Scott v. Kruse (In re Fisher Financial & Investment LLC)

Summarized by Thomas Phinney , Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP
14 years 9 months ago

Citation:

___ F.3d ___ (9th Cir. May 19, 2011) (Case No. 09-60035) (Unpublished; Not precedent except as provided by 9th Cir. R. 36).

Tag(s):

9th Circuit

Ruling:

The Ninth Circuit upheld the imposition of sanctions against an attorney, based on the bad faith removal of an action to bankruptcy court, as an appropriate exercise of the court’s inherent power. The Ninth Circuit found that although the bankruptcy did not expressly find "bad faith," this finding was implied (see In re Lehtinen, 564 F.3d 1052, 1061 (9th Cir. 2009), and that the attorney had sufficient notice and opportunity to respond to the threatened sanctions.

Procedural context:

The Ninth Circuit affirmed the ruling of the Bankruptcy Appellate Panel, which affirmed an order of the bankruptcy court.

Facts:

The facts recited in the opinion are abbreviated. An attorney Robert Scott filed a Notice of Removal days before the hearing on a sanctions motion against the removing parties for which the removing parties had filed no opposition papers, forcing the state court proceedings off calendar and strongly suggesting Scott acted to delay the state court proceedings. Scott also failed to attach the required state court papers with the notice of removal, providing the court a misleading picture of the nature of the state court action.

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