Keeping courts afloat in a rising sea of litigation: an objective approach to imposing Rule 38 sanctions for frivolous appeals.

• Author: Martin, Scott A.
• Position: Federal Rules of Appellate Procedure

INTRODUCTION

As their dockets swell, federal judges' tolerance for attorney misconduct wears thin. (1) More than ever, judges are willing to impose sanctions for abuses of federal court processes, including frivolous appeals. (2) As one judge explained, "[w]ith courts struggling to remain afloat in a constantly rising sea of litigation, a frivolous appeal can itself be a form of obscenity." (3)

Aside from the need to reduce caseloads, other factors underlie the courts' willingness to impose sanctions for frivolous appeals. One concern is that the costs to responsible, ethical litigants increase sharply when the court system's resources are diverted to meritless claims. (4) Another motivating factor is the simple desire to "insur[e] justice to the appellee." (5) Also exacerbating courts' frustrations with frivolous appeals is their realization that, as the judiciary and bar have grown, attorneys' incentive to regulate themselves has weakened because it is now less likely that any attorney will have to appear regularly before the same judge. (6)

Congress provided federal judges with an arsenal of statutes and rules they may use to impose sanctions and thereby defend themselves against abusive tactics. (7) Chief among them, Rule 38 of the Federal Rules of Appellate Procedure states: "If a court of appeals determines that an appeal is frivolous, it may ... award just damages and single or double costs to the appellee." (8) Pursuant to Rule 38, federal appellate courts have found it appropriate to impose sanctions in a variety of cases, such as when the arguments presented in an appeal are "utterly baseless," (9) when the arguments presented are irrelevant or bizarre, (10) when "there [are] no reasonable, good-faith arguments advanced for the extension, modification, or reversal of precedent," (11) and when it is clear that an appellant filed an appeal simply to delay the inevitable. (12) Furthermore, appellate courts have generally understood that it is within their authority to raise sua sponte the issue of Rule 38 sanctions. (13)

Rule 38's language, however, gives little guidance as to when a court should award such sanctions. From the Rule's use of the word "may," it is clear that whether to impose sanctions under the Rule is discretionary. (14) If it were mandatory, a word such as "must" or "shall" might have been used, as it is in Rule 11 of the Federal Rules of Civil Procedure. (15) Because Rule 38's language makes no mention of whom to sanction, it is also unclear whether the appellant, the appellant's attorney, or both should bear the burden of such sanctions. Furthermore, the Rule neither defines what are "just" damages nor indicates the circumstances appropriate for imposing single costs, as opposed to double costs. (16) The Advisory Committee Notes to Rule 38 do not give courts any clues about how to solve these questions. (17) The circuits do not take a uniform approach to solving these questions, either. (18) The only way to predict the resulting sanction--or lack thereof--is to determine what a particular circuit's attitude toward imposing sanctions has been in the past--aggressive, reluctant, or uncertain. (19)

Furthermore, there is visible disagreement over the elements of Rule 38. The Sixth Circuit recently noted a split between circuits on the issue of whether Rule 38 requires evidence of bad faith before a court can impose sanctions under the Rule. (20) One scholar, Robert J. Martineau, previously identified the crux of the courts' disagreement. (21) Some courts impose Rule 38 sanctions for an objectively meritless appeal, regardless of whether there is any evidence of bad faith. (22) Pursuant to this objective approach, a court focuses exclusively on the record, briefs and argument and, essentially, asks whether a "reasonably prudent attorney" would have filed the appeal. (23) In contrast, another set of courts reads a scienter (24) requirement into Rule 38. Pursuant to this subjective approach, a court demands at least some evidence of bad faith before imposing Rule 38 sanctions. (25) Conceding that the issue of whether bad faith is an element of Rule 38 is still not "free of doubt," the Sixth Circuit sided with the set of courts that use an objective approach. (26)

Both the subjective and the objective approaches to Rule 38 have some identifiable problems. A court that makes a subjective inquiry into bad faith may be reading into the Rule a requirement that its drafters did not intend. On the other hand, courts that apply a purely objective test may threaten an attorney's ability to fulfill his ethical duty to represent with zeal the interests of his client (27)--a consequence that can also create a "chilling effect" on novel appeals. (28) Also, a purely "objective" test may achieve inequitable results when either pro se appellants or attorneys who work for large institutional clients and exercise little control over the litigation are held to the same standard as those attorneys who are experts in their fields and those who do exercise control over the litigation. (29)

In recognition of these sorts of problems, some ambivalent courts have articulated various two-part tests in their Rule 38 analyses. In Zahran v. Schmidt, the Seventh Circuit used a two-part test: "First, the court must conclude that the appeal is frivolous, and second, that sanctions are appropriate. (30) Under the first step of the Zahran test, an appeal is frivolous if "the result is foreordained by the lack of substance to the appellant's arguments" (31) or if the appeal "merely restates arguments that the district court properly rejected." (32) Under the second step, sanctions are appropriate only if the court has some "indication that the appeal was prosecuted for delay, harassment, or out of sheer obstinacy, with no reasonable expectation of altering the district court's judgment." (33) Other courts have implemented, and some commentators have advocated, similar two-part tests calling for a threshold inquiry into objective meritlessness, followed by an inquiry into the subjective intent of the appellant or the appellant's attorney. (34)

This Note argues that Rule 38 requires federal appellate courts to apply a single-step, objective standard that does not take into account the subjective state of mind of the appellant or the appellant's attorney. It also argues that it is appropriate for courts imposing Rule 38 sanctions to command the appellant's attorney, rather than the appellant, to pay for the appellee's actual costs and attorney fees. Part I asserts that neither the plain language nor the legislative history of Rule 38 indicates that the Rule has a scienter requirement and proposes a single-step "reasonable attorney" test for defining frivolity under Rule 38. Part II argues that a court should ordinarily impose the full burden of Rule 38 sanctions upon the appellant's attorney, rather than the appellant. This approach is best because, if a reasonable attorney standard is appropriate for defining frivolity, it also makes sense to discipline the attorney who acted unreasonably by making the frivolous arguments, rather than to discipline the client who was not responsible for the merits of those arguments. In cases where the attorney represents a sophisticated institutional client that does not rely completely on the advice of its attorney, however, a court should impose Rule 38 sanctions jointly on the attorney and the client to ensure that all of those responsible for the appeal's frivolity will bear the burden of such sanctions. Part III explains why a single-step reasonable attorney test best advances the policy goal of deterring frivolous appeals. This Part also argues, however, that cases involving pro se appellants warrant an exception to the reasonable attorney test. This Note concludes that, by using a single-step reasonable attorney test and by imposing the full burden of Rule 38 sanctions against the attorneys responsible for filing meritless appeals, federal appellate courts can deter frivolous appeals and, in so doing, keep themselves afloat in the rising sea of litigation.

1. RULE 38 WARRANTS A SINGLE-STEP "REASONABLE ATTORNEY" TEST

   This Part argues that, in deciding whether to impose Rule 38 sanctions, a court should apply an objective, single-step "reasonable attorney" test. Section I.A asserts that Rule 38 is an objective rule focused on the merits of an appeal, rather than the bad faith of an appellant or an appellant's attorney. Section I.B argues that courts should apply a reasonable attorney test to determine whether an appeal is frivolous for purposes of Rule 38. To avoid a chilling effect on novel appeals, however, a court should be careful to classify as frivolous only those appeals that have no colorable legal support. Section I.C maintains that only one step of objective analysis is necessary. No subjective "second step" is necessary to determine when a sanction is necessary to assign blame or to calculate a just sanction.

   1. Rule 38 Has No Scienter Requirement

      A textual analysis of Rule 38's plain language demonstrates that the Rule has no scienter requirement, and therefore, does not require an inquiry into the bad faith of the appellant or the appellant's attorney. To determine Rule 38's requirements, one should focus on the ordinary meaning of the Rule's language in its textual context, and then ask whether there is any clear indication that some permissible meaning other than the ordinary one applies. (35) The plain language of Rule 38 makes no mention of a scienter requirement: "If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee." (36)

      Unlike 28 U.S.C. [section] 1927, a rule allowing sanctions against an attorney who multiplies proceedings "vexatiously," (37) Rule 38 has no language corresponding...