Budget Rent A Car Sy v. Consolidated Equity ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-3579
BUDGET RENT-A-CAR SYSTEM, INC.,
Plaintiff-Appellee,
v.
CONSOLIDATED EQUITY LLC,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 04 C 1772—William T. Hart, Judge.
____________
SUBMITTED OCTOBER 13, 2005—DECIDED NOVEMBER 4, 2005
____________
Before POSNER, ROVNER, and SYKES, Circuit Judges.
POSNER, Circuit Judge. We ordered that sanctions be
imposed on Consolidated Equity for this frivolous appeal,
Fed. R. App. P. 38, and Budget has submitted a statement of
its fees and costs. They are exorbitant. Because the appeal
was dismissed before briefing, Budget’s only appellate
submission was a four-page jurisdictional memo that cites
five cases. Budget claims that the memo cost $4,626.50 to
produce (3.3 partner hours at $425 per hour and 10.4
associate hours at $310 per hour); for so modest a product,
13.7 hours of high-paid professionals’ time are too many.
Budget has also included in its statement of fees and costs
2 No. 05-3579
its fees for preparing its motion for sanctions and the
statement of fees and costs itself—a total, again too high, of
$4,354 (1.2 partner hours and 12.4 associate hours). It is
inconceivable that this is the going market price for such
exiguous submissions.
Budget’s statement of costs, at $198.30, is also too high.
Budget claims in an affidavit to have incurred a $165 “filing
fee,” but there is no fee in this court for filing a jurisdictional
memorandum or a motion for sanctions, and the billing
records reveal that the $165 was actually a fee for the
admission of one of its attorneys to practice before this
court. Budget’s mischaracterization further undermines the
credibility of its submissions.
A number of cases, though none under Rule 38 of the
Federal Rules of Appellate Procedure, which governs the
award of sanctions for misconduct in federal appellate
proceedings, authorize the denial of an otherwise warranted
request for an award of fees because the request is for an
exorbitant amount. Vocca v. Playboy Hotel of Chicago, Inc., 686
F.2d 605, 607-08 (7th Cir. 1982) (per curiam); Brown v.
Stackler, 612 F.2d 1057 (7th Cir. 1980); Peter v. Jax, 187 F.3d
829, 837-38 (8th Cir. 1999); Fair Housing Council of Greater
Washington v. Landow, 999 F.2d 92, 96-97 (4th Cir. 1993)
(accepting contention “that a district court has the discretion
to deny a request for attorneys’ fees in its entirety when the
amount of the request is ‘grossly excessive’ ”); Lewis v.
Kendrick, 944 F.2d 949, 957-58 (1st Cir. 1991) (on rehearing).
When abatement is sought for a sanction based on Rule 11
of the Federal Rules of Civil Procedure, we held in Frantz v.
U.S. Powerlifting Federation, 836 F.2d 1063, 1065-66 (7th Cir.
1987), that the district court must award two separate
sanctions. They may cancel out but the district court must
explain each sanction and its effect on the other one so that
No. 05-3579 3
each party’s wrongful act is punished. See also In re Central
Ice Cream Co., 836 F.2d 1068, 1074-75 (7th Cir. 1987). But this
rule is based on the fact that when Frantz was decided Rule
11 provided that the district court “shall impose
an . . . appropriate sanction” for misconduct specified by the
rule, Brown v. Federation of State Medical Boards, 830 F.2d
1429, 1434 n. 1 (7th Cir. 1987), whereas, as noted in Frantz,
836 F.2d at 1065, the statute at issue in our earlier case of
Brown v. Stackler, supra—42 U.S.C. 1988—uses “may” rath-
er than “shall, “and so does Rule 38 of the appellate rules.
When an award of fees is permissive, denial is an appro-
priate sanction for requesting an award that is not merely
excessive, but so exorbitant as to constitute an abuse of the
process of the court asked to make the award.
Our previous order granting the motion to award fees and
costs is VACATED and the motion DISMISSED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-4-05