Court Opinion

ID: 34927
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:21:59+00
Date Added: 2024-06-11T17:09:15.782519
License: Public Domain

United States Court of Appeals
                                                                 Fifth Circuit
                                                              F I L E D
                    UNITED STATES COURT OF APPEALS
                         For the Fifth Circuit                March 31, 2004

                                                          Charles R. Fulbruge III
                                                                  Clerk
                             No. 03-20182

                      TIMOTHY JAY CLARK, ET AL.

                                                          Plaintiffs,

                                VERSUS

                    JANET MORTENSON, ETC., ET AL.

                                                          Defendants,

         JANET MORTENSON, PERMANENT RECEIVER OF AUSTIN FOREX
                INTERNATIONAL, INC., MICHAEL SHAUNESSY

                                              Defendants-Appellees,

                                VERSUS

                       SHELDON BAUM, BRIAN BAUM

                                                  Movants-Appellants,
                                 and

                             DOUGLAS BAUM

                                                            Appellant.

             Appeal from the United States District Court
                  For the Southern District of Texas

Before EMILIO M. GARZA, DeMOSS, and CLEMENT, Circuit Judges.
PER CURIAM:*
     The Movants-Appellants filed a suit on behalf of Plaintiffs

     *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
against Defendants-Appellees in federal district court.                    The suit

was dismissed and Appellants were sanctioned by the court for

filing a frivolous lawsuit and for their egregious conduct in the

district court.      Appellants appeal the district court’s sanction

order.

                                  BACKGROUND

     Brian Baum, his father Sheldon Baum, and his brother Douglas

Baum (hereinafter referred to as the Baums), filed a lawsuit in the

United States District Court for the Southern District of Texas

purportedly on the behalf of former investors of Austin Forex

International, Inc., International Foreign Exchange Corp., and

AusForex International, L.L.C., (collectively referred to as AFI)

against,   inter   alia,     Janet      Mortenson    and    Michael   Shaunessy.

Mortenson is the Permanent Receiver of AFI and was appointed by the

250th District Court of Travis County, Texas in 1998 after AFI was

forced into involuntary bankruptcy due to Russell Erxleben’s, the

former   president    of   AFI,    fraud     in   creating    a    ponzi   scheme.

Erxleben pled guilty to securities fraud and is serving seven years

in a federal correctional facility in Beaumont, Texas.                 Shaunessy

represents   Mortenson       in   the    receivership.        Mortenson’s       and

Shaunessy’s efforts in the receivership returned approximately 63

cents of each dollar invested to the persons who were defrauded by

Erxleben’s AFI scheme.

     Sheldon   Baum    met    Erxleben       while   they   were    both   serving

                                         2
sentences for fraud in the federal penitentiary in Beaumont. Brian

Baum visited Erxleben several times in the federal penitentiary and

consulted with Erxleben concerning how “to go after” Mortenson and

Shaunessy.        Erxleben apparently blames Mortenson for the severity

of his criminal sentence.            After being released from federal

prison, Sheldon Baum, with the assistance of his sons Brian and

Douglas, began a course of conduct which ultimately resulted in the

district court sanctioning the Baums, which is the subject of this

appeal.

       In   the    summer   of   2002,   Brian   Baum   sent    letters     to   AFI

investors urging them to file a class action lawsuit against

Mortenson.        When Mortenson learned of Baum’s solicitation letters,

she alerted the receivership court; State District Judge Paul Davis

(who   oversees      the    receivership)    immediately       issued   a   letter

scheduling a September 20, 2002, hearing and inviting any AFI

investor with complaints to appear.                No investor appeared to

complain at the September 20 hearing.              At the conclusion of the

hearing, Judge Davis entered an order finding that Mortenson had

served the best interests of the receivership estate, that she had

fully complied with all of the court’s orders, and that she had

complied with the court’s instructions concerning payment of her

own fees, receivership expenses, and her attorney Shaunessy’s fees,

and that no accounting was due until the close of the receivership.

       None of the Baums appeared at the September 20 hearing before

Judge Davis. Instead, on September 17, 2002, three days before the

                                         3
hearing, Brian Baum and Baum & Baum Associates, P.A., filed a

federal lawsuit in Houston, purportedly on behalf of four AFI

investors (Clark, Howard, Johnson, and Beck).                  The Baums alleged

that Mortenson, who had been appointed receiver for AFI, breached

her fiduciary   duty      because    she   failed   to   provide     a   regular,

detailed accounting of receivership funds and that Mortenson and

Shaunessy embezzled funds from the receivership by falsifying legal

expenses and generating legal fees by pursuing wasteful lawsuits.

The Baums alleged that these acts violated their clients’ civil

rights under federal law.           They also averred that Mortenson and

Shaunessy were guilty of:      (1) conspiracy to violate federal law;

(2)   embezzlement   of    government      property;     (3)    fraud    upon   the

government; (4) mail fraud; and (5) various RICO violations.1

      On October 22, 2000, the court, sua sponte, ordered the

plaintiffs to replead because the plaintiffs:                     (1) failed to

explain how Mortenson acted outside her authority as receiver; (2)

failed to describe an act of Mortenson that would cause the loss of

her immunity as a receiver; and (3) appeared to use a civil rights

suit to collaterally attack interlocutory state-court decisions.

The court advised the plaintiffs that if the amended complaint was

      1
      The same day the Baums filed their federal suit, Brian Baum
faxed a copy of the complaint to the Austin American-Statesman,
which printed a story about how Mortenson was accused of
“conspiring with her lawyers to embezzle money from the nearly 32
million collected.” The Baums also mailed a copy of the lawsuit
and newspaper article to about 20 AFI investors. The Baums,
however, did not serve Mortenson or Shaunessy with the lawsuit
until two months later.

                                       4
again baseless in law or fact, they bore the risk of sanctions.

     The plaintiffs filed an amended complaint, deleting certain

plaintiffs and defendants and averring, inter alia, that Mortenson:

(1) breached her fiduciary duty by failing to furnish investors

with a detailed accounting; (2) breached her fiduciary duty by

instituting     worthless    claims    for    her    financial    gain    and   the

financial gain of Shaunessy; and (3) eroded investor confidence by

substituting the law firm that had originally represented her in

her capacity as receiver with a new firm.

     Mortenson and Shaunessy (the “appellees”) filed a motion to

dismiss for failure to state a claim.                   They also moved for

sanctions and a permanent injunction against further proliferation

of litigation.        The district court held more than 30 hours of

hearings   to    address    the    motions.     The    district        court   first

converted the motion to dismiss into a motion for summary judgment

and granted the motion in favor of the appellees, finding that the

complaint failed to state a cause of action upon which relief could

be granted.        The court found that the “plaintiffs failed to

articulate a single fact to support their claims in the original

complaint,      the   amended     complaint,    or    during     the    protracted

hearings.”      The district court also imposed sanctions and issued a

permanent injunction against the Baums enjoining them from filing

any further lawsuits against Mortenson, Shaunessy, and related

parties without advanced permission.            The district court made the

following findings:

                                        5
       Most of the blame for the filing of the frivolous lawsuit fell

on the Baums.         The court found that Sheldon had graduated from

Tulane and attended one semester of law school (Sheldon sometimes

went by the name of Abe Baum, which was the name of his dead father

who had been a lawyer and had practiced in New Jersey).               Sheldon

was one of the owners of Creditor Funds Recovery, a proprietorship

that located missing creditors for unclaimed funds in bankruptcy

court.     Although Sheldon formally withdrew from Creditor Funds

Recovery on the registration with the county clerk, he continued to

run the business through his sons.            Brian Baum is the elder son of

Sheldon.       He graduated from law school and passed the Pennsylvania

bar.    Brian operated his law practice from the family home located

in Katy, Texas.       “His assumed name certificates [were] for Baum &

Baum,    and    one   of    them   include[d]   his   non-lawyer   brother   as

principal.”       Douglas Baum is the non-lawyer son of Sheldon and

brother of Brian.          Douglas stated that he operated Creditor Funds

Recovery.

       The district court found that the Baums recruited four people

to join the suit as plaintiffs by telling them that: (1) there were

funds in the receivership that Mortenson had not disclosed and

(2) they could get other funds by seeking an accounting of assets

that Mortenson had not recovered.            The plaintiffs all had accounts

with AFI.       The plaintiffs either signed contingent-fee contracts

with Baum & Baum, wrote letters of authorization, or otherwise

indicated their interest in joining the lawsuit.            The fee contract

                                         6
granted the authority to seek an accounting and to recover other

assets of the receivership.       The district court found that each of

the plaintiffs had continually received notices from Mortenson with

regard to settlements, disbursements, hearings, and other events in

the course of the receivership.            None of the plaintiffs knew

anything about errors or omissions by Mortenson and admitted they

had no reason to bring suit.      Nor did the plaintiffs know anything

about the Baums -- except for the solicitation letter.2

     With regard to the Baums, the district court found that

Sheldon    proclaimed   himself   the    instigator   of   the   suit.   He

determined whom to name as plaintiffs, what claims to file, whom to

sue, and where to file the suit.        He polled attorneys and receivers

for advice with regard to the complaint and conferred with the

plaintiffs.     The plaintiffs all believed that Sheldon was an

attorney.   Sheldon proclaimed his personal hostility to Mortenson.

The district court found that Sheldon’s “relationship to the truth

[was] pathological.”     The district court noted that in response to

“direct questions about simple objective data,” Sheldon said “what

he preferre[d] the facts to be rather than what they demonstrably

[were].”    The district court provided the following examples:

     1.     Sheldon swore that he graduated from Tulane Law

     2
      The district court ultimately imposed some minor sanctions
on the named plaintiffs because in the district court’s words the
plaintiffs thought they could scare Mortenson into giving them
money by hiring people they did not know to go collect money that
was not due to them. These plaintiffs have not appealed their
sanctions.

                                     7
            School.   However, Tulane advised the court that
            Sheldon had not graduated from their law school,
            and Sheldon could produce only a registrar’s letter
            reflecting that he had completed 12 hours.

      2.    Sheldon testified that he did not have a Texas
            driver’s license because he no longer drove.
            However, he then stated that the license had
            expired and that he had “turned it back.”      He
            explained that earlier, when he testified that he
            did not have a license, he meant that he did not
            have it with him.

      3.    Although Sheldon had stated that he no longer
            drove, he later explained to the court that he was
            present in the courtroom because he had driven his
            sons to the hearing.

      4.    After telling the court that he was retired and
            that he only answered telephones for his sons’
            business, Sheldon admitted that he was the driving
            force behind the litigation. Others testified that
            their contact was with Sheldon, not with his sons.

      The district court found that Sheldon had extensive experience

with courts, noting that: (1) he was convicted of felony theft of

his   brother’s    car;   (2)   he   had   filed   involuntary   bankruptcy

petitions against others and had been barred by the courts from

filing similar petitions in the future; and (3) his father and son

were lawyers.     The district court found that Sheldon had a history

of acting on “greed, malice, and illness.”

      With regard to Brian Baum, the district court noted that he

was an attorney licensed to practice in Pennsylvania and that he

had signed the pleadings in the instant suit.          The district court

found that Brian “would not -- could not perhaps -- tell the

truth.”    As examples, the court recalled that:

      1.    Brian had stated that his father was licensed as an

                                      8
     attorney by New Jersey. Realizing that the lawyer
     he was referring to was his grandfather and not his
     father, Brian “just kept talking.”

2.   Brian stood mute as Sheldon “told the court his
     lies.”

3.   After examining the complaint and amended complaint
     paragraph by paragraph, Brian admitted that the
     claims were fabricated. However, Brian persisted
     in his argument that some of the actions of the
     receiver were “‘unneeded.’”

4.   Brian also disclaimed having prepared pro se
     pleadings for several of the plaintiffs. However,
     the plaintiffs testified that they received the
     pleadings from Brian and were told to sign and mail
     them to the court.

5.   Besides denying that he had prepared the pleadings,
     Brian “violated the proper legal practice when he
     prepared pleadings for laymen to file as if they
     had prepared them themselves.”

6.   Brian told the district court that Creditor Funds
     Recovery was defunct and that his father had
     discontinued business six or seven years ago. The
     court noted, however, that the “assumed name [was]
     still active” and that while Sheldon withdrew from
     the business, Brian was among the surviving
     principals.

7.   Brian listed Douglas as a principal of Baum & Baum,
     knowing that the firm was not a professional
     association.

8.   Brian had filed a special appearance, an answer,
     and a plea in abatement in a state court defamation
     suit filed by Mortenson and Shaunessy against,
     inter   alia,   the   plaintiffs   and  the   Baums
     notwithstanding that the district court had ordered
     the plaintiffs or their agents to not file anything
     with a court or administrative agency until after a
     hearing scheduled for December 6, 2002.         The
     district court found that by filing the above
     pleadings, as well as a motion to dismiss in the
     instant suit, Brian violated an earlier-imposed
     preliminary injunction.

                           9
     9.    Brian included as a plaintiff Gary Johnson
           notwithstanding Johnson’s written statement on the
           contingency fee contract that he had no claim
           personally and that the claim was to be pursued on
           behalf of a family partnership.

     10.   Brian, in the instant lawsuit, was purportedly
           representing investors who had lost money as the
           result of the mismanagement of AFI by its
           president, Russell Erxleben.     However, in other
           instances, Brian represented people who helped
           Erxleben hide profits and people who were resisting
           the receiver. The district court found that Brian
           failed to disclose his prior representation to the
           present plaintiffs and that he was “conflicted.”

     11.   Brian had a history of filing lawsuits against
           receivers and the receivers’ attorneys.

     The district court found that Douglas Baum:

     1.    Assisted his family in the suit and “argued for
           their positions in the face of contrary facts.”

     2.    Clearly acted for his father and brother.

     3.    Signed the “assumed name registration [for Baum &
           Baum] as an owner, knowing it was not a
           professional association” and that he was not a
           lawyer.

     The district court concluded that the Baums had brought the

suit “to satisfy their illusion of hidden funds or to extort deals

for their other clients.”     The court found the lawsuit to be

fraudulent and that “[o]nce instituted, the Baums maintained [the

suit] with singular ineptitude.”     The district court noted that

when asked to explain their case, “Brian and Sheldon Baum did not

tell the truth.”

     The district court ordered a variety of sanctions against the

Baums including restraining orders, orders to write letters of

                                10
apology, and an order forbidding Sheldon from practicing law either

formally or informally.   The Baums appeal the following actions of

the district court:

     1.     The district court, finding that Brian had violated
            the preliminary injunction, ordered him to serve
            ten days in jail.    The court found further that
            Sheldon had aided and abetted Brian in violating
            the preliminary injunction and ordered that he also
            serve ten days in jail.

     2.     Brian and Sheldon were ordered to pay $100,000 to
            Mortenson for the legal fees she and Shaunessy
            incurred.

     3.     The district court barred the Baums from filing,
            directly or indirectly, any papers in the courts
            of Texas or Louisiana, state or federal, or with an
            executive agency without the written permission of
            a judge.

                              DISCUSSION

I.   Whether the district court abused it discretion in ordering
     Brian and Sheldon to be incarcerated ten days for contempt.

     While the Baums appeal the district court’s sanction order,

they do not contest any of the district court’s findings with

regard to their deceitful behavior, the frivolity of the complaint,

or the vexatious nature of the litigation.     Accordingly, they have

abandoned any challenge to the district court’s factual findings on

appeal.    Yohey v. Collins, 985 F.2d 222, 224-25 (5th Cir. 1993).

     The appellees aver that the appeal of the incarceration aspect

of the sanction order is moot inasmuch as the Baums have served

their     sentences.    The   Baums    argue   that   the   “collateral

consequences” they will experience as a result of the sanction

                                  11
order allow review of this aspect of the sanction order.                      See

Sinclair v. Blackburn, 599 F.2d 673, 675 (5th Cir. 1979) (holding

that release from custody does not moot a case where the prisoner

continues to suffer collateral consequences as a result of his

conviction).

      The   Baums    fail    to   specifically      state      what   “collateral

consequences” they will experience.             To the extent they argue that

the fact that they were sentenced to jail time could be used to

impeach their testimony in the future and could adversely impact

their careers, as pointed out by the appellees, the order of

incarceration can do no more harm than the Baums’ actions in the

past, i.e., a state theft conviction and sentence, a federal

bankruptcy fraud conviction and sentence (Sheldon Baum), a theft by

check   conviction,     a    deferred    adjudication       for    cocaine,   and

marijuana possession (Brian Baum).           As the Baums have served their

jail time and they have failed to show that they will suffer any

specific collateral consequences as a result of the incarceration

contempt    order,    this    court     finds     that   the    appeal   of   the

incarceration order is moot.          Schlang v. Heard, 691 F.2d 796, 799

& n.6 (5th Cir. 1982) (finding a claim is moot “in the sense that

. . . there is simply no relief this court can give”) (habeas

proceeding).

II.   Whether the district court’s sanction order violated the
      Baums’   constitutional  rights,   Federal Rule of  Civil
      Procedure 11, or 28 U.S.C. § 1927.

                                        12
      The federal courts are vested with the inherent power “‘to

manage   their   own     affairs    so   as   to    achieve   the      orderly    and

expeditious disposition of cases.’”                Gonzalez v. Trinity Marine

Group, Inc., 117 F.3d 894, 898 (5th Cir. 1997) (citation omitted).

The   invocation    of    these    inherent    powers      must   be    done     with

“‘restraint and discretion,’” and should comply with the mandates

of due process.        Id. (citation omitted).             Sanctions under the

inherent power should be confined to instances of “‘bad faith or

willful abuse of the judicial process.’”              Id. (citation omitted).

      A court may also impose sanctions under 28 U.S.C. § 1927.

Section 1927 provides that any 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.”     The statute requires “that there be evidence of bad

faith, improper motive, or reckless disregard of the duty owed to

the court.”      Edwards v. General Motors Corp., 153 F.3d 242, 246

(5th Cir. 1998).          Lastly, Federal Rule of Civil Procedure 11

directs district courts to impose sanctions against a litigant who

signs frivolous or abusive pleadings.

      A district court’s sanction order, whether premised on Rule

11, § 1927, or its inherent powers to impose sanctions is reviewed

for abuse of discretion.          Tollett v. City of Kemah, 285 F.3d 357,

363 (5th Cir. 2002).       The district court did not state whether the

                                         13
basis for the sanctions was under Rule 11, § 1927, or its inherent

power. A court need not provide specific factual findings in every

sanction order.       Topalian v. Ehrman, 3 F.3d 931, 936 (5th Cir.

1993); Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 883 (5th

Cir. 1988) (en banc).

     The Baums aver that the contempt/sanction order was criminal

in nature and that they were entitled to certain constitutional

protections.      A   contempt   order   is   characterized   as   civil   or

criminal based on its primary purpose.          FDIC v. LeGrand, 43 F.3d

163, 168 (5th Cir. 1995). “[T]he ultimate test for determining the

civil or criminal character of a contempt order is ‘the apparent

purpose of the trial court in issuing the contempt judgment,’ a

punitive purpose or one ‘designed to vindicate the authority of the

court’ establishing the criminal nature of the order, while a

coercive or remedial purpose characterizes a civil contempt.”

Thyssen, Inc. v. S/S Chuen On, 693 F.2d 1171, 1173-74 (5th Cir.

1982) (quoting Smith v. Sullivan, 611 F.2d 1050, 1053 (5th Cir.

1980)).     “When a contempt order contains both a punitive and a

coercive dimension, for purposes of appellate review it will be

classified as a criminal contempt order.” LeGrand, 43 F.3d at 168.

     The contempt order in the instant case does not expressly

state whether it is a civil or criminal contempt order.            However,

the apparent purpose of the order was punitive or “designed to

vindicate the authority of the court” rather than coercive or

remedial.    See Thyssen, 693 F.2d at 1173-74.          The ten-day jail

                                    14
sentence was punishment for past wrongs, not a sentence intended to

coerce compliance with an ongoing order.                     Accordingly, at least

part of the order is criminal, therefore for purposes of appellate

review the order will be treated as criminal.                    See LeGrand, 43 F.3d

at 168.

      “While it is clear that a district court has the power to

issue a criminal contempt sanction for the refusal to comply with

a    court   order,     procedures       are      mandated       which     protect     the

contemnor’s constitutional rights.” Lamar Fin. Corp. v. Adams, 918

F.2d 564, 567 (5th Cir. 1990) (footnote omitted). Rule 42 requires

notice, the appointment of a prosecutor, and an opportunity to be

heard.    FED. R. CRIM. P. 42(a)(1)-(3).

      The Baums do not contend that they did not receive adequate

notice or that they did not have an opportunity to be heard.

Rather, they contend that they were entitled to the appointment of

an   independent      prosecutor       and    that    the    district      court     judge

improperly presided over the contempt proceedings.

      Notwithstanding Rule 42’s requirement with regard to the

appointment of a prosecutor, Rule 42(b) also provides for summary

criminal contempt penalties when the judge sees or hears in-court

contemptuous behavior.           FED. R. CRIM. P. 42(b).              Direct contempt

occurs “under the [court’s] own eye within its hearing.”                           In re

Terry,    128    U.S.   289,     310    (1888).           Direct    contempt     is    the

“intentional      obstruction      of    court       proceedings      that    literally

disrupt[s]      the   progress    of    the       trial    and     hence   the   orderly

                                             15
administration of justice.” United States v. Wilson, 421 U.S. 309,

315-16 (1975) (footnote omitted).

     Here, the Baums’ contemptuous behavior before the district

court   as   outlined     by   the    court    and   which    the    Baums   do   not

challenge, included lying to the district court, failing to answer

the district court judge’s direct questions, the unauthorized

practice of law (Sheldon Baum), and admitting that the complaint

was frivolous.      See Howell v. Jones, 516 F.2d 53, 55, 58 (5th Cir.

1975) (failing to answer direct questions); United States v.

Johnson,     327   F.3d   554,   559-60       (7th   Cir.    2003)   (unauthorized

practice of law).          Thus, the Baums were not entitled to an

independent prosecutor.

     The Baums also aver that because they were not given the

benefit of the 21-day “safe harbor” provision of Rule 11, the

sanction order must be reversed.              Rule 11 provides that sanctions

may be imposed only if the offending party has notice and a

“reasonable    opportunity       to   respond.”        FED. R. CIV. P. 11(C).

Further, a motion for sanctions “shall not be filed with or

presented to the court unless, within 21 days after service of the

motion (or such other period as the court may prescribe), the

challenged paper, claim, defense, contention, allegation, or denial

is not withdrawn or appropriately corrected.”                       FED. R. CIV. P.

11(C)(1)(A).

     The Baums are wrong.        First, the “safe harbor” provision does

                                         16
not apply to sanctions ordered on the court’s initiative. FED. R.

CIV. P. 11(C)(1)(B); Elliot v. Tilton, 64 F.3d 213, 216 (5th Cir.

1995).    Thus, to the extent that the sanctions were imposed on the

court’s own initiative and under its inherent power, the Baums were

not entitled to the 21-day “safe harbor” provision. Second, to the

extent    that      the   sanctions     were    imposed   as    a    result   of    the

appellees’ motion for sanctions, the appellees were unable to

comply with the requirement that the motion be served 21 days

before filing it with the court because the district court ordered

them to file the motion in six days. Rule 11(c)(1)(A) specifically

provides that the time between service and filing may be prescribed

by the court.

      Sheldon and Douglas also argue that because they were not

attorneys (Brian was the signatory attorney on the pleadings) or

parties to the case, they cannot be sanctioned under Rule 11 or

§ 1927.      Although it is true that Rule 11 provides for sanctions

against the individual attorney or party or agent of a party who

signs an abusive pleading or motion and § 1927 is limited to

attorney misconduct, a district court may rely on its inherent

powers to sanction the responsible party. Chambers v. NASCO, Inc.,

501   U.S.    32,    42-51   (1991).       In   Chambers,      the    Supreme     Court

explained     that    a   court   may    use    its   inherent       power   to   reach

misconduct that is beyond the scope of Rule 11 and § 1927.                        Id. at

50.   Thus, this argument is also rejected.

      Brian also argues that the sanctions against him were improper

                                          17
under   §   1927    as    he   did    nothing    to   prolong   or   multiply     the

proceedings.        Again, § 1927 provides for sanctions against an

attorney    who     “unreasonably          and   vexatiously”    multiplies       the

proceedings.       Edwards, 153 F.3d at 246.          “Underlying the sanctions

provided in . . . § 1927 is the recognition that frivolous . . .

arguments waste scarce judicial resources and increase legal fees

charged to parties.”           Baulch v. Johns, 70 F.3d 813, 817 (5th Cir.

1995). However, because § 1927 sanctions are “penal in nature, and

in order not to dampen the legitimate zeal of an attorney in

representing his client, § 1927 is strictly construed.”                   Travelers

Ins. Co. v. St. Jude Hosp. of Kenner, La., Inc., 38 F.3d 1414, 1416

(5th Cir. 1994) (internal citations omitted).

     Brian, as evidence that he did nothing to prolong or multiply

the proceedings and that the sanctions were improper as against

him, points to the fact that within three weeks of filing the

amended complaint, he orally requested that the complaint be

dismissed, that he later admitted that the complaint’s allegations

were unfounded,          and   that   he   subsequently    filed     a   motion   for

dismissal with prejudice.

     Simply because, in Brian’s own view of the proceedings, he

believes he may have acted expeditiously in seeking to have a

frivolous lawsuit dismissed does not excuse his first transgression

-- the filing of a lawsuit known to be frivolous.               Had he not filed

the lawsuit, the answers, and motions, numerous hearings would not

have ensued.       To hold otherwise would allow attorneys to avoid the

                                            18
consequences of their bad faith conduct by simply dismissing a

frivolous suit before sanctions are entered.          Accordingly, to the

extent that the sanction order against Brian was predicated on

§ 1927, the district court did not abuse its discretion.

III. Whether the district court committed any other complained of
     errors.

     The Baums make several other arguments, many of them in

footnotes, claiming error.        Insofar as these arguments can be

understood they are outlined here and rejected by this court.

     Brian avers that the district court, in imposing sanctions,

erred in considering conduct that occurred in other courts.             Brian

contends that the district court, in referring to the case as “an

example of guerrilla warfare through litigation,” impermissibly

considered other conduct.

     Brian misstates the law.      The power to punish for contempt is

inherent in all courts and “reaches both conduct before the court

and that beyond the court’s confines.”           Chambers, 501 U.S. at 44.

Moreover,   a   court   can   consider   other    litigation    in   imposing

sanctions under § 1927.       In Travelers, this court clarified that

although an attorney may not be sanctioned for conduct that could

not be construed as part of the proceedings before the court

issuing the § 1927 sanctions, the issuing court could consider such

conduct in determining whether the conduct before it was taken in

bad faith or undertaken with an improper motive.               Travelers, 38

F.3d at 1417-18.        Here, the district court considered Brian’s

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conduct in the receivership court to determine whether the instant

lawsuit and related conduct were done in bad faith.    This was not

improper.

      The Baums, in a footnote, argue that the district court’s

failure to state whether it was basing the sanction order on Rule

11, § 1927, and/or its inherent power itself mandates reversal of

the sanction order.    Again, a court need not provide specific

factual findings in every sanction order. Topalian, 3 F.3d at 936;

Thomas, 836 F.2d at 883.     Findings and conclusions are required

only to the extent necessary to facilitate appellate review.

Thomas, 836 F.2d at 883.      Here, the district court’s sanction

order, which was ten pages in length, was sufficiently detailed for

the purpose of appellate review and the fact that the district

court did not state what authority it was basing the sanctions on

does not require reversal.

      The Baums also argue in a footnote that if the case is

remanded it should not be remanded to Judge Hughes because of his

comments concerning their conduct.       This request, however, is

untimely and Judge Hughes’s comments were from an “intrajudicial

source,” -- the deceitful conduct he witnessed -- and therefore

cannot constitute an alleged bias.    Andrade v. Chojnacki, 338 F.3d

448, 455 (5th Cir. 2003).    No recusal was or is necessary.

IV.   Whether the award of attorneys’ fees was unsupported and
      excessive.

      The Baums argue that the award of attorneys’ fees in the

                                 20
amount of $100,000 in favor of Mortenson was unsupported and

excessive.      The court ordered Brian and Sheldon Baum to pay

Mortenson $100,000 for the legal fees that she and Shaunessy

“incurred in this case.”                The court stated that “[t]his [was] a

cost    adjustment        in     this    case,      and    it     [did]   not   represent

compensation for” defaming Mortenson.                      The Baums argue that the

only evidence of the amount of legal fees were the fees billed by

Mortenson’s attorney, Janiece Longoria, in the amount of $19,727.

The Baums aver further that because Shaunessy was proceeding pro

se, he was not entitled to an award of attorneys’ fees.

       Again   the       Baums    are    wrong.           First,    Shaunessy    was   not

proceeding pro se.          He was also represented by Longoria.                 Second,

there was evidence presented to the court that Mortenson and

Shaunessy incurred legal fees in the amount of $103,550.05.

V.     Whether the district court abused its discretion in
       permanently enjoining the Baums from filing papers in Texas or
       Louisiana.

       The Baums aver that the district court erred in permanently

enjoining them from filing papers in Texas or Louisiana courts,

state or federal, or any administrative agency without the prior

permission     of    a    judge.        They     argue     that    such   a   requirement

impermissibly infringes upon their right of access to the courts

and interferes with their ability to make a living.

       This court reviews a district court’s grant of an injunction

for an abuse of discretion.               Newby v. Enron Corp., 302 F.3d 295,

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301 (5th Cir. 2002).            Federal courts have the power to enjoin

plaintiffs who abuse the court system and harass their opponents.

This includes enjoining future filings to protect its jurisdiction

and control its docket.         Farguson v. MBank Houston, N.A., 808 F.2d

358, 360 (5th Cir. 1986).          However, an “injunction against future

filings must    be    tailored     to   protect      the   courts   and    innocent

parties, while preserving the legitimate rights of litigants.” Id.

      In Farguson, the district court barred Farguson from filing

any further actions against any of the defendants based on any

matter set forth in the complaint.            Id. at 359.      This court upheld

the injunction finding that it was “specific and limited” in that

it related “only to the same claims against the same defendants.”

Id. at 360.    This court noted that the injunction did not prohibit

“[o]ther claims or claims against other parties.”                 Id.     This court

noted that while the injunction punished Farguson for abusive

litigation, the injunction served only to effectuate the court’s

judgment and protect the defendants from further litigation on

claims which were already deemed to be frivolous.                   Id.    However,

the court noted that “a broader injunction, prohibiting any filings

in   any   federal    court     without     leave    of    that   court”     may   be

“appropriate if a litigant is engaging in a widespread practice of

harassment against different people.”               Id.

      As a preliminary matter, determining exactly what the Baums

have been enjoined from doing is important. The December 23, 2002,

sanction   order     of   the    district    court    states      that    the   Baums

                                        22
“directly or indirectly, may not file papers in the courts of Texas

or Louisiana, state or federal, or with an executive agency without

written permission of Judge Lynn N. Hughes, or Texas District Judge

Paul Davis, Bankruptcy Judge Stephen Callaway, or Bankruptcy Judge

William Greendyke.” The wording of this sanction seems very broad,

but this particular sanction was placed in the midst of the other

sanctions dealing specifically with the Baums’ conduct in relation

to Mortenson and Shaunessy. Likewise, the judges listed as able to

grant such permission all preside in courts where the Baums had

filed something   related   to   AFI   matters.   This   sanction   made

permanent an earlier preliminary injunction that the Baums had

violated.   The wording of the district court’s earlier preliminary

injunction, entered on December 9, 2002, states that the Baums or

people associated with Baum & Baum or Creditor Funds Recovery “may

not make claims, including affirmative defenses, in municipal,

state, federal, or bankruptcy courts or before administrative

agencies, executive officers, or legislative officers against Janet

Mortenson personally or as receiver, Janiece Longoria, Michael

Shaunessy, Anne Greenberg, or their associates, partners, agents,

contractors, friends, neighbors, and employees” except with the

express written permission of the same judges as listed in the

sanction order.   Accordingly, we read the sanction order in the

context of this entire litigation, and find that the Baums have not

been enjoined from filing any papers in any court or agency, state

or federal, but rather just as to filings against Mortenson and

                                  23
Shaunessy and related individuals and to filings relating to AFI

matters without first obtaining the permission of one of the judges

involved in sorting out the mess the Baums have proliferated within

our courts.   This more narrow reading indicates the injunction is

similar to the injunction upheld in Farguson with the exception

that this injunction bars all filings against Mortenson and others,

not just filings relating to AFI matters.      It is hard to imagine

what other legitimate claims the Baums could bring against the off

limit individuals and therefore the district court did not abuse

its discretion and the injunction is affirmed.

     We note that our statement in Farguson, that “a broader

injunction, prohibiting any filings in any federal court without

leave of that court” may be “appropriate if a litigant is engaging

in a widespread practice of harassment of different people,” could

potentially apply to the Baums.      Id.   If the Baums persist in a

widespread practice that is deserving of such a broad sanction,

then such an injunction could be appropriate.    But here, as of now,

we interpret this injunction as more narrow and appropriate based

on the Baums’ actions in relation to AFI matters.

                            CONCLUSION

     The sanction order is affirmed because the district court did

not abuse its discretion, committed no reversible errors, and under

our interpretation the permanent injunction is sufficiently limited

and appropriate based on the Baums’ conduct.

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AFFIRMED.

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