Exercising its inherent power, a federal court may award attorney fees as a sanction; however, unless criminal contempt procedures are followed, the sanction cannot exceed the amount of attorney fees the opposing party would not have incurred but for the sanctionable conduct. Federal courts have inherent power to sanction parties or their attorneys for conduct that abuses the judicial process. One permissible sanction is imposition of attorney fees incurred by the opposing party. However, when sanctions are imposed using civil procedures—i.e., not allowing jury trial or requiring proof beyond a reasonable doubt—the court may award as sanctions only the fees that the opposing party incurred because of—i.e., would not have incurred but for—the sanctionable conduct. Establishing a causal linkage between the conduct and the fees is essential, though the court may do so by rough approximation rather than minutely accurate accounting. Here, the lower courts did not require a causal connection, wrongly thinking it could be jettisoned given the egregiousness of the sanctionable conduct or allowing fees incurred after rather than because of the sanctionable conduct. The case is remanded to see whether Goodyear waived any objection to sanctions of $2 million ($700,000 less than the amount awarded) and if not, to assess sanctions anew under the proper standard.
United States Supreme Court (Kagan, J.); April 18, 2017; 2017 WL 1377379