The opinion of the court was delivered by: LATCHUM
Plaintiff, Peter T. Campana ("P. Campana"), an attorney, filed a complaint on April 22, 1983, in this Court, seeking monetary damages against the defendant, the Honorable Malcolm Muir ("Judge Muir"), a United States District Court Judge for the Middle District of Pennsylvania. On July 11, 1983, this Court entered summary judgment in favor of Judge Muir based on the doctrine that a United States District Court Judge is immune from liability for damages on the claims asserted. See 585 F. Supp. 33 (M.D.Pa. 1983). (Docket Item ["D.I."] 24.) Presently before this Court is defendant's motion for attorneys' fees in favor of the United States and against P. Campana and his counsel, Ambrose R. Campana ("A. Campana"), pursuant to 28 U.S.C. § 1927 (1980) and Roadway Express Inc. v. Piper, 447 U.S. 752, 65 L. Ed. 2d 488, 100 S. Ct. 2455 (1980). (D.I. 36.) Because of defendant's motion, the Court held an evidentiary hearing on April 26, 1985, to receive evidence concerning attorneys' fees in order to determine whether P. Campana and A. Campana acted in bad faith when they continued to prosecute the claims in light of the defense of judicial immunity. (D.I. 49.) The parties completed post-hearing briefing on July 19, 1985, and the matter is now ripe for disposition.
I. APPLICABLE LEGAL PRINCIPLES
A. Roadway Express, Inc. and The Court's Inherent Power To Assess Attorneys' Fees
The general rule of law, known as the "American rule," is that each litigant must pay his own attorneys' fees. Alyeska Pipe Line Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975). The rationale for this rule is that "one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents' counsel." F.D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 129, 40 L. Ed. 2d 703, 94 S. Ct. 2157 (1974) (quoting Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 18 L. Ed. 2d 475, 87 S. Ct. 1404 (1967)). However, over the years courts have carved out a number of narrowly defined exceptions.
See Alyeska Pipe Line Service, 421 U.S. at 247-57. In Alyeska, the Supreme Court acknowledged the "inherent power" of courts to
assess attorneys' fees for the "willful disobedience of a court order . . . as part of the fine to be levied on the defendant[,] Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399, 426-428 [67 L. Ed. 719, 43 S. Ct. 458] (1923)," Fleischmann Distilling Corp. v. Maier Brewing Co., supra, at 718; or when the losing party has acted in bad faith, vexatiously, wantonly or for oppressive reasons . . . ." F. D. Rich Co. [v. United States ex rel. Industrial Lumber Co.], 417 U.S. , at 129 [(1974)] (citing Vaughan v. Atkinson, 369 U.S. 527, 8 L. Ed. 2d 88, 82 S. Ct. 997 (1962)).
The bad-faith exception for the award of attorneys' fees is not restricted to cases where the action is filed in bad faith. "'Bad faith' may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation." Hall v. Cole, 412 U.S. 1, 15, 36 L. Ed. 2d 702, 93 S. Ct. 1943 (1973). Moreover, the Supreme Court recently acknowledged the principle that it is within the inherent power of a federal court to assess attorneys' fees against an attorney who has acted unreasonably, vexatiously or in bad faith in connection with a piece of litigation so as to constitute an abuse of the judicial process. Roadway Express, Inc. v. Piper, 447 U.S. 752, 766, 65 L. Ed. 2d 488, 100 S. Ct. 2455 (1980).
28 U.S.C. § 1927, which provides for the assessment of sanctions directly against counsel, reads:
Any attorney or other person admitted to conduct cases in any court of the United States of 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 of such conduct.
Although the statute enables courts to impose sanctions for attorney misconduct, courts should exercise this power "only in instances of a serious and studied disregard for the orderly process of justice." Overnite Transportation Co. v. Chicago Industrial Tire Co., 697 F.2d 789, 795 (7th Cir. 1983) (quoting Kiefel v. Las Vegas Hacienda, Inc., 404 F.2d 1163, 1167 (7th Cir. 1968), cert. denied, 395 U.S. 908, 89 S. Ct. 1750, 23 L. Ed. 2d 221 (1969).
Pursuant to section 1927, three substantial requirements must be met before liability may be imposed: (1) a multiplication of proceedings by an attorney; (2) by conduct that can be characterized as unreasonable and vexatious; and (3) a resulting increase in the cost of the proceedings. Baker Industries, Inc. v. Cerberus, Ltd., 764 F.2d 204, 214 (3d Cir. 1985) (dissent, Higginbotham, J.). Because the lynchpin of section 1927 liability is "improper conduct," for purposes of analysis, the requirement of unreasonable and vexatious conduct will be considered first.
1. The Unreasonable and Vexatious Requirement
In order to assess fees against an attorney where the effect of the attorney's conduct is such that it "unreasonably and vexatiously increases the costs," the Court of Appeals for the Third Circuit follows the majority rule which holds that before attorneys' fees and costs may be taxed under section 1927, the district court must make a finding of "willful bad faith on the part of the offending attorney." Baker Industries, Inc. v. Cerberus, Ltd., 764 F.2d 204, slip op. at 9, 25 fn.3 (3d Cir. 1985).
The Second Circuit also has stated that an action is brought in bad faith when there is clear evidence that the claim is entirely without color and has been asserted wantonly for purposes of harassment or delay or for other improper purposes. Browning Debenture Holders' Committee v. DASA Corp., 560 F.2d 1078, 1088 (2d Cir. 1977). The bad faith criteria does not require that the legal and factual bases for the action prove totally frivolous. Where a litigant is motivated by vindictiveness, obduracy or mala fides, the assertion of a colorable claim will not bar the assessment of attorneys' fees. In re National Student Marketing Litigation, 78 F.R.D. 726, 728 (D.D.C. 1978), aff'd, 214 U.S. App. D.C. 1, 663 F.2d 178 (D.C.Cir. 1980).
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 a federal court has the inherent power to assess attorney's fees against an attorney who litigates in bad faith. The Court stated that a finding of "bad faith" concerning either the filing or the prosecution of the litigation would have to precede any sanction against an attorney. 447 U.S. at 767. In McCandless v. The Great Atlantic and Pacific Tea Co., Inc., 529 F. Supp. 476 (N.D.Ill. 1982), aff'd, 697 F.2d 198 (7th Cir. 1983), the court of appeals upheld the district court's finding that an attorney acted in bad faith when he filed a frivolous lawsuit, misquoted precedent, and failed to respond to defendant's motion for fees and costs. The court noted that: "The lawsuit could have been avoided had [plaintiff's] counsel done the minimum amount of research required by a responsible member of the bar. Basic research would have revealed that exhaustion of adequate internal union remedies . . . is a prerequisite to suit. . . ." Id. at 478.
A careful review of the evidentiary record (D.I. 49) is necessary to determine whether A. Campana and P. Campana acted in bad faith.
(1) On February 23, 1983, P. Campana commenced an action against Judge Muir by issuing a writ of summons against the defendant in the Court of Common Pleas of Lycoming County. (Civil Action No. 83-00363.) This lawsuit was based upon alleged libelous statements contained in Judge Muir's opinion dated February 18, 1983. Before any complaint was filed in the Court of Common Pleas, on March 8, 1983, the action was removed to this Court on defendant's request pursuant to 28 U.S.C. § 1443. (D.I. 1.)
(2) Shortly after the commencement of the state court action against Judge Muir (in late February or early March of 1983), Assistant United States Attorney Gordon A. D. Zubrod ("Zubrod") contacted plaintiff's attorney, A. Campana, and informed him that Zubrod would be representing Judge Muir and that Judge Muir intended to raise the defense of judicial immunity. (D.I. 49 at 25.)