Blue v. US Department of the Army Brief of Appellants Julius L. Chambers and Ferguson, Stein, Watt, Wallas & Adkins, P.A.
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October 14, 1989

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Brief Collection, LDF Court Filings. Blue v. US Department of the Army Brief of Appellants Julius L. Chambers and Ferguson, Stein, Watt, Wallas & Adkins, P.A., 1989. d98191f8-c99a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/04c7b171-a49c-4d62-9a8a-14b2f8558b5f/blue-v-us-department-of-the-army-brief-of-appellants-julius-l-chambers-and-ferguson-stein-watt-wallas-adkins-pa. Accessed July 20, 2025.
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United States (Enurt of Appeals for the Jfmtrtli Itttrcuit No. 88-1364 (Lead) SANDRA L. BLUE, Plaintiff-Appellant, — against — UNITED STATES DEPARTMENT OF THE ARMY, et a l , Defendants-Appellees. IN RE: JULIUS L. CHAMBERS, Appellant in No. 88-1379, FERGUSON, STEIN, WATT, WALLAS & ADKINS, P.A., Appellant in No. 88-1377. Appeal from the United States District Court for the Eastern District of North Carolina, at Fayetteville, James C. Fox, Judge. BRIEF OF APPELLANTS JULIUS L. CHAMBERS AND FERGUSON, STEIN, WATT, WALLAS & ADKINS, P.A. B o n n i e K a y a t t a - S t e i n g a r t F r ie d , F r a n k , H a r r is , S h r iv e r & J a c o b s o n (A Partnership Including Professional Corporations) One New York Plaza Newr York, New York 10004 (212) 820-8000 Attorneys for Appellant Julius L. Chambers Of Counsel: J o h n S u l l i v a n D o u g l a s H . F l a u m T r ic ia K a l l e t t K l o s k P e t e r L . S i m m o n s TABLE OF CONTENTS Page TABLE O F AUTH ORITIES ........................................ v ISSUES PR ESEN TED ................................................... 2 STATEM ENT OF TH E C A S E ................................... 3 The Complaints .............................................. 4 The Pretrial Orders ................................................. 6 Trials ................. 7 Settlements and Sanctions H earings.................... 10 SUMMARY O F A R G U M EN T..................................... 13 A R G U M E N T ............. ............................ 16 I. The District Court Erred in Finding That Harris’ Claims Were F rivo lous............................. 16 A. A History of Discrimination Against Harris 16 B. Harris Could Establish a Prima Facie Case on Her Promotion C la im s............................... 18 1. MPA 64-81 .................................................. 19 2. MPA 94-81 .................... 20 3. MPA 210-81 ............................................ .. . 21 4. MPA 196-82 and MPA 5-83 .................... 21 i Page C. Harris Could Establish a Prima Facie Case on Her Job Classification Claim . . . . 23 D. Harris Could Establish a Prima Facie Case of Discriminatory Denial of Training 25 II. The District Court Erred in Finding That Blue’s Claims Were F r iv o lo u s ............................. 26 A. Blue’s Employment R e c o r d ........................... 29 B. The Tried Claims Presented Prima Facie Cases of D iscrim ination ................................. 30 1. MPA 73-79 ................. 30 a. Disparate T re a tm e n t........................... 30 b. Disparate I m p a c t ...................... 33 2. MPA 303-79 ............... 36 C. Blue Could Present a Prima Facie Case on Her Untried C laim s.......................................... 40 1. MPA 67-83 ................................. 40 2. The 1979 Discriminatory Appraisal Adversely Affected Blue’s Chances for Other Promotions................... 41 a. MPA 440-80............................................ 41 b. MPA 274-79....................................... 42 c. MPA 2 7 7 - 7 9 .. ........................................ 42 3. Blue’s Retaliatory Discipline Claim . . . . 43 III. The District Court Erred as a Matter of Law in Imposing Sanctions Under Rule 11 ............. 45 A. The Evidentiary Record Shows Plaintiffs’ Claims Were Not F rivo lous................... 47 n Page B. The District Court Erred in Failing to Evaluate the Pleadings and Pretrial Orders as of the Time That They Were S ig n e d ........... ....................................................... 49 1. The District Court’s Conclusions Imroperly Rested on Hindsight Determinations of Witness Credibility . 50 2. The Distrct Court Erroneously Relied on Hindsight in Interpreting the Law and Applied the Wrong L a w .................. 53 3. The District Court Erred in Assuming That Dropping Claims Proves That They Are Frivolous . . . . . . . . . . . . . . . . . 54 C. The Conduct of the Army and the District Court Throughout the Litigation Shows That Plaintiffs’ Claims Were Not Frivolous........... .................................................. 55 D. The District Court Erred in Awarding the Army Expenses for Prosecuting the Sanctions Motions ............................................. 58 IV. The District Court Violated its Local Rules and the Due Process Clause in Disciplining the A ttorn eys................... 58 A. Chambers and Sumter Did Not Receive Notice That They Might Be Disciplined . . 59 B. The Court Disregarded its Disciplinary R u le s ........... .. ................................... 61 V. Section 706(k) of Title VII Precludes the District Court’s Awards of Attorneys’ Fees to the A rm y....................................................... 63 in Page VI. The District Court Erred in Fining the Attorneys for the “Expenses” of the Court. . 71 A. The District Court Lacked Authority to Impose this F i n e .......................................... 71 B. The Sanction Was a Form of Criminal Contempt Imposed Without the Required Procedures................................... 76 VII. The District Court Erred in Imposing Sanctions Under its Inherent Power and Section 1927 .......................................................... 79 A. There Was No Basis for Sanctions Under the Court’s Inherent P o w er......... 79 B. The Court Erred in Imposing Sanctions Under Section 1927 ...................................... 81 V III. The District Court Erred in Imposing Sanctions Under Rule 1 6 ................................. 84 IX. There Is Neither a Factual Nor a Legal Basis to Sanction the Law F i r m .................... 87 C O N C L U SIO N ................................................................ 89 ADDENDUM Glossary of Army A bbreviations.................... A-l Identification of Key Participants.................. B-l S ta tu te s ............................................ C -l Federal Rules of Civil Procedure .................. D -l E .D .N .C . Disciplinary R u les........................... E -l Advisory Committee Materials on Rule 16 . F -l IV TABLE OF AUTHORITIES Cases Page Abex Corp. v. Ski’s Enters., 748 F .2d 513 (9th Cir. 1984)..................................................... ................. 68 Afram Export Corp. v. Metallurgiki Halyps, 772 F,2d 1358 (7th Cir. 1985) ........................................ 55 Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) . ............................................................................ 3, 33 Alfonso v. United States, 613 F .2d 1309 (5th Cir. 1980)................................. 67 Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (1975) ................................................... 66, 69, 70, 73, 79 Ambush v. Montgomery County Gov’t Dep’t of Fin., 620 F .2d 1048 (4th Cir. 1980) .................... 18, 19 Anthony v. Marion County Gen. Hosp. 617 F.2d 1164 (5th Cir. 1980)............................... 55 Arnold v. Burger King Corp., 719 F .2d 63 (4th Cir. 1983), cert, denied, 469 U.S. 826 (1984) . . 47 Badillo v. Central Steel <b Wire Corp., 717 F.2d 1160 (7th Cir. 1983)................................................. 83 Barnett v. W.T. Grant Co., 518 F .2d 543 (4th Cir. 1975).................... 4 Basch v. Westinghouse Elec. Corp., I l l F .2d 165 (4th Cir. 1985), cert, denied, 476 U.S. 1108 (1 9 8 6 )............... 58 Bass v. Southwestern Bell Tel., 811 F .2d 44 (8th Cir. 1987)............................................ 47 Page Batson v. Neal Spelce Assocs., Inc., 805 F .2d 546 (5th Cir. 1986) ............................... ............................ 73 Bazemore v. Friday, 751 F .2d 662 (4th Cir. 1984), aff’d in part <b vacated in part, 478 U.S. 385 (1986), on remand, 848 F .2d 476 (4th Cir. 1988)................................................................................ 35 Beall v. Curtis, 603 F. Supp. 1563 (M.D. G a.), aff’d mem., 778 F .2d 191 (11th Cir. 1985) . . . . 23 Beaudry Motor Co. v. Abko Properties, Inc., 780 F .2d 751 (9th C ir.), cert, denied, 479 U.S. 825 (1 9 8 6 )............................................. . 80 Bell v. New Jersey, 461 U.S. 773 (1983)............... .. 66 Bernard v. Gulf Oil Corp., 841 F .2d 547 (5th Cir. 1988)............. 34 Blair v. Shenandoah Women’s Center, 757 F.2d 1435 (4th Cir. 1985).................................... .............. 81 Bloom v. Illinois, 391 U.S. 194 (1968) .................... 72 Bloomer v. Liberty Mut. Ins. Co., 445 U.S. 74 (1 9 8 0 ).............................................................................. 71 Boddie v. Connecticut, 401 U.S. 371 (1971) ......... 76 Bowers t>. Kraft Foods Corp., 606 F .2d 816 (8th Cir. 1979)....................................................................... 48 Brewer v. School Bd. of Norfolk, 456 F .2d 943 (4th C ir.), cert, denied, 406 U.S. 933 (1 9 7 2 ) ... 79 Brown v. General Servs. Admin., 425 U.S. 820 (1 9 7 6 )...................... 67 Burrus v. United Tel. Co., 683 F .2d 339 (10th C ir.), cert, denied, 459 U.S. 1071 (1982)............. 22 vi Page Burull v. First N atl Bank of Minn., 831 F .2d 788 (8th Cir. 1987), cert, denied, 108 S. Ct. 1225 (1 9 8 8 )........... .................................................... ............. 81 Butler v. USDA, 826 F .2d 409 (5th Cir. 1987) . . . 63, 70 Byram Concretanks, Inc. v. Warren Concrete Prods. Co., 374 F .2d 649 (3d Cir. 1967) . . . . . . 71 Cabell v. Petty, 810 F .2d 463 (4th Cir. 1987) . . . . 76 Calloway v. Marvel Entertainment Group, 854 F .2d 1452 (2d Cir. 1988), cert, granted, 109 S. Ct. 1116 (1989) .................... ....................................... 88 Carbon Fuel Co. v. United Mine Workers, 517 F .2d 1348 (4th Cir. 1975) .................... ................... 77, 78 Carlucci v. Piper Aircraft Corp., 775 F .2d 1440 (11th Cir. 1985) ............................. .. 62 Carpenter v. Stephen F. Austin State Univ., 706 F .2d 608 (5th Cir. 1 9 8 3 )......................................... 67 Castaneda v. Partida, 430 U.S. 482 ( 1 9 7 7 ) . . . . . . . 45 Celotex Corp. v. Catrett, A ll U .S. 317 (1986) . . . 52 Chambers v. Hendersonville City Bd. of Educ., 364 F .2d 189 (4th Cir. 1966) ................................. 4 Cheek v. Doe, 828 F .2d 395 (7th C ir.), cert, denied, 484 U.S. 955 (1 9 8 7 )............. .. .............. 68 Chisholm v. United States Postal Serv., 665 F.2d 482 (4th Cir. 1981)........... ......................................... 34 vii Page Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978) ..................................................................... passim Cohen v. Virginia Elec, ir Power Co., 788 F .2d 247 (4th Cir. 1986) ................................................... 58 Colomhrito v. Kelly, 764 F .2d 122 (2d Cir. 1985) 80-81 Connecticut v. Teal, 457 U.S. 440 (1982)............... 5, 25, 34 Copeland v. Martinez, 603 F .2d 981 (D .C . Cir. 1979), cert, denied, 444 U.S. 1044 (1980) ......... 70 Corporation of the Presiding Bishop v. Associated Contractors, Inc., 877 F .2d 938 (11th Cir. 1989)................................................................................ 50 Crawford Fitting Co. v. J.T . Gibbons, Inc., 482 U.S. 437 (1987)............................................................ 68, 72 Culberston v. Jno. McCall Coal Co., 495 F .2d 1403 (4th C ir.), cert, denied, 419 U.S. 1033 (1 9 7 4 ).......................... ......................................... .. 69 Daly v. Hill, 790 F .2d 1071 (4th Cir. 1986) ......... 67 De Lesstine v. Fort Wayne State Hosp., 682 F .2d 130 (7th C ir.), cert, denied, 459 U.S. 1017 (1982) ........................................ 25 Disabled in Action v. Mayor of Baltimore, 685 F .2d 881 (4th Cir. 1 9 8 2 ).......................................... 56 District Number 8, In ti Ass’n of Machinists v. Clearing, 807 F .2d 618 (7th Cir. 1986) ................. 52 Donaldson v. Clark, 819 F .2d 1551 (11th Cir. 1987) (en b a n c ) .......................................................... 72, 78 V l l l Page Donovan v. Nichols, 646 F .2d 190 (5th Cir. 1981) 70 Dooley v. Reiss, 736 F .2d 1392 (9th Cir.) cert, denied, 469 U .S. 1038 (1984) ............................. 53 Dow Chem. Pac. Ltd. v. Rascator Maritime S.A., 782 F .2d 329 (2d Cir. 1986) .................................... 87, 88 Dreiling v. Peugeot Motors, 850 F .2d 1373 (10th Cir. 1988)................................... ............................ .. 80 EEOC v. Fruehauf Corp., 609 F .2d 434 (10th Cir. 1979).................. .. ............................... ................. 48 EEOC v. Kenneth Balk 6- Assocs., 813 F .2d 197 (8th Cir. 1987) ........... ................................................ 57 EEOC v. Kimbrough Inv. Co., 703 F .2d 98 (5th Cir. 1983).............................................. 56, 63 EEOC v. Pet, Inc., 719 F .2d 383 (11th Cir. 1983) 48, 53 EEOC v. Sears, Roebuck & Co., 114 F .R .D . 615 (N.D. 111. 1987)............................... ............................ 56 EEOC v. St. L o u is-S .F . Ry., 743 F .2d 739 (10th Cir. 1984)................ ................. ................ ................... 54 EEOC v. Tarrant Distribs., Inc., 750 F .2d 1249 (5th Cir. 1984) ............................... ..................... . . . 47, 55 Eash v. Riggins Trucking, Inc., 757 F .2d 557 (3d Cir. 1985) (en b an c) ........................... ................. .. 72, 74 IX Page Eastway Constr. Corp, v. City of New York, 762 F .2d 243 (2d Cir. 1985)............................................ 46 Epstein v. Secretary, United States Dep’t of Treasury, 739 F .2d 274 (7th Cir. 1984) ............. 23, 24 Estate of Bias ex rel. Chargualaf v. Winkler, 792 F .2d 858 (9th Cir. 1 9 8 6 )............................... .. 83 Evans v. Davie Truckers, Inc., 769 F .2d 1012 (4th Cir. 1985) ............................................................ 48 Evans v. Jeff D ., 475 U.S. 717 (1986)...................... 67 F.D. Rich Co. v. United States, 417 U.S. 116 (1 9 7 4 )........................................ ..................................... 73, 75 Fetner v. City of Roanoke, 813 F .2d 1183 (11th Cir. 1987).................................................................. 61 F.H. Krear 6- Co. v. Nineteen Named Trustees, 810 F .2d 1250 (2d Cir. 1 9 8 7 )................................. 87 Figueroa-Rodriguez v. Lopez-Rivera, 878 F .2d 1488 (1988), reinstated in part, 878 F .2d 1478 (1st Cir. 1989) (en b a n c ) ........................ ................. 85, 86, 87 Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714 (1967)..................... 71 Ford v. Temple Hosp., 790 F .2d 342 (3d Cir. 1986).............................................. ............... 81, 84 Forrest Creek Assocs., Ltd. v. McLean Sav. b Loan Assn, 831 F .2d 1238 (4th Cir. 1987) . . . . 49 Foster v. Areata Assocs., Inc., 772 F .2d 1453 (9th Cir. 1985), cert, denied, 475 U.S. 1048 (1986) . 22 x Page Fourco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222 (1957)............................................ 68 Furnco Constr. Corp. v. Waters, 438 U.S. 567 (1 9 7 8 )............. 22 Gagliardi v. McWilliams, 834 F .2d 81 (3d Cir. 1987).. .......................................................... 75 Gaiardo v. Ethyl Corp., 835 F .2d 479 (3d Cir. 1987).............................................. .............................. .. 46, 50 Gamble v. Pope 6- Talbot, Inc., 307 F .2d 729 (3d Cir.) (en banc), cert, denied, 371 U.S. 888 (1962) .............................................................................. 74 Gelco Corp. v. Baker Indus., 779 F .2d 26 (8th Cir. 1985).................................... 84 Gerena-Valentin v. Koch, 739 F .2d 755 (2d Cir. 1984) ............................. ................... .............................. 67 Gibson v. Davis, 587 F .2d 280 (6th Cir. 1978), cert, denied, 441 U.S. 905 (1979) ......................... 70 Glymph v. Spartanburg Gen. Hosp., 783 F.2d 476 (4th Cir. 1986)......... ................. .. 47, 52, ’ 56’ Great Am. Fed. Sav. & Loan Ass’n v. Novotny, 442 U.S. 366 (1 9 7 9 )............. 68 Greenberg v. Hilton In ti Co., 870 F .2d 926 (2d Cir. 1989)....................................................... 83 Greenberg v. Sola, 822 F.2d 882 (9th Cir. 1987) . 46, 52 Grier v. Secretary of the Navy, 677 F. Supp. 362 (E.D . Pa. 1 9 8 7 ) . . ........... 22 Griggs v. Duke Power Co., 401 U.S. 424 (1971). . 3 XI Page Gunby v. Pennsylvania Elec. Co., 840 F .2d 1108 (3d Cir. 1988), cert, denied, 109 S. Ct. 3213 (1 9 8 9 )................................................................ 17 Hairston v. McLean Trucking Co., 520 F .2d 226 (4th Cir. 1975) .............................. 4 Hall v. Cole, 412 U.S. 1 (1 9 7 3 )................................. 70 Hamer v. County of Lake, 819 F .2d 1362 (7th Cir. 1987)......................................................... 46 Hamilton v. Daley, 111 F .2d 1207 (7th Cir. 1985) 56 Harris v. Marsh, 100 F .R .D . 315 (E .D .N .C . 1983)......................................................... 5 Harris v. Marsh, 679 F . Supp. 1204 (E .D .N .C . 1987) , modified, 123 F .R .D . 204 (E .D .N .C . 1988) ........................................................... passim Harris v. Marsh, 123 F .R .D . 204 (E .D .N .C . 1988)......................................................... ..................... 3, 12, 60, 77-78 Hawkins v. Anheuser-Busch, Inc., 697 F .2d 810 (8th Cir. 1983) ............................................................ 22 Hensley v. Eckerhart, 461 U.S. 424 (1983)............... 67 Herbert v. Monsanto Co., 682 F .2d 1111 (5th Cir. 1982)....................................................................... 48 Herbert v. Saffell, 877 F .2d 267 (4th Cir. 1989) . . 76 Hess v. New Jersey Transit Rail Operations, Inc., 846 F .2d 114 (2d Cir. 1 9 8 8 )...................................... 78 Hicks ex rel. Feiock v. Feiock, 108 S. Ct. 1423 (1 9 8 8 )............................................................................. 77 Xll Page Hicks v. Heckler, 756 F .2d 1022 (4th Cir. 1985). . 14-15 Holmes v. Bevilacqua, 794 F .2d 142 (4th Cir. 1986) (en b a n c ) ........................ ................. ................. 18, 19, 54 Hoover Universal, Inc. v. Brockway Imco, Inc., 809 F .2d 1039 (4th Cir. 1 9 8 7 ) ............................... 46 Hudson v. Moore Business Forms, Inc., 836 F.2d 1156 (9th Cir. 1987).................................... ............... 53 Hughes v. Rowe, 449 U.S. 5 (1980)............. .. 56 Independent Fed’n of Flight Attendants v. Zipes, 109 S. Ct. 2732 (1989)............................................... 67 In re Abrams, 521 F .2d 1094 (3d C ir.), cert, denied, 423 U .S. 1038 (1975) .................................. 61 In re Baker, 744 F .2d 1438 (10th Cir. 1984), cert, denied, 471 U.S. 1014 (1 9 8 5 )................................. 88 In re Chaplain, 621 F .2d 1272 (4th C ir.), cert. denied, 499 U.S. 834 (1980) ............................. .. 62 In re Kave, 760 F .2d 343 (1st Cir. 1985) . . . . . . . . 78-79 In re McDonald, 819 F .2d 1020 (11th Cir. 1987) . 62 In re Reid,'854 F .2d 156 (7th Cir. 1 9 8 8 )........... 71 In re Ruben, 825 F .2d 977 (6th Cir. 1987), cert, denied, 108 S. Ct. 1108 (1988).............. 81 In re Rumaker, 646 F .2d 870 (5th Cir. 1 9 8 0 )___ 78 X l l l Page In re Thalheim, 853 F .2d 383 (5th Cir. 1 9 8 8 ) . . . . 61, 62 In re Yagman 796 F .2d 1165 (9th Cir. 1986), cert, denied, 484 U.S. 963 (1987) ........................ 75, 78, 88 ’ Introcaso v. Cunningham Corp., 857 F .2d 965 (4th Cir. 1988) ............................................................ 47, 58 Johnson v. Ryder Truck Lines, 555 F .2d 1181 (4th Cir. 1977), cert, denied, 440 U.S. 979 (1979) ...................................................................................... 3 Johnson v. Seaboard Air Line R.R., 405 F .2d 645 (4th Cir. 1968), cert, denied, 394 U.S. 918 (1969) .................................................................................. 4 Jones v. Continental Corp., 789 F .2d 1225 (6th Cir. 1986)................................................................... 46, 47-48 Jones v. Texas Tech. Univ., 656 F .2d 1137 (5th Cir. 1981)....................................................................... 50 Jordon v. Gilligan, 500 F .2d 701 (6th Cir. 1974), cert, denied, 421 U.S. 991 (1975) ........................ 69 Kirby v. Allegheny Beverage Corp., 811 F .2d 253 (4th Cir. 1987) ............................................................ 50 Lankford v. Law Enforcement Assistance Admin., 620 F .2d 35 (4th Cir. 1980) .................................... 82 Larouche v. National Broadcasting Co., 780 F.2d 1134 (4th C ir.), cert, denied, 479 U.S. 818 (1 9 8 6 )............................................................................. 79 LeBeau v. Libbey-Owens-Ford Co., 799 F .2d 1152 (7th Cir. 1986)................................... ............... 47, 50 Lee v. Southern Home Sites Corp., 444 F .2d 143 (5th Cir. 1971) ..................................... 66 xiv Page Little v. Southern Elec. Steel Co., 595 F .2d 998 (5th Cir. 1979) ................................................. .. 52 Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) ........................... ................ ................................ 61 Long v. Ford Motor Co., 496 F .2d 500 (6th Cir 1974) ............................................ ................................ 25 Lotz Realty Co. v. United States Dep’t of Horn. 6- Urban Dev., 717 F .2d 929 (4th Cir. 1983) . . 19 Lynn v. Regents Univ. of C a l, 656 F .2d 1337 (9th Cir. 1981), cert, denied, 459 U.S. 823 (1982) ........................................ .............................. .. 22 Maine v. Thiboutot, 448 U.S. 1 (1980) . . . . . . . . . . 67 Manax v. McNamara, 842 F.2d 808 (5th Cir. 1988) ........................................ ....................................... 81 Marshall v. Jerrico, Inc., 446 U.S. 238 (1980)___ 75 Mary Ann Pensiero, Inc. v. Lingle, 847 F .2d 90 (3d Cir. 1988) ...................................... ....................... 55, 57 McCargo v. Hedrick, 545 F .2d 393 (4th Cir. 1976) ............................... 86 McCrary v. Runyon, 515 F .2d 1082 (4th Cir. 1975) , aff’d, 427 U.S. 160 (1976).............. .. 66 McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) ............................. passim Mihalik v. Pro Arts, Inc., 851 F .2d 790 (6th Cir. 1988) ............................. 48 Miranda v. Southern Pac. Transp. Co., 710 F.2d 516 (9th Cir. 1983).................................... 60, 62 Mitchell v. Baldrige, 759 F ,2d 80 (D .C . Cir. 1985).. .................................................. 22 XV Page Mitchell v. Office of Los Angeles County Superintendent of Schools, 805 F .2d 844 (9th Cir. 1986), cert, denied, 484 U.S. 858 (1987) . . 48 Montgomery Ward 6- Co. v. Pacific Indem. Co., 557 F .2d 51 (3d Cir. 1977 )...................................... 69 Montgomery v. Yellow Freight Sys., 671 F .2d 412 (10th Cir. 1982) ................................. ........................ 48 Moore v. National Assn of Sec. Dealers, Inc., 762 F.2d 1093 (D .C . Cir. 1985) ............. ..................... 67 Morris v. Peterson, 871 F .2d 948 (10th Cir. 1989) 80 Mount Sinai Hosp. v. Weinberger, 517 F .2d 329 (5th Cir. 1975), cert, denied, 425 U .S. 935 (1 9 7 6 )............................................................................. 65-66 NAACP v. City of Mansfield, 866 F .2d 162 (6th Cir. 1989)....................... ........................... ................... 34 National Ass’n of Gov’t Employees v. National Fed’n of Fed. Employees, 844 F .2d 216 (5th Cir. 1988)..................................................... 56 Neitzke v. Williams, 109 S. Ct. 1827 (1989) ......... 46, 49 Nelson v. Piedmont Aviation, Inc., 750 F .2d 1234 (4th Cir. 1984), cert, denied, 471 U.S. 1116 (1985) .............................................................................. 79 Nemeroff v. Abelson, 620 F .2d 339 (2d Cir. 1980) 81 Nepera Chem., Inc. v. Sea-Land Serv., Inc., 794 F.2d 688 (D .C . Cir. 1986) ..................................... 80 Nesmith v. Martin Marietta Aerospace, 833 F.2d 1489 (11th Cir. 1987).......................................... 47 xvi Page New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298 (9th Cir. 1989)................................................... 81 New York Gaslight Club, Inc. v. Carey, 447 U S 54 (1980) ............. ..................... ................... ............... 67, 70 Nix v. Whiteside, 475 U.S. 157 (1986) .................... 52 Northcross v. Board of Educ., 412 U.S. 427 (1 9 7 3 )................................................ ................. .. 67 Nye v. United States, 313 U.S. 33 (1941 )............... 77 Obin v. District No. 9 In ti Ass’n of Machinists, 651 F .2d 574 (8th Cir. 1 9 8 1 ) ...................... .. 48 Olga’s Kitchen of Hayward, Inc. v. Papo, 108 F .R .D . 695 (E .D . Mich. 1985), aff’d in part and rev’d in part, No. 85-1581 (6th Cir. Feb. 16, 1987) ............. .............................................. 73 Oliveri v. Thompson, 803 F .2d 1265 (2d Cir. 1986), cert, denied, 480 U.S. 918 (1987) . . . . . . 46, 50, 52, 81 O’Rourke v. City of Norman, 875 F .2d 1465 (10th Cir. 1989) ........... ....................................... .. 83 Page v. Bolger, 645 F .2d 227 (4th C ir.), cert. denied, 454 U.S. 892 (1 9 8 1 )...................... .. 18 Pantry Pride Queen Foods, Inc. v. Lifschultz Fast Freight, Inc., 809 F .2d 451 (7th Cir. 1987) . . . . 50 Parker v. Califano, 561 F .2d 320 (D .C . Cir. 1977) ......................................................................... .. 64 Patterson v. Coughlin, 761 F .2d 886 (2d Cir. 1985), cert, denied, 474 U.S. 1100 (1986) ......... 61 xvii Page Patterson v. McLean Credit Union, 109 S. Ct. 2363 (1989) ................................................................... passim Pavelic ir Leflore v. Marvel Entertainment Group, No. 88-791 (U.S. argued Oct. 2, 1989) . 88 Penfield Co. v. SEC, 330 U.S. 585 (1 9 4 7 )............. 77 Peters v. Lieuallen, 693 F .2d 966 (9th Cir. 1982). 25 Pickens v. Children’s Mercy Hosp., 124 F .R .D . 209 (W .D. Mo. 1989)........................................ 50, 51 Pitre v. Western Elec. Co., 843 F .2d 1262 (10th Cir. 1988)....................................................................... 25 Plemer v. Parsons-Gilbane, 713 F .2d 1127 (5th Cir. 1983).................... .. ............................................... 24, 48 Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp., 828 F .2d 211 (4th Cir. 1987) . .................. 57 Poulis v. State Farm Fire & Casualty Co., 747 F .2d 863 (3d Cir. 1984)............. .............................. 88 Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530 (1949) ...................... 69 Ray A. Scharer 6- Co. v. Plabell Rubber Prods., Inc., 858 F .2d 317 (6th Cir. 1988) ...................... 73, 75 Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1 9 6 9 )............................ 65 Rhode Island Comm, on Energy v. General Servs. Admin., 561 F .2d 397 (1st Cir. 1 9 7 7 ) .................. 70 Richmond Black Police Officers Ass’n v. City of Richmond, 548 F .2d 123 (4th Cir. 1 9 7 7 )........... 77 xvui Page Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980) ........... .............................. ................. passim Robinson v. Lehman, 771 F .2d 772 (3d Cir. 1985).................... ................. ......................................... 22 Robinson v. National Cash Register Co., 808 F.2d 1119 (5th Cir. 1987)............................. .. 88 Rossman v. State Farm Mut. Auto. Ins. Co., 832 F.2d 282 (4th Cir. 1987) ............................... .. 51 Runyon v. McCrary, 427 U.S. 160 (1976) . ............ 3, 52 Russell v. American Tobacco Co., 528 F .2d 357 (4th Cir. 1975), cert, denied, 425 U.S. 935 (1 9 7 6 )........................................................ 3-4 Schwarz v. Folloder, 767 F .2d 125 (5th Cir. 1985) .................................................................. 87 Seatrain Shipbuilding Corp. v. Shell Oil Co., 444 U.S. 572 (1980)....................................................... 65 Seymore v. Readers Digest Ass n, 493 F. Supp. 257 (S.D.N.Y. 1 9 8 0 ) . . . . . . . . . . . . . . . . . . . . . . . . 25 Shillitani v. United States, 384 U.S. 364 (1966) . . . 78 Sierra Club v. United States Army Corps of Eng’rs, 776 F .2d 383 (2d Cir. 1985), cert, denied, 475 U .S. 1084 (1986) .................... .. 80 Smith v. WGBH-TV, 26 Em pl. Prac. Dec. (CCH) 1 31,891 (D. Mass. May 14, 1981)...................... 25 Snow Machines, Inc. v. Hedco, Inc., 838 F.2d 718 (3d Cir. 1988) ........................................ 75 X IX Page Sullivan v. Pennsylvania Dep’t of Labor ir Indus., 663 F .2d 443 (3d Cir. 1981), cert, denied, 455 U .S. 1020 (1982) .................................. 56 Sullivan v. School Bd. of Pinellas County, 773 F .2d 1182 (5th Cir. 1 9 8 5 )....................................... 53, 56 Tarter v. Raybuck, 742 F .2d 977 (6th Cir. 1984), cert, denied, 470 U.S. 1051 (1985) ...................... 53 Taylor v. Safeway Stores, Inc., 365 F. Supp. 468 (D. Colo. 1973), aff’d in part ir rev’d in part, 524 F .2d 263 (10th Cir. 1975) ......................... 25 Terrell v. United States, 6 F .2d 498 (4th Cir. 1925)................................................................................ 75 Texas Dep’t of Community Affairs v. Burdine, 450 U .S. 248 (1 9 8 1 )................................................... 33, 47 Thomas v. Capital Sec. Servs., Inc., 836 F .2d 866 (5th Cir. 1988) (en banc).................... ..................... 50, 88 Thornberry v. Delta Air Lines, 676 F.2d 1240 (9th Cir. 1982), vacated on other grounds, 461 U .S. 952 (1983).......................... 67 Tiedel v. Northwestern Mich. College, 865 F.2d 88 (6th Cir. 1988)................................... 76 Tom Growney Equip., Inc. v. Shelley Irrigation Dev., Inc., 834 F .2d 833 (9th Cir. 1987) . . . . . . 61 Torres v. County of Oakland, 758 F .2d 147 (6th Cir. 1985)....................................................................... 17, 53 Townsend v. Holman Consulting Corp., 881 F.2d 788 (9th Cir. 1989)..................................................... 57 xx Page United Food ir Commercial Workers, Local 400 v. Marval Poultry Co., 876 F .2d 346 (4th Cir. 1989).. ............................................................................ 14, 15 United States v. Austin, 749 F .2d 1407 (9th Cir. 1984)..................................................... .......................... 72 United States v. Blodgett, 709 F .2d 608 (9th Cir. 1983) ........................................................................... .. . 72 United States v. McPherson, 840 F .2d 244 (4th Cir. 1988)....................................... ............................ .. 68 United States v. Ross, 535 F .2d 346 (6th Cir. 1976) ........................... .............................. ............ .. 72, 74 United States v. Standard Oil Co., 603 F.2d 100 (9th Cir. 1979) ................................................ 80 United States v. Stoneberger, 805 F .2d 1391 (9th Cir. 1986)............. .................................. .. 61 United States v. Waste Indus., 734 F.2d 159 (4th Cir. 1984)................................................................ 65 Vance v. Whirlpool Corp., 716 F .2d 1010 (4th Cir. 1983), cert, denied, 465 U.S. 1102, & 467 U.S. 1226 (1984) ...................... 65 Vandenplas v. City of Muskego, 797 F .2d 425 (7th Cir. 1986) ........................................................... 48 Walker v. St. Anthony’s Med. Center, 881 F.2d 554 (8th Cir. 1989).. .................................. 25 Warren v. Halstead Indus., 802 F .2d 746 (4th Cir. 1986)................................... 18 Warren v. Reserve Fund, Inc., 728 F .2d 741 (5th Cir. 1984)............. .......................... ............................. 84 X XI Page Wattleton v. Ladish Co., 520 F. Supp. 1329 (E .D . Wis. 1981), aff’d sub nom. Wattleton v. International Bhd. of Boilermakers,, 686 F .2d 586 (7th Cir. 1982), cert, denied, 459 U.S. 1208 (1983) ................................................................... 56 Weinberger v. Hynson, Westcott <b Dunning, Inc., 412 U.S, 609 (1 9 7 3 ) ........... ............................ 82 Westmoreland v. CBS, Inc., 770 F .2d 1168 (D .C , Cir. 1985)............................... 88 Whalen v. Ford Motor Credit Co., 684 F .2d 272 (4th Cir.) (en banc), cert, denied, 459 U.S. 910 (1 9 8 2 )........... 85 Wheeler v. Durham City Bd. of Educ., 585 F .2d 618 (4th Cir. 1978)............. .............................. .. 67, 68 White v. Raymark Indus., 783 F .2d 1175 (4th Cir. 1986)....................................................................... 72, 74, 75 White v. South Park Indep. School Dist., 693 F .2d 1163 (5th Cir. 1 9 8 2 )........... 48 Windsor Power House Coal Co. v. District 6 United Mine Workers, 530 F .2d 312 (4th C ir.), cert, dismissed, 429 U.S. 876 (1 9 7 6 ).................... 77, 79 Williams v. Giant Eagle Markets, 51 Empl. Prac. Dec. (CCH) 1 39,290 (3d Cir. Aug. 28, 1989) . 48 Woodrum v. Woodward County, 866 F .2d 1121 (9th Cir. 1989) ............................................................ 46 Wrenn v. Gould, 808 F .2d 493 (6th Cir. 1987), cert, denied, 108 S. Ct. 1032 (1988) . .................. 47, 48 Zaldivar v. City of Los Angeles, 780 F .2d 823 (9th Cir. 1986) ....................................................... 47, 69, 88 xxii Page Statutes and Rules 8 U .S.C § 1324b ....... .................................................... 65 17 U .S.C . § 505 ....... ........................................... 65 28 U .S.C . § 1920 ........... ....................................... 68, 71-72 28 U .S.C . § 1927 .................... ............................ .. passim 28 U .S.C . § 2072(b) ................ .............................. 69 28 U .S.C . § 2412 ....................................................... .... 63, 70 42 U .S.C . § 2000h ....................................................... .. 76 42 U .S.C . § 1988 ....................................................... .. . 58, 64, 66-67 42 U .S.C . § 1997a ....................................................... .. 65 42 U .S.C . § 2000a-3 ..................................................... .. 65 42 U .S.C . § 2000e-5(k) ................ ................................ 63, 66-71 Fed. R. Civ. P. 1 1 . passim Fed. R. Civ. P. 16 ....... ............. passim Fed. R. Civ. P. 37(a)(4).................................... 58 Fed. R. Civ. P. 3 7 (b ) . 69 Fed. R. Civ. P. 4 1 (b )............................................... .. . 33-34 Fed. R. Grim. P. 42(b) ..................................... .. . 76, 78 Fed. R. Evid. 201(b) ............................................ .. 79 Fed. R. Evid. 201(e).................... .............................. .. . 79 Fed. R. Evid. 605 ........... .............................................. 79 Fed. R. Evid. 8 0 2 ........... .......... .......... . . . . . . . . . . . . 79 4th Cir. R. 2 8 (c ) ......... .............................. .. 61 E .D .N .C . R. 2.10 . . . . ................ .................................. 61 XX111 Page E .D .N .C . Disc. R. 101 .00 ............................................ 61 E .D .N .C . Disc. R. 102.00 ............................................ 61 E .D .N .C . Disc. R. 104.00 ............................... 61 E .D .N .C . Disc. R. 104 .01 ............................................ 61 E .D .N .C . Disc. R. 104.02 ..................................... 61 E .D .N .C . Disc. R. 105 .01 ............................................ 61-62 E .D .N .C . Disc. R. 105.04 ................... 62 E .D .N .C . Disc. R. 112 .00 ............................................ 62 Other Authorities S. Rep. No. 1011, 94th Cong., 2d Sess., reprinted in 1976 U.S. Code Cong. & Admin. News 5908 66 H.R. Rep. No. 442, 99th Cong., 1st Sess. (1986) . 69 H.R. Rep. No. 1234, 96th Cong., 2d Sess., reprinted in 1980 U.S. Code Cong. & Admin. News 2781 .................................................................... 72, 82-83 H .R. Rep. No. 1558, 94th Cong., 2d Sess. (1976). 66 134 Cong. Rec. S16,296 (daily ed. Oct. 14, 1988) 69 126 Cong. Rec. 23,625-26 (1980 )............................... 83 122 Cong. Rec. 35,116 (1976)................... 64-65 Fed. R. Civ. P. 11 advisory committee n o t e ......... 49 Manual for Complex Litigation §§ 21.634, 21.66 (2d ed. 1 9 8 5 )................................................................ 86 XXIV Page 2A J. Moore, Moore’s Federal Practice if 11.02[3] (1 9 8 7 ).................... .............................. .......................... 68 2A N. Singer, Statutes and Statutory Construction § 46.06 (4th ed. 1 9 8 4 ).............................................. 82 Webster’s Ninth New Collegiate Dictionary (1986) 82 6 J. Wigmore, Evidence in Trials at Common Law § 1805 (Chadbourn rev. ed. 1 9 7 6 )............. 79 Burbank, Proposal to Amend Rule 68 - Time to Abandon Ship, 19 U. Mich. J .L . Ref. 425 (1 9 8 6 )........... 69 R. Rodes, K. Ripple & C. Mooney, Sanctions Imposable for Violations of the Federal Rules of Civil Procedure (Federal Judicial Center 1981) ................................... 86 Schwarzer, Rule 11 Revisited, 101 Harv. L . Rev. 1013 (1988) . ................................ 75 X X V Hotted l&aies (Court of Appeals for the fourth (Circuit No. 88-1364 (Lead) SANDRA L. BLU E, Plaintiff-Appellant, — against — UNITED STATES DEPARTM ENT OF TH E ARMY, et ah, Defendants-Appellees. IN RE: JU LIU S L . CHAMBERS, Appellant in No. 88-1379, FERGUSON, STEIN , W ATT, W ALLAS & ADKINS, P.A., Appellant in No. 88-1377. Appeal from the United States District Court for the Eastern District of North Carolina, at Fayetteville, James C. Fox, Judge. BRIEF OF APPELLANTS JULIUS L. CHAMBERS AND FERGUSON, STEIN, WATT, WALLAS & ADKINS, P.A. Issues Presented 1. Whether the district court erred in finding that Beulah Mae Harris’ discrimination claims were frivolous. 2. Whether the district court erred in finding that Sandra Blue’s discrimination claims were frivolous. 3. Whether the district court erred in sanctioning plaintiffs’ attorneys under Fed. R. Civ. P. 11. 4. Whether the district court erred in awarding attorneys’ fees to the Army for frivolous litigation under a general statute, court rules and the common law when Title VII expressly prohibits such an award. 5. Whether the district court erred in disciplining the attorneys without following its local rules and without giving them prior notice and an opportunity to be heard. 6. Whether the district court erred in fining the attorneys and the parties nearly $38,000 for the time spent by the court and its staff, and in doing so without following the procedures re quired for criminal contempt. 7. Whether the district court erred in finding that the at torneys acted in bad faith and in construing 28 U.S.C. § 1927 to apply to negligent acts. 8. Whether the district court erred in imposing sanctions under Fed. R. Civ. P. 16 for conduct that the rule does not address. 9. Whether the district court lacked legal authority to sanc tion the attorneys’ law firm and failed to make the required fac tual finding of improper conduct. 2 Statement of the Case1 The appeal arises from numerous and complicated claims of race discrimination that were filed against the United States Army concerning its employment practices at Fort Bragg, North Carolina. After almost seven years of litigation, during which most of the claims were settled, the United States District Court for the Eastern District of North Carolina dismissed the remain ing claims and sanctioned two of the plaintiffs and their counsel almost $90,000, in addition to disciplining counsel for ethical violations. Harris v. Marsh, 679 F. Supp. 1204 (E.D.N.C. 1987). After post-judgment motions, the court modified the sanctions, eliminating the penalities for two of the attorneys, but increas ing the sanctions payable by the appellants here Harris v. Marsh, 123 F.R.D. 204 (E.D.N.C. 1988); App. 1Q39-43.2 Julius Chambers, the lawyer who had the ultimate respon sibility for the conduct of the litigation below (App. 1008, 1173), has had a long and distinguished career as a civil rights lawyer. He has successfully participated in numerous civil rights cases before the United States Supreme Court, particularly employ ment discrimination cases. E.g., Griggs v. Duke Power Co., 401 U.S. 424 (1971); Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975). Just last Term, he argued for the petitioner in Patterson v. McLean Credit Union, 109 S. Ct. 2363, 2371 (1989), in which the Court reaffirmed “society’s deep commitment to the eradica tion of discrimination based on a person’s race or the color of his or her skin,” refusing to overrule Runyon v. McCrary, 427 U.S. 160 (1976).3 In many of these cases, Mr. Chambers’ clients ' For the Court’s convenience, we have submitted in the addendum to this brief a glossary of abbreviations and a list of relevant Army individuals. 1 “App. —” refers to pages in the Appendix where supporting record evidence has been reproduced. Cited materials that are not included in the Appendix are referred to by docket entry (“Dkt.”) numbers. Transcript references to the Appendix identify the name of the witness and the date of the testimony, and other transcript references are cited as “Tr.” 3 His record before this Court is equally extensive. E.g., Johnson v. Ryder Truck Lines, 555 F.2d 1181 (4th Cir. 1977), cert, denied, 440 U.S. 979 (1979); Russell (Footnote continued) 3 did not finally prevail until the Supreme Court vindicated their positions. Here, too, it was not until the Court’s decision in Pat terson that issues of law critical to this litigation were dispositive- ly resolved, in direct conflict with the lower court’s rulings. The Complaints In the spring of 1980, Mr. Chambers was contacted by two individuals about an administrative class action complaint that had been filed, alleging racial discrimination at Fort Bragg, an Army base in Fayetteville, North Carolina. Chambers con ferred with statisticians and was assured that their analyses demonstrated statistically significant racial effects in a number of the Army’s employment practices. App. 1174. He then agreed to represent two potential class members. Following ad ministrative proceedings, the EEO C concluded that a class should be certified with respect to claims of discriminatory pro motions and reprisal. App. 82-83. A complaint was filed in federal court in September 1981. App. 48. Sandra Blue was a class representative. Chambers and his associates met repeatedly with her and other individual members of the class and collected documents from them / App. 1175-76. Between the filing of the complaint and the subsequent hear ing on class certification, the plaintiffs’ and defendant’s counsel conducted substantial discovery. App. 2. The discovery showed that prior to 1982, applications for pro motions were initially screened by a staffing specialist from Fort v. American Tobacco Co., 528 F.2d 357 (4th Cir. 1975), cert, denied, 425 U.S. 935 (1976); Hairston v. McLean Trucking Co., 520 F.2d 226 (4th Cir. 1975); Barnett v. W.T. Grant Co., 518 F.2d 543 (4th Cir. 1975); Johnson v. Seaboard Air Line R.R., 405 F.2d 645 (4th Cir. 1968), cert, denied, 394 U.S. 918 (1969); Chambers v. Hendersonville City Bd. of Educ., 364 F.2d 189 (4th Cir. 1966). * At the outset of the case, Chambers was assisted by Gilda Glazer, an associate at his firm, Chambers, Ferguson, et al., and later by Penda Hair, an attorney from the NAACP Legal Defense and Educational Fund, Inc. In 1983, he was joined by Geraldine Sumter, an associate who had recently been hired by his firm. 4 Bragg’s Civilian Personnel Office (“CPO”) to determine whether the candidates met the position’s minimum eligibility require ments. A rating and ranking panel composed of three employees would then evaluate the qualified candidates according to highly qualifying criteria (“H Q C”). The panel, again assisted by the staffing specialist, then scored the applicants under four major categories: experience, awards, supervisory appraisals and “self development.” (Until the 1982 revisions of the promotion prog ram, applicants received points in the self development category for training and education that were not necessarily job-related.) The Army next employed its 85 % and Ten Referral Rules, which limited the referral of candidates to those individuals who scored within 85 % of the top score, with a maximum of ten candidates, to determine which candidates should be deemed “best qualified” and referred for an interview. App. 79. After the filing of the class complaint, which addressed the promotion system and other employment practices, the Army changed certain features of its promotion system, including eliminating the 85 % and Ten Referral Rules. The Army also substantially reduced the role of subjective judgments in the pro motion process, about which plaintiffs had also complained. It shifted to a more objective skill-specific evaluation, and eliminated consideration of certain factors unrelated to job per formance. App. 79. On July 1, 1983, after extensive briefing and six weeks following a hearing, the court denied plaintiffs’ motion for class certifica tion. App. 99.5 The order provided that plaintiffs could seek class certification again should the trial evidence demonstrate it was proper. Trial had been set to begin on August 1, 1983. Dkt. 61.6 5 Sandra Blue had resigned from the Army in June 1983. 6 After deliberating for two months, the court issued a memorandum opinion. Harris v. Marsh, 100 F.R.D. 315 (E.D.N.C. 1983). Because of later settlement agreements (see infra), this order denying class certification cannot be appealed. The court based its decision in part on a showing that overall, blacks received approximately 21 to 24 % of promotions yet represented only 22 to 23 % of the workforce Id. at 323. This “ bottom line” analysis was legally erroneous. See Connecticut v. Teal, 457 U.S. 440, 444, 454-56 (1982). 5 Potential class members were thus required to intervene to secure relief. Upon discussing the administrative complaints with them, and reviewing their claims (including previous considera tion of some of the claims in the class action context), counsel concluded that forty-four clients, including Beulah Mae Har ris, should move to intervene. The discussions with the clients, documents produced (including defendant’s affirmative action reports), and an examination of the law at that time led counsel to conclude that each claimant could establish at least a prima facie case of liability. App. 1176-77.7 A proposed complaint-in intervention, which largely incorporated by reference the class complaint and included Beulah Mae Harris as a plaintiff, and a motion to intervene were filed on July 5. Dkt. 84. The court overruled the Army’s objection to intervention, and on August 25 ordered the filing of a complaint-in-intervention. 679 F. Supp. at 1229.8 Trial was set to commence in January 1984. App. 294. Following the filing of the complaint, counsel continued to investigate claims, conduct discovery, and to file motions to compel discovery. App. 11-12. The Pretrial Orders On December 8, 1983, a final pretrial order was filed as to claims of the six named plaintiffs, including Sandra Blue. App. 114. On December 13, the court entered an order dividing the trial into three phases: Phase I to consist of the presentation regarding each claim of the named plaintiffs and plaintiff- intervenors; Phase II to “consist of defendant’s evidence on the general methodology of promotion followed by plaintiffs’ evidence concerning the procedures and criteria followed by defendant in selecting employees for promotion.” The court order 7 Counsel also reviewed, among other things: regulations regarding defendant’s merit promotion procedures and policies, official personnel files, CIVPER- SINS data (employment histories, education and length of service by employees), disciplinary cards, awards, and training files. App. 1115. 8 The intervention created potential conflicts among the plaintiffs, which were addressed by having some intervenors (including Blue and Harris) drop cer tain claims. App. 1192. The court found at that time that the conflicts had been “satisfactorily resolved.” App. 1201. 6 provided that “ [a]ny evidence in the nature of a class action is precluded until after the methodology phase of the trial. At that time, the court will consider any motions regarding reconsidera tion of the class denial and whether additional evidence may be presented by either party [Phase III].” App. 295. On December 16, an amended complaint-in-intervention was filed, which particularized the claims of the intervenors, App. 282. On January 5, 1984, a supplemental pre-trial order was filed as to claims of the intervenors.9 App. 297. In the meantime, the Army filed a flurry of motions affect ing nearly all the plaintiffs and over one hundred claims. None addressed the merits of the Blue or Harris claims, much less sug gested that any claim was frivolous. 679 F. Supp. at 1229-30. Trials The first intervenor’s trial started on January 23, 1984.10 It was prolonged by disputes over numerous procedural, eviden tiary, and trial practice issues. 679 F. Supp. at 1231. On March 14, after the conclusion of the first trial, the court observed that “ [c]learly, counsel are extraordinarily competent and have diligently prepared for this case,” but expressed dissatisfaction with the slow progress of the case App. 676.“ The order, although it established comprehensive rules for future trials, made no reference to altering the phases of the litigation. 9 At the time the pretrial orders were filed, there was no requirement that claims be designated as for “background” versus “relief.” Cf. Dkt. 151. 10 On the day of trial, plaintiffs filed proposed findings of fact and conclu sions of law, quoting the court’s December 13 order. The submission governed the claims of the plaintiffs whose cases were to be tried first. Recognizing the Phase I-Phase II distinction, the submission stated that “ limited references to various personnel practices are included . . . to explain the individual claims of plaintiffs. . . . Proposed findings and conclusions will be submitted later addressing the claims of the other plaintiffs for Phase I as well as the promo tion and personnel practices for Phase II.” App. 565. u In February 1984, the Army fired Harris. In addition, the court moved the trial to Wilmington from Fayetteville App. 15. 7 Blue’s pretrial brief and exhibit list was filed April 3. Dkt. 166-67, On April 17, the Army filed a motion seeking sanctions for the abandonment of claims, allegedly demonstrated by failure to include certain claims in Blue’s pretrial brief. App. 1045-52. No motion was made as to claims included in Blue’s brief, or as to many claims that had not been specifically men tioned in the brief. Trial of Blue’s case commenced on April 19. Her case con sisted of 4 witnesses and 18 exhibits. On April 24, at the close of Blue’s case-in-chief, the Army moved under Rule 41(b) for judgment on the 85 % Rule claims. See App. 2219-27. The Army made no motion as to any other claim or allegation. Later that day, it became obvious that there was confusion or disagreement among counsel and the court about the scope of the phases in the proceeding. App. 2228-30. Chambers stated that while plain tiff intended to introduce in Phase I some statistical evidence concerning the 85 % Rule, further statistical evidence was ex pected to be presented in Phase II. App. 2222-23, 2230. An order was issued on May 14 granting the Army’s Rule 41(b) motion, but no memorandum opinion was filed. The order provided that “plaintiffs are at liberty to move the court to reconsider the rul ing at any time in the trial of this litigation, upon a further show ing of evidence on the 85 % Rule issue” App. 695-96.12 On May 7, 1984, Harris moved to voluntarily dismiss her claims. Dkt. 193. The Army cross-moved for sanctions against Harris based on the abandonment of her claims. See App. 1079, 1095. The court granted Harris’ motion with prejudice, reserving the right to impose sanctions later based on the Army’s cross motion. App. 698-701. On June 1, the court ordered that decisions on sanctions motions would be deferred “in order for the court to 12 The May 14 order also required, for the first time in the litigation, that all claims presented in the future be preceded by an identification of the legal theory relied upon (e.g., disparate impact or disparate treatment), and that if “plaintiffs contend that a particular issue or claim is proceeding under a disparate impact theory, plaintiffs shall specify the exact employment criterion of the defendant and whether statistical evidence will be presented to sup port the impact contention.” App. 697. 8 accurately assess the claims and conduct of all parties.” It never theless required prompt responses to the motions. Dkt. 213. On July 5, the court found “ it necessary to issue [an] order detailing the phases of this litigation.” The order stated that in Phase I plaintiffs must “present all relevant anecdotal and statistical evidence on each p lain tiff s case when it is called for trial,” and that Phase II would be optional in the court’s discre tion. App. 703, 705. On July 16, plaintiffs filed a response to this order. They stated that their understanding of the court’s previous orders conflicted with the new scheme proposed by the court, and contended that Phase II of the case should be man datory. App. 708. On August 2, plaintiffs filed a proposal for further guidelines as to the proof allowed in Phase I, which the defendant opposed. Included was a request to reopen the Blue case and two other cases previously tried. App. 712.13 Counsel stated that they wished to recall Sandra Blue as well as the plain tiffs whose cases were previously concluded to introduce evidence of background claims, which were previously expected to be shown in Phase II. App. 715-25. The Blue trial resumed on August 27, with the Army present ing its defense, which ultimately included 23 witnesses and 22 exhibits. The next day, the court filed an order containing “addi tional guidelines” regarding the order of proof. App. 1828. The order stated that Phase I should include any statistical evidence directly relevant to any criteria, procedure or practice under attack in any plaintiffs claim, e.g. the 85 % Rule. It refused 13 The filing stated: Based on the earlier Orders of the Court, plaintiffs had prepared their individual cases to address only claims for which plantiffs were seeking individual relief and such relevant background in formation as affected those specific claims. Plaintiffs anticipated that Phase II was automatic and would address other anecdotal incidents which established a clear pattern of discrimination by defendant in the application of its employee selection criteria and procedures or other personnel decisions, the racially discriminatory impact of various selection criteria and procedures and the sub jectivity governing defendant’s personnel decisions. App. 713 (footnote omitted). 9 to admit anecdotal evidence of pattern and practice, subjec tivity, or disparate impact not directly relevant to plaintiffs’ claims until Phase II. The court refused the request to reopen two prior cases and did not respond in the order to plaintiffs motion to reopen the Blue case. App. 1828-30. The Blue trial was completed on September 4. Decision was reserved, and the court requested proposed findings of fact and conclusions of law. No further motions as to Blue’s case were made by the Army. After the testimony was completed in Blue, the Army requested that the court issue findings and conclu sions on each claim as testimony was concluded. This request was denied. App. 729. The court stated its intention to file draft findings under seal, but never did. On October 26, the Army submitted its proposed findings and conclusions in the Blue case. Dkt. 326. It did not suggest that the tried claims were frivolous and made no motions as to them. Settlements and Sanctions Hearings On February 28, 1985, after the claims of six plaintiffs had been tried, the parties entered into a settlement agreement.14 The defendants agreed to pay $75,000 (with potential offsets) in ex change for dismissal with prejudice of all claims that had not yet been tried. The agreement also provided that: the Army would continue to implement its affirmative action programs in good faith; claims heard by the court were to be adjudicated, with both parties waiving any right to appeal the rulings; and the pending motions for sanctions were to be decided by the court, with both parties reserving the right to appeal. The court approved this agreement on March 4, 1985. App. 731, 762. To deal with the sanction motions remaining, the court on March 4 ordered bifurcated hearings (liability, then expenses). The court directed that the hearings focus on two issues: whether claims were frivolous or vexatious under Christiansburg and whether claims in the final pretrial order were abandoned in l'1 In February 1985, Mr. Chambers withdrew his appearance as lead in-court counsel in order to accept a position as the Director-Counsel of the NAACP Legal Defense and Educational Fund, Inc. Dkt. 343, 347. 10 bad faith. App. 1191a-t. It did not mention Rule 11, Rule 16 or section 1927.15 “Liability” sanction trials consumed thirteen days in March and April 1985. Again the court requested proposed findings of fact and conclusions of law.16 On June 6, 1985 the Army was ordered to file proof of fees and expenses incurred. App. 1171. During this time, the judge issued numerous orders on motions, heard 23 days of testimony and argument, and received dozens of affi davits and sets of proposed findings and conclusions. App. 29-35. On July 31, 1985, the parties entered into a final agreement dismissing all claims, and all claims for sanctions. App. 773. The agreement did not apply to Harris or Blue. The court found the agreement effective without the need for court approval. 679 F. Supp. at 1237. The evidence on sanctions was deemed closed as of August 23, and final submissions with respect to the Blue and Harris cases were filed on November 5, 1985 — nearly nineteen months after the commencement of the Blue trial on the merits (on which no decision had yet been rendered) and nearly eighteen 15 Although the Army’s motions were stimulated by the “dropping” of claims (Blue) and withdrawals from the litigation (Harris), the Army regarded both as evidence either of frivolousness or of some improper purpose from the outset. App. 1051-52, 1099-1100. The court, on the other hand, launched the sanc tion hearings almost a year later on the theory that the abandonment of even a non-frivolous claim set forth in a pretrial order is sanctionable unless it was “a good faith abandonment predicated upon some factual circumstances oc curring after the entry of the pre-trial order.” App. 1191e. Plaintiffs’ counsel objected to the new theory, correctly noting how the Army’s motions had been transformed. App. 1191b-c. 18 Prior to the sanctions hearings, plaintiffs’ counsel consulted with clients to ex plain that conflicts that originally arose among the multiple intervenors might arise again, and received consent to continue representation. At the Harris sanction hearings, however, in a ruling unanticipated by plaintiffs counsel, the court allowed the Army to inquire concerning a claim that Harris had dropped, before she withdrew her case, to eliminate conflict problems. App. 1210-33. Be cause of the conflict created by allowing this inquiry, the court granted Harris’ counsel’s motion to withdraw, and substitute counsel was obtained. App. 1292. The order granting leave to withdraw made no mention of any discipline for any conflict, and the matter was not raised again during the hearings. 11 months after Harris had asked to remove her case from the court’s docket. The Army made no sanctions motion as to the Blue claims that were tried. Id. at 1315 n.173. Years passed. Three days after Christmas in 1987, the court released a memorandum opinion of nearly 500 pages. Dkt. 501. Without observing any of the required procedures, the court had adjudicated a violation of the disciplinary rules for a con flict the court had earlier found to have been satisfactorily re solved. In addition to awarding sanctions to the Army, the court fined plaintiffs and their counsel nearly $38,000, an amount that purportedly represented the pro-rata salaries of the judge and his staff. The court also invited the Army to make a motion for sanctions as to the Blue claims that were tried. After post-trial motions, the court determined the amount of fees to the Army for the tried Blue claims, vacated the sanc tions imposed on Penda Hair, and vacated the disciplinary find ings with respect to both Hair and Gilda Glazer. The court denied Chambers’ motion that he personally bear the sanctions imposed on all lawyers. Harris v. Marsh, 123 F.R.D. 204 (E.D.N.C. 1988); App. 1039-43. Thus, the final judgment im poses the following fines and sanctions against: Counsel for bad faith, and under 28 U.S.C. § 1927, Rules 11 and 16, and the disciplinary rules: Chambers $34,250.00 Sumter 15,750.00 Glazer 5,000.00 Chambers’ former law firm17 1,413.62 $56,413.62 Harris and Blue for bad faith and Rule 11 (Harris only) 33,000,00 $89,413.62 17 The sole justification given for the sanction against the firm was that “a number of other lawyers with the law firm participated in this case in vary ing minor ways.” 679 F. Supp. at 1392. 12 Of this amount, $37,905 was directed to be paid to the clerk of the court (approximately 45 % of which reflected fines for the sanctions hearings). All parties and counsel listed above ex cept Glazer are appellants here. Summary of Argument The court found the claims brought below to be frivolous. In so doing it erroneously twisted the law of sanctions, ignored the requirements of due process, and disregarded statutes and procedural rules. These legal errors infect every aspect of the court’s analysis, and the precedents they set would poison the relationships between counsel and client, and between judge and lawyer. As a matter of law, the claims these attorneys pursued were not frivolous under any reasonable meaning of the word. The lower court came to its conclusions about frivolousness more than five years after exhaustive document and deposition discovery, more than four years after the filing of extensive pretrial orders, more than three years after a partial trial on the merits and more than two years after the close of prolonged sanction hearings — thousands of hours of effort by all concerned. The court retroactively applied adverse changes in the law and unfavorable credibility determinations to find that the lawyers should have known that the claims were frivolous from the beginning. By doing so, it improperly made the lawyers insurers of the suc cess of their clients’ claims. Ironically, critical precedents relied on by the lower court were ultimately decided by the Supreme Court to be wrong. Viewed from a proper perspective, and against the correct law, the claims were not frivolous. The court also erred as a matter of law in finding that the lawyers violated their professional responsibilities to their clients. It did so without affording them prior notice or an opportuni ty to be heard, and in disregard of the court’s own rules. Fur ther ignoring the requirements of due process, and specifically the rules governing criminal contempt, the court also awarded itself almost $38,000 as reimbursement for the salaries of the judge and his staff. This type of fine, pitting court against 13 litigant, should never be allowed, and in fact has never been sustained on appeal. In addition to ignoring the due process clause, the lower court flouted the intent of Congress. In enacting Title VII as a com prehensive and conclusive remedy, Congress specifically pro hibited the United States from recovering attorneys’ fees for defending claims frivolously brought or maintained. To avoid this prohibition, the lower court invoked 28 U.S.C. § 1927, Rules 11 and 16 of the Federal Rules of Civil Procedure, and its in herent power to penalize precisely the same conduct. The na tional civil rights policy cannot be so easily circumvented. The district court also erred in construing section 1927 to merely require a finding of negligence. It achieved this result by disregarding overwhelming contrary judicial precedents and eliminating the word “vexatious” from the statute. The court likewise ignored the requirement that specific findings of sub jective bad faith are necessary for the imposition of sanctions under the bad faith exception to the American Rule. Here, the court found bad faith in the attorney’s lack of professionalism, a woefully inadequate predicate. The number and magnitude of the district court’s legal er rors require reversal. These errors are subject to de novo review under the standard of review recently articulated by this cir cuit in cases involving sanctions: If the claim is of error in underlying factfindings which infected the ultimate decision, review must pro ceed under the clearly erroneous standard; if of error of law infecting the ultimate decision, under the de novo review standard. Only if the claim of error goes exclusively to the impropriety of an ultimate exercise of available discretion is review solely under the abuse of discretion standard. United Food ir Commercial Workers, Local 400 v. Marval Poultry Co., 876 F.2d 346, 351 (4th Cir. 1989); see Hicks v. 14 Heckler, 756 F.2d 1022, 1024-25 (4th Cir. 1985) (reviewing de novo whether substantial evidence supported government’s posi tion under the EAJA). In Marval, the court found that the district court had committed fully “reviewable error[s] of law” in deciding whether a sanctioned party’s position had an “arguable basis” in law. 876 F.2d at 351. Errors of law pervade the lower court’s opinion here, including its conclusion that claims were frivolous, and they are likewise fully reviewable. 15 Argument I . The District Court Erred in Finding That Harris’ Claims Were Frivolous Harris is a black woman who was a civilian employee at Fort Bragg. She asserted nine claims of race discrimination: five pro motion claims, one denial of proper job classification claim, two denial of training claims (for 1980 and 1982), and a retaliation claim encompassing harassment, intimidation and denial of equal benefits of employment. App. 306, 310, 319, 326!s The lower court itself found that two of Harris’ claims (retaliation and 1980 denial of training) were not frivolous. 679 F. Supp. at 1360-62!9 Had the district court examined the documentary and other evidence accompanying the pretrial order (rather than Harris’ reasons for dropping her claims and her knowledge of Title VII law) and properly stated and applied the law, it should have concluded that a prima facie case could have been establish ed for each of the other claims. A. A History of Discrimination Against Harris Harris’ employment records show that she was a hard working, self-motivated employee whose performance was often rated outstanding, “markedly far beyond the requirements of her job,” and commended by her superiors. See App. 1471-91 (employee performance ratings); App. 1520-31 (supervisory ap praisals); App. 1532-41 (letters of commendation). There were, however, suspicious circumstances suggesting that discrimina tion tainted some of Harris’ appraisals. 18 The court found that Harris raised ten claims. 679 F. Supp. at 1339. It im properly extracted “denial of equal benefits” as a separate claim when the claim was simply part of a broader allegation of retaliation. See id. at 1233 n.34 (stating that Harris raised only nine claims). 19 No sanctions were awarded for the claims that the court agreed were non- frivolous. 679 F. Supp. at 1365 111), 1370 131). 16 In 1979, she successfully grieved a claim of improper appraisal. The Chief of COMPACT, Maj. Pratt, had recommended that Lt. Col. Batts, Deputy Commander, HQ Command, reject Har ris’ immediate supervisors’ determinations that Harris deserved an outstanding performance appraisal. App. 1744. Pratt was far removed from any direct observation or supervision of Harris’ job performance and had never before chosen to overrule the appraisal of an employee’s immediate supervisor. App. 1744. Harris complained, and after an investigation she received the original “outstanding” rating rather than Pratt’s proposed “satisfactory” rating. App. 1744-48, 1478, 1598, 1617.20 Moreover, prior to filing her complaint-in-intervention, Harris had successfully pursued a grievance for discriminatory denial of promotion. In May 1981, Harris had applied for a Military Personnel Clerk position, GS-5. She was rated “best qualified, referred for an interview, and was rejected in favor of white selectees. App. 1514,1516-19. Harris filed an administrative com plaint contending that her rejection was due to her race and in reprisal for her EEO activities. App. 1732-33. An EEO investigation determined that not only were the selectees less qualified than Harris (one of the selectees had even received a lower score by the rating panel) but one of the selectees per sonnel files included letters of reprimand for misconduct. Fur thermore, the selecting officials (who were white) admitted that they had never reviewed the applicants’ personnel files. App. 1736-39. The EEO investigation also determined that Harris was treated differently in the interview process than the other ap plicants: she had been given a short interview and was asked questions unrelated to the prospective position. App. 1734-39. Furthermore, Maj. Marshall, then Chief of COMPACT, had 20 Her supervisory appraisals were generally very good up to 1981. See App. 1601-23. See generally Gunby v. Pennsylvania Elec. Co., 840 F.2d 1108, 1117 (3d Cir. 1988) (aberrational appraisal may demonstrate pretext), cert, denied, 109 S. Ct. 3213 (1989); Torres v. County of Oakland, 758 F.2d 147, 152 (6th Cir. 1985) (downgrading appraisal may demonstrate intent to interfere with promotion). 17 asked Harris to transfer laterally to the promotion position one week before the promotion was announced. App. 1734-39. The selecting officials had asked Harris (but not other applicants) the same question during her interview. App. 1736-39; App. 1464-65, Harris (July 9, 1985). After the EEO investigating of ficer concluded that this promotion should be reevaluated, Harris received the promotion. App. 1624-25.21 These incidents of discrimination not only provide relevant support for the claims in litigation, but bolster the reasonableness of the views of Harris and her attorneys that she had been the victim of discrimination. E.g., Warren v. Habtead Indus., 802 F.2d 746, 752 (4th Cir. 1986) (harassment, threats, and general atmosphere of discrimination are relevant). B. Harris Could Establbh a Prima Facie Case on Her Promotion Claims Before turning to the evidence documenting Harris’ promo tion claims, a brief discussion of the appropriate legal standard is necessary. From the time the complaints below were filed until the court rendered its final decision, the law concerning promo tions was in flux. There was agreement as to the first three ele ments of the prima facie case under the framework established by McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973): mem bership in a protected class, application and qualification, and rejection. Courts divided, however, both within and without this circuit, on what additional showing was required. Compare Page v. Bolger, 645 F.2d 227, 229-30 (4th Cir.), cert, denied, 454 U.S. 892 (1981), with Ambush v. Montgomery County Gov’t Dep’t of Fin., 620 F.2d 1048, 1052 (4th Cir. 1980); see Holmes v. Bevi- lacqua, 794 F.2d 142, 147 (4th Cir. 1986) (en banc) (where posi tion does not remain open, plaintiff must show “some other evidence that his race was a factor” in denial of the promotion). As of the filing of the pretrial orders and before, the law in this circuit was that the fourth prong could be satisfied 21 One year earlier, Harris received a priority referral for a GS-5 promotion after the Chief of Recruitment and Placement determined that Harris had not received proper consideration for a prior promotion. App. 1593. 18 simply by showing that the selectee was white. Ambush v. Montgomery County, 620 F.2d at 1052. The district court, however, applied the en banc decision in Holmes, even though it was decided years after the complaints and pretrial orders were filed. 679 F. Supp. at 1281,1288. This was plainly the wrong standard for judging the reasonableness of the parties’ and their attorneys’ conduct. See Lotz Realty Co. v. United States Dep’t of Horn, b Urban Dev., 717 F.2d 929, 932 (4th Cir. 1983). After the district court’s decision, the Supreme Court ruled definitively on this issue in Patterson v. McLean Credit Union, 109 S. Ct. 2363 (1989). It held, as urged by Julius Chambers, that the fourth prong could be satisfied by showing that after plaintiff was rejected, the employer either continued to seek ap plicants for the position, or that it filled the position with a white employee. Id. at 2378. The documentary evidence here proves that Harris could pre sent prima facie cases as to all five promotion claims under the correct legal standard: Harris applied, was found not only qualified but highly qualified, was not selected, and the selectees were white. In most instances there is also other significant evidence of discrimination. 1. MPA 64-81 (Military Personnel Clerk, GS-5) Harris applied for the promotion, was rated “best qualified,” and was rejected by a white selecting official in favor of a white male, Mr. Todd. App. 1492-1512; App. 1414-16, 1426-27, Harris (July 9, 1985). By itself, this evidence establishes a prima facie case. There is, however, additional evidence of race discrimina tion. Harris had more relevant experience and had received more merit awards than the selectee. App. 1506, 1510.22 The job 22 Harris received one of the highest evaluations of any of the applicants. App. 1494-97. Todd’s score was higher because of a subjective, non job-related category. Under its former promotion practices (abandoned after this lawsuit was filed), the Army considered non-job-related experience when scoring the “experience” criterion and the “self development” category. See supra p. 5. The difference in scores between Harris and Todd derived from the “self development” category: Harris received 1.92 points and Todd received 9.59 points. App. 1506, 1510. 19 opening was for a position in the office Harris then worked in, and under applicable guidelines, Harris’ application should have been favored. App. 1415-18, Harris (July 9, 1985). There is also evidence that Todd was pre-selected for the promotion: Harris testified that she had read a note sent to her supervisor which stated that “Mae Harris would go on the interview for Mr. Todd’s job.” App, 1328, Harris (July 8, 1985). The district court’s findings do not negate the elements of a prima facie case. The court only refused to believe Harris’ testimony that she saw a note on pre-selection. 679 F. Supp. at 1348-49. Even if the court was correct in discrediting her testimony, the lack of the note in no way vitiates Harris’ prima facie showing. The court also ruled that the claim was frivolous because Harris was found by the court not to be better qualified than the selectee. 679 F. Supp. at 1349-50. Although this point is certainly arguable, Harris was not under any burden to show that she was best qualified, either to establish a prima facie case or even to prevail. See Patterson, 109 S. Ct. at 2378. The district court thus based its finding of frivolousness on an erroneous legal conclusion. 2. MPA 94-81 (Management Assistant Position, GS-5) Harris was rated “best qualified,” referred for the position, interviewed by a white selecting official, and rejected in favor of a white selectee. App. 1751-65; App. 1427-30, Harris (July 9, 1985).23 This was a prima facie showing of discrimination. There was additional evidence to support Harris’ claim. She had previously worked as a management assistant and had done the same type of work the promotion position required. The selectee had less experience at Fort Bragg than Harris and had served as a military personnel clerk for a shorter period of time. Moreover, Harris’ interview experience led her to believe that the selecting official had no interest in her application: “I just got the feeling that even though the questions she asked me — 23 Harris’ scores were very similar to Wells’ (the selectee) in all categories other than self-development, where Harris received 1.93 points compared to Wells’ 8.36. App. 1758, 1762. 20 she didn’t ask that many questions. There wasn’t interest.” App. 1341, Harris (July 8, 1985).24 The district court ignored this prima facie showing, focus ing on other evidence that Harris articulated in support of her claim, such as her belief that blacks were not adequately represented in the office, and noting her failure to file a grievance on this promotion. 679 F. Supp. at 1350-51. These find ings do not vitiate Harris’ prima facie showing; they simply represented a rejection of Harris’ evidence of pretext.25 3. MPA 210-81 (GS-5 Trainee for GS-7 Management Assistant Position) Harris was rated “best qualified,” was rejected by a panel of two white selecting officials, and the selectee was white. App. 1770, 1781-84; App. 1431-33, Harris (July 9, 1985).26 The district court again made no finding that negated these elements of a prima facie case. Instead, it simply rejected Harris’ testimony that she believed the length of her interview was evidence of discrimination, and focused on the selectee’s supposedly superior qualifications. 679 F. Supp. at 1351-52. Harris had no burden, however, to prove that she was as or more qualified than the selectee. See Patterson, 109 S. Ct. at 2378. 4. MPA 196-82 (GS-5 Trainee for GS-7 Management Assistant Position) and MPA 5-83 (Management Assistant Position, GS-5) In both of these claims Harris had met all of the qualifica tion requirements, but was not rated “best qualified” and 24 Harris had experienced a similar interview in 1981, complained, and was awarded the promotion after an EEO investigation noted a short interview. See supra p. 17. ” The court pointed to Harris’ failure personally to investigate facts relating to the claims such as talking to other interviewees. 679 F. Supp. at 1351. She properly relied on her attorneys to do so, and the evidence shows that they adequately investigated the claim. " Harris’ low total score, 63.61, again derived from the self-development category, in which she received 1.93 compared to the selectee Wells’ 8.43. Harris had a higher performance evaluation (10 compared to Wells’ 9.9); and there were small differences in experience (Harris’ 43.68 compared to Wells’ 44.8) and awards (Harris’ 8 compared to Wells’ 10). App. 1781, 1785. 21 therefore was not referred for an interview. In both claims, the selectees were white. App. 1573-80; App. 1438-40, Harris (July 9, 1985); App. 1542, 1545-46.27 Even if Harris was not “best qualified” under the Army’s in ternal classification system, she was still qualified as a matter of law under McDonnell Douglas. To raise an inference of discrimination, a plaintiff need only show she has met the minimum qualifications for the promotion position, and is not required to prove her qualifications relative to the other ap plicants. 411 U.S. at 802 (Court did not consider or compare the other applicants’ or selectees’ performance or experience); Furnco Constr. Corp. v. Waters, 438 U.S. 567, 570-76 (1978) (plaintiff satisfied burden of establishing a prima facie case, where the Court found that the plaintiff was qualified, but not highly qualified).28 This principle has been applied to military promotion prog rams similar to the Army’s. In Robinson v. Lehman, 771 F.2d 772 (3d Cir. 1985), the employer’s promotion system had rated the plaintiff, a naval civilian employee, “qualified” and “highly qualified,” but a maximum referral rule barred the plaintiffs referral. The court held that the plaintiff satisfied the quali fication prong of McDonnell Douglas. Id. at 777 & n.13; see Grier v. Secretary of the Navy, 677 F. Supp. 362, 363 (E.D. Pa. 1987). Thus, the district court committed legal error in concluding that these claims were frivolous simply because Harris was not referred. 679 F. Supp. at 1355-57. Moreover, instead of examining 27 Harris should have been rated “best qualified” for MPAs 5-83 and 196-82, as she had for the same positions one year earlier. See App. 1751, 1770. One year later, after Harris had gained additional experience (and after she raised complaints of racial discrimination), she was suddenly no longer “best qualified.” “ See Mitchell v. Baldrige, 759 F.2d 80, 85, 89 (D.C. Cir. 1985); Foster v. Ar eata Assocs., Inc., 772 F.2d 1453, 1460 (9th Cir. 1985), cert, denied, 475 U.S. 1048 (1986); Hawkins v. Anheuser-Busch, Inc., 697 F.2d 810, 813 (8th Cir. 1983); Burrus v. United Tel. Co., 683 F.2d 339, 342-43 (10th Cir.), cert, denied, 459 U.S. 1071 (1982); Lynn v. Regents of Univ. of Cal., 656 F.2d 1337, 1344 n.18 (9th Cir. 1981), cert, denied, 459 U.S. 823 (1982). 22 the elements of the prim a facie case, the court looked at Har ris’ personal investigation of her claim, such as her failure to examine the selectee’s qualifications. Id. at 1353-56. The court never explained, however, why a party cannot rely on her at torney to make such an investigation, or why she should in vestigate a proposition that she has no burden to prove and that does not even come in issue until the defendant submits evidence as part of its rebuttal. The court’s analysis also reflects a serious misunderstanding of Title VII law: it erroneously believed that a discrimination claim must be frivolous if a white is rejected for promotion at the same time a black is rejected. Id. at 1356. If this were the standard, virtually no Title VII plaintiff could succeed. C. Harris Could Establish a Prima Facie Case on Her Job Classification Claim Harris performed substantially the same job as a white man and possessed almost identical work experience, yet was paid less. She thus could establish a prima facie case of improper job classification. The lower court articulated the governing standard for establishing a discriminatory job classification claim: “plaintiff must prove she is (1) a member of a protected class and (2) paid less than a member of a different race for work requiring substantially the same responsibilities.” 679 F. Supp. at 1357 (citation omitted). Courts have evaluated the second factor by examining the nature of the employee’s actual duties. See Epstein v. Secretary, United States Dep’t of Treasury, 739 F.2d 274, 277 (7th Cir. 1984). Jobs are sufficiently comparable if they require substan tially the same skill, effort, responsibilities, and are performed under similar working conditions. See Beall v. Curtis, 603 F. Supp. 1563, 1577, 1581 (M.D. Ga.), aff’d mem., 778 F.2d 791 (11th Cir. 1985). Although Harris was classified a GS-4, a lower grade with lower compensation than a white man, Eldridge, a GS-5, they performed essentially the same job. App. 1452-54, Harris (July 9, 1985). They assisted each other in their work and neither individual served in a supervisory capacity. App. 1453-56, Harris (July 9, 1985). 23 The court below essentially conceded that Harris had made out a prima facie case: “Standing alone, these facts might sup port a prima facie case of unequal job classification and pay under Title VII . . . ” 679 F. Supp. at 1357. It further found, however, that the positions had different job descriptions and Eldridge had more experience than Harris. Id. at 1357-58. It was legally erroneous to conclude that Harris could not have stated a prima facie claim based on these two grounds. First, to prove a prima facie case, the plaintiff need only show that the work actually performed was the same; not that the job titles were the same. See, e.g., Epstein, 739 F.2d at 277. Substan tively, Harris and Eldridge performed the same job, and the dif ferences in job descriptions were inconsequential.29 Moreover, the job descriptions did not accurately reflect Harris’ and Eldridge’s working relationship. App. 1452-54, Harris (July 9, 1985). Second, the court erred as a matter of law in requiring Har ris to prove she was more experienced than Eldridge. Eldridge’s assertedly greater qualifications was a defense, not an element of a prim a facie case See Plemer v. Parsons Gilbane, 713 F.2d 1127, 1137 (5th Cir. 1983). Indeed, the court’s own language shows that these points go only to rebuttal. See 679 F. Supp. at 1357. In any event, this defense is insubstantial. In 1980, Eldridge had worked for the civil service for 14 or 15 years, Har ris had been an Army employee for 12 years. App. 1469-70 (Eldridge Dep.), 1295-96, Harris (March 27, 1985). There was, moreover, no finding that this difference in experience had any effect on whether the two were actually performing the same duties. Harris’ claim of improper job classification thus could squarely establish a prima facie case. 29 Indeed, after Harris’ and Eldridge’s supervisor (Whitlock) left the Army, Harris was assigned Whitlock’s duties, but retained her former responsibilities, job description and salary. When Harris asked her commanding officer, Maj. Marshall, about this situation he told her that Whitlock believed that Harris was the only employee who knew and was capable of performing Whitlock’s duties. One explanation for Harris’ and Eldridge’s different descriptions and grades had been that Eldridge was supposed to perform Whitlock’s job in Whitlock’s absence. However, upon Whitlock’s departure, Harris (rather than Eldridge) was required to perform Whitlock’s job. App. 1651-52, 1655-56. 24 D. Harris Could Establish a Prima Facie Case of Discriminatory Denial of Training During 1982 Harris was an EEO counselor. She was supposed to attend supervisor school, the only facet of EEO training she lacked. Harris repeatedly applied for this training and, although she was qualified, the training was always denied. App. 1402-03, Harris (July 8, 1985); App. 1447-49, Harris (July 9, 1985). Under McDonnell Douglas, a prima facie case of discrim inatory denial of training requires proof that the plaintiff: belonged to a racial minority; sought and was qualified for train ing which her employer offered to others; was rejected; and after rejection, training remained available and others received it. Smith v. WGBH-TV, 26 Empl. Prac. Dec. (CCH) 1 31,891 (D. Mass. May 14, 1981).30 Harris could have met these elements: she applied, was qualified, and was summarily denied training that was offered to others. The district court concluded that the training claim was frivolous because other black employees did receive training. 679 F. Supp. at 1359-60. This was legally erroneous. A prima facie discrimination claim does not require proof that only whites received the benefit sought.31 There is also other evidence of discrimination. Harris had suc cessfully pursued a grievance for a nearly simultaneous in terference with her EEO duties. In 1981, Major Marshall had * The district court incorrectly applied a test applicable to a claim of inade quate training. 679 F. Supp. at 1358-59; see Long v. Ford Motor Co., 496 F.2d 500, 502 (6th Cir. 1974); Seymore v. Readers Digest Ass’n, 493 F. Supp. 257, 260 (S.D.N.Y. 1980); Taylor v. Safeway Stores, Inc., 365 F. Supp. 468, 472 (D. Colo. 1973), a ff’d in part ir rev’d in part, 524 F.2d 263 (10th Cir. 1975). 31 See Walker v. St. Anthony’s Med. Center, 881 F.2d 554, 558 (8th Cir. 1989); De Lesstine v. Fort Wayne State Hasp., 682 F.2d 130 (7th Cir.), cert, denied, 459 U.S. 1017 (1982); Pitre v. Western Elec. Co., 843 F.2d 1262 (10th Cir. 1988); Peters v. Lieuallen, 693 F.2d 966 (9th Cir. 1982); see also Connecticut v. Teal, 457 U.S. 440, 455 (1982) (employer has no license to discriminate against some employees on the basis of race merely because he favorably treats other members of the race). 25 requested the removal of Harris’ EEO duties. App. 1636-43, 1648, 1655; App. 1456-61, Harris (July 9, 1985). Harris’ direct supervisors had not objected to her continued service nor pro posed the removal to Marshall. App. 1637-43, 1655; App. 1299, 1308-09, Harris (March 27, 1985). She challenged the propos ed action, alleging that Marshall was retaliating for her job classification complaint. An Army investigator found that: Mar shall’s business purpose explanation for requesting the removal of Harris’ duties “had no merit whatsoever”; Marshall had a distorted view of the EEO program; Harris’ superior officers, Marshall and Jenkins, admittedly regarded Harris’ use of the EEO complaint system and the assertion of her rights as the acts of a “troublemaker”; and Harris’ complaint of reprisal was supported by the evidence. App. 1636-43. As a result, Harris was reappointed as an EEO counselor and Marshall was required to attend supervisory responsibility training sessions. App. 1626-29, 1642-43; App. 1318-19, Harris (July 8, 1985). The concurrent denial of Harris’ application for EEO training in 1982 must be viewed in this same context.32 Initially, the Com mander of COMPACT had unsuccessfully attempted to relieve Harris of her EEO duties and had been chastened for his ac tions. Then, the Army denied Harris the opportunity for her re maining EEO training. This evidence simply buttresses the strength of the prima facie claim. Thus, this claim, like all of Harris’ claims, could present a prima facie case of discrimination. H. The District Court Erred in Finding That Blues Claims Were Frivolous The procedural history of Blue’s claims reveals that the district court not only erroneously characterized claims as dropped, but incorrectly expanded the scope of the Army’s motion for sanctions against Blue. In any event, none of the claims were frivolous. 32 See McDonnell Douglas, 411 U.S. at 804 (employer’s treatment of employee during term of employment relevant to determining whether non- discriminatory justification is pretextual). 26 The pretrial brief for Blue’s individual case was filed on April 3, 1984. App. 1806. It stated that Blue was seeking individual relief only with respect to MPA 273-79 and 303-79. App. 1807-08. Under 273-79, Blue claimed she had been discriminatorily denied application of a highly qualifying criteria and that the 85% Rule improperly prevented her referral. Under 303-79, Blue claimed she had been denied promotion because of her race, because of the 85 % R ule, and because of a low appraisal that was given in retaliation for her equal employment opportunity complaints. App. 1807-08. Three days later, the Army filed a motion for sanctions charg ing that Blue had “dropped” four promotion claims: 278-79, 442-80 (neither of which was even included in the pretrial order),33 285-78, and 67-83. The Army did not contend that Blue had dropped the other promotion claims listed in the pretrial order, which it obviously believed were not dropped or had been properly deferred until Phase II.34 App. 1045-58. Its motion as to three of the four dropped promotion claims was completely unfounded. All three had been disposed of with court permission: 278-79 and 442-80 because of conflicts with 33 The declaration annexed to the Army’s April 1984 motion for sanctions er roneously asserted that Blue dropped her claims to MPA’s 278-79 and 440-80 due to conflict (App. 1055-58) when, in fact, Blue dropped MPA 287-79 and 442-80 for reasons of conflict. App. 1200-09. 33 In the pretrial order, the Army listed only two “triable” issues for Blue: whether she ever received unfair performance appraisals because of her race; and whether she was ever disciplined on account of her race. App. 122. Addi tionally, the Army stated by way of defenses that Blue was disruptive and did not abide by the rules, and that she was properly appraised and properly disciplined. App. 147. There was no mention of Blue’s promotions in the Army’s statements of issues and defenses. The Army also stated in the order its understanding that the promotion process at Fort Bragg was not an issue in the determinations of the cases of the named plaintiffs, and that the process would be an issue only after the conclusion of the individual cases. App. 137; see App. 1804. 27 other intervenors, and 285-78 had been ruled time barred. App. 1200-09; 679 F. Supp. at 1322-23 n.187.35 On May 21, Blue’s counsel responded, pointing out that MPA 285-78 was time barred by court order, but that it would still be presented as background to MPA 303-79 (both involved a dispute about the same HQC). App. 1071-72. With respect to MPA 67-83, counsel stated Blue intended to prove this claim in Phase II. The response also pointed out that the Army’s motion was untimely because Blue intended to present evidence on other promotion, training and other experiences in Phase II, even though she did not seek individual relief for them in Phase I. App. 1073-74. On August 2, Blue’s counsel again clarified which claims had been asserted only for background purposes, to be proved in Phase II: discrimination in rating and ranking (for MPA 285-78); discrimination in referrals and selection (for MPAs 285-78, 274-79, 277-79, and 440-80); discriminatory discipline; and retaliation. App. 712-28. This submission also stated that Blue’s promotion experiences in 1979 would be used as background evidence for the challenge to the 85% Rule. App. 719-20. This history shows that Blue did not improperly drop any claims. Some claims were eliminated because of conflicts or were time-barred. The remainder were intended to be background claims to be put into evidence in Phase II. Until after Blue’s case in-chief was finished her counsel reasonably believed that Phase II was mandatory. The court then decided that it was not and Phase II was never held. Thus, no sanctions are appropriate for these background events. The lower court’s conclusions concerning MPAs 274-79, 277-79 and 440-80 are erroneous because these claims were not included in the Army’s April 1984 motion. The first time the Army 35 The Army also contended that Blue had dropped a 1979 quality step claim, her training and detailing claim, and her discipline claim. The claims for quali ty step increase and training/detailing are not in issue on this appeal because the lower court found that the Army presented no evidence that these claims were frivolous. 679 F. Supp. at 1323; see infra pp. 43-45 (discussing discipline claim). 28 mentioned them was in an affidavit filed in September 1985, after the close of evidence in the sanctions hearings.36 In any event, the court’s conclusions about frivolity are wrong. Once the claims are properly analyzed, it is easy to see that they were not frivolous. Before analyzing the individual claims, however, it is helpful to put Blue’s employment at Fort Bragg in context. A. Blue’s Employment Record Blue was initially hired on July 30, 1973 as a Nursing Assist ant, GS-4, in the maternity ward at Womack Army Hospital. App. 2660. For two years, she worked in the maternity ward’s labor and delivery room, where she became familiar with operating room procedures and protocol. She then transferred to DENTAC and took a voluntary downgrade to Dental Assis tant, GS-3. App. 2662. On September 19, 1976, Blue was promoted to Dental Assis tant, GS-4, at Dental Clinic No. 1. App. 2663. In December, Blue was assigned to Dental Clinic No. 6 (“DC-6”). From May 1976 through October 1978, she worked primarily in the Oral Surgery Department of DC-6, and then she rotated through the various departments. App. 1976, Blue (April 19, 1984). Her Of ficial Personnel File (“OPF”) showed that from October 1978 through March 1979, she was moved from oral surgery and worked in restorative dentistry, and then performed chairside assistance to dentists (for varying periods dependent on the policy of the current Officer in Charge), in all phases of general den tistry: restorative; oral surgery, prosthetic, endodontic, periodon tic, and prosthetics, fixed and removable. App. 1977-79, Blue (April 19, 1984); App. 2647-55. 36 App. 1928. The court’s observation that plaintiffs “cannot now be heard to complain about defendant’s supplemental request” should be rejected. 679 F. Supp. at 1367 n.256. Plaintiffs filed a brief in response to the affidavit arguing that it was untimely and unfair because the claims had not previously been raised in the sanctions proceedings. App. 1930-31, 1954-55. 29 Blue supplemented her work skills by participating in a number of training programs. See App. 2633-45. She consistently received “satisfactory” annual performance appraisals, and when the rating system was changed in 1982, Blue received the equivalent “fully successful” rating. App. 2928-31, 2935-36, 2941-44, 2946-47, 2954, 2966-67, 2972-73. She also received a number of letters of appreciation and commendation for her job performance at Fort Bragg. App. 2681-86.37 B. The Tried Claims Presented Pima Facie Cases of Discrimination 1. MPA 273-79 (General Dentistry Specialty, GS-5) a. Disparate Treatment Blue applied for this position, met the eligibility requirements, and was rated qualified. App. 3234. The rating and ranking panel, however, erroneously determined that Blue did not satisfy HQC #2. In addition, the white woman selected for the pro motion (Brocki) herself lacked HQC §2. Blue could prove that she was discriminatorily denied HQC #2 and that she was suf ficiently qualified for this promotion. She thus presented a prima facie case under McDonnell Douglas. HQC §2 required: “ Knowledge of the equipment material used in oral surgery, pedodontic, periodontic, endodontic, pros- thodontic, oral medicine and pathology at specialty level.” App. 3233. Blue had gained experience in all these areas from rotating for over one and one-half years in DC-6’s various departments 37 One letter of commendation is of particular interest. It is a Feb. 6, 1979 letter from James T. Lamb, DDS, assigned to DC-6 for the prior 2-1/2 years: Ms. Blue goes out of her way to find work. If a doctor is without an assistant, Ms. Blue will shun her break in order to aid him. In addition her personality is a tremendous asset in easing the tension . . . in dental treatment. Ms. Blue [is] a dental auxiliary of the highest calibre, deserving of the maximum grade that she can obtain. App. 2681, 2843. 30 and as a nursing assistant at St. Lukes and Womack Hospitals.38 Blue’s OFF also documented that she had gained the requisite experience to satisfy HQ C #2. Amendments to her personal qualifications statements outlined her duties as a dental assist ant in oral surgery, endodontics and prosthodontics, and a Cer tificate of Experience documented her work in endodontics, or thodontics, periodontics, and prosthodontics. App. 2832-41. Blue was nevertheless denied credit for her relevant work experience. Blue’s application for MPA 273-79 was improperly evaluated in other ways. Her score from the rating and ranking panel in correctly reflected her letters of appreciation. App. 1987-88, Blue (April 19, 1984).39 Compare App. 3243 with App. 2681-86.'“ 38 App. 1983-86, Blue (April 19, 1984); App. 2650-55. Although the Army asserted that there were no “specialists” at DC-6 and that no oral surgery was performed there, its own witnesses testified that they believed that they con ducted oral surgery at DC-6. App. 2276-77, 2286, Jones (April 25, 1984). The Army’s counsel later led them into other characterizations. E.g., App. 2240, 2243, Jones (April 25, 1984). Moreover, DC-6 officials had given Blue and other employees reason to believe that training in oral surgery in DC-6 would provide the assistants with experience necessary to qualify for GS-5 assistant position in oral surgery. App. 2487-89, Cave (Aug. 30, 1984). Blue Brocki Experience 62.25 56.25 Award 4.00 4.00 Appraisal 5.66 10.00 Self Dvlpt. .51 1.72 Total 72.42 71.97 App. 3243, 3247. Apparently, all applicants for this MPA were rated by the panel even though most were not rated highly qualified. This was at variance with the usual procedure where only highly qualified applicants were rated. See supra p. 5. 40 She received no credit for Dr. Lamb’s Feb. 1979 Letter, see supra n.37, nor for a May 14, 1976 Letter of Commendation from Silar Crase, Director of DC-1: “personal congratulations upon your outstanding performance of duties which reflects the highest credit upon you as an Oral Surgery Assistant.” App. 2685. The lower court excused the omission of Crase’s letter because it found the letter “unofficial” and “explained” the exclusion by stating that Crase’s letter “refers to the same achievement evidenced by another letter of com mendation” which Blue had received, that same day, from her direct super visor. 679 F. Supp. at 1249 & n.72. 31 Other applicants were given credit for experience outside of Fort Bragg. See, e.g., App. 3251-56, App. 1995-96, Blue (April 19, 1984). Blue received no credit for her experience at Womack or St. Luke’s Hospitals, App. 3244; see App. 1988, Blue (April 19, 1984), yet still received a higher score for experience than the selectee. Furthermore, Blue’s overall score, even including the discriminatory 1979 appraisal, was still higher than three of the people referred for the interview, including the selectee. App. 3245-48, 3257-60, 3261-63. The selecting official, Col. Morgan, claimed that he believed Brocki was more qualified than Blue. Morgan admitted, however, that he had never reviewed Blue’s OPF, nor the OPF of any of the other applicants, and knew nothing about Blue’s knowledge, education, training or experience.41 In fact, Morgan had never worked with or observed the performance of the selectee. An officer who assisted Morgan in interviewing the ap plicants also failed to read any of the applicants’ personnel files. App. 2447, Jacobson (Aug. 29, 1984). The Army itself, moreover, had found the selectee, Brocki, in essence lacked HQC §2. This MPA required the employee to assist the dentist in the specialty areas of dentistry including periodon tics. App. 3233. Nearly simultaneously with Brocki’s selection for this position, the Army found Brocki unqualified for a dif ferent promotion, MPA 274-79, because she lacked “knowledge of direct chairside assisting [sic] in periodontal procedures” in a non-specialty capacity. App. 3189, 3202-03. This contradic tion was never explained. Merely because the court chose to credit defendant’s evidence with respect to Blue’s HQC §2 qualification, it determined that 41 App. 2379-83, 2387, Morgan (Aug. 29,1984). Morgan claimed that he could not recall any meetings with Blue App. 2362-63, Morgan (Aug. 29, 1984). However, Blue testified that she had met with Morgan in 1979 and 1980 on three occasions, twice to discuss discriminatory practices at DC-6. App. 2507-10, Blue (Sept. 4, 1984). Blue met with Morgan in December 1979 to discuss whether it was necessary to work with a specialist to be qualified for the GS-5 promotions, because if so Blue wanted to know if the dental assistants in DC-6 could rotate into other clinics to get the requisite experience. App. 2507-10, Blue (Sept. 4, 1984). 32 Blue failed to present a prima facie case. See 679 F. Supp. at 1288. The court’s credibility determination did not vitiate the prima facie case that Blue presented.42 b. Disparate Impact Blue also established a prim a facie claim under MPA 273-79 using a disparate impact theory: the 85 % Rule prevented her referral. Looking at all the evidence (rather than just that presented in Blue’s trial),43 the disparate impact claims were not frivolous.44 The Army’s abandonment of the 85 % and Ten Refer ral Rules after the commencement of these actions is compel ling proof. William Dickerson, Chief of Fort Bragg’s Recruitment and Placement Division (called by plaintiffs as an adverse witness) testified that the Army had determined that both the 85 % and Ten Referral Rules may have adversely impacted minorities. App. 2154-59, 2163-64, 2167, 2176, 2187, Dickerson (April 24, 1984); 42 The Army introduced testimony from Fort Bragg employees and military personnel in an effort to rebut Blue’s case. These witnesses (or their superiors) were not without an interest in the litigation. 43 Complete statistical evidence on the 85 % Rule was not presented in Blue’s case-in-chief because plaintiffs anticipated presenting such evidence in Phase II of the proceeding. See App. 560-65, 581-90. The district court thus granted a Rule 41(b) motion as to 85 % Rule claims at the close of Blue’s case-in-chief, but expressly provided that plaintiffs were at liberty to move for reconsidera tion upon a showing of further evidence. App. 695-96. After this ruling, on June 1, plaintiffs filed a list of witnesses affected by the 85 % Rule, listing Blue’s promotion claims — 274-79, 277-79, 303-79 and 440-80 — that were intend ed to be presented in Phase II. App. 718-19; see App. 1819, 1822. Subsequent ly, on July 5 and August 28, the court filed additional orders changing the definition of proof required in Phase I of the litigation and ruling for the first time that Phase II was optional. App. 702-07, 1828; see App. 708-11; cf. App. 2230 (referring to only Phase III as “optional”). Accordingly, in the very next trial (Ballew), plaintiffs’ counsel presented further statistical evidence con cerning the 85% Rule See App. 1865. 44 To show disparate impact, the plaintiff has the initial burden of proving that the challenged employment practice selects or designates employees in a racial pattern significantly different from the general pool of applicants. Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975). The burden then shifts to the employer to articulate the job relatedness of the criteria. Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248 (1981). 33 App. 2593, 2595-96, 2601, 2615-16 (Dickerson Dep.). He con ceded that there was no business necessity for the rules, and that the Army eliminated them “ in the interest of referring more minorities and women.”45 CPO official Horne (contrary to the court’s finding) also admitted that the defendants had recognized that the 85 % Rule may have served as a barrier to minority ad vancement, and so they were “taking action to correct it.”46 During the Ballew trial, plaintiffs’ statistical expert (Dr. Par- row) demonstrated a discriminatory impact under EEOC guidelines. App. 1866. Parrow showed that blacks were referred at a rate less than 80% of white applicants: 82.56% (white) versus 58.14% (black). App. 1867. Four-fifths of the white refer ral rate was 66%, which under the “four-fifths rule” illustrated disparate impact. App. 1867.47 The district court’s post hoc determination of frivolousness is inconsistent with its conduct during the Ballew trial. The Army filed a Rule 41 motion to dismiss the 85 % Rule claim at the close of Ballew’s case. Both sides submitted substantial briefs. 45 App. 2155-56, 2165, Dickerson (April 24, 1984). Dickerson, who was evasive and hostile on examination by plaintiffs’ counsel (679 F. Supp. at 1276), later purported to retract this statement on examination by the Army with the “ex planation” that he had not understood what the term “business necessity” meant. App. 2180. That the Army eliminated the rule shows its lack of business necessity, whether or not Dickerson changed his testimony. 44 App. 2590-91 (Horne Dep.); see 679 F. Supp. at 1276. During Blue’s case, the court had found two critical pieces of plaintiffs evidence inadmissible: a racial breakdown of employees, and the deposition of William Dickerson. The court later reversed the second ruling. 679 F. Supp. at 1275-76 n.113. The first exhibit provided a basis for non-expert analysis showing the discriminator)’ effect of the 85 % Rule. App. 2200-01, 2222-24. Thus, the court erred in stating that plaintiffs failed to make “even the simplest of statistical presentations” during Blue’s trial. 679 F. Supp. at 1298 n.149. 47 An inference of adverse impact arises “[i]f the selection rate for a protected class is less than 80 % of the selection rate for the group selected at the highest rate.” Chisholm v. United States Postal Serv., 665 F.2d 482, 495 n.22 (4th Cir. 1981); see also Connecticut v. Teal, 457 U.S. 440, 443 n.4 (1982); NAACP v. City of Mansfield, 866 F.2d 162 (6th Cir. 1989); Bernard v. Gulf Oil Corp., 841 F.2d 547 (5th Cir. 1988). 34 App. 1831, 1865. Nearly two months later, the court granted the Army’s motion, noting that both parties had submitted “ex tensive and excellent briefs,” and granting plaintiffs leave to move to reconsider the ruling if further evidence on the 85 % Rule were presented later. App. 1890. No memorandum opinion was issued and the court did not suggest then that the 85% Rule claim was frivolous. Reflecting the legal uncertainty surrounding this issue, on December 18 the court requested supplemental briefs on the mo tion in light of this Court’s ruling in Bazemore v. Friday, 751 F.2d 662 (4th Cir. 1984), aff’d in part ir vacated in part, 478 U.S. 385 (1986), on remand, 848 F.2d 476 (4th Cir. 1988). App. 1892. Roth sides submitted briefs reflecting substantial disagree ment about the import of Bazemore. App. 1894, 1899. One month later the court decided that the 85 % Rule claim should be dismissed. No memorandum opinion was issued. App. 1922. The Bazemore decisions show that the district court here took too cramped a view of plaintiffs’ statistical evidence. In Baze more, a split panel of this Court affirmed a finding that black employees failed to establish prima facie cases of disparate treat ment and that plaintiffs’ statistical proof failed to show a prima facie case of disparate impact. The Supreme Court reversed and remanded, stating “ [t]he court’s [Fourth Circuit] view of the evidentiary value of the regression analysis was plainly incor rect.” 478 U.S. at 400. The Court noted that statistics are not to be viewed in a vacuum: “A plaintiff in a Title VII suit need not prove discrimination with scientific certainty . . . . Whether, in fact, [statistics] . . . carry the plaintiffs’ ultimate burden will depend in a given case on the factual context of each case in light of all the evidence presented by both the plaintiff and the defendant.” Id. (citations omitted) (emphasis in original). The district court’s depiction of Parrow’s statistical proof failed to take into consideration the other facets of plaintiffs proof of discrimination, which included the Army’s post-complaint abandonment of the 85 % and Ten Referral Rules together with the testimony of Dickerson and Horne that these employment practices may have adversely impacted minorities. 35 Plaintiffs’ case was further bolstered by the Army’s own statistics. The Army’s Multi-Year Affirmative Action Program Plan (“AAP”) and Federal Equal Opportunity Recruitment Program (“FEO RP”) were based on statistical determinations that minority employees were underrepresented at Fort Bragg. App. 73-74.4,5 In total, the evidence presented a prima facie claim. 2. MPA 303-79 (Dental Assistant, Oral Surgery, GS-5) Blue was rated best qualified but not referred for an inter view, because she did not receive a score within 85 % of the top score received by an applicant. The selectee was white. App. 1998-2003, Blue (April 19, 1984); App. 2703, 3036-39. This established a prima facie case under McDonnell Douglas. See supra p. 22. There is additional evidence of discrimination. Army officials made repeated “errors” when evaluating Blue’s application: Blue received five letters of commendation, but her application was credited with only four. App. 2681-86, 3038; App. 2004, Blue (April 19, 1984). Other applicants received credit for all of their letters of commendation. See, e.g., App. 3059 (appli cant received five or six letters of commendation and her ap plication was credited with six points). Blue received no credit for her experience as a nursing assistant at Womack or at St. Luke’s Hospital. App. 3039; App. 2004, Blue (April 19, 1984). At least one other applicant, however, received credit for non dental experience both at and outside Fort Bragg. See, e.g., App. 3049. In a prior promotion, MPA 285-78, Blue had received credit for her non-dental experience at Womack. See App. 2991-92. 48 Defendants Multi-Year AAP for Fiscal Years 1982-1986 noted underrepresen tation of minority employees in several areas including: Professional Entry Level (GS5-8) (black women); Clerical Entry Level (GS1-4) (black men); Ad ministrative Entry Level (GS5-8) (black men and women); Technical Entry Level (GS3-5) (black men); Clerical Mid-Level (GS5-6); Technical Mid-Level (GS6-7) (black men and women). App. 73, 75 36 As had often occurred when Blue applied for a promotion, her relevant experience was initially ignored, and she was not credited with two of the highly qualifying criterion. In this MPA, Blue was found to lack HQC #3: “knowledge of operating room protocol and ability to function as an operating room scrub technician.” App. 2712. Blue complained to Jean Byrd, the staffing specialist, that she had operating room experience and that such experience was reflected in her official personnel file.49 The lower court found the claim was frivolous because Blue failed to prove that she was the best qualified applicant. 679 F. Supp. at 1291-92. As Patterson shows, she was under no such burden. The lower court erred in finding this claim to be frivolous. Blue also established a prima facie case for MPA 303-79 under a discriminatory appraisal theory. On December 5, 1979, after complaints to the union in 1978 and subsequent grievances in May 1979, Blue received an aberrational appraisal by Sgt. Vin cent, which was reviewed by Col. Paquette. App. 2669-71, 2941-43. Blue received no A’s, two B ’s, eleven C ’s, five D ’s and two N’s and an overall rating of “good all around,” the third lowest rating. Blue signed the appraisal under protest. App. 2671. This appraisal earned Blue’s application for MPA 303-79 the low score of 5.66 (out of 10) for the appraisal category, and prevented Blue from being referred for an interview. See App. * App- 2014-15, Blue (April 19, 1984); see App. 2650. This was the second time in less than one year that Byrd had improperly failed to credit Blue’s applica tion with work experience In fact, HQC #3 was the identical criterion that Blue had been improperly denied under MPA 285-78. App. 2016-17, Blue (April 19, 1984); App. 2984. Under MPA 285-78, Blue was initially found to lack HQC #3. App. 2989-90. After she complained, Lt. Col. Beasley, an oral surgeon and OIC at Fort Bragg, reviewed Blue’s personnel file and corrected Byrd’s error. App. 2993-94. Beasley wrote a memorandum outlining these events, which was placed in Blue’s OPF. Id. Byrd acknowledged Beasley’s memoran dum and her error in a corresponding memorandum. App. 2995. The rating and ranking panel for MPA 285-78 reconvened, Blue was re-rated, found best qualified, referred and interviewed for the position, for which a white woman was selected. App. 2996-97. 37 2709. She missed the cut-off by 1.5 points on a scale of 100. All but one of the “best qualified” applicants for MPA 303-79 re ceived a 10 for appraisals (the other was a 9.36). App. 2713, 2718, 2720, 2722, 2783, 2785. Blue established a prim a facie case in connection with her discriminatorily appraisal claim.50 She was rated by officials who lacked knowledge of her performance, who had been put on advance notice about “certain” employees at Fort Bragg, and who never again served at Fort Bragg in supervisory capacities; she received a very low supervisory' appraisal, considerably lower than prior appraisals, and lower than a comparable white employee who had an erratic attendance record; and this 1979 appraisal prevented Blue from effectively competing for MPA 303-79, as well as for three other applications for promotions in 1979 and 1980. See infra pp. 41-43. The lower court’s refusal to infer that Blue was appraised dif ferently than non-minority employees was contrary to the evidence, which reflected a dramatic change in Blue’s marks from 1978 to 1979. 679 F. Supp. at 1293. Vincent and Paquette reviewed Blue’s performance in December 1979 although they had only supervised Blue for a short period of time. App. 2320, Jones (April 25, 1984). After Blue filed a complaint about the 1979 review, as well as other incidents where she had been disciplined by Vincent, Vincent and Paquette were transferred from DC-6 and neither served in any further supervisory posi tions at Fort Bragg. App. 2511, Blue (Sept. 4,1984); App. 2582, Morgan (Sept. 4, 1984). There was also evidence that Blue was reviewed differently from other dental assistants. Paquette called an informal “ “Title VII is violated when a supervisor, acting in his official capacity, deliberately places an inaccurate, discriminatory performance evaluation in to an employee’s personnel file. . . . If the discriminatorily low evaluation reduces plaintiffs overall point rating and prejudices her with respect to an opportunity for promotion, it fatally and invidiously infects the promotion process at issue.” 679 F. Supp. at 1292 (citations omitted). 38 panel of the DC-6 dentists to contribute to Blue’s appraisal. This panel received no instructions on how to appraise her performance. In fact, Vincent testified that they didn’t assess Blue’s performance based on objective criteria — instead it was a matter of “personal opinion.” App. 2472-77, Vincent (Aug. 29,1984). There was no evidence that any other applicant was so treated. In addition, Sgt. Wayne Jones, a frequent NCOIC of DC-6 and the assistant NCO IC at the time of the appraisal, disagreed with the review. He had informed the EEO counselor who was investigating Blue’s complaint in connection with this appraisal that he disagreed with and would have rated Blue higher (very possibly would have given her A’s) in three specific areas, including accepting responsibility for assigned work. App. 2321-23, Jones (April 25, 1984); App. 2325-28, Jones (Aug. 27, 1984).51 A white dental assistant, Ann Randall, received a much higher review despite her record of sporadic attendance at DC-6. Dur ing the 1979 appraisal period, Randall had missed forty-five of sixty days, and Randall acknowledged that she missed approx imately fifty days in one year. App. 2150, Ballew (April 23, 1984); S1 The court noted that Jones testified at trial that he would have also rated Blue lower in certain criteria. 679 F. Supp. at 1268. In an appraisal or “justifica tion” that Jones provided for Blue’s application for MPA 67-83, however, he wrote: Ms. Blue is very knowledgeable of the materials and instruments used in surgery and surgical procedures. Ms. Blue has worked in surgery during 1977 through 1978 as the permanent surgery assis tant for DC #6. During this time Ms. Blue received letters of com mendation and letters of appreciation for her surgery skills and knowledge which enabled the doctor to perform all surgery pro cedures with ease. Ms. Blue’s performance as a surgery assistant is truly commendable and I would recommend her for any job as a surgery assistant. App. 3340 (emphasis added). 39 App. 2439, Randall (Aug. 29, 1984). The manner in which Blue was reviewed and its harmful consequences thus presented a prima facie case of discriminatory appraisal.52 C. Blue Could Present a Prima Facie Case on Her Untried Claims Once the claims that were withdrawn with court permission and claims that the lower court found were not frivolous are eliminated, the following untried claims remain: MPA 67-83; the effect of the 1979 discriminatory appraisal on MPAs 440-80, 274-79, and 277-79; and discriminatory discipline. Because these background claims were intended to be proved in Phase II, Blue did not have the anticipated opportunity to prove them. Nor were sanctions proper as to 440-80, 274-79 or 277-79 because the Army failed to move for them. Nevertheless, the documents submitted with the pretrial order and evidence on the tried claims establishes that these claims presented prim a facie cases of discrimination. 1. MPA 67-83 (Dental Assistant, Oral Surgery, GS-5) Blue applied, was qualified and “best qualified,” and a white employee was selected. App. 3331, 3346, 3352. The lower court itself recognized that Blue proved these elements, which establish a prima facie case. 679 F. Supp. at 1322 n.184. There is other evidence of discrimination. Blue again had dif ficulty in receiving proper credit for her experience. Originally the rating and ranking panel determined that Blue did not meet one of the criteria, KSA #3 (under a new rating system the qualification criteria were termed KSA, instead of HQC). KSA §3 required: “ability to schedule patients for treatment to in clude maintaining patient records and daily treatment logs.” 52 In addition, Blue could prove a prima facie case for MPA 303-79 under a disparate impact theory because the 85% Rule prevented her referral. See supra pp. 33-36. 40 App. 3321. Approximately one month later, Blue learned that the CPO had determined that there was a procedural error, her application was accepted, and she would be referred for an in terview. App. 3352. Again, Blue was not selected, and the selectee was white. App. 2584-86, Blue (April 9. 1985); App. 3331. The court held that since the rating and ranking panel had revised the evaluation of all applicants, including Blue, the audit and revision of scores presents no proof of discriminatory con duct towards Blue. 679 F. Supp. at 1321. The Army’s treatment of Blue in connection with MPA 67-83, however, was part of a continuing pattern of “error” that occurred each time Blue applied for a position. The announcement was for the same posi tion as those announced under MPAs 285-78 and 303-79, and in all three promotions the defendants’ officials determined that it was necessary to audit the rating and ranking panels and consequently revised Blue’s score. Blue’s experience applying for these prior positions provides additional evidence to buttress her prima facie showing. 2. The 1979 Discriminatory Appraisal Adversely Affected Blue’s Chances for Other Promotions The 1979 appraisal remained in Blue’s OPF and prevented her from being referred for promotion under MPAs 440-80, 274-79, and 277-79, as follows: a. MPA 440-80 (Dental Assistant, Prostho- dontic Specialty, GS-5) Blue applied, was qualified and met the highly qualifying criterion; but she was not referred for an interview.53 The low 1979 appraisal, however, prevented Blue from being within 85 % 53 Blue’s experience, as listed in her official personnel file, as well as her specific qualification statements, indisputably demonstrated that Blue possessed suf ficient experience for this position. E.g., App. 2832-41. Furthermore, Blue had worked approximately eight months with a prosthodontist at DC-6. App. 2836. 41 of the top score, best qualified and referred for an interview. The selectee was white. See App. 2802. The cut-off score for referrals for MPA 440-80 was 73.601. App. 3273, 3275-77. If Blue had received the average of the supervisory appraisals, instead of 5.66, she would have scored within the 85 % R ule. Thus, Blue could have presented a prima facie case that her 1979 appraisal affected her promotion to MPA 440-80. b. MPA 274-79 (Dental Assistant, Periodontal Specialty, GS-5) Blue applied, was qualified and highly qualified for the posi tion, but she was not selected and the selectees were white App. 3190-94. The appraisal score of 5.66 again played a significant role in preventing Blue from being considered for this promo tion. App. 3198-3200. Five of the six applicants who were within the “best qualified” category received scores of ten in the ap praisal category, the sixth received a 9.48. App. 3208, 3212, 3216, 3220, 3224, 3228. Had Blue received only the average appraisal rating of the “best qualified” applicants, she would have scored within 85 % of the highest applicant and been referred for an interview. The cut-off score for referrals was 73.17 (85% of 86). App. 3206-08. Blue, even with her 5.66 appraisal score, receiv ed a total score of 72.426. App. 3200. Therefore, the 1979 ap praisal again precluded Blue’s promotion chances. c. MPA 277-79 (Dental Assistant, Prosthodon- tic Specialty, GS-5) Blue applied, was qualified, and highly qualified. App. 3127-29, 3184. As a result of Blue’s low supervisory appraisal, however, she was not rated “best qualified,” and thus was not referred for an interview. See App. 3132-35. Two whites and one black were selected for the position.*4 App. 3184. As with the two previous MPAs, Blue’s 1979 appraisal, which provided Blue’s 54 A plaintiff can establish a prima facie case of discrimination even if black employees receive the promotion and even if she is not rated “best qualified.” See supra pp. 22, 25. 42 promotion applications with the score of 5.66, effectively prevented her from receiving this promotion.55 App. 3136-38, 3140-42, 3144-46, 3148-50, 3152-54, 3156-58, 3160-62, 3164-66, 3168-70, 3172-74, 3176-78, 3180-82. 3. Blue’s Retaliatory Discipline Claim By October 1978, Blue had received five years of good ap praisals. At that time, Blue and a co-worker, Geraldine Ballew, complained to their union about working conditions. App. 2693. Blue also filed a grievance in connection with her October 20, 1978 annual appraisal from Col. Cressler, Officer-In-Charge of DC-6. App. 2117, Blue (April 20, 1984); see App. 2946-47.56 Thereafter, a pattern of retaliatory treatment, including discipline, ensued: • On October 30, 1978, Blue was informed that she could no longer work in oral surgery because DC-6 was starting a new policy of rotating the dental assistants through the different departments. Until Cressler left DC-6, however, Blue was the only den tal assistant who was required to rotate App. 2135-38, Blue (April 23, 1984). • On October 31, 1978, Cressler, in response to Ballew’s and Blue’s union visit, announced in a staff meeting that he “would crucify anyone that ever went to the union.” 679 F. Supp. at 1251; App. 2147-49 (April 23, 1984); App. 2490, Roach (Aug. 31, 1984); App. 2693.57 5! To the extent that any of these promotions were adversely affected by the 85 % Rule, they present prima facie disparate impact claims as well. See supra pp. 33-36. “ Blue also went to the union to complain about Cressler’s statement. 679 F. Supp. at 1251. There was evidence that at this time the union sometimes represented Fort Bragg’s claimants with race discrimination complaints. See Dkt. 325 at 22; Plaintiffs Ex. 3f. ” The lower court determined that Cressler’s behavior was not discriminatory because Blue was not intimidated. 679 F. Supp. at 1251. Title VII, however, does not require proof of intimidation. 43 • On February 22, 1979, Blue was issued a proposed letter of reprimand for allegedly refusing to obey N CO IC Sgt. Ramos’ order to assist Dr. Lamb. App. 2687. (Dr. Lam b’s letter of commendation of Blue is listed at n.37). Ramos disciplined Blue even though he knew that Blue had, on her own initiative, offered the doctor assistance that the doctor had declined. App. 2511-14, Blue (Sept. 4, 1984). In March 1979, after Blue filed a grievance, the OIC downgraded Ramos’ proposed reprimand to a counseling state ment, which was entered into Blue’s employee record. App. 2697. After Blue followed up with a Step 2 Grievance on June 4, 1979, the counseling statement was expunged. App. 2692. • In December 1979, Blue received a very low super visory appraisal from N CO IC Sgt. Vincent, approv ed by OIC Col. Paquette, who had been her super visors for at most six months and who had been forewarned by other management officials that “cer tain employees” at DC-6 were troublemakers. App. 2669; App. 2462, 2481-82, Vincent (Aug. 29, 1984). Blue filed a complaint in connection with this ap praisal and in 1983 (after it had already impeded several promotion applications) it was removed from her record. App. 1994, Blue (April 19, 1984). • Blue was disciplined for tardiness and parking viola tions, App. 2119-22, Blue (April 23, 1984); and for leaving her work station to assist another patient, App. 2519-22 (Sept. 4, 1984); App. 3363. Again, after Blue filed a grievance, these entries were deleted. Com pare App. 3359 with App. 2627; see App. 3363. • Blue was disciplined for talking on the intercom in a playful manner and talking during a meeting, App. 2699-2701. The Army rescinded its discipline for the intercom incident after Blue filed a grievance. App. 2689. With respect to the meeting incident, again, more senior officials stepped in and rebuffed Blue’s 44 supervisor’s discipline attempt after Blue filed a com plaint. App. 2698.58 • DENTAC management officials had discussed Blue, were well aware of her complaints, labeled her a dif ficult employee, and consequently tainted all of Blue’s subsequent contacts with DENTAC management. App. 2440-42, Jacobson (Aug. 29, 1984); App. 2462, 2481-82, Vincent (Aug. 29, 1984). Blue was a well-regarded employee for the first five years she was at Fort Bragg. In 1978, she complained to union officials about her treatment and soon thereafter experienced a profound change in discipline and in her employment opportunities. That the lower court chose not to draw an inference of discrimina tion from these circumstances does not make these claims frivolous. Thus, Blue’s claims were neither improperly dropped nor frivolous. The district court’s analysis was completely erroneous. in. The District Court Erred as a Matter of Law in Imposing Sanctions Under Rule 11 The district court erred as a matter of law in sanctioning the attorneys under Rule JJ because the Harris and Blue claims were not frivolous. The court also erred in viewing the claims in hind sight, penalizing the attorneys for failing to foresee adverse rul ings, especially as to witness credibility. The actions of the Army and the conduct of the lower court also preclude a finding of frivolousness. M That some of Blue’s supervisors were black does not belie her claims of discrimination. See Castaneda v. Partida, 430 U.S. 482, 499 (1977). 45 Courts should impose sanctions under Rule 11 only in “exceptional circumstances,” where a claim is patently fri volous.59 In this circuit, the test of frivolousness is whether objectively the plaintiff had “a glimmer of a chance of pre vailing.”60 “ [A]ny and all doubts [about the validity of a Rule 11 certification] must be resolved in favor of the signer.” Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir. 1985). Special care must be exercised in applying these standards in civil rights cases, where plaintiffs are the chosen instruments of a national policy to eradicate prejudice E.g., Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978). Indiscriminate im position of sanctions against these plaintiffs risks discouraging use of a congressionally favored enforcement scheme.61 This Court has recognized the chilling effect of awarding attorneys’ 58 Gaiardo v. Ethyl Corp., 835 F.2d 479, 483 (3d Cir. 1987); see Oliveri v. Thompson, 803 F.2d 1265, 1275 (2d Cir. 1986) (“ [R]ule 11 is violated only when it is ‘patently clear that a claim has absolutely no chance of success.’”), cert, denied, 480 U.S. 918 (1987); Greenberg v. Sola, 822 F.2d 882, 887-89 (9th Cir. 1987) (per curiam) (a pleading is not “frivolous unless some clear authority or a litigant’s own clear admission erases the factual underpinning from some essential element”). * Hoover Universal, Inc. v. Brockway Imco, Inc., 809 F.2d 1039, 1044 (4th Cir. 1987); see Neitzke v. Williams, 109 S. Ct. 1827, 1831 (1989) (a complaint is not frivolous under section 1915 if it is has an arguable basis in either law or fact; a factual allegation is frivolous if “fan cifu l’) (emphasis added). 61 See Hamer v. County of Lake, 819 F.2d 1362, 1367 (7th Cir. 1987); Woodrum v. Woodward County, 866 F.2d 1121, 1127-28 (9th Cir. 1989); Jones v. Con tinental Corp., 789 F.2d 1225, 1232 (6th Cir. 1986). The lower court turned this rationale on its head, stating that claims of racial discrimination should be more carefully scrutinized because of their “enormously stigmatizing ef fect.” 679 F. Supp. at 1220; see id. at 1379 (“serious stigmatizing charges”). The court had curious notions about discrimination. See id. at 1220 (civil disorders in 1960’s and 1970’s were an example of blacks discriminating against whites); id. at 1347 (“ greatest deterrent to racism . . . is excellence in performance”). 46 fees to prevailing defendants and the “broad remedial purpose of Title VII,” holding that fees should be awarded “sparingly.”62 Counsels’ efforts to gather and analyze the relevant data were Herculean.63 The numerous and extensive briefs filed show a continuing analysis of the bases for the lawsuit. The district court, in hindsight, decided that counsel should have known that their analysis was flawed. This conclusion was based on the court’s faulty legal analysis of the claims. A. The Evidentiary Record Shows Plaintiffs’ Claims Were Not Frivolous Substantially all the plaintiffs’ claims could be supported by a prima facie showing, so they were not frivolous.64 Once a Title VII plantiff establishes of a prima facie case, the defendant must articulate a legitimate and non-discriminatory reason for its ac tion, or the plaintiff is entitled to judgment as a matter of law. Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248, 254 (1981). The mere statement of a justification by a defendant, however, does not support forcing a plaintiff to abandon claims under threat of sanction. The trier of fact must decide whether the reason in fact motivated the conduct. Jones v. Continental “ Arnold v. Burger King Corp., 719 F.2d 63, 65 (4th Cir,), cert, denied, 469 U.S. 826 (1984). The Rule 11 and Christiansburg standards of frivolousness are equivalent. Zaldivar v. City of Los Angeles, 780 F.2d 823, 831 (9th Cir. 1986); see Nesmith v. Martin Marietta Aerospace, 833 F.2d 1489, 1491 (11th Cir. 1987); Bass v. Southwestern Bell Tel., 817 F.2d 44, 45-47 (8th Cir. 1987). “ 679 F. Supp. at 1379 n. 267 (“plaintiffs’ counsel expended a great deal of effort at securing defendant’s documents and files”); id. at 1229 (“an extraor dinary amount of discovery was exchanged,” most of it sought by the plain tiffs); id. at 1222 (“case represents an expenditure of an extraordinary amount of time and resources for all concerned”). 84 EEOC v. Tarrant Distribs., Inc., 750 F.2d 1249,1251 (5th Cir. 1984); LeBeau v. Libbey-Owens-Ford Co., 799 F.2d 1152 (7th Cir. 1986); see Glymph v. Spar tanburg Gen. Hasp., 783 F.2d 476, 479-80 (4th Cir. 1986); Wrenn v. Gould, 808 F.2d 493, 504-05 (6th Cir. 1987), cert, denied, 108 S. Ct. 1032 (1988); cf. Intro- caso v. Cunningham Corp., 857 F.2d 965, 967-68 (4th Cir. 1988) (affirming sanction where a defense was “readily apparent to plaintiff from the outset of the litigation” based on prior administrative proceedings and Supreme Court precedent). 47 Corp., 789 F.2d 1225, 1233 (6th Cir. 1986); Obin v. District No. 9, Int’l Ass’n of Machinists, 651 F.2d 574, 587 (8th Cir. 1981); White v. South Park Indep. School Dist., 693 F.2d 1163, 1169 (5th Cir. 1982). A plaintiff is entitled to proceed even though it might appear that the defense is strong or even “airtight.” Williams v. Giant Eagle Markets, 57 Empl. Prac. Dec. (CCH) 1 39,290 (3d Cir. Aug. 28, 1989); Mihalik v. Pro Arts, Inc., 851 F.2d 790, 794 (6th Cir. 1988). In any event, plaintiffs proof need not even suffice to establish a prima facie claim to be found non- frivolous.65 Appellate courts have interpreted the definition of frivolous ness very narrowly. For example, in Mitchell v. Office of Los Angeles County Superintendent of Schools, 805 F.2d 844 (9th Cir. 1986), cert, denied, 484 U.S. 858 (1987), the district court had granted a dismissal after the close of plaintiff’s case. In over thirty cases where plaintiffs applications had been rejected, the selectee was better qualified. The committees that had reviewed applications were not even aware of plaintiffs race, and the defendant’s employment of blacks compared favorably with that of the relevant labor market. Id. at 846. The court of appeals nevertheless found the action was not frivolous, observing that there “is a significant difference between the bringing of cases with no foundation in law or facts at the outset and the failure to present evidence sufficient to justify relief at trial.” Id 65 EEO C v. Pet, Inc., 719 F.2d 383 (11th Cir. 1983) (per curiam); Plemer v. Parsons-Gilbane, 713 F.2d 1127, 1141 (5th Cir. 1983); EEOC v. Fruehauf Corp., 609 F.2d 434 (10th Cir. 1979); Bowers v. Kraft Foods Corp., 606 F.2d 816, 819 (8th Cir. 1979); see Evans v. Davie Truckers, Inc., 769 F.2d 1012, 1014 (4th Cir. 1985) (no fees awarded to prevailing defendant even though plain tiff had failed to establish a prima facie case). « See Wrenn v. Gould, 808 F.2d at 503-04 (no sanction even though selectee was black); White v. South Park Indep. School Dist., 693 F.2d at 1169 (same); Herbert v. Monsanto Co., 682 F.2d 1111, 1126 n.18 (5th Cir. 1982) (same); see also Vandenplas v. City of Muskego, 797 F.2d 425, 428-29 (7th Cir. 1986) (claim found non-frivolous even though plaintiffs “failed to produce any evidence or affidavits showing they had been treated in a discriminatory manner”); Montgomery v. Yellow Freight Sys., 671 F.2d 412, 414 (10th Cir. 1982) (record must be devoid of any evidence of discrimination). 48 B. The District Court Erred In Failing to Evaluate the Pleadings and Pretrial Orders as of the Time They Were Signed The perspective from which the filings in a lawsuit is judged is critical. The Supreme Court in Christiansburg specifically disapproved of sanctioning plaintiffs based on hindsight: [I]t is important that a district court resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. This kind of hindsight logic would discourage all but the most air tight claims, for seldom can a prospective plaintiff be sure of ultimate success. No matter how honest one’s belief that he has been the victim of discrimination, no matter how meritorious one’s claim may appear at the outset, the course of litigation is rarely predic table. Decisive facts may not emerge until discovery or trial. The law may change or clarify in the midst of the litigation. 434 U.S. at 421-22. The Rule 11 advisory committee similarly cautions that the “rule is not intended to chill an attorney’s en thusiasm or creativity in pursuing factual or legal theories. The court is expected to avoid using the wisdom of hindsight and should test the signer’s conduct by inquiring what was reasonable at the time the pleading, motion or other paper is signed.”67 The lower court evaluated plaintiffs’ claims in hindsight. In nearly 200 pages of opinion, the court devoted only two paragraphs to speculating about what counsel “should have known” when it filed the complaint and pretrial orders. 679 '7 Fed. R. Civ. P. 11 advisory committee note (emphasis added); see Forrest Creek Assocs., Ltd. v. McLean Sav. ir Loan Assn, 831 F.2d 1238, 1244 (4th Cir. 1987) (“[T]hat the plaintiffs did not prevail at trial is irrelevant. Rule 11 was never meant to impose a penalty upon every plaintiff whose case is dis missed.”); cf. Neitzke v. Williams, 109 S. Ct. 1827, 1833-34 (1989) (an action may be dismissed for failure to state a claim and yet not be so “frivolous” or defective that it should never have been brought). 49 F. Supp. at 1387-88 (claims “apparently pursued without ob jective thought”). The court’s conclusions as to sanctions are “no more than reiteration of its ultimate conclusions on the merits,” which does not satisfy Christiansburg. Jones v. Texas Tech. Univ., 656 F.2d 1137, 1146 (5th Cir. 1981). It failed to distinguish its post-trial findings from what a reasonable view of the case would have been when the complaints and pre-trial orders were filed. See LeBeau v. Libbey-Owens-Ford Co., 799 F.2d at 1160 (“too much reliance is placed on the facts as found at trial to support a finding that the suit should not have been brought”).68 The lower court found that counsel were guilty of pursuing a case with the hope that the court would reject the defendant’s evidence, accept the plaintiffs favorable evidence, find the plain tiffs credible, and draw inferences of discrimination. 679 F. Supp. at 1380. This is not a Rule 11 violation: it is a prescription for trying any Title VII case. “Subjective and nearly intuitive fact finding is necessary in many cases, not least in reconstructing the ’truth’ in discrimination cases, and a plaintiff is entitled to hope for the best without a substantial amount of objective proof of discrimination.” Pickens v. Childrens Mercy Hosp., 124 F.R.D. 209, 211 (W.D. Mo. 1989). 1. The District Court's Conclusions Improperly Rested on Hindsight Determinations of Witness Credibility The lower court’s conclusions of frivolousness were premised on its belief that the plaintiffs were not credible witnesses.69 For 68 The Rule 11 sanctions were also premised on an erroneous perception of the rule’s scope 679 F. Supp. at 1386-87. The court held, contrary to the vast weight of authority, that Rule 11 imposes a continuing obligation to update or revise previously filed pleadings. Oliveri v. Thompson, 803 F.2d 1265 (2d Cir. 1986), cert, denied, 480 U.S. 918 (1987); Gaiardo v. Ethyl Corp, 835 F.2d at 484; Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866 (5th Cir. 1988) (en banc); Pantry Pride Queen Foods, Inc. v. Lifschultz Fast Freight, Inc., 809 F.2d 451 (7th Cir. 1987); Corporation of the Presiding Bishop v. Associated Contractors, Inc., 877 F.2d 938, 943 (11th Cir. 1989); see Kirby v. Allegheny Beverage Corp., 811 F.2d 253, 257 (4th Cir. 1987) (focal point under Rule 11 is when the document was signed). 88 E.g., 679 F. Supp. at 1251, 1252, 1254, 1255, 1256, 1257, 1265, 1266, 1268, 1277, 1278, 1348, 1359. The opinion is riddled with observations that plain tiffs presented “no credible evidence” E.g., id. at 1348 (emphasis added). 50 example, based on the testimony of Army employees, enlisted personnel and officers, the lower court found that Blue was un professional and discourteous, among other things. 679 F. Supp. at 1250. It obviously was not frivolous for attorneys to believe that these assertions presented litigable issues of fact: documen tary evidence showed satisfactory annual performance ratings and five letters of commendation (before Blue’s EEO C claims were filed).70 Other factual issues involved “swearing matches,” where plain tiffs and defendant offered differing versions of events not ob jectively verifiable.71 Although the court resolved nearly all of these contests against the plaintiffs, it found some of the plain tiffs’ witnesses entirely credible, 679 F. Supp. at 1224 n.7, and questioned the objectivity or veracity of some of defendant’s witnesses.72 The court never explained, though, how counsel was supposed to discern which witnesses the court would ultimate ly choose to believe. Rule 11 requires no such prediction. Sanctioning the failure to foresee credibility determinations not only violates the principle that claims are not to be judged in hindsight, but misperceives the role of the attorney. Generally, m 679 F. Supp. at 1249; see also Rossman v. State Farm Mut. Auto. Ins. Co., 832 F.2d 282, 290 (4th Cir. 1987) (vigorous pursuit of questions of fact that are “hotly disputed” is not grounds for sanction). While the lower court found that plaintiffs’ supposed personality problems justified the defendant’s con duct, other courts have found that this label can can be an “earmark of racial tension.” Pickens v. Children’s Mercy Hosp., 124 F.R.D. at 211 n.2. 71 E.g„ 679 F. Supp. at 1250, 1252, 1255, 1256, 1257, 1265, 1265-66, 1268, 1277,1319 n.180, 1348, 1359 n.246, 1361-62. Plaintiff s proposed findings and conclusions submitted in the Blue case show exactly what a reasonable non hindsight view of claims was and how the credibility determinations were crucial to the case. Dkt. 316. n E.g., 679 F. Supp. at 1255 (Vincent); id. at 1256 (Soehren); id. at 1265-66 n.92 (Lane); see also App. 688 (describing witnesses for both sides as “evasive”); Dkt. 264 at 8 (magistrate found certain defense witnesses incredible, their testimony being “patently inconsistent” with the evidence). The court’s credibility determinations were not always internally consistent. Compare 679 F. Supp. at 1268 (crediting Jones over Carter) with id. at 1224 n.7 (Carter was “entirely credible”). 51 it is improper for an attorney to “adopt the role of the judge or jury to determine the facts.” Nix v. Whiteside, 475 U.S. 157, 189 (1986) (Blackmun, J., concurring) (citation omitted). The lower court’s action thus impermissibly “blurfs] the roles of at torneys and finders of fact.” Greenberg v. Sala, 822 F.2d at 886-87; cj. Celotex Corp. v. Catrett, A ll U.S. 317, 327 (1986) (courts forbidden to make credibility determinations on sum mary judgment). Reviewing courts have thus consistently held in similar con texts that attorneys should not be subject to sanctions merely because the trial court has found witnesses incredible. In Runyon v. McCrary, 427 U.S. 160 (1976), plaintiffs claimed that the de fendants had litigated in bad faith, citing conflicts in testimony that the district court had resolved against the defendants, and the district court’s characterization of certain defendants’ testimony as “ unbelievable.” Id. at 183. Rejecting plaintiffs’ claims, and affirming the Fourth Circuit’s holding, the Court held: “Faults in perception or memory often account for dif fering trial testimony, but that has not yet been thought a suf ficient ground to shift the expense of litigation.” Id. (citation omitted); see Oliveri v. Thompson, 803 F.2d at 1277-78 (“Sec tion 1927 was not intended to require an attorney to pass judg ment on the credibility of his client on pain of a monetary sanc tion in the form of paying adversaries’ attorneys’ fees should he evaluate that credibility contrary to the district court’s view.”). The same principle applies under Rule 11.73 In Glymph v. Spartanburg General Hospital, 783 F.2d 476 (4th Cir. 1986), this Court reversed the imposition of sanctions against an employment discrimination plaintiff. The Court held: 73 District No. 8, Int’l Ass’n of Machinists v. Clearing, 807 F.2d 618, 622 (7th Cir. 1986) (attorney does not violate Rule 11 by relying on the representations of a client, even where a court ultimately refuses to credit those representa tions at trial); see Little v. Southern Elec. Steel Co., 595 F.2d 998, 1005 (5th Cir. 1979) (award to defendant under Christiansburg reversed despite district court’s conclusion that “plaintiff s testimony was so inconsistent and contradic tor}’ throughout as to suggest strongly the he was lying under oath”). 52 [Plaintiff s] case depended almost wholly on her oral testimony that she was forced to resign, and while it is true that the hospital presented a strong defense that she voluntarily resigned, which was accepted by the district court, we do not think that such cases should subject unsuccessful plaintiffs to the award of at torneys’ fees under Christiansburg.. . . Id. at 480; see Sullivan v. School Bd. of Pinellas County, 773 F.2d 1182, 1190 (5th Cir. 1985) (claim found not frivolous even though plain tiff s refutation of defendants’ complaints against her consisted primarily of her own testimony).74 2. The District Court Erroneously Relied on Hind sight in Interpreting the Law and Applied the Wrong Law Litigants should not be penalized for urging new or different legal propositions, especially when the law in the substantive area is unsettled, as it surely has been under Title VII.75 In this litiga tion the status of the law was always uncertain. The court itself conceded as much. Tr. at 142 (Aug. 22, 1983). While the court later suggested that the lack of merit to their claims should have been readily visible to the plaintiffs, it justified a fee award to the Army with this observation: The litigation presented continually challenges [sic] issues of both fact and law. The record and this opinion reveal its complexity and magnitude. . . . The 7< A litigant is entitled to her day in court even where the record reveals prior inconsistent statements. See Torres v. County of Oakland, 758 F.2d 147 (6th Cir. 1985) (sanctions inappropriate even though the plaintiff had admitted during her deposition that she did not feel she was discriminated against in the interview process, but then contradicted this testimony at trial); EEOC v- Pet, Inc., 719 F.2d at 386 n.5 (claim is not frivolous merely because affidavits of plaintiffs were of questionable accuracy and conflicted with subsequent deposition testimony). " Tarter v. Raybuck, 742 F.2d 977, 987 (6th Cir. 1984), cert, denied, 470 U.S. 1051 (1985); Dooley v. Reiss, 736 F.2d 1392, 1394 (9th Cir.), cert, denied, 469 U.S. 1038 (1984); Hudson v. Moore Business Forms, Inc., 836 F.2d 1156,1160-61 (9th Cir. 1987). 53 sheer enormity of the task of trying a case such as this is transparent. In a legal sense, many aspects of the law governing Title VII actions was and is [sic] in flux. 679 F. Supp. at 1332; see id. at 1223 (Army contended in pretrial order that there were 112 triable issues of law). The court’s own opinion shows the fluidity of Title VII principles. For example, between the time of its class certification opinion and the final opinion, it reversed its view that an excessive subjectivity claim could be proved only under a disparate treatment theory. 679 F. Supp. at 1228 n.9. It acknowledged initial misreadings of the law in other respects. Id. at 1295 n.43. The lower court did not interpret these uncertainties, as re quired by Rule 11 and Christiansburg, to give the attorneys the benefit of the doubt on uncertain legal issues. Instead, it retroac tively applied unfavorable precedents to justify sanctions.76 This is a reversible error of law. The danger in the district court’s method was made apparent when the Supreme Court decided Patterson v. McLean, 109 S. Ct. 2363 (1989), which completely vindicates the contentions below concerning the promotion claims. Patterson shows the lower court was wrong in interpreting the fourth prong of the required showing in a promotion case, and in concluding that plaintiffs claims were frivolous because they failed to prove that they were best qualified. This change in the law completely undermines the district court’s ruling that the claims were frivolous. See EEO C v. St. Louis — S.F. Ry., 743 F.2d 739, 744 (10th Cir. 1984) (action was not frivolous where state of law was originally not settled and had since been settled in favor of plain tiffs position). 3. The District Court Erred in Assuming that Drop ping Claims Proves That They Are Frivolous In another example of improper hindsight, the lower court assumed that dropping a claim proves the claim is frivolous. 679 76 The most prominent example of this was its application of the en banc deci sion in Holmes. 679 F. Supp. at 1224, 1279,1288, 1291,1297,1322 n.184,1349. 54 F. Supp. at 1347. This reasoning is fallacious. At most, drop ping a claim may reflect a party’s belief that she will not prevail, and failure to prevail may not be equated with frivolousness. Other courts have rejected the inference relied upon by the lower court. “The abandonment of a claim does not show that it is frivolous.” Afram Export Corp. v. Metallurgiki Halyps, 772 F.2d 1358, 1372 (7th Cir. 1985); see Anthony v. Marion County Gen. Hosp., 617 F.2d 1164, 1170 (5th Cir. 1980). Drawing such an inference is not only inaccurate, but an unwise judicial policy: “[I]t would be a serious mistake to adopt a rule that gave par ties an incentive to litigate claims merely to avert an award of attorney’s fees.’’ Afram, 772 F.2d at 1372. “Courts benefit when counsel reduce the issues in dispute by objectively reappraising the evolving strengths of their positions throughout the course of litigation. Rule 11 was not intended to inhibit such activity by permitting it to be characterized by an adversary as an ad mission of liability.” Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 95-96 (3d Cir. 1988); see Tarrant Distribs., 750 F.2d at 1251. Harris’ case also disproves the lower court’s premise. She dropped two claims that the lower court itself found were not frivolous. The court never addressed this serious contradiction in its reasoning.77 C. The Conduct of The Army and the District Court Throughout the Litigation Shows That Plaintiffs’ Claims Were Not Frivolous The entire course of the litigation also belies any finding of frivolousness. After the complaints were filed, the Army substan tially changed its promotion policies. Among other things, it abandoned the 85 % and Ten Referral Rules, and reduced the influence of subjective determinations in the promotion process. In some cases, such a sequence of events has entitled the plaintiff 77 Harris’ case shows another dimension to the hindsight-credibility error. The court’s findings as to Harris’ credibility flowed from her testimony regarding why she dropped her claims, an event that occurred after the pleadings in issue were filed. 55 to an award of fees as a prevailing party.78 It surely must suf fice to show that sanctions are unwarranted. In its veritable blizzard of pretrial motions, the Army made no motions on the merits. At trial, it made a motion as to only one substantive element of Blue’s case , and then only after the close of plaintiff s evidence. “One might well wonder how a case could be so frivolous as to warrant sanctions if it has sufficient merit to get to trial.” 79 Moreover, if the claims were truly frivolous, the Army would not have agreed to pay $75,000 to settle them. EEO C v. Kimbrough Inv. Co., 703 F.2d 98, 103 (5th Cir. 1983); see Wattleton v. Ladish Co., 520 F. Supp. 1329, 1351 (E.D. Wis. 1981), aff’d sub nom. Wattleton v. International Bhd. of Boilermakers, 686 F.2d 586 (7th Cir. 1982), cert, denied, 459 U.S. 1208 (1983). The lower court’s own actions also undercut its post-hoc deter mination of frivolousness. That it took the court over two years and hundreds of pages of decisions to return its findings is anomalous. In Hughes v. Rowe, 449 U.S. 5 (1980), the Supreme Court held that the detailed consideration given by the district and appellate courts to dismissing a plaintiff’s claims was itself proof that the claims were not frivolous. Likewise, in Glymph, 783 F.2d at 479-80, this Court found evidence that a claim was 78 A plaintiff whose case acted as a “catalyst” in motivating the defendant to provide the primary relief sought is entitled to an attorneys’ fees award. E.g., Sullivan v. Pennsylvania Dep’t of Labor ir Indus., 663 F.2d 443 (3d Cir. 1981), cert, denied, 455 U.S. 1020 (1982); see Disabled in Action v. Mayor oj Baltimore, 685 F.2d 881 (4th Cir. 1982). 79 National Ass’n of Govt. Employees v. National Fed’n of Fed. Employees, 844 F.2d 216, 223 (5th Cir. 1988) (citation omitted); see Sullivan v. School Bd. of Pinellas County, 773 F.2d at 1189 (failure by defendant to file a sum mary judgment motion and the holding of a nine-day trial showed lack of frivolousness); Hamilton v. Daley, 111 F.2d 1207, 1214 n.7 (7th Cir. 1985) (“In deed the more time and effort the defendant spends in defending a case . • the less likely it is that the case was frivolous and that a fee award is appropriate in the first place.”); EEOC v. Sears, Roebuck <b Co., 114 F.R.D. 615, 632 (N.D. 111. 1987) (court found action was not frivolous, noting that the defendant had spent “much time and effort in its defense, and [the] court relied heavily on [defendant’s] evidence in ruling, . . . as [the] court’s reference to [de fendant’s] evidence throughout its decision demonstrates”). 56 not meritless in the district court’s taking weeks to deliberate on and decide the case on the merits.80 The description of the litigation in EEOC v. Kenneth Balk b Associates, 813 F.2d 197, 198 (8th Cir. 1987) (citation omit ted), largely applies here: The claim was not so baseless that [defendant] sought either a pretrial dismissal or summary judgment. Similarly, [defendant] never moved for a directed ver dict during the trial, which consumed four days . . . . Moreover, the district court directed the parties to sub mit post-trial briefs as well as proposed findings of fact and conclusions of law before taking the case under submission. . . . Finally, the district court’s find ings of fact and conclusions of law revealed that it based its decision on the resolution of conflicting evidence and testimony. However unpersuasive the . . . evidence ultimately proved to be, the evidence pro vided “some basis” for the . . . claim. The appellate court reversed the sanction, as this Court should do here. Even if this Court decides that some of the claims presented were frivolous, the sanctions awards should nevertheless be reversed in their entirety'. See Townsend v. Holman Consulting Corp., 881 F.2d 788, 795 (9th Cir. 1989) (“a pleading which contains a non- frivolous claim cannot be sanctioned as frivolous under Rule 11 even though other claims in that pleading are frivolous”).81 “ See Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp., 828 F.2d 211, 221 (4th Cir. 1987); see also Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 99 (3d Cir. 1988) (“ [I]f there is doubt as to how the district court will rule on the challenged pleading or motion, the filing of the paper is unlikely to have violated Rule 11.”). 11 The record contains no basis to allocate sanctions for frivolous versus non- frivolous claims. The district court's only analysis in this respect is flawed mathematically. 679 F. Supp. at 1365, 1370 (reducing sanction by 10% bas- ed on findings that two out of ten claims (20 %) were non-frivolous). The proof submitted by the Army below also failed to account for expenses on a claim- by-claim basis. E. g., App. 1086-93. 57 D. The District Court Erred in Awarding the Army Ex penses for Prosecuting the Sanctions Motions A substantial portion (nearly $7,000) of the fees awarded the Army were for the prosecution and trial of the sanctions mo tions. 679 F. Supp. at 1326, 1365, 1331 n.205. This double sanc tion (part of it awarded sua sponte) was erroneous as a matter of law. Fees for the prosecution of sanctions motions cannot be awarded under Rule 11. Introcaso v. Cunningham Corp,, 857 F.2d 965, 970 (4th Cir. 1988) (disallowing fees for “litigation activity and associated expenses for defendant’s motion for at torney’s fees under § 1988 and Rule 11”). Rule 11 authorizes sanc tions for filing frivolous or vexatious pleadings. There was no finding below (nor could there have been), that the attorneys’ opposition to the sanctions motions was frivolous or improper. Nor can the fees be justified as related to the filing of the sub stantive pleadings for which sanctions were imposed. The drafters of Rule 11 made no provision for such an award. Cf. Fed. R. Civ. R 37 (a) (4) (expressly authorizing award of fees in connec tion with discovery sanction motions). Moreover, this Court has rejected such a rationale in denying fees on appeals from sanc tions awards, as long as the appeal itself (even if unsuccessful) is not frivolous. E.g., Cohen v. Virginia Elec. 6- Power Co., 788 F.2d 247, 249 (4th Cir. 1986); Basch v. Westinghouse Elec. Corp., 777 F.2d 165, 175 (4th Cir. 1985), cert, denied, 476 U.S. 1108 (1986). Accordingly, the lower court’s award of fees and expenses for litigating the sanctions motions should be reversed, whether or not the underlying claims were frivolous. IV. The District Court Violated its Local Rules and the Due Process Clause in Disciplining the Attorneys The district court ignored its local rules in deciding — more than two years after conceding the reasonableness of counsel’s conduct — that Chambers and Sumter should be penalized for violating the disciplinary rules governing conflicts o f interest. 679 F. Supp. at 1362-64. The court also failed to give the 58 attorneys notice that it was even considering imposing disciplinary sanctions. As a result of this disregard of the court’s rules and the due process clause, the disciplinary sanctions im posed below were erroneous as a matter of law. A. Chambers and Sumter Did Not Receive Notice That They Might Be Disciplined Potential conflicts of interest first arose in August 1983 follow ing the denial of class certification. Certain intervenors had con flicting claims because they had sought promotion to the same job vacancy. Intervenor Beulah Mae Harris had accused in- tervenor Alicia Chisolm, her former supervisor, of participating in discriminatory conduct. As the lower court later observed, conflicts such as these frequently arise in civil rights class ac tions, and are almost always easily resolved. App. 1217. To eliminate the conflict, the overlapping claims were promptly withdrawn and Harris opted not to pursue her discriminatory appraisal claim in litigation. App. 1192, 1197. Thereafter, the court entered an order declaring the matter “satisfactorily resolv ed” as to “all potential conflict of claims among the plaintiffs and intervenors.” App. 1201; 679 F. Supp. at 1229 n.15. The problem unexpectedly resurfaced during the sanctions hearings in 1985, when the court (to the surprise of plaintiffs’ counsel) allowed the Army to examine Harris regarding her 1983 appraisal claim and her belief that Chisolm discriminated against her.82 There was no indication during the sanctions hear ings (or at any other time) that the court was considering im posing penalties based on the disciplinary rules. Counsel were not asked to justify their conduct, nor was there an opportuni ty or a reason to do so. To the contrary, when the conflict unex pectedly reappeared, the court expressed agreement with counsels’ position: Counsel reasonably perceived this claim was not in issue during the sanc tions hearings because it was withdrawn with court approval prior to the pretrial order and long before Harris dismissed her case App. 1288; see App. 1192; Dkt. 133; cf. 679 F. Supp. at 1322 (denying request for sanctions with respect to Blue claim dropped with court approval). 59 MS. WRIGHT: Your Honor, our concern is when we came in on these sanctions hearings, it was our understanding, as Mr. Lowenberg very well knows, what the issues were. Early on, there have been withdrawals of issues involved in a conflict. We did not anticipate that all these issues were going to be before the Court, which is why we withdrew from having those issues in the first place. When we came into these sanctions and hearings, we did not know that was going to be an issue or that the defendants were going to get involved in any issue that had previously been dropped. BY TH E COURT: I think you are correct. Once the issues, whether there are in conflict [sic] are withdrawn from litigation, at that point in time I doubt that you foresaw, anyone foresaw that sanctions motions would be filed, and that you anticipated that you would be trying claims in which there were no conflicts. App. 1239-42 (emphasis added). The issue was resolved by ad journing the examination of Harris and allowing her time to obtain new counsel. App. 1257. In granting counsel’s motion to withdraw from the Harris representation, the court gave no hint that it was considering imposing a disciplinary penalty. App. 1292. It was not until December 1987 — when the sanctions were actually imposed — that the issue was raised again. That “notice,” of course, came too late. An attorney may not be disciplined without prior notice that the court is considering the imposition of penalties and without an opportunity to res pond to the charges.83 The lack of such protections here requires reversal. “ Roadway Express, Inc. v. Piper, 447 U.S. 752, 767 (1980); Miranda v. Southern Pac. Transp. Co., 710 F.2d 516, 522 (9th Cir. 1983). The district court subsequently reasoned that any deficiency in process was cured by the oppor tunity to present arguments after the judgment. 123 F.R.D. at 213. The (Footnote continued) 60 B. The Court Disregarded its Disciplinary Rules The court also erred in ignoring its own local rules. Failure to follow the court’s disciplinary rules vitiates the entire disciplinary finding and requires that it be set aside In re Thalheim, 853 F.2d 383, 386, 388 (5th Cir. 1988); In re Abrams, 521 F.2d 1094, 1104-05 (3d Cir.) (en banc), cert, denied, 423 U.S. 1038 (1975); see United States v. Stoneberger, 805 F.2d 1391,1393 (9th Cir. 1986). Rule 2.10 of the district court’s General Rules establishes that the North Carolina Code of Professional Responsibility governs attorney conduct. It specifies that “ [t]he disciplinary procedures of this court shall be on file with the clerk and furnished to counsel upon request.” E.D.N.C. R. 2.10. Rule 105.01 of the Rules of Disciplinary Procedure adopted by the court in turn provides that whenever allegations of misconduct come to the attention of the court “by complaint or otherwise,” the court “shall refer the matter for investigation and if warranted the prosecution” of a disciplinary proceeding.84 The rule requires independent review of all charges of “mis conduct” which “would warrant discipline,” unless the rules pro vide specific alternate procedures, as they do for convictions and sanctions imposed by other courts. E.D.N.C. Disc. R. 101.00, 102.00; see Thalheim, 853 F.2d at 387; Abrams, 521 F.2d at 1104-05 n.8. Rule 104.00 and the court’s opinion make clear that the charge levelled against Chambers and Sumter falls square ly within the ambit of those matters that must be referred to special counsel. See Disc. R. 104.01 (allowing discipline for misconduct as defined in rules); id. 104.02 (misconduct includes, availability of a post-judgment motion does not cure the failure to provide the requisite prior notice and opportunity to be heard. E.g., Tom Growney Equip., Inc. v. Shelley Irrigation Dev., Inc., 834 F.2d 833, 836-37 (9th Cir. 1987); Patterson v. Coughlin, 761 F.2d 886, 892 (2d Cir. 1985), cert, denied, 474 U.S. 1100 (1986); Fetner v. City of Roanoke, 813 F.2d 1183,1186 (11th Cir. 1987) (citing Logan v. Zimmerman Brush Co., 455 U.S. 422, 436 (1982)). ** The Rules of Disciplinary Procedure are not available in any published reporter or rule book, but have been reproduced in the addendum to this brief pursuant to Fourth Circuit Rule 28(c). 61 inter alia, violation of Code of Professional Responsibility); 679 F. Supp. at 1363-64; see Carlucci v. Piper Aircraft Corp., 775 F.2d 1440, 1449 (11th Cir. 1985). The court was thus required to stay its hand until the charges had been independendy examined and a recommendation had been made. Thereafter, the rules require that the challenged at torney be provided with “notice and [an] opportunity to be heard.” E.D.N.C. Disc. R. 104.01. Moreover, the trial judge was prohibited from ruling on the issue himself. Id. 105.04. The lower court ignored these protections and impermissibly assumed the roles of constable, prosecutor, judge, and jury. After the fact, the court asserted that it was entitled to discipline the attorneys pursuant to disciplinary rule 112.00. 123 F.R.D. at 218. This rationale must fail. That rule applies only when the court needs to deal summarily with criminal contempt or other matters requiring immediate action to maintain order.85 For only in such instances of disruptive or contumacious con duct in the courtroom may prior notice and an opportunity to be heard be dispensed with. In re Chaplain, 621 F.2d 1272,1275 (4th Cir.), cert, denied, 449 U.S. 834 (1980); In re McDonald, 819 F.2d 1020, 1024 (11th Cir. 1987); Miranda, 710 F.2d at 522. A conflict of interest is obviously not one of these instances, and the court’s delay of over two years in imposing penalties demonstrates that there was no urgency. The lower court also erroneously reasoned that the disciplinary rules impose no restrictions on the court’s ability to deal with any conduct that occurs in a pending case. 123 F.R.D. at 218. This interpretation is wholly untenable since it allows the exception to swallow the general rule. Thalheim, 853 F.2d at 388 & n.7. The court’s reasoning is contradicted not only by the language of Rule 105.01, which refers to matters com ing to a judge’s attention “by complaint or otherwise,” but also by Rule 105.04, which requires that when a judge initiates the 85 “Nothing contained in these Rules shall be construed to deny to this court such powers as are necessary for the court to maintain control over proceedings before it, such as proceedings for contempt under Title 18 of the United States Code or under Rule 42, F.R. Crim. P.” 62 disciplinary proceeding, as occurred in this case, the charges must be heard by a different judge. These provisions would be super fluous if Rule 105.00 applied, as the district court said, only to “situations in which the alleged unethical conduct comes to the court’s attention from some external source.” 123 F.R.D. at 218. The district court disregarded all of the required procedures and contradicted its own prior statements and rulings. The find ings of and sanctions for ethical violations must be reversed. V. Section 706(k) of Title VII Precludes the District Courts Award of Attorneys’ Fees to the Army Section 706(k) of Title VII permits a court to “allow the pre vailing party, other than the [EEO C] or the United States, a reasonable attorney’s fee.” 42 U.S.C. § 2000e-5(k) (emphasis added).86 The district court correctly concluded that this express prohibition of fee awards precluded a sanction under section 706(k) where the government is a prevailing defendant.87 It then completely undermined this prohibition by awarding sanctions to the United States in reliance on another statute, court rules, and the common law. 679 F. Supp. at 1375-76, 1383, 1388-89. This holding was contrary to the plain language of section 706(k), congressional intent, and principles of statutory construction.88 An award of fees to a defendant under section 706(k) is a sanc tion, and the statute denies that sanction to the United States. The same sanction may not be awarded under another name. " This provision allows a sanction if the plaintiffs claim was “frivolous, unrea sonable, or groundless, or . . . the plaintiff continued to litigate after it clearly became so.” Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978). " 679 F. Supp. at 1375; see Butler v. USDA, 826 F.2d 409, 411-14 (5th Cir. 1987). Both courts rejected arguments that the plain meaning of the statute should be ignored because Title VII originally did not allow suits by govern ment employees. " Awards of attorneys’ fees in cases involving the United States are generally governed by section 2412 of title 28. Section 2412(b) allows awards “ [ujnless expressly prohibited by statute” Section 706(k) is precisely such a prohibition. EEOC v. Kimbrough Inv. Co., 703 F.2d 98, 103 (5th Cir. 1983). 63 The plain meaning of the statutory prohibition is supported by legislative history. Although this history does not show ex press consideration by Congress of fee awards to the government as a prevailing defendant in connection with the adoption or amendment of Title V II,89 later action unambiguously reveals the congressional intent. The Civil Rights Attorney’s Fees Act of 1976, now codified at 42 U.S.C. § 1988, prohibits the United States from receiving fee awards in language nearly identical to Title VII.90 In pass ing section 1988, Congress intended to bar the United States from recovering sanctions in civil rights cases as a defendant: MR. McCLORY. . . . . It is my understanding that the Senate bill pro vides for the allowance of fees to attorneys who pre vail, for the plaintiff if the plaintiff prevails in court, or for the defendant if the defendant prevails, or with respect to suits which are brought involving the In ternal Revenue Code, if the defendant prevails and can show that such action was filed in bad faith. In other words, the United States is excluded from any attorneys’ 89 Congress’ decision to afford government employees greater protection from sanctions than private litigants enjoy should not be upset. Government employees face greater obstacles in these suits than their private counterparts. Unlike private sector employees, federal employee complainants are not mere private attorneys general; they are the only attorneys general under the enforcement schema . . . Suits in behalf of federal employees by the Attorney General or EEO C are not authorized against federal agencies. Indeed, the Attorney General is frequently counsel for the other side Also unlike private sector employees, federal employees must first bring their employment discrimination grievances, not to an independent state or local administrative body or to EEOC, but to the very agency about whose practices they are complaining. Parker v. Califano, 561 F.2d 320, 331 (D.C. Cir. 1977) (citations omitted) (em phasis added). 90 This section provides that “the court, in its discretion, may allow the prevail ing party, other than the United States, a reasonable attorney’s fee as part of the costs.” 64 fees under any thesis or under any hypothesis that we might present with regard to this legislation. There is a prohibition against the United States recovering attorneys’ fees either in a civil rights case or in income tax matters. MR. DRINAN. That is pervasive in the whole United States Code . . . . 122 Cong. Rec. 35,116 (1976) (emphasis added).91 In subsequent colloquy, Representative Drinan, the floor leader of the bill, made the intent clear: MR. W HITE. . . . . Does this act we are attempting to pass now supersede the court decisions? In other words, would the defendant get an equal opportunity to receive at torneys fees, or is the defendant who prevails going to be limited as to whether or not there is a suit brought maliciously or in harassment or with other qualifying features? MR. DRINAN. If the gentlemen will yield, I will state that the U.S. Government may not have attorney fees awarded. In other cases, it belongs in the proper discretion of the judge. If the suit is of a vexatious and harassing nature, the defendant should be given his reasonable attorneys fees. I think it is all carefully regulated by a body of law which goes back at least 50 years . . . . Id. at 35,118 (emphasis added). Subsequent legislative history7 can be an authoritative expres sion of original intent.92 In Mount Sinai Hospital v. Weinberger, " E.g., 8 U.S.C. § 1324b; 17 U.S.C. § 505; 42 U.S.C. § 1997a; id. § 2000a-3. ” E.g, Seatrain Shipbuilding Corp. v. Shell Oil Co., 444 U.S. 572, 596 (1980); Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 380-81 (1969); United States »■ Waste Indus., 734 F.2d 159, 166 (4th Cir. 1984); Vaneev. Whirlpool Corp., 716 F.2d 1010, 1012 (4th Cir. 1983), cert, denied, 465 U.S. 1102 & 467 U.S. 1226 (1984). 65 517 F.2d 329 (5th Cir. 1975), cert, denied, 425 U.S. 935 (1976), the court addressed the effect on the original legislation of legislative pronouncements made while amending a complex statutory scheme: Subsequent statements of Congress about what it meant years earlier in enacting a law are “entitled to great weight in statutory construction.” . . . Here we have Congress at its most authoritative, adding com plex and sophisticated amendments to an already complex and sophisticated act. Congress is not mere ly expressing an opinion on a matter which may come before a court but is acting on what it understands its own prior acts to mean. Id. at 343 (citations omitted), quoted in Bell v. New Jersey, 461 U.S. 773, 785 n.12 (1983). Congress enacted the Civil Rights Acts in 1964, and amended them in 1972. The 1976 Act was a refinement in the law to respond to the Supreme Court’s decision in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975). Thus, the congressional statements in 1976 directly control here93 Resort to section 1988’s legislative history is necessary not only because the relevant language of the two provisions is the same, but because Congress specifically intended that they have a uniform meaning. S. Rep. No. 1011, 94th Cong., 2d Sess. 2-6, reprinted in 1976 U.S. Code Cong. & Admin. News 5908, 5909-13; H.R. Rep. No. 1558, 94th Cong., 2d Sess. 5-8 (1976). Thus, the Supreme Court has twice relied on legislative history to section 1988 when construing the attorneys’ fees provision of Title VII. In Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980), the Court held that for the purposes of determining the propriety of an attorneys’ fees award, sections 706(k) and 1988 “may be « See also McCrary v. Runyon, 515 F.2d 1082, 1090-91 (4th Cir. 1975) (en banc) (“In considering an award of fees in an action based on the older civil rights statutes, we look to more recent congressional determinations . . . .”) (citing Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971)), affd, 427 U.S. 160 (1976). 66 considered to have the same substantive content. . . . They authorize fee awards in identical language, and Congress acknowledged the-close connection between the two statutes when it approved § 1988.” Id. at 758 n.5 (citations omitted). Similarly, in New York Gaslight Club, Inc. v. Carey, 447 U.S. 54 (1980), the Court relied on legislative history to section 1988 when construing the propriety of an attorneys’ fee award under section 706(k). It noted that Section 1988 is “ legislation similar in purpose and design to Title VII’s fee provision.” Id. at 70 n.9.94 This Court has held likewise. Wheeler v. Durham City Bd. ofEduc., 585 F.2d 618, 621 (4th Cir. 1978); Daly v. Hill, 790 F.2d 1071, 1083 n.17 (4th Cir. 1986) (referring to section 1988 and section 1617). As have other courts,95 this Court in other contexts has also specifically relied upon Rep. Drinan’s remarks concerning the passage of section 1988. Daly, 790 F.2d at 1083 n.17. They are due the same weight in the Title VII context. See Thornberry v. Delta Air Lines, 676 F.2d 1240, 1244 (9th Cir. 1982), vacated on other grounds, 461 U.S. 952 (1983). Moreover, as part of a comprehensive and detailed statutory scheme, section 706(k) excludes the operation of other general statutes and court rules. Brown v. General Services Admin., 425 U.S. 820, 834 (1976). In Brown, Title VII was held to be the ex clusive and preemptive remedy governing employment discrimina tion cases where the federal government is the defendant. The “ See Moore v. National Ass’n of Sec. Dealers, Inc., 762 F.2d 1093,1100,1116-17 (DC. Cir. 1985); Gerena-Valentin v. Koch, 739 F.2d 755, 760 n.2 (2d Cir. 1984); Carpenter c. Stephen F. Austin State Univ., 706 F.2d 608, 633 (5th Cir. 1983); cj. Independent Fed’n of Flight Attendants v. Zipes, 109 S. Ct. 2732, 2735 n.2 (1989) (“fee-shifting statutes’ similar language is a strong indication" that they are to be interpreted alike); Northcross v. Board of Educ., 412 U.S. 427, 128 (1973) (applying Title II attorneys’ fees standard to desegregation legisla tion, noting similar language and purpose of two statutes); Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983) (opinion stated its applicability to all fee statutes with the same language). BE.g., Evans v. Je ff D., 475 U.S. 717, 730 n.18, 732 n.22 (1986); Maine v. Thiboutot, 448 U.S. 1, 9-10 (1980); Alfonso v. United States, 613 F.2d 1309, 1313 (5th Cir. 1980). 67 Court specifically noted that Title VII “governs such issues as . . . attorneys’ fees.” 96 Likewise, a comprehensive statutory scheme cannot be nullified by a general rule of civil procedure. Thus, in Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437 (1987), the Court rejected a construction of rule 54(d) that would have allowed a recovery of costs beyond those specified in 28 U.S.C. § 1920, 482 U.S. at 445; see Wheeler v. Durham City Bd. ofEduc., 585 F.2d at 623 (“ [wjhere attorneys’ fees are expressly authorized by statute, as in § 1617, Rule 54(d) is no longer relevant,” the statutory authorization is controlling). This rationale applies to Rule 11 as well. In United States e. McPherson, 840 F.2d 244 (4th Cir. 1988), a taxpayer sought a sanction against the government. Denied it under an applicable provision of the Internal Revenue Code, he argued alternative ly for a sanction under Rule 11. The Court held that applica tion of Rule 11 was precluded because the tax code “detailed how and under what circumstances fees may be allowed,” and this “provision would be rendered pointless if fees could also be awarded in such cases under Rule 11 standards.” Id. at 246; see also Cheek v. Doe, 828 F.2d 395, 398 (7th Cir.) (referring to penalty ceiling in the tax code as setting the maximum amount of sanctions in tax protester cases under Rule 11), cert, denied, 484 U.S. 955 (1987); 2A J. Moore, Moore’s Federal Practice 1 11.02[3] (1987) (it is preferable to use more closely tailored statutory provisions or rules to exclusion of Rule 11 even as to 96 425 U.S. at 835; see Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445 (1987) (“[Wjhere there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment.”); see also Great Am. Fed. Sav. ir Loan Ass’n v. Novotny, 442 U.S. 366, 375-78 (1979) (Title VII preempts remedy under section 1985); Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 228-29 (1957) (patent venue provision controls to the exclusion of the general venue statute); cf. Patterson v. McClean Credit Union, 109 S. Ct. 2363, 2375 (1989) (court narrowed con struction of section 1981, precluding recovery for certain discriminatory con duct; otherwise, statutory prerequisites in Title VII would be rendered a “dead letter”); Abex Corp v. Ski’s Enters., 748 F.2d 513 (9th Cir. 1984) (EAJA cannot be used to override governmental priority established under tax lien statutes). 68 misconduct apparently covered by Rule 11); cf. Zaldivar v. City of Los Angeles, 780 F.2d 823, 830 (9th Cir. 1986) (“Nor is [Rule 11] properly used to sanction the inappropriate filing of papers where other rules more directly apply.”).97 Section 706(k) specifically prohibits a sanction for bringing or maintaining frivolous claims against the government. The district court, however, imposed sanctions precisely because it found that claims were frivolously brought and maintained. See 679 F. Supp. at 1330, 1365, 1370 (reducing fee award to extent claims were not frivolous). It utilized Rule 11, Rule 16, and sec tion 1927 to impose a sanction forbidden by section 706(k).98 The general language of these other rules and statutes as ap plied cannot be used to achieve the result specifically proscribed by Congress. See also Jordon v. Gilligan, 500 F.2d 701, 705 (6th Cir. 1974) (“ [I]f a party is immune from an award of attorneys’ fees as such, that immunity is not altered by taxing the fees as part of the costs. If the award is void in one form, it is void in the other.”), cert denied, 421 U.S. 991 (1975).99 * Liability for attorneys’ fees is a substantive obligation. Montgomery Ward bCo. v. Pacific Indem. Co., 557 F.2d 51, 55-58 (3d Cir. 1977); see Alyeska, 421 U.S. at 259 n.31; Culberston v. Jno. McCall Coal Co., 495 F.2d 1403 (4th Cir.), cert, denied, 419 U.S. 1033 (1974); H.R. Rep. No. 442, 99th Cong., 1st Sess. 13, 21-22 (1986); 134 Cong. Rec. S16,296 (daily ed. Oct. 14,1988) (remarks of Sen. Heflin). Title VII governs that obligation and the Federal Rules of Civil Procedure may not alter or expand it. 28 U.S.C. § 2072(b); see Ragan o. Merchants Transfer ir Warehouse Co., 337 U.S. 530, 533 (1949). See generally Burbank, Proposals to Amend Rule 68 — Time to Abandon Ship, 19 U. Mich. J.L. Ref. 425, 428-30 (1986). “The district court failed to allocate the fees awarded according to the par ticular statute or rule violated, instead imposing one lump sum and attemp ting to justify it all under the various authorities that it considered inter changeable. 679 F. Supp. at 1392. In contradiction, under its section 706(k) analysis, the court pointed to the differences under other sanctions mechanisms, eg., such as who may be held liable (attorney versus client). This analysis is unavailing. Section 706(k) says the government shall not receive, and that proscription is violated no matter who pays the fee award. Sanctioning the lawyer as opposed to the client in no way lessens the chilling effect on civil rights claims by government employees that Congress sought to prevent. "The Court need not decide whether section 706(k) forbids use of the rules of procedure to impose sanctions in the government’s favor for conduct other than the assertion of frivolous claims. E.g., Fed. R. Civ. P. 37(b). 69 The district court likewise erred in imposing sanctions under the “bad faith” exception to the American Rule See 679 F. Supp. at 1375-76. Congress intended the language in section 706(k) to preclude the award of fees to the United States under any theory. See supra pp. 64-65. “ [E]ven where ‘fee-shifting’ would be appropriate as a matter of equity, Congress has the power to circumscribe such relief.” Hall v. Cole, 412 U.S. 1, 9 (1973); see Alyeska, 421 U.S. at 249. The prohibition in section 706(k) extends to the common law bad faith exception.100 Where the plain language of a statute prohibits fee awards concerning the United States, such a prohibition permits no “bad faith” exception. For example, prior to 1980, 28 U.S.C. § 2412 prohibited the award of attorneys’ fees to the prevailing party in any action involving the United States.101 Courts repeatedly held that by “its literal terms,” the statute “admits of no judicially fashioned ‘bad faith’ exception.” 102 The same must be true of sec tion 706(k). Indeed, far less explicit evidence of congressional intent is sufficient to pre-empt attorneys’ fees awards under the 100 Copeland v. Martinez, 603 F.2d 981 (D.C. Cir. 1979), cert, denied, 444 U.S. 1044 (1980), which held to the contrary, has been superseded by the Supreme Court’s later decisions in Roadway and New York Gaslight. In Butler v. USDA, the court followed Copeland, without even discussing its reasoning or the supervening Court decisions. The case involved a pro se appellant, and the court need not have reached the issue because it found no evidence of bad faith. 826 F.2d at 414. 101 28 U.S.C. § 2412 (1978) (amended 1980) provided in part: Except as otherwise specifically provided by the statute, a judgment for costs, as enumerated in section 1920 of this title but not includ ing the fees and expenses of attorneys may be awarded to the pre vailing party in any civil action brought by or against the United States or any agency or official of the United States acting in his official capacity, in any court having jurisdiction of such action. 10J Rhode Island Comm, on Energy v. General Seres. Admin., 561 F.2d 397, 405 (1st Cir. 1977); see Gibson v. Davis, 587 F.2d 280 (6th Cir. 1978), cert, denied, 441 U.S. 905 (1979); Donovan v. Nichols, 646 F.2d 190, 192 (5th Cir. 1981); see also Alyeska, 421 U.S. at 268-69 (section 2412 on its face precludes fee award under common law exception). 70 common law ,103 including sanctions for bad faith litigation. In re Reid, 854 F.2d 156, 161-62 (7th Cir. 1988); Byram Con- cretanks, Inc. v. Warren Concrete Prods. Co., 374 F.2d 649, 653 (3d Cir. 1967), cited in Christiansburg, 434 U.S. at 419 n.13. The language in section 706(k) is explicit in its prohibition, and legislative history shows that Congress intended to preclude bad faith awards in favor of the government. The lower court thus erred in awarding fees to the Army under the bad faith exception, as well as under Rule 11, Rule 16, and section 1927. VI. The District Court Erred in Fining the Attorneys for the “Expenses” of the Court Without warning, the district court imposed upon plaintiffs and their counsel a penalty of nearly $38,000 for the “expenses” of the court and its staff. 679 F. Supp. at 1324-26, 1364-65. In addition to being unjustified by the conduct of the attorneys or their clients, this sanction was legally erroneous in other ways. There is no authority or need for such a massive retribution, especially one imposed without the constitutional prerequisites of prior notice or an opportunity to be heard, and without the procedures required under criminal contempt law. A. The District Court Lacked Authority to Impose this Fine The lower court sub silentio found authority to impose this pen alty under section 1927, Rules 11 and 16, and the “bad faith” excep tion to the American Rule See 679 F. Supp. at 1380, 1383, 1388, 1390. None of these authorities, however, permits such a radical and fundamental shifting of costs from the judiciary to litigants. “ See Fleischmann Distilling Carp. v. Maier Brewing Co., 386 U.S. 714, 719 (1967) (because the Lanham Act “meticulously detailed the remedies” available to a plain tiff whose trademark has been infringed, Court inferred a congressional intent to preclude a common law award of attorneys’ fees); see also Bloomer v. Liberty Mut. Ins. Co., 445 U.S. 74 (1980) (finding “common fund” exception to American Rule pre-empted by federal longshoreman statute). 71 Section 1920 of the Judicial Code governs the taxation of court costs. Although it provides for the award of fees for the court clerk, marshall and court reporter, the statute makes no provi sion for payment of the salary of the judge, the judges law clerk, or other staff. 28 U.S.C. § 1920. Congress specifically addressed unreasonable or vexatious multiplication of litigation in section 1927. Appellate courts have unanimously found that Congress did not intend costs under this section to include court expenses.104 Congress amended sec tion 1927 in 1980 to permit awards of attorneys’ fees. H.R. Rep. No. 1234, 96th Cong., 2d Sess. 8, reprinted in 1980 U.S. Code Cong. & Admin. News 2781. Although it extensively examined the subject of frivolous litigation, Congress made no provision for additional court costs in section 1927 or in section 1920. Nor do Rules 11 and 16 authorize the courts to privatize judicial costs. Neither the Rules nor their drafting history reflects any intent to initiate such a radical departure from traditional practice. The drafters likely realized that such a result would impermissibly conflict with sections 1920 and 1927. See Craw ford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 442 (1987).l0S Finally, there is no inherent power to impose such a penalty. The taxation of forum “costs” based on the court’s inherent power106 redistributes litigation expenses in a manner contrary 104 Eash v. Riggins Trucking, Inc., 757 F.2d 557, 560 (3d Cir. 1985) (en banc); United States v. Blodgett, 709 F.2d 608, 609 (9th Cir. 1983); United States v. Ross, 535 F.2d 346 (6th Cir. 1976); United States v. Austin, 749 F.2d 1407, 1409 (9th Cir. 1984). The same judgment is reflected in section 706(k), which specifically limits recovery of costs to the prevailing party and says nothing about fines for the court. 105 The court need not decide here whether Rule 11 would permit (subject to due process constraints) imposing a fine under a different rationale than the lower court relied on or in a substantially smaller amount. E.g., Donaldson v. Clark, 819 F.2d 1551 (11th Cir. 1987) (en banc) ($500 fine). « E.g., White v. Raymark Indus., 783 F.2d 1175,1177 (4th Cir. 1986). Because this power is shielded from direct democratic controls, it must be exercised with restraint and discretion. Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980); see Bloom v. Illinois, 391 U.S. 194, 202 (1968) (reflecting concern about “unbridled” contempt power). 72 to the “American Rule” or any of its exceptions. This rule re quires that parties “shoulder their own counsel fees and other litigation expenses absent statutory or contractual authority for an alternative allocation.” Batson v. Neal Spelce Assocs., Inc., 805 F.2d 546, 550 (5th Cir. 1986); see Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717 (1967); F.D. Rich Co. v. United States, 417 U.S. 116, 128 (1974) (Congress rather than the courts should address further departures from the American Rule). A narrow exception exists for bad faith litiga tion, but under this exception the Supreme Court has never held or suggested that judicial salaries may be charged to litigants. Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258-59 (1975); F.D. Rich Co., 417 U.S. at 129. The courts have no “ roving authority” to tax their salaries, for such a practice “would make major inroads on a policy m at ter that Congress reserved for itself.” Alyeska, 421 U.S. at 269. The ostensible concerns reflected in the district court’s opinion are more appropriately associated with congressional budget decisions rather than an Article III function. See 679 F. Supp. at 1324 (concern for the “ taxpayers of the United States”); id. at 1391 (same) & n.279 (lamenting the “country’s astronomical trade and budget deficits”); id. at 1392 (government is not a profit-making enterprise). Courts of appeal have consistently rejected attempts by district courts to tax their salaries as “costs.”107 In Ray A. Scharer & Co. v. Plabell Rubber Products, Inc., 858 F.2d 317 (6th Cir. 1988), the Sixth Circuit reversed an assessment of the lower court’s costs of operation as a sanction. The district court had assessed over $19,000 “ for the cost of the Court’s wasted time” incurred in presiding over a proceeding where a mistrial was declared. Vacating the assessment, the appellate court expressed “doubt 107 The lower court cited only a few district court opinions for the proposition that litigants can be forced to pay the court’s pro-rata salary. See 679 F. Supp. at 1324. The only decision cited that was the subject of an appellate court opinion was reversed, a development not noted below. Olga’s Kitchen of Hayward, Inc. c. Papo, 108 F.R.D. 695 (E.D. Mich. 1985) ($1,000 award of court’s costs), rev’d in relevant part, No. 85-1581, slip. op. at 48 n.12 (6th Cir. Feb. 16, 1987) (un published opinion) (LEXIS, Genfed Library, US App file). 73 . . . that the court may or should assess its costs of operation’ as sanctions especially without a full opportunity for the offend ing party or parties to be assessed to be heard or to challenge the basis and reasonableness of such sanction.” Id. at 321. The “expenditure” of court resources might be used as a pretext for the imposition of a massive fine, limited only by judicial whim. The rationale could extend to electricity, salaries of maintenance employees, and depreciation of the courthouse itself. See Ross, 535 F.2d at 391.108 It is doubtful whether an award of costs may ever lawfully extend beyond marginal ex penses, objectively quantifiable, incurred directly because of pro ven misconduct. In Eash v. Riggins Trucking, 757 F.2d 557 (3d Cir. 1985) (en banc), a bare majority of the court upheld a $390 sanction against a defendant for belatedly settling a case. The amount represented the cost of impanelling jurors that the judiciary incurred as a result of the delay in settlement. Eash overruled a prior en banc decision, Gamble v. Pope ir Talbot, Inc., 307 F.2d 729 (3d Cir.) (en banc), cert, denied, 371 U.S. 888 (1962), in which a divided court vacated a $100 sanction against an attorney for filing a late brief. In White v. Raymark Industries, 783 F.2d 1175 (4th Cir. 1986), the court approved a juror cost sanction of $2,000 imposed pursuant to a local court rule. In Eash and Raymark, the penalty assessed was nominal and objectively determinable by reference to an additional cost that was incurred directly because of the misconduct found. None of these factors is present here. Even assuming such a fine could be within the court’s authori ty, due process would require that the link between the con duct sanctioned and the fine imposed be subject to contention. This result would improperly cast the court as adverse to a 108 The lower court billed time for itself and its law clerks at an annualized rate of approximately $120,000 ($60 per person per hour), far in excess of the salaries they are paid. See 679 F. Supp. at 1325. The relationship to any ac tual cost is thus questionable. See 28 U.S.C. § 1927 (limited to costs and ex penses “ incurred because of such misconduct”); Fed. R. Civ. P. 11 (expenses “ incurred because o f ’ the filing). 74 litigant.109 The Supreme Court has “ jealously guarded” the re quirement of neutrality in adjudicative proceedings, which preserves both the appearance and reality of fairness. Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980). Once the court con templates submitting a subjective bill for its costs, its status as an independent trier of fact is lost,110 especially here, where the bill was submitted sua sponte, after the matter had been sub mitted for decision, and without notice to the parties.111 The lower court attempted to justify the award of costs as a deterrent. E.g., 679 F. Supp. at 1390. The fine came too late, how ever, to affect the conduct in this case See In re Yagman, 796 F.2d 1165, 1184 (9th Cir. 1986), cert, denied, 484 U.S. 963 (1987). Moreover, the court failed to explain why the huge award to the Army was alone insufficient to accomplish future deterrence. This failure itself is reason to disapprove the extraordinary penalty. 119 Such an inquiry should question whether the court has an obligation to mitigate its expenses by informing the parties when the costs meter starts running and to avoid extended satellite litigation. Cj. Schwarzer, Rule 11 Revisited, 101 Harv. L. Rev. 1013, 1019 (1988) (“If a claim or defense is indeed frivolous, that fact should be sufficiently apparent, early in the litigation pro cess, for the judge or opposing counsel to address it and, by motion or other appropriate measures, eliminate it with minimum expenses.”). The “tim e, ex pense and difficulties of proof inherent in litigating the question of what con stitutes” a reasonable judge’s bill should give the court considerable pause before authorizing its collection. F.D. Rich, 417 U.S. at 116. “ See Terrell v. United States, 6 F.2d 498, 499 (4th Cir. 1925) (judge cannot be a witness). That an award of costs for the court creates an ill fit with the adversary system is especially apparent on appeal. Snow Machines, Inc. v. Hedco, Inc., 838 F.2d 718, 726 (3d Cir. 1988) (“there is no appellee, and the district judge is the closest thing to an adversary”). m In Plabell, the Sixth Circuit reversed in part because there had been inadequate notice and opportunity to be heard with respect to the assessment, even though the party sanctioned had some prior notice that the court was contemplating a sanction of the type and amount awarded, considerably more process than was afforded by the lower court here. 858 F.2d at 320; see also Gagliardi v. McWil liams, 834 F.2d 81, 83 (3d Cir. 1987) (reversing sanction of injunction against future filings for lack of notice, even though pleading sought Rule 11 sanctions and “other appropriate relief which the court deems just and proper”); cj. Raymark, 783 F.2d at 1177 (cost imposed under local rule, after notice). 75 Cabell v. Petty, 810 F.2d 463, 467 (4th Cir. 1987) (“the least severe sanction adequate to serve the purpose should be imposed”); see Herbert v. Saffell, 877 F.2d 267, 270 (4th Cir. 1989) (reversing Rule 41(b) dismissal for district court’s failure to consider whether “other, less drastic sanctions” would accomplish purpose). Members of the bar know that district courts have a variety of means to control their dockets and the conduct of lawyers. There is no need to add court salaries to the sanctions arsenal P2 The absence of objective standards and a true adversarial process for imposing these costs creates a substantial risk of error, if not abuse, and destroys the appearance of impartiality. Pre-existing mechanisms provide the necessary deterrence without the flaws that inhere in this dangerous assertion of power.113 B. The Sanction Was a Form of Criminal Contempt Imposed Without the Required Procedures The unconditional order requiring payment of nearly $38,000 to the court was a punitive fine of the type that can only be imposed for conduct that constitutes criminal contempt. Federal Rule of Criminal Procedure 42(b) and federal law prescribe the procedure to be followed in criminal contempt proceedings. This procedure includes appropriate notice as defined in Rule 42(b), and an opportunity to demand a trial by jury. See 42 U.S.C. § 2000h (in criminal contempt proceedings arising under Title VII, “the accused, upon demand therefor, shall be entitled to a trial by jury, which shall conform as near as may be to the m See Tiedel v. Northwestern Mich. College, 865 F.2d 88, 94 (6th Cir. 1988) (finding imposition of attorneys’ fees pursuant to local mediation rule out side the scope of inherent power, court noted that there was no evidence that this “extraordinary and exceptional measure” was the only way to assure suc cess of mediation scheme). U3 The lower court made no finding that counsels’ opposition to the Army’s sanctions motions was frivolous or undertaken in bad faith. The award of court costs for the sanctions hearings must be vacated for this reason alone Moreover, a court may not demand its “costs” from a litigant as a condition to receiving due process. See Boddie v. Connecticut, 401 U.S. 371, 380-81 (1971); see also supra section III.D (“fees on fees” not permissible). 76 practice in criminal cases”). Because the procedures required for imposition of criminal contempt were not followed, this fine must be vacated. Richmond Black Police Officers Ass’n v. City of Richmond, 548 F.2d 123, 126-28 (4th Cir. 1977). The distinction between criminal and civil contempt is that if the “relief provided is a fine, it is remedial when it is paid to the complainant and punitive when it is paid to the court, though a fine that would be payable to the court is also remedial when the defendant can avoid paying the fine simply by per forming the affirmative act required by the court’s order.” Hicks ex rel. Feiock v. Feiock, 108 S. Ct. 1423, 1429-30 (1988). Even if the contempt is only partly criminal in nature, that criminal aspect “fixes its character for purposes of procedure on review.” Penfield Co. v. SEC, 330 U.S. 585, 591 (1947); seeNyev. United States, 313 U.S. 33, 42-43 (1941). The fine imposed below has all the indicia of criminal con tempt. It was exacted for past conduct and not to encourage prospective performance. The parties cannot avoid the fine by another act — payment alone is required. The fine is payable to the court and not to the adversary, a classic indication of punitive purpose where the penalty is not coercive E.g., Windsor Power House Coal Co. v. District 6 United Mine Workers, 530 F.2d 312, 317 (4th Cir.), cert, dismissed, 429 U.S. 876 (1976); Carbon Fuel Co. v. United Mine Workers, 517 F.2d 1348, 1350 (4th Cir. 1975). The punitive purpose was also betrayed by the conditions restricting and eliminating the ability of third parties to pay the fines. The court expressly prohibited the NAACP or the NAACP Legal Defense and Educational Fund (neither of which was a party to the proceedings) from paying the fines, and limited the attorneys’ law firm to paying 75 % of the sanctions assessed. 679 F. Supp. at 1392. It also refused Mr. Chambers’ offer to bear the fines, fees and costs imposed on all lawyers. 123 F.R.D. at 223. If the purpose was only compensatory, the court would have had no interest in who satisfied the obliga tion. See Richmond Black Police Officers Ass’n, 548 F.2d at 125 (requiring personal payment by contemnor was evidence of 77 punitive character). The court’s professed desire to deter,U4 the immense size of the award, and its questionable propriety also show a punitive purpose.115 The district court’s efforts to relate the fine to “expenses” of the judiciary do not overcome its criminal essence. In Hess v. New Jersey Transit Rail Operations, Inc., 846 F.2d 114 (2d Cir. 1988), the district court had ordered the defendant to pay $1,000 to the court for making a dilatory settlement offer. The figure represented the approximate cost of empanelling a jury. The Sec ond Circuit held the fine to be a criminal contempt order, calling it an “unconditional punishment for past conduct, having only such deterrent effect as inheres in any criminal punishment.” Id. at 115 (citing Carbon Fuel); see In re Rumaker, 646 F.2d 870 (5th Cir. 1980) ($500 fine payable to court for expenses in curred by marshall and clerk’s offices found primarily punitive). Moreover, the judiciary experienced no actual financial loss as a result of the conduct punished. The overhead cited by the court is not a “cost,” as all of these expenses were salaries that the government would have been obligated to pay even if plain tiffs had never come to court. In In re Kave, 760 F.2d 343 (1st Cir. 1985), the district court had imposed a fine of $3,000 on an attorney, payable to the court, for reimbursement of stenographer costs, master’s fees, and attorneys’ fees. The court of appeals held that this fine was punitive because (among other u< 679 F. Supp. at 1391; 123 F.R.D. at 223; see also 679 F. Supp. at 1375 (ra tionale for shifting fees in instances of bad faith is punitive); id. at 1390 (more than compensation, aim of sanction is to deter and punish). 115 Yagman, 796 F.2d at 1180-81; see Shillitani v. United States, 384 U.S. 364, 370 n.5 (1966) (deterrence is a characteristic of criminal contempt); cj. Donaldson v. Clark, 819 F.2d 1551, 1559 n.10 (11th Cir. 1987) (en banc); id. at 1563-64 (Johnson, J., concurring). In Donaldson, the court thought com pliance with Rule 42(b) would be unnecessary where a $500 fine was imposed, payable to the clerk, under Rule 11. The opinions indicate that the court would consider contempt proceedings mandatory, however, for a fine of the nature and magnitude imposed below. 819 F.2d at 1561 (more extensive procedural safeguards required where sanction is severe in amount or arguably unrelated to the misconduct). 78 things) there was “no outstanding documentation or testimony upon which [to] conclude that the fine represents reasonable compensation for losses incurred by the victim of the alleged contemnor’s conduct.” Id. at 352 (emphasis in original); see Windsor Power House, 530 F.2d at 317 (finding proof of punitive purpose where record contained no evidence that the fine equaled the complaintant’s actual loss). The record here is likewise barren of documentation or admissible testimony that proves the court’s “costs.” 116 This deficiency, the large amount of the fine, and its punitive purpose all prove the error in fail ing to afford the attorneys criminal contempt protections. VII. The District Court Erred in Imposing Sanctions Under its Inherent Power and Section 1927 A. There Was No Basis for Sanctions Under the Court’s Inherent Power Under the “bad faith” exception to the American Rule, a court may impose sanctions only in “exceptional cases” where it deter mines that an “unfounded action” has been brought “in bad faith, vexatiously, wantonly, or for oppressive reasons.”117 Since an “award of attorney fees under the ‘bad faith’ exception is punitive . . . the penalty can be imposed only in exceptional The findings (679 F. Supp. at 1324-26, 1364-65) are based solely on asser tions submitted by the court itself, and this proof is not competent. See Fed. R. Evid. 605 (judge may not testify as a witness). They are also improperly based on judicial notice of various costs, which the parties had no opportuni ty to comment upon. Fed. R. Evid. 201(b), (e). None of the court’s assertions about the time spent by it or its staff were subject to cross-examination, and thus are inadmissible hearsay. Fed. R. Evid. 802; see 6 J. Wigmore, Evidence in Trials at Common Law § 1805, at 347 (Chadbourn rev. 1976). Larouche v. National Broadcasting Co., 780 F.2d 1134, 1140 (4th Cir.) (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258-59 (1975)), cert, denied, 479 U.S. 818 (1986); Nelson v. Piedmont Aviation, Inc., 750F-2d 1234, 1238 (4th Cir. 1984), cert, denied, 471 U.S. 1116 (1985); Brewer c' School Bd. of Norfolk, 456 F.2d 943, 949 (4th Cir.), cert, denied, 406 U.S. 933 (1972). 79 cases and for dominating reasons of justice.”118 To “award fees under the bad faith exception a court must find clear evidence that the losing party’s claims were ‘entirely without color and made for reasons of harassment or delay or for other improper purposes.’ The test is conjunctive and neither meritlessness alone nor improper purpose alone will suffice.”119 The only “finding” made below with respect to the bad faith of counsel was: 11. As for plaintiffs’ counsel, they had the responsibility to ascertain and assess the facts in light of the generally discernible legal standards for determining unlawful discrimination under Title VII. Counsel, experienced in the field, have been trained to make this legal analysis and reach a rational conclusion about the merits of plaintiffs’ numerous claims. If this had been done to any professional degree, it is inconceivable that many of plaintiffs’ claims would have been filed and clearly none would have been maintained after the close of discovery. 679 F. Supp. at 1204. The court thus reduced bad faith to a lack of professionalism, which does not constitute the necessary “specific finding” of an improper purpose that “ha[s] to precede any sanction under the court’s inherent powers.” Roadway Ex press, Inc. v. Piper, 447 U.S. 752, 767 (1980). Moreover, none of the Blue or Harris claims were frivolous. This, quite simply, ends the inquiry, and requires reversal of the bad faith sanctions. See Colombrito v. Kelly, 764 F.2d 122,133 m Beaudry Motor Co. v. Abko Properties, Inc., 780 F.2d 751 (9th Cir.) (quoting United States v. Standard Oil Co., 603 F.2d 100, 103 (9th Cir. 1979)), cert, denied, 479 U.S. 825 (1986); Morris v. Peterson, 871 F.2d 948, 950 (10th Cir. 1989); Nepera Chem., Inc. v. Sea-Land Serv., Inc., 794 F.2d 688, 702 (D.C. Cir. 1986). 119 Sierra Club v. United States Army Corps of Eng’rs, 776 F.2d 383, 390 (2d Cir. 1985), cert, denied, 475 U.S. 1084 (1986); see Dreiling v. Peugeot Motors, 850 F.2d 1373, 1384 (10th Cir. 1988). 80 (2d Cir. 1985); Nemeroffv. Abelson, 620 F.2d 339, 348 (2d Cir. 1980) F° B. The Court Erred in Imposing Sanctions Under Sec tion 1927 Ignoring the language of the statute121 and overwhelming authority that intentional misconduct is required under section 1927,122 the lower court sanctioned the attorneys for their “negligent conduct.” 679 F. Supp. at 1383. This standard is wrong as a matter of law and the imposition of section 1927 sanctions must be reversed. According to the court below, “ ‘unreasonable’ behavior im plies an incorporation of pure negligence concepts” since “negligence is a matter of risk . . . quintessential^ . . . defined as ‘conduct which involves an unreasonably great risk.’ ” Id. at 1381. Likewise, according to the court, “vexatiousness” means conduct which is “without reasonable or probable cause.” Id. at 1382. Thus, the court below incorrectly read Cong ress’ requirement that an attorney’s conduct “multipl[y] the “ Underlying the court’s conclusion here was the erroneous notion that drop ping a claim can be sanctionable. If a claim is frivolous, its withdrawal should be encouraged, not punished. If a claim is not frivolous, sanctions could not be awarded at the conclusion of the case, so they surely cannot be justified at an earlier stage “ 28 U.S.C. § 1927 provides: “Any attorney . . . who so multiplies the pro ceedings 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.” m Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986), cert, denied, 480 U.S. 918 (1987); New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1906 (9th Cir. 1989); Burull v. First N atl Bank of Minn., 831 F.2d 788, 790 (8th Cir. 1987), cert, denied, 108 S. Ct. 1225 (1988); Manax v. McNamara, 842 F.2d 808, 814 (5th Cir. 1988); Ford v. Temple Hosp., 790 F.2d 342, 346-50 (3d Cir. 1986); see Blair v. Shenandoah Women’s Center, 757 F.2d 1435, 1438 (4th Cir. 1985) (affirming section 1927 sanction based on “a correct finding of subjective bad faith”). The court purported to be applying law adopted by the Sixth Circuit. 679 F. Supp. at 1381. It was wrong. See In re Ruben, ® F.2d 977, 983-87 (6th Cir. 1987) (“negligent acts will not support an award under § 1927”), cert, denied, 108 S. Ct. 1108 (1988). 81 the proceedings . . . unreasonably and vexatiously” to mean merely that the conduct be “unreasonable” and “without reason.” “ [A]ll parts of a statute, if at all possible, are to be given effect,” and “clear use of different terminology within a body of legis lation is evidence of an intentional differentiation.” 123 Congress did not mean to be redundant when it required that proceedings be multiplied unreasonably and vexatiously. “Vexatious” means “intended to harass.” Webster’s Ninth New Collegiate Dictionary 1312 (1986). The lower court improperly read this crucial ele ment of intent out of the statute. As a second basis for adopting a negligence standard, the lower court looked to the 1980 amendment to section 1927, which added attorneys’ fees to the statute’s sanctions. The court assumed that Congress must have intended to change the standard of care, else the statute would be redundant to the court’s inherent powers. 679 F. Supp. at 1382.124 This assumption is wholly unfounded. Congress did not change the standard of care by its 1980 amend ment. It merely supplemented the sanctions available in response to the decision in Roadway Express that “excess costs” did not in clude attorneys’ fees. The legislative history proves this: As a compromise [Congress] agreed to amend section 1927 . . . in one respect — to broaden the range of in creased expenses which an attorney who engages in dilatory litigation practices may be required by the judge to satisfy personally. . . . The amendment agreed to by the managers expands the category of expenses the judge might require an attorney to satisfy personally to include “excess costs, expenses, and attorneys’ fees reasonably incurred because of such [dilatory] conduct.” 123 Weinberger v. Hynson, Westcott, ir Dunning, Inc., 412 U.S. 609, 633 (1973); Lankford v. Law Enforcement Assistance Admin., 620 F.2d 35, 36 (4th Cir. 1980); see 2A N. Singer, Statutes and Statutory Construction § 46.06 (4th ed. 1984). 114 The court’s concern for redundancy here is inconsistent with its equating “unreasonable” with “vexatious.” 82 H.R. Rep. No. 1234, 96th Cong., 2d Sess. 8 (emphasis added), reprinted in 1980 U.S. Code Cong. & Admin. News 2781, 2782. Section 1927 sanctions are to be imposed only “if an attorney violate[s] the existing standard covering dilatory conduct.” Id. The drafters recognized that abrogation of the bad faith standard could have the deleterious and unwanted result that has occured here: “The high standard which must be met to trigger section 1927 insures that the provision in no way will dampen the legitimate zeal of an attorney in representing his client.” 125 Thus, as with inherent power sanctions, the court under sec tion 1927 must find both that the action was without merit and that it was prosecuted for an improper purpose. Since the claims here were not frivolous they cannot be the basis of section 1927 sanctions. Greenberg v. Hilton In ti Co., 870 F.2d 926, 936 (2d Cir. 1989); O’Rourke v. City of Norman, 875 F.2d 1465 (10th Cir. 1989); Badillo v. Central Steel b Wire Co., 717 F.2d 1160, 1165 (7th Cir. 1983). Even if the plaintiffs’ case was frivolous, sanctions are inap propriate under section 1927. Estate of Bias ex rel. Chargualaf a Winkler, 792 F.2d 858, 860 (9th Cir. 1986) (citation omitted). “[B]ad faith is present when an attorney knowingly or recklessly raises a frivolous argument or argues a meritorious claim for the purpose of harassing an opponent.” Id. (citations omitted). The court below alternatively relied upon its bad faith “find ings” to support sanctions under section 1927. 679 F. Supp. at m Id. The floor debate confirms this principle. The managers on the part of the House were firm in their resolve to maintain the tough standard of current law so that the legisla tion in no way would dampen the legitimate zeal of an attorney in representing a client. Under the agreement of the managers, an attorney may be re quired to pay costs, as well as expenses and attorney’s fees reasonably incurred on account of such attorney’s dilatory con duct. But the standard is that in current law, not the less severe standard the Senate had agreed to originally. 126 Cong. Rec. 23,625-26 (1980) (remarks of Rep. Mazzoli). 83 1384. There was no sufficient finding of bad faith by the at torneys. See supra p. 80. Thus, there are no findings that justify sanctions even under the court’s alternative holding.126 The sanc tions imposed under section 1927 must, therefore, be reversed. VIII. The District Court Erred in Imposing Sanctions Under Rule 16 In imposing sanctions under Rule 16(f), the district court relied exclusively on the provision authorizing sanctions “if a party or party’s attorney fails to participate in good faith.” 679 F. Supp. at 1389. The court reasoned that “ [i]f an allegation or conten tion is offered in a final pre-trial order without a reasonable factual or legal basis, much like Rule 11, it violates Rule 16,” Id. The lack of “good faith” found by the court consisted of the assertion of “meritless or frivolous claimjs]” with the knowledge that opposing counsel will prepare to defend against them. Id. And according to the court, for final pre-trial orders the “standards of professional responsibility'” are the same under Rule 16 and Rule 11, so liability does not require a finding of an im proper motive, bad faith, or reckless conduct. Id. The district court thus committed four legal errors. First, there is simply no support in the language or drafting history of Rule 16(f) for the proposition that its standards of conduct and “liability” mimic those under Rule 11. Rule 16’s drafting history demonstrates that the court erred in its assertion regarding “standards of pro fessional responsibility” and in effectively reading “good faith” out of Rule 16(f), or at least in depriving it of subjective content. In responding to comments on the published preliminary draft of the proposed amendments to Rule 16, the Chairman and m Moreover, the court incorrectly believed that section 1927 “requires” a sanc tion if liability is found. 679 F. Supp. at 1380. The imposition of sanctions under this statute (unlike Rule 11) is discretionary, and the court may for equitable reasons decline to impose sanctions even where it finds a statutory violation. See Ford v. Temple Hosp., 790 F.2d at 347; Warren v. Reserve Fund, Inc., 728 F.2d 741, 748 (5th Cir. 1984); Gelco Corp. v. Baker Indus., 779 Fid 26, 28-29 (8th Cir. 1985). 84 Reporter of the Civil Rules Committee recommended rejection of a proposal to “[djelete 16(f) (sanctions) and incorporate [them] in one [proposed] separate sanctions rule for 7, 11, 16, 26(g), 37.” Advisory Committee on Civil Rules, Analysis of Comments Received Re: Proposed Rule 16, at 11 (Dec. 21, 1981).127 One reason for opposing the proposal to combine sanction provisions was that “since the standards differ as between some of these rules, the test for determining whether a violation occurred will differ.” Id. Judge Mansfield and Professor Miller also recom mended rejection of a proposal to delete “ the provision for im position of sanctions ‘if a party or a party’s attorney fails to par ticipate in good faith,’ ” failing to “see how, if sanctions are to be a useful deterrent against current delay and wasteful prac tices on the part of counsel, we can avoid requiring the judge to determine in certain cases whether the conduct was willful and in bad faith.” Id. at 13. The Advisory Committee followed both recommendations. Cf. Whalen v. Ford Motor Credit Co., 684 F.2d 272, 275-79 (4th Cir.) (en banc) (relying on Advisory Committee papers), cert, denied, 459 U.S. 910 (1982). Second, the district court erroneously interpreted the provi sion in Rule 16(f) on which it relied to apply to a failure “to participate in good faith” in a pretrial order, when that provi sion applies only to a failure to so participate in a pre-trial con ference, as the immediately preceding clause makes clear. See Hgueroa-Rodriguez v. Lopez-Rivera, 878 F.2d 1488,1491 (1988), reinstated in part, 878 F.2d 1478, 1486 (1st Cir. 1989) (en banc). Sanctions may be imposed under Rule 16(f) “with respect to final pre-trial orders” only for a failure to obey such an order, and that was not the predicate for the violation found below.128 m This memorandum, which is filed in the National Archives, Washington, D.C., is reprinted in the addendum to this brief. “ The district court committed a third, related error in finding that “plain tiffs counsel violated Rule 16(d) and (e) with respect to both Final Pre-Trial Orders.” 679 F. Supp. at 1390. The only “violations” of Rule 16 for which sanc tions may be imposed are stated in Rule 16(f); failing “to participate in good faith” in a pretrial order is not one of those violations, and there is no basis for finding that plaintiffs’ counsel failed “to participate in good faith” in the final pretrial conference. 85 The court also found a violation (“with respect to both Final Pre-Trial Orders”) for “failing to participate in the final pre-trial conference and its concomitant final order (s) in good faith 679 F. Supp. at 1390. It did not explain, however, how counsel failed “to participate in good faith” in the final pretrial con ference, and the transcript of that conference reveals no such failure. App. 3381-86; see Figueroa-Rodriguez, 878 F.2d at 1491 (“ [Njothing about the Rule divorces it from the usual require ment that findings be made adequate to support its invocation.”). The court evidently believed that if there is a pretrial con ference at which a pretrial order is discussed, a frivolous con tention in that order constitutes a failure “to participate in good faith” in the conference (even if the contentions are not discussed at the conference, see App. 3386). This theory has no support in the rule or its drafting history and unreasonably expands the four discrete violations for which the rule authorizes sanctions. The district court thus committed the same error that led to reversal of the Rule 16 sanction in Figueroa-Rodriguez, 878 F.2d at 1491 n.6, where the district court found that a frivolous sum mary judgment motion violated Rule 16. The First Circuit reversed, holding that “the filing of a ‘meritless and frivolous’ pleading [or other paper] does not, in itself, transgress Rule 16.” Id. at 1491. Fourth, even if sanctions could be imposed under Rule 16 for failure “ to participate in good faith” in a pretrial order, the documents on which the district court relied for that purpose are not the pretrial orders. Far from “reciting the action taken” at the final pretrial conference, both pretrial orders are mainly the parties’ respective contentions and lists of possible exhibits and witnesses. They were thus more in the nature of pretrial statements.129 In fact, the “Final Pre-Trial Order” was hardly 129 See McCargo v. Hedrick, 545 F.2d 393, 401 & n.9 (4th Cir. 1976) (pre-1983 requirement that “court shall make an order”); R. Rodes, K. Ripple & C. Mooney, Sanctions Imposable for Violations of the Federal Rules of Civil Pro cedure 66-67 (Federal Judicial Center 1981). Compare Manual for Complex Litigation §§ 21.634, 21.66 (2d ed. 1985). 86 discussed at the final pretrial conference on December 8. App. 3381-86. Finally, even though the latter document was “approv ed” by the court, it is not clear that the “Supplemental Pre-Trial Order” was ever “approved” or otherwise adopted by the district court; if not, it is neither an “order” nor a “pretrial order” for purposes of Rule 16. IX. There Is Neither A Factual Nor A Legal Basis To Sanction The Law Firm The district court assessed $1,413.62 against Ferguson, Stein, Watt, Walls & Adkins, P.A.,130 the firm of the three attorneys in dividually sanctioned. The firm was not punished for any con duct of Chambers, Glazer or Sumter, but only because “a number of other lawyers with the firm participated in this case in varying minor ways.” 679 F. Supp. at 1392. The court did not specify which “other” attorneys acted improperly or in what way. This failure alone constitutes reversible error.131 Moreover, none of the authorities relied upon below support the imposition of sanctions against a law firm. By its terms, Rule 11 applies only to attorneys and not to law firms. It is the at torney who must sign all papers, and thereby vouch for their sufficiency. Fed. R. Civ. P. 11 (“Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in the attorney’s individual name.”). And it is only the signatory that the court may 130 This was the name of the firm at the time that it was sanctioned; at the outset of the litigation it was Chambers, Stein, Ferguson & Becton, P.A.; it is now Ferguson, Stein, Watt, Wallas, Adkins & Gresham, P.A. U1 See F.H. Krear 6- Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1268 (2d Cir. 1987) (Rule 11); Figueroa-Rodriguez v. Lopez-Rivera, 878 F.2d 1488, 1491 (1988) (Rule 16), reinstated in part, 878 F.2d 1478 (1st Cir. 1989) (en banc); Dow Chem. Pac. Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 345 (2d Cir. 1986) (bad faith exception); Schwarz v. Folloder, 767 F.2d 125, 132-33 (5th Cir. 1985) (section 1927). 87 sanction, not the law firm.132 Similarly, no authority supports the extension of Rule 16 from a “party or party’s attorney” to the attorney’s law firm. The suggestion is so obscure that research reveals no Rule 16 case that considers sanctioning a law firm. See, e.g., Poulis v. State Farm Fire ir Casualty Co., 747 F.2d 863 (3d Cir. 1984); In re Baker, 744 F.2d 1438 (10th Cir. 1984), cert, denied, 471 U.S. 1014 (1985). Section 1927 is even more narrowly drawn; it applies only to “attorney[s] or other person[s] admitted to conduct cases in any court of the United States.” 28 U.S.C. § 1927. Since law firms cannot be admitted to practice law, and since the statute re quires the sanction to be satisfied “personally,” they cannot be sanctioned under this provision.133 This rationale also underlies the bad faith exception to the American Rule. See Roadway Ex press, Inc. v. Piper, 447 U.S. 752, 766 (1980); see also Dow Chem. Pac. Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 344 (2d Cir. 1986) (“bad faith is personal”). The sactions imposed against the law firm were thus entirely without factual or legal justification. 132 See Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 875 & n.13 (5th Cir. 1988) (en banc); Robinson v. National Cash Register Co., 808 F.2d 1119, 1128-29, 1132 (5th Cir. 1987). But see Calloway v. Marvel Entertainment Group, 854 F.2d 1452, 1478-81 (2d Cir. 1988), cert, granted, 109 S. Ct. 1116 (1989). The Supreme Court recently heard argument to resolve this split in the circuits. Pavelic &■ Leflore v. Marvel Entertainment Group, No. 88-791 (U.S., argued Oct. 2, 1989). 133 See also Zaldivar v. City of Los Angeles, 780 F.2d 823, 831 (9th Cir. 1986) (“ jsjanctions under section 1927 may be imposed only against attorneys and not parties”); Westmoreland v. CBS, Inc., 770 F.2d 1168,1173 (D.C. Cir. 1985) (section 1927 “applies only to attorney misconduct”); cf. In re Yagman, 796 F.2d 1165, 1188 n.26 (9th Cir. 1986) (raising but not deciding the issue), cert, denied, 484 U.S. 963 (1987). 88 CONCLUSION For all of the foregoing reasons, the judgment of the district court should be reversed insofar as it sanctioned the appellants and disciplined the attorney-appellants. Respectfully submitted, I s i B o n n i e K a y a t t a - S t e i n g a r t B o n n i e K a y a t t a -S t e i n g a r t FRIED , FRANK, HARRIS, SHRIVER & JACOBSON (A Partnership Including Professional Corporations) One New York Plaza New York, New York 10004 (212) 820-8000 Attorneys for Appellant Julius L. Chambers Of Counsel: J o h n S u l l i v a n D o u g l a s H . F l a u m Tr ic ia K a l l e t t K l o s k P e t e r L . S i m m o n s Pa t r ic ia S . G e n n e r i c h * Dated: New York, New York October 14, 1989 * Not yet admitted to the bar 89 ADDENDUM GLOSSARY OF ARMY ABBREVIATIONS AAP . . . . . . . . . . . Affirmative Action Plan AFGE . . . . . . . . . . American Federation of Government Employees C B A ...................... Collective Bargaining Agreement C P O .................... .. Civilian Personnel Office DC ......................... Dental Clinic D E N T A C ............. Dental Activity FE O R P .................. Federal Equal Opportunity Recruitment Program FORSCOM . . . . . Forces Command (Fort Bragg’s Higher Headquarters) PPM . . . . . . . . . . . Federal Personnel Manual FSEE .................. .. Federal Service Entrance Examination G S .................. General Schedule HQC ....................... Highly Qualifying Criterion IMA . ..................... Institute for Military Assistance KSA. . . . . . . . . . . . Knowledge, Skills and Ability (scoring classification after June 1982) M E D D A C ........... Medical Activity MPA . . . . . . . . . . . Merit Promotion Announcement M P P ...................... Merit Promotion Plan MSPB . .................. Merit Systems Protection Board A-l N C O IC .................. Non-Commissioned Officer in Charge O IC .................... .. Officer in Charge O P F ...................... Official Personnel Folder O P M .................. Office of Personnel Management (formerly Civil Service Commission) Q S I ........................ Quality Step Increase R I F .................... Reduction-in-Force S S P .................... Sustained Superior Performance VRA . . . . . . . . . . . Veterans Readjustment Appointment W B .................... Wage Board W G .................... .. . Wage Grade W L ........................ Wage Leader W S ........................ Wage Supervisor A-2 IDENTIFICATION OF KEY PARTICIPANTS G ERA LD IN E Dental Assistant at DC-6. BA LLEW Sandra Blue’s co-worker. LT. CO L. BATTS Deputy Commander. HQ Command in 1979. LT. CO L. BEASLEY Oral surgeon and OIC. On rating and ranking panel for MPA 285-78. SANDRA BLU E Plaintiff Army employee from 1973 to 1983. JOAN BRO CKI Selected over Blue for MPA 273-79. JEAN BYRD Staffing Specialist for MPAS 303-79, 273-79, 67-83 and 285-78. CAROLYN CAVE Dental Assistant at DC-6 since 1980. SILAR CRASE Director of DC-1 in 1976. COL. CR ESSLER OIC at DC-6 in October 1978. W ILLIAM D ICKERSON Chief of Fort Bragg’s Recruitment and Placement Division since 1980. E LD R ID G E Harris’ co-employee, classified GS-5. BUELAH MAE HARRIS Plaintiff-Intervenor. JERRY HORNE Civilian Personnel Officer at Ft. Bragg from January 1980. COL. SH ELD O N Deputy DENTAC Commander JACOBSON OIC at DC-5 since July 1982 B-l JEN KIN S COMPACT Sergeant M ajor in 1981. SGT. WAYNE JO N ES N CO IC at DC-6 from May 1980 to February 1982, and August 1982 to March 1983. JAM ES T. LAMB, Dentist assigned to DC-6 in February D.D.S. 1979. MAJ. M ARSHALL Chief of COMPACT in 1981. G IN ET TE MOREAU Selected over Blue for 303-79. CO L. SAM UEL C. MORGAN Colonel in the Dental Corps DENTAC Commander from 1978 to June 1982. CO L. PAQUETTE OIC for DC-6 in December 1979 Blue’s Reviewing Officer. ALAN PARROW Plaintiffs’ Statistical Expert. MAJ. PRATT Chief of COMPACT in 1979. SGT. OSCAR Dental Specialist at Ft. Bragg from 1975 RAMOS-RIVERA to June 1979. NCO IC at DC-6 from April 1978 until June 1979. PATRICIA ANN RANDALL Dental assistant at DC-6 from July of 1978 until November 1981. MARILYN ROACH Dental Hygienist at DC-6 since 1978. MAJOR FR ED E R IC K L. SYKES OIC at DC-6 from May 1981 to October 1982. MR. TODD Selected over Harris for MPA 64-81. B-2 SGT. JO SEPH VINCEN T RUBY W ELLS CH RISTINE W H ITLO CK N CO IC at DC-6 from June 1979 to April 1980. Selected over Harris for MPAS 94-81 and 210-81. Supervisor of Harris and Eldridge, in con nection with Harris’ classification claim. B-3 STATUTES 28 U.S.C. § 1920. Taxation of Costs A judge or clerk of any court of the United States may tax as costs the following: (1) Fees of the clerk and marshal; (2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and copies of papers necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title. (6) Compensation of court appointed experts, com pensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under sec tion 1828 of this title. A bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree. 28 U.S.C. § 1927. Counsels liability for excessive costs 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 vex- atiously 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. § 2412. Costs and fees (a) Except as otherwise specifically provided by statute, a judgment for costs, as enumerated in section 1920 of this C-l title, but not including the fees and expenses of attorneys, may be awarded to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. A judgment for costs when taxed against the United States shall, in an amount established by statute, court rule, or order, be limited to reimbursing in whole or in part the prevailing party for the costs incurred by such party in the litigation. (b) Unless expressly prohibited by statute, a court may award reasonable fees and expenses of attorneys in addi tion to the costs which may be awarded pursuant to subsec tion (a), to the prevailing party in any civil action brought by or against the United States or any agency or any of ficial of the United States acting in his or her official capaci ty in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award. 42 U.S.C. § 2000e-5(k) Attorney’s fee; liability of Commission and United States for costs (k) In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney’s fee as part of the costs, and the Commission and the United States shall be liable for costs the same as private person. C-2 FEDERAL RULES OF CIVIL PROCEDURE Rule 11. Signing of Pleadings, Motions, and Other Papers; Sanctions Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one at torney of record in the attorney’s individual name, whose ad dress shall be stated. A party who is not represented by an at torney shall sign the party’s pleading, motion, or other paper and state the party’s address. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. The rule in equity that the averments of an answer under oath must be overcome by the testimony of two witnesses or of one witness sustained by corroborating circumstances is abolished. The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not in terposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. If a pleading, motion, or other paper is not signed, it shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader or movant. If a pleading, mo tion or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an ap propriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee. Rule 16. Pretrial Conferences; Scheduling; Management (a) Pretrial Conference; Objectives. In any action, the court may in its discretion direct the attorneys for the parties and any unrepresented parties to appear before it for a con ference or conferences before trial for such purposes as D-l (1) Expediting the disposition of the action; (2) establishing early and continuing control so that the case will not be protracted because of lack of management; (3) discouraging wasteful pretrial activities; (4) improving the quality of the trial through more thorough preparation, and; (5) facilitating the settlement of the case. (b) Scheduling and Planning. Except in categories of actions exempted by district court rule as inappropriate, the judge, or a magistrate when authorized by district court rule, shall, after consulting with the attorneys for the parties and any unrepresented parties, by a scheduling conference, telephone, mail, or other suitable means, enter a schedul ing order that limits the time (1) to join other parties and to amend the pleadings; (2) to file and hear motions; and (3) to complete discovery. The scheduling order also may include (4) the date or dates for conferences before trial, a final pretrial conference, and trial; and (5) any other matters appropriate in the circumstances of the case. The order shall issue as soon as practicable but in no event more than 120 days after filing of the complaint. A schedule shall not be modified except by leave of the judge or a magistrate when authorized by district court rule upon a showing of good cause. D-2 (c) Subjects to be Discussed at Pretrial Conferences. The par ticipants at any conference under this rule may consider and take action with respect to (1) the formulation and simplification of the issues, including the elimination of frivolous claims or defenses; (2) the necessity or disrability of amendments to the pleadings; (3) the possibility of obtaining admissions of fact and of documents which will avoid unnecessary proof, stipulations regarding the authenticity of documents, and advance rulings from the court on the admissibili ty of evidence; (4) the avoidance of unnecessary proof and of cumulative evidence; (5) the identification of witnesses and documents, the need and schedule for filing and exchanging pretrial briefs, and the date or dates for further conferences and for trial; (6) the advisability of referring matters to a magistrate or master; (7) the possibility of settlement or the use of extra judicial procedures to resolve the dispute; (8) the form and substance of the pretrial order; (9) the disposition of pending motions; (10) the need for adopting special procedures for managing potentially difficult or protracted actions that may involve complex issues, multiple parties, dif ficult legal questions, or unusual proof problems; and (11) such other matters, as may aid in the disposition of the action. D-3 At least one of the attorneys for each party participating in any conference before trial shall have authority to enter into stipula tions and to make admissions regarding all matters that the par ticipants may reasonably anticipate may be discussed. (d) Final Pretrial Conference. Any final pretrial conference shall be held as close to the time of trial as reasonable under the circumstances. The participants at any such conference shall formulate a plan for trial, including a program for facilitating the admission of evidence. The conference shall be attended by at least one of the attorneys who will con duct the trial for each of the parties and by any unrepresented parties. (e) Pretrial Orders. After any conference held pursuant to this rule, an order shall be entered reciting the action taken. This order shall control the subsequent course of the ac tion unless modified by a subsequent order. The order following a final pretrial conference shall be modified on ly to prevent manifest injustice. (f) Sanctions. If a party’s attorney fails to obey a schedul ing or pretrial order, or if no appearance is made on behalf of a party at a scheduling or pretrial conference, or if a party or party’s attorney is substantially unprepared to par ticipate in the conference, or if a party or party’s attorney fails to participate in good faith, the judge, upon motion or the judge’s own initiative, may make such orders with regard thereto as are just, and among others any of the orders provided in Rule 37(b)(2)(B), (C), (D). In lieu of or in addition to any other sanction, the judge shall require the party or the attorney representing the party or both to pay the reasonable expenses incurred because of any non- compliance with this rule, including attorney’s fees, unless the judge finds that the noncompliance was substantially justified or that other circumstances make an award of ex penses unjust. D-4 Rule 41. Dismissal of Actions (a) Voluntary Dismissal: Effect Thereof. (1) By Plaintiff; by Stipulation. Subject to the provi sions of Rule 23(e), of Rule 66, and of any statute of the United States, an action may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judg ment, whichever first occurs, or (ii) by filing a stipula tion of dismissal signed by all parties who have ap peared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of the United States or of any state an action based on or including the same claim. (2) By Order of Court. Except as provided in paragraph (1) of this subdivision of this rule, an action shall not be dismissed at the plaintiff s instance save upon order of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff’s motion to dismiss, the ac tion shall not be dismissed against the defendant’s ob jection unless the counterclaim can remain pending for independent adjudication by the court. Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice. (b) Involuntary Dismissal: Effect Thereof. For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against the defendant. After the plaintiff, in an action tried by the court without a jury, has completed the presen tation of evidence, the defendant, without waiving D-5 the right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment un til the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a). Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a part under Rule 19, operates as an adjudication upon the merits. (c) Dismissal of Counterclaim, Cross-Claim, or Third- Party Claim. The provisions of this rule apply to the dismissal of any counter-claim, cross-claim, or third- party claim. A voluntary dismissal by the claimant alone pursuant to paragraph (1) of subdivision (a) of this rule shall be made before a responsive pleading is served or, if there is none, before the introduction of evidence at the trial or hearing. (d) Costs of Previously Dismissed Action. If a plaintiff who has once dismissed an action in any court com mences an action based upon or including the same claim against the same defendant, the court may make such order for the payment of costs of the action previously dismissed as it may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order. D-6 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NORTH CAROLINA ORDER ADOPTING DISCIPLINARY RULES The attached rules of disciplinary procedure are adopted, effective October 1, 1980, to govern professional conduct of attorneys appearing in this court. The Clerk is directed to main tain a copy of these disciplinary rules available for public inspection in each of his offices, and to provide copies to attorneys free of charge upon request. SO ORDERED. This 29th day of August, 1980. Is/ F.T. D UPREE, JR .” C H IE F UNITED STATES D ISTRICT JU D G E Is/ W. EA RL BRITT UNITED STATES D ISTRICT JUD G E Isl ___________________________________ JOHN D. LARKINS, JR. SENIOR UNITED STATES DISTRICT JU D G E VI. RULES OF DISCIPLINARY PROCEDURE RULE 100.00 ADOPTION OF DISCIPLINARY RULES RU LE 101.00 ATTORNEYS CO NVICTED OF CRIM ES 101.01 Filing of Judgment of Conviction 101.02 Definition of “Serious Crime” E-l 101.03 101.04 101.05 101.06 RU LE 102.00 102.01 102.02 102.03 102.04 102.05 102.06 RU LE 103.00 Certified Copy of Judgm ent Conclusive Evidence Suspension and Referral Conviction of Non-Serious Crime Reinstatement D ISC IPLIN E IM POSED BY OTHER COURTS Duty to Inform This Court Notice to Attorney Deferral of Action Imposition of Discipline Effect of Final Adjudication Appointment of Counsel DISBARM ENT ON CO NSENT OR RESIGNATION IN OTHER COURTS 103.01 Cease To Practice in This Court 103.02 Duty To Inform Clerk RU LE 104.00 STANDARDS FOR PROFESSIONAL CO NDUCT RULE 104.01 Form of Discipline 104.02 Grounds for Discipline 105.00 DISCIPLINARY PRO CEED IN G S 105.01 Referral by the Court 105.02 Recommendation for Disposition 105.03 Initiation of Disciplinary Proceedings 105.04 Procedure for Hearing E-2 RULE 106.00 DISBARM ENT ON CONSENT W H ILE UNDER DISCIPLINARY INVESTIGATION OR PROSECUTION 106.01 Filing of Affidavit, Contents 106.02 Order of Disbarment RULE 107.00 REINSTATEMENT 107.01 After Suspension or Disbarment 107.02 Time of Application Following Disbarment 107.03 Hearing on Application 107.04 Duty of Counsel 107.05 Deposit for Costs of Proceeding 107.06 Conditions of Reinstatement 107.07 Successive Petitions RULE 108.00 SERVICE O F PAPERS AND OTHER NOTICES RULE 109.00 APPOINTMENT O F CO UNSEL RULE 110.00 D U TIES O F THE C LER K 110.01 To Secure Certificate of Conviction 110.02 To Secure Disciplinary Judgment or Order 110.03 Transmittal to Other Jurisdictions 110.04 National Discipline D ata Bank RULE 111.00 PUBLICITY RULE 112.00 JU RISD ICTIO N RULE 113.00 to 120.00: Reserved for future purposes E-3 VI. RULES OF DISCIPLINARY PROCEDURE RULE 100.00 ADOPTION OF DISCIPLINARY RULES. The United States District Court for the Eastern District of North Carolina, in furtherance of its inherent power and respon sibility to supervise the conduct of attorneys who are admitted to practice before it, or admitted for the purpose of a particular proceeding (pro hac vice), has adopted the following Rules of Disciplinary Procedure. RULE 101.00 ATTORNEYS CONVICTED OF CRIMES. 101.01: Filing of Judgment of Conviction. Upon the filing with the clerk of a certified copy of a judgment of conviction stating that an attorney admitted to practice before the court has been convicted in any Court of the United States, or the District of Columbia, or of any state, territory, commonwealth or posses sion of the United States of a serious crime as hereinafter defined, this court shall enter an order immediately suspending that at torney, whether the conviction resulted from a plea of guilty, of nolo contendere or from a verdict after trial or otherwise, and regardless of the pendency of any appeal, until final disposi tion of a disciplinary proceeding to be commenced in accord with the provision of Rule 101.04. A copy of such order shall immediately be served upon the attorney. Upon good cause shown, the court may set aside such order when it appears in the interest of justice to do so. 101.02: Definition of “Serious Crime.” The term “serious crime” shall include any felony and any lesser crime a necessary ele ment of which, as determined by the statutory or common law definition of such crime in the jurisdiction where the judgment was entered, involves false swearing, misrepresentation, fraud, willful failure to file income tax returns, deceit, bribery, extor tion, misappropriation, theft, or an attempt or a conspiracy or solicitation of another to commit a “serious crime.” E-4 101.03: Certified Copy of Judgment Conclusive Evidence. A certified copy of a judgment of conviction of an attorney for any crime shall be conclusive evidence of the commission of that crime in any disciplinary proceeding instituted against that at torney based upon such conviction. 101.04: Suspension and Referral. Upon the filing with the clerk a certified copy of a judgment of conviction of an attorney for a serious crime, the court shall in addition to suspending that attorney in accordance with the provisions of Rule 101.01, also refer the matter to counsel for the institution of a disciplinary proceeding before the court in which the sole issue to be determined shall be the extent of the final discipline to be im posed as a result of the conduct resulting in the conviction, pro vided that a disciplinary proceeding so instituted will not be brought to final hearing until all appeals from the conviction are concluded. 101.05: Conviction of Non-Serious Crime. Upon the filing with the clerk of a certified copy of a judgment of conviction of an attorney for a crime not constituting a “serious crime,” the court may refer the matter to counsel for whatever action counsel may deem warranted, including the institution of a disciplinary pro ceeding before the court; provided, however, that the court may in its discretion make no referral with respect to convictions for minor offenses. 101.06: Reinstatement. An attorney suspended under the pro visions of this Rule 101.00 will be reinstated immediately upon the filing with the clerk of a certificate demonstrating that the underlying conviction crime has been reversed but the reinstate ment will not terminate any disciplinary proceeding then pen ding against the attorney, the disposition of which shall be deter mined by the court on the basis of all available evidence per taining to both guilt and the extent of discipline to be imposed. RULE 102.00 DISCIPLINE IMPOSED BY OTHER COURTS. 102.01: Duty to Inform This Court. Any attorney admitted to practice before this court shall, upon being subjected to public E-5 discipline by any other court or administrative body of the United States or the District of Columbia, or by a court or ad ministrative body (or state agency clothed with disciplinary authority), of any state, territory, commonwealth or possession of the United States, promptly inform the clerk of this court of such action. 102.02: Notice to Attorney. Upon the filing with the clerk of a certified or exemplified copy of a judgment or order demonstrating that an attorney admitted to practice before this court has been disciplined by another court or administrative body (or state agency clothed with disciplinary authority), this court shall forthwith issue a notice directed to the attorney containing: (a) a copy of the judgment or order from the other court or administrative body (or state agency clothed with disciplinary authority); and, (b) an order to show cause directing that the attorney inform this court within 30 days after service of that order upon the attorney, personally or by mail, of any claim by the attorney predicated upon the grounds set forth in Rule 102.04 that the imposition of the indentical discipline by the court would be unwarranted and the reasons therefor. 102.03: Deferral of Action. In the event the discipline imposed in the other jurisdiction has been stayed there, any reciprocal discipline imposed in this court shall be deferred until such stay expires. 102.04: Imposition of Discipline. Upon the expiration of 30 days from service of the notice issued pursuant to Rule 102.02 this court shall impose the identical discipline unless the respondent-attorney demonstrates, or this court finds, that upon the face of the record upon which the discipline in another jurisdiction is predicated it clearly appears: E-6 (a) that the procedure was so lacking in notice or op portunity to be heard as to constitute a deprivation of due process; or (b) that there was such an infirmity of proof establishing the misconduct as to give rise to the clear conviction that this court could not, consistent with its duty, accept as final the conclusion on that subject; or (c) that the imposition of the same discipline by this court would result in grave injustice; or (d) that the misconduct established is deemed by this court to warrant substantially different discipline. Where this court determines that any of said elements exist, it shall enter such other order as it deems appropriate. 102.05: Effect of Final Adjudication. In all other respects, a final adjudication in another court or administrative body (or state agency clothed with disciplinary authority) that an attorney has been guilty of misconduct shall establish conclusively the miscon duct for purposes of a disciplinary proceeding in this court. 102.06: Appointment of Counsel. This court may at any stage appoint counsel to prosecute the disciplinary proceedings. RULE 103.00 DISBARMENT ON CONSENT OR RESIGNA TION IN OTHER COURTS. 103.01: Cease to Practice In This Court. Any attorney admitted to practice before this court who shall be disbarred by consent or resign from the bar of any other Court of the United States or the District of Columbia, or from the Bar of any state, ter ritory, commonwealth or possession of the United States while an investigation into allegations of misconduct is pending, shall, upon the filing with the clerk of a certified or exemplified copy of the judgment or order accepting such disbarment by con sent or resignation, cease to be permitted to practice before this E-7 court and be stricken from the roll of attorneys admitted to prac tice before this court. 103.02: Duty to Inform Clerk. Any attorney admitted to prac tice before this court shall, upon being disbarred on consent or resigning from the bar of any other court of the United States or the District of Columbia, or from the bar of any state, ter ritory, commonwealth or possession of the United States while an investigation into allegations of misconduct is pending, promptly inform the clerk of such disbarment by consent or resignation. RULE 104.00 STANDARDS FOR PROFESSIONAL CONDUCT. 104.01: Forms of Discipline. For misconduct defined in these Rules, and for good cause shown, and after notice and oppor tunity to be heard, any attorney admitted to practice before this court may be disbarred, suspended from practice before this court, reprimanded or subjected to such other disciplinary ac tion as the circumstances may warrant. 104.02: Grounds for Discipline. Acts or omissions by an at torney admitted to practice before this court, individually or in concert with any other person or persons, which violate the Code of Professional Responsibility adopted by this court shall constitute misconduct and shall be grounds for discipline, whether or not the act or omission occurred in the course of an attorney-client relationship. The Code of Professional Respon sibility adopted by this court is The North Carolina State Bar Code of Professional Responsibility adopted by The Supreme Court of North Carolina, except as may be otherwise provided by specific Rule of this court. RULE 105.00 DISCIPLINARY PROCEEDINGS. 105.01: Referral By The Court. When misconduct or allegations of misconduct on the part of an attorney admitted to practice before this court which, if substantiated, would warrant discip line of such attorney shall come to the attention of a judge of this court, whether by complaint or otherwise, and the applicable E-8 procedure is not otherwise mandated by these Rules, the judge shall refer the matter to counsel for investigation and if warranted the prosecution of a formal disciplinary proceeding or the the for mulation of such other recommendation as may be appropriate. 105.02: Recommendation for Disposition. Should counsel con clude after investigation and review that a formal disciplinary proceeding should not be initiated against the respondent- attorney because sufficient evidence is not present, or because there is pending another proceeding against the respondent- attorney, the disposition of which in the judgment of the counsel should be awaited before further action by this court is con sidered or for any other valid reason, counsel shall file with the court a recommendation for disposition of the matter, whether by dismissal, admonition, deferral, or otherwise, setting forth the reasons therefor. 105.03: Initiation of Disciplinary Proceedings. To initiate for mal disciplinary proceedings, counsel shall obtain an order of this court upon a showing of probable cause requiring the respondent-attorney to show cause within 30 days after service of that order upon that attorney, personally or by mail, why the attorney should not be disciplined. 105.04: Procedure for Hearing. Upon the respondent-attorney’s answer to the order to show cause, if any issue of fact is raised or the respondent-attorney wishes to be heard in mitigation this court shall set the matter for prompt hearing before one or more judges of this court, provided however that if the disciplinary proceeding is predicated upon the complaint of a judge of this court the hearing shall be conducted before another judge of this court appointed by the Chief Judge, or if the Chief Judge is the complainant, by the next senior judge of this court. RULE 106.00 DISBARMENT ON CONSENT W HILE UNDER DISCIPLINARY INVESTIGATION OR PROSECUTION. 106.01: Filing of Affidavit, Contents. Any attorney admitted to practice before this court who is the subject of an investigation E-9 into, or a pending proceeding involving, allegations of miscon duct may consent to disbarment, but only by filing with the clerk an affidavit stating that the attorney desires to consent to disbarment and that: (a) the attorney’s consent is freely and voluntarily rendered, the attorney is not being subjected to coercion or duress, and the attorney is fully aware of the implica tions of so consenting; (b) the attorney is aware that there is a presently pending investigation or proceeding involving allegations and that there exist grounds for the discipline of the at torney the nature of which the attorney shall specifically set forth; (c) the attorney acknowledges that the material facts so alleged are true; and, (d) the attorney so consents because the attorney knows that if charges were predicated upon the matters under in vestigation, or if the proceeding were prosecuted, the at torney could not successfully defend himself. 106.02: Order of Disbarment. Upon the filing of the required affidavit, the court shall enter an order disbarring the attorney. The order disbarring the attorney on consent shall be a matter of public record. However, such affidavit shall not be publicly disclosed or made available for use in any other proceeding ex cept upon order of the court. RULE 107.00 REINSTATEMENT RULE 107.01: After Suspension or Disbarment. An attorney who has been suspended shall be automatically reinstated at the end of the period of suspension upon filing an affidavit of compliance with the provisions of the order of suspension. An attorney who has been disbarred may not resume practice until reinstated by order of this court. E-10 107.02: Time of Application Following Disbarment. An at torney who has been disbarred after hearing or by consent may not apply for reinstatement until the expiration of at least 3 years from the effective date of the disbarment. 107.03: Hearing on Application. Petitions for reinstatement by a disbarred attorney shall be filed with the Chief Judge of this court. Upon receipt of the petition, the Chief Judge shall promptly refer the petition to counsel and shall assign the m at ter for a hearing before one or more judges of this court, pro vided however that if the disciplinary proceeding was predicated upon the complaint of a judge of this court the hearing shall be conducted before another judge of this court appointed by the Chief Judge, or, if the Chief Judge was the complainant, by the next senior judge of this court. The judge assigned to the matter shall within 30 days after referral hold a hearing at which the petitioner shall have the burden of demonstrating by clear and convincing evidence that the petitioner has the moral qualifications, competency and learning in the law required for admission to practice law before this court and that the resump tion of the practice of law by the petitioner will not be detrimen tal to the integrity and standing of the bar or to the administra tion of justice, or subversive of the public interest. 107.04: Duty of Counsel. In all proceedings upon a petition for reinstatement, cross-examination of the witnesses of the respondent-attorney and the submission of evidence, if any, in opposition to the petition shall be conducted by counsel. 107.05: Deposit for Costs of Proceeding. Petitions for reinstate ment shall be accompanied by an advance cost deposit in an amount to be set from time to time by the court to cover an ticipated costs of the reinstatement proceeding. 107.06: Conditions of Reinstatement. If the petitioner is found unfit to resume the practice of law, the petition shall be dis missed. If the petitioner is found fit to resume the practice of law, the judgment shall reinstate him, provided that the judg ment may make reinstatement conditional upon the payment of all or part of the costs of the proceedings, and upon the E-ll making of partial or complete restitution to parties harmed by the petitioner. 107.07: Successive Petitions. No petition for reinstatement shall be filed within 1 year following an adverse judgment upon a petition for reinstatement by or on behalf of the same person. RULE 108.00 SERVICE OF PAPERS AND OTHER NOTICES. Service of an order to show cause instituting a formal disciplinary proceeding shall be made by personal service or by registered or certified mail addressed to the respondent-attorney at the address shown in the most recent registration filed pur suant to N.C.G.S. §84-34, or, in the case of an attorney admit ted to this court pursuant to Local Rule 2.05, at the address shown in papers filed with the court. Service of any other papers or notices required by these Rules of Disciplinary Procedure shall be deemed to have been made if such paper or notice is addressed to the respondent-attorney at the address determined as aforesaid; or to counsel or the attorney for the respondent at the address indicated in the most recent pleading or other docu ment filed by the respondent. RULE 109.00 APPOINTMENT OF COUNSEL. Whenever counsel is to be appointed to investigate allegations of misconduct or prosecute disciplinary proceedings or in con junction with a reinstatement petition filed by a disbarred at torney, this court shall appoint as counsel the duly appointed counsel of The Council of The North Carolina State Bar, Inc. If said counsel declines appointment, or such appointment is clearly inappropriate, the court shall appoint as counsel one or more members of the bar of this court to investigate the allega tions of misconduct or to prosecute disciplinary proceedings under these Rules, provided, however, that the respondent- attorney may move to disqualify an attorney so appointed who is or has been engaged as an adversary of the respondent-attorney in any matter. Counsel, once appointed, may not resign unless permission to do so in given by the court. E-12 RULE 110.00 DUTIES OF TH E CLERK. 110.01: To Secure Certificate of Conviction. Upon being in formed that an attorney admitted to practice before this court has been convicted of any serious crime, the clerk shall deter mine whether the clerk of the court (or the state agency clothed with disciplinary authority) in which such conviction occurred has forwarded a certificate of such conviction to this court. If a certificate has not been so forwarded, the clerk shall promptly obtain a certification and cause it to be filed in this court. 110.02: To Secure Disciplinary Judgment or Order. Upon be ing informed that an attorney admitted to practice before this court has been subjected to discipline by another court, or by an administrative body(or by a state agency clothed with disciplinary authority), the clerk shall determine whether a cer tified or exemplified copy of the disciplinary judgment or order has been filed with this court, and, if not, the clerk shall promptly obtain a certified or exemplified copy of the disciplinary judgment or order and cause it to be filed in this court. 110.03: Transmittal to Other Jurisdictions. Whenever it ap pears that any person convicted of any serious crime, disbarred, suspended, censured or disbarred on consent by this court is ad mitted to practice law in any other jurisdiction or before any other court, the clerk shall, within 10 days of that conviction, disbarment, suspension, censure, or disbarment on consent, transmit to the disciplinary authority in such other jurisdiction, or for such other court, a certificate of the conviction or a cer tified exemplified copy of the judgment or order of disbarment, suspension, censure, or disbarment on consent, as well as the last known office and residence addresses of the defendant or respondent. 110.04: National Discipline Data Bank. The clerk shall, notify the National Discipline D ata Bank operated by the American Bar Association of any order of this court imposing public discipline upon any attorney admitted to practice before this court. E-13 RULE 111.00 PUBLICITY. All parties in a disciplinary proceeding shall conduct them selves in accord with the provisions of Local Rules 7.00 and 45.00. RULE 112.00 JURISDICTION. Nothing contained in these Rules shall be construed to deny to this court such powers as are necessary for the court to main tain control over proceedings conducted before it, such as pro ceedings for contempt under Title 18 of the United States Code or under Rule 42, F.R. Grim. P. RULES 113.00 to 120.00 Reserved for Future Purposes E-14 COM M ITTEE ON RULES OF PRACTICE AND PROCEDURE OF THE JUDICIAL CO NFERENCE OF TH E UNITED STATES WASHINGTON, D.C. 20544 Chairmen of Advisory Committees Walter R. Mansfield Civil Rules Walter E. Hoffman Criminal Rules Robert A. Ainsworth, Jr, Appellate Rules Ruggero J. Aldisert Bankruptcy Rules December 21, 1981 To: Members of the Advisory Committee on Federal Civil Rules cc: Hon. Edw ard T. Gignoux Re: Committee Meeting on Jan. 7-8, 1982 In preparation for the above meeting I enclose a loose-leaf folder containing for each of our major proposed rule changes (Rules 4, 45, 7, 11, 16, 26, 52 and 67): (1) An analysis by Prof. Miller and myself of the comments received with respect to the rule; (2) Any suggested changes in our draft rule and in our Advisory Committee Note that seemed advisable to Prof. Miller and myself in light of comments re ceived with respect to it. For your convenience these have been incorporated in a cut-and-paste version of our Preliminary Draft which shows the suggested changes at appropriate intervals; and (3) A digest of the substance of each of the com ments (oral and written) received. Edw ard T. Gignoux Chairman Joseph F. Spaniol, Jr. Secretary F-l In view of the large volume of individual comments, reports and the oral statements at our Washington, DC, and Los Angeles hearings, all of which have been distributed, you may find it more convenient first to study the data enclosed herewith. If each Committee member does his homework, I am confident that we will make satisfactory progress at our meeting, which is expected to last for two full days. Our tentative agenda is to take up each of the rules in the order indicated in the attached folder. We must submit to the Standing Rules Committee by mid-January our final recom mended changes in Rules 4 and 45 so that it can take action as [sic] its scheduled January 28, 1981, meeting. Although the balance of our proposed changes need not be submitted to that Committee until late winter or early spring, it would greatly facilitate our work if we were able to reach agreement on substantially all of the proposals at our January meeting, which might enable us to distribute further drafts and reach a con sensus without an additional meeting. In short, the progress we make at our January 7-8 meeting depends on your doing the necessary advance preparation work, as I know you will. A Merry Christmas and a Happy New Year to you all! Is/ Walter R. Mansfield F-2 ADVISORY COM M ITTEE ON CIVIL RULES Analysis of Comments Received Re: Proposed Rule 16 Of 45 comments received only 8 were against making any changes in Rule 16. The opponents reasoned that the proposed new rule was unnecessary, that it would lead to “paper trials,” greatly increasing the cost of litigation and burdens on the court without any showing of need or benefits, that early judicial in volvement would not be helpful, that the provision for sanc tions is too vague, and that judges would be forced to inquire into confidential attorney-client relationships, with resulting satellite litigation. The balance of those commenting, which con stitutes an overwhelming majority, either expressly favor the substance of the new rule or imply that they would approve it if certain changes were made. The three areas of most concern were (1) the impression gained by many from the draft and our ACN that scheduling con ferences and pretrial conferences would be mandatory; (2) the provision in 16(b) that a scheduling order must issue no later than 90 days after filing of the complaint, and (3) the re quirements of 16(b) and (f) that only a judge, not a magistrate, may issue a scheduling order and impose sanctions. With respect to the first of the above three matters, many per sons simply assume the rule to require that a scheduling con ference must be held, despite our deliberate and careful use of the word “consultation” instead of “conference” in 16(b) (p. 10, line 14) and our ACN statement (p. 16, lines 16-18) that “a scheduling order must be issued. . .after some communication with the parties, which may be by telephone or mail rather than in person.” From the number of comments construing the rule as mandating scheduling orders and conferences some clarifica tion is obviously needed. We suggest a more explicit clarifying statement in the rule as follows: “ (b) SCH ED U LIN G AND PLANNING: Except in categories of actions exempted by district court rule as inappropriate the judge, after com municating with the parties, either by a scheduling F-3 conference, telephone, mail or other suitable facility, shall enter a scheduling order that limits the time. . . Such a statement would make it crystal clear that a schedul ing conference may be called by the judge but is not mandated. However, the references in our ACN at the bottom of page 15 and top of page 16 to “scheduling conference and order,” “ scheduling conferences and orders,” and “mandatory schedul ing conference or scheduling order” could be construed as im plying that the judge is expected to hold a scheduling conference in every case, followed by the entry' of a scheduling order. Similarly the wording of the second full paragraph of the ACN on page 16 suggests that a scheduling conference is expected to be held but that if by some chance it is not arranged within the 90-day period a scheduling order must nevertheless be entered after some communication by the judge with the par ties. Although the ACN should encourage the use of scheduling conferences as the preferable method in an appropriate case for putting the case on a more efficient and less costly course by eliminating deadwood, establishing some order and limitations with respect to discovery and motions, there are undoubtedly many run-of-the-mill, relatively simple cases where a schedul ing conference or even a pretrial conference (except on the eve of trial) would be wasteful and costly. To eliminate any misapprehension, and make clear that scheduling conferences are not mandated, we recommend amen ding our ACN at the bottom of page 15, third line from the bot- ton, to eliminate the words “conference and” and eliminate the words “conference and” from the last line, so that the phrases would read “scheduling order” and “scheduling orders,” respec tively. At page 16, line 3, also eliminate “scheduling conference and” so that it would read “mandatory scheduling order.” At least 9 or 10 persons, assuming that a pretrial conference (as distinguished from a scheduling conference) is also man datory under our draft rule, argue in favor or making it per missive or discretionary. Their principal argument is that such conferences may be fruitful in complex cases but would be wasteful and develop into minitrials in smaller cases. A few take F-4 the now generally outmoded view that if the parties do not want to get a case to trial the court ought not to force them to do so. One judge notes that his pretrial conferences are often han dled by his clerks and that if he personally held such a conference in every case he would not have enough time to conduct trials. Our draft rule was designed to encourage greater use of pretrial conferences wherever appropriate, in view of the F JC ’s study of five metropolitan districts showing that early judicial assumption of control produced more prompt and efficient final dispositions, but not to m andate them. Since the rule and ACN are being construed by some as mandating pretrial conferences as well as scheduling conferences, we recommend a more direct statement in the ACN of the rule’s purpose and our interpreta tion of it. Perhaps the best place for such a brief statement would be on page 15 of the ACN, immediately before the heading “Discussion.” We also suggest that we move to this point the state ment in the ACN presently found at page 18, lines 7-13, which provides support for the rule generally rather than just for sub division (c). Turning to our provision in Rule 16(b) that a scheduling order must issue with [sic] 90 days after filing of the complaint, ap proximately 12 persons protest that this period is so short as to be unrealistic after taking into account that in some cases service will not be made and an answer filed for more than 90 days, thus precluding the judge at this premature stage from fixing sensible time limits for discovery and motions. Some alternatives suggested by them: (1) 90 days after filing of the answer, which must be filed within 90 days after filing of the complaint; (2) 120-150 days after filing of complaint; (3) as soon as practicable after filing of the answer provided that, if the answer is filed more than 90 days after filing of the complaint, the scheduling order shall be filed within 20 days thereafter. Here, as in fixing time limits for completion of service under Rule 4, we recom mend employing a fixed time limit rather than by indirection extend the existing time limits fixed by Rules 12 and 13 for fil ing of answers, counterclaims, cross-claims and third-party claims. We favor extending the cut-off date to 120 days after filing of the summons and complaint. F-5 One person suggests that our draft’s description of the schedul ing order at page 11, line 18, as limiting the time “ (2) to serve and hear motions” be changed to “ (2) to file motions” since the court would not want to impose time limits on its own deter mination of the most cases. We disagree. Part of the philosophy behind the mandatory scheduling order is to induce judges to take hold of cases sooner and push them along. We suggest changing it to read “ (2) file and hear motions.” The National Ass’n of U.S. Magistrates and the Magistrates Committee of the Judicial Conference both strongly object to the use of “ judge” instead of “court” in our draft’s provisions in Rule 16(b) that the judge shall issue a scheduling order and in 16(f) that the judge may impose sanctions. They even go so far as to suggest that the effect of these provisions will be to destroy the magistrate’s role and overburden federal judges in the handling of pretrial matters. This is an overreaction ap parently based on a misreading of the proposed rule. Although the rule obligates the judge to issue the scheduling order, nothing precludes the judge from thereafter delegating to a magistrate any of the numerous pretrial duties presently handled by magistrates in some districts, including hearing and rulings on non-dispositive matters (e.g., discovery), hearings and recom mendations on dispositive matters (e.g., summary judgment), handling of prisoners’ habeas corpus petitions, and of course consensual trials under 28 U.S.C. §636(c). Sanctions cannot now be imposed by a magistrate who at most can recommend sanc tions to the judge. We recommend that in view of the magistrates’ misreading of the proposed rule we spell out the above in the ACN. When it comes to the issuance of a scheduling order and the imposi tion of sanctions, however, we believe strongly that we should remain resolute. While the magistrates’ desire to increase their already-enlarged powers is understandable, the entire purpose of our draft Rule 16, which is to reduce cost and delay through early judicial management of litigation, will be frustrated if judges are permitted to transfer all of these management duties from the outset to a magistrate. Except for the few consensual trials to be held before a magistrate, every unsettled case is go ing to be tried before a judge, not a magistrate. With due respect for the enormous powers granted to magistrates, every lawyer F-6 knows that except as to some procedural matters the judge must make the vital decisions that will mean the difference in inducing the parties to act promptly in settling or trying a case. When the judge, who is correctly viewed by counsel as knowing his own calendar and capabilities better than a magistrate, fixes limits for motions, discovery and trial, counsel and the parties pay his order more respect than they would to that of a magistrate, from whom an appeal can always be taken to the judge. Moreover the magistrate, unlike the judge, cannot dismiss claims or defenses, much less assess expenses or penalties for violation of Rule 16’s provisions. For these reasons, while we should be willing to assure the magistrates that their functions will be very much alive and not destroyed by our proposed Rule 16, we should also make clear that the prompt disposition of litigation depends on early and frequent direct intervention by the judge. The other comments received regarding proposed Rule 16 are relatively minor, including the following: (1) Preclude a judge from holding a pretrial con ference sua sponte by inserting at page 10, line 2, in lieu of the words “the court may” the words “the court upon motion of any party shall”. This suggestion is somewhere right of Pres. McKinley. Not even the rule adopted in 1938 deprives the judge of the right, which he should have, of goosing the parties into action by himself calling a conference. (2) Omit the proposed authority in Rule 16(b), page 10, lines 12-14, to district courts to exempt by rule cer tain types of cases (eg., social security, habeas cor pus) from scheduling conferences or orders. We are unpersuaded by the argument that this would lead to distortion and harmful variations between districts. (3) Make the entry of a scheduling order (16(b)) and other pretrial orders (16(e)) discretionary rather than mandatory. This would emasculate the rule. If the F-7 system is going to work, written or recorded orders are essential. (4) Dispense with the itemization in 16(c) of sub jects that may be discussed at pre-trial conferences and substitute a general statement of the type now in Rule 16. We disagree. The “laundry list” is a useful orien tation to judges and counsel. (5) Strengthen the word “consider” at the outset of 16(c), page 11, line 32, since the ACN at page 18 (2d full paragraph) states that the court may under 16(c)(1) eliminate frivolous claims, not merely con sider them, without waiting for a formal motion for summary judgment. One person urges that the rule should expressly give the judge power to grant sum mary judgment without a written motion. We recommend changing the language at page 11, line 32, to read “consider and take action with respect to”. As long as a record is made (preferably by court reporter who will register the material facts not disputed) this should permit a judge to grant an oral motion to dismiss at a pretrial conference. (6) Add an explicit reference in 16(c) to obtaining advance rulings from the court on the admissibility of evidence and stipulations as to the authenticity of documents. We suggest 16(c)(3) be changed to read “ (3) the possibility of obtaining advance rulings from the court on the admissibility of evidence, admissions of fact, and stipulations regarding the authenticity of documents;”. (7) Insert in 16(c)(10), page 12, line 54, just before the word “complex” the words “evidence of ex periments, including surveys, specially conducted for or in contemplation of litigation”. This is apparently F-8 a common practice in patent litigation. We have no objection. (8) Add to the end of 16(d), page 13, line 68, the words “and by any unrepresented parties.” We have no objection. The section presently is limited to attorneys. (9) At the end of 16(c), page 12, line 59, change “shall” to “must”. We agree that “must” is more appropriate. (10) Resolve the apparent inconsistency between our draft 16(e), which directs that the pretrial order “shall control the subsequent course of the action” and be changed only “to prevent manifest injustice”, with pre sent Rule 15(b) which authorizes such amendments of pleadings during the trial as are necessary to cause them to conform to the evidence. Since a pretrial order governs the trial, there is no inconsistency. See Wright and Miller, 6 Federal Prac tice and Procedure §1527 (1971). (11) Resolve the apparent conflict between proposed 16(c)(6), page 12, lines 45-46, which provides for discussion at a pretrial conference of the “advisabili ty of reference of matters to a magistrate” with pro posed 73(b), page 41, lines 16-21, which (as required by 28 U.S.C. §636(c)) prohibits a judge from per suading or inducing a party “to consent to a reference of a civil matter to a magistrate under this rule” or even from being informed of parties’ responses to the clerk’s notice. We suggest a statement in our ACN to Rule 16 that 16(c)(6) refers to matters other than consensual trials under §636(c). The purpose of the latter statute is to prevent a judge from forcing parties to consent to trial of an entire case before a magistrate rather than to F-9 the judge. But Rule 16 deals with the numerous other matters which a judge may under §636(b) refer to a magistrate without the parties’ consent. (12) Clarify that under 16(c) (7) parties are not compelled to discuss settlement with the judge assigned to try the case. We believe this is made sufficiently clear by our ACN at page 19, lines 2-4. If the parties all want to discuss settlement with the trial judge if he is agreeable, they should not be barred from doing so. Otherwise he should not impose discussions on un willing litigants except to the extent of referring this aspect to a neutral third party such as a different judge. (13) Delete 16(f) (sanctions) and incorporate in one separate sanctions rule for 7, 11, 16, 26(g), 37. We have already indicated our objections to this proposal in our analysis of the sanctions provisions of Rules 7 and 11. Con centration of sanctions in one rule would dilute the deterrence value of express provisions in locations most likely to be con sulted by the average practising lawyer. Also, since the standards differ as between some of these rules, the tests for determining whether a violation occurred will differ. (14) In the sanctions subdivision, 16(f) at page 13, line 78, add after “conference” the phrase “with respect to any matter which the particiants may reasonably anticipate may be dis missed.” We have no objection to the proposal, which reiterates the phrase previously used in 16(c) at page 12, lines 60-61. (15) Make sanctions completely discretionary by changing “shall” at page 13, line 82, to “may.” We disagree and favor a sanctions provision that would parallel whatever we eventual ly adopt for Rules 7, 11 and 26(g). In our proposed 16(f), unlike our sanctions provisions in Rules 7, 11 and 26(g), we followed the format of Rule 37(b)(2) except F-10 to leave open to the court the discretionary power to impose sanctions greater than those specified in Rule 37 (b) (2). As we indicated in the analysis of 7 and 11 we believe we should make all sanctions mandatory but draw a distinction between an award of reasonable expenses, including attorneys’ fees, and penalties, which should be imposable for willful or egregious conduct. Indeed, one reason for judicial reluctance to impose Rule 37(b)(2) sanctions may be its failure to mandate any sanc tion for a violation, even expenses, which though mandatory in form is discretionary in substance, merely shifting to the of fending party the duty of showing justification for the viola tion, whatever that means. (16) Delete from 16(f) at page 13, lines 78-79, the provision for imposition of sanctions “ if a party or a party’s attorney fails to participate in good faith.” The American College argues that in the absence of a reliable definition this provision can be mischievous, giving a judge the power to impose sanctions for refusal to settle or stipulate to admissions considered unreasonable, despite our ACN statement to the contrary, and that the provision would have a chilling effect. We do not see how, if sanctions are to be a useful deterrent against current delay and wasteful practices on the part of counsel, we can avoid requiring the judge to determine in cer tain cases whether the conduct was willful and in bad faith. However, if, as we would prefer, we require greater proof of willfulness before sanctions other than reasonable expenses may be imposed, we would be happier. In short we are against the suggested deletion. (17) Amplify 16(f) to permit sanctioning of an unrepresented party. We think this is already covered by the repeated reference to a “party” in the draft. However, we have no objection to an appropriate reference in the ACN. (18) Change “advising” to “representing” at page 13, line 83. We have no objection. F-ll Conclusion The only major changes we would favor are (1) changing the language of 16(b) and the ACN to make clear that while a scheduling order is mandatory, scheduling conferences and pretrial conferences, while useful and advocated in appropriate cases, are not mandatory, (2) extending the 90-day limit in 16(b) to 120 days, (3) clarifying in the ACN that except for schedul ing orders and imposition of sanctions a broad range of activities remain for delegation to U.S. magistrates, and (4) rewriting the 16(f) sanctions provision to accord with Rules 7, 11, and 26(g). If these plus a few minor changes are made, we can have a rule ready for recommendation to the Standing Committee without further hearings or submissions to bench and bar. W.R.M. A.R.M. 12/21/81 F-12 CERTIFICATE OF SERVICE I certify that I have today caused two copies of the attached brief for appellants Julius L. Chambers and Ferguson, Stein, Watt, Wallas & Adkins, P.A. to be served, together with a copy of the appellants’ Appendix, upon the following counsel by the methods indicated below. Dated: New York, New York October 14, 1989 T h o m a s M . B o n d y , E s q . U.S. Department of Justice Civil Division, Appellate Staff Room 3617 Washington, D.C. 20530 (by Federal Express) P r o f . G e o r g e C o c h r a n University of Mississippi Faculty-Law Center Grove Loop University, Mississippi 38677 (by Federal Express) A d a m S t e i n , E s q . 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