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Meyer v. Big Sky Resort

United States District Court, D. Montana, Butte Division

November 27, 2018

JOHN MEYER, Plaintiff,
v.
BIG SKY RESORT, Defendant.

          ORDER

          Brian Morris United States District Court Judge.

         The 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).

         I. Big Sky's Motion to Dismiss (Doc. 29)

         Big Sky 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).

         A 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. Id.

         The 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.

         The 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.

         The 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).

         Meyer's 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. Id.

         Meyer 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).

         Meyer's 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).

         Meyer's 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 Meyer.

         Accordingly, 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).

         II. Big Sky's Motion for Judgement on the ...


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