Unpublished Disposition, 935 F.2d 273 (9th Cir. 1990)

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U.S. Court of Appeals for the Ninth Circuit - 935 F.2d 273 (9th Cir. 1990)

No. 90-15417.

United States Court of Appeals, Ninth Circuit.

Before BRUNETTI and RYMER, Circuit Judges, and STEPHEN V. WILSON, District Judge** 


Paul Arons and Sharon Grace ("appellants"), attorneys for Brian Barlow, appeal from an order awarding Rule 11 sanctions against them. Appellants moved for a new trial after a jury found for American Telephone and Telegraph Co. ("AT & T) in Barlow's action for wrongful termination. The new trial motion was denied, and defendant-appellee AT & T sought attorney's fees. A magistrate awarded AT & T attorney's fees under Fed. R. Civ. P. 11 for time spent opposing the motion for new trial and preparing the motion for sanctions. We have jurisdiction under 28 U.S.C. § 1291 and affirm in part and reverse in part.

This appeal arises from Barlow's employment termination action against AT & T. After a jury found in favor of AT & T on the wrongful termination claim, Barlow filed a motion for a new trial, claiming he was denied a fair trial due to the pervasiveness of perjured testimony. A magistrate denied the motion without hearing.

AT & T filed a motion for attorney's fees and costs, seeking sanctions against appellants for their actions throughout the course of the proceedings. Fees and costs were denied on all grounds except for the award of sanctions under Rule 11 for filing a frivolous motion for a new trial. The magistrate ordered AT & T to submit a declaration stating the time spent opposing the new trial motion, and on the motion for sanctions. On February 27, 1990, the magistrate filed a second order requiring appellants to pay $4,901.25 in attorney's fees and costs to AT & T.

Standard of Review

An award of sanctions under Rule 11 is reviewed for an abuse of discretion. See Cooter & Gell v. Hartmax, 110 S. Ct. 2447, 2461 (1990). "A district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence." Id.

Appropriateness of Sanctions

Rule 11 states:

The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading ...; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose....

In this circuit, a Rule 11 sanction is appropriate when a pleading is "frivolous." Townsend v. Holman Consulting Co., 929 F.2d 1358 (9th Cir. 1990) (en banc). As the Townsend court stated: "The word 'frivolous' does not appear anywhere in the text of the Rule; rather, it is a shorthand that this court has used to denote a filing that is both baseless and made without a reasonable and competent inquiry." Id.

The magistrate held Barlow's motion for a new trial was frivolous. In her Rule 11 order she stated:

Counsel's major basis for the motion for a new trial was their allegation, without any substantive evidence, that Defendants and/or their attorneys orchestrated a scheme of perjury causing witnesses to lie under oath. The motion revealed that Plaintiff's counsel based this theory of perjury on the fact that inconsistent testimony was given by the various witnesses.

The Court denied the motion without a response from Defendants or oral argument, noting that discrepancies in testimony among witnesses are properly argued to the jury, as Plaintiff did, so that the jury could consider the credibility of witnesses during deliberations. Inconsistency in testimony is not a ground for a new trial.

Order On Costs and Sanctions at 2.

Appellants argue the basis for the court's Rule 11 award was an abuse of discretion. The magistrate was wrong, they assert, that " [i]nconsistency in testimony is not a ground for a new trial." For their view appellants cite a litany of cases supporting the view that evidence of perjury at trial is a sound basis for a new trial motion. See, e.g., Harre v. A.H. Robins, 750 F.2d 1501 (11th Cir. 1985); Phillips v. Crown Central Petroleum Corp. 556 F.2d 702 (4th Cir. 1977); Aetna Casualty v. Surety Co. v. Yeatts, 122 F.2d 350 (4th Cir. 1941). Appellants then go on to recite each of the alleged instances of "perjury" that occurred during trial.

The district court did not hold perjury is an insufficient grounds for a new trial. The court simply found no evidence of perjury in appellant's motion, and because merely inconsistent testimony is not adequate grounds for a new trial, it made the Rule 11 award. Order on Costs and Sanctions at 2-3; see also Bulgo v. Munoz, 863 F.2d 710, 714 (9th Cir. 1988) (rejection of motion for new trial based on conflicting testimony).

The award in this case was not an abuse of discretion. To reverse the district court, we would have to find that the magistrate, who sat through the trial and perceived the witnesses, was wrong to find the perjury allegations baseless. This is precisely the kind of review the Supreme Court intended to avoid when, in Cooter, it instructed appellate courts to pay deference to the Rule 11 decisions of lower courts. Cooter & Gell, 110 S. Ct. at 2460-61. We decline to disturb the view of the magistrate here.

Amount of Sanctions

Appellants argue the amount of the sanctions in this case was an abuse of discretion because the award was based on the "contradictory declarations" of appellees regarding their time spent opposing the motion for a new trial, and preparing their fees motion. It appears the two declarations filed by appellees assert widely different amounts of time spent opposing appellants' frivolous motion.

There was no error in the award, however, because the magistrate took this inconsistency into account in making the award. Indeed, the final award was very close to the lowest hour amount asserted by appellees. The final award of $4910.25 was not an abuse of discretion.

Sanctions Against Attorney Grace

It is unclear from the magistrate's order precisely against whom the Rule 11 sanction was imposed. The order states: "Counsel for plaintiff is sanctioned pursuant to Federal Rule of Civil Procedure 11...." (emphasis supplied) It continues: "Counsel's major basis for the motion for a new trial was their allegation ... that Defendants and/or their attorneys orchestrated a scheme of perjury...." This confusing mixture of singular and plural leaves unresolved the question whether Magistrate Wilken intended to sanction Arons, Grace, the Law Office of Paul Arons, or some combination thereof. There is no doubt, however, that the motion for new trial was signed only by Arons.

Appellants assume on appeal that both Arons and Grace were sanctioned individually. They argue because she did not sign the motion, sanctions cannot be imposed against Grace. Pavelic & LeFlore v. Marvel Entertainment Group, 110 S. Ct. 456, 459-60 (1990), supports this view. See also Robinson v. National Cash Register Co., 808 F.2d 1119 (5th Cir. 1987).

AT & T asserts because this issue was not raised below, this court need not consider it. See Cooter & Gell, 110 S. Ct. at 2452, n. * *. However, the Pavelic decision was not filed until after the magistrate imposed the sanctions, although it was rendered before the sanctions order became final. Nevertheless, we will consider an issue for the first time on appeal if the issue is purely a question of law. Bolker v. Commissioner, 760 F.2d 1039, 1042 (9th Cir. 1985). For all intents and purposes, the change in the law did occur during the pendency of the appeal. The magistrate awarded sanctions, and held off on a final disposition until a premature appeal was dismissed by this court.

Should we reach the issue, AT & T argues the sanction should be upheld because (1) Grace signed a declaration filed in support of the motion for a new trial; and (2) the magistrate's award could be supported under 28 U.S.C. § 1927.

AT & T cites no support for the proposition that an attorney who signs a document supporting a motion is liable under Rule 11 for sanctions if the motion is determined to be frivolous. Indeed, the magistrate here did not mention the declaration, a separate pleading, but imposed the sanction for the submission of the new trial motion.

AT & T's motion for sanctions sought attorney's fees under Sec. 1927. The magistrate declined to sanction appellants for anything other than the Rule 11 violation. It would be inappropriate for us to allow the award of sanctions against Grace under Sec. 1927 when the magistrate declined to do so.

Any sanction against Grace or the Law Firm of Paul Arons is precluded under Pavelic. We find that the Rule 11 award was intended to be imposed on Paul Arons, individually, and we affirm the sanction as such. Any sanction as to Grace or the law firm is reversed.

Attorney's Fees on Appeal

AT & T seeks attorney's fees under FRAP 38 and Circuit Rule 28-2.3, on the ground that the appeal is frivolous.

Attorney's fees are properly awarded on appeal when the result is obvious or when the appellant's arguments are wholly without merit. Sheet Metal Workers, Local 162 v. Jason Mfg., 900 F.2d 1392, 1401 (9th Cir. 1990). Although we affirm, we cannot say the challenge to any sanction against attorney Grace was wholly without merit. We therefore decline to award attorney's fees on appeal and each party shall bear its own costs on appeal.



The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a); Circuit Rule 34-4


Stephen V. Wilson, United States District Judge for the Central District of California, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Circuit Rule 36-3