Bad Behavior Exhibited by Counsel or Parties and the Court’s Inherent Power

In the last post, we examined several Federal Rules of Civil Procedure which allow a party to recover attorneys’ fees for certain discovery abuses by an opponent. But what if the other party engages in conduct that is not specifically covered by the Rules of Civil Procedure? Or, what if the other party engages in bad behavior outside of the discovery process altogether? In those situations, you can look to the court’s inherent sanctions power as a possible source to recover attorneys’ fees for your client.

Under common law, courts have the inherent authority to police the legal process and sanction misconduct in the court system. A court may award attorneys’ fees to a successful party where “his opponent has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons.’” A showing of bad faith–a relatively high standard to meet–is a prerequisite to a fee award under this power. Bad faith has been found where a party engages in fraud, delays or disrupts the litigation, or fails to follow a court order. In Chambers v. Nasco, Inc., for instance, the losing party was required to pay attorneys’ fees to the opposing party because he attempted a scheme to place property at issue outside the jurisdiction of the court, denied access to corporate records, filed meritless papers and engaged in tactics to delay the proceedings, violated court orders, and interfered with equipment on the property. In that case, the court noted that exercise of its inherent power was “particularly appropriate” because the offending party engaged in fraud upon the court.

In addition to meeting this difficult standard, you may encounter another hurdle: a court will likely be hesitant to exercise its power. Pursuant to Supreme Court guidance, the inherent power “must be exercised with restraint and discretion.” Furthermore, the court retains discretion to fashion remedies that are appropriate to the situation, and attorneys’ fees are one of many possible remedies the court may choose to punish or deter the party’s conduct. Assuming that the courts try to marry an appropriate remedy with the offense, it would seem that an award of attorneys’ fees is most likely in those situations where the other party’s conduct has resulted in prolonged litigation, unnecessary pleadings and proceedings, and increased expenses for their opponent.

As you can see, a claim for attorneys’ fees under the court’s inherent power is no slam dunk. However, if you encounter egregious, bad faith conduct from an opposing party, especially if that behavior increases the costs of litigation for your client, you may be able to convince a court that it should exercise its inherent power to sanction that behavior.

For further information, we invite you to download the following Legal Insights White Paper:

Turning the Tables: Effective Strategies for Shifting the Burden of Attorneys’ Fees

Further Reading and References:

Homer v. Rowan Cos., 153 F.R.D. 597, 599 (S.D. Tex. 1994) (finding sanctionable conduct where counsel misled opposing counsel); Scotch Game Call Co. v. Lucky Strike Bait Works, Ltd., 148 F.R.D. 65, 67 (W.D.N.Y. 1993) (imposing sanctions based on unreasonable multiplication of proceedings).

Chambers v. Nasco, Inc., 501 U.S. 32 (1991)

Hall v. Cole, 412 U. S. 1, 5 (1973); see also Hutto v. Finney, 437 U. S. 678, 689, n.14 (1978).