The opinion of the court was delivered by: CHRISTOPHER CONNER, District Judge
Presently before the court are cross-motions (Docs. 163, 174)
for sanctions pursuant to 28 U.S.C. § 1927.
The instant action was transferred to this court from the
Northern District of California in March 2002. At that time
counsel for plaintiff, Attorney Naren Chaganti ("Attorney
Chaganti"), was admitted pro hac vice to practice before the
court and, pursuant to the Local Rules, was directed to obtain
the services of associate counsel.*fn1 Two years later, on
the eve of trial, and only after being ordered to do so, Attorney
Chaganti finally complied with the Local Rules and associate
counsel entered an appearance in this case. (See Doc. 130).
Shortly thereafter, the court was made aware that Attorney
Chaganti might attempt to testify at trial based upon his
personal knowledge of events relevant to his client's claims.
(See Doc. 75). Defendant moved to preclude any such testimony,*fn2 but the court denied the motion based upon
Attorney Chaganti's representations that associate counsel would
conduct his examination, limited solely to the authentication of
certain correspondence. (See Doc. 133 at 190, 196).
Trial of this case commenced on April 6, 2004. Prior to jury
selection, associate counsel moved to withdraw his appearance,
averring that he did not believe himself to be "particularly
competent" to try the case because Attorney Chaganti had not
spoken with him about the trial or provided any files or
materials relevant to the issues to be tried. (See Doc. 132 at
3-5; Doc. 133 at 193-94). When questioned about this assertion,
Attorney Chaganti replied that he had not contacted associate
counsel because a witness had recently become available whose
testimony would obviate the need for Attorney Chaganti to take
the stand. The court warned Attorney Chaganti that he would be
expected to strictly comply with the Local Rules of court, and
that associate counsel could prove helpful in complying with these rules,*fn3 but nevertheless allowed
associate counsel to withdraw from the case, based in large
measure upon Attorney Chaganti's representation that he would not
testify at trial. (See Doc. 132 at 3-5, 108; Doc. 133 at 191).
During opening statements, however, it became apparent that
Attorney Chaganti still intended to testify. (See Doc. 132 at
108). In addition, the examination of plaintiff's witness made it
clear that Attorney Chaganti was the sole individual who could
testify on certain material issues. (See Doc. 132 at 74, 109).
The court excused the jury and again inquired of Attorney
Chaganti whether he intended to testify. Attorney Chaganti stated
that, given the limited knowledge of his witness, he needed to
testify regarding material facts relevant to his client's claims,
and that his testimony would not be limited but would "cover the
entire case." (See Doc. 132 at 109-10; Doc. 133 at 186, 191;
Doc. 135 at 421). Without associate counsel to direct the
examination, Attorney Chaganti offered to provide his testimony
by way of a narration, or by posing questions to himself and then
answering them. (See Doc. 132 at 110-12). The court informed
the parties that it might allow the case to proceed if they could stipulate to
material facts and narrow the scope of Attorney Chaganti's
testimony. Attorney Chaganti would then be permitted to proffer a
brief narration to the jury, and defense counsel would be
permitted to cross examine him. The jury was then excused for the
day and counsel had the opportunity to meet and confer for the
purpose of stipulating to material facts. However, it soon became
clear that the parties could not reach an agreement on either the
facts or the scope of Attorney Chaganti's testimony. (See Doc.
132 at 114-15; Doc. 133 at 192-93).
The following morning, the second day of trial, Attorney
Chaganti entered court with his former associate counsel, Karl
Hildabrand, Esquire. Attorney Hildabrand was permitted to conduct
the direct examination of Attorney Chaganti, who testified at
length regarding material facts involved in this case. (See
Doc. 133 at 121-85). After the jury was excused for a brief
recess, Attorney Hildabrand informed the court that he was given
the distinct impression by Attorney Chaganti that the court had
ordered him to re-enter his appearance.*fn4 (See Doc. 133
at 185). The court explained that it did not order Attorney
Hildabarnd to return, and that if Attorney Hildabrand chose to
continue he would be expected to try the case to verdict because
of Attorney Chaganti's status as a material fact witness.*fn5 (See Doc. 133 at 186-87).
Attorney Hildabrand stated that he was ill-prepared to assume the
role of trial counsel. After additional prodding by the court,
Attorney Hildabrand indicated that he would be able to fulfill
the obligations of trial counsel if he had one more day to
prepare. (See Doc. 133 at 198). Accordingly, the court excused
the jury for the day to facilitate Attorney Hildabrand's
preparation for the remainder of the trial. (See Doc. 133 at
The next day, the third day of trial, Attorney Hildabrand
competently continued plaintiff's case. (See Doc. 134 at 205).
However, on the morning of the fourth day of trial, Attorney
Hildabrand notified the court that he had been discharged by
Attorney Chaganti for other than financial reasons. (See Doc.
135 at 417-18). Attorney Chaganti admitted to the termination,
and expressed serious concerns over his associate counsel's legal
strategy, lack of familiarity with the facts of the case, and
ironically Attorney Hildabrand's desire to learn more about the
facts of the case before proceeding with the representation.
(See Doc. 135 at 418-30). Attorney Chaganti also expressed
dismay that his associate counsel would do anything in this case
other than "read the script" that Attorney Chaganti had provided
to him. (See Doc. 135 at 421-22). The court concluded that the
relationship between associate counsel and plaintiff was
irretrievably broken, and declared a mistrial. (See Doc. 135 at
429-30). The costs of the mistrial were assessed against
plaintiff (see Doc. 130), and the parties subsequently filed
the instant motions for sanctions defendant for the fees and expenses
associated with the mistrial, and plaintiff for costs incurred in
opposing defendant's motion for sanctions.
The instant motions are brought pursuant to 28 U.S.C. § 1927.
Section 1927 provides for the sanctioning of wayward counsel who
intentionally and unnecessarily delay judicial proceedings. See
Williams v. Giant Eagle Markets, Inc., 883 F.2d 1184
, 1190 (3d
Cir. 1989); see also LaSalle Nat'l Bank v. First Conn. Holding
Group, LLC, 287 F.3d 279
, 288 (3d Cir. 2002). This section
states as follows:
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 of such conduct.
28 U.S.C. § 1927. Caselaw interprets this provision as requiring
a finding that counsel acted in bad faith. See Jones v.
Pittsburgh Nat'l Corp., 899 F.2d 1350
, 1357 (3d Cir. 1990);
Boykin v. Bloomsburg Univ. of Pa., 905 F. Supp. 1335, 1346
(M.D. Pa. 1995). Hence, a § 1927 violation entails (1) an
attorney's multiplication of the proceedings, (2) by conduct
constituting willful bad faith, (3) resulting in an increase in
the cost of the proceedings. See LaSalle, 287 F.3d at 288;
Campana v. Muir, 615 F. Supp. 871, 874 (M.D. Pa. 1985).
In the matter sub judice, the mistrial certainly multiplied
the proceedings; but for Attorney Chaganti's conduct the
above-captioned action would have proceeded to verdict. And, as
set forth in defendant's motion, the mistrial directly increased
the costs associated with resolution of the instant case. See,
e.g., Dowe v. Nat'l R.R. Passenger Corp., No. 01-5808, 2004 WL 1393603 (N.D.
Ill. June 22, 2004) (stating that § 1927 sanctions are
appropriate for mistrial even when case is not retried). The
issue, then, is whether Attorney Chaganti's actions constitute
bad-faith conduct warranting the invocation of § 1927 sanctions.
The court finds that Attorney Chaganti's conduct is a classic
example of bad faith within the ambit of § 1927.
Attorney Chaganti retained associate counsel just three weeks
before trial and only by compulsion of court order. (See Docs.
61, 71). Instead of educating associate counsel on the issues to
be tried, Attorney Chaganti refused to share case files or assist
in any trial preparation. When associate counsel moved for leave
to withdraw due to his inability to participate at trial in a
meaningful way, the court allowed him to do so based upon
Attorney Chaganti's representation that he would not testify at
trial. However, during opening statements Attorney Chaganti
alluded to his own testimony. After plaintiff's principal witness
failed to address the relevant facts to Attorney Chaganti's
satisfaction, Attorney Chaganti informed the court that he
desired to testify as a material fact witness. Attorney Chaganti
then misrepresented the court's directives to his former
associate counsel and advised Attorney Hildabrand that he was
required to return to the trial. Within two business days,
Attorney Chaganti fired Attorney Hildabrand ostensibly for
spending too much time on the case without obtaining new
associate counsel or any reasonable means of continuing the case
to verdict. The court finds that these actions constitute willful
bad-faith conduct "violative of recognized standards in the conduct of litigation," and worthy of sanctions. See In re
Orthopedic Bone Screw Prod. Liab. Litig., 193 F.3d 781, 785 (3d
Cir. 1999); see also In re Prudential Ins. Co. Am. Sales
Practice Litig., 278 F.3d 175, 189 (3d Cir. 2002) (stating that
bad faith conduct need not be single act, but can be found or
inferred from facts taken as a whole); Schwartz v. Millon Air,
Inc., 341 F.3d 1220, 1225-26 (11th Cir. 2003) (stating that bad
faith can be found where an attorney "engages in litigation
tactics that needlessly obstruct the litigation of non-frivolous
claims"). Accordingly, defendant's motion for sanctions will be
While defendant avers that it is entitled to "the entire
pre-trial and trial preparation costs," it is only the "excess"
costs, fees, and expenses incurred as a result of Attorney
Chaganti's conduct that are recoverable. See 28 U.S.C. § 1927;
see also Prudential, 278 F.3d at 188 ("Sanctions that are
imposed under § 1927 must only impose costs and expenses that
result from the particular misconduct."). In this matter, the
amount recoverable is the sum of those costs, fees, and expenses
associated only with the four day proceeding that, due to
Attorney Chiganti's actions, resulted in the mistrial.
Accordingly, counsel for defendant will be directed to file an
affidavit of fees and expenses related solely to the four days
of trial held in this case. An appropriate order will issue. ORDER
AND NOW, this 28th day of September, 2005, upon consideration
of the motions (Docs. 163, 174) for sanctions, and for the
reasons set forth in the accompanying memorandum, it is hereby
1. Defendant's motion for sanctions (Doc. 163) is GRANTED.
a. Defendant shall submit, on or before October 21,
2005, an affidavit of fees and expenses for the four
days of trial held in the above-captioned case on
April 6, 7, 8, and 12, 2004.
b. Attorney Chaganti shall be permitted to file, on
or before November 4, 2005, an ...