4.11 Appellate Review of Sanctions Awards

• Library: Attorney Fees and Sanctions - Virginia and Federal Courts (Virginia CLE) (2016 Ed.)

4.11 APPELLATE REVIEW OF SANCTIONS AWARDS

4.1101 Abuse of Discretion. When district courts impose an award against an attorney under section 1927, the Fourth Circuit reviews the award only for an abuse of discretion. ³⁴⁹

This standard recognizes that, as in the context of sanctions under Rule 11 of the Federal Rules of Civil Procedure, "the district court is better situated than the court of appeals to marshal the pertinent facts and apply the fact-dependent legal standard" of section 1927. ³⁵⁰

However, the factual findings underpinning the district court's award are reviewed for clear error. ³⁵¹ Imposition of discovery sanctions is reviewed under an abuse of discretion standard. ³⁵²

The Rule 61 standard obligating a reviewing court to "disregard all errors and defects that do not affect any party's substantial rights" applies equally to discovery orders. ³⁵³ In Flame S.A. v. Freight Bulk PTE Ltd., the Fourth Circuit rejected a defendant's claim of error as to a discovery order

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where each factual finding that noted a negative inference from a discovery violation sanction was supported by more than one piece of additional evidence that had been admitted at trial. Furthermore, the negative inferences from the defendant's other misconduct were considerably more damaging to the defendant than negative inferences created by document discovery violation sanctions. The court concluded that "even if we assume that the district court erred in sanctioning Freight Bulk for failing to produce ICI documents, that error did not substantially affect the judgment." ³⁵⁴

4.1102 Review of a Magistrate Judge's Report and Recommendation. "The issue of Rule 11 sanctions is a non-dispositive matter subject to the clearly erroneous review under Rule 72(a), unless the nature of the sanction imposed, i.e. dismissal of the...