conclusory arguments, it did not constitute “a serious and studied disregard for the orderly processes
of justice.” Burda v. M. Ecker Co.,2 F.3d 769, 777 (7th Cir. 1993). The magistrate judge noted that
the post-trial motions may have been filed to preserve issues for appeal. Ee declined to address
Thomas’ argument that defense counsel acted in bad faith by inducing the bankruptcy trustee to
reopen his bankruptcy case, holding that the bankruptcy matter is not before the court. The magistrate
judge concluded that defense counsel did not engage in unreasonable and vexatious conduct. Thus,
he recommended that Thomas’ § 1927 motion for sanctions be denied.

C. Thomas’ Objections

Thomas argues that the magistrate judge overlooked key facts in assessing Guardsmark’s
motives, including timing of the motions. He contends the magistrate judge’s finding that
Guardsmark’s motion to reconsider was based on newly discovered cvidence that “arguably
supported” its claim is refuted by the evidence. Further, Thomas argues the magistrate judge failed
to consider relevant evidence of Guardsmark’s bad faith. Specifically, Thomas asserts the magistrate
judge should have considered Guardsmark’s actions before the bankruptcy court. Thomas also argues
that Guardsmark filed a baseless summary judgment motion, unsupported motions in Jimine and
frivolous post-tnal motions.

D. Motion for Sanctions

The decision to award sanctions is solely within the discretion of the district court. Kotsilieris
v, Chalmers, 966 F.2d 1181, 1183 (7th Cir. 1992). Thomas seeks sanction under 28 U.S.C. § 1927,
which provides:

Any attomney or other person admitted to conduct cases in any court of

the United States or any Territory thereof who so multiples the
proceedings in any case unreasonably and vexatiously may be required



739 (7th Cir. 1999); Retired Chicago Police Assn. et al. v City of Chicago et al., 76 F.3d 856, 869
(7th Cir, 1996) (magistrate judge’s decision on a sanctions motion must be reviewed de nove); Lowe
v. SRAIBM MacMillian Pension Plan, No. 02 C 58, 2003 WL 1565841, at *2 (N.D. Ill. March 25,
2003). However, the district court is not required to conduct a hearing to review the magistratc’s
findings and credibility determinations. Goffman v. Gross, 59 F 3d 668, 671 (7th Cir. 1995). Rather,
the district court may accept, reject, or modify the recommended decision. Jd.

B. Magistrate Judge’s Recommendation

The magistrate judge recommended that Thomas’ motion for sanctions pursuant to 28 U.S.C.
§ 1927 be denied. The magistrate judge noted that defense counsel acted unreasonably, particularly
with regard to the emergency motion to dismiss. He recognized that Guardsmark had access to the
bankruptcy filings and notice of the filing for months prior to the trial date, rendering the emergency
motion unnecessary. The magistrate judge, however, was unable to determine that defense counsel
acted in bad faith. He noted that counsel attached a declaration to its emergency motion stating it was
filed in good faith and not for any improper purpose. The magistrate judge concluded that while
Guardsmark’s arguments in its emergency motion were ultimately unconvincing, they were at least
plausible, In considering the motion to reconsider, the magistrate judge concluded that the creditors
meeting audiotape constituted newly discovered evidence. Thus, the magistrate judge concluded
defense counsel's actions did not constitute bad faith.

The magistrate judge addressed Thomas’ arguments that the motion for summary judgment,
motions in imine, and post-trial motions were legally and factually bascless. He determined although
Guardsmark’s arguments regarding the summary judgment motion were unpersuasive, they were not

legally or factually baseless. He found that while the omnibus motion in limine may have contained



by the court to satisfy personally the excess costs, expenses, and
attorneys’ fees reasonably incurred because of such conduct.

Section 1927 requires that counsel act unreasonably and vexatiously before sanctions may be
awarded. Claiborne v. Wisdom, 414 F.3d 715, 721 (7th Cir. 2005). Unreasonable conduct and
ordinary negligence do not meet § 1927's standard. Kovsileris, 966 F.2d at 1184; TUF-Flex Glass v.
National Labor Relations Board, 715 F.2d 291, 298 (7th Cir. 1983) (Section 1927 award is an
extraordinary remedy not warranted on the basis of negligence). Instead, a sanctioned party must
have acted in bad faith, demonstrated by subjective evidence of malice, objective evidence of reckless
conduct or indifference to the law. Kotsileris, 966 F.2d at 1184; Jn re TCI Ltd., 769 F.2d 441, 445
(7th Cir. 1985); Burda v. M. Ecker Co., 2 F.3d 769 (7th Cir. 1993) (court may award sanctions where
attorncy acted in objectively unreasonable manner by engaging in a “serious and studied disregard
for the orderly process of justice”) (citations omitted). The objective component of bad faith conduct
can be satisfied by extremely negligent or reckless conduct. Claiborne, 414 F.3d at 721 (attorney’s
failure to answer discovery and production requests, disclose witnesses, and investigate claims met
bad faith standard).

The magistrate judge could not determine that Guardsmark acted in bad faith. This court
agrees. Although Guardsmark acted unreasonably and negligently in filing its cmergency motion two
days prior to trial, § 1927 requires more than a showing of negligence or unreasonableness.
Kotsilieris, 966 F.2d at 1184. The record does not establish that Guardsmark acted with malice in
filing the motion nor does it establish extreme negligence. In its motion to reconsider, Guardsmark
put forth additional evidence that was not available when it filed its original motion. Publishers Res.

Inc. y. Walker-Davis Pub., Ine., 762 F.2d 557, 561 (7th Cir. 1985) (motion to reconsider appropriate


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

CARL THOMAS,

Plaintiff, No. 02 C 8848
v. Suzanne B, Conlon, Judge
GUARDSMARK, INC.,

Defendant.

MEMORANDUM OPINION & ORDER

Carl Thomas (“Thomas”), a security guard, sued Guardsmark, Inc. (“Guardsmark”) for
wrongful termination in violation of public policy. A jury returned a $78,001 verdict in Thomas’
favor. Pursuant to 28 U.S.C. § 636 and Fed. R. Civ. P. 72, the case was referred to a magistrate
judge for a report and recommendation on Thomas’ motion for sanctions under 28 U.S.C. § 1927.
The magistrate judge recommended the motion be denied. Thomas objects to the magistrate judge’s
recommendation.

BACKGROUND

Thomas sued Guardsmark for wrongful termination in violation of public policy because of
statements he made during a November 2001 television interview. Guardsmark moved for summary
judgment on two grounds: (1) Thomas’ claim was time barred, and (2) Guardsmark terminated
Thomas for violating company rules. No. 02 C 8848, Dkt. No. 39 (Feb, 12, 2005). The court found
that a genuine issue of material fact existed regarding whether Thomas was aware ofhis termination
and whether Guardsmark terminated Thomas in retaliation for protected conduct. Accordingly, the
court denied Guardsmark’s motion for summary judgment. Dkt. No. 49 (April 13, 2005).

1



for presenting new evidence). The court found Guardsmark’s characterization that Thomas intended
to misrepresent the status of his lawsuit inaccurate. The court did not, however, find that Guardsmark
made its argument in bad faith, TUF-Flex Glass, 715 F.2d at 298 (factual misrepresentations not
sufficient for § 1927 award).

Guardsmark’s motion for summary judgment did not constitute unreasonable or vexatious
conduct. In fact, the Seventh Circuit stated “this case may ultimately prove appropriate for summary
judgment.” Thomas v. Guardsmark, 381 F.3d 701, 708 (7th Cir. 2004). Its motions in fimine and
post-trial motions contained arguments that were not ultimately convincing but were at least plausible.

TUF-Flex Glass, 715 F.2d at 298. Finally, the record does not establish that Guardsmark persuaded
the bankruptcy trustee to reopen the bankruptcy proceedings, Providing the bankruptcy trustee with
copies of publicly available pleadings is not sufficient to establish collusion. Based on the record,
Guardsmark and its defense counsel acted unreasonably and in some instances negligently. However,
their conduct does not meet the high standard necessary to warrant § 1927 sanctions.

CONCLUSION
Thomas’ objections to the magistrate judge’s report and recommendation are overruled. The

court adopts the report and recommendation in full. Thomas’ motion for sanctions is denied.

January 4, 2006 ENTER:

apd 8 Cab.

United States District Judge



On July 5, 2005, two days before trial, Guardsmark filed an emergency motion to dismiss the
case on the bases of judicial estoppel, standing, and as a discovery sanction. Dkt. No. 75.
Specifically, Guardsmark contended Thomas: (1) failed to adequately schedule the pending lawsuit
in his 2003 and 2004 bankruptcy petitions; (2) lacked standing because the lawsuit became the
property of the bankruptcy estates; and (3) engaged in discovery abuses by inadequately disclosing
documents pertaining to bankruptcy. The court denied Guardsmark’s motion in its entirety because
Thomas had properly disclosed his lawsuit to the bankruptcy trustee and the trustee had abandoned
the claim, Dkt. No. 78 (July 7, 2005). The court further determined that Guardsmark could have
pursued additional bankruptcy documents months prior to the start of trial, making the emergency
motion unnecessary. Before receiving the court’s ruling, Guardsmark filed a motion to reconsider
based on an audiotape of the creditors meeting in Thomas’ Chapter 7 bankmptcy. Dkt. No. 81 (July
7, 2005). Although Guardsmark argued that the transcript reflected Thomas misrepresented the status
of his lawsuit, the court found Thomas’ representation of the status of the lawsuit was accurate.
Moreover, the trustce had sufficient notice of this lawsuit. Thus, the court found the record did not
support a conclusion that Thomas had affirmatively misrepresented the status of his lawsuit and
denied Guardsmark’s motion to reconsider. Dkt. No, 82 (July 7, 2005).

Jury trial commenced on July 7, 2005. On July 13, 2005, the jury retumed a $78,001 verdict
in Thomas’ favor. Guardsmark’s oral motion for judgment as a matter of law, made at the close of
Thomas’ case, was denied. Guardsmark then filed a renewed motion for judgment as a matter of law,
without Icave of court. The motion was stricken, On July 27, 2005, Guardsmark filed a renewed

motion for judgment as a matter of law, a motion for a new trial and a motion to alter or amend the

judgment. Dkt. Nos, 93, 95, 97 uly 27, 2005). In its motion for judgment as a matter of law,



Guardsmark again raised the argument that Thomas did not properly schedule his federal lawsuit
against Guardsmark in his 2003 and 2004 bankruptcy filings and that judicial estoppel barred his
claims. The court rejected this argument for a third time. The court found the only changed
circumstance since Guardsmark’s prior motions on the issue, the United States Bankruptcy Court’s
reopening of Thomas’ 2004 bankruptcy case, did not change the court’s decisions. The three motions
were denied. Dkt. No. 110 (Aug. 30, 2005).

Thomas moves for sanctions against Guardsmark. He argues Guardsmark’s emergency
motion was filed on the eve of trial to disrupt his trial preparation. He contends Guardsmark filed
numerous motions that were factually and legally baseless including the motion for summary
judgment, the emergency motion to dismiss, motions in /imine, and the post-trial motions. Thomas
also argues that defensc counsel colluded with the bankruptcy trustee to reopen his bankruptcy case
and failed to notify Thomas of the motion to reopen. He supports his claim of collusion by stating
the trustee and defense counsel were in close contact at the time the bankruptcy case was reopened
and defense counsel provided the trustee with copies of Guardsmark’s emergency motion to dismiss
and its motion to reconsider. Further, Thomas contends that defense counsel knew of the trustee’s
motion to reopen and failed to notify Thomas.

DISCUSSION

A. Legal Standard

Federal Rule of Civil Procedure 72(b) requires a party who disagrees with a magistrate judge's
report and recommendation to file “written, specific objections” to the report. Under Rule 72(b), the
district court judge must conduct a de novo review of any portion of the record to which a specific

written objection is directed. Fed. R. Civ, P. 72(b); Johnson v. Zema Systems Corp., 170 F.3d 734,