On Appeal from the United States District Court for the Western District of Pennsylvania (C.A. No. 82-0885).
Aldisert, Chief Judge, Seitz, Adams, Gibbons, Hunter, Weis, Garth, Higginbotham, Sloviter, and Becker Circuit Judges.
This appeal presents an issue important to judicial administration, namely, whether a district court may order an attorney to pay to the government the cost of impanelling a jury for one day as a sanction for the attorney's abuse of the judicial process.
The underlying action in this case was a personal injury suit brought in a Pennsylvania state court in 1982 by plaintiffs Irvin and Yvonne Eash. Upon motion by the defendants, the case was removed to the District Court for the Western District of Pennsylvania, pursuant to 28 U.S.C. § 1441 (1982). Settlement negotiations took place between the parties in the spring of 1983, leading to a stipulation to dismiss the case. Consequently, on August 1, 1983, the district court dismissed the action.
On August 12, 1983, without giving notice to the parties or conducting a hearing, the district court entered an order requiring defendants' counsel to pay $390 to the Clerk of Court. A copy of the order appears in the appendix. The case was scheduled for trial before a jury on May 23, 1983, and according to the district court judge, plaintiffs' attorney made repeated attempts to communicate with defendants' counsel regarding settlement possibilities during the week of May 16, 1983. Receiving no response, plaintiffs' attorney prepared for trial and came to court on May 23. At that point, defendants' counsel proposed a settlement figure that plaintiffs accepted. The district court believed, although this is disputed, that because defendants' attorney was scheduled for trial in state court that same day, the settlement avoided a scheduling conflict.
The district court concluded that under the circumstances "settlement on the eve of trial was not justified. Defendants' attorney was given adequate notice by plaintiffs' counsel and by court personnel to attempt to reach an agreement." App. at 8A. The court therefore imposed a sanction of $390 on defendants' attorney, calculated as follows: $30, the per diem fee for each juror, multiplied by 13, the minimum number of persons necessary to select a jury. Subsequently the court denied a petition for reconsideration submitted by defendants' counsel, in which counsel disputed the factual basis of the order.
After a timely appeal was filed, the case was listed for resolution by a panel of this Court.*fn1 Because of the importance of the questions presented, however, the Court in banc has reviewed the case.
We first address appellants' contention that the district court was without jurisdiction to enter the order imposing the sanction because the order was entered eleven days after the dismissal of the case. It is clear that there are various contexts in which the district court retains jurisdiction over particular matters after a judgment has been entered. For example, the court retains jurisdiction to fix costs under Fed. R. Civ. P. 54(d) and Fed. R. Civ. P. 58, even after dismissal of the underlying action. See 10 C. Wright & A. Miller, Federal Practice and Procedure § 2668 (1983); cf. Richards v. Government of Virgin Islands, 579 F.2d 830, 833 (3d Cir. 1978). In addition, courts generally have recognized that there is retained jurisdiction to assess attorney's fees pursuant to 28 U.S.C. § 1927 (1982), within a reasonable time after a judgment on the merits is entered. See, e.g., Overnite Transportation Co. v. Chicago Industrial Tire Co., 697 F.2d 789, 793 (7th Cir. 1983); Obin v. District of the International Assoc. of Machinists & Aerospace Workers, 651 F.2d 574 (8th Cir. 1981).
Assuming the district court had the authority to impose the sanction in this matter, we find no jurisdictional obstacle to the entry of the order in question eleven days after the underlying case was disposed of on the merits.
Counsel also challenges the district court's power to impose the cost of impanelling a jury as a sanction for his misconduct. The district court did not specify the authority upon which it relied; however, there appear to be two possible sources: 28 U.S.C. § 1927 (1982) or the court's inherent power.
As amended in 1980, 28 U.S.C. § 1927 states:
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because ofsuch conduct.
A threshold question is whether the terms "costs" and "expenses" contained in the statute include the per diem juror fees paid by the government. If not, the statute would appear to provide no authority for the order in question.
In Roadway Express, Inc. v. Piper, 447 U.S. 752, 65 L. Ed. 2d 488, 100 S. Ct. 2455 (1980), the Supreme Court held that "costs" under § 1927 are limited to those costs permitted under 28 U.S.C. § 1920 (1982), which enumerates the items that ordinarily may be taxed to a losing party.*fn2 The Court reasoned that § 1927 should be read in pari materia with § 1920 because the two sections are part of an integrated legislative effort, first approved in 1853, to allow the award of excess costs against lawyers who vexatiously multiply litigation. 447 U.S. at 760. The Supreme Court concluded that the
most reasonable construction is that the [original Act containing the present § 1920] defined those costs that may be recovered from counsel. Congress, of course, may amend these provisions that derive from the 1853 Act. In the absence of express modification of those provisions by Congress, however, we should not look beyond the for the definition of costs under § 1927."
Id. at 760 (footnote omitted).*fn3 Neither § 1920 nor § 1927 contains reference to the costs of impanelling a jury, costs which customarily are borne by the government. Only the opposing litigants' costs and expenses incurred by virtue of an attorney's misconduct are within the ambit of the statutes. Thus, the Supreme Court's decision in Roadway precludes reliance on § 1927 as granting district courts the authority to impose the sanction employed in this case. See also United States v. Blodgett, 709 F.2d 608 (9th Cir. 1983); United States v. Ross, 535 F.2d 346 (6th Cir. 1976) (§ 1927 does not authorize assessment of juror costs).*fn4
The amicus suggests that the district court's order is most properly viewed as an exercise of the court's inherent power. That courts have inherent powers -- powers vested in the courts upon their creation, see Michaelson v. United States, 266 U.S. 42, 66, 69 L. Ed. 162, 45 S. Ct. 18 (1924); Ex parte Robinson 86 U.S. (19 Wall.) 505, 510, 22 L. Ed. 205 (1874); Anderson v. Dunn, 19 U.S. (6 Wheat.) 204, 227, 5 L. Ed. 242 (1821), and not derived from any statute, see Link v. Wabash Railroad Co., 370 U.S. 626, 630, 8 L. Ed. 2d 734, 82 S. Ct. 1386 (1962); United States v. Hudson, 11 U.S. (7 Cranch) 34, 3 L. Ed. 259 (1812) -- is not disputed. Inherent power has been frequently invoked by the courts to regulate the conduct of the members of the bar as well as to provide tools for docket management. Courts have thus relied on the concept of inherent power to impose several species of sanctions on those who abuse the judicial process. For example, federal courts may dismiss a case for failure to prosecute. Link v. Wabash Railroad Co., 370 U.S. at 629-30; see also National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 49 L. Ed. 2d 747, 96 S. Ct. 2778 (1976) (per curiam); Titus v. Mercedes Benz of North America, 695 F.2d 746 (3d Cir. 1982). Similarly, the contempt power is rooted in the inherent power of the judiciary. E.g., Levine v. United States, 362 U.S. 610, 615, 4 L. Ed. 2d 989, 80 S. Ct. 1038 (1960). Commentators have also noted occasions in which, under its inherent power, a court has disbarred, suspended from practice, or reprimanded attorneys for abuse of the judicial process. See Comment, Financial Penalties Imposed Directly Against Attorneys in Litigation Without Resort to the Contempt Power, 26 UCLA L. Rev. 855, 856 (1979); Comment, Involuntary Dismissal for Disobedience or Delay: The Plaintiff's Plight, 34 U. Chi. L. Rev. 922, 937 n.96 (1967); accord Ex parte Wall, 107 U.S. 265, 288-89, 2 S. Ct. 569, 27 L. Ed. 552 (1883); cf. Spevack v. Klein, 385 U.S. 511, 524, 17 L. Ed. 2d 574, 87 S. Ct. 625 (1967) (Harlan, J., dissenting) (courts "have endeavored to regulate the qualification and practice of lawyers, always in hope that this might better assure the integrity and evenhandedness of the administration of justice . . . since the 17th century"). This Court has stated that in the absence of a statute, the taxation of costs in the appellate court "is a matter, inherently and necessarily within its general powers." See Island Development Co. v. McGeorge, 37 F.2d 345, 345 (3d Cir. 1930); see also Levin & Amsterdam, Legislative Control Over Judicial Rule-Making: A Problem of Constitutional Revision, 107 U. Pa. L. Rev. 1, 16 (1958). Courts, pursuant to inherent powers, have declared attorneys who choose to be absent from docket call "ready for trial," even though this may lead ineluctably to the entry of a default judgment. Williams v. New Orleans Public Service, Inc., 728 F.2d 730, 732 (5th Cir. 1984); see also Schlesinger v. Teitelbaum, 475 F.2d 137, 142 (3d Cir.), cert. denied, 414 U.S. 1111, 38 L. Ed. 2d 738, 94 S. Ct. 840 (1973) (an inherent power to set counsel fees in cases involving persons of presumed incapacity).
Despite historical reliance on inherent powers, including Supreme Court, jurisprudence dating back to 1812, the notion of inherent power has been described as nebulous,*fn5 and its bounds as "shadowy." See Rosenberg, Sanctions to Effectuate Pretrial Discovery, 58 Colum. L. Rev. 480, 485 (1958). The conceptual and definitional problems regarding inherent power that have bedeviled commentators for years, see Burbank, Sanctions in the Proposed Amendments to Federal Rules of Civil Procedure: Some Questions About Power, 11 Hofstra L. Rev. 997, 1004 (1983); see also Sanctions Imposable, supra n. 5, stem from several factors. First, perhaps because federal courts infrequently resort to their inherent powers or because such reliance most often is not challenged, very few federal cases discuss in detail the topic of inherent powers. Cf. Note, Power of Federal Courts to Discipline Attorneys for Delay in Pretrial Procedure, 38 Notre Dame Law, 158, 161 (1963).*fn6 More importantly, those cases that have employed inherent power appear to use that generic term to describe several distinguishable court powers. Cf. Williams, The Source of Authority for Rules of Court Affecting Procedure, 22 Wash. U.L.Q. 459, 473-74 (1937); Frankfurter & Landis, Power of Congress over Procedure in Criminal Contempts in "Inferior" Federal Courts - A Study in Separation of Powers, 37 Harv. L. Rev. 1010, 1023 (1924). To compound this lack of specificity, courts have relied occasionally on precedents involving one form of power to support the court's use of another. See Burbank, supra, 11 Hofstra L. Rev. at 1005.
These observations suggest that it is not always possible to categorize inherent power decisions. Nevertheless, it appears that the term inherent power has been employed in three general fashions. The first stems from the fact that once Congress has created lower federal courts and demarcated their jurisdiction, the courts are vested with judicial powers pursuant to Article III. This use of inherent power, which might be termed irreducible inherent authority, encompasses an extremely narrow range of authority involving activity so fundamental to the essence of a court as a constitutional tribunal that to divest the court of absolute command within this sphere is really to render practically meaningless the terms "court" and "judicial power." See Levin & Amsterdam, supra, 107 U. Pa. L. Rev. at 30-32. In this limited domain of judicial autonomy, courts may act notwithstanding contrary legislative direction. These inherent powers are grounded in the separation of powers concept, because to deny this power "and yet to conceive of courts is a self-contradiction." Frankfurter & Landis, supra, 37 Harv. L. Rev. at 1023; see Levin & Amsterdam, supra, 107 U. Pa. L. Rev. at 33; see also United States v. Klein, 80 U.S. (13 Wall.) 128, 147, 20 L. Ed. 519 (1872).
Boundaries for this sphere of minimal judicial integrity are not possible to locate with exactitude.*fn7 Certainly the power must be exercised with great restraint and caution. Whatever the proper limit of this form of inherent power may be, it is not the power to which the amicus has pointed as authority for the sanction imposed by the district court here.
The second, and most common, use of the term "inherent power" encompasses those powers sometimes said to arise from the nature of the court, see Ex parte Terry, 128 U.S. 289, 303, 9 S. Ct. 77, 32 L. Ed. 2d 405 (1888); United States v. Hudson, 11 U.S. (7 Cranch) at 34, 3 L. Ed. 259, but more often thought to be the powers "necessary to the exercise of all others." E.g., Roadway, 447 U.S. at 764 (quoting Hudson). Here courts are referring to powers implied from strict functional necessity. In Roadway the Supreme Court termed the contempt sanction "the most prominent" of these powers.*fn8 Historically, it has viewed this particular power as "essential to the administration of justice," Michaelson, 266 U.S. at 65, and "absolutely essential" for the functioning of the judiciary. Levine v. United States, 362 U.S. 610, 616, 4 L. Ed. 2d 989, 80 S. Ct. 1038 (1959); see also Cooke v. United States, 267 U.S. 517, 539, 69 L. Ed. 767, 45 S. Ct. 390 (1925); Myers v. United States, 264 U.S. 95, 103, 68 L. Ed. 577, 44 S. Ct. 272 (1924).
Because this second form of inherent power arises from necessity, on several occasions the Supreme Court has stated that while the authority "may be regulated within limits not precisely defined," it can "neither be abrogated nor rendered practically inoperative." Michaelson, 266 U.S. at 66. Levine v. United States, 362 U.S. 610, 80 S. Ct. 1038, 4 L. Ed. 2d 988 (1960). Indeed, in one of its earliest decisions regarding the contempt power, the Supreme Court observed that congressional enactment of a contempt statute should "be considered, only as an instance of abundant caution, or a legislative declaration, that the power of punishing for contempt shall not extend beyond its known and acknowledged limits. . . ." Anderson, 19 U.S. (6 Wheat.) at 226, 5 L. Ed. 242; see also Cammer v. United States, 350 U.S. 399, 404, 100 L. Ed. 474, 76 S. Ct. 456 (1956); United States v. Hall, 198 F.2d 726, 728 (2d Cir. 1952), cert. denied, 345 U.S. 905, 73 S. Ct. 641, 97 L. Ed. 1341 (1953) (statute merely "defines the acts toward which it may be directed").
The third form of authority subsumed under the general term inherent power implicates powers necessary only in the practical sense of being useful. An early example is Ex parte Peterson, 253 U.S. 300, 64 L. Ed. 919, 40 S. Ct. 543 (1920), in which the Supreme Court determined that "the court possesses the inherent power to supply itself" with and "auditor" to aid in its decisionmaking. Id. at 312. "Courts have (at least in the absence of legislation to the contrary) inherent power to provide themselves with appropriate instruments required for the performance of their duties," and to appoint "persons unconnected with the court to aid judges in the performance of specific judicial duties." Id.; see also Ruiz v. Estelle, 679 F.2d 1115, 1161 (5th Cir. 1982), cert. denied, 460 U.S. 1042, 75 L. Ed. 2d 795, 103 S. Ct. 1438 (1983); Schwimmer v. United States, 232 F.2d 855, 865 (8th Cir.), cert. denied, 352 U.S. 833, 77 S. Ct. 48, 1 L. Ed. 2d 52 (1956).*fn9
This third category of inherent power has sometimes been said to be "rooted in the notion that a federal court, sitting inequity, possesses all of the common law equity tools of a Chancery Court (subject, of course, to congressional limitation) to process litigation to a just and equitable conclusion." ITT Community Development Corp. v. Barton, 569 F.2d 1351, 1359 (5th Cir. 1978); cf. Hall v. Cole, 412 U.S. 1, 5, 36 L. Ed. 2d 702, 93 S. Ct. 1943 (1973) (courts possess "inherent equitable power"); Johnston v. Marsh, 227 F.2d 528, 531 (3d Cir. 1955) ("Our Federal judiciary has consistently recognized that at common law this inherent power existed."). In other cases this power is said to derive from necessity; for example, the court termed "essential" the appointment of an auditory in Peterson, 253 U.S. at 312. Yet it is clear that such power is necessary only in the sense of being highly useful in the pursuit of a just result. See Note, Compulsory Reference in Actions at Law, 34 Harv. L. Rev. 321, 324 (1921).
As suggested by the above quotation from Peterson, courts may exercise this kind of inherent power only in the absence of contrary legislative direction. See Williams, supra, 22 Wash. U.L.Q. at 473; see also Alyeska Pipeline Service v. Wilderness Society, 421 U.S. 240, 259, 44 L. Ed. 2d 141, 95 S. Ct. 1612 (1975) ("These exceptions are unquestionably assertions of inherent power in the courts to allow attorneys' fees in particular situations, unless forbidden by Congress. . . .").
The third form of power has also been invoked as "the underlying federal basis that permits the court to elect to use" a state mechanism for certification of a question of doubtful state law, Weaver v. Marine Bank, 683 F.2d 744 (3d Cir. 1982); in order to grant bail in a situation not dealt with by statute, Johnston v. Marsh, 227 F.2d at 531; see also Wright v. Henkel, 190 U.S. 40, 63, 47 L. Ed. 948, 23 S. Ct. 781 (1903); In re Gannon, 27 F.2d 362, 363 (E.D. Pa. 1928); and to dismiss a suit pursuant to the doctrine of forum non conveniens, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 502, 507, 91 L. Ed. 1055, 67 S. Ct. 839 (1947).
Courts rarely have explained exactly what kind of authority they mean to invoke when using an inherent power to sanction an attorney. See Dowling, The Inherent Power of the Judiciary, 21 A.B.A.J. 635 (1935). Nevertheless, it seems quite clear that at least in the absence of contrary legislation, courts under their inherent powers have developed a wide range of tools to promote efficiency in their courtrooms and to achieve justice in their results. E.g., Link, 370 U.S. at 630-31 (where the Supreme Court stated that the authority to dismiss a case is an inherent "control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases"); see also Moulton v. Commissioner of Internal Revenue, 733 F.2d 734, 735 (10th Cir. 1984); Barnd v. City of Tacoma, 664 F.2d 1339, 1342 (9th Cir. 1982); Penthouse International Ltd. v. Playboy Enterprises, Inc., 663 F.2d 371, 386 (2d Cir. 1981).
Nearly a quarter century ago, and more than fifteen years prior to the Supreme Court's decision in Roadway, this Court sitting in banc held that a district court lacked inherent authority to impose a "fine" on an attorney who had failed to file a pretrial memorandum in a timely fashion. Gamble v. Pope & Talbot, Inc., 307 F.2d 729 (3d Cir.), cert. denied, 371 U.S. 888, 83 S. Ct. 187, 9 L. Ed. 2d 123 (1962). The plurality of the Court believed that the effect of the fine, whatever "it be called . . . was to punish defendant's attorney for contempt in failing to file the defense pretrial memorandum within time." Id. at 731. The district court in Gamble did not, however, designate the lawyer's act as contempt nor did it invoke the formal contempt proceeding. On review, this Court noted that there was nothing in the Federal Rules of Civil Procedure which explicitly authorized the sanction that had been imposed. Id. While the plurality conceded that district courts have substantial local rulemaking power, it determined that such a "basic disciplinary innovation" as the sanction in question required a national "uniform approach." Id. at 732. The plurality believed that only a statute or Federal Rule could accomplish this. Significantly, while stating that no inherent authority for the fine existed, neither the plurality opinion nor the concurring statement of Judge Hastie discussed the doctrine of inherent powers, and neither opinion cited any case involving inherent power.
Judge Goodrich, dissenting, asserted that a judge "undoubtedly has inherent power to impose sanctions for the disciplining of lawyers who, in matters not amounting to contempt, do not obey rules." Id. at 737 (Goodrich, J., dissenting). In a separate dissent Chief Judge Biggs disputed the majority's perception that the fine carried any criminal connotation. He emphasized that unlike many of the penalties that courts impose for an attorney's failure to perform his or her duty, the monetary sanction did not punish clients for the shortcomings of their counsel. Id. at 734.*fn10
The decision in Gamble was promptly and roundly criticized. E.g., Note, Power of Federal Courts, 38 Notre Dame L. Rev. 158; Comment, Dismissal for Failure to Attend a Pretrial Conference and the use of Sanctions at Preparatory Stages of Litigation, 72 Yale L.J. 819 (1963). And the case has continued to come under attack. See, e.g., Renfrew, Discovery Sanctions, A Judicial Perspective, 67 Calif. L. Rev. 264, 270 (1979); Comment, Sanctions Imposed by Courts on Attorneys Who Abuse the Judicial Process, 44 U. Chi, L. Rev. 619, 635 (1977). Commentators have highlighted the curious and contradictory result created by the juxtaposition of Link, decided in 1962, and Gamble, decided one year later. Under Link, courts may invoke their inherent power to dismiss a plaintiff's entire case when a lawyer has failed without adequate excuse to appear at a scheduled pretrial conference, Link, 370 U.S. at 628-29, but under Gamble courts may not sanction financially a blameworthy attorney who filed a pretrial memorandum ten months late, Gamble, 307 F.2d at 730. See, e.g., Comment, Financial Penalties, 26 UCLA L. Rev. at 877.
Recently a number of courts have rejected the result and reasoning of Gamble as unduly narrow. See, e.g., Miranda v. Southern Pacific Transp. Co., 710 F.2d 516, 520 (9th Cir. 1983) ("For the reasons stated by Judge Biggs, we decline to follow Gamble."); Martinez v. Thrifty Drug & Discount Co., 593 F.2d 992, 993 (10th Cir. 1974) (explicitly rejecting Gamble); In re Sutter, 543 F.2d 1030, 1037 (2d Cir. 1976) ("We . . . decline to follow the Third Circuit."); see also Richman v. General Motors Corp., 437 F.2d 196, 200 (1st Cir. 1971). A major factor in the decisions that have refused to follow Gamble has been the startling increase in the number and complexity of cases filed in the federal courts. The dramatic rise in litigation in the last decade has led trial judges to conclude that indulgent toleration of lawyers' misconduct is simply a luxury the federal court system no longer can afford. See Renfrew, supra, 67 Calif. L. Rev. at 275-76. Chief Justice Burger has recently observed that "a small handful [of lawyers] must not be permitted to abuse the system and preempt its time and machinery for purposes not intended, thus delaying and denying" access to courts to others in need of the courts' limited resources. Burger, Abuses of Discovery, Trial (Sept. 1984). For example, the Second Circuit in Sutter upheld the imposition of juror costs based in part upon "intensified concerns" over "the increasing backlog of calendars." 543 F.2d at 1037. The Martinez court concluded that a sanction based on the cost of impanelling a jury had the "object and purpose of administering the court in an efficient manner." 593 F.2d at 994.
With the foregoing discussion of inherent powers and the evolution of practice regarding attorney sanctions as background, we turn to the challenged order at issue here. Appellants, relying on the continuing vitality of the reasoning in Gamble, urge that a sanction in the form of juror costs improperly and "informally inflict[ed] a criminal" punishment, like contempt, without resort to the contempt statute. Gamble, 307 F.2d at 733. To a considerable extent, Judge Sloviter's dissent also rests on this view.
In Gamble this Court essentially was concerned with the imposition of a fine unrelated to any actual consequence of counsel's conduct and that knew no bounds other than each individual judge's notion of an appropriate penalty warranted by a counsel's misdeeds. The present case is significantly different in that the district court tied its sanction to specific costs ...