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SJC-11789

GARY WONG vs. GEORGE V.H. LUU & others1

(and seven consolidated cases2).3

Suffolk. March 3, 2015. - July 15, 2015.

Present: Gants, C.J., Spina, Cordy, Botsford, & Duffly, JJ.

Practice, Civil, Attorney's fees. Attorney at Law, Conduct 

prejudicial to administration of justice.

Civil action commenced in the Superior Court Department on 

August 17, 2009.

 

1 Super 88 Allston, LLC; Hong Kong Supermarket, Inc.; Hong 

Kong Supermarket Holding Corp.; Hong Kong Supermarkets of Mass.,

LLC; Hong Kong Supermarkets of Allston, LLC; Jeffrey Wu, also 

known as Myint J. Kyaw; and Lucky Star Elmhurst, LLC.

2 Wincent International, Inc. vs. George V.H. Luu & others; 

Tin World, Inc. vs. Super 88, LLC, & others; Hop Lee Trading 

Co., Inc., & others vs. Wincent International, Inc., & others; 

Cheng Liu & others vs. Winvest LLC & others; Cheng Lee Co., Inc. 

vs. Super 88 Allston LLC & others; Gary Wong vs. Haymarket 

Capital, LLC, & others; Chang & Son Enterprises, Inc., & others

vs. Super 88 Super Market II, Inc., & others.

3 The appellant, Attorney Richard Goren, was allowed to 

intervene in these cases solely for the purpose of appealing the 

award of sanctions against him that is at issue in this appeal.
2

A motion for sanctions, filed on March 29, 2011, was heard 

by D. Lloyd Macdonald, J.

The Supreme Judicial Court granted an application for 

direct appellate review.

Michael P. Angelini for Richard Goren.

Cynthia Mark (Anne R. Sills with her) for Yu Cheng Liu & 

another.

Gregory P. Turner, for Hop Lee Trading Co., Inc., & others,

was present but did not argue.

Vy Truong, for Tin World, Inc., was present but did not 

argue.

Debra Squires-Lee & Jessica Gray Kelly, for Boston Bar 

Association, amicus curiae, submitted a brief.

GANTS, C.J. The issue presented in this case is the scope 

of a judge's authority under the inherent powers of the court to 

order an attorney for a party to pay the other parties' 

attorney's fees as a sanction for the attorney's misconduct 

where that sanction is not authorized by any statute or court 

rule, and where the attorney has not violated a court order or 

rule of procedure. We conclude that a judge may exercise the 

court's inherent power to sanction an attorney with an 

assessment of attorney's fees only if the attorney has engaged 

in misconduct that threatens the fair administration of justice 

and the sanction is necessary to preserve the judge's authority

to administer justice. Because we conclude that the judge 

abused his discretion in exercising the court's inherent powers 

to sanction the attorney under the circumstances in this case, 

and that the attorney's alleged misconduct was more 
3

appropriately addressed by a referral to the Board of Bar 

Overseers (board), we reverse the judge's order imposing 

sanctions.4

Background. Attorney Richard Goren was the attorney for

Cheng Lee Co., Inc. (Cheng Lee), one of the plaintiffs in a

complex litigation in the Superior Court arising out of the 

attempted sale of three supermarkets in the Boston area (the

Super 88 stores). Eight cases, later consolidated, were brought 

by three groups of plaintiffs: the "trade creditors" (vendors 

of the Super 88 stores, including Cheng Lee, the "Hop Lee" 

plaintiffs, and the "Tin World" plaintiffs); the "workers" 

(former employees of the Super 88 stores asserting class action 

wage claims); and the "asset purchasers" (aggrieved attempted 

purchasers of the Super 88 stores). The cases were brought 

against three groups of defendants: the "Super 88 defendants"

(corporate entities and principals of the Super 88 stores); the 

"Hong Kong Supermarket defendants" (the prospective purchasers

of the Super 88 stores); and the "lenders" (financial 

institutions that lent money to the Super 88 defendants).

On December 10, 2010, counsel for all parties in the

litigation appeared in court for a conference pursuant to Mass. 

R. Civ. P. 16, as amended, 466 Mass. 1401 (2013), and for an 

 

4 We acknowledge the amicus brief submitted by the Boston 

Bar Association.
4

omnibus motions hearing. With the judge's permission, counsel 

used the occasion instead to engage in substantive settlement 

discussions. They reported to the court that a potential 

settlement framework had been reached, and they requested that 

the conference be continued so that they could further develop

the framework. The judge allowed the continuance and encouraged 

counsel's efforts. The conference was continued a second time

on the representation by counsel that substantial progress was 

being made towards settlement. The judge scheduled March 18, 

2011, as the date on which counsel would report the terms of a 

final settlement to the court or proceed with the conference and 

hearing.

Prior to March 18, the parties had reached a final 

settlement agreement, which they had intended to sign and file 

with the court. Under the terms of the settlement agreement, 

the lenders agreed to release their claims to a security 

interest in the Super 88 store located in the Dorchester section 

of Boston in exchange for a release of the claims of all 

plaintiffs in the consolidated cases. From the proceeds of the 

sale of the Dorchester store to one of the asset purchasers in 

settlement of its claims, Cheng Lee was to receive $650,000; the 

Hop Lee plaintiffs were to receive $264,000; the Tin World 

plaintiffs were to receive $313,395; and the workers were to 

receive $950,000, but $500,000 would not be paid for six months. 
5

This would leave a balance of approximately $7 million for the 

lenders from the sale of the other two Super 88 stores.

On March 18, however, counsel appeared in court and 

announced that there had been a "breakdown in the settlement 

discussions" because, days earlier, they had learned of a 

solicitation letter that Goren had sent out the week before to 

106 unsecured creditors of the Super 88 defendants that had been 

identified on a 2009 bankruptcy schedule.

5 Most of the 

recipients were nonparty creditors, but four of the Hop Lee

plaintiffs also received the letter, as did one nonparty 

creditor who was represented by the attorney for Tin World.

6 In 

the letter, which was printed on the stationery of Goren's law 

firm at the time, Bodoff & Associates, P.C. (Bodoff), Goren 

explained that he "represent[ed] an unsecured trade creditor of 

Super 88 and [was] about to conclude an agreement whereby [his] 

client will recover 100 cents on the dollar in a settlement with 

various parties." The letter went on to request that the

recipient complete an enclosed form if the recipient were

"interested in seeking to recover [its] unpaid Super 88 invoices 

on a contingent fee basis." The letter further explained, "If 

 

5 The Super 88 defendants had filed for bankruptcy in 2009,

but the bankruptcy petitions were dismissed.

6 Goren later stated that the letter was sent to the Hop Lee 

plaintiffs through "error and inadvertence." 
6

there is sufficient interest generated by unpaid creditors, we 

will bring a lawsuit against certain parties on the creditors' 

collective behalf . . . ."7 The letter both began and concluded 

with a request that the recipient treat the inquiry as 

confidential.8

The Tin World and Hop Lee plaintiffs and the Super 88 

defendants moved for sanctions against Goren on the grounds that 

he had violated the rules of professional conduct9 and had 

interfered with the "effective administration of justice."10 At 

 

7 The letter further stated that "[t]he contingency would be 

for 50% plus a proportionate share of costs and no settlement 

for less than 90% of aggregate face value could be made without 

the approval of a majority in interest of the claimants and the 

party financing the litigation."

8 In a subsequently filed affidavit, Goren stated that "[a] 

number of creditors responded" to this inquiry, and that he 

informed them that he was "not advising, nor agreeing then to 

represent" them, but "was gathering information for [a] third 

party who was considering financing the prosecution of their 

claims and that upon resolution of [his] current representation 

[of Cheng Lee], [he] would be in touch with them."

9 The "Tin World" plaintiffs and "Hop Lee" plaintiffs

specifically claimed that Goren had contacted parties 

represented by counsel (including the four Hop Lee plaintiffs 

who received the solicitation letter) in violation of Mass. R. 

Prof. C. 4.2, as amended, 437 Mass. 1303 (2002), and that he had 

solicited clients with interests adverse to his client, Cheng 

Lee Company Co., Inc. (Cheng Lee), in violation of Mass. R. 

Prof. C. 1.7, as amended, 430 Mass. 1301 (1999). The Super 88 

defendants also claimed that Goren had "engag[ed] in bad faith 

negotiations over the course of three months with all counsel in 

these consolidated actions" in violation of the preamble to the 

rules of professional conduct.

10 The moving parties requested that sanctions also be 

imposed on Bodoff & Associates, P.C. (Bodoff), and the Super 88 
7

the sanctions hearing on April 8, the various counsel explained 

why Goren's solicitation letter had derailed the settlement 

process. They noted that the total amount of the claims 

exceeded the aggregate sale prices of the three supermarkets, 

and that everyone understood that it was in the interest of 

their clients that "outsiders to the consolidated actions not be 

invited in on what was a finite pot of money." As a number of 

the parties had agreed to compromise their claims in various 

ways for the sake of reaching a settlement, the prospect of 

additional claims caused them to renege, because they had only 

agreed to compromise their claims on the assumption that they 

"were wrapping up all of the litigation," and because "a 

potential involuntary bankruptcy" could have been triggered if 

other "potential creditors [were] alerted to the false 

assumption that there's a pot of money out there that's just 

waiting to be tapped."

11 The parties had never entered into a 

confidentiality agreement, and there was no confidentiality 

provision in the proposed settlement agreement, but counsel 

explained that "there was no real need for a [c]onfidentiality 

 

defendants requested that sanctions also be imposed on Goren's 

client, Cheng Lee.

11 Counsel also contended that Goren's statement that his 

client had received "100 cents on the dollar" contributed to the 

derailment of the settlement because it caused the Tin World 

plaintiffs -- who had only received "69 cents on a dollar" -- to 

insist on receiving more money.
8

[a]greement because it was in all of [their] own clients' 

interest to keep this as quiet as possible."12

Goren replied that sanctions were unwarranted because he 

had not violated any ethical rule or court order or committed a 

breach of any agreement with the other parties, and because 

jurisdiction for sanctioning attorneys for ethical violations 

lies with the board. He also denied that he had had any 

intention to "torpedo" the settlement.

The judge ordered Goren to "reimburse all parties in the 

consolidated cases their necessary and reasonable attorney[']s 

fees and expenses incurred from December 10, 2010 through April 

8, 2011 in connection with the effort to settle the litigation 

and respond to the solicitation by Attorney Goren."

13 The judge 

quoted the following passage from Beit v. Probate & Family Court 

Dep't, 385 Mass. 854, 859-860 (1982):

 

12 Counsel also noted that although "confidentiality was 

discussed," the negotiations involved a class action suit and 

"confidentiality would actually be difficult in this 

circumstance."

13 Originally, the judge also ordered that Cheng Lee be 

jointly and severally liable for the parties' attorney's 

fees.However, the judge later vacated that part of the order 

after he was persuaded, based in part on an affidavit from 

Goren, "that Cheng Lee intended that the settlement go through 

as negotiated by the parties and that Cheng Lee did nothing to 

encourage Goren's solicitation." The judge stated that "[o]n 

the expanded record, it would be unjust for Cheng Lee to be 

sanctioned for conduct that directly harmed Cheng Lee's own 

interests." The judge did not order sanctions against Bodoff.
9

"Judges have the inherent power to do whatever may be done 

under the general principles of jurisprudence to insure 

[the integrity of the judicial process]. . . . Simply 

stated, implicit in the constitutional grant of judicial 

power is authority necessary to the exercise of . . . 

[that] power. . . . [E]very judge must exercise his 

inherent powers as necessary to secure the full and 

effective administration of justice. . . . Exercising this 

power, a judge may impose reasonable court costs on an 

attorney who . . . delays the adjudication of legitimate 

claims and defenses, unnecessarily increases clients' 

litigation expenses, and squanders limited judicial 

resources. A judge cannot condone behavior that causes 

precious time to be wasted away while the court, parties, 

court personnel, and witnesses [otherwise diligently 

conduct themselves]" (quotations, citations, and footnotes

omitted).

The judge noted that, "[i]n a technical sense," he did not have 

jurisdiction to rule on compliance with the rules of 

professional conduct, but he concluded that the content of the 

rules "may inform the [c]ourt's assessment of whether Goren 

acted unreasonably such as to have impeded 'the full and 

effective administration of justice' and 'delay[ed] the 

adjudication of legitimate claims and defenses . . . and 

squander[ed] limited judicial resources.'" The judge found that 

"[u]nquestionably, Goren did so."

The judge stated that he had "placed on hold [his] earlier 

effort to move the consolidated cases to prompt trial on 

counsel's representation in December, joined by Goren, that they 

had agreed on a settlement framework but that time was needed to 

finalize it." He did so in reliance "on the good faith of all 

counsel, as officers of the [c]ourt, in representing to the 
10

[c]ourt that they were engaged diligently in the global 

settlement effort." He found that "but for one participant," 

impliedly Goren, "they were in fact so engaged."

He found that the settlement negotiations had been 

"conducted in confidence because of the parties' awareness that 

if additional claimants appeared, the finite settlement fund 

would be further diluted and (if a critical mass of new claims 

were filed) a bankruptcy petition could be triggered that would 

have left all the plaintiffs without a practical remedy." He 

also found that, in these circumstances, "the very act of 

solicitation and its communication of the prospect of a recovery 

by third parties breached the assumption of confidentiality, 

which was central to the prospect of achieving settlement."

The judge found that Goren "appeared to have . . . 

violat[ed]" Mass. R. Prof. C. 4.2, as amended, 437 Mass. 1303 

(2002), by soliciting five creditors that Goren knew or should 

have known were already represented by counsel for the trade 

creditors.

14 He further found that Goren "was subject to"

paragraph 2 of the preamble to the rules of professional conduct

 

14 Rule 4.2 of the Massachusetts Rules of Professional 

Conduct, as amended, 437 Mass. 1303 (2002), provides: "In 

representing a client, a lawyer shall not communicate about the 

subject of the representation with a person the lawyer knows to 

be represented by another lawyer in the matter, unless the 

lawyer has the consent of the other lawyer or is authorized by 

law to do so."
11

and that his "conduct was fundamentally dishonest toward his cocounsel and a breach of the core professional duty of good faith 

and fair dealing with other counsel."15 The judge also found 

that Goren's conduct "was a fundamental breach of his duty of 

candor to the [c]ourt," in violation of Mass. R. Prof. C. 3.3,

426 Mass. 1383 (1998), but he did not specify how Goren had 

committed a breach of this duty, or which subsection of rule 

3.3 (a) Goren had violated.

16,17

The judge further concluded that "[t]he [c]ourt has been 

materially prejudiced" by Goren's conduct, writing:

"The impact of Goren's conduct on the administration of 

justice, the [c]ourt's most immediate concern, has been 

stark. The progression of the consolidated cases to a fair 

and prompt disposition has been obstructed. Three months 

 

15 Paragraph 2 of the Preamble to the Massachusetts Rules of 

Professional Conduct, 426 Mass. 1303 (1998), provides, in 

relevant part: "As a representative of clients, a lawyer 

performs various functions. . . . As negotiator, a lawyer seeks 

a result advantageous to the client but consistent with 

requirements of honest dealing with others."

16 Rule 3.3 (a) of the Massachusetts Rules of Professional 

Conduct, 426 Mass. 1383 (1998), which was the rule in effect on 

the date of the judge's order, provided that a "lawyer shall not 

knowingly . . . (1) make a false statement of material fact or 

law to a tribunal; (2) fail to disclose a material fact to a 

tribunal when disclosure is necessary to avoid assisting a 

criminal or fraudulent act by the client . . . ; (3) fail to 

disclose to the tribunal legal authority in the controlling 

jurisdiction known to the lawyer to be directly adverse to the 

position of the client and not disclosed by opposing counsel; or

(4) offer evidence that the lawyer knows to be false . . . ."

17

 The judge made no findings regarding the allegation by 

the moving parties that Goren had violated Mass. R. Prof. C. 

1.7.
12

of diligent and expensive lawyers' time has been wasted. 

And the assumption on which the [c]ourt relied in staying 

the cases has been shown to have been based on a false 

premise."

In addition to allowing in part the motions for sanctions and 

ordering sanctions against Goren, the judge referred a copy of 

his order to the board for its review.

Pursuant to the judge's order, counsel involved in the 

settlement negotiations filed affidavits detailing their 

attorney's fees. After a nonevidentiary hearing addressing

those filings, the judge ordered Goren to pay sanctions totaling 

$239,928.40 to counsel for the parties engaged in settlement 

negotiations (other than Cheng Lee). The judge observed:

"The magnitude of the total award gives the [c]ourt 

temporary pause. However, on reflection, it is a fair, 

reasonable and just sanction under the unusual, if not 

unique, circumstances of this case. Attorney Goren's 

callous indifference to the consequences of his unethical 

solicitation directly caused the predictable financial 

injury which the sanctions are designed to compensate. 

Further, not reflected in the sanctions is the impact on 

the [c]ourt (the resources of which are currently strained 

to the limit). If such impact were in fact monetized, the 

total sanctions would be substantially enlarged."

Goren appealed, and we granted direct appellate review.18

 

18 The sanctions award against Goren is the only issue on 

appeal. The parties ultimately entered into a court-indorsed 

settlement agreement on June 11, 2014, which resolved all claims 

in these consolidated cases apart from the sanctions at issue in 

this appeal and a separate award of attorney's fees not 

involving Goren.
13

Discussion. Massachusetts generally follows the "American 

rule" and denies recovery of attorney's fees unless such feeshifting is authorized by contract, statute, or court rule. See 

Police Comm'r of Boston v. Gows, 429 Mass. 14, 17 (1999) (Gows); 

Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93, 95 (1997). In 

some circumstances, a judge in a civil case is expressly 

authorized by statute or rule to sanction an attorney for 

misconduct by requiring the attorney to pay opposing counsel's 

fees. A judge may award an adverse party reasonable attorney's 

fees and other costs upon a finding that "all or substantially 

all of the claims, defenses, setoffs or counterclaims . . . made 

by any party who was represented by counsel . . . were wholly 

insubstantial, frivolous and not advanced in good faith." G. L. 

c. 231, § 6F. See Mass. R. Civ. P. 11 (a), as amended, 456 

Mass. 1401 (2010) (attorney may be subjected to "appropriate 

disciplinary action" for wilful violation of rule requiring that 

attorney not sign pleading unless "to the best of his knowledge, 

information, and belief there is a good ground to support it;

and that it is not interposed for delay"). A judge is also 

granted abundant authority pursuant to Mass. R. Civ. P. 37 to 

impose sanctions, including attorney's fees, where an attorney 

violates a rule of discovery or an order regarding discovery. 

See Mass. R. Civ. P. 37 (b), as amended, 423 Mass. 1406 (1996).

Furthermore, even though not expressly authorized by the rules 
14

governing contempt, we have recognized -- notwithstanding the 

American rule -- that "[w]here a party's conduct in a litigation 

constitutes contempt of court, . . . a court has discretion to 

award attorney's fees against the contumacious party." Gows, 

supra.

19

In this case, the judge assessed attorney's fees against 

Goren without the authority of any statute or rule, without 

finding Goren in contempt of court, and in the absence of any 

contractual arrangement among the parties authorizing the 

assessment of attorney's fees. The judge in his decision 

imposing sanctions on Goren quoted the legal standard we 

declared in Beit, noting that a judge, through the exercise of 

the court's inherent powers, may sanction an attorney by the 

award of attorney's fees "as necessary to secure the full and 

effective administration of justice." Beit, 385 Mass. at 859, 

quoting O'Coins, Inc. v. Treasurer of the County of Worcester, 

362 Mass. 507, 514 (1972). But the legal issue in Beit was 

simply whether a judge, through the exercise of inherent powers, 

 

19 See Mass. R. Civ. P. 65.3, as appearing in 386 Mass. 1244 

(1982) (authorizing civil contempt proceedings for violations of 

"orders or judgments entered pursuant to these rules, for the 

violation of which civil contempt is an appropriate remedy"). 

See also Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 

571 (1997), S.C., 428 Mass. 543 (1998), and S.C., 432 Mass. 43 

(2000) ("As matter of law, the awarding of attorney's fees and 

costs is an appropriate element of a successful civil contempt 

proceeding"); Matter of Vincent, 408 Mass. 527, 530 (1990) ("It 

is well settled that a court has the inherent power to impose 

sanctions for contempt of its orders").
15

could sanction an attorney for failing to appear at trial. That

was effectively a violation of a court order, because when a 

judge sets a date for trial, and no continuance is sought or 

allowed, the judge is implicitly ordering counsel in the case to 

appear on that date for trial, and the counsel's failure to 

appear, without excuse, is plainly grounds for sanction. See 

Beit, supra at 859-860 ("authority to make the court's lawful 

orders effective" includes authority to sanction attorney for 

failure to appear). Goren did not violate any court order; nor 

did he engage in any misconduct in the court room. Therefore, 

this case tests the limits of a judge's inherent powers to 

sanction in a way that Beit did not, and requires us to revisit 

the scope of the court's inherent powers.

We have held that a judge has the inherent power to assess 

attorney's fees against a party or attorney for out-of-court 

misconduct that was not in violation of any court order, but 

only in "rare and egregious cases." Gows, 429 Mass. at 17, 19 

(judge awarded attorney's fees against party who delayed 

compliance with lawful court order and forced prevailing party 

to resort to litigation to obtain compliance). The crux of the 

issue here is whether this is such a "rare and egregious" case.

Under Federal law, a judge may exercise the inherent powers

of the court to assess attorney's fees against an attorney as a 

sanction for misconduct where the attorney has "willful[ly]
16

disobe[yed]" a court order or where the attorney has "acted in 

bad faith, vexatiously, wantonly, or for oppressive reasons." 

Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991), quoting 

Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 

258-259 (1975). See Gows, 429 Mass. at 18, quoting Newman v. 

Piggie Park Enters., Inc., 390 U.S. 400, 402 n.4 (1968) (noting 

that under Federal law, "[c]onduct has been held to justify an 

award of attorney's fees where a party has acted 'in bad 

faith'"). In Chambers, the bad faith conduct that warranted the 

assessment of attorney's fees -- which included but went beyond 

violations of court orders and other misconduct that could be 

sanctioned under Federal statutes and rules -- was egregious. 

See Chambers, supra at 35-42, 58 (affirming award of almost $1 

million in attorney's fees against litigant who tried "first, to 

deprive [the Federal District Court] of jurisdiction [by acts of 

fraud on the court] and, second, to devise a plan of 

obstruction, delay, harassment, and expense sufficient to reduce 

[opposing party] to a condition of exhausted compliance").

However, there appears to be no Federal rule defining what 

constitutes "bad faith" for the purpose of justifying a court's 

award of attorney's fees based on the court's inherent 

powers. See id. at 63 (Kennedy, J., dissenting) (only 

limitation on court's exercise of inherent power to impose 

sanctions "appears to be a finding at some point of 'bad faith,' 
17

a standard the Court fails to define"). We recognize that "bad 

faith" alone is too vague a standard to establish the scope of a 

judge's inherent power to assess attorney's fees against an 

attorney who is not in violation of a court order, statute, or 

rule of procedure.

A judge's inherent powers -- including the inherent power 

to assess attorney's fees for misconduct -- must be broad enough 

to enable a judge to ensure the fair administration of justice. 

See Avery v. Steele, 414 Mass. 450, 457 (1993), quoting New 

England Novelty Co. v. Sandberg, 315 Mass. 739, 746 (1944) 

("'[C]ourt[s] of superior jurisdiction [have] the inherent power 

. . . to punish those who obstruct or degrade the administration 

of justice' . . . [and] have wide discretion to determine when a 

party or attorney before them has acted in a manner warranting 

the imposition of sanctions"); Beit, 385 Mass. at 859. But the 

exercise of these powers to assess attorney's fees must be 

limited to those cases where the imposition of such sanctions is 

necessary to preserve the court's authority to accomplish 

justice. See Chambers, 501 U.S. at 64 (Kennedy, J., dissenting) 

("Like all applications of inherent power, the authority to 

sanction bad-faith litigation practices can be exercised only 

when necessary to preserve the authority of the court"); 

O'Coins, Inc., 362 Mass. at 510, quoting Opinion of the 

Justices, 279 Mass. 607, 609 (1932) ("[I]mplicit in the 
18

constitutional grant of judicial power is 'authority necessary

to the exercise of . . . [that] power [emphasis supplied]'"). 

The inherent powers of the court are limited by this rule of 

necessity, consistent with the principle that "[b]ecause 

inherent powers are shielded from direct democratic controls, 

they must be exercised with restraint and discretion." Roadway 

Express, Inc. v. Piper, 447 U.S. 752, 764 (1980). See Chambers, 

supra at 44 ("Because of their very potency, inherent powers 

must be exercised with restraint and discretion").

20 In accord 

with this principle, a court should exercise restraint and 

discretion both in determining whether the rule of necessity 

permits the imposition of sanctions under a court's inherent 

powers and, where it does, in determining whether to impose a 

sanction in a particular case and the severity of the sanction.

The inherent powers necessary to preserve the court's 

authority to accomplish justice include the power to sanction an 

attorney for failing to comply with an order of the court and

for undue delay in compliance. See Sommer v. Maharaj, 451 Mass. 

 

20 Where a court's power to impose the sanction of 

attorney's fees is concerned, there is an additional 

consideration warranting restraint, namely, the risk that the 

court's inherent powers might be interpreted so liberally as to 

create an exception to the American Rule so broad that it might 

in practice devour the rule. See Chambers v. NASCO, Inc., 501 

U.S. 32, 45 (1991), quoting Roadway Express, Inc. v. Piper, 447 

U.S. 752, 765 (1980) (court has inherent power to depart from 

American rule only in "narrowly defined circumstances").
19

615, 620-622 (2008), cert. denied, 556 U.S. 1235 (2009)

("extreme delay in payment of the judgment" warranted forfeiture 

of party's right to be heard); Gows, 429 Mass. at 17-19; Beit, 

385 Mass. at 859-860; Commonwealth v. Rogers, 46 Mass. App. Ct. 

109, 112 (1999) (upholding nominal assessment of fees against 

attorney for violation of court order where violation was not 

disruptive enough to warrant summary contempt punishment). See 

also Chambers, 501 U.S. at 45-46, quoting Alyeska Pipeline Serv. 

Co., 421 U.S. at 258, and Hutto v. Finney, 437 U.S. 678, 689 

n.14 (1978) (fee shifting allowed for "willful disobedience of a 

court order" and where party "shows bad faith by . . . hampering 

enforcement of a court order"). The court's inherent powers

also include the power to sanction an attorney for making 

knowingly false misrepresentations to the court, intentionally 

misleading the court, or knowingly concealing information that 

an attorney has a duty to provide to the court. See Chambers, 

supra at 46, quoting Universal Oil Prods. Co. v. Root Refining 

Co., 328 U.S. 575, 580 (1946) ("[I]f a court finds 'that fraud 

has been practiced upon it . . . ,' it may assess attorney's 

fees against the responsible party"); Munshani v. Signal Lake 

Venture Fund II, LP, 60 Mass. App. Ct. 714, 714-715, 718-722

(2004) (dismissal of party's case pursuant to court's inherent 

powers was warranted after party committed fraud on court by 

"manufacturing evidence, swearing to its authenticity, and 
20

continuing to insist on its authenticity for more than seven 

months while an expert investigated the matter"). They also 

include the power to sanction an attorney for engaging in 

conduct in the court room that interferes with a judge's ability 

to manage the court room fairly, efficiently, and respectfully. 

See Chambers, supra, quoting Hutto, supra (fee shifting allowed 

where party "shows bad faith by delaying or disrupting the 

litigation"); Clark v. Clark, 47 Mass. App. Ct. 737, 743-744

(1999) (award of attorney sanctions was not improper where 

attorney engaged in "bombastic" behavior during trial, and 

walked out of court room during cross-examination of her client 

without permission after having been warned by court that such 

conduct could result in criminal contempt proceedings being 

instituted against her). They also include the power to 

sanction an attorney for other types of misconduct, but only 

where the exercise of that inherent power is necessary to 

punish, deter, or remedy misconduct that threatens a judge's 

ability to ensure the fair administration of justice. See 

Avelino-Wright v. Wright, 51 Mass. App. Ct. 1, 3, 5-6 (2001)

(upholding attorney's fee sanction for attorney who "abused the 

court process" by, inter alia, "challenging the integrity of the 

judges and appointed experts"; "becoming so enmeshed with her 

client that she [had] lost her professionalism in advocating for 

a client"; "not attempting to exercise proper control and 
21

guidance of her client"; and "violating the court imposed 

restraining order against her").

The judge in this case essentially found that Goren, by 

sending the solicitation letter, committed a breach of the 

"assumption of confidentiality" that was "central to the 

prospect of achieving settlement," and thereby thwarted a 

settlement that was on the verge of being executed, which wasted 

three months of attorneys' time that had been invested in 

negotiating the settlement, and "materially prejudiced" the 

court by delaying the judge's effort to move the consolidated 

cases towards trial. Further, although the judge recognized 

that he had no jurisdiction "[i]n a technical sense" to decide 

whether Goren had violated the rules of professional conduct, he 

nonetheless essentially found that Goren had violated these 

rules, and the judge relied on these violations to demonstrate 

that Goren had acted unreasonably to impede "the full and 

effective administration of justice." We review the judge's 

imposition of sanctions under the court's inherent powers for 

abuse of discretion. See Chambers, 501 U.S. at 55. "[A]

judge's discretionary decision constitutes an abuse of 

discretion where we conclude the judge made 'a clear error of 

judgment in weighing' the factors relevant to the decision, 

. . . such that the decision falls outside the range of 
22

reasonable alternatives" (citation omitted). L.L. v. 

Commonwealth, 470 Mass. 169, 185 n.27 (2014).

We know of no other case, nor has one been cited by the 

parties or amicus, where a judge sanctioned an attorney pursuant 

to the inherent powers of the court for conduct that resulted in 

a breakdown of settlement negotiations where there was no breach 

of a settlement agreement or confidentiality agreement, and no 

violation of an order of the court or rule of procedure.

21 The 

fair administration of justice does not require the settlement 

of a case; although the parties are free to settle their case, 

their entitlement under law is to a trial, not to a settlement 

in lieu of a trial. See Bower v. Bournay-Bower, 469 Mass. 690, 

701 (2014) ("art. 11 [of the Massachusetts Declaration of 

Rights] safeguards an individual's right to seek recourse under 

the law"); Graizzaro v. Graizzaro, 36 Mass. App. Ct. 911, 912 

(1994) ("A court may appropriately urge settlement on the 

 

21 In Strand v. Hubbard, 31 Mass. App. Ct. 914, 914-915 

(1991), where the Appeals Court approved an award of attorney's 

fees against a party who "provoked a needless round of 

litigation by torpedoing the settlement to which she had 

previously agreed," the Appeals Court was acting pursuant to its 

statutory authority under G. L. c. 215, § 45, which applies only 

in probate proceedings and which permits a court to award costs 

and expenses "as justice and equity may require." The holding 

in that case applies only to probate proceedings. See Matter of 

the Estate of King, 455 Mass. 796, 802-805 & n.13 (2010) ("§ 45 

is a special departure from the American rule . . . but one 

[that is] limited to matters relating to wills, estates, and 

trusts").
23

parties but may not refuse them access to a judicial forum to 

resolve their justiciable disputes"). See also Goss Graphics 

Sys., Inc. v. DEV Indus., Inc., 267 F.3d 624, 627-628 (7th Cir. 

2001) ("If parties want to duke it out, that's their 

privilege"). It might be regrettable that money and time were 

wasted in negotiations that ultimately failed to bear fruit, but 

that risk is inherent in every negotiation. Because of the risk

that judges may misuse the inherent powers to pressure a party 

to settle a case by threatening the party with sanctions, and 

also because of the risk that judges will be drawn into 

collateral disputes regarding what occurred during settlement 

negotiations by parties seeking sanctions, we must scrutinize 

with special care any exercise of the inherent powers in the 

context of settlement negotiations. Cf. Graizzaro, supra ("[A]

judge must show restraint in urging settlement on the parties," 

and "[w]hile a judge in a civil case doubtless may play a role 

in settlement discussions . . . , he must be conscious to avoid 

use of his power to coerce settlements from recalcitrant 

parties" [citation omitted]).

A settlement agreement, especially in a case as complex as 

this, no doubt would spare the court the time and resources that 

would otherwise be devoted to trying the case. But an 

attorney's conduct during settlement negotiations that results 

in the failure of those negotiations is not subject to sanctions 
24

under the judge's inherent powers where the judge is not 

participating in those negotiations, because the failure of 

settlement negotiations does not threaten a judge's ability to 

ensure the fair administration of justice.22 Where a settlement 

agreement is entered into as a result of fraud or duress, the 

aggrieved party may challenge the lawfulness of the agreement 

and may potentially be awarded attorney's fees as an equitable 

remedy, along with the voiding of the agreement. Cf. Warner

Ins. Co. v. Commissioner of Ins., 406 Mass. 354, 360 n.7 (1990) 

("settlement agreement is a private contract . . . governed by 

general contract law"). But where, as here, no agreement is 

reached, a judge's inherent powers do not authorize the judge to 

determine who was responsible for the breakdown of negotiations, 

and order the attorney responsible to pay the attorney's fees 

incurred by the other parties in the thwarted negotiations.

 

22 We do not mean to suggest that a court does not have a

legitimate interest in the progress of settlement negotiations. 

Cf. Mass. R. Civ. P. 16, as amended, 466 Mass. 1401 (2013)

(identifying "possibility of settlement" as subject that "a 

court may in its discretion direct the attorneys for the parties 

. . . to appear before it" to consider at pretrial conference). 

Other jurisdictions have accordingly held that a court has the 

inherent power to order parties to attend settlement 

negotiations, and to sanction parties for failing to comply with 

such orders. See In re Novak, 932 F.2d 1397, 1406-1407 (11th 

Cir. 1991); G. Heileman Brewing Co. v. Joseph Oat Corp., 871 

F.2d 648, 656-657 (7th Cir. 1989). But we note that no such 

order was issued in this case.
25

The judge here determined that Goren committed a breach of

the "assumption of confidentiality" that was necessary to the 

entry of a settlement agreement, but where no confidentiality 

agreement was entered into and where confidentiality was not 

required by an order of the court, the inherent powers of the 

court are not properly exercised to sanction the breach of such 

an assumption.23 The judge suggested that the breach of the 

"assumption of confidentiality" violated the obligation of an 

attorney to deal honestly with others, but the inherent powers 

of the court do not extend to claims that an attorney during 

settlement negotiations did not act honestly.24

The judge also found that Goren violated Mass. R. Prof. C. 

4.2 by sending his solicitation letter to a few prospective 

 

23 Contrast Baella-Silva v. Hulsey, 454 F.3d 5, 7, 11-13

(1st Cir. 2006) (affirming sanction imposed by Federal District 

Court against party who committed breach of confidentiality 

clause of settlement agreement incorporated into court's 

judgment); Toon v. Wackenhut Corrections Corp., 250 F.3d 950,

952, 954 (5th Cir. 2001) (affirming sanction against party who 

committed breach of confidentiality provision of settlement 

agreement by filing unsealed motion to enforce settlement 

agreement).

24 The judge focused on the provision in Mass. R. Prof. C. 

Preamble, par. 2, which provides, "As negotiator, a lawyer seeks 

a result advantageous to the client but consistent with 

requirements of honest dealing with others," and implicitly 

found that Goren violated that part of the preamble that calls 

for "honest dealing with others." But the preamble to the rules

of professional conduct provides only "general orientation"; it 

is not itself a rule. Mass. R. Prof. C. Scope [9], 426 Mass. 

1308 (1998).
26

clients who were already represented by counsel in settlement 

negotiations. The judge recognized that "[i]n a technical 

sense" the adjudication of an alleged violation of an ethical 

rule rests solely with the board and this court, and that a 

judge does not have jurisdiction to rule on issues of 

compliance.

25 But he nonetheless determined that a finding of an 

ethical violation may bear on the issue whether Goren impaired 

the administration of justice. In the circumstances of this 

case, we disagree. Sending a solicitation letter to a 

represented client in these circumstances -- even assuming it 

was in violation of rule 4.2 -- is not conduct that may be 

sanctioned through the inherent powers of the court; such 

sanctions were not necessary to ensure the fair administration 

of justice where the judge also referred the matter to the board 

for its consideration, and where disciplinary proceedings 

instituted by the board and reviewed by this court would be able 

to protect the interests embodied in rule 4.2.

The judge's finding that Goren committed "a fundamental 

breach of his duty of candor to the [c]ourt," in violation of 

rule 3.3, calls for separate analysis, because this rule 

prohibits an attorney from making a knowing false statement to a 

 

25 See S.J.C. Rule 4:01, § 1, as amended, 430 Mass. 1319 

(2000) ("exclusive disciplinary jurisdiction" over lawyers 

practicing in the Commonwealth lies with Supreme Judicial Court 

and Board of Bar Overseers).
27

court, and it is plain that the inherent powers of the court 

include the authority to sanction an attorney for such 

misconduct, regardless of the adjudication of any complaint 

before the board for violation of this rule. See Rockdale Mgt. 

Co. v. Shawmut Bank, N.A., 418 Mass. 596, 598 (1994) ("When a 

fraud on the court is shown through clear and convincing 

evidence to have been committed in an ongoing case, the trial 

judge has the inherent power to take action in response to the 

fraudulent conduct," and "has broad discretion to fashion a 

judicial response warranted by the fraudulent conduct"); 

Munshani, 60 Mass. App. Ct. at 718-722. See also Chambers, 510 

U.S. at 46, quoting Universal Oil Prods. Co., 328 U.S. at 580

("if a court finds 'that fraud has been practiced upon it, or 

that the very temple of justice has been defiled,' it may assess 

attorney's fees against the responsible party"). The judge did 

not specify what he found to constitute this breach of Goren's 

duty of candor but we need not remand for such a finding, 

because the only finding that might support the exercise of the 

judge's inherent powers to sanction -- a finding that, when the 

attorneys represented to the judge that they were exploring 

settlement of the case, Goren knowingly misled the judge because 

Goren knew at the time that he intended to sabotage any possible 

settlement by sending out the solicitation letter -- is not 

supported by the information presented to the court. Although 
28

there was ample information to support a finding that Goren 

should have recognized that his sending of the solicitation 

letter put at risk the settlement agreement that he claimed in 

the letter he was "about to conclude" for his client, there is 

no information to suggest that Goren sought settlement 

discussions to procure delay in the litigation, knowing that he 

would sabotage any possible settlement.

We understand the judge's frustration that a settlement of 

a complex case was thwarted by Goren's desire to solicit other 

clients at a time when he should have known that doing so risked 

the settlement that had so nearly been achieved. We understand 

as well the parties' frustration that so much of their 

attorneys' time (and therefore their money) was squandered by 

the ultimate failure of negotiations triggered by Goren's 

solicitation. But the inherent powers of a judge to sanction an 

attorney are not so broad as to right all wrongs. They are 

limited to what is necessary to "vindicat[e] judicial 

authority." Chambers, 501 U.S. at 46, quoting Hutto, 437 U.S. 

at 689 n.14. See Byrne v. Nezhat, 261 F.3d 1075, 1133 n.116 

(11th Cir. 2001) ("Unlike the tort law, [sanctions imposed under 

court's inherent powers] are aimed directly at redressing the 

harm suffered by the judicial system"); Mark Indus., Ltd. v. Sea 

Captain's Choice, Inc., 50 F.3d 730, 733 (9th Cir. 1995) 

("Return of all fees and costs [was] too severe a sanction" 
29

because "[t]he proper use of sanctions that are within the 

court's inherent power is to protect the court so it may 

adequately dispense justice," whereas "[h]ere . . . the court 

chose to impose what amounted to a summary malpractice 

penalty").26 Because the alleged wrongs committed by Goren did 

not threaten the judge's ability to ensure the fair 

administration of justice, we conclude that the judge exceeded 

the inherent powers of a court by his assessment of attorney's 

fees and therefore abused his discretion in doing so.27

 

26 Sanctions imposed under the court's inherent powers may 

also serve the purpose of "mak[ing] [a] party whole for expenses 

caused by his opponent's obstinacy." Chambers, 501 U.S. at 46, 

quoting Hutto v. Finney, 437 U.S. 678, 689 n.14 (1978). See 

Avelino-Wright v. Wright, 51 Mass. App. Ct. 1, 5 (2001) ("Unlike 

the use of the criminal contempt power, the purpose of sanctions 

is designed not only to punish but also to compensate the 

aggrieved litigant for the actual loss incurred by the 

misconduct of the offending party"). But it does not follow 

that sanctions can always be justified whenever a party is 

injured by an opposing party's or an attorney's misconduct. The 

limiting principle of necessity means that the inherent powers 

of a judge may only be exercised where necessary to preserve the 

court's authority to administer justice.

27 Because we conclude that the sanctions order must be 

reversed where the fair administration of justice was not 

threatened by Goren's conduct, we do not reach the issue whether 

Goren's conduct was in bad faith, or whether a finding of bad 

faith is required to assess attorney's fees under the judge's 

inherent powers where no court order or rule of procedure has 

been disobeyed. Nor do we consider Goren's argument that he was 

entitled to an evidentiary hearing before sanctions could be 

imposed.
30

Conclusion. For the reasons stated, we reverse the judge's 

order and subsequent amended order as they pertain to the 

imposition of sanctions on Goren.

28

So ordered.

 

28 Our reversal of the judge's order does not affect the 

judge's referral of the matter to the Board of Bar Overseers for 

its consideration.