Opinion ID: 510975
Heading Depth: 1
Heading Rank: 5

Heading: amount of the sanctions

Text: 41 Rule 11 specifically authorizes as one available sanction an award equivalent to the movant's legal fees. Fed.R.Civ.P. 11. Yet, Rule 11 does not require an award of actual fees. See Eastway Constr. Corp. v. City of New York, 821 F.2d 121, 122 (2d Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987) (the full amount of legal fees need not be routinely awarded.). As the Fifth Circuit noted in Thomas v. Capital Security Services, Inc., 836 F.2d 866, 879 (5th Cir.1988) (en banc), [w]hat constitutes 'reasonable expenses' and a 'reasonable attorney's fee' within the context of Rule 11 must be considered in tandem with the rule's goals of deterrence, punishment, and compensation. In short, the courts retain discretion to tailor the sanction to the violation. 42 Although Rule 11 sanctions are designed to deter frivolous lawsuits, the victim of a frivolous lawsuit is charged with a duty to mitigate, using reasonable means to terminate the litigation and to prevent the costs of that frivolous suit from becoming excessive. See Dubisky v. Owens, 849 F.2d 1034, 1037 (7th Cir.1988) (A party defending against a frivolous paper has a duty under Rule 11 to mitigate its fees and expenses by resolving frivolous issues quickly and efficiently.); Thomas v. Capital Sec. Servs., Inc., 836 F.2d at 881 ([p]arties should not be allowed to 'run up' exorbitant fees and expenses when responding to papers filed in violation of Rule 11); Gaiardo, 835 F.2d at 483 (the duty of mitigation should minimize any excessive burden on the sanctioned party); INVST Fin. Group v. Chem-Nuclear Sys., 815 F.2d 391, 404 (6th Cir.) (A party seeking Rule 11 costs and attorney's fees has a duty to mitigate those expenses, by correlating his response, in hours and funds expended, to the merit of the claims.), cert. denied, --- U.S. ----, 108 S.Ct. 291, 98 L.Ed.2d 251 (1987). And, as Judge Weis has aptly noted, [i]n all phases of the fee determination, the district judge must cast a critical eye on the award request. Ursic v. Bethlehem Mines, 719 F.2d 670, 676 (3d Cir.1983). 43 The district court assessed costs against Bass totaling $21,423.21, consisting mostly of counsel fees. The government was awarded $4,260 in consideration of the labors of an Assistant U.S. Attorney who, according to his affidavit, expended 42.6 hours on the case. The court fixed $100 per hour as the reasonable rate for his services. 9 The district court awarded the balance of the sanction ($17,163.26) to the Legion, largely in consideration of 117.8 hours billed by three attorneys from two different law firms. 10 Although the district court accurately stated the governing legal principles and carefully delineated the factors involved in its decision to impose sanctions, it provided little insight into the basis for its determination of the sanctions amount. We will consider the award of fees to the government and Legion in turn.
44 We have no difficulty with the district court's determination of fees due the government. That determination--that 42.6 hours was a reasonable amount of time to spend on research, writing several motions and a 26-page memorandum which capably and concisely covered several legal issues, coupled with in-court appearances--is plainly within the range of the court's discretion. This appeal does, however, raise a question of first impression in this circuit, as to whether the district court abused its discretion in the award of $100 an hour for the Assistant U.S. Attorney handling the case. 45 We have no doubt that the government may recover under Rule 11 when confronted with a frivolous action. See, e.g., Engh v. United States, 658 F.Supp. 698 (N.D.Ill.1987) (government recovery of Rule 11 sanctions for frivolous suit by taxpayers). The difficult question is that of the reasonable hourly rate for government attorneys. At first blush, it seems inappropriate for the services of an Assistant United States Attorney to be valued at some kind of market rate. However, upon reflection, we can perceive no difference between the situation of an Assistant U.S. Attorney and that of a public interest lawyer whose services, the Supreme Court has held, are to be valued at a market rate, even though he or she, like Assistant U.S. Attorneys, had no regular billing rate. See Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 1547, 79 L.Ed.2d 891 (1984). 46 Finally, we have considered but reject the notion that, in a case such as this, in which the award of counsel fees to a plaintiff who prevails against the government is limited by EAJA, 28 U.S.C. Sec. 2412 (1982), any award of sanctions to a government defendant should be limited to the amount allowable under EAJA. The argument is attractive, i.e., that the government should not be entitled to collect from Bass as a sanction more than he could collect from it had Napier prevailed, and thus that EAJA sets the prevailing rate in such cases. However, to apply the EAJA standard would result in counsel for the Legion being paid at a higher rate than the government, an untoward result, particularly in this case, where government counsel used its time so much more economically. 47 Moreover, since EAJA was not intended to do any more than make it possible for certain litigants to recover modest fees against the government for prevailing in certain lawsuits, we see no reason to extend its umbrella to an area that it was not intended to cover. Congress, by its limited waiver of sovereign immunity, intended to limit the government's liability, not its recovery. Accord Harris v. Marsh, 679 F.Supp. 1204, 1333 n. 210 (E.D.N.C.1987) (stating that EAJA does not set $75 per hour cap on attorneys' fees sought by government counsel).
48 A number of courts have concluded that the hourly rate properly charged for the time of a government attorney is the  'amount to which attorneys of like skill in the area would typically be entitled for a given type of work on the basis of an hourly rate of compensation.'  United States v. Kirksey, 639 F.Supp. 634, 637-38 (S.D.N.Y.1986) ($100 per hour reasonable for experienced U.S. attorney in 1982) (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 471 (2d Cir.1974)); Hamer v. Lake County, 819 F.2d 1362, 1365 n. 9 (7th Cir.1987) ($85 per hour reasonable for state's attorney). We conclude that the district court did not abuse its discretion by awarding the government's attorney $100 per hour as a reasonable attorney's fee, in view of the Assistant U.S. Attorney's experience. See supra note 9.
49 We react differently to the award of $17,163.26 in fees and costs to the American Legion's attorneys, however. We note at the outset that it seems paradoxical to award over $20,000 in fees for the defense of a case that the Legion itself maintains was so frivolous that it crie[d] out for the award of sanctions. Amer. Legion Br. at 43. Although the district court rejected $51.96 for computer research, it accepted without discussion or modification the affidavits of the Legion's counsel as to the number of hours they expended and their proffered hourly rates. The hourly rates are not contested, but under our jurisprudence the calculation of the sanctions amount requires an inquiry by the court into both the reasonableness of the hourly rate and the reasonableness of the number of hours expended in this case. See Lindy Bros. Builders, Inc. v. American Radiator, 540 F.2d 102 (3d Cir.1976) (in banc). 11 However, the district court did not undertake an examination of whether the number of hours expended by the Legion was in actuality excessive. Had it done so we are confident that it would agree that the Legion's attorneys were guilty of overkill in their extensive briefing of this frivolous lawsuit. 50 The district court dismissed Bass' contention that the level of legal sophistication necessary for summary dismissal was not that great by noting that the contention simply amounted to an admission of the frivolous nature of the complaint. App. at 17. Although we agree that the statement supports the decision to sanction Bass, we conclude that the court erred in failing to consider whether the frivolousness also indicated that a less sophisticated or expensive response was required. As we stated above, the Rule 11 movant has a duty to mitigate by using reasonable means to terminate the litigation and to prevent costs from becoming excessive. In this case, the clearly frivolous nature of the complaint indicates that the expenditure of a substantial number of hours in defense of the suit is at least suspect, and we seriously doubt whether the Legion can justify spending more hours on the case than the government. 51 As we have noted, the Legion claims that its counsel expended 117.8 hours in, inter alia, preparation of motions, and writing an 11-page brief in support of a motion for summary judgment and a 10-page reply brief. In our view, however, the Legion has not advanced a credible justification for spending anywhere near 117.8 hours on this case. Moreover, one of the three issues in the Legion brief (regarding the statute of limitations) duplicated the government's arguments, despite the Legion's having discussed the case with the government. Although this overlap of legal defenses proffered by the defendants is not tremendous, a simple incorporation of the government's argument in the Legion's brief would have resulted in satisfaction of the affirmative duty to mitigate, which here included the duty not to duplicate arguments. Spell v. McDaniel, 616 F.Supp. 1069, 1093 (E.D.N.C.1985) (discussing court's scrutiny of unreasonable duplication of work by multiple counsel), aff'd in part and vacated in part, 824 F.2d 1380 (4th Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 752, 98 L.Ed.2d 765 (1988); Harris v. Marsh, 679 F.Supp. at 1333 n. 210 (same). We do not suggest that counsel are forbidden to brief as extensively as they desire or even to duplicate arguments of co-counsel (presumably on the theory that they will brief them better). All we hold is that they cannot receive counsel fees for duplicative or excessive effort. 52 In sum, we conclude that the district court abused its discretion under the circumstances in failing to examine the number of hours expended by the Legion to defend a patently frivolous claim. Although we have expressed doubt that the Legion can justify its expenditure of hours on this case, perhaps it can, and because it has not had the opportunity to do so, we will remand to the district court for a reconsideration of the Legion's sanctions award in accordance with the standards set forth in this opinion. 12