On Thursday, the 5th U.S. Circuit Court of Appeals ruled that a U.S. law that can force a lawyer to pay legal fees for “vexatious” or “unreasonable” conduct in federal court does not extend to the attorney’s law firm. The ruling acknowledged a divide among other courts. It vacated a nearly $50,000 award imposed on the Texas firm Brewer Storefront PLLC and several of its attorneys, including William Brewer III.
“Courts do not admit law firms to conduct cases, but instead admit individual attorneys,” 5th Circuit Judge Patrick Higginbotham wrote for the panel, with Circuit Judges Stuart Duncan and Kurt Engelhardt. The judges said they joined “most of our sister circuits” in holding that the law “does not provide grounds for a district court to award attorney’s fees against law firms or other entities not admitted to practice law.”
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The law at the heart of the case says “any attorney or other person” litigating in federal court can be ordered to pay fees for conduct that “multiplies the proceedings.” A separate provision of the federal rules of civil procedure permits a judge to sanction a law firm. Still, that provision, known as Rule 11, generally focuses on document filings and was not at issue in the case.
Brewer, who has long defended the National Rifle Association in various cases, in a statement on Friday, said the court’s “decision confirms that any sanctions previously awarded were unwarranted.” A lawyer who defended the school district had no immediate comment.
The 5th Circuit’s order vacated the sanction imposed on Brewer and his firm for filing a lawsuit claiming a local school board’s election system for board members violated the federal Voting Rights Act. The court remanded the case for further review about whether the conduct at depositions might justify fees.
U.S. District Judge Sean Jordan in Plano, Texas, imposed the fee sanction after finding the lawsuit’s claims “were frivolous and unreasonable.” Jordan said the plaintiff, as a white male, had no legal standing to pursue the case. However, the 5th Circuit found the lawsuit was an attempt to “extend the law” and was not frivolous.
The ruling has significant implications for legal professionals and their practices. While individual lawyers can still be subject to sanction laws, law firms are now not liable for their attorneys’ vexatious or unreasonable conduct in federal court. The decision clarifies the legal landscape and guides attorneys and law firms in the U.S.
However, the ruling does highlight a divide among courts, with the Atlanta-based 11th Circuit holding that the law allows a sanction against law firms. This means that legal professionals and firms must be mindful of the jurisdiction in which they are practicing and ensure they comply with relevant laws and regulations.
Overall, the 5th Circuit Court of Appeals ruling provides much-needed clarity on the issue of sanction laws and law firms. While individual lawyers are still subject to sanctions, law firms are not. This is a significant development for the legal industry, and it will be interesting to see how this decision impacts legal practices and the wider industry moving forward.