United States Court of Appeals, Tenth Circuit

744 F.
2d 1438
40 Fed.R.Serv.2d 171
In the Matter of the Sanction of Jay C. BAKER and Michael J.

Carson, Appellants.
George Roland MULVANEY, Plaintiff-Appellant,
v.
RIVAIR FLYING SERVICE, INC., Defendant,
v.
Ed DIETLIN, d/b/a Dietlin Aircraft, Third Party DefendantAppellant.
No. 83-1246.
United States Court of Appeals,

Tenth Circuit.
Oct. 3, 1984.
Jay C. Baker, Baker & Baker, Tulsa, Okl., and Michael J. Carson, Gann,
Yeksavich, Carson & Leonard, Tulsa, Okl., filed a brief for appellants.
Before HOLLOWAY, SETH, BARRETT, DOYLE, McKAY, LOGAN,
SEYMOUR and McWILLIAMS, Circuit Judges.
OPINION ON REHEARING EN BANC
McKAY, Circuit Judge.
After the panel decision in this case, the court determined to consider en banc
some of the growing number of sanctions cases. We therefore ordered the recall
of the mandate and here consider the issues raised in this case en banc along
with D & H Marketers, Inc. v. Freedom Oil & Gas, Inc., 744 F.2d 1443 (10th
Cir.1984), also decided today.
The case out of which this appeal arises was set for trial on January 17, 1983.
Not long before trial, the defendant in this three-party action sought a
continuance for the convenience of counsel. The court indicated, by denying
the motion, the urgency of its need to abide with the scheduled jury trial.
Thereafter, four days before trial, the third-party defendant moved for a
continuance based on a failure to depose a critical witness. That motion was
heard on the day scheduled for trial. Counsel for plaintiff, although announcing
his readiness for trial, candidly advised the court that he might be responsible,
at least in part, for counsel's inability to take the deposition in question. The
parties had tried to agree on a mutually acceptable time for the deposition but
that effort had failed. In any event, with the trial date approaching and even in
the face of the court's previous refusal to grant a continuance because of the
absence from the country of chief counsel on one side, the third party defendant
had not noticed the deposition or otherwise adequately anticipated the
inconvenience that would be caused by not being ready for trial on the long
anticipated and set date with a jury planned. The trial court granted the
continuance but imposed a $350 sanction on the attorneys for the plaintiff and
the third party defendant because of the seriousness of the problems created for
the court. The court did not make a finding that there was bad faith but clearly it
was concerned that delays caused by negligent counsel burden the taxpayers
and the court system.
3
The issue in this case is whether the court abused its discretion by imposing
this sanction. See National Hockey League v. Metropolitan Hockey Club, Inc.,
427 U.S. 639, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976). The issue of discretion
must not be viewed in isolation. Rather, we must look at the totality of the
circumstances, including the specific case under review, the total management
problems for courts, and access and cost problems for litigants. The problems
of congested calendars and the disgraceful costs of litigation have been so
widely discussed that they do not require further documentation. The problems
have been encapsulated by the Advisory Committee on Rules in its Notes
accompanying the 1983 amendments to Federal Rule of Civil Procedure 16,
which governs pretrial management and was amended to alleviate these
problems. It is enough to note that the management of cases from the time of
filing the complaint until the beginning of trial had become unacceptably long,
necessitating amendment of Rule 16. While on the whole Rule 16 is concerned
with the mechanics of pretrial scheduling and planning, its spirit, intent and
purpose is clearly designed to be broadly remedial, allowing courts to actively
manage the preparation of cases for trial. Some dispute may exist concerning
the dichotomy among the various authorities on which the courts may rely for
sanctions. See, e.g., Federal Rule of Civil Procedure 37, sanctions for failure to
make or cooperate in discovery; the court's contempt powers; 28 U.S.C. Sec.
1927, counsel's liability for excessive costs; a variety of provisions for award of
attorney's fees to prevailing parties; and the inherent power of the court to
control its docket and adjudicatory functions. However, there can be no doubt
that subsection (f), added as part of the 1983 amendments to Rule 16, indicates
the intent to give courts very broad discretion to use sanctions where necessary
to insure not only that lawyers and parties refrain from contumacious behavior,
already punishable under the various other rules and statutes, but that they
fulfill their high duty to insure the expeditious and sound management of the
preparation of cases for trial. Indeed, the Rule suggests a different focus and
presumption in the administration of sanctions than do the other available
sanction provisions. It provides in part:
4 lieu of or in addition to any other sanction, the judge shall require the party or the
In
attorney representing him or both to pay the reasonable expenses incurred because of
any noncompliance with this rule, including attorney's fees, unless the judge finds
that the noncompliance was substantially justified or that other circumstances make
an award of expenses unjust.
5
Fed.R.Civ.P. 16(f) (emphasis added).
It is clear from the language and the context in which this amendment to the
Rule was enacted that neither contumacious attitude nor chronic failure is a
necessary threshold to the imposition of sanctions. The intent is to impose the
sanction where the fault lies. It is not necessary that the party or the party's
lawyer be in violation of a court order as required for the application of Rule
37(b)(1), Federal Rules of Civil Procedure. Both the text and the Notes of the
Advisory Committee make clear that concerns about burdens on the court are
to receive no less attention than concerns about burdens on opposing parties.
While the sanctions imposed in this case occurred shortly before the adoption
of the 1983 amendments to Rule 16, the spirit and purpose of those
amendments have always been within the inherent power of the courts to
manage their affairs as an independent constitutional branch of government.
See Roadway Express, Inc. v. Piper, 447 U.S. 752, 764-67, 100 S.Ct. 2455,
2463-65, 65 L.Ed.2d 488 (1980); Link v. Wabash Railroad Co., 370 U.S. 626,
82 S.Ct. 1386, 8 L.Ed.2d 734 (1962). Piper held that the court must find bad
faith before the sanction of dismissal could be imposed. However, Piper was
decided before the amendments to Rule 16 and the sanction imposed was much
harsher than the fine imposed here. We therefore examine the issue of abuse of
discretion in light not only of the historic powers of the court but in light of
these amendments to Rule 16 as well.
The primary focus of amended Rule 16 is on the mechanics of pretrial

conferences and scheduling. The purpose of Rule 16 is to insure early judicial
intervention in the process of trial preparation and proper conduct of that entire
process. When viewed in its broad remedial context, subsection (e)

contemplates its application to all pretrial management orders. Certainly the
sanctions concept contained in subsection (f) is a codification of the purpose to
insist that the court, the lawyers and the parties abandon habits which
unreasonably delay and otherwise interfere with the expeditious management of
trial preparation. There is no reason, either in specific language or logic, for
applying sanctions differently to pretrial matters other than the formal
conferences defined and expanded in the 1983 amendments to Rule 16.
9
We are not dealing here with the historic concept of contempt. We are not
dealing with the traditional award of attorney's fees as an adjunct of success in
litigation. Nor are we dealing with the defiant refusal of an attorney or party to
comply with some order of the court, such as discovery. Instead, we are dealing
with the matter most critical to the court itself: management of its docket and
avoidance of unnecessary burdens on the tax-supported courts, opposing parties
or both. The primary purpose of sanctions in this context is to insure reasonable
management requirements for case preparation. The secondary purpose is to
compensate opposing parties for inconvenience and expense incurred because
of any noncompliance with the reasonable management orders of the court. Of
course the trial court has discretion to withhold the award of expenses,
including reasonable attorney's fees, on an affirmative finding that the
noncompliance was substantially justified or that other circumstances would
make the award unjust.
10
Here, the court had set the case for trial. No one asserts that the parties and
their attorneys did not have adequate notice in order to prepare for trial. The
record reflects not contumaciousness, but a pattern of negligence. This
negligence imposed on the court, on the day trial was scheduled, necessitated
the cancelling of the jury trial and either wasting that jury time or trying to
reschedule other matters to accommodate the unwarranted delay. As a sanction
message to the lawyers involved, as well as to the bar generally, $175 imposed
on each lawyer is certainly modest enough to fall well within the realm of the
trial court's broad discretion.
11
The trial court could have simply denied the continuance and thus the
inconvenience to the court. However, this would turn the purpose of sanctions
on their head. Apparently the trial court was impressed that the nondeposed
witness was of genuine importance to the merits of the third-party defendant's
cause. To have forced that party to go to trial without the advantage of having
deposed that witness would have effectively imposed the sanction on the client.
It is clear from the record in this case that the interference with sound
management of the court was the fault of the lawyers on whom the sanction
was imposed--not their clients. It is the trial court's duty, within the spirit of its
total powers, including Rule 16, to impose sanctions and compensating awards
of expenses, including attorney's fees, in a manner designed to solve the
management problem. If the fault lies with the attorneys, that is where the
impact of sanction should be lodged. If the fault lies with the clients, that is
where the impact of the sanction should be lodged. In this case the trial court
lodged the impact of the sanction precisely where it should have, and in modest
terms appropriate to the circumstances. There are a broad range of sanctions
available to the trial court, but they should be administered and tailored in a
manner designed to effectuate the purpose of the sanction and in order of their
seriousness as sound discretion dictates.
12
The trial court's determination of the amount of the sanction apparently was
based on the estimated expense to the court. However, the context of the trial
court's order makes clear that its concern was to get across the message which
sanctions are designed to portray--the imperative of expeditious management of
preparation of cases for trial. The language of Rule 16(f) is in terms of
"reasonable expenses." The Rule does not require that those reasonable
expenses be only those of opposing parties. While this may be an issue in future
cases, we do not find it necessary to rule on that potential issue here. We do not
believe that the cost of the court's inconvenience is a precise measure to be
routinely awarded in each and every case of unwarranted delay. At the same
time, we do not think that cognizance of the costs imposed upon the judicial
system are irrelevant in determining the seriousness and extent of the sanction
appropriate in particular cases.
13
We have indicated elsewhere that preclusive sanctions require more serious

default than is present in this case. D & H Marketers, Inc. v. Freedom Oil &
Gas, Inc., 744 F.2d 1443 (10th Cir.1984); Hollis v. United States, 744 F.2d
1430 (10th Cir.1984). We have also indicated that, as in this case, the trial court
should set forth in the record the justification for the sanctions imposed. See
Hollis v. United States, at 1433. While the record is not as explicit as it could
be, we believe that the context is clear enough to understand the trial court's
justification for imposing the sanction. Since both of those standards are
satisfied in this case and the sanction imposed is well within the record and the
discretion of the trial court, we affirm.
McWILLIAMS, Circuit Judge, dissents:
14
I respectfully dissent and would adhere to the Order and Judgment of the panel
heretofore filed in the instant case on March 13, 1984. Insofar as the record is
concerned, the trial judge imposed sanctions without giving any reason. The
trial judge did state that the amount of the "fine" or "sanction" was based on a
statement made by the Chief Justice in a speech at an A.B.A. meeting.
15
In sum, the record does not support the action taken by the trial judge, and, in
my view, the majority has filled in the gaps.

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744 F.

In the Matter of the Sanction of Jay C. BAKER and Michael J.

United States Court of Appeals,

Fed.R.Civ.P. 16(f) (emphasis added).

The primary focus of amended Rule 16 is on the mechanics of pretrial

process. When viewed in its broad remedial context, subsection (e)

We have indicated elsewhere that preclusive sanctions require more serious

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