Inherent Sanctioning Power in the Federal Courts After Chambers v. NASCa, Inc.

I. INTRODUCTION Litigants in federal court are seeing an increased emphasis on sanctions to curb litigation misconduct. Various Federal Rules of Civil Procedure have been amended to include sanctions,(1) and an important federal sanctioning statute has been amended to give it more "teeth."(2) The Advisory Committee on Civil Rules has advocated increased use of sanctions to control litigation abuse,(3) as have other judges and scholars.(4) In response, federal courts have interpreted sanctioning provisions broadly to help effectuate their stated purposes.(5) Yet the most potent sanctioning power might not be embodied in any set of rules or statutes, but rather embedded in the institution of the judiciary itself: the inherent power of a federal court to shift attorney's fees as sanctions for bad-faith litigation. In Chambers v. NASCO, Inc.,(6) a divided Supreme Court upheld the use of this power to sanction a party for nearly one million dollars, holding that express sanctioning provisions do not limit use of the inherent sanctioning power. This Note examines the ramifications of Chambers on sanctions jurisprudence and on the other inherent powers of federal courts. Part II provides the background for the case, exploring the evolution and interplay of the inherent and textual powers at issue. Part III summarizes the case and the competing opinions. Part IV examines the impact of the holding, analyzing the inherent sanctioning power that emerged from Chambers and critiquing the Court's methodology. Part V concludes that Chambers forged a new inherent power for the federal courts to use in the war against litigation misconduct, but that it did so at the expense of clarity and faithfulness to precedent. II. BACKGROUND A. GENERAL RECOGNITION OF INHERENT POWERS Article III of the Constitution provides that " t!he judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish."(7) Inherent in the concept of judicial power are c!ertain implied powers that! must necessarily result to our Courts of justice from the nature of their institution. ... To fine for contempt--imprison for contumacy--inforce the observance of order, &c. are powers which cannot be dispensed with in a Court, because they are necessary to the exercise of all others: and so far our Courts no doubt possess powers not immediately derived from statute ....(8) These implied or "inherent" powers are generally institutional powers of control that allow a court to maintain the integrity of its proceedings.(9) Included in these powers are those originally possessed by the English equity courts and vested in federal district courts upon their creation, subject to modifications by Congress."(10) B. ASSERTION OF INHERENT POWER TO ALLOW ATTORNEY'S FEES AS COSTS One of the powers purportedly possessed by the English courts and, consequently, inherent in every federal district court, is the power to impose attorney's fees as costs if a losing party litigates in bad faith.(11) Ordinarily, a losing party in federal court must pay the prevailing party's costs.(12) (Costs" comprise the expenses of litigation,(13) such as court fees, court re- porter fees, and copies,(14) but generally do not include attorney's fees.(15) Congress controls the costs available to prevailing parties(16) and has specified by statute instances in which attorney's fees may be included as costs.(17) The federal judiciary, however, has asserted an inherent power to tax attorney's fees as costs in several additional instances, including litigation in which a losing party "as acted in bad faith, vexatiously, wantonly, or for oppressive reasons."(18) Because of its penal nature, exercise of this inherent power to shift fees has sometimes been viewed as a sanction.(19) C. SANCTIONS IN THE FEDERAL RULES OF CIVIL PROCEDURE In 1938, the Federal Rules of Civil Procedure began governing procedure in the federal courts. …