United States District Court, D. Montana, Butte Division
Morris United States District Court Judge.
Court addresses the following motions: Defendant Big Sky
Resort's (“Big Sky”) Motion for Judgement on
the Pleadings (Doc. 9); Plaintiff Meyer's
(“Meyer”) Motion to File Sur-Reply (Doc. 13); Big
Sky's Motion to Dismiss (Doc. 29); and Meyer's Motion
to Dismiss (Doc. 35).
Big Sky's Motion to Dismiss (Doc. 29)
seeks to dismiss with prejudice Meyer's lawsuit as a
sanction for Meyer's alleged abuse of judicial process
and other alleged violations of the Montana Rules of
Professional Conduct. (Doc. 30 at 7). District courts possess
an “inherent authority to impose sanctions for bad
faith, which includes a broad range of willful improper
conduct.” Fink v. Gomez, 239 F.3d 989, 992
(9th Cir. 2001). These powers are “governed not by rule
or statute but by the control necessarily vested in courts to
manage their own affairs so as to achieve the orderly and
expeditious disposition of cases.” Link v. Wabash
R. Co., 370 U.S. 626, 630-631 (1962).
finding of “bad faith” that permits the Court to
impose sanctions under its inherent power does not require
that the legal and factual basis for the action prove totally
frivolous. Fink, 239 F.2d at 992. If the litigant is
“substantially motivated by vindictiveness, obduracy or
mala fides, then assertion of colorable claim will not bar
assessment of attorney fees” and sanctions.
Id. Accordingly, bad faith sanctions are justified
when a party intends to act for an improper purpose.
district court in United States v. Stoneberger, 805
F.2d 1391 (9th Cir. 1986), suspended an attorney for one year
as a sanction for being late to several scheduled trial dates
on a prosecution for misdemeanor criminal charges before a
federal magistrate. The attorney claimed that he had been
tied up with other cases in state court. The Ninth Circuit
reversed. Id. The Ninth Circuit determined that
“[a] specific finding of bad faith . . . must precede
any sanction under the court's inherent [sanction]
powers.” Id. Mere tardiness failed to reach
the requisite improper purpose or intent required for
sanctions. Id. at 1393.
Ninth Circuit regularly has denied sanctions where counsel
simply acted negligently or where no evidence existed that an
attorney had acted in bad faith or had intended to mislead
the court. For example, the Ninth Circuit in Zambrano v.
City of Tustin, 885 F.2d 1473 (9th Cir. 1989), vacated
sanctions against two attorneys who had failed to comply with
a local rule that required them to be admitted to the
district court bar before making an appearance. The Ninth
Circuit determined the trial court must make a specific
finding of bad faith to accompany the sanctions order in all
such cases. Id. at 1478.
Ninth Circuit in Yagman v. Republic Ins., 987 F.2d
622, 628 (9th Cir. 1993), likewise vacated an order of
sanctions premised on “careless and slovenly”
legal work. The Ninth Circuit determined that a trial court
lacks the power to impose sanctions pursuant to its inherent
authority absent a “specific finding of bad
faith.” Id. at 1393, citing
Stoneberg, 805 F.2d at 1393; see also Jones v.
Williams, 68 Fed.Appx. 857, 859 (9th Cir. 2003)
(vacating sanctions imposed for counsel's violation of a
pre-trial order without a determination that counsel had
acted in bad faith); In re Keegan Mgmt. Co., Sec.
Litig., 78 F.3d 431, 436 (9th Cir. 1996) (vacating
sanctions imposed for counsel's failure to make
reasonable inquiry before filing an action).
conduct falls short of bad faith that rises to the level
necessary for sanctions to be imposed. Big Sky casts
Meyer's admissions of the allegations in its counterclaim
as acts of bad faith. Big Sky claims that Meyer admits to
coercion when he states that he attempted “to settle
the case for much less than $50 million by offering to drop
the lawsuit if Defendants . . . agreed to provide healthcare
for its employees.” (Doc. 30 at 11). Big Sky alleges
that Meyer's $50 million claim is frivolous. Big Sky
further asserts that Meyer seeks an award of the cost of Big
Sky meeting his demand of healthcare for its employees.
remains free to use the proceeds from any eventual settlement
of his negligence claims with Big Sky for any purpose that he
wishes. Meyer also remains free to use any jury award arising
from his negligence claims against Big Sky for any purpose
that he chooses - including the creation of a trust to help
pay for the healthcare of Big Sky's employees. In the
interim, Meyer, as counsel for himself, remains bound by the
Montana Rules of Professional Conduct and the rules of this
Court. D. Mont. L.R. 83.8(a); 83.2(a).
path of conduct is troubling. Meyer has organized and engaged
in public rallies against Big Sky. (Doc. 30 at 19-20). Meyer,
as opposing counsel and litigant, solicited Big Sky employees
to engage in the public rallies via public posts on social
media. Id.; Mont. R.P.C. 4.4(a). Meyer knowingly
communicated with Big Sky ski patrol in November and December
of 2017 when Meyer knew that counsel represented Big Sky and
its employees. Id. at 12-13; Mont. R.P.C. 4.2. Meyer
contacted Big Sky's counsel and informed them he was
prepared to rent a billboard “on Highway 191 on the way
to Big Ski Resort that says, ‘Heated chair lifts, but
no healthcare for seasonal employees? That's
B.S.!'” Id. at 22; Mont. R.P.C. 4.4(a);
see also Ex. 19 (Meyer email dated March 16, 2018).
conduct, though troubling and unprofessional, falls short of
a violation of the Montana Rules of Professional Conduct and
does not warrant sanctions at this time. The Court cautions
Meyer, however, that future conduct could rise to the level
of bad faith that would warrant the imposition of sanctions
if he persists despite this warning in his extra-judicial
actions to coerce Big Sky into a settlement that conflict
with his duties under the Montana Rules of Professional
Conduct and the rules of this Court. The Court will tolerate
no further violations or deviations from these rules by
the Court denies Big Sky's motion to dismiss and denies
the imposition of any sanctions against Meyer at this time.
The Court further takes this opportunity to recommend that
Meyer retain counsel to represent him in this matter.
Meyer's conduct to date demonstrates a lack of
understanding of his obligations under the Montana Rules of
Professional Conduct and the rules of this Court in pursuing
his negligence claims against Big Sky. See D. Mont.
L.R. 83.2(a); 83.1(a)(1).
Big Sky's Motion for Judgement on the ...