Fink v. Gomez

• Decision Date: 08 February 2001
• Docket Number: No. 99-56139,99-56139
• Citation: 239 F.3d 989
• Parties: (9th Cir. 2001) DAVID M. FINK, Petitioner-Appellant, v. JAMES H. GOMEZ, Director, Respondent-Appellee, DIANA CARLONI NOURSE, Appellee
• Court: U.S. Court of Appeals — Ninth Circuit

Page 989

239 F.3d 989 (9th Cir. 2001)

DAVID M. FINK, Petitioner-Appellant, v. JAMES H. GOMEZ, Director, Respondent-Appellee, DIANA CARLONI NOURSE, Appellee.

No. 99-56139

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted November 13, 2000

Filed February 8, 2001

Stephen G. Perry, Woodland Hills, California, for appellant David M. Fink.

David T. Dibiase (argued), Anderson, McPharlin & Conners LLP, Los Angeles, California; Richard R. Clouse and E. Sean Archer, Cihigoyenetche, Grossberg & Clouse, Ontario, California, for appellee Diana Carloni Nourse.

Appeal from the United States District Court for the Central District of California J. Spencer Letts, District Judge, Presiding. D.C. No.CV-96-02652-JSL

Before: William C. Canby, Jr., M. Margaret McKeown, and Richard A. Paez, Circuit Judges.

McKEOWN, Circuit Judge:

We must decide whether, as a matter of law, a district court has authority under its inherent power to impose sanctions when an attorney has made reckless misstatements of law and fact, and has done so for an improper purpose. We conclude that it does have the authority and thus reverse and remand so that the district court may exercise its discretion to determine whether sanctions are appropriate.

BACKGROUND

This appeal involves the intersection of two different actions brought by David M. Fink. Both cases stem from a 1993 altercation between Fink and several guards at the California Institute for Men, where Fink was serving a sentence for commercial burglary. The altercation left Fink permanently and severely disabled.

Fink filed the first action, Fink v. Ylst, No. CV 94-590 JSL (C.D. Cal.), in 1994 against a number of the prison guards for violation of his civil rights. The action before us is Fink's petition for habeas corpus, filed in 1996. Fink contends that the disciplinary proceeding that followed the 1993 altercation violated his constitutional rights, and he seeks restoration of good behavior credits and other adjustments in his status in California Department of Corrections inmate records.

In June 1998, the district court conditionally granted the petition, finding that the state's failure to allow Fink to appear or present witnesses violated his due process rights. The conditional judgment required the State to restore Fink's good conduct credits unless the State held a new disciplinary hearing within 60 days. The State did not conduct a hearing within 60 days, and the writ therefore became unconditional.

Some months after entry of the conditional judgment, in September 1998, the court held an off-the-record telephon conference, which included Fink (who was pro se), the state's counsel in the habeas case, and an attorney representing the defendants in the Ylst 1983 case ("Ylst counsel"). Apparently, Ylst counsel participated in the call to monitor the habeas case and to protect her clients' interests in the Y1st case; she was never counsel of record for any party in the habeas case. During the conference call, Ylst counsel told the district court that California law required the prison to hold a disciplinary hearing concerning the 1993 altercation, although the conditional judgment precluded a new disciplinary hearing. In the interest of federal/state comity, and on the basis of the representations of Ylst counsel, the district court declined specifically to enjoin a hearing, but stressed that no hearing should have any adverse consequences for Fink.

Four days later, the state proceeded to hold a new disciplinary hearing. Fink did not appear and no witnesses testified on his behalf. At the conclusion of the hearing, the hearing officer found that Fink had committed a disciplinary infraction, his good conduct credits were not fully restored despite the district court's ruling, and his status was adjusted so that, if he were ever to return to prison, he could be placed in a segregated housing unit. In other words, the hearing resulted in adverse consequences for Fink.

The parties, plus Ylst counsel, were back in court two months later. At a hearing in November 1998, Ylst counsel represented to the district court that the matter of the 1993 altercation had been referred to the district attorney for prosecution, that the district court's denial of the petition for writ of habeas corpus "wasn't exactly reversed," that the September 1998 disciplinary hearing was evidentiary only, and that the hearing resulted in no change in Fink's inmate status for any purpose.

Prompted by the various misrepresentations by Ylst counsel, in January 1999, the district court sua sponte issued an order to show cause why Ylst counsel should not be sanctioned. The district court described a series of statements that it believed justified sanctions -in particular, Ylst counsel's statements that California law required the disciplinary hearing, and that the hearing would not and did not have adverse consequences for Fink. The district court specifically found that "[a]ll claims by Ylst Counsel and respondent that the [state] was required to hold the 1998 Disciplinary Hearing [were] meritless," and that the hearing had adverse consequences for Fink. In addition, the court noted that "[i]nformation obtained by the court since the 1998 Disciplinary Hearing, including admissions by Ylst Counsel, has led the court to the inevitable conclusion that the 1998 Disciplinary Hearing was orchestrated by Ylst Counsel for the purpose of gaining tactical advantage in the Ylst case." These findings and others led the court to find that "Ylst Counsel has attempted repeatedly to mislead the court by making misrepresentations regarding the state of the record, the orders of the court, and the actions taken by respondent and the CDC . . . . It appears that the entire 1998 Disciplinary Hearing, and theevents that followed, have been orchestrated by Ylst counsel in bad faith with a view to gaining an advantage in the Ylst case."

In March 1999, the district court issued an order finding that Ylst counsel failed to show cause why she should not be sanctioned, but declining to sanction her under the court's inherent power because, although "she acted with reckless disregard for the truth, which rose to the level of objective bad faith," the district court could not "determine whether [Ylst counsel] acted in subjective bad faith." Fink v. Gomez, 39 F. Supp. 2d 1225, 1226 (C.D. Cal. 1999). The judge mused that, although some opinions of this court indicate that only "subjective bad faith" is sanctionable, others imply that "recklessness" or "objective bad faith" will suffice. Id. The lack of certainty in the case law, and the "tenor" of circuit court opinions reversing the imposition of sanctions, led the district court to decide not to impose sanctions. Id. at 1226-27.

The district court denied Fink's motion for reconsideration, and this timely appeal followed. Fink contends that the district court abused its discretion by declining to impose sanctions after finding that Ylst counsel had acted in a reckless manner rising to the level of bad faith.

ANALYSIS

I. Sanctions Under the Court's Inherent Power

Three primary sources of authority enable courts to sanction parties or their lawyers for improper conduct: (1) Federal Rule of Civil Procedure 11, which applies to signed writings filed with the court, (2) 28 U.S.C. 1927, which is aimed at penalizing conduct that unreasonably and vexatiously multiplies the proceedings, and (3) the court's inherent power. This case involves sanctions under the third source of authority.

The Supreme Court in Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980), delivered the definitive summary of the bases on which a federal court may levy sanctions under its inherent power. The Court reiterated the federal courts' inherent power to levy sanctions, including attorneys' fees, for "willful disobedience of a court order . . . or when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons . . . ." Id. at 766 (internal quotation marks and citations omitted). The Roadway Court also noted that a court "certainly may assess [sanctions] against counsel who willfully abuse judicial processes." Id. The Court reaffirmed the Roadway principles in Chambers v. NASCO, Inc., 501 U.S. 32 (1991), emphasizing the continuing need for resort tothe court's inherent power, because it is "both broader and narrower than other means of imposing sanctions. " Id. at 46. On the one hand, the inherent power "extends to a full range of litigation abuses." On the other, the litigant must have "engaged in bad faith or willful disobedience of a court's order." Id. at 46-47. In Chambers, the Court left no question that a court may levy fee-based sanctions when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons, delaying or disrupting litigation, or has taken actions in the litigation for an improper purpose. Id. at 45-46 & n.10.

It appears that the Court in Roadway and Chambers used the term "bad faith" to mean two different things. The Court sometimes used "bad faith" to mean a single category of sanctionable conduct, and sometimes as a shorthand term for all sanctionable conduct under a court's inherent power. For example, Chambers used "bad faith" as a shorthand term to encompass a broad range of conduct in observing that a party may "show[ ] bad faith by delaying or disrupting the litigation or by hampering enforcement of a court order," 501 U.S. at 46. On the other hand, Roadway treated bad faith as being distinct from delay, disruption, and disobeying a court order. See Roadway, 447 U.S. at 766-67 & n.13 (addressing only "bad faith" conduct after setting out the five bases for inherent power sanctions--disobedience, bad faith, and vexatious, wanton, or oppressive actions).

Under both Roadway and Chambers, then, the district court has the inherent authority to impose sanctions for bad faith, which includes a broad range of willful...