Zambrano v. City of Tustin

• Decision Date: 21 September 1989
• Docket Number: No. 88-5621,88-5621
• Citation: 885 F.2d 1473
• Parties: Linda Marie ZAMBRANO, Plaintiff, and Jose E. TAFOLLA, Esq.; Philip W. Orr, Esq., Claimants-Appellants, v. CITY OF TUSTIN; David Kreyling, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1473

885 F.2d 1473

Linda Marie ZAMBRANO, Plaintiff, and Jose E. TAFOLLA, Esq.; Philip W. Orr, Esq., Claimants-Appellants, v. CITY OF TUSTIN; David Kreyling, Defendants-Appellees.

No. 88-5621.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 4, 1988.

Decided Sept. 21, 1989.

J. Manuel Sanchez, J. Manuel Sanchez & Associates, San Diego, Cal., for claimants-appellants.

Daniel K. Spradlin, Rourke and Woodruff, Orange, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before SCHROEDER and REINHARDT, Circuit Judges, and HARDY ^*, District Judge.

REINHARDT, Circuit Judge:

Attorneys Jose Tafolla and Philip Orr appeal sanctions levied against them for failure to comply with local rules requiring admission to the district court bar. We must decide whether, under the particular circumstances of the case before us, the district court overstepped the limits of its discretion in sanctioning appellants. Because we conclude that in this case it did, we vacate the order.

I. Factual Background

This appeal stems from a Sec. 1983 action filed by Linda Zambrano against the City of Tustin, California. From the very beginning, the trial proved to be an undignified affair. On the first day, Orr, representing the plaintiff, appeared twenty minutes past the scheduled hearing time; Judge Richard A. Gadbois, Jr., the presiding judge at trial, fined him $150. ¹ Several minutes later, the Court severely chastised counsel for failing to rise when addressing the bench. ² The petty disputes not only marred the first day of trial, they also foreshadowed greater problems.

When Orr arrived punctually for trial the second day, Judge Gadbois announced that his investigation, conducted sua sponte, revealed that Orr was not a member of the Bar of the Central District and was therefore ineligible to practice before the Court. "You're not admitted to the Bar of this Court. Now, that doesn't strike you as being an impropriety of rather significant proportions? You know, that happened to ... [another judge in the Central District] ... in the very recent history ... and he held the lawyer who did what you've done in criminal contempt and had him put into leg irons and taken out of the courtroom." ³ After counsel confessed that he had inadvertently failed to comply with the enrollment requirements of Local Rule 2.1, Judge Gadbois ordered a recess with the expectation that Tafolla, who had initially represented the plaintiff and had arranged for Orr's participation at trial, would appear and assume responsibility for the trial. Instead, the Court discovered that Tafolla had also never been admitted to the Central District Bar, and, later that day, declared a mistrial. ⁴ The Court decreed that neither Orr nor Tafolla was qualified to practice and that there was no procedure that could remedy the situation. The court expressed the startling conclusion that Orr and Tafolla, both members of the California state bar and Southern District of California bar, were not "any more qualified than an auto mechanic" to conduct a trial. ⁵ Two weeks later, the district court issued an order to show cause and imposed sanctions consisting of costs for jury fees amounting to $2,217.88, ⁶ lawyers' fees for the defendants totaling $2,525, and $1,500 in accumulated expenses to compensate the judicial branch for being "badly used by counsel".

II. Jurisdiction

Before we turn to the merits of the sanction order, we must first determine whether the order has been properly appealed. On December 14, 1987, Judge Gadbois issued an order assessing the $6,242.88 in sanctions and also providing that "[c]ounsel may seek a hearing on these matters before finality of the order." The court scheduled a hearing before the federal magistrate for the afternoon of December 18 and ordered that the fines be paid on December 23, presumably with the understanding that the sanctions could be altered if the magistrate so recommended before the payment date. Because the four-day preparation time for the December 18th hearing proved inadequate, appellants requested a continuance; the magistrate took the motion under submission and ultimately granted the request. A new hearing date was set for March 8, 1988. However, Judge Gadbois, on December 22, instead of delaying the payment date until after the March hearing, rescheduled the payment date for January 22. Appellants filed their notice of appeal--seeking, alternatively, relief from the sanctions or a right to a pre-deprivation hearing--on January 21.

In sum, the district court's directive of December 22 required appellants to submit a final, nonrefundable payment of the sanction within thirty days. See Fed.R.App.P. 4(a). Appellants were not afforded an adequate opportunity during the payment period to contest the order. While a hearing should have been held on the sanctions question prior to the time the order became final, ⁷ a hearing that takes place after the payment of sanctions and after a final order does not constitute a constitutionally adequate opportunity to be heard. ⁸ We therefore hold that the order of December 22 constituted a final order appealable within the statutory time limit. Since appellants filed their notice of appeal within that period, we have jurisdiction to hear their claim.

III. Discussion

The part of the order imposing fines payable to the court and the portion requiring payment of attorneys' fees to the City of Tustin both constitute sanctions. However, they, at least in part, raise different legal issues and implicate different bodies of case law, and we consequently treat them separately. First, we discuss the propriety of the approximately $3700 in penalties payable to the court; in section B, we turn to the portion of the district court's order requiring the payment of attorneys' fees.

A. Sanctions Payable to the Court

In determining the validity of any judicial sanction, we must first consider the underlying authority for the court's action. "For a sanction to be validly imposed, the conduct in question must be sanctionable under the authority relied on." Cunningham v. County of Los Angeles, 869 F.2d 427, 436 (9th Cir.1989) (quoting McCabe v Arave, 827 F.2d 634, 639 (9th Cir.1987)). In sanctioning Tafolla and Orr, the trial court explicitly acted under the aegis of local rules adopted by the judges of the Central District of California. ⁹ Local Rule 2.1 requires that any attorney appearing on behalf of a client before the district court be a member in good standing of the court's bar. ¹⁰ Local Rule 27.1 authorizes the trial judge to sanction a party or counsel for a wide range of transgressions. "The violation of or failure to conform to any of these Local Rules, the F.R.Civ.P., F.R.Crim.P. or F.R.App.P., 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."

We have consistently upheld the power of the district court to sanction attorneys for violations of local rules. See, e.g., United States v. Summet, 862 F.2d 784, 786 (9th Cir.1988). Although district courts frequently sanction members of their bar under the authority of such rules, we may have been somewhat remiss in not defining the source of the court's authority, drawing the precise contours of that power, or establishing rules to guide trial courts in the exercise of their discretion.

The power of the federal courts to sanction parties and counsel has been a subject of intense debate. In Gamble v. Pope & Talbot, Inc., 307 F.2d 729 (3d Cir.) (en banc), cert. denied, 371 U.S. 888, 83 S.Ct. 187, 9 L.Ed.2d 123 (1962), the Third Circuit held that a federal district court lacked the power to sanction counsel for violations of a "standing order" of the Eastern District of Pennsylvania. The majority, over a vigorous dissent by Chief Judge Biggs, reasoned that the fine was a criminal penalty and that the power to assess criminal punishment was strictly a legislative, not a judicial, function. Id. at 733. In dissent, the Chief Judge argued that miscreant attorneys posed a substantial hazard to the fair and orderly administration of justice. "The often unconscious mental attitudes of this small group [of attorneys] contributes substantially to calendar congestion. It is the banal but brutal fact that justice delayed is justice denied." Id. at 734. Chief Judge Biggs argued that sanctioning counsel--rather than visiting the more serious penalty of dismissal upon the litigant ¹¹--was an appropriate and reasonable solution to the problems engendered by repeated lawyer misconduct. This power, the dissent argued, was consistent with both the separation of powers and Congress' delegation of authority to the federal courts.

The Gamble holding has been much criticized, both by commentators ¹² and courts. ¹³ The Third Circuit itself has repudiated Gamble. See Eash v. Riggins Trucking Co., 757 F.2d 557 (3d Cir.1985) (en banc). In our seminal decision on the issue, Miranda v. Southern Pacific Transportation Co., 710 F.2d 516 (9th Cir.1983), we declined to follow Gamble and adopted the theories advocated by Chief Judge Biggs. ¹⁴ "We see no reason to preclude the use of reasonable monetary sanctions against attorneys for violations of local rules when they are the offending parties." Id. at 521.

The Miranda court concluded that the power to issue sanctions under local rules has two sources. First, the authority to sanction attorneys under local rules emanates from the trial court's inherent power. Miranda, 710 F.2d at 520. See also Roadway Express Inc. v. Piper, 447 U.S. 752, 766, 100 S.Ct. 2455, 24, 65 L.Ed.2d 488 (1980) (recognizing the "well-acknowledged" inherent power of the court to levy sanctions). This inherent authority flows from the very nature of a court, from strict functional...