The U.S. Supreme Court accepts a case on propriety of sanctions against a party and attorneys

In a historic move, the U.S. Supreme Court accepted, first time in decades, a case raising the issue of propriety of sanctions against an attorney and a party, using the so-called "inherent powers of the court".

Here is the certiorari petition that was accepted.

The issue presented for review of the U.S. Supreme Court is, reportedly, whether sanction of attorney fees imposed upon a party (and attorneys) under inherent powers of the court, without criminal procedural protections, must be tailored to the harm directly caused by misconduct, and whether attorney fees can be awarded for actions of attorneys not directly attributable to subjective bad faith of clients.

Of course, the petition was filed by a party, not by its attorneys, and thus the focus of the petition is on the rights of the parties in view of alleged misconduct of their counsel.

Yet, since attorneys were also sanctioned in this case, and since rules distinguishing whether certain awards are compensatory or punitive/criminal, will equally apply to attorneys and parties, the case is important for both litigants and the legal community.

The mere fact that the U.S. Supreme Court took such a case, coming from the 9th Circuit (of course, sanctions were very high - $2.7 million) indicates that the Court, finally took an interest in the issue of the court sanctions.

It should be noted, too, that, before imposing sanctions, the court did hold an evidentiary hearing - which is rare.  Usually courts impose sanctions under their "inherent power" without any hearings.

And, even though in this case not criticism of a judge (which is a constitutionally protected conduct of an attorney and party), but a non-disclosure in discovery (which is attorney misconduct, if attorney knew of the discovery item subject to disclosure and did not disclose it), the issues are:

1. the propriety of use of "inherent power of the court" to sanction,
2. whether there must be a connection between harm caused and the amount in sanctions, and
3. whether procedural protections similar to those in criminal proceedings must be provided -

and these issues apply to all sanctions imposed by courts against parties or attorneys.

I will need some time to read through the 9th Circuit's opinion and dissent and through the certiorari petition, and will provide more comment on them in the future.

Stay tuned.