixth,
Seventh, Eight, Tenth, and Eleventh Circuits have found bad
faith is not a predicate to imposing § 1927 sanctions.
See
Rentz v. Dynasty Apparel Indus., Inc., 556 F.3d 389, 396 (6th
Cir. 2009); Hamilton v. Boise Cascade Exp., 519 F.3d 1197, 1202
(10th Cir. 2008); Amlong & Amlong, P.A. v. Denny’s, Inc., 500
F.3d 1230, 1241 (11th Cir. 2007); Clark v. United Parcel Serv.,
Inc., 460 F.3d 1004, 1011 (8th Cir. 2006); Claiborne v. Wisdom,
414 F.3d 715, 721 (7th Cir. 2005); Edwards v. Gen. Motors Corp.,
153 F.3d 242, 246 (5th Cir. 1998); Cruz v. Savage, 896 F.2d 626,
631–32 (1st Cir. 1990). The Second and Third Circuits have held
that bad faith is necessary to impose sanctions under § 1927.
See Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986);
Baker Indus., Inc. v. Cerberus Ltd., 764 F.2d 204, 209 (3d Cir.
1985).
The Ninth Circuit’s case law is unclear on this issue,
see In re Girardi, 611 F.3d 1027, 1061 (9th Cir. 2010), and the
D.C. Circuit has not decided this issue, see LaPrade v. Kidder
Peabody & Co., Inc., 146 F.3d 899, 905 (D.C. Cir. 1998).
Recognizing this split in authorities, we are nonetheless
bound by our precedent which explicitly states bad faith is a
precondition to imposing sanctions under § 1927.
United States
v. Chong, 285 F.3d 343, 346 (4th Cir. 2002) (“It is well settled
that a panel of this [C]ourt cannot overrule, explicitly or
implicitly, the precedent set by a prior panel of this [C]ourt.
Only the Supreme Court or this [C]ourt sitting en banc can do
that.”) (citation and quotation marks omitted)).
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excessive number of clients, and not the result of bad
faith or willful misconduct.
Curtis v. Norfolk S. Ry. Co., No. 1:05-CV-115, 2010 WL 2662269,
at
*3
(D.S.C.
June
21,
2010)
(emphasis
added).
In
denying
Appellants’ Rule 60(b) motion for relief from attorneys’ fees,
the district court stated:
Certainly[,] the court was loath to reach a conclusion
that [Schmidt] intentionally and with improper motive
disregarded evidence of res judicata presented by
Defendant with respect to the state court proceedings
at issue. It is the court’s expectation that all
counsel appearing before the court will comport
themselves
in
accordance
with
the
rules
of
professional conduct, and the court was willing to
give [Schmidt] the benefit of the doubt by not making
a finding of bad faith.
Nevertheless, sanctions are
appropriate.
Counsel engaged in reckless behavior
that
demonstrated
a
conscious
disregard
for
a
foreseeable
risk
that
proceedings
would
be
unreasonably and vexatiously multiplied.
(J.A. 1968-69 (emphasis added).)
We note that at the time of
its decision, the district court did not have the benefit of
Great Steaks.
Yet, our precedent on the necessity of a bad
faith finding prior to the imposition of § 1927 sanctions is
clear.
refrained
Because the district court expressly and specifically
from
finding
bad
attorneys’ fees on Schmidt.
faith,
it
was
error
to
impose
Accordingly, the district court’s
order imposing attorneys’ fees is reversed.
17
Appeal: 10-1829
Doc: 84
Filed: 11/20/2012
Pg: 18 of 18
III.
For
the
reasons
stated
above,
we
dismiss
affirm in part, the appeals of the injunctions.
in
part,
and
Additionally,
we reverse the award of attorneys’ fees issued against Schmidt.
AFFIRMED IN PART,
DISMISSED IN PART,
AND REVERSED IN PART
18
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