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Salstrom v. Citicorp Credit Services, Inc.
Citations: 74 F.3d 183; 96 Cal. Daily Op. Serv. 356; 33 Fed. R. Serv. 3d 1351; 96 Daily Journal DAR 565; 1996 U.S. App. LEXIS 472; 1996 WL 14233Docket: Nos. 94-35816, 94-35849
Court: Court of Appeals for the Ninth Circuit; January 16, 1996; Federal Appellate Court
Gregory Lamont Gudger and Dean Browning Webb appeal a district court order imposing monetary sanctions under 28 U.S.C. § 1927 and nonmonetary sanctions under the court’s inherent power. They argue that the denial of sanctions under Rule 11 precludes sanctions under § 1927. The court rejects this argument, affirming that findings under Rule 11 do not limit a court’s authority to impose sanctions under § 1927. The decision clarifies that, unlike the Eighth Circuit, the Ninth Circuit does not require a finding of objectively unreasonable behavior for § 1927 sanctions; a finding of subjective bad faith suffices. The district court's finding of bad faith was based on three factors: the volume and length of pleadings, the timing of filings, and the substance of claims. Gudger and Webb's assertion that no single factor justifies a finding of bad faith overlooks that it was the combination of these factors that warranted sanctions. This conclusion is supported by the record and does not constitute an abuse of discretion. Furthermore, Gudger and Webb argue that the § 1927 sanctions are impermissible post-judgment retribution, citing In re Yagman. They misinterpret Yagman, which allows for the possibility of withholding sanctions until the end of trial if the misconduct's liability is not immediately apparent. The court affirms that this procedural approach is acceptable under certain circumstances. Sanctions were imposed based on the cumulative effect of the attorneys’ conduct, with the district court finding it impossible to calculate the exact attorney’s fees and costs incurred by Citicorp due to Gudger and Webb's misconduct. Unlike the case in Yagman, where a blanket award was made without assessing the specific conduct responsible for incurred fees, the district court here determined that at least 30% of total defense costs were attributable to Gudger and Webb’s actions. This calculation aligns with precedent established in Hudson v. Moore Business Forms, Inc. Furthermore, Gudger's claim that the district court failed to allocate individual responsibility was incorrect; the court assigned equal responsibility to both Gudger and Webb, splitting the total sanction award equally. The ruling was affirmed.