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Wednesday, November 20, 2019

Seventh Circuit sanctions plaintiffs attorney for filing case in Arkansas

By Rebecca Campbell | Sep 8, 2016

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MADISON, Wis. (Legal Newsline) – The U.S. Court of Appeals for the Seventh Circuit has imposed sanctions on a plaintiff attorney after he filed litigation in an Arkansas state court where the case allegedly had no connection to Arkansas.

In Boyer v. BNSF Railway Company, one of the original lawyers, Christopher Stombaugh, from the 2012 decision in Irish v. BNSF Railway Company decided to bring a class action with a different plaintiff to test the legal theory that the Seventh Circuit refused in Irish.

The Boyer case was filed in Arkansas state court in an attempt to avoid the same judges who were encountered in Irish. BNSF then removed the case to federal court, but once it was removed there, it was then transferred back to the Western District of Wisconsin, where it met the same fate as Irish. Subsequently, BNSF asked the district court to award attorneys fees and sanctions and deem the case frivolous.

The district court, recognizing that the Seventh Circuit had specifically declined to resolve the new argument, found the case was not frivolous and declined to award fees. It then went back to the Seventh Circuit.

Speaking to Legal Newsline, Colin Flora, an associate civil litigation attorney at Pavlack Law, said courts are extremely hesitant to award sanctions under Section 1927.

“The court found that the problem from Irish of constantly changing arguments continued in Boyer, [which] would likely not have been enough to get the court to award sanctions,” Flora said. “Instead it took the matter of filing the case in Arkansas when there was no apparent rationale for doing so.”

The sanctioned lawyer, according to Flora, argued the court was sanctioning him for filing his new case in Arkansas state court, thereby sanctioning him for conduct before the case was even in federal court.

In essence, the lawyer tried to argue as though the case, when it was in state court, was a different case from when it was in federal court. The law is clear that Section 1927 cannot be used to sanction an attorney for conduct in a different case, Flora added.

The Seventh Circuit failed to agree for two reasons. 

First, it wasn’t sanctioning him for what he did in the Irish case but for his conduct in the Boyer case. It seems the choice to file in Arkansas was the most problematic. Second, the court noted it is an interesting question whether Section 1927 can be used to sanction a lawyer for filing in state court when the case is readily removable.

However, instead of resolving the issue of Section 1927, the Seventh Circuit invoked its authority to sanction.

The common basis for determining a sanction is to ask the side who was inconvenienced by the sanctionable conduct to submit an accounting of the costs and legal fees it sustained due to the conduct.

According to Flora, BNSF submitted an accounting of $51,586,80. The court found that $17,011 were accrued due to the plaintiffs having appealed the order transferring the case from Arkansas to Wisconsin. However, that portion was removed, leaving $34,575,80 remaining.

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U.S. District Court for the Western District of Wisconsin