Ayala v. Gabriel Building Supply et al
Filing
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ORDER AND REASONS granting 50 MOTION for Sanctions filed by Mr. Heater, Inc. The parties are ordered to the Magistrate Judge assigned to this case for the purpose of determining the quantum of costs and attorney's fees associated with the Instant Motion. Signed by Judge Jane Triche Milazzo. (NEF: Judge Chasez)(ecm, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PATRICIA HAMAKER AYALA
CIVIL ACTION
VERSUS
NO: 12‐577
GABRIEL BUILDING SUPPLY, ET AL.
SECTION: “H”(5)
ORDER AND REASONS
On November 7, 2012, the Court ordered Plaintiff’s Counsel (Fred E. Salley) to show cause
why he should not be sanctioned and assessed costs and attorney’s fees associated with Defendant
Mr. Heater, Inc.’s (“Mr. Heater”) Motion to Enjoin State Court Proceedings Pursuant to the All Writs
Act and for Sanctions (“Instant Motion”). (See R. Docs. 60; 50.) The Court is now ready to rule and
hereby assesses against Plaintiff’s Counsel attorney’s fees and costs incurred by Mr. Heater in
bringing the Instant Motion pursuant to 28 U.S.C. § 1927. The parties are ordered to the
Magistrate Judge assigned to this case for the purpose of determining quantum.
BACKGROUND
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The facts of this case are summarized in detail in this Court’s Order of November 7, 2012
(R. Doc. 61) in which the Court granted in part and denied in part the Instant Motion (R. Doc. 50).
The Court ordered Plaintiff’s Counsel to return for a hearing before this Court on December 5,
2012, at 10:00 a.m. to show cause why sanctions should not be imposed under 28 U.S.C. § 1927.
(R. Doc. 61.) The Court further required Plaintiff’s Counsel to submit a written memorandum in
support of his position no later than November 20, 2012. (Id.) Plaintiff’s Counsel filed the
memorandum on November 22, 2012.1 (R. Doc. 68.) The Court held a show‐cause hearing on
December 5, 2012. (R. Doc. 79.)
LEGAL STANDARD
28 U.S.C. § 1927 permits a federal court to levy “excess costs, expenses, and attorney’s
fees” against “[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably
and vexatiously.” 28 U.S.C. § 1927. The Fifth Circuit has characterized awards under Section
1927 as “penal in nature.” Browning v. Kramer, M.D., 931 F.2d 340, 344 (5th Cir. 1991). Thus,
Section 1927 is “strictly construed, and sanctions may not be imposed for mere negligence on
the part of counsel.” Baulch v. Johns, 70 F.2d 813, 817 (5th Cir. 1995). Rather, “the offending
attorney's multiplication of the proceedings must be both ‘unreasonable’ and ‘vexatious.’” Fed.
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The Court orally ordered that Plaintiff’s Counsel file a written memorandum no later than
fifteen days from November 7, 2012, the date of oral argument. The minute entry and Order and
Reasons issued that same day, however, required that the memorandum be submitted by November 20,
2012. The Court is aware of the potential for confusion created by these conflicting dates and will
therefore consider Plaintiff Counsel’s memorandum as if it were filed timely.
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Deposit Ins. Corp. v. Conner, 20 F.3d 1376, 1384 (5th Cir. 1376) (quoting 28 U.S.C. § 1927). The
Fifth Circuit requires evidence that “an attorney has acted in bad faith, with improper motive,
or with a reckless disregard of the duty owed to the court.” Baulch, 70 F.2d at 817; see also
Procter & Gamble Co. v. Amway Corp., 280 F.3d 519, 525 (5th Cir. 2002); Edwards v. Gen.
Motors Corp, 153 F.2d 242, 246 (5th Cir. 1998). The purpose of sanctioning counsel under
Section 1927 is to deter “frivolous appeals and arguments” which “waste scarce judicial
resources and increase legal fees charged to the parties.” Baulch, 70 F.2d at 817. This Court is
“mindful that [Section] 1927 sanctions should not be accessed without fair notice and without
giving the attorney an opportunity to respond.” Id.; see also Roadway Express, Inc. v. Piper, 447
U.S. 752, 767 (finding that “attorneys fees should not be assessed lightly or without fair notice
and an opportunity for a hearing on the record”).
LAW AND ANALYSIS
For the following reasons, the Court finds that sanctions are appropriate pursuant to 28
U.S.C. § 1927. Accordingly, Plaintiff’s Counsel is assessed costs and attorney’s fees incurred by
Mr. Heater in bringing the Instant Motion.
Plaintiff’s Counsel contends that he did not intend to challenge or subvert this Court’s
jurisdiction by filing claims in state court against Mr. Heater virtually identical to those currently
pending before this Court. (R. Doc. 53.) He argues that he was “forced” to assert claims against
Mr. Heater so as not to lose them to prescription and to guard against a possible charge of legal
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malpractice. (Id.); (see also R. Doc. 68). Plaintiff’s Counsel makes much of the fact that Mr.
Heater was brought into the state court action as a third‐party defendant by Defendant Gabriel
Building Supply (“Gabriel”). This third‐party demand apparently “caused counsel to panic and
believe that he might need to close pleadings in state court to doubly ensure all of Plaintiff’s
rights.” (R. Doc. 68.) Plaintiff’s Counsel insists that he prefers to litigate in federal court and
looks forward to his upcoming trial date. (Id.) Therefore, any attempt to subvert federal court
jurisdiction would “obviously” be “self‐defeating.” (Id.)
Plaintiff’s Counsel’s arguments are specious at best. In Louisiana, tort actions are
subject to a liberative prescription of one year. La. Civ. Code art. 3462. “The filing of an action
in a court of competent jurisdiction and proper venue within the one year prescriptive period
interrupts prescription for as long as the action is pending.” Luckett v. Delta Airlines, Inc., 171
F.3d 295, 299 (5th Cir. 1999) (citing La Civ. Code art. 3463). Therefore, Plaintiff’s Counsel
interrupted prescription by filing suit in state court—which was subsequently removed to this
Court—against Mr. Heater. Since this action is still pending, prescription against Mr. Heater
remains interrupted. Thus, Plaintiff is in no danger whatsoever of losing her claims against Mr.
Heater to prescription.
Plaintiff Counsel’s argument that it was necessary to assert claims against Mr. Heater in
the state court action in order to “close pleadings” and “doubly ensure all of Plaintiff’s rights” is
similarly unavailing and nonsensical. As discussed in this Court’s November 7 Order, Plaintiff’s
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Claims against Mr. Heater in the state court action are virtually identical to those currently
pending. (R. Doc. 61.) Thus, Plaintiff’s rights against Mr. Heater are adequately protected in
this Court. To suggest otherwise is to directly challenge the competency of this Court to fully
and fairly adjudicate Plaintiff’s claims.
Plaintiff’s Counsel’s actions evince a “reckless disregard of the duty owed to the court.”
Cf. Baulch, 70 F.2d at 817. By filing duplicative claims in state court, Plaintiff’s counsel wasted
the time and resources of both opposing counsel and this Court. Consequently, the Court will
impose sanctions under 28 U.S.C. § 1927.
CONCLUSION
For the reasons previously stated, sanctions are imposed against Plaintiff’s Counsel
under 28 U.S.C. § 1927. The parties are hereby ordered to the Magistrate Judge assigned to
this case to determine the quantum of costs and attorney’s fees associated with the Instant
Motion.
New Orleans, Louisiana, on this 5th day of December, 2012.
_________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
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