Opinion ID: 4528901
Heading Depth: 2
Heading Rank: 2

Heading: Inherent Power to Sanction

Text: Various rules and statutes imbue courts with authority to sanction attorneys for professional lapses of one kind or another with or without bad faith.39 Courts also possess inherent powers that aid the exercise of their jurisdiction, facilitate the administration of justice, and preserve the independence and integrity of the judicial system.40 A court’s inherent authority includes the “power to discipline an attorney’s behavior.”41 34 Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004). 35 Id. 36 In re Barber, 982 S.W.2d 364, 366 (Tex. 1998). 37 Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006). 38 Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997). 39 See supra n.2. 40 Eichelberger v. Eichelberger, 582 S.W.2d 395, 399 (Tex. 1979). 41 See In re Bennett, 960 S.W.2d 35, 40 (Tex. 1997). 20 Inherent authority emanates “from the very fact that the court has been created and charged by the constitution with certain duties and responsibilities.”42 Indeed, courts “‘are universally acknowledged to be vested, by their very creation, with power to impose silence, respect, and decorum, in their presence, and submission to their lawful mandates.’”43 Courts are accordingly empowered to punish an attorney’s behavior even when the offensive conduct is not explicitly prohibited by statute, rule, or other authority.44 That power is not boundless, however. The inherent authority to sanction is limited by due process, so sanctions must be just and not excessive.45 Moreover, “[b]ecause inherent powers are shielded from direct democratic controls,”46 and “[b]ecause of their very potency, inherent powers must be exercised with restraint[,] discretion,”47 and “great caution.”48 To that end, invocation of the court’s inherent power to sanction necessitates a finding of bad faith.49 With the understanding that inherent powers must be used sparingly, our appellate courts have consistently held that a court’s inherent power to sanction “exists to the extent necessary to 42 Eichelberger, 582 S.W.2d at 398. 43 Chambers v. NASCO, Inc. 501 U.S. 32, 43 (1991) (quoting Anderson v. Dunn, 19 U.S. 204, 227 (1821)). 44 Bennett, 960 S.W.2d at 40. 45 Id.; TransAmerican Nat’l Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991). 46 Roadway Exp., Inc. v. Piper, 447 U.S. 752, 764 (1980). 47 Chambers, 501 U.S. at 44; accord Roadway Exp., 447 U.S. at 764. 48 Chambers, 501 U.S. at 43 (quoting Ex Parte Burr,6 L. Ed. 152 (1824)). 49 Roadway Exp., 447 U.S. at 767 (imposition of “any sanction under the court’s inherent authority” requires a finding of bad-faith conduct); see Chambers, 501 U.S. at 49-50 (1991) (“[A] federal court is [not] forbidden to sanction bad-faith conduct by means of the inherent power simply because that conduct could also be sanctioned under the statute or the Rules. A court must, of course, exercise caution in invoking its inherent power and it must comply with mandates of due process, both in determining that the requisite bad faith exists and in assessing fees.”). 21 deter, alleviate, and counteract bad faith abuse of the judicial process . . . .”50 Bad faith is not just intentional conduct but intent to engage in conduct for an impermissible reason, willful noncompliance, or willful ignorance of the facts.51 “Bad faith” includes “conscious doing of a wrong for a dishonest, discriminatory, or malicious purpose.”52 Errors in judgment, lack of diligence, unreasonableness, negligence, or even gross negligence—without more—do not equate 50 Houtex Ready Mix Concrete & Materials v. Eagle Const. & Envtl. Servs., L.P., 226 S.W.3d 514, 524 (Tex. App.—Houston [1st Dist.] 2006, no pet.); accord, e.g., Darnell v. Broberg, 565 S.W.3d 450 (Tex. App.—El Paso 2018, no pet.); Liles v. Contreras, 547 S.W.3d 280 (Tex. App.—San Antonio 2018, pet. denied); Guerra v. L&F Distribs., 521 S.W.3d 878, 890 (Tex. App.—San Antonio 2017, no pet.); Fast Invs., LLC v. Prosper Bank, No. 02-13-00026-CV, 2014 WL 888438 (Tex. App.—Fort Worth Mar. 6, 2014, no pet.) (mem. op.); McDonald v. State, 401 S.W.3d 360 (Tex. App.—Amarillo 2013, pet. ref’d); Union Carbide Corp. v. Martin, 349 S.W.3d 137 (Tex. App.—Dallas 2011, no pet.); Ezeoke v. Tracy, 349 S.W.3d 679 (Tex. App.—Houston [14th Dist.] 2011, no pet.); Dike v. Peltier Chevrolet, Inc., 343 S.W.3d 179 (Tex. App.—Texarkana 2011, no pet.); Wythe II Corp. v. Stone, 342 S.W.3d 96, 113 (Tex. App.—Beaumont 2011, pet. denied); Davis v. Rupe, 307 S.W.3d 528, 531 (Tex. App.—Dallas 2010, no. pet.); Finlan v. Peavy, 205 S.W.3d 647 (Tex. App.—Waco 2006, no pet.); Howell v. Tex. Workers’ Comp. Comm’n, 143 S.W.3d 416, 446-47 (Tex. App.—Austin 2004, pet. denied); McWhorter v. Sheller, 993 S.W.2d 781 (Tex. App.—Houston [14th Dist.] 1999, pet. denied); Keithly v. P.G.D., Inc., No. 08-99-00278-CV, 2000 WL 1681066 (Tex. App.—El Paso Nov. 9, 2000, no pet.) (mem. op.); Williams v. Azko Nobel Chems. Inc., 999 S.W.2d 836, 843 (Tex. App.—Tyler 1999, no pet.); Onwuteaka v. Gill, 908 S.W.2d 276, 280 (Tex. App.—Houston [1st Dist.] 1995, no writ); Kutch v. Del Mar Coll., 831 S.W.2d 506, 510 (Tex. App.—Corpus Christi 1992, no writ); see also Clark v. Bres, 217 S.W.3d 501, 512 (Tex. App.—Houston [14th Dist.] 2006, pets. denied) (“Even in the absence of an applicable rule or statute, courts have the authority to sanction parties for bad faith abuses if it finds that to do so will aid in the exercise of its jurisdiction, in the administration of justice, and the preservation of its independence and integrity.”). Some courts have further articulated, as an additional requirement, that “the conduct complained of significantly interfered with the court’s legitimate exercise of one of its traditional core functions.” Kennedy v. Kennedy, 125 S.W.3d 14, 19 (Tex. App.—Austin 2002, pet. denied) (party’s actions subjected her to contempt of court but not sanctions under a statute or rule, or even under the court’s inherent power to sanction for abuse of the judicial process, which requires evidence and findings of significant interference with core judicial functions (citing Kutch, 831 S.W.2d 506, 510 (Tex. App.—Corpus Christi 1992, no writ), which articulates bad faith as a predicate to inherent-authority sanctions)). But see In re J.V.G., No. 09-06-015CV, 2007 WL 2011019, at  (Tex. App.—Beaumont July 12, 2007, no pet.) (mem. op.) (upholding sanctions because counsel’s pattern of conduct “significantly interfered” with core judicial functions and stating “bad faith” is “one basis for imposing inherent authority sanctions” but “broader considerations are involved when reviewing the propriety of sanctions imposed”). 51 Cf. Assoc. Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285 (Tex. 1998) (explaining in the surety context that “‘bad faith’ means more than merely negligent or unreasonable conduct; it requires proof of an improper motive or wilful ignorance of the facts”); Citizens Bridge Co. v. Guerra, 258 S.W.2d 64, 69-70 (Tex. 1953) (willful ignorance is the equivalent of bad faith). 52 Pearson v. Stewart, 314 S.W.3d 242, 248 (Tex. App.—Fort Worth 2010, no pet.); Zuehl Land Dev., LLC v. Zuehl Airport Flying Cmty. Owners Ass’n, Inc., 510 S.W.3d 41, 53 (Tex. App.—Houston [1st Dist.] 2015, no pet.); Robson v. Gilbreath, 267 S.W.3d 401, 407 (Tex. App.—Austin 2008, pet. denied); Elkins v. Stotts-Brown, 103 S.W.3d 664, 669 (Tex. App.—Dallas 2003, no pet.). 22 to bad faith.53 Improper motive,54 not perfection,55 is the touchstone. Bad faith can be established with direct or circumstantial evidence, but absent direct evidence, the record must reasonably give rise to an inference of intent or willfulness.56 An illustrative case involving the use of inherent authority to sanction attorney misconduct is In re Bennett, which involved an attorney’s plan to deliberately circumvent rules implementing random assignment of cases in the district courts.57 The attorney sequentially filed seventeen lawsuits with the same factual allegations and the same legal claims against the same defendants, but with different plaintiff groups.58 Each case was randomly assigned, but plaintiffs’ counsel instructed the clerk of the court not to prepare service of citation for the first sixteen filings.59 Mere hours after securing assignment to a particular judge for the seventeenth lawsuit, plaintiffs’ counsel amended the petition in that case to add approximately seven hundred plaintiffs.60 Soon after, counsel attempted to nonsuit the sixteen previously filed lawsuits.61 The trial judge assigned to the 53 See Assoc. Indem., 964 S.W.2d at 285 (discussing bad faith in the surety context); Gomer v. Davis, 419 S.W.3d 470, 478 (Tex. App.—Houston [1st Dist.] 2013, no pet.); Elkins, 203 S.W.3d at 664. 54 Zuehl, 510 S.W.3d at 54; Dike v. Peltier Chevrolet, Inc., 343 S.W.3d 179, 194 (Tex. App.—Texarkana 2011, no pet.); Robson, 267 S.W.3d at 407. 55 See Dike, 343 S.W.3d at 191; cf. Cosgrove v. Grimes, 774 S.W.2d 662, 664-65 (Tex. 1989) (good-faith defense to a legal malpractice action is governed by an objective inquiry: “An attorney who makes a reasonable decision in the handling of a case may not be held liable if the decision later proves to be imperfect.”). 56 Zuehl, 510 S.W.3d at 54; Dike, 343 S.W.3d at 194. 57 960 S.W.2d 35, 36-37 (Tex. 1997). 58 Id. at 36. 59 Id. 60 Id. at 36-37. 61 Id. at 37. 23 first-filed case sanctioned plaintiffs’ counsel for knowingly and intentionally violating rules providing for random assignment.62 Plaintiffs’ counsel admittedly gamed the system to ensure assignment to a particular court, but such activities were not expressly prohibited.63 We nevertheless upheld the sanctions order.64 We considered counsel’s overall course of conduct as well as his expressed intent and held that subversion of random assignment procedures is “an abuse of the judicial process” that “if tolerated, breeds disrespect for and threatens the integrity of our judicial system.”65 Bennett involved rules that did not specifically prohibit the attorney’s conduct, but the attorney’s filings exhibited a pattern giving rise to an inference of improper motive, which he admitted. We have had few occasions to consider conduct sanctionable only under a court’s inherent authority, and when we have done so, we have not explicitly articulated bad faith as a predicate finding. But we have used equivalent language;66 we have not upheld a sanction where bad faith conduct was lacking; and we have observed that the severity of the sanction imposed turns on the 62 Id. 63 Id. 64 Id. at 40. 65 Id. 66 See, e.g., Bennett, 960 S.W.2d at 40 (stating courts have inherent authority to sanction attorneys who “abuse [] the judicial process” and citing Lawrence v. Kohl, 853 S.W.2d 697, 700 (Tex. App.—Houston [1st Dist.] 1993, no writ), and Kutch v. Del Mar College, 831 S.W.2d 506, 509-10 (Tex. App.—Corpus Christi 1992, no writ), for the proposition that “trial courts have the power to sanction parties for bad faith abuse of the judicial process not covered by rule or statute” (emphasis added)); id. (noting the egregious conduct at issue there would “if tolerated, breed[] disrespect for and threaten[] the integrity of our judicial system”); see also Abuse, OXFORD AMERICAN DICTIONARY & THESAURUS (3d ed. 2010) (“use something to bad effect or for a bad purpose”); Abuse, WEBSTER’S SECOND NEW UNIVERSITY DICTIONARY 69 (1984) (“to use wrongly or improperly”). 24 degree of bad faith.67 Today’s concurring opinion agrees that bad faith is a prerequisite to a sanctions award, but only for certain sanctions, like attorney’s fees, and not other types of sanctions, like requiring hours of legal-ethics education.68 The distinction the concurrence makes lacks clarity and provides no guidance to trial courts.69 More significantly, it ignores decades of jurisprudence that has ably guided Texas courts,70 is derived from a misreading of the Supreme Court’s opinion 67 See Altesse Healthcare Sols. v. Wilson, 540 S.W.3d 570, 575-76 (Tex. 2018) (“extreme sanctions” like death-penalty sanctions require flagrant bad faith). 68 Post at 6-7. 69 In urging bad faith is required only for some sanctions and not others, the concurrence cites three cases as allowing courts to invoke inherent authority to impose sanctions based only on “significant interference” with core judicial functions. Post at 8-9. Two of those cases do not so hold, see infra n. 70, but more problematically, the concurrence never says whether that is the standard and, if so, how that standard is satisfied on this record. Indeed, the concurrence does not identify any standard as guiding invocation of a court’s inherent authority to sanction parties and counsel. The concurrence studiously avoids the issue, but as the highest civil court in the state, we have a duty to establish standards and settle the law, not unsettle the law and leave the applicable standards in doubt. 70 See supra n.50. With the weight of authority decidedly in opposition, the concurrence’s contrary view rests on a single unpublished case with flawed reasoning that has not been followed by any other court, including its own. Post at 9 (citing In re J.V.G., No. 09-06-015CV, 2007 WL 2011019 (Tex. App.—Beaumont July 12, 2007, no pet.) (mem. op.)). But see Wythe II Corp. v. Stone, 342 S.W.3d 96, 113 (Tex. App.—Beaumont 2011, pet. denied) (observing inherent authority to sanction exists “to the extent necessary to deter, alleviate, and counteract bad faith abuse of the judicial process”). The opinion in J.V.G. states that bad faith is but one basis for imposing sanctions and holds sanctions were proper there for a pattern of conduct that “significantly interfered with” a core judicial function. Id. at -8. But all of the cases J.V.G. relied on treated “significant interference” as a required component of a bad-faith finding, not as an alternative standard. See In re K.A.R., 171 S.W.3d 705, 712 n.3, 714-15 (Tex. App.—Houston [14th Dist.] 2005, no pet.) (observing bad-faith conduct findings were unchallenged and conduct significantly interfered with core judicial functions); Kings Park Apts., Ltd. v. Nat’l Union Fire Ins. Co., 101 S.W.3d 525, 541 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (evidence that a party instructed a paralegal to steal documents from the judge’s chambers authorized sanctions under the trial court’s inherent authority); Roberts v. Rose, 37 S.W.3d 31 (Tex. App.—San Antonio 2000, no pet.) (“Roberts’s deliberate acts of bad faith throughout his representation” were evidence of bad faith that supported the imposition of sanctions against him). The concurrence also misstates the holdings in Kennedy v. Kennedy, 125 S.W.3d 14, 19 (Tex. App.—Austin 2002, no pet.), and McWhorter v. Sheller, 993 S.W.2d 781, 789 (Tex. App.—Houston [14th Dist.] 1999, pet. denied), as rejecting bad faith as the guiding standard. But both Kennedy and McWhorter hold only that sanctions not authorized by rule or statute cannot stand without a finding and evidence of significant interference with core judicial functions, an issue raised here that we do not reach. Notably, both courts relied on Kutch v. Del Mar College, which articulates the standard as requiring both bad faith and significant interference. 831 S.W.2d 506, 509-10 (Tex. App.—Corpus Christi 1992, no writ) (“We hold Texas courts have inherent power to sanction for bad faith conduct during litigation.”). More to the point, the Austin and Houston courts of appeals have long articulated the standard for inherent-authority sanctions as requiring bad faith. See supra n.50. 25 in Chambers v. NASCO, Inc.,71 and inverts the analysis by looking to the particular sanction imposed to determine whether conduct is sanctionable in the first instance.72 But whether counsel should 71 The concurrence misconstrues Chambers v. NASCO, Inc., 501 U.S. 32 (1991), as requiring bad faith to support inherent-authority sanctions only when the court chooses attorney’s fees as the particular sanction. Post at 6. Of course, it is true the Supreme Court required bad faith to support an award of attorney’s fees as a sanction, because bad faith is necessary whenever a court invokes inherent authority to impose any sanction. Roadway Exp., Inc. v. Piper, 447 U.S. 752, 767 (1980). But Chambers actually involves the analytically obverse issue—whether attorney’s fees could ever be imposed as a sanction in light of the American Rule’s restriction on fee shifting. Chambers, 501 U.S. at 45, 51; see Travelers Indem. Co. v. Mayfield, 923 S.W.2d 590, 594 (Tex. 1996) (allowing trial courts to award attorney’s fees “under the guise of ‘inherent authority’ would constitute a judicial end-run around the statutory fee-shifting scheme”). The Court held attorney’s fees could indeed be awarded as a sanction under a court’s inherent authority, id. at 51, 57, and more recently has clarified that such an award is limited to only those fees causally related to the bad faith conduct. Goodyear Tire & Rubber Co. v. Heager, 137 S. Ct. 1178, 1184 (2017) (a federal court’s inherent authority to award attorney’s fees as a sanction for bad-faith conduct is limited to the fees the innocent party incurred solely because of the misconduct). So, while trial courts do not have inherent authority to award attorney’s fees when not provided by contract or statute, courts have inherent authority to impose sanctions for bad-faith conduct and those sanctions can include attorney’s fees incurred because of the misconduct. The Supreme Court cases the concurrence cites are not inconsistent with our holding today. Post at 6-7. Those cases affirm that courts possess inherent authority to enforce their lawful mandates by contempt, manage their dockets, and dismiss with prejudice cases involving deliberate and undue delay. See Young v. U.S. ex rel Vuitton et Fils S.A., 481 U.S. 787, 796 (1987) (criminal contempt power); Illinois v. Allen, 397 U.S. 337, 343 (1970) (criminal contempt power); Link v. Wabash R. Co., 370 U.S. 626, 630-31 (1962) (docket management and dismissal with prejudice). Contempt requires willful disobedience—engaging in specifically and definitely prohibited conduct. See Lee v. State, 799 S.W.2d 750, 753 (Tex. Crim. App. 1990) (“Because it is the disobedience of the inherent authority of the court that is at issue, it follows that a court, before exercising its contempt powers, must have provided the person it seeks to punish with specific and definite notice of those acts which he may or may not perform without the risk of being held in contempt.”); accord, e.g., Allen, 397 U.S. at 353 (holding a defendant can be excluded from trial for stubbornly defiant, contumacious, and disruptive behavior after being warned by the judge to cease and desist). Here, the trial court neither exercised its contempt power nor could on this record. What is more, this case involves inherent authority to sanction, not the court’s inherent authority to manage a docket. As to the former, Link, which involved dismissal with prejudice as a sanction for deliberate dilatory conduct, accords with our analysis. See Link, 370 U.S. at 630-32 (“[I]t could reasonably be inferred from [petitioner’s] absence [at a court-ordered hearing and] from the drawn-out history of the litigation that petitioner had been deliberately proceeding in dilatory fashion.”). The concurrence’s citation to Anderson v. Dunn, 19 U.S. 204, 227 (1821), is confounding as that case involves inherent powers of Congress to compel attendance at contempt proceedings, which is not even close to being the same issue. 72 Sanctioning counsel involves a two-step determination: “[1] whether the attorney has abused the judicial process, and, [2] if so, what sanction would be appropriate.” In re Bennett, 960 S.W.2d 35, 39 (Tex. 1997) (quoting Cooter & Gell v. Hartmax Corp., 496 U.S. 384, 396 (1990))). The concurrence’s analysis puts the proverbial cart before the horse, collapsing the second inquiry—what sanction is appropriate—onto the first—whether conduct is sanctionable at all. This root flaw is most readily apparent in the discussion regarding sanctions for spoliation. Post at 5. Trial courts have some discretion to fashion an appropriate remedy for discovery abuse, including spoliation, but whether spoliation occurred at all depends on the existence of a duty to preserve evidence, which is a question of law. Brookshire Bros., Ltd. v. Aldridge, 428 S.W.3d 9, 14, 20 (Tex. 2014) (“[A] spoliation analysis involves a two-step judicial process: (1) the trial court must determine, as a question of law, whether a party spoliated evidence, and (2) if spoliation occurred, the court must assess an appropriate remedy . . . Upon a finding of spoliation, the trial court has broad discretion to impose a remedy that, as with any discovery sanction, must be proportionate[.]”); Wal-Mart Stores, Inc. v. Johnson, 106 S.W.3d 718, 722 (Tex. 2003) (declining to consider whether a particular sanction for spoliation was justified because the 26 receive any sanction at all is a serious matter that impugns counsel’s professional judgment and ethical standing. It must be treated as such. Requiring a predicate finding of bad faith before imposing sanctions under the amorphous and uniquely powerful inherent authority to sanction does not “handcuff[]” courts as the concurrence says.73 Courts have many tools at their disposal under rules and statutes that are relatively specific in defining the duties imposed and the conduct proscribed, many of which do not require bad faith or its equivalent.74 But to wield inherent powers of intrinsic potency and unconstrained breadth necessitates the restraint and caution the bad-faith predicate encapsulates.75