In Bad Faith

“The above-described conduct of plaintiff’s counsel in this case supports a finding of bad faith.”



Case No.: CV-98-3985 CAS (Shx) April 15, 1999



Jim Holmes, Carmelita Lee, Deputy Clerk Court Reporter




The initial complaint filed in this action on May 21, 1998, was 166 pages long, named over fifty defendants, and contained twenty-four claims for relief arising out of plaintiff Michael Pattinson's twenty-five year involvement with the Church of Scientology. On August 5, 1998, defendant Kendrick Moxon ("Moxon") served a motion for sanctions under Fed. R. Civ. P. 11 on plaintiff's counsel, Graham Berry ("Berry"). Pursuant to Rule 11(c)(1)(A), plaintiff was allowed a twenty-one day period to withdraw or amend his pleading. Plaintiff subsequently filed a first amended complaint on August 18, 1998. The first amended complaint consisted of 312 pages and included thirty claims for relief. Following the filing of the first amended complaint Moxon filed a motion for Rule 11 sanctions with the Court.

On September 28, 1998, this Court issued an order denying Moxon's motion for sanctions and granting plaintiff leave to file a second amended complaint. The Court directed plaintiff to replead in conformity with the Rule 8 requirement of a "simple, concise and direct statement" of the facts upon which the claims were based. Plaintiff responded by filing a second amended complaint on October 28, 1998. The second amended complaint was 176 pages long, listed twenty-four claims for relief, and contained many of the deficiencies of the previously filed complaints. At the same time, plaintiff's counsel requested leave to file a "revised" second amended complaint, claiming that word processing and other difficulties had made it impossible to file a complaint in conformity with the Court's order. The "revised" second amended complaint filed on November 4, 1998, was 177 pages long and contained twenty-two claims for relief. In addition to filing the "revised" second amended complaint, plaintiff's counsel filed a motion for leave to file a "radically restructured, repleaded and reduced" third amended complaint.

On November 17, 1998, Moxon filed a motion to dismiss the second amended complaint, along with a renewed motion for Rule 11 sanctions. In an order issued on January 21, 1999, this Court granted Moxon's motion to dismiss the second amended complaint, and allowed plaintiff leave to file a third amended complaint. The Court also continued Moxon's renewed motion for Rule 11 sanctions, stating that it would be heard in conjunction with any motion to dismiss the third amended complaint.

Plaintiff filed a third amended complaint in this action on February 9, 1999. This complaint was seventy-four pages long, and listed thirteen claims for relief. Moxon filed a Motion to Dismiss the Third Amended Complaint and Renewal of Request for Sanctions on February 9, 1999. On March 1, 1999, Moxon filed a Motion for Costs, Expenses, and Attorneys' Fees Pursuant to 28 U.S.C. § 1927. Plaintiff filed a notice of voluntary dismissal of the case pursuant to Fed. R. Civ. P. 41(a) on March 19, 1999. The motions pending before this Court are defendant Moxon's motion for costs, expenses, and attorneys' fees, and his request for sanctions.


Moxon seeks costs, expenses, and attorneys' fees from Berry pursuant to 28 U.S.C. § 1927. Section 1927 provides that:

Any attorney ... who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.

28 U.S.C. § 1927. This section authorizes the imposition of costs on attorneys responsible for the unnecessary multiplication of proceedings. The Ninth Circuit has held that section 1927 sanctions "must be supported by a finding of subjective bad faith." New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989). "Bad faith is present when an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent." Estate of Blas v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986) (citations omitted); see also West Coast Theater Corp. v. City of Portland, 897 F.2d 1519, 1528 (9th Cir. 1990); Soules v. Kauaians for Nukolii Campaign Comm., 849 F.2d 1176, 1185-86 (9th Cir. 1988). "Tactics undertaken with the intent to increase expenses or delay may also support a finding of bad faith. Even if an attorney's arguments are meritorious, his conduct may be sanctionable if in bad faith." New Alaska Dev. Corp., 869 F.2d at 1306. An award under section 1927 is appropriate "where there is no obvious violation of the technical rules, but where, within the rules, the proceeding is conducted in bad faith for the purpose of delay or increasing costs." Matter of Yagman, 796 F.2d 1165, 1187 (9th Cir. 1986).

In the present case, the Court finds that the claims alleged against Moxon were asserted in bad faith, and resulted in an unnecessary multiplication of the proceedings for Moxon. Each of the successive amended complaints in this action fails to state facts supporting a basis for liability against Moxon, an attorney who has previously represented Scientology organizations. A review of the claims in the third amended complaint demonstrates that plaintiff has failed to allege any facts that would support a viable claim for relief against Moxon. The complaint contains a detailed description of plaintiff's involvement with the Church of Scientology and various individual members of the Church. Plaintiff alleges claims for fraud, unfair business practices, breach of fiduciary duty, false imprisonment, intentional infliction of emotional distress, interference with business relations, negligence, breach of contract and breach of the covenant of good faith and fair dealing, restitution, unjust enrichment, and declaratory and injunctive relief. All of these claims arise out of plaintiff's lengthy involvement with Scientology. The complaint centers around plaintiff's contentions that he was lured into Scientology by a number of fraudulent representations, and suffered for over twenty-five years as a result of continued misrepresentations. Plaintiff claims, for example, that defendants falsely represented that they could "cure" homosexuality. Plaintiff contends that his reliance on these misrepresentations caused him to expend large sums of money for Scientology treatments. The complaint sets forth detailed descriptions of alleged mistreatment by plaintiff at the hands of Scientology members, including allegations that plaintiff was forced to perform labor for the Church without adequate compensation, and that Scientology members failed to maintain the confidentiality of certain disclosures made during his membership. Plaintiff describes the negative effect of his involvement with Scientology on his artistic career and personal life, and requests restitution of the amount of money he paid to Scientology during the course of his membership.

The seventy-four page complaint contains detailed allegations concerning plaintiff's involvement with Scientology, but lacks specific allegations with respect to Moxon's liability. For example, the complaint contains the allegation that "[d]efendants, and particularly Defendant Moxon, in concert with others, continue to engage in illegal, outrageous, oppressive, tortious and harassing activities against those who they deem to be 'enemies' of Scientology." Third Amended Complaint, ¶ 53.1 Yet plaintiff fails to demonstrate that Moxon engaged in the allegedly fraudulent conduct that led to plaintiff's continued involvement with Scientology, and ultimately formed the basis for the claims in this lawsuit. The earlier, lengthier complaints filed in this action similarly lack any factual basis for naming Moxon as a defendant.


1 Plaintiff alleges that Moxon has filed a retaliatory lawsuit against him following the filing of the instant action. However, even if plaintiff could state a claim against Moxon for filing a retaliatory suit, the complaint at hand is devoid of any allegations of malicious prosecution.

Despite the fact that the complaints do not specify the basis for Moxon's liability, Moxon was apparently the first party served with the complaint. Plaintiff eventually dismissed the majority of the named defendants, and only served the complaint on eight defendants. See Declaration of Graham E. Berry as to Service and Proofs of Service. After several attempts by Moxon to dismiss the complaint, plaintiff voluntarily dismissed the complaint. Thus, at least four separate versions of the complaint were served on Moxon, each time requiring him to formulate a response to the allegations contained therein. The record reflects that Berry continued to amend the complaint, yet failed to provide any basis for Moxon's liability to plaintiff. The above-described conduct of plaintiff's counsel in this case supports a finding of bad faith.

Section 1927 allows for the recovery of excess attorneys' fees, costs, and expenses incurred as a direct result of the conduct leading to the multiplication of proceedings- See United States v. Associated Convalescent Enter., Inc., 766 F.2d 1342, 1347-48 (9th Cir. 1985). On September 28, 1998, this Court allowed plaintiff to amend the complaint, and ordered plaintiff to file a "short and plain" statement of the claim. The Court finds that because Berry failed to comply with the Court's order of September 28, 1998, filings after that date represent an unreasonable multiplication of the proceedings with respect to defendant Moxon.


Alternatively, the Court finds that the repeated filing of complaints naming Moxon without demonstrating any factual support for the allegations violated Rule 11. Federal Rule of Civil Procedure 11 requires that all pleadings and other motions filed with a court must be signed by an attorney or an unrepresented party, certifying that "to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances": (1) the paper is not presented for an improper purpose; (2) the claims have a valid legal basis; and (3) there is factual support for the allegations. Fed. R. Civ. P. 11(b). Pursuant to Rule 11, the court may impose sanctions on attorneys or unrepresented parties for submitting papers that are frivolous, legally unreasonable, baseless, or filed for an improper purpose. See Simpson v. Lear Astronics Corp., 77 F.3d 1170, 1177 (9th Cir. 1996). The imposition of sanctions under Rule 11 lies in the discretion of the court. Fed. R. Civ. P. 11(c).

As the history of this case demonstrates, plaintiff's counsel repeatedly filed complaints naming Moxon as a defendant, yet failed to provide factual support for these claims, or show the existence of a valid legal basis for these claims. The Court therefore finds that the award of attorneys' fees, costs, and expenses to defendant Moxon would be warranted under Rule 11 in the alternative.


Moxon shall have up to and including May 3, 1999, to submit documentation as to his reasonable attorneys' fees, costs, and expenses incurred in responding to papers filed by plaintiff after September 28, 1998. The Court will consider Moxon's efforts to mitigate expenses in determining the appropriate amount of fees. Plaintiff's counsel shall have up to and including May 10, 1999, to file a response to Moxon's submission. Thereafter, the matter will be submitted, and the Court will issue a ruling thereon.

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