Note: Punishing the Pettifogger’s Practice: Applying the Sanction Power of 28 U.S.C. § 1927 to Law Firms
By Joseph T. Janochoski. Full text here.
The federal statute 28 U.S.C. § 1927 permits litigants to seek repayment of, and courts to sanction in the form of, “the excess costs, expenses, and attorneys’ fees reasonably incurred” as a result of “[a]ny attorney or other person admitted to conduct cases in any court of the United States . . . who so multiplies the proceedings in any case unreasonably and vexatiously.” While the statute permits the assessment of attorney’s fees against an individual attorney or “other person,” there is a circuit split over whether such a sanction may be levied against an attorney’s law firm. Currently, the Sixth, Seventh, and Ninth Circuits have all ruled that § 1927 cannot be used to sanction law firms, while the First Circuit’s Bankruptcy Appellate Panel, and the Second, Third, Eighth, Eleventh and D.C. Circuits have all found law firms can be subject to sanctions under the statute. In total, nine courts of appeal have weighed in on the issue.
This Note takes the position § 1927 should apply to law firms. It argues that the statute’s original purpose and historical development, viewed through the lens of modern statutory interpretation and strong policy considerations, necessitates interpreting § 1927’s language broadly to encompass law firms. The rise of massive international law firms has altered the way law is practiced in the United States by substantially reducing individual attorney autonomy over legal projects; indeed, the legal profession, much like a corporation, has become compartmentalized and specialized. As such, ascribing a level of personhood to a law firm for the purposes of sanctions under § 1927 is acceptable, especially in light of recent legal developments prescribing the characteristics of personhood to businesses and corporations. Furthermore, utilizing § 1927 against an entire firm, instead of an individual attorney with only minimal involvement and autonomy over a given matter, serves to deter unreasonable and vexatious conduct on an institution-wide basis. Doing so avoids imposing heavy sanctions upon an individual attorney who, due to immense social and professional pressure, may have aligned their behavior to the vexatious norms of their employer.
Ultimately, there is a fine line between zealous advocacy and unreasonably vexatious conduct. Using § 1927 to help create uniform perspicuous guidelines for staying on the right side of that line is valuable for firms, advantageous to the judiciary, and imperative for the smooth administration of justice.