Opinion ID: 503514
Heading Depth: 1
Heading Rank: 5

Heading: sanctions imposed by the district court

Text: 42 Uniden's request for sanctions was served on Schumaier by mail on Friday, June 13, 1986. Schumaier received the request the following day. Two days later, on Monday, June 16, 1986, the district court awarded sanctions against Weinstock and Schumaier. 43 Schumaier argues that the court's award of sanctions violated due process because counsel did not receive adequate notice or opportunity to respond to Uniden's request for sanctions. Schumaier also argues that Uniden would have filed its motion for a protective order regardless of any action on the part of Schumaier. Accordingly, Schumaier contends that the failure to oppose the motion for a protective order had nothing to do with the expenditure of time in writing it. 44 Uniden requests that we sustain the imposition of sanctions on the following grounds: 45 One. Written notice of the motion for a protective order was mailed to Schumaier three weeks before the hearing date. 46 Two. Schumaier had two days' actual notice of the request for sanctions. 47 Three. The local rules require that a party oppose or acquiesce in a motion. 48 Four. The district court may impose sanctions for a violation of the local rules. 49 A district court's award of sanctions is reviewable for abuse of discretion. FTC v. Alaska Land Leasing, Inc., 799 F.2d 507, 510 (9th Cir.1986). 50 Under 28 U.S.C. Sec. 1927, [a]ny 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. 28 U.S.C. Sec. 1927 (1982). Section 1927 authorizes a taxing of only those excess costs incurred by reason of an attorney's unreasonable and vexatious conduct. United States v. Blodgett, 709 F.2d 608, 610 (9th Cir.1983). Moreover, section 1927 does not authorize imposition of sanctions in excess of costs reasonably incurred because of such conduct. Id. at 610-11. 51 Uniden incurred the cost of making its motion for a protective order because Schumaier refused to comply with Uniden's demand that the documents be returned. Schumaier's refusal, however, was not unreasonable. The transcript of the discovery hearing in Michaels confirms Schumaier's contention that when the district court denied plaintiff's motion to compel Mr. Ducote to answer deposition questions, the court did not adjudicate the privileged character of the documents now at issue and did not impose any obligation on Schumaier to return the documents to Uniden. Schumaier acted reasonably, therefore, in not acceding to Uniden's later demand that Schumaier return the documents. Uniden's demand was premised solely on its disputed understanding of the Michaels ruling. 52 Once Schumaier refused to return the documents, Uniden had no recourse but to seek an order from an appropriate court that would adjudicate the privileged nature of the documents and order their return. Absent such a motion, Uniden had no means of recovering the documents. Uniden incurred the cost of making its motion because of Schumaier's reasonable refusal to return the documents, not because of Schumaier's failure to oppose the motion. Uniden incurred no excess costs because of Schumaier's failure. Since section 1927 permits an award of excess costs only, Blodgett, 709 F.2d at 610-11, the district court abused its discretion in imposing sanctions under section 1927. 53 In addition to relying on section 1927, Uniden premised its request for sanctions on the local court rules and on the inherent powers of the court. Central District Local Rule 7.6 requires the nonmoving party to file either a memorandum in opposition or a written statement that he or she will not oppose the motion. Local Rule 27.1 provides: The violation of or failure to conform to any of these Local Rules ... shall subject the offending party or counsel to such penalties, including monetary sanctions and/or the imposition of costs and attorney's fees to opposing counsel, as the Court may deem appropriate under the circumstances. 54 Schumaier does not argue that the district court's award was unauthorized by the local rules. Instead, Schumaier contends that it had inadequate notice and opportunity to be heard before the sanctions were imposed. 55 Sanctions under local court rules should not be imposed absent notice, an opportunity to respond, and a hearing. Miranda v. Southern Pacific Transp. Co., 710 F.2d 516, 522 (9th Cir.1983); see Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980) ([S]anctions ... should not be assessed lightly or without fair notice and an opportunity for a hearing on the record.) (footnote omitted); Alaska Land Leasing, Inc., 799 F.2d at 510 (quoting Toombs v. Leone, 777 F.2d 465, 472 (9th Cir.1985)) (Due process ... requires that parties subject to sanctions have 'sufficient opportunity to demonstrate that their conduct was not undertaken recklessly or willfully.'  ). 56 We have held that a district court has no power to impose monetary sanctions against attorneys without affording them procedural due process as protective as that afforded by Fed.R.App.P. 46(c), which guarantees the attorney a hearing, if requested, before sanctions may be imposed. Miranda, 710 F.2d at 523 & n. 13. 57 In Miranda, we identified compelling reasons why notice, an opportunity to prepare a defense, and a hearing are required before sanctioning counsel: 58 These procedural requirements will ensure that: (1) the attorneys will have an opportunity to prepare a defense and to explain their questionable conduct at a hearing; (2) the judge will have time to consider the severity and propriety of the proposed sanction in light of the attorneys' explanation for their conduct; and (3) the facts supporting the sanction will appear in the record, facilitating appellate review. 59 Id. at 522-23. 60 In the present case, Schumaier first received notice of Uniden's intent to seek sanctions on Saturday, June 14, 1986, just two days before the hearing at which sanctions were imposed. This short notice, arriving during the weekend before the Monday hearing, undoubtedly left Schumaier inadequate time to prepare a defense and to travel from its offices in Missouri to Los Angeles to attend the hearing. 61 At the hearing on Uniden's motion and request for sanctions, Schumaier's local co-counsel, Weinstock, represented to the court that Schumaier had informed him that Schumaier had not received notice of Uniden's motion. Weinstock further stated: I would request that the court ... defer any sanctions until it has an opportunity to hear what law offices of Schumaier, Roberts and McKinsey have to say. I understand they have been trying to call the court as well as Mr. McKnight [Uniden's counsel] and as Mr. McKnight indicated he did get in touch with Mr. McKnight but I am not aware whether he--they were able to contact the court.Schumaier was entitled to be present at a hearing at which it could present its defense to Uniden's request for sanctions. Weinstock's presence at the June 16 hearing was insufficient to protect Schumaier's interest. Indeed, Weinstock resisted Uniden's request for sanctions by arguing that Schumaier, not he, bore responsibility for the violation of the local court rules. 62 Under Miranda, the district court had no power to impose sanctions without granting at least a short continuance of the hearing to enable Schumaier to attend. The award of sanctions, therefore, whether under the authority of the local rules or under the court's inherent authority to control its own processes, constituted an abuse of discretion.