Case Name: Morton M. HILL, Jr., Plaintiff-Appellant, v. NORFOLK AND WESTERN RAILWAY COMPANY, Defendant-Appellee
Court: United States Court of Appeals for the Seventh Circuit
Jurisdiction: United States
Decision Date: 1987-03-16
Citations: 814 F.2d 1192
Docket Number: No. 86-2202
Parties: Morton M. HILL, Jr., Plaintiff-Appellant, v. NORFOLK AND WESTERN RAILWAY COMPANY, Defendant-Appellee.
Judges: Before POSNER and EASTERBROOK, Circuit Judges, and PARSONS, Senior District Judge.
Reporter: Federal Reporter 2d Series
Volume: 814
Pages: 1192–1208

Head Matter:
Morton M. HILL, Jr., Plaintiff-Appellant, v. NORFOLK AND WESTERN RAILWAY COMPANY, Defendant-Appellee.
No. 86-2202.
United States Court of Appeals, Seventh Circuit.
Argued Jan. 5, 1987.
Decided March 16, 1987.
As Amended March 17, 1987.
Rehearing and Rehearing En Banc Denied May 13, 1987.
Daniel J. Harrigan, Bayliff, Harrigan, Cord & Maugans, P.C., Kokomo, Ind., for plaintiff-appellant.
Linzey D. Jones, Sidley & Austin, Chicago, 111., for defendant-appellee.
Before POSNER and EASTERBROOK, Circuit Judges, and PARSONS, Senior District Judge.
Hon. James B. Parsons of the Northern District of Illinois, sitting by designation.

Opinion:
POSNER, Circuit Judge.
Hill, a brakeman fired by the Norfolk and Western railroad, took the matter to arbitration before a public law board, see 45 U.S.C. § 153 Second, which unanimously rejected his claim that he had been fired in violation of the collective bargaining agreement between the railroad and his union. He then brought this suit under 45 U.S.C. § 153 First (q) to set aside the board's decision, lost in the district court, and appeals to us. The appeal has no merit; indeed, it reveals a serious misunderstanding of the scope of federal judicial review of arbitration decisions.
As we have said too many times to want to repeat again, the question for decision by a federal court asked to set aside an arbitration award — whether the award is made under the Railway Labor Act, the Taft-Hartley Act, or the United States Arbitration Act — is not whether the arbitrator or arbitrators erred in interpreting the contract; it is not whether they clearly erred in interpreting the contract; it is not whether they grossly erred in interpreting the contract; it is whether they interpreted the contract. See, e.g., Dreis & Krump Mfg. Co. v. International Ass'n of Machinists & Aerospace Workers, 802 F.2d 247, 253 (7th Cir.1986), and cases cited there; Brotherhood of Locomotive Engineers v. Atchison, Topeka & Santa Fe Ry., 768 F.2d 914, 921 (7th Cir.1985). If they did, their interpretation is conclusive. By making a contract with an arbitration clause the parties agree to be bound by the arbitrators' interpretation of the contract. A party can complain if the arbitrators don't interpret the contract — that is, if they disregard the contract and implement their own notions of what is reasonable or fair. A party can complain if the arbitrators' decision is infected by fraud or other corruption, or if it orders an illegal act. But a party will not be heard to complain merely because the arbitrators' interpretation is a misinterpretation. Granted, the grosser the apparent misinterpretation, the likelier it is that the arbitrators weren't interpreting the contract at all. But once the court is satisfied that they were interpreting the contract, judicial review is at an end, provided there is no fraud or corruption and the arbitrators haven't ordered anyone to do an illegal act.
An operating rule of the Norfolk and Western railroad, incorporated by reference in the collective bargaining agreement with Hill's union, provides that "the conduct of any employee leading to conviction of any felony, or of any misdemeanor involving the unlawful use, possession, transportation, or distribution of narcotics or dangerous drugs, or of any misdemeanor involving moral turpitude is prohibited." In 1982 Hill was charged in a criminal court with a felony violation of Indiana's drug laws. At first he pleaded not guilty; but in September 1983, pursuant to a plea bargain, he filed with the court a motion to plead guilty to possession of marijuana, a misdemeanor. In the motion he said that "I know the Court will not accept a plea of GUILTY from anyone^ who claims to be innocent, and I make no claim of innocence. I now state that I did commit the crime to which I am pleading guilty." He asked the court to sentence him under an Indiana statute that allows a court to sentence a criminal defendant without entering a "judgment of conviction." Indiana Code § 35-48-4-12. Pursuant to this provision the judge suspended further proceedings in the case and sentenced Hill to probation. He also imposed a $500 fine (the proceeds to go to the police department, which wanted a new camera). But he did not enter a formal judgment. A few months later the prosecutor dismissed the criminal charge.
Shortly before it was dismissed, the railroad got wind of Hill's plea of guilty, and after verifying the plea and sentence from court records, it suspended him on January 5, 1984. At the same time it notified him that, pursuant to the collective bargaining agreement, the railroad would conduct an investigatory hearing on January 13 (later postponed to January 27). At the hearing, Hill's lawyer in the criminal action testified that Hill had told him that a malicious neighbor had seeded Hill's corn patch with marijuana, which had grown into the "mere sprouts" (18 inches high) seized by the authorities, and that Hill did not know how other marijuana had found its way into his unlocked shed, where it was also seized. On February 8 the railroad notified Hill that he was fired. The arbitration proceeding before the public law board followed. The board held that the word "conviction" in the collective bargaining agreement encompassed the disposition of Hill's criminal case and that the railroad had not violated the agreement by firing him.
Hill makes four arguments. (1) He was not convicted within the meaning of the collective bargaining agreement. (2) Even if he was, the agreement does not authorize discharge as a sanction for "conduct . leading to conviction." (3) The railroad denied him due process by failing to comply with certain procedural provisions in the collective bargaining agreement. (4) The public law board's decision is void because untimely.
1. Hill asks us to interpret the collective bargaining agreement and conclude that the arbitrators erred in holding that he engaged in "conduct . leading to conviction" within the meaning of the agreement. As we said earlier, we have no power to reinterpret the agreement. This is the bedrock principle of federal judicial review of arbitration awards and the failure of Hill's counsel to conform his submission to that principle falls short of minimum professional standards of representation.
Hill's argument that the arbitrators committed some form of lése majesté by refusing to conform the contractual meaning of "conviction" to the meaning that the word bears in the law of Indiana is absurd on two counts. First, the statute under which he was sentenced does not provide that the defendant punished under it is not "convicted," as if it were possible to impose criminal punishment (such as probation and a fine) on a person who had not been convicted of a crime. The statute merely provides that no "judgment of conviction" shall be entered. The collective bargaining agreement says nothing about conduct leading to a judgment of conviction, so there is no inconsistency between Indiana law and the arbitrators' interpretation of the agreement. Second, the agreement is in force in 20 states and there is no indication that the parties intended its words to be interpreted in accordance with the criminal procedure of Indiana.
Hill's further argument that the parties agree that Indiana law governs this case is false. The parties do not agree, and it is unlikely they would, since this case is under the federal Railway Labor Act. But maybe all Hill means is that the collective bargaining agreement requires, as a basis for sanctions under the operating rule in question, that the worker have been duly convicted, necessarily under some state or federal law. If that is what he is arguing, it exposes a second fallacy underlying his attack on the arbitrators' interpretation (the first being his misconception of the scope of judicial review of that interpretation). This fallacy is to suppose that the word "conviction" has a single meaning: and that the one which Hill argues (probably erroneously, as we are about to see) it bears in the Indiana statute under which he was sentenced. The word has three meanings that are potentially relevant to this case. First, it means a formal criminal judgment which becomes a part of one's record and can be used to enhance the punishment for a subsequent crime. Hill was not convicted in this sense. Second, it means a determination of guilt that is used as the predicate for imposing criminal punishment. That is the sense in which Hill was convicted. He was given a criminal punishment — probation—in a criminal proceeding. In no civilized system of criminal justice can you be sentenced without being convicted, whether or not a formal judgment of conviction is entered. Third, "conviction" could mean simply an authoritative determination of guilt, whether or not any punishment followed; in this view, the determination of guilt in a criminal proceeding is a substitute for the railroad's own factfinding.
The second sense was the one used by the Supreme Court in Dickerson v. New Banner Institute, Inc., 460 U.S. 103, 112-14, 103 S.Ct. 986, 991-92, 74 L.Ed.2d 845 (1983), in holding that a man who had pleaded guilty to an offense and been placed on probation, but without entry of a formal judgment, had been "convicted" within the meaning of the federal gun control laws. This is the meaning of "conviction" in Indiana as well. Hill was sentenced, hence "convicted"; he just didn't suffer the indignity of a formal "judgment of conviction." See Schalkle v. State, 272 Ind. 134, 140, 396 N.E.2d 384, 389 (1979).
So far as the Norfolk and Western railroad is concerned, the relevant sense of conviction is either the second or the third, but not the first. For reasons too obvious to dwell on, the railroad doesn't want to employ a brakeman who has been found guilty of violating the drug laws. The railroad doesn't give a hoot whether he is allowed to plead guilty to a lesser offense than the one with which he was originally charged (for the collective bargaining agreement expressly prohibits misdemean- or drug violations); or sentenced to pay a $500 fine; or let off with a fine plus probation, but no criminal record, because the police want to use the proceeds of the fine to buy a camera; or sentenced under a first offender's statute that allows the record of the conviction to be expunged. Cf. Dickerson v. New Banner Institute, Inc., supra, 460 U.S. at 114-22, 103 S.Ct. at 992-96. Hill pleaded guilty and the plea was accepted and that is the end of it so far as the railroad is concerned. Of course its position was not binding on the arbitrators but they agreed with it and their conclusion was certainly reasonable. Anyway all that matters is that they were interpreting the contract.
We have italicized this last sentence to drill home the fundamental point that the judicial function in arbitration cases is at an end when the court is satisfied that the arbitrators were interpreting the contract rather than doing something else. The correctness of their interpretation is irrelevant. Suppose for example that these arbitrators had found the dissent in Dickerson more persuasive than the majority opinion and had decided that the dissent provided the best guide to the meaning of the word "conviction" in the collective bargaining agreement. A court could not conclude that the arbitrators were acting lawlessly, and set aside the award.
After saying that "the claimant did in fact violate the rules of the Carrier," the public law board added: "The Carrier is very concerned in view of the number of serious accidents that have involved railroads and the investigations being carried on by the government into the use of drugs and alcohol. Under the circumstances herein, there is no justification to set the discipline aside." If this were read to mean that the board had upheld Hill's discharge not because the collective bargaining agreement authorized the discharge but because the board or the railroad is concerned about the use of illegal drugs, there would be an argument that the board had strayed outside its lawful domain, which is confined to contract enforcement. But the opinion cannot be read so. Having found that Hill had violated the "conduct . leading to conviction" rule (the reason for the board's reference to "rules" is that the same ground for discharge appears in two provisions incorporated in the collective bargaining agreement), the board then turned to the question whether it should exercise discretion to mitigate the severity of the sanction, and declined to do so. It is generally assumed that the parties to collective bargaining agreements intend that the arbitrators will have some discretion with regard to sanctions for misconduct. See, e.g., Zeviar v. Local No. 2747, Airline, Aerospace & Allied Employees, 733 F.2d 556 (8th Cir.1984) (per curiam); Elkouri & Elkouri, How Arbitration Works 664-70 (4th ed. 1985). Hill doesn't attack the board's failure to exercise whatever discretion it might have; he complains about its interpretation of the collective bargaining agreement as authorizing his dismissal. As to this it is plain from Hill's own manner of argument that the board was attempting to interpret the collective bargaining agreement rather than imposing private notions of workplace justice.
2. Hill further argues, however, that even if he engaged in conduct leading to conviction within the meaning of the collective bargaining agreement, the agreement doesn't clearly make discharge a permissible sanction for such conduct, and he says that any ambiguity in the agreement must be construed against the railroad. Again Hill misconceives the scope of judicial review. We have no authority to apply the principles of contract interpretation and, if we come up with a different conclusion from the arbitrators, to set their decision aside. Hill regards the agreement as ambiguous because the "conduct . leading to conviction" rule omits mention of the sanctions for its violation, and because another operating rule, also incorporated in the collective bargaining agreement, lists several forms of conduct that "are sufficient cause for dismissal," including negligence, sleeping on duty, willful neglect of duty, giving false statements, and dishonesty — and neither "conduct . leading to conviction" nor possession or use of illegal drugs is on the list. Taking these points in reverse order, we first note that in ordinary language criminal misconduct is a species of dishonesty and that the second rule appears to use the word in this sense, for it lists the giving of false statements (which is dishonesty in the sense of lying) as a-separate ground for dismissal from dishonesty. That the rule prohibiting "conduct . leading to conviction" mentions no sanctions does not imply that none can be imposed. Except for Hill's strained reading of the "sufficient cause for dismissal" rule, there is no basis in the agreement for doubting that conduct leading to conviction is punishable by any appropriate sanction, including dismissal. Cf. Zeviar v¡ Local No. 2747, supra. Contracts contain implicit as well as explicit terms, and arbitrators' authority to interpret the latter is as great as their authority to interpret the former. See, e.g., Dreis & Krump Mfg. Co. v. International Ass'n of Machinists & Aerospace Workers, supra, 802 F.2d at 253; Ethyl Corp. v. United Steelworkers of America, 768 F.2d 180, 185-86 (7th Cir.1985). An implicit term in the collective bargaining agreement is that the railroad may punish a violation of its operating rules with any sanction up to and including dismissal, subject to the arbitrators' discretion (the precise bounds of which we need not consider) to insist on a more lenient sanction than that chosen by the railroad.
The language we quoted earlier from the public law board's opinion may well indicate that the board thought discharge was not merely an authorized sanction but the right sanction. But the language will not bear the interpretation that although the collective bargaining agreement does not authorize dismissal as a sanction the board decided to approve it anyway. Hill's argument again comes down to a quarrel with the board's interpretation of the agreement — a quarrel he must lose.
3. The collective bargaining agreement can be read to require that the railroad's investigation must precede the worker's suspension, and also to entitle the suspended worker to an additional hearing, which Hill says he asked for and was refused. A worker who in the grievance proceedings growing out of his discharge is denied procedural rights granted him by the collective bargaining agreement can complain to the public law board, which must enforce those rights just as it must enforce any other rights conferred by the agreement. Wilson v. Chicago & North Western Transport. Co., 728 F.2d 963, 966-67 (7th Cir.1984). Hill claims that the board refused to do this, but he muddies his argument by repeated references to "procedural due process," as if he were trying to raise an issue of constitutional law. We held in Elmore v. Chicago & Illinois Midland Ry., 782 F.2d 94, 96-97 (7th Cir.1986), that for purposes of the Fifth Amendment a private railroad is not the United States, and therefore a denial by the railroad of due process of law is not a violation of the due process clause of that amendment. The district court relied on Elmore in turning down Hill's argument. Yet Hill did not cite it in his opening brief in this court, let alone argue that it either is distinguishable from this case or should be overruled. Nor did he cite it in his reply brief, even though the railroad's answering brief cited and relied on it.
The ostrich-like tactic of pretending that potentially dispositive authority against a litigant's contention does not exist is as unprofessional as it is pointless. Bonds v. Coca-Cola Co., 806 F.2d 1324, 1328 (7th Cir.1986). But in fairness to Hill's counsel we note that several sentences in his opening brief, when read closely, reveal that he is not attempting to press a "constitutional" due process claim, but merely a "contractual" due process claim; in other words, he is merely complaining about a violation of the collective bargaining agreement's procedural provisions and not about a deprivation of his property (his job rights) without due process of law. His failure to make this clear by discussing the bearing of Elmore is, however, distressing, and at oral argument he appeared to conflate the two types of "due process" claim. After argument he sent us a letter correcting this mistake, but he did not ask the court's permission to file what was in effect a post-argument brief, thus betraying a lack of familiarity with this court's rules and decisions. See Palmer v. City of Chicago, 806 F.2d 1316, 1324 (7th Cir.1986).
At all events Hill's claim to have been denied procedural protections guaranteed him by the collective bargaining agreement has been waived by not having been made to the public law board. It is true that the union (Hill's representative before the board) mentioned the alleged denial of his procedural rights in its statement of facts. But it did not argue the point or ask for any germane relief, such as a new investigative hearing, or reinstatement pending that hearing, or back pay until the final disposition of Hill's grievance. The facts being so cut and dried, the union no doubt realized that additional procedures would not change the outcome. At all events it put all its eggs in the basket labeled violation of Hill's substantive rights under the collective bargaining agreement.
4. The agreement provides that "the Board shall make findings of fact and render an award on each case submitted to it, within thirty (30) days after the close of the hearing of each claim, with the exception of such case or cases as may be withdrawn from the Board by the mutual consent of the parties." The board took three and a half months to make its award. Hill contends that the award is therefore void, so that he should be entitled to resubmit his claim. We disagree. The agreement does not say that a late award lacks binding effect, as in Huntington Alloys, Inc. v. United Steelworkers of America, 623 F.2d 335 (4th Cir.1980). And there is no suggestion that Hill either was harmed by the two-month delay or complained after the deadline passed. Unless the agreement itself makes the deadline jurisdictional, a party's failure to complain about delay before the award is made forfeits his right to challenge the timeliness of the award. Lodge No. 725 v. Mooney Aircraft, Inc., 410 F.2d 681, 683 (5th Cir.1969); West Rock Lodge No. 2120 v. Geometric Tool Co., 406 F.2d 284, 286 (2d Cir.1968); In re Arbitration Between American Airlines, Inc. and Local 501, 633 F.Supp. 723 (E.D.N.Y.1986). Hill's failure to object distinguishes Jones v. St. Louis-San Francisco Ry., 728 F.2d 257, 264-67 (6th Cir.1984).
Hill's reliance on Brotherhood of Railway & Steamship Clerks v. Norfolk Southern Ry., 143 F.2d 1015 (4th Cir.1944), is misplaced. The court there was interpreting another provision of the Railway Labor Act, not applicable to this case, which (as the court read it — whether rightly or wrongly we need not decide) made the arbitrators' authority to make an award lapse after the expiration of the deadline fixed in the collective bargaining agreement unless the period was extended by agreement of the parties prior to the making of the award, and no such agreement had been made. The provision in question, 45 U.S.C. § 158(i), applies to the ad hoc private arbitration authorized by 45 U.S.C. § 157 First rather than to arbitration by national or regional adjustment boards (see 45 U.S.C. § 153 First) or public law boards (see 45 U.S.C. § 153 Second). The Fourth Circuit's decision may therefore reflect some hostility to the idea of letting the members of an ad hoc tribunal flex their muscles by handing down awards after the deadline specified in the arbitration agreement has passed. All three types of tribunal authorized by the Railway Labor Act to make binding decisions — the national and regional adjustment boards, the special adjustment boards known as "public law boards" (so called after the "public law" that amended the Railway Labor Act to authorize them), and the ad hoc arbitrators authorized by section 157 First — are arbitration tribunals. But the methods of selecting the arbitrators and the procedures they follow differ somewhat among the types of tribunal, and only section 157 uses the word "arbitrator." The format contemplated by sections 157 and 158 comes closest to ordinary commercial arbitration and is not applicable to arbitration before the adjustment boards or the public law boards. See Anderson v. National Rail road Passenger Corp., 754 F.2d 202, 205 n. 4 (7th Cir.1984) (per curiam).
An additional consideration is that the dispute in the Fourth Circuit's case concerned modification of the collective bargaining agreement, a highly sensitive question on which the timing of the answer might be important; the present case involves a routine disciplinary matter. At all events there is no statutory provision applicable to arbitration before the public law board corresponding to section 158(i), hence no peg on which to hang the Fourth Circuit's view if we have divined it correctly.
So the district court's judgment, refusing to disturb the arbitrators' decision, must be affirmed. But that cannot be the end of our consideration, for there is a matter of sanctions to be resolved. Hill's counsel wasted our time and his adversary's money unpardonably by misrepresenting the standard of federal judicial review of arbitration decisions. The appeal as a whole is not frivolous, because the complaint about the board's failure to render a timely award has at least colorable merit. But most of Hill's brief is devoted to frivolous argumentation. Rule 38 authorizes sanctions for the filing of a frivolous appeal (as does the less frequently cited 28 U.S.C. § 1912), and we have held that the rule authorizes the imposition of sanctions for the part of an appeal that is frivolous even if the presence of a colorable ground prevents the entire appeal from being adjudged frivolous. District No. 8, International Ass'n of Machinists & Aerospace Workers v. Clearing, 807 F.2d 618, 619, 623 (7th Cir.1986); see also Granado v. Commissioner of Internal Revenue, 792 F.2d 91, 94 (7th Cir.1986). It would be strange if by the happenstance of including one colorable (though losing) claim amidst an ocean of frivolous ones, a litigant could ward off all sanctions.
It is true that in Miller Brewing Co. v. Brewery Workers Local Union No. 9, 739 F.2d 1159, 1168 (7th Cir.1984), we said that "as a general rule" it would not be worthwhile "to divide a suitor's claims (or defenses) into frivolous and non-frivolous, and award attorney's fees in respect to the frivolous claims but not the others." We adhere to the general rule but recognize exceptions to it. In Miller the suitor (a company that had lost a labor arbitration and was trying to get the award set aside) actually prevailed in part, unlike the situation in the present case; moreover, only one of the company's arguments was even arguably frivolous. The appeal in this case was a complete loser, and most of the grounds of appeal were patently groundless. In addition, the suit in Miller preceded the effective date of the amended Rule 11 of the Federal Rules of Civil Procedure, which makes clear that adequate factual and legal investigation must precede every pleading in a federal district court action. It is true that this court has not incorporated Rule 11 into its own rules, and therefore the rule does not apply directly to proceedings in this court. It does however provide guidance in interpreting the rules that do control the proceedings in this court, such as Fed.R.App.P. 38 and 46, and 28 U.S.C. § 1912 and 1927. See Thornton v. Wahl, 787 F.2d 1151 (7th Cir.1986); In re Kelly, 808 F.2d 549 (7th Cir.1986).
We conclude that sanctions should be imposed in this case under Rule 38 for the filing of an appeal based largely on frivolous grounds. The usual form of sanctions for filing a frivolous suit or appeal is an order to pay the litigation expenses of the winning party, and we see no reason to depart from that measure here. It is immaterial that the defendant did not request an award of sanctions. We frequently impose sanctions on our own initiative; for a recent example see Weinstein v. University of Illinois, 811 F.2d 1091, 1098 (7th Cir.1987). The appeal has "required members of this court and its staff to expend a good deal of time and attention which could have been used elsewhere. The United States pays the salaries of the judges of this court and its staff. In wasting their time, [Hill] also wasted the government's money." United States v. Stillwell, 810 F.2d 135, 136 (7th Cir.1987) (per curiam). Rather than attempt to estimate the cost to the government, our policy in these cases is to award the costs reason ably incurred by the winning party, in the hope that such awards will be sufficient to deter frivolous lawsuits.
We could stop here, and we do not suppose anyone would or could raise a question about the procedures used to determine that Rule 38 sanctions should be imposed in this case. The appeal is (in major part) frivolous, it has caused delay in a method of nonjudicial dispute resolution intended to avoid delay, and no more is necessary to demonstrate the propriety of an award of sanctions under Rule 38. We also do not suppose, however, that a railroad brakeman is responsible for frivolous legal arguments, so we are minded to order Hill's counsel to bear personally the expense incurred by the railroad in briefing the issues that we have found were frivolously raised by Hill's opening brief. We have on several occasions in recent years ordered counsel to bear personally the expense of sanctions under Rule 38. See Westinghouse Electric Corp. v. NLRB, 809 F.2d 419, 425 (7th Cir.1987); Thornton v. Wahl, supra, 787 F.2d at 1154; Lepucki v. Van Wormer, 765 F.2d 86, 88-89 (7th Cir.1985) (per curiam); Reid v. United States, 715 F.2d 1148, 1155 (7th Cir.1983). We have not, however, discussed at any length our power to do so, and the appropriate procedures to be employed in doing so; and we desire now to repair this omission.
The imposition of Rule 38 sanctions directly on counsel could be thought the imposition of a disciplinary sanction under Rule 46(c), which provides for a hearing at counsel's request. (There is no counterpart provision in Rule 38 itself.) In incomplete response it could be noted that 28 U.S.C. § 1927, which provides that any attorney "who so 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," and which says nothing about a hearing, is applicable to this case. The taking of a frivolous appeal from the confirmation of an arbitration award delays the finality of the arbitration proceeding and by doing so thwarts the essential purpose of arbitration — to provide a swift and conclusive alternative to litigation. It is a separate question, however (one to which we shall return), whether this conduct is "vexatious" per se. In any event the Supreme Court has made clear — what is anyway obvious — that the requirements of due process of law are applicable to a proceeding to impose sanctions under this statute, Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980); and a number of decisions, building on Piper, say that notice and an opportunity to be heard are required before sanctions can be imposed on an attorney under section 1927. See, e.g., Eash v. Riggins Trucking Inc., 757 F.2d 557, 570-71 (3d Cir.1985) (en banc).
Far from having any quarrel with these decisions, we believe absolutely that an attorney ordered to pay money as a sanction for the filing of a frivolous suit or appeal is entitled to due process of law, and that this entitlement includes an opportunity for a hearing if a factual question concerning the propriety of sanctions is raised. Such a question was raised in In re Kelly, supra, so we issued a rule to show cause and gave the attorney an opportunity for a hearing. In Shrock v. Altru Nurses Registry, 810 F.2d 658, 661-62 (7th Cir.1987), we directed the district court to grant a hearing before imposing sanctions, because the adequacy of the factual investigation conducted by the plaintiff and his counsel before filing the complaint was in question.
But obviously the right to a hearing, whether that right is implicit or (as in Rule 46(c)) explicit, is limited to cases where a hearing would assist the court in its decision. Cf. Lepucki v. Van Wormer, supra, 765 F.2d at 87-88; United States v. Blodgett, 709 F.2d 608, 610 (9th Cir.1983). Where, as in this and most Rule 38 cases, the conduct that is sought to be sanctioned consists of making objectively groundless legal arguments in briefs filed in this court, there are no issues that a hearing could illuminate. All the relevant "conduct" is laid out in the briefs themselves; neither the mental state of the attorney nor any other factual issue is pertinent to the imposition of sanctions for such conduct. Where a hearing would be pointless it is not required, see United States v. Nesglo, Inc., 744 F.2d 887 (1st Cir.1984); hence "if there are no contested factual issues the district judge can proceed summarily," Centurion Reinsurance Co. v. Singer, 810 F.2d 140, 143 (7th Cir.1987), as we are doing here. Cf. Fed.R.Crim.P. 42(a) ("A criminal contempt may be punished summarily if the judge certifies that he saw or heard the conduct constituting the contempt and that it was committed in the actual presence of the court"); Commodity Futures Trading Comm'n v. Premex, Inc., 655 F.2d 779, 782 n. 2 (7th Cir.1981). If the question were whether Hill's counsel had made arguments unsupported by the trial record (and if that record were not a part of the record before us), or had made frivolous legal arguments willfully, or maliciously, or with "conscious indifference" to their validity, or otherwise in bad faith, there would be a factual issue and he would be entitled to a hearing. See Knorr Brake Corp. v. Harbil, Inc., 738 F.2d 223, 227-28 (7th Cir.1984). The standard for the imposition of sanctions under Rule 38 is an objective one, however; it has nothing to do with the mental state of the person sanctioned. See, e.g., Bacon v. American Federation of State, County & Municipal Employees Council, # 13, 795 F.2d 33, 35 (7th Cir.1986). And it is under Rule 38 that we are proceeding in this case.
Knorr suggests that a finding of intentional misconduct is a prerequisite to imposing sanctions under section 1927. See 738 F.2d at 226-27. This reading is supported by the word "vexatiously" in section 1927, but is in tension with the Supreme Court's statement in Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421, 98 S.Ct. 694, 700, 54 L.Ed.2d 648 (1978), that "the term 'vexatious' in no way implies that the plaintiff's subjective bad faith is a necessary prerequisite to a fee award against him," and with our recent suggestion that "negligent inattention" is a sufficient predicate for imposing sanctions under section 1927, see Westinghouse Electric Corp. v. NLRB, supra, 809 F.2d at 425. In re TCI Ltd., 769 F.2d 441, 445-46 (7th Cir.1985), interpreting Knorr, suggests that bad faith is relevant only if the suit is colorable; this parallels the distinction in tort law between abuse of process and malicious prosecution. See Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F.2d 466, 470-71 (7th Cir.1982). At all events, proof of intentional or even negligent misconduct, while it would certainly provide an added reason for a sanction under Rule 38 or any other provision, is not a prerequisite to imposing sanctions under Rule 38. See, e.g., Munson v. Friske, 754 F.2d 683, 698 n. 10 (7th Cir.1985). That rule has no language corresponding to "vexatiously." And lest there be any doubt about the nature of our action, we emphasize that we are not accusing Hill's counsel of morally blameworthy conduct. We find merely that he made (we assume in perfect good faith) objectively groundless legal arguments for which a monetary sanction is proper in order to protect this court's ability to serve litigants with meritorious cases and in order to make lawyers give thoughtful consideration to whether there are grounds for an appeal before filing an appeal. This is not a new principle. The filing of an appeal should never be a conditioned reflex. "About half the practice of a decent lawyer consists in telling would-be clients that they are damned fools and should stop." 1 Jessup, Elihu Root 133 (1938).
The text of Rule 38, and our previous decisions applying it, provide all the notice that an attorney could reasonably demand that sanctions may be imposed on counsel directly for the making of frivolous legal arguments in this court — and imposed without a hearing, if there are no factual questions. The cases we cited earlier in which this court has required the attorney to bear personally the sanctions imposed under Rule 38 did not give the attorney a hearing. Nor did Hagerty v. Succession of Clement, 749 F.2d 217 (5th Cir.1984), a similar case in another circuit. A hearing is required in a proceeding concerning sanctions only if there is a contested factu al issue; there is not and cannot be one in this case.
This court has been plagued by groundless lawsuits seeking to overturn arbitration awards, and again we remind the bar that whether the suit is brought by the company or the union or, as here, by an individual employee, if it is frivolous in whole or part this court will impose sanctions. See Dreis & Krump Mfg. Co. v. International Ass'n of Machinists & Aerospace Workers, supra, 802 F.2d at 254-56. The promise of arbitration is spoiled if parties disappointed by its results can delay the conclusion of the proceeding by groundless litigation in the district court followed by groundless appeal to this court; we have said repeatedly that we would punish such tactics, and we mean it.
As should be evident to any regular reader of federal court decisions, the frequency with which federal judges are imposing sanctions for abuse of federal court process has increased markedly in recent years. The reasons are systemic. As the federal courts become more and more overloaded, the costs imposed on ethical and responsible litigants when judicial resources are diverted to the processing of frivolous claims and defenses mount higher and higher. Moreover, as the bar and the judiciary both expand, the incentive for self-regulation by lawyers that comes from appearing regularly before the same judges diminishes, making judicial regulation by sanctions increasingly necessary. We are in a transitional period, and some members of the bar still do not realize that the judicial attitude toward attorney misconduct has stiffened. They had better realize it.
The railroad shall submit to the clerk of this court within 15 days proper documentation of its expenses in defending this appeal against the claims that the public law board misinterpreted or misapplied the collective bargaining agreement. Mr. Hill's counsel will of course have an opportunity to contest the amount requested by the railroad.
Affirmed With Sanctions.