Friday, April 13, 2007

Third Circuit Discusses Appealability of Sanction -- Whether Court's Statement Constitutes a Sanction

Per Bowers v. National Collegiate Atheltic Association, 475 F.3d 524 (3rd Cir. Feb. 1, 2007):

As a threshold matter, we must determine whether attorneys for Bowers have standing to appeal the sanctions order in this case. Standing is the “irreducible constitutional minimum” necessary to make a justiciable “case” or “controversy” under Article III, § 2. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The sanctions order in this case clearly granted Temple's sanctions motion against Bowers, but did not impose any additional monetary or disciplinary sanctions on Bowers' attorneys beyond factual findings and language in the actual order that the conduct of those attorneys merited sanctions. Defendants argue that because the District Court did not impose any monetary penalty directly against counsel, but rather limited the sanction to precluding plaintiff from introducing and challenging certain evidence that was withheld under Rule 37, attorneys for Bowers have not suffered a cognizable “injury” to establish Article III standing. Id.

We have previously stated that “an attorney subjected to a sanction may appeal.” Bartels v. Sports Arena Employees Local 137, 838 F.2d 101, 104 (3d Cir.1988). However, a review of the case law on this question reveals some disagreement among the courts of appeals as to whether and when a court's statement in a judicial opinion amounts to a sanction “affecting an attorney's professional reputation” and thus “impos[ing] a legally sufficient injury to support appellate jurisdiction.” Butler v. Biocore Med. Techs., Inc., 348 F.3d 1163, 1167-68 (10th Cir.2003). Most courts agree that mere judicial criticism is insufficient to constitute a sanction. United States v. Talao, 222 F.3d 1133, 1138 (9th Cir.2000); Williams v. United States, 156 F.3d 86, 90 (1st Cir.1998); Bolte v. Home Ins. Co., 744 F.2d 572, 573 (7th Cir.1984). In addition, courts are in near complete agreement that an order rising to the level of a public reprimand is a sanction. See Bank of Nova Scotia v. United States, 487 U.S. 250, 263, 108 S.Ct. 2369, 101 L.Ed.2d 228 (1988) (noting ability to issue a formal reprimand of attorney for violating Federal Rule of Criminal Procedure); Talao, 222 F.3d at 1138 (equating formal finding with public reprimand and sanction); Williams, 156 F.3d at 91, 92 (“Words alone may suffice [as sanctions] if they are expressly identified as a reprimand.”); Walker v. City of Mesquite, Tx., 129 F.3d 831, 832 (5th Cir.1997) (finding appealable sanction where attorneys were “reprimanded sternly and found guilty of blatant misconduct”); United States v. Horn, 29 F.3d 754, 758 n. 1 (1st Cir.1994); see also Fed.R.Civ.P. 11(c)(2) (providing, inter alia, that sanctions may consist of “directives of a nonmonetary nature”). The reason for the courts' consensus is that a public reprimand carries with it the formal censure of the court and may, in many cases, have more of an adverse effect upon an attorney than a minimal monetary sanction. See, e.g., Precision Specialty Metals, Inc. v. United States, 315 F.3d 1346, 1353 (Fed.Cir.2003). Only the Seventh Circuit has clearly held that a public reprimand not accompanied by a monetary sanction is non-appealable. Clark Equip. Co. v. Lift Parts Mfg. Co., Inc., 972 F.2d 817, 820 (7th Cir.1992) (“[W]e have already decided that an attorney may not appeal from an order that finds misconduct but does not result in monetary liability, despite the potential reputational effects.”).

There is more substantial disagreement among the courts, however, as to whether a factual finding in an opinion that an attorney has engaged in improper conduct is in itself a sanction, or whether the court must enter an explicit order that the conduct is sanctionable. Compare Precision Specialty Metals, Inc., 315 F.3d at 1353 (stating fact that reprimand not explicitly contained in separate order was not determinative in whether the court has entered a formal reprimand), and Walker, 129 F.3d at 832 (factual finding of misconduct alone sufficient to constitute sanction), and Sullivan v. Comm. on Admissions and Grievances, 395 F.2d 954, 956 (D.C.Cir.1967) (same), with Weissman v. Quail Lodge, Inc., 179 F.3d 1194, 1199 (9th Cir.1999) (stating that a factual finding in an opinion that “merely serves to justify the imposition of a sanction is not an independent sanction”); Williams, 156 F.3d at 90 (same); The Baker Group, L.C. v. Burlington Northern and Santa Fe Ry. Co., 451 F.3d 484 (8th Cir.2006). We need not examine that dichotomy in great detail in this case because both the order and opinion issued by the District Court in this case explicitly stated that the Court was sanctioning not only Bowers but also her attorneys.

We find the weight of authority supports a finding that the repeated, explicit public reprimand of the attorneys in this case constitutes an appealable sanction. See Young v. City of Providence, 404 F.3d 33, 38 (1st Cir.2005) (finding a sanction where the district court explicitly imposed “the sanction of public reprimand”); Precision Specialty Metals, Inc., 315 F.3d at 1352-53. In similar cases, courts have concluded that express findings that a party violated a particular rule of civil procedure constituted a sanction. See Young, 404 F.3d at 38 (finding sanction where the district court stated that attorney violated Rule 11); Precision Specialty Metals, Inc., 315 F.3d at 1352-53 (same); Butler, 348 F.3d at 1168 (explicit finding that attorney violated state ethical rule was a sanction); Talao, 222 F.3d at 1138 (same); Walker, 129 F.3d at 832 (same). The order here clearly rose above mere judicial criticism. The District Court concluded not only that the attorneys violated Rule 26(e), but also entered a public reprimand by explicitly granting the sanctions motion against Bowers' attorneys. For these reasons, we agree with attorneys for Bowers that the sanctions order in this case is an appealable order.


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