Opinion
3:96-CV-510.
April 30, 2001.
THOMAS F. O'CONNOR, ESQ., O'CONNOR, GACIOCH POPE, Attorneys for Plaintiffs, Binghamton, New York.
NEIL D. KIMMELFIELD, ESQ., BALL JANIK LLP, Attorneys for Plaintiffs, Portland, Oregon.
WILLIAM H. PEASE, ESQ., Assistant U.S. Attorney, HON. DANIEL J. FRENCH, United States Attorney for the Northern District of New York Attorney for Defendant, Syracuse, New York.
ALAN SHAPIRO, ESQ., UNITED STATES DEPARTMENT OF JUSTICE, Tax Division For Defendant, Washington, DC.
DECISION and ORDER
Presently before the court is a letter request by the United States to renew its motion seeking attorney fees, costs, and other relief pursuant to 28 U.S.C. § 1927, filed on February 2, 2000. Plaintiffs responded with a letter requesting that the motion be denied, or in the alternative sought thirty days to file a response. The United States then replied by letter. Additionally, plaintiffs seek reimbursement of expert discovery fees pursuant to Fed.R.Civ.P. 26(b)(4)(C). Familiarity with the prior decision in this action is assumed. See Abbott v. United States, 76 F. Supp.2d 236 (N.D.N.Y. 1999), affirmed, 231 F.3d 889, (2d Cir. 2000), cert. denied, 121 S.Ct. 1484 (2001).
An attorney may be ordered to pay excess costs, expenses, and attorneys fees reasonably incurred by the opposing party, which are caused by the attorney's unreasonable and vexatious multiplication of proceedings. 28 U.S.C. § 1927; Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986). An award of attorneys fees and costs pursuant to § 1927 is appropriate only where "the attorney's actions are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose such as delay." Oliveri, 803 F.2d at 1273. The attorney's actions must have been undertaken in bad fath, vexatiously, wantonly, or for oppressive reasons. Id. at 1272-73. Upon a similar showing, the court, based upon its inherent power, may make an award of sanctions against an attorney or a party. Id.
The United States contends that plaintiffs' attorneys sought discovery from IBM with the purpose of learning IBM's intent and purpose in making the payments to plaintiffs at the time their employment was terminated. The United States argues that as of June 20, 1997, and certainly no later than October 17, 1997, plaintiffs knew that IBM would testify that its intent was in the form of severance pay and not to settle or compensate tort claims. The United States contends that all activities after that October 17, 1997, were focused on improperly prolonging the litigation and obstructing the United States' discovery. The United States also characterizes as vexatious other activities, such as requesting written discovery seeking answers to hypothetical legal questions, noticing the deposition of the government for Portland, Oregon, seeking information subject to various privileges in a deposition, and naming an expert witness one day prior to the discovery cut-off.
The issue in this action was one of first impression. To award sanctions when an issue of first impression is at stake may "`deter persons with colorable claims from pursuing those claims,'" which care must be taken to avoid. See id. at 1272 (quoting Dow Chemical Pacific Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 344 (2d Cir. 1986)). Additionally, the United States has not shown that the activities of plaintiffs' attorneys were conducted in bad faith. While the United States argues that plaintiffs' claims were totally without merit, it cannot be said that pursuit of a colorable claim, rooted in an issue of first impression, is vexatious, wanton, or done for oppressive reasons. Accordingly, an award of sanctions against plaintiffs' attorneys is not warranted.
Plaintiffs previously requested reimbursement from the United States pursuant to Fed.R.Civ.P. 26(b)(4)(C). Plaintiffs contend that the United States has agreed to pay only a portion of the requested amount and seeks an order for the remainder. The amount that the United States agreed to pay, $13,864.30 is fair and reasonable. Thus, plaintiffs' request for additional reimbursement will be denied.
ORDERED that
1. The motion for attorneys fees, expenses, and costs brought by the United States is DENIED with prejudice; and
2. Plaintiffs' request for additional reimbursement pursuant to Fed.R.Civ.P. 26(b)(4)(C) is DENIED.
IT IS SO ORDERED.