No Finding of Bad Faith Dooms Sanction Order
Though the underlying matter ultimately settled, defendant’s counsel appealed the district court’s sanction order. Counsel for defendant argued that the district court “abused its discretion” because “it did not make any finding of bath faith” and “misconstrued 28 U.S.C. § 1746.”
Applying an abuse of discretion standard of review, the Fifth Circuit agreed. It found that “[i]n order to impose sanctions against an attorney under its inherent power, a court must make a specific finding that the attorney acted in bad faith.” However, no such finding of “bad faith” had been found by the district court prior to imposing sanctions against the attorneys for the parties. The appellate court further held that the defense counsel’s failure to file an affidavit was neither an “error” nor was it “bad faith,” since defense counsel had complied with the district court’s order under federal law.
Indeed, the court of appeals found that 28 U.S.C. § 1746, “by its very terms permits counsel to file an unsworn declaration as a substitute for an affidavit.” And since defense counsel’s “proffered reason for filing such declaration rather than an affidavit was due to inclement weather,” the district court’s imposition of sanctions was “clear abuse of discretion.”
Strictly Comply with Court Orders
Section leaders urge strict compliance with court orders, particularly those that are in the nature of sanctions. “This is a case where context matters,” states Joseph V. Schaeffer, Pittsburgh, PA, cochair of the Litigation Section’s Pretrial Practice & Discovery Section. “Follow the court’s order to the letter,” he warns.
If there is any uncertainly about what a court’s order does not and does not permit, err on the side of careful compliance. “Strict compliance—in the absence of a clarification or permission for a modification—is always the best practice,” adds Jeanne M. Huey, Dallas, TX, cochair of the Section’s Ethics & Professionalism Committee.