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What should you do when opposing counsel is acting like a jerk? Unless the conduct or action is egregious, in bad faith, and demonstrably harmful to your client, you generally should do nothing. Grow thicker skin. This is because most conduct endured by courts and litigants is not covered by a specific sanctions statute or rule,[1] and most judges dislike sanctions motions as much if not more than discovery motions.

Rule 9011(b) provides that by presenting to the court a petition, pleading, written motion or other paper, an attorney is certifying that, to the best of the person’s knowledge, information and belief, it is not presented “for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.”[1] In In re EHC, LLC[2] the court found debtor’s counsel violated Rule 9011 when he filed chapter 11 bankruptcy petitions solely to avoid the appointment of

The United States Bankruptcy Court for the District of New York (the “Bankruptcy Court”) recently ruled In re Scandia Seafood (New York), Inc.[1] that an involuntary chapter 7 bankruptcy case filed against Scandia Seafood (New York), Inc.

If you were looking for something else to worry about at night, ponder the following scenario that forms the basis for the putative class-action complaint brought by the lender group-plaintiffs (the “Plaintiffs”) that was dismissed by the United States District Court for the Northern District of Illinois and affirmed on appeal in Oakland Police & Fire Retirement System et.al. v. Mayer Brown. [1]  

In In re Nortel Networks, Inc.,[1] the Delaware Bankruptcy Court concluded that noteholder objections to the Indenture Trustee’s attorney fees must be made “on a timely, not hindsight basis.” The court’s decision serves as sound guidance to indenture trustees that, as long as any attorney’s fees charged were reasonable and prudent when incurred, they need not worry about a court reviewing their work with the clear perspective of hindsight.

[1]In a recent unanimous decision delivered by Justice Kagan,[2] the Supreme Court has made clear that federal courts, when awarding sanctions for bad faith conduct through the use of their inherent powers (not derived from rule or statute), must limit such sanctions to only compensatory damages that have a causal connection to the misconduct.

In Blixseth v. Yellowstone Mountain Club, LLC,[1] the Ninth Circuit Court of Appeals provided guidance on awards of attorneys’ fees.