MEADOW v. GOODRICH CORPORATION (2021)

United States Court of Appeals, Ninth Circuit.2021-07-13No. No. 20-16753

Summary · law.co

Holding. The appellate court affirmed the district court's denial of sanctions under 28 U.S.C. § 1927, finding no abuse of discretion where the district court determined that counsel had not acted with subjective bad faith in pursuing claims that, while ultimately unsuccessful, were not patently frivolous.

Patricia Meadow sued Goodrich Corporation for negligence and premises liability relating to injuries she sustained while working for a Goodrich contractor. The district court granted summary judgment in Goodrich's favor, finding that Arizona law provided Goodrich with statutory immunity. Goodrich then sought sanctions against Meadow's counsel under federal law, claiming the attorney had unreasonably pursued a case that was frivolous from the outset given Goodrich's immunity defense.

The district court denied Goodrich's sanctions motion. On appeal, the court reviewed whether the district court abused its discretion in that denial. The court found that the district court properly concluded Meadow's claims required fact-specific analysis and that nothing in the record demonstrated counsel acted in bad faith. Although Meadow ultimately lost on summary judgment, her lawyer's decision to litigate the claims to that point was not frivolous or pursued for harassment.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether an attorney's pursuit of claims that fail at summary judgment constitutes sanctionable conduct under § 1927
What standard applies to determine 'subjective bad faith' required for § 1927 sanctions
Whether statutory immunity provided an overwhelming basis for sanctions from the time of filing

Procedural posture

Goodrich Corporation appealed the district court's denial of its motion for sanctions under 28 U.S.C. § 1927 following the court's grant of summary judgment in Goodrich's favor on Meadow's negligence and premises liability claims.

Authorities cited

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Opinion · public domain

MEMORANDUM **

This case arises out of Patricia Meadows claims against Goodrich Corporation for negligence and premises liability under Arizona law, concerning injuries Meadow sustained while working for a Goodrich contractor. The district court granted summary judgment to Goodrich, ruling that Goodrich was statutorily immune from liability under Arizona law for Meadows injuries. Goodrich then moved for sanctions under 28 U.S.C. § 1927, arguing that Meadows counsel had unreasonably and vexatiously pursued this action despite Goodrichs repeated arguments that it was statutorily immune from suit under Arizona law. The district court denied Goodrichs motion for sanctions, and Goodrich timely appealed. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

We review for abuse of discretion a district courts ruling on a motion for sanctions under § 1927. Kaass L. v. Wells Fargo Bank, N.A., 799 F.3d 1290, 1292 (9th Cir. 2015). A district court abuses its discretion if its “application of the correct legal standard was (1) ‘illogical,’ (2) ‘implausible,’ or (3) without ‘support in inferences that may be drawn from the facts in the record.’ ” United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc) (quoting Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 577, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)).

An attorney who “multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” § 1927. Sanctions imposed under § 1927 “must be supported by a finding of subjective bad faith.” Blixseth v. Yellowstone Mountain Club, LLC, 796 F.3d 1004, 1007 (9th Cir. 2015) (citation omitted). “[S]ubjective bad faith ․ is present when an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent.” B.K.B. v. Maui Police Dept, 276 F.3d 1091, 1107 (9th Cir. 2002) (citation omitted).

The district court did not abuse its discretion in denying Goodrichs motion for § 1927 sanctions. The district court reviewed the record and found that the merits of Meadows claims called for “a fact specific determination which require[d] consideration of the totality of the circumstances.” Notably, the district court disagreed with Goodrichs assertion of “overwhelming evidence” from the time Goodrich filed its answer that Meadows claims were barred by Arizona law. Although Meadow did not ultimately prevail on her claims, the court saw nothing in the record to indicate that Meadows counsel “acted in bad faith” in pursuing those claims to summary judgment. That holding was not “illogical” or “implausible,” nor “without support in inferences ․ drawn from the facts in the record.” Hinkson, 585 F.3d at 1262 (internal quotation marks omitted). This result is especially true considering that “[d]istrict courts enjoy much discretion in determining whether ․ sanctions are appropriate” under § 1927. Trulis v. Barton, 107 F.3d 685, 694 (9th Cir. 1995).

AFFIRMED.

FOOTNOTES

. Meadow challenges the district courts underlying summary judgment order in her answering brief—which was filed nearly a year after the district court granted summary judgment to Goodrich. Meadow has not filed a notice of cross-appeal on this untimely challenge, so we decline to address it. See Lee v. Burlington N. Santa Fe Ry. Co., 245 F.3d 1102, 1107 (9th Cir. 2001) (noting that we generally require a notice of cross-appeal where, as here, a party “seeks to increase its monetary recovery or decrease its monetary liability ․ [or] if an issue affects a legal right that may have an impact on damage recovery.”); see also id. (considering “whether the nature of the district court opinion should have put the appellee on notice of the need to file a cross-appeal” (citation omitted)).