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William Adkins, Individually and As A Shareholder Suing In the Right of W. Babylon Chevrolet-Geo, Inc v. General Moters Corp.

March 31, 2011

WILLIAM ADKINS, INDIVIDUALLY AND AS A SHAREHOLDER SUING IN THE RIGHT OF W. BABYLON CHEVROLET-GEO, INC., D/B/A PALANKER CHEVROLET, A DELAWARE CORPORATION, PLAINTIFF,
v.
GENERAL MOTERS CORP., GENERAL MOTORS ACCEPTANCE CORP., TIMOTHY RINKE AND PAUL FIELDS, DEFENDANTS.



The opinion of the court was delivered by: Seybert, District Judge:

MEMORANDUM & ORDER

Pending before the Court is Defendant GMAC's motion for attorneys' fees and taxable costs. For the following reasons, GMAC's motion for attorneys' fees is DENIED, and its request for taxable costs is GRANTED IN PART.

BACKGROUND

The Court assumes familiarity with the facts and posture of this litigation, and only sets forth here facts sufficient to ground the discussion that follows. Briefly, Plaintiff sued GM, two GM employees (collectively, the "GM Defendants") and GMAC. GMAC's motion to dismiss was denied, but its motion for summary judgment was granted. Plaintiff moved for reconsideration and, after additional discovery and briefing, that motion was denied. See July 6, 2004 Order. GMAC then moved to recover its attorneys' fees and costs from Plaintiff and Plaintiffs' attorneys on May 11, 2005. The Court referred GMAC's motion to Magistrate Judge Michael L. Orenstein for a Report and Recommendation.

GM, GMAC's co-defendant, lost at trial but eventually prevailed on appeal. It, too, requested its costs from Plaintiff as a prevailing party. On September 30, 2007, the Court denied GM's costs because it found that imposing costs on Plaintiff would be inequitable in light of Plaintiff's strained financial circumstances (the "September 2007 Order").

On April 8, 2008 (the "April 2008 Order"), the Court similarly found that taxing Plaintiff with GMAC's costs would be inequitable. The Court vacated its Order referring GMAC's motion for attorneys' fees and costs to Judge Orenstein and summarily denied GMAC's requests. April 2008 Order at 4. In its April 2008 Order, the Court did not address GMAC's request for attorneys' fees.

GMAC appealed, and on January 28, 2010 the Second Circuit vacated and remanded the April 2008 Order with directions that the Court (1) address GMAC's attorneys' fees argument and (2) articulate more clearly its reasons for denying GMAC its taxable costs. Second Circuit January 29, 2010 Mandate at 3-4 (the "Mandate").

DISCUSSION

GMAC seeks to recover its fees and costs from both Plaintiff and Plaintiffs' attorneys pursuant to Section 1927 and the Court's inherent power to sanction frivolous litigation. It also seeks its taxable costs from Plaintiff as the prevailing party under Federal Rule of Civil Procedure 54.

I. Frivolous Litigation

GMAC has not shown that it is entitled to attorneys' fees under either the Court's inherent power or Section 1927.

A. Legal Standard

1. The Court's Inherent Power

The Court may sanction parties and their attorneys for bad faith conduct pursuant to its inherent authority "to manage [its] own affairs so as to achieve the orderly and expeditious disposition of cases." Revson v. Cinque & Cinque, P.C., 78 (2d Cir. 2000) (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 43, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991)). Sanctions under this power may be appropriate where "here the party or the ...


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