Before a court can order the imposition of attorneys' fees under 28 U.S.C.S. § 1927, it must find willful bad faith on the part of the offending attorney. Although the court need not make an express finding of bad faith in so many words, there must at least be statements on the record which this court can construe as an implicit finding of bad faith.
Plaintiff sued defendant for copyright infringement. Defendant moved to dismiss, and the district court ruled in defendant's favor. While the motion was pending, defendant moved for sanctions, on the ground that plaintiff's attorney had failed to conduct an inquiry into the facts and law. The Court granted this sanction, and plaintiff and plaintiff's attorney were subject to joint and several liability for the sanctions. Plaintiff settled with defendant, but plaintiff's attorney appealed the grant and application of such sanctions.
Was the trial court proper in assessing and levying sanctions against appellant attorney?
On appeal, the court held that the district court abused its discretion in awarding sanctions without finding bad faith and without providing adequate notice. The court concluded that it was error to invoke without comment a very severe penalty.