Peerless Industries, Inc. v. Crimson AV, LLC, 1-11-cv-01768 (ILND May 14, 2013, Order) (Cox, M.J.).
Friday, May 17, 2013
Inadvertent Production of Counsel’s Analysis Acknowledging Weakness of Infringement Claim did not Justify § 1927 Sanctions
The court denied defendants' motion for sanctions under 28 U.S.C. § 1927 after plaintiff inadvertently produced a document regarding the weakness of its claim. "[28 U.S.C. § 1927] allows sanctions when an attorney has pursued a claim that is without plausible legal or factual basis, or has pursued a case that a 'reasonably careful attorney' would have known to be unsound. But we also have no basis upon which to find that plaintiff’s claims are 'entirely without support.'. . . We do acknowledge, however, that there is a claim that can be made when a party seeks not to obtain a judgment but to 'obtain a competitive advantage independent of the outcome of the case by piling litigation costs on a competitor': abuse of process, which is a tort suit. . . . [A]t this point in the litigation this single document acknowledging the weakness of a legal claim does not support a finding that plaintiff brought a frivolous claim ‘in order to obtain an advantage unrelated to obtaining a favorable judgment.’”