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114 F.3d 1188, 1997 WL 280188, at
& $PRXQWRIWKHDWWRUQH\IHHV *5-6 (6th Cir. May 27, 1997). Under Chambers, other
Circuits have held that the mere fact that conduct is held not
)LUVW%DQNQH[WFRQWHQGVWKDWWKHGLVWULFWFRXUWDEXVHGLWV to be a violation of any rule or statute authorizing sanctions
GLVFUHWLRQLQWKHDPRXQWRIIHHVLWDZDUGHG+DUWIRUGXQGHULWV does not preclude a district court from imposing sanctions
LQKHUHQWSRZHUV under its inherent power. See Amsted Industries, Inc. v.
Buckeye Steel Castings Co., 23 F.3d 374, 377-79 (Fed. Cir.
+HUHWKHGLVWULFWFRXUWKHOGDKHDULQJWRGHWHUPLQHZKHWKHU 1994) (recognizing a federal courts inherent power to
VDQFWLRQV ZHUH DSSURSULDWH DQG LI VR WKH DPRXQW RI WKH
VDQFWLRQV'XULQJWKHVDQFWLRQVKHDULQJ+DUWIRUGSUHVHQWHG impose sanctions); Gillette Foods Inc. v. Bayernwald-
H[SHUWWHVWLPRQ\WKDWDGGUHVVHGWKHUHDVRQDEOHQHVVRIWKHIHHV Fruchteverwertung, 977 F.2d 809, 813-14 (3d Cir. 1992)
FKDUJHGE\+DUWIRUG¶VFRXQVHO7KHH[SHUWZLWQHVVWHVWLILHG UHMHFWLQJWKHUXOHWKDWVDQFWLRQVFDQQRWEHLPSRVHGE\WKH
WKDWWKHKRXUO\IHHFKDUJHGRIZDVORZDQGWKDWWKH GLVWULFWFRXUWXQGHULWVLQKHUHQWSRZHUVLPSO\EHFDXVHDFODLP
ZRUN GRQH DQG IHHV FKDUJHG ZHUH ³ERWK UHDVRQDEOH DQG LV KHOG QRW WR YLRODWH 5XOH  RU DQRWKHU UXOH RU VWDWXWH
QHFHVVDU\IRUWKLVW\SHRIFDVH´)XUWKHUWKHH[SHUWZLWQHVV DXWKRUL]LQJ VDQFWLRQV The Seventh Circuit observed that
HVWLPDWHGWKDWRI+DUWIRUG¶VFRXQVHO¶VWLPHZDVVSHQW "courts need not consider lesser sanctions, however, in
GHIHQGLQJ&RXQW,,EHFDXVH+DUWIRUGKDGDOUHDG\DJUHHGWR
SD\)LUVW%DQNIRUWKH&RXQW,FODLPEHIRUH)LUVW%DQNILOHG 
WKHDFWLRQ)LUVW%DQNGLGQRWUHEXWWKHWHVWLPRQ\ 7KH GLVVHQW FRQWHQGV WKDW $PVWHG GRHV QRW VXSSRUW WKH PDMRULW\¶V
SRVLWLRQ 8QGHU WKH IDFWV WKHUH WKH &RXUW GLG QRW ILQG WKDW DQ DZDUG RI
7KHGLVWULFWFRXUWDFFHSWHGWKHXQUHIXWHGH[SHUWWHVWLPRQ\ H[SHUW ZLWQHVV IHHV ZDV DSSURSULDWH XQGHU WKH &RXUW¶V LQKHUHQW DXWKRULW\
QRW@ XS WR WKH WDVN WKH FRXUW PD\ VDIHO\ UHO\ RQ LWV LQKHUHQW SRZHU :H
EHOLHYH WKLV VWDWHPHQW UHIHUUHG WR WKH DELOLW\ RI D FRXUW WR LPSRVH VDQFWLRQV
XQGHU LWV LQKHUHQW SRZHU ZKHQ VRPH RI WKH DWWRUQH\¶V FRQGXFW FRXOG EH
VDQFWLRQDEOH XQGHU 5XOH  DQG RWKHU UXOHV *LOOHWWH  )G DW 
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situations where the misconduct is ‘so egregious, inexcusable, PHULWOHVVFODLP$VWREDGIDLWKLQWKHQDWXUHRIILOLQJVXLW
and destructive that no lesser sanction than dismissal could be )LUVW %DQN¶V LPSURSHU SXUSRVH ZDV WR ILOH D ODZVXLW DV D
adequate.’" Graham v. Schomaker, 215 F.3d 1329, 2000 WL PHFKDQLVPWRIRUFH+DUWIRUGWRVHWWOH&ODLP,,UDWKHUWKDQ
717093, at *3 (7th Cir. 2000). At one time, the Third Circuit WU\LQJWRSUHYDLORQWKHPHULWVRIWKDWFODLP)XUWKHULPSOLFLW
noted that the district court is not require to "exhaust all other LQWKHGLVWULFWFRXUW¶VILQGLQJVRIEDGIDLWKZDVWKHILQGLQJ
sanctioning mechanisms prior to resorting to its inherent WKDW)LUVW%DQNKDGWKHLPSURSHUSXUSRVHVRIGHOD\LQILOLQJ
power." Landon v. Hunt, 938 F.2d 450, 454 (3rd Cir. 1991). DQGSURVHFXWLQJ LWV FODLPDQGRIKDUDVVPHQWE\IDLOLQJWR
GLVFORVH WKH 7RQWL DIILGDYLW XQWLO UHVSRQGLQJ WR +DUWIRUG¶V
To be sure, the Third Circuit now citing Chambers has PRWLRQIRUVXPPDU\MXGJPHQWDQGE\HQJDJLQJLQPXOWLSOH
reversed a district court for failure to consider the applicable GLVFRYHU\YLRODWLRQV&RQVHTXHQWO\ZHDJUHHZLWKWKHGLVWULFW
federal rules of civil procedure and statutes before resorting FRXUWWKDW)LUVW%DQNDFWHGLQEDGIDLWKDQGVXFKEDG IDLWK
to its inherent power can be reversible error.  Montrose FOHDUO\HYLQFHG)LUVW%DQN¶VLPSURSHUSXUSRVHLQSXUVXLWRI
Medical Group Participating Savings Plan v. Bulger, 243 WKLVOLWLJDWLRQ
F.3d 773, 785 (3d Cir. 2001) (noting that we squarely held
that before utilizing its inherent power, a district court should %HFDXVH WKH GLVWULFW FRXUW GLG QRW EDVH LWV ILQGLQJ RQ DQ
consider whether any Rule - or statute - based sanctions are HUURQHRXVYLHZRIWKHODZRUDFOHDUO\HUURQHRXVDVVHVVPHQW
up to the task in holding that the district court erred when it RI WKH HYLGHQFH DQG EHFDXVH WKHUH LV DPSOH HYLGHQFH WR
"did not consider whether any such sanctions . . . would have
sufficed to deal with any misconduct that occurred in this 
case.") (emphasis added) (citing Klein,185 F.3d at 110) 7KH GLVVHQW FRQWHQGV WKDW RXU DQDO\VLV HVVHQWLDOO\ HOLPLQDWHV WKH
("When the Rules or pertinent statutes are ‘up to the task,’ WKLUG UHTXLUHPHQW RI WKH EDGIDLWK H[FHSWLRQ +HUH WKH GLVWULFW FRXUW IRXQG
WKDW )LUVW %DQN¶V ILOLQJ DQG SURVHFXWLRQ ZDV LQ WKH QDWXUH RI EDG IDLWK
they should be used. When they are not, a trial court may turn ,PSOLFLW LQ WKLV ILQGLQJ LV WKH ILQGLQJ WKDW )LUVW %DQN KDG WKH LPSURSHU
to its inherent power, but should exercise that power with SXUSRVHV RI DWWHPSWLQJ WR XVH WKH FRXUW V\VWHP WR WKUHDWHQ +DUWIRUG LQ DQ
caution.") (emphasis added and footnotes omitted). DWWHPSW WR IRUFH VHWWOHPHQW RU RWKHU DFWLRQ ZKHUH QRW RWKHUZLVH REWDLQDEOH
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LW NQHZ ZDV DQ LQYDOLG FODLP XQGHU WKH WHUPV RI WKH %RQG In our view, Chambers should be read broadly to permit the
$JUHHPHQW´ (PSKDVLV DGGHG  %XW KDYLQJ DOUHDG\ district court to resort to its inherent authority to sanction bad-
FRQFOXGHGWKDW)LUVW%DQN¶VEDGIDLWK±RULPSURSHUSXUSRVH faith conduct, even if the court has not expressly considered
±ZDVLQWKHQDWXUHRIEULQJLQJWKHDFWLRQWKHGLVWULFWFRXUW whether such conduct could be sanctioned under all
VWDWHGWKDWLW³QHHGQRWUHDFK>WKHLVVXHRI)LUVW%DQN¶VDWWHPSW potentially applicable rules or statutes. While a district court
WRDFWXDOO\SUHYDLORQWKHPHULWVRI&ODLP,,@WRILQGWKDW)LUVW should ordinarily consider whether "the conduct could also be
%DQN¶VVXLWZDVLQEDGIDLWK´ sanctioned under the statute or the Rules," Chambers, 501
U.S. at 50, there is nothing in Chambers that explicitly
,QDGGLWLRQWRHYLGHQFHRI)LUVW%DQN¶VEDGIDLWKLQILOLQJ requires a court to determine whether "the conduct at issue is
WKLVDFWLRQWKHUHFRUGUHIOHFWVWKHGLVWULFWFRXUW¶VILQGLQJVWKDW covered by one of the other sanctioning mechanisms." Id.
)LUVW %DQN IDLOHG WR FRPSO\ ZLWK VHYHUDO GLVFRYHU\ RUGHUV We are reluctant to impose a wooden requirement where the
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LQ WKH SURRI RI ORVV DQG D YLVLW E\ 0U 3RZHUV ZKR $SSO\LQJ WKH DEXVH RI GLVFUHWLRQ VWDQGDUG WKH )LIWK &LUFXLW XSKHOG
VSHFLILFDOO\DVNHGIRUVXSSRUWLQJGRFXPHQWDWLRQWRVKRZWKDW WKH GLVWULFW FRXUWs award of sanctions under its inherent power in Carroll
0U%LHKO¶VORDQVZHUHGLVKRQHVW´-$DW v. The Jaques Admiralty Law Firm, P.C., 110 F.3d 290 (5th Cir. 1997).
In Carroll, the Fifth Circuit concluded that the district court did not err in
7KXVUDWKHUWKDQSURYLGLQJLQIRUPDWLRQWR+DUWIRUGZKLFK resorting to its inherent power to sanction an attorney for his behavior at
a deposition, finding that "the usual rules were not up to the task. 110
FRXOGKDYHHQDEOHGLWWRDVVHVVWKHFRYHUDJHRI&ODLP,,XQGHU F.3d at 293. The Ninth Circuit in Mark Indus., 50 F.3d at 732, also found
WKH SROLF\ )LUVW %DQN FKRVH WR KLGH WKH EDOO DQG ILOH WKLV that the district court did not abuse its discretion by sanctioning an
DFWLRQZKHQLQIRUPHGWKDW+DUWIRUGEHOLHYHGWKDWWKHFODLP attorney under its inherent power for entering into a stipulated order of
ZDV QRW FRYHUHG XQGHU WKH ERQG EHFDXVH RI WKH ODFN RI dismissal without the consent of the client. In that case, the Ninth Circuit
HYLGHQFHRIPDQLIHVWLQWHQW concluded that Rule 11 did not authorize sanctions in favor of a party
against its own lawyer. Notwithstanding, Mark Indus. held that the trial
)LUVW %DQN FRQWHQGV WKDW LWV IDLOXUH WR GLVFORVH %LHKO¶V court has the inherent power, apart from the rules or statutes, to sanction
FRPPHQWLVQRWHYLGHQFHRIEDGIDLWK attorneys for their willful abuse of judicial process or bad faith conduct.
Id. The Third Circuit also found no abuse of discretion in Fellheimer,
1RW WHOOLQJ WKH LQVXUDQFH FRPSDQ\ DERXW D Eichen & Braverman, P.C., v. Charter Technologies, Inc., 57 F.3d 1215,
1227- 28 (3d Cir. 1995), upholding the imposition of sanctions as the
FRQYHUVDWLRQZLWKDWKLHIWKDWPDGHQRGLIIHUHQFHWRWKH proper exercise of the bankruptcy courts discretion under its inherent
LQVXUDQFHFRPSDQ\LVQRWEDGIDLWK%DGIDLWKLVGHILQHG power for the bad-faith conduct of the debtors attorneys.
DVVLWXDWLRQVZKHUHWKHFODLPVZHUHEURXJKWIRULPSURSHU On the other hand, circuit courts have reversed district courts for
SXUSRVHVVXFKDVKDUDVVPHQWRUGHOD\7KH'LVWULFW abusing their discretion by imposing sanctions under their inherent power.
&RXUWPDGHQRILQGLQJWKDWWKHFODLPZDVEURXJKWIRUDQ In Gillette Foods, the Third Circuit considered whether the district court
LPSURSHUSXUSRVHVXFKDVKDUDVVPHQWRUGHOD\ had the inherent authority to impose sanctions under its inherent power
against counsel for Gillette Foods Incorporated for including a tortious
7KHILOLQJRIDODZVXLWDIWHUWKHUHKDVEHHQDGHQLDORI interference claim in the second amended complaint. The district court
imposed sanctions after recognizing that counsels conduct was beyond
FRYHUDJH LV QRW EDG IDLWK EHFDXVH LW ZDV QRW ILOHG IRU the reach of Rule 11 because he did not personally sign the complaint. In
SXUSRVHVRIKDUDVVPHQWRUGHOD\7KHVXLWZDVILOHGWR that case, the Third Circuit held that "Gillette Foodss reasonable claim
VHHNUHFRYHU\XQGHUDQLQVXUDQFHERQGWKDWZDVEHOLHYHG for tortious interference could not have been brought in bad faith, finding
"it hard to conceive that the tortious interference claim survives Rule 11
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+DUWIRUG8QGHUZULWHUV +DUWIRUG8QGHUZULWHUV
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GLVFUHWLRQLVWKHDELOLW\WRIDVKLRQDQDSSURSULDWHVDQFWLRQIRU VXSSRUWHGE\WKHHYLGHQFHLQWKHUHFRUG
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86DW$VWKH6XSUHPH&RXUWQRWHGWRLPSRVHWKLV ,QKROGLQJWKDW)LUVW%DQNDFWHGLQEDGIDLWKWKHGLVWULFW
UHTXLUHPHQWLQHYHU\LQVWDQFHPD\KDYHWKHHIIHFWRIFDXVLQJ FRXUW IRXQG WKDW )LUVW %DQN KDG NQRZOHGJH RI %LHKO¶V
D GHOD\ LQ WKH SURFHHGLQJ WKDW LPSURSHUO\ UHZDUGV WKH FRPPHQWWKDWKHLQWHQWLRQDOO\LQFUHDVHGWKH0DVFUHWHOLQHRI
RIIHQGLQJSDUW\,QWHUSUHWLQJWKHSURFHHGLQJVRQWKHPHULWV FUHGLWZKHQLWILOHGLWVRULJLQDOSURRIRIORVVZLWK+DUWIRUGLQ
WR FRQGXFW VDQFWLRQV KHDULQJV PD\ VHUYH RQO\ WR UHZDUG D -XO\ RI   'HVSLWH WKLV NQRZOHGJH )LUVW %DQN GLG QRW
SDUW\VHHNLQJGHOD\,GDWChambers, 501 U.S. at 56. SURYLGHLQIRUPDWLRQDERXW%LHKO¶VFRPPHQWWR+DUWIRUGLQWKH
Moreover, as the Seventh Circuit observed, district courts 3URRIRI/RVVIRUPRULQDQ\RWKHUVXSSRUWLQJGRFXPHQWDWLRQ
need the discretion "to craft sanctions because the power to ,QIDFWGHVSLWHWKHERQGDJUHHPHQW¶VUHTXLUHPHQWRID³SURRI
sanction is essential for them to manage heavy case loads and RIORVVGXO\VZRUQWRZLWKIXOOSDUWLFXODUV´DQG+DUWIRUG¶V
to protect the interests of litigants." Graham, 2000 WL FRQWLQXDOUHTXHVWVIRULQIRUPDWLRQ)LUVW%DQNGLGQRWUHYHDO
717093, at *3 (citing Oliver v. Gramley, 200 F.3d 465, 466 %LHKO¶VDOOHJHGFRPPHQWVXJJHVWLQJDPDQLIHVWLQWHQWWRKDUP
(7th Cir. 1999)). WKH EDQN XQWLO -XO\   ZKHQ )LUVW %DQN ILOHG WKH
$IILGDYLWRI3DWULFN7RQWLLQRSSRVLWLRQWR+DUWIRUG¶VPRWLRQ
As a practical matter, the district court should usually IRUVXPPDU\MXGJPHQW7KHGLVWULFWFRXUWIRXQG
inform the parties, as did the district judge here, that the
district court is considering using its inherent authority to )LUVW %DQN KDG LQ LWV SRVVHVVLRQ WKH UHTXLVLWH SURRI WR
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scrutiny, yet can be sanctioned as a claim brought in bad faith. Id. at 814-
15. The Third Circuit also found in Saldana v. Kmart Corp., 260 F.3d 
228, 238 (3d Cir. 2001) that an attorneys use of profanity and her post- 7KH GLVVHQW DUJXHV WKDW WKH GLVWULFW FRXUW GLG QRW PDNH DQ\ ILQGLQJV
verdict letter describing an expert witness as a "Nazi" did not justify the WKDW )LUVW %DQN DFWHG ZLWK DQ LPSURSHU SXUSRVH $IWHU LWV VHYHQ SDJHV RI
IDFWXDO ILQGLQJV WKH GLVWULFW FRXUW H[SUHVVO\ IRXQG WKDW ³WKHUH LV DQ
imposition of sanctions under the district courts inherent authority. In
DEXQGDQFH RI HYLGHQFH ZKLFK GHPRQVWUDWHV WKDW )LUVW %DQN DFWHG LQ EDG
Saldana, the Third Circuit found that the district court improperly IDLWK QRW RQO\ LQ ILOLQJ WKH FODLP EXW LQ SURVHFXWLQJ LW ,Q RXU UHYLHZ RI
imposed sanctions because the conduct was not "egregious" and because D GLVWULFW FRXUW¶V IDFWXDO ILQGLQJV ³WKH DSSHOODWH FRXUW PXVW YLHZ WKH
another basis for sanctions existed in the form of a local rule. 260 F.3d at HYLGHQFH LQ WKH OLJKW PRVW IDYRUDEOH WR LWV SURSRQHQW JLYLQJ WKH HYLGHQFH
238. The Seventh Circuit in Corley v. Rosewood Care Center, Inc. of LWV PD[LPXP UHDVRQDEOH SUREDWLYH IRUFH DQG LWV PLQLPXP UHDVRQDEOH
Peoria, 142 F.3d 1041, 1958-59 (7th Cir. 1998) similarly vacated the SUHMXGLFLDO YDOXH 3DVFKDO Y )ODJVWDU %DQN )6%  :/ 
district courtV DZDUG RI VDQFWLRQV XQGHU LWV LQKHUHQW SRZHUV ZKLFK ZDV WK &LU  TXRWLQJ 8QLWHG 6WDWHV Y 6FKURFN  )G   WK
LPSRVHG DJDLQVW DQ DWWRUQH\ IRU ILOLQJ D IULYRORXV PRWLRQ ,Q &RUOH\ WKH &LU 7KLV UXOH RI DSSHOODWH UHYLHZ SHUPLWV XV WR PDNH UHDVRQDEOH
6HYHQWK &LUFXLW IRXQG WKDW WR WKH H[WHQW WKH GLVWULFW FRXUW LQWHQGHG WR LQIHUHQFHV IURP WKH IDFWV IRXQG E\ WKH GLVWULFW FRXUW =DFN  )G DW
LPSRVH WKH VDQFWLRQ XQGHU 5XOH  LW FOHDUO\ DEXVHG LWV GLVFUHWLRQ IRU  $V D PDWWHU RI ODZ WR ILOH D PHULWOHVV ODZVXLW ,3/ WR ZLWKKROG
QHLWKHU GHIHQGDQWV QRU WKH FRXUW FRPSOLHG ZLWK WKH UXOHs procedural PDWHULDO HYLGHQFH LQ VXSSRUW RI D FODLP LV DQ LPSURSHU XVH RI WKH FRXUWV
requirements. Id. at 1058. The Seventh Circuit in Corley also found that 6HH 0DQVPDQQ Y 7XPDQ  )6XSS   ('3D  ,I
the court could not rely upon its inherent power because the attorney was 3ODLQWLII KDG DOOHJHG WKH 7XPDQV KDG LQWHQWLRQDOO\    ZLWKKHOG
not given an opportunity to respond to the defendants motion for LQIRUPDWLRQ IURP WKHP WR ILOH D ODZVXLW WKH 7XPDQV NQHZ ZDV QRW
sanctions. Id. at 1059. ZDUUDQWHG 3ODLQWLII ZRXOG KDYH VWDWHG D FODLP DJDLQVW WKHP IRU ZURQJIXO
XVH RI FLYLO SURFHHGLQJV
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7KH HYLGHQFH LQ WKH UHFRUG FOHDUO\ VXSSRUWV WKH GLVWULFW sanction particular conduct. The parties can present to the
FRXUW¶VILQGLQJWKDW)LUVW%DQN¶VFRXQVHONQHZRUVKRXOGKDYH district court those rules or statutes that may be more
NQRZQWKDW&ODLP,,RILWVFRPSODLQWZDVZLWKRXWPHULWDQG appropriate. The district court can then exercise its "informed
ZHDIILUPWKHGLVWULFWFRXUW¶VFRQFOXVLRQRQWKLVLVVXH discretion" in selecting the appropriate authority. "The
different grounds for ordering sanctions and shifting
,PSURSHU3XUSRVH5HTXLUHPHQW attorney’s fees are distinct and require a close and careful
analysis." In re Ruben, 825 F.2d 977, 983 (6th Cir. 1987). Of
$VWRWKHWKLUGHOHPHQWUHTXLUHGWRDZDUGVDQFWLRQVXQGHU course, there may be some instances in which the litigation
LWVLQKHUHQWSRZHUVWKHGLVWULFWFRXUWFRQFOXGHGEDVHGRQDQ conduct is so egregious and the court’s inherent authority so
H[WHQVLYH UHYLHZ RI WKH HYLGHQFH LQ WKH UHFRUG WKDW )LUVW clearly applicable that a district court can exercise its inherent
%DQN¶VVXLWDJDLQVW+DUWIRUGZDV³ODFHGZLWKEDGIDLWK-$ authority without the necessity of a full exposition on the
DW7KHGLVWULFWFRXUWH[SOLFLWO\IRXQGWKDW³)LUVW%DQN¶V potentially applicable federal rules and statutes.
VXLWDJDLQVW+DUWIRUGLVLQWKHQDWXUHRIEDGIDLWKRIµEULQJLQJ
DQDFWLRQRUFDXVLQJDQDFWLRQWREHEURXJKW¶-$DW7KH To be sure, the Court in Chambers cautioned that "inherent
GLVWULFW FRXUW SURYLGHG D GHWDLOHG FKURQRORJ\ RI WKH IDFWV powers must be exercised with restraint and discretion. Id.XQGHULWVKHDGLQJ)LUVW%DQN$FWHGLQ%DG)DLWK-$DW at 44. Under Chambers, the appellate court reviews a district
$OWKRXJKWKHGLVWULFWFRXUWGLGQRWH[SOLFLWO\ODEHOLWVILQGLQJV court’s resort to its inherent authority for an abuse of
LQWKHEDGIDLWKVHFWLRQRILWVRUGHUDVDILQGLQJRI³LPSURSHU discretion and a district court’s failure to use a clearly
SXUSRVH´WKHUHFRUGDQG6L[WK&LUFXLWSUHFHGHQWUHIOHFWWKDW applicable and effective sanction rule could constitute an
WKLVLVZKDWWKHGLVWULFWFRXUWLQWHQGHG6HHVXSUDQRWH abuse of discretion. Chambers, 501 U.S. at 50. As noted by
)RU WKH UHDVRQV WKDW IROORZ ZH FRQFOXGH WKDW WKH GLVWULFW the Third Circuit in Martin v. Brown, 63 F.3d 1252, 1265 (3d
FRXUW¶VILQGLQJWKDW)LUVW%DQNDFWHGLQEDGIDLWKLVVXIILFLHQW Cir. 1995), "[g]enerally, a courts inherent power should be
reserved for those cases in which the conduct of a party or an
attorney is egregious and no other basis for sanctions exists.
(citing Gillette Foods v. Bayernwald-Fruchteverwertung, 977
F.2d 809, 813 (3rd Cir. 1992).
The exercise of inherent authority is particularly
appropriate for impermissible conduct that adversely impacts
the entire litigation. In response to the contention in
Chambers that the conduct at issue could have been addressed
by Rule 11 and "other Rules", the Supreme Court responded:
Much of the bad-faith conduct by Chambers, however,
was beyond the reach of the Rules; his entire course of
conduct throughout the lawsuit evidenced bad faith and
an attempt to perpetrate a fraud on the court, and the
conduct sanctionable under the Rules was intertwined
within conduct that only the inherent power could
 )LUVW%DQNRI0DULHWWDY 1R 1R )LUVW%DQNRI0DULHWWDY 
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address. In circumstances such as these in which all of WKDW WKH ILOLQJ RI D VXLW ZLWK ZKDW WKH LQVXUDQFH FDUULHU
a litigant’s conduct is deemed sanctionable, requiring a EHOLHYHVWREHDGHILFLHQWSURRIRIORVVEDUVDVXLW´)LQDOO\
court first to apply Rules and statutes containing )LUVW%DQNUHLWHUDWHVWKDWWKHGLVWULFWFRXUWHUUHGEDVHGRQD
sanctioning provisions to discrete occurrences before ZDLYHUDUJXPHQW
invoking inherent power to address remaining instances
of sanctionable conduct would serve only to foster ,QRXUYLHZ)LUVW%DQN¶VDUJXPHQWVWKDWLWRULWVFRXQVHO
extensive and needless satellite litigation, which is VKRXOGQRWKDYHEHHQH[SHFWHGWRNQRZWKDW)LUVW%DQNIDLOHG
contrary to the aim of the Rules themselves. WRVDWLVI\WKHFRQGLWLRQSUHFHGHQWDUHXQSHUVXDVLYH*LYHQ
2KLR¶V ORQJVWDQGLQJ UXOH UHTXLULQJ FRPSOLDQFH ZLWK DOO
Id. at 50-51, citing Advisory Committee’s Notes on 1983 FRQGLWLRQVSUHFHGHQWLQDQLQVXUDQFHFRQWUDFWD5XOHOHWWHU
Amendment to Rule 11, 28 U.S.C. App., pp. 575-576. ZDVXQQHFHVVDU\WRFRQYH\WKHODFNRIPHULWIRU)LUVW%DQN¶V
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Further, as noted in Chambers, there are significant ILOHD5XOHVDIHKDUERUOHWWHUDQGWKHGLVWULFWFRXUWGLGQRW
differences between Rule 11 sanctionsDQGLQKHUHQWSRZHU VSHFLI\WKDWWKHSURRIRIORVVZDVGHILFLHQW)LUVW%DQNVKRXOG
VDQFWLRQV5XOHDSSOLHVSULPDULO\WRSOHDGLQJDQGSDSHUV KDYH NQRZQ WKDW E\ QRW SURYLGLQJ D SURRI RI ORVV ZLWK
%\UQH Y 1H[KDW  )G   WK &LU  SDUWLFXODUV DERXW WKH 0DVFUHWH ORDQ )LUVW %DQN IDLOHG WR
$QRWKHUSULQFLSDOGLIIHUHQFHLVWKDWWKHLPSRVLWLRQRI5XOH FRPSO\ZLWKWKHFRQGLWLRQSUHFHGHQWDVUHTXLUHGE\2KLRODZ
VDQFWLRQV UHTXLUHV D VKRZLQJ RI "objectively unreasonable +HUH)LUVW%DQNQHYHUVSHFLILHGDQDPRXQWRIFODLPHGORVV
conduct," United States v. Koury Perez, 187 F.3d 1, 8 (1st IURPWKH0DVFUHWHORDQRQWKHSURRIRIORVVIRUPDQGQHYHU
Cir. 1999). In contrast, the imposition of inherent power VXSSOHPHQWHG WKH IRUP ZLWK IXUWKHU GRFXPHQWDWLRQ DV
sanctions requires a finding of bad faith. "A court may SURPLVHGRUDVUHSHDWHGO\UHTXHVWHGE\+DUWIRUG
impose sanctions pursuant to its inherent powers only when
it finds the action in question was taken in bad faith," )LUVW%DQNZDVZHOODZDUHRIWKHFRQGLWLRQSUHFHGHQWDVLW
Lockary v. Kayfetz, 974 F.2d 1166, 1174 (9th Cir. 1992) DSSHDUVLQ6HFWLRQRIWKHILGHOLW\ERQGDJUHHPHQWDQGLV
(citing Chambers, 501 U.S. at 50), or conduct that is UHLWHUDWHG LQ +DUWIRUG¶V -XO\   OHWWHU WR )LUVW %DQN
"tantamount to bad faith." Roadway Express, Inc. v. Piper, +DUWIRUG LQGLFDWHG LQ D VHFRQG OHWWHU GDWHG 6HSWHPEHU 
447 U.S. 752, 767 (1980). Moreover, a Rule 11 monetary WKDW)LUVW%DQNKDVQRWGHPRQVWUDWHGWKDW%LHKODFWHG
sanction is limited to "only those expenses directly caused by ZLWKD³PDQLIHVWLQWHQW´WRFDXVHDORVVWR)LUVW%DQN)LUVW
the [offending] filer." Cooter & Gell v. Hartmarx Corp., 496 %DQNGLGQRWUHVSRQGWRWKH6HSWHPEHUWKOHWWHUDQGQHYHU
U.S. 384, 406-07 (1990). Where, as here, the offending VXSSOHPHQWHG LWV SURRI RI ORVV RU SURYLGHG DGGLWLRQDO
party’s conduct extends through the proceedings, Rule 11 GRFXPHQWDWLRQ UHJDUGLQJ &ODLP ,,  ,QVWHDG DV WKH GLVWULFW
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+HUH WKH GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ remedies would not address the injury that the district court
ILQGLQJWKDWWKHUHZDVQRFRORUDEOHEDVLVIRU&ODLP,,7RWKH sought to remedy that included withholding evidence, the
FRQWUDU\ WKH HYLGHQFH LQ WKH UHFRUG VWURQJO\ VXSSRUWV WKH consequences of the withholding, violating discovery orders
GLVWULFW FRXUW¶V ILQGLQJ   $GGLWLRQDOO\ ZLWK WKH SRVVLEOH and extending the proceedings.
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GLVWULFWFRXUWRQ-XO\)LUVW%DQNGLGQRWSURYLGHDQ\ Chambers leaves to the district courts "informed
SURRIWRHVWDEOLVKWKDW%LHKOPDGHWKHORDQZLWKD³PDQLIHVW discretion" whether the applicable statutes or rules are "up to
LQWHQW´WRFDXVHWKHLQVXUHGKDUPDUHTXLUHPHQWIRUUHFRYHU\ the task"given the circumstances of the particular conduct.
XQGHUWKHERQG See Klein v. Stahl GMBH & Co. Maschinefabrik, 185 F.3d
98, 109-11 (3rd Cir. 1999) (interpreting Chambers to mean
)RU WKHVH UHDVRQV WKLV &RXUW DIILUPV WKH GLVWULFW FRXUW¶V "that the Rules are not up to the task when they would not
ILQGLQJWKDWWKHUHZDVQRFRORUDEOHEDVLVIRU&ODLP,,RI)LUVW provide a district court with the authority to sanction all of the
%DQN¶VFRPSODLQW conduct deserving of sanction"); Mark Indus., Ltd. v. Sea
Captain's Choice, Inc., 50 F.3d 730, 732 (9th Cir.1995)
 &RXQVHO.QHZRU6KRXOG+DYH.QRZQWKH&ODLPZDV (noting that the inherent power to sanction generally should
0HULWOHVV5HTXLUHPHQW be invoked only if statutes or rules are not "up to the task");
)LUVW%DQNQH[WDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJ Gillette Foods, 977 F.2d at 814 n.10 (construing the above-
WKDW)LUVW%DQNVKRXOGKDYHNQRZQWKDWWKHUHZDVDIDLOXUHRI quoted paragraph from Chambers to refer to "the ability of a
FRQGLWLRQ SUHFHGHQW RQ WKH SURRI RI ORVV LVVXH IRU VHYHUDO court to impose sanctions under its inherent power when
UHDVRQV)LUVW3ODLQWLIIFRQWHQGVLWZDVQRWPDGHDZDUHRILWV some of the attorneys conduct could be sanctionable under
IDLOXUHRIFRQGLWLRQSUHFHGHQWEHFDXVH+DUWIRUGQHYHUVHQWLW Rule 11 and other rules"). In the absence of a plainly
D³5XOHVDIHKDUERUOHWWHUVWDWLQJWKDWWKHFODLPVKRXOGEH applicable rule, we likewise trust in the district court’s
GLVPLVVHGEHFDXVHWKHUHZDVQROHJDORUIDFWXDOJURXQGVWR "informed discretion" when the circumstances require the
VXSSRUWWKHFODLP´6HFRQGEHFDXVHWKHSULRUGHFLVLRQVRI exercise of its inherent authority.
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