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Friday, April 09, 2010
Courts - "The plain terms of the statute prohibit Sec. 1927 sanctions from being imposed against a law firm."
That was the ruling of a federal judge in Nevada in the case of Montgomery v. eTreppid Technologies, LLC. From a story in the Los Angeles Metropolitan News Enterprise headed "Judge Reverses Sanctions Against Law Firm, Attorneys":
A U.S. District Judge in the District of Nevada has rejected a $200,000 sanctions award recommended by a magistrate judge against a California firm and two of its former attorneys.Judge Philip M. Pro on Monday affirmed the objections of Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP and Los Angeles attorneys Deborah Klar and Teri Pham to U.S. Magistrate Judge Valerie P. Cooke’s ruling, without prejudice. * * *
Cooke found that Klar and Pham had acted in bad faith in their efforts to secure Montgomery’s files from his former attorneys and Cooke ordered sanctions of $204,411 against Klar, Pham, the firm and Montgomery, in addition to $201,990 in fees and costs.
The magistrate further ordered the attorneys to perform a combined total of 300 hours of pro bono work, and barred them from applying to practice pro hac vice in the District of Nevada for five years.
She also referred potential Rules of Professional Conduct violations by Klar and Pham to the Nevada and California State Bar Associations.
Pro, however, said that Cooke’s order as to the firm was contrary to law because she purported to impose sanctions against Liner Grode pursuant to 28 U.S.C. § 1927, which applies only to an “attorney or other person admitted to conduct cases in any court of the United States.”
Because a law firm is not an attorney or a person admitted to conduct cases in federal courts, Pro reasoned that the plain terms of the statute prohibit Sec. 1927 sanctions from being imposed against a law firm.
The judge also concluded that the sanctions against Klar and Pham violated the attorneys’ due process rights since they had not been given adequate notice.
He noted that the magistrate judge’s order setting the evidentiary hearing on the issue of sanctions compelled both attorneys to attend, but their names were listed along with Flynn’s name as parties whose presence was required. Pro reasoned that this would not have alerted Klar or Pham to the possibility that they were personally facing the possibility of sanctions.
Posted by Marcia Oddi on April 9, 2010 01:41 PM
Posted to Courts in general