Opinion ID: 167175
Heading Depth: 2
Heading Rank: 3

Heading: Initiation versus Multiplication

Text: 33 Gage next argues that § 1927 only applies to the multiplication of proceedings and not to the initiation of proceedings. This argument has support. See, e.g., DeBauche v. Trani, 191 F.3d 499, 511 (4th Cir.1999); Zuk v. E. Pa. Psychiatric Inst., 103 F.3d 294, 297 (3d Cir.1996); In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 435 (9th Cir.1996). But see In re TCI, Ltd., 769 F.2d 441, 448 (7th Cir.1985). Gage maintains, then, that the district court erred in sanctioning him for filing the initial complaint. We agree, to the extent that the court actually did so. The court stated that the proceedings had been multiplied by Gage's decision to move forward with [the § 1983 and § 1985] claims when no clear legal basis supported them, Aplt.App. at 1038, and then directed Winn to account for the fees incurred in connection with [the] defense of the dismissed § 1983 and § 1985 claims. Id. at 1041. But afterward, when reviewing Winn's counsel's accounting, which included fees for drafting the motion to dismiss, the court said that Gage had violated § 1927 by asserting the § 1983 and § 1985 claims. Id. at 1228. This court has encountered similarly imprecise language before. 34 In Dreiling v. Peugeot Motors of America, Inc., 768 F.2d 1159, 1165 (10th Cir. 1985), this court affirmed a § 1927 sanction against an attorney who, according to the district court, had continued to assert bogus claims long after it would have been reasonable and responsible to have dismissed the claims, and who commenced the action ... without grounds and thereafter maintained `the litigation in bad faith, vexatiously, wantonly and for oppressive reasons.' This court further identified a bad faith multiplication of proceedings in the attorney's filing of an amended complaint prior to receiving discovery essential to understanding one of the defendant's roles in the litigation. Id. at 1166. 35 Insofar as Dreiling includes commenc[ing] the action without grounds amongst the court's § 1927 reasoning, we do not think the court meant to say that § 1927 liability could be imposed for initiating meritless litigation. Rather, it appears the court either included this language as a precursor to its discussion of the merits or simply incorporated the district court's use of inherent-power terminology, which would have been appropriate for discussing the bad faith initiation of litigation, see Oliveri v. Thompson, 803 F.2d 1265, 1272 (2d Cir.1986). In any event, we read Dreiling in line with other courts that recognize § 1927's incentive for attorneys to regularly re-evaluate the merits of their claims and to avoid prolonging meritless claims, see, e.g., Jolly Group, Ltd. v. Medline Indus., Inc., 435 F.3d 717, 720 (7th Cir.2006); Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 875 (5th Cir. 1988), but we reiterate that § 1927 covers only the multiplication of the proceedings in any case, 28 U.S.C. § 1927. 11 This unambiguous statutory language necessarily excludes the complaint that gives birth to the proceedings, as it is not possible to multiply proceedings until after those proceedings have begun. 12 To the extent that the Seventh Circuit held otherwise in In re TCI, Ltd., 769 F.2d at 448, we find the court's reasoning questionable. There, the Seventh Circuit looked beyond § 1927's language to (1) a failed amendment that would have required a warning prior to sanctions; and (2) the new Fed.R.Civ.P. 11, which, the court observed, requires the attorney to take care before filing a complaint. Id. We see no reason to look past § 1927's clear language. See BedRoc Ltd., LLC v. United States, 541 U.S. 176, 187 n. 8, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004) (recognizing longstanding precedents that permit resort to legislative history only when necessary to interpret ambiguous statutory text). 36 Because Gage acquiesced in Winn's first and only attempt to dismiss the § 1983 claim, we cannot say that Gage multiplied the proceedings after pleading this claim in the complaint. Consequently, the district court abused its discretion in awarding sanctions based on this claim. But Gage did oppose the dismissal of the § 1985(2) and (3) claims and even sought to expand their scope in the motion to amend/add parties, requiring Winn to further address § 1985's viability in the reply in support of dismissal and in the response to the motion to amend/add parties. Given the patently meritless nature of the § 1985 claims, 13 we conclude that Gage's conduct in pursuing those claims in the face of Winn's motion to dismiss multiplied the proceedings recklessly and with indifference to well-established law. 37 We stress, however, that § 1927 could have been applied only to Gage's conduct in attempting to preserve and advance the § 1985 claims beyond the complaint. Gage did nothing with these claims until after Winn moved to dismiss. Thus, the district court abused its discretion to the extent it awarded fees based on Winn's counsel's preparing the April 1999 motion to dismiss. Accordingly, this matter will be remanded for the district court to deduct from the sanctions award the fees generated by Winn's counsel in attacking the Title 42 claims via the April 1999 motion. 38