Opinion ID: 784283
Heading Depth: 2
Heading Rank: 2

Heading: History of Intervening

Text: 26 The district court's only other given explanation for its holding that Selden and Rosenthal intervened solely to extort a fee for themselves was its finding that [t]hese attorneys have seemingly made intervening in nationwide class actions a routine practice. App. at 599. The district court apparently based this finding on four cases, which it cited in its order. See In re Synthroid Marketing Litig., 201 F.Supp.2d 861 (N.D.Ill.2002); French v. Selden, 59 F.Supp.2d 1152 (D.Kan.1999); In re The Prudential Ins. Co. of Am. Sales Practices Litig., 962 F.Supp. 450 (D.N.J. 1997); White, III v. General Motors Corp., 718 So.2d 480 (La.Ct.App.1998). 27 Even assuming that Selden and Rosenthal have routinely engaged in a practice of intervening, this finding teaches us little about the propriety of their motives for intervening in this case. Each of these past interventions may have been made out of concern for the class members or at least with the intention of increasing the value of the settlement. In fact, with the exception of the case at bar, none of Selden and Rosenthal's interventions have ever been found to be frivolous or motivated by an improper purpose. 28 In a recent case, this court reviewed a district court's sua sponte award of $1,000 in Rule 11 sanctions based on its finding that the plaintiff was an extortionist. See Reed, 330 F.3d at 936-37. The district court based its finding that the plaintiff was an extortionist on his 15-year history of bringing similar lawsuits. This court vacated the district court's award because none of the plaintiff's previous cases had been adjudged frivolous and the district court did not find them to be frivolous. Id. ([T]he sanctions order thus appears to rest on nothing more solid than the speculation that Reed is an extortionist. This speculation is too thin to sustain that order.). So too, in this case Selden and Rosenthal's past objections, which have never been adjudged frivolous, cannot form the proper basis of a sanctions award. 29 Although the district court cited no other evidence supporting its finding of an improper motive, we have considered the record in its entirety and see no other basis upon which to support the proposition that either Selden or Rosenthal sought to intervene in order to get paid to go away or for other improper purposes. At oral argument, class counsel suggested that the improper purpose could be inferred from the fact that Selden and Rosenthal ultimately declined to intervene. We find this fact to be of little relevance as well. By the time Selden and Rosenthal declined to intervene, there were numerous good reasons for them to do so, including the amount of time and effort they had already expended, and the fact that other capable objectors had emerged. In sum, we find no evidence in the record supporting the finding that Selden and Rosenthal intervened solely to extort a fee, and the imposition of sanctions was therefore an abuse of discretion. 30 Further, the district court disregarded this court's instructions in Vollmer I, in which we indicated that it was inappropriate for the district court to rely on evidence outside of the record and that the court had to provide a more detailed explanation for such a large award of sanctions. The district court ignored both instructions. Even after remand, the district court's opinion indicated that it conducted its own research into other class action litigation involving Selden and Rosenthal but failed to cite to any of this research or to indicate what part of the research, if any, the district court relied on in imposing sanctions.App. at 559. The few cases cited by the district court in which Selden and Rosenthal allegedly intervened were not the result of the court's own research, since they had been repeatedly cited by the class since the two filed objections with the court. Further, the district court failed to provide any additional explanation for the exceptionally large sanctions. Instead, the district court arbitrarily reduced its sanctions from $50,000 to $35,000 stating, we'll see how that fares. Given that in Vollmer I we suggested that $500-$1,000 was an appropriate amount for sanctions imposed sua sponte, we find that $35,000 in sanctions fares pretty poorly. 31 Finally, we reiterate that even if we had found sanctions to be appropriate in this case, absent extraordinary circumstances not shown here, sua sponte sanctions are generally limited to several thousand dollars. See, e.g., In re Bagdade, 334 F.3d 568, 571-72 (7th Cir.2003) (imposing a $1,000 sua sponte sanction); Powers v. Duckworth, No. 90-2492, 1995 WL 496751, at  (7th Cir.1995) (upholding $500 sua sponte sanctions); Burda v. M. Ecker Co., 2 F.3d 769, 776 (7th Cir.1993) (reducing sua sponte sanction from $2,500 to $1,000). Given the resources already devoted to this issue and the potential additional costs of litigating it further, we would decline to remand. See Kotsilieris, 966 F.2d at 1188 n. 2 (declining to remand sanctions in a case where the court found it would not be worth the expenditure of further resources).