The opinion of the court was delivered by: ROBRENO
Before the Court is an Order to Show Cause why counsel should not be sanctioned under the authority of 28 U.S.C. § 1927 for continuing to pursue the instant lawsuit once it became clear during the course of litigation that the lawsuit was frivolous. As Judge Schwarzer has noted: "of all the duties of the judge, imposing sanctions on lawyers is perhaps the most unpleasant."
Yet, none is more important. Because the willful prosecution of frivolous claims not only inflicts costs on innocent parties, but also consumes judicial resources to the detriment of meritorious claims, the imposition of sanctions upon willful transgressors is essential to preserving public confidence in our system of justice. With this important role of sanctions in mind, and for the reasons stated below, the Court concludes: that the claim stated in the plaintiff's complaint
became frivolous during the course of litigation; that the conduct of plaintiff's counsel in prosecuting a frivolous claim constituted willful bad faith; and that under the circumstances of the case, imposing a monetary sanction of $ 4,000 upon plaintiff's counsel is appropriate.
Plaintiff's counsel in this matter is H. Francis deLone, Jr., Esquire. On May 10, 1993, Mr. deLone filed a complaint on behalf of the plaintiff, Francis J. Loftus, against the Southeastern Pennsylvania Transportation Authority ("SEPTA") and the Transport Workers Union of Philadelphia, Local 234 ("Local 234"). The complaint alleged that SEPTA and Local 234 violated 42 U.S.C. § 1983 by conspiring to prevent Mr. Loftus from taking his grievance to arbitration following his discharge from employment, and that such actions violated his Fourteenth Amendment right to procedural due process. The case was assigned to the Honorable Eduardo C. Robreno.
On September 6, 1994, Mr. deLone filed a two count complaint in this Court against the same defendants on behalf of Joseph G. Dykes. See Dykes v. SEPTA, 1996 U.S. Dist. LEXIS 14070, No. 94-5478. Count II of the complaint asserted the identical claim which Mr. deLone was pressing on Mr. Loftus's behalf in the instant lawsuit. The Dykes case was assigned to the Honorable Herbert J. Hutton. By orders dated December 19, 1994 and December 29, 1994, Judge Hutton dismissed both counts of the complaint. Mr. deLone, acting on Mr. Dykes's behalf, appealed both dismissals to the Third Circuit.
On November 7, 1995, the Third Circuit affirmed Judge Hutton's dismissal of both counts of the Dykes complaint holding that as to Count II, Mr. Dykes did not have a cognizable procedural due process claim under 42 U.S.C. § 1983 because, under state law, Mr. Dykes had a right to petition the court of common pleas to order arbitration over his employment grievance; a procedure sufficient to satisfy the due process clause. Dykes v. SEPTA, 68 F.3d 1564, 1572 (3d Cir. 1995), cert. denied, 517 U.S. 1142, 116 S. Ct. 1434, 134 L. Ed. 2d 556 (1996). 1572. Plaintiff then petitioned the Supreme Court of the United States for certiorari. Certiorari was denied on April 15, 1996. Dykes, 517 U.S. 1142, 116 S. Ct. 1434, 134 L. Ed. 2d 556.
Between November 7, 1995 when the Third Circuit rendered its decision in Dykes and January 30, 1996 when the discovery period in the instant action ended, the parties engaged in extensive discovery regarding a number of issues in this case. Thereafter, on February 27, 1996, SEPTA and Local 234 each filed a motion for summary judgment. Both defendants argued that based upon the Third Circuit's decision affirming the dismissal of Count II in Dykes, the instant case had lost its legal merit. Mr. deLone, on behalf of Mr. Loftus, opposed the defendants' motions for summary judgment. On January 13, 1998,
the Court granted defendants' motions for summary judgment finding that the Dykes case was indistinguishable from Mr. Loftus's claim and indeed controlled the outcome of this case. (Ct. Order 1/13/98 at n.1, doc. no. 63).
After summary judgment was granted in their favor, SEPTA and Local 234, as prevailing parties, filed motions for the award of attorney fees pursuant to 42 U.S.C. § 1988(b). Because § 1988 only authorizes the award of attorney fees against losing parties and not counsel representing the losing party, and because defendants could not show that plaintiff himself (as opposed to his lawyer) either knew or should have known that the cause of action alleged in the complaint had become frivolous after the Dykes decision, the Court denied the motions.
The conduct of plaintiff's counsel, which was placed on the record during the hearing on the defendants' motions for attorney fees, however, raised in the Court's mind serious issues about the actions of plaintiff's counsel in this litigation. Therefore, the Court issued a rule to show cause why sanctions under § 1927
should not be imposed upon plaintiff's counsel for continuing the litigation of this case after the claim had become frivolous. The parties were afforded an opportunity to make written submissions, and to offer evidence and legal arguments at a hearing.
A. Attorney Fees Under 28 U.S.C. § 1927
Section 1927 of Title 28 of the United States ...