Sanction law applies to lawyers, not firms, U.S. appeals court says

A man walks on a street between buildings at a business district in Tokyo
REUTERS/Yuya Shino
  • 5th Circuit panel says law meant to punish attorneys
  • Court vacated fee sanction but sent case back for review

(Reuters) - A U.S. law that can force a lawyer to pay legal fees for "vexatious" or "unreasonable" conduct in federal court does not extend to the attorney's law firm, the 5th U.S. Circuit Court of Appeals said in a ruling on Thursday that acknowledged a divide among other courts.

The three-judge panel of the New Orleans-based appeals court vacated a nearly $50,000 award that had been imposed on the Texas firm Brewer Storefront PLLC and several of its attorneys, including William Brewer III.

"Courts do not admit law firms to conduct cases, but instead admit individual attorneys," 5th Circuit Judge Patrick Higginbotham wrote for the panel, with Circuit Judges Stuart Duncan and Kurt Engelhardt.

The judges said they joined "the majority of our sister circuits" in holding that the law at issue "does not provide grounds for a district court to award attorney's fees against law firms or other entities not admitted to practice law."

The appeals court said it disagreed with the conclusion of the Atlanta-based 11th Circuit that the law allows such a sanction.

The law at the heart of the case says "any attorney or other person" who is litigating in federal court can be ordered to pay fees for conduct that "multiplies the proceedings."

A separate provision of the federal rules of civil procedure permits a judge to sanction a law firm, but that provision, known as Rule 11, generally focuses on document filings and was not at issue in the case.

Brewer, who has long defended the National Rifle Association in various cases, in a statement on Friday said the court's "decision confirms that any sanctions previously awarded were unwarranted."

A lawyer who defended the school district had no immediate comment.

The 5th Circuit's order vacated the sanction imposed on Brewer and his firm for filing a lawsuit claiming a local school board's election system for board members violated the federal Voting Rights Act. The court remanded the case for further review about whether conduct at depositions might justify fees.

U.S. District Judge Sean Jordan in Plano, Texas, imposed the fee sanction after finding the lawsuit's claims "were frivolous and unreasonable." Jordan said the plaintiff, as a white male, had no legal standing to pursue the case.

The 5th Circuit, however, found the lawsuit was an attempt to "extend the law" and so was not frivolous.

The case is Vaughn v. Lewisville Independent School District, 5th U.S. Circuit Court of Appeals, No. 22-40057.

For plaintiff: Meredith Prykryl Walker of Walsh Gallegos Treviño Kyle & Robinson

For defendant: William Brewer III of Brewer Storefront

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