Dube v. Eagle Global Logistics

BY THE COURT: Before us is the motion of Defendant-Appellee Eagle Global Logistics (“Eagle”) to impose sanctions on Plaintiffs-Appellants, their counsel (principally, the “Provost Umphrey” law firm 1 ), or both. Eagle invites us to rely on Rule 38 of the Federal Rules of Appellate Procedure, as well as 28 U.S.C. § 1927 and our inherent powers. We choose to decide this matter under Rule 38 only, and impose sanctions against Provost Umphrey thereunder. Eagle’s request for sanctions is predicated on our previous rejection of Provost Umphrey’s appellate briefs as noncompli-ant and on that firm’s subsequent voluntary dismissal of its clients’ consolidated appeals. We rejected Provost Umphrey’s briefs as noncompliant because, inter alid) they contained “specious arguments” and *195 had “grossly distorted” the record through the use of ellipses to misrepresent the statements and orders of the district court.. Under Rule 38, a federal appellate court, following a motion by counsel, may impose “just damages” and award single or double costs to an appellee if the court determines that an appeal is frivolous. In construing Rule 38, federal courts define a “frivolous appeal” in terms of either the legal merits of the case or the acts and methods of appellate counsel. 2 With respect to the latter, we have followed the lead of other circuits 3 that have sanctioned attorneys for filing briefs that were “bent on misleading the court” 4 and for advancing arguments that fell “below minimum professional standards.” 5 Courts of Appeal have also sanctioned attorneys under Rule 38 for breaches of professional conduct essentially identical to those committed by Provost Umphrey in these consolidated appeals, i.e., misrepresenting the record and using ellipses to misrepresent statements out of context. 6 Inasmuch as Provost Umphrey elected to dismiss its clients’ appeals and exhibited a degree of contrition following our initial ruling in this matter, we deem sanctions in an amount equal to the attorneys’ fees and costs actually incurred by Eagle in the appeal of these actions to be sufficient. In cases such as this one, however, appellants generally are not held accountable for the offending tactics employed by their attorneys. Thus, appellate counsel alone are frequently held personally liable for any sanctions imposed by the court. 7 IT IS ORDERED, therefore, that Eagle’s motion for sanctions against Provost Umphrey under Rule 38 is GRANTED, in the amount of Eagle’s attorneys’: fees and costs actually incurred ($71,117.75). IT IS FURTHER ORDERED that Eagle’s request for sanctions against Plaintiffs-Appellants and for other sanctions against their counsel is DENIED. Footnotes [1] Three attorneys not formally associated with Provost Umphrey signed the offending appellate briefs: Jonathan S. Massey, Daniel Gutt-man, and Marian S. Rosen. These attorneys are held jointly and severally liable with Provost Umphrey for the sanctions imposed hereunder. [2] The Federal Circuit casts this distinction in terms of appeals that are “frivolous as filed” versus appeals that are "frivolous as argued.” Finch v. Hughes Aircraft Co., 926 F.2d 1574 (Fed.Cir.1991). [3] Coghlan v. Starkey, 852 F.2d 806, 816 n. 19 (5th Cir.1988). [4] Herzfeld & Stern v. Blair, 769 F.2d 645, 647 (10th Cir.1985). [5] SEC v. Suter, 832 F.2d 988, 991 (7th Cir.1987). [6] Ortiz Villafane v. Segarra, 797 F.2d 1, 2 (1st Cir.1986) (sanctioning attorney for "blatant misrepresentations [of the record] in appellant’s brief’); Paulik v. Rizkalla, 796 F.2d 456, 460 (Fed.Cir.1986) (sanctioning attorney for using ellipses to create "flagrant misrepresentations of the record, [which] was a gross violation of the high standards of professional conduct that we expect and demand of members of our bar”). [7] Coghlan, 852 F.2d at 818. See also Hilmon Co. (V.I.) Inc. v. Hyatt Int’l, 899 F.2d 250, 253-54 (3d Cir.1990) (citing circuits that have interpreted Rule 38 as permitting a court to hold an attorney personally liable for sanctions imposed thereunder).