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Counsel: Sanctions – Pre-Litigation Advice

Godfrey & Kahn, S.C. v. Circuit Court for Milwaukee County, 2012 WI App 120(recommended for publication); case activity

A court doesn’t possess inherent authority to impose on counsel a sanction (here, monetary) for pre-litigation advice, that is, conduct occurring before the court’s jurisdiction was invoked:

¶3        We conclude that the record, particularly the trial court’s own words in its ruling, clearly shows that the trial court imposed the sanction for pre-litigation legal advice that the trial court believed Godfrey & Kahn had given to its client, Midwest.  And while it is well-established law in Wisconsin that trial courts have broad inherent powers to enable them to function as courts, see State v. Cannon, 196 Wis. 534, 536, 221 N.W. 603 (1928) (“Such powers have been conceded because without them [courts] could neither maintain their dignity, transact their business, nor accomplish the purposes of their existence.”), neither party cites to any legal authority justifying the exercise of inherent powers to sanction for pre-litigation legal advice, nor could we find any.  Rather, the test for whether a court can invoke its inherent power to sanction is whether such action is necessary for the court to properly function.  See State v. Braunsdorf, 98 Wis. 2d 569, 580, 297 N.W.2d 808 (1980) (“These cases teach that an inherent power is one without which a court cannot properly function.”); see also Jacobson v. Avestruz, 81 Wis. 2d 240, 245-46, 260 N.W.2d 267 (1977) (“‘The general control of the judicial business before it is essential to the court if it is to function.’”) (emphasis added; citation omitted).

¶4        Here, the pre-litigation legal advice on which the trial court based its sanction did not occur in the presence of the trial court, nor did it impede the trial court’s ability to function as a court.  See id.  Indeed, the trial had been completed, and the verdicts had been rendered and affirmed by the time the trial court imposed the sanction.  Thus, we conclude that the trial court lacked a legal basis for invoking its inherent powers and issuing the sanction.

¶42      “[Trial] courts have ‘inherent, implied and incidental powers.’”  Henley, 328 Wis. 2d 544, ¶73 (citation omitted).  Inherent “powers are those that are necessary to enable courts to accomplish their constitutionally and legislatively mandated functions.”  Id.  There are three areas in which the courts have generally exercised their inherent authority:  “(1) to guard against actions that would impair the powers or efficacy of the courts or judicial system; (2) to regulate the bench and bar; and (3) to ensure the efficient and effective functioning of the court, and to fairly administer justice.”  Id.  A trial court “should only invoke inherent power when such power is necessary to the functioning of the court.”  Id., ¶74; see also Braunsdorf, 98 Wis. 2d at 580.

¶43      Certainly, a trial court has the inherent authority to sanction a party or its attorney for misconduct during litigation by ordering payment of the opposing party’s attorney’s fees and costs.  See Schultz v. Sykes, 2001 WI App 255, ¶2, 248 Wis. 2d 746, 638 N.W.2d 604 (trial court has the inherent authority to order a party to pay the opposing party’s attorney’s fees and to dismiss a case for suborning perjury); Schultz v. Darlington Mut. Ins. Co., 181 Wis. 2d 646, 650-53, 658-59, 511 N.W.2d 879 (1994) (trial court has the inherent authority to impose opposing party’s costs on defendant’s attorney for inappropriate comments in front of the jury during trial); Schaefer v. Northern Assur. Co. of Am., 182 Wis. 2d 148, 162, 513 N.W.2d 615 (1994) (trial court “has ‘inherent authority to sanction parties for failure to prosecute, failure to comply with procedural statutes or rules, and for failure to obey court orders’”) (citation omitted); Jensen, 275 Wis. 2d 604, ¶¶1-2, 33-35 (trial court has the inherent authority to impose attorney’s fees and costs against the plaintiff’s attorney for failing to obey the trial court’s scheduling order); Teubel v. Prime Dev., Inc., 2002 WI App 26, ¶¶16-17, 249 Wis. 2d 743, 641 N.W.2d 461 (WI App 2001) (trial court has the inherent authority to sanction an attorney for altering marked exhibits); Johnson v. Johnson, 199 Wis. 2d 367, 376-78, 545 N.W.2d 239 (Ct. App. 1996) (trial court has the inherent authority to sanction a party for overtrial).

The nature of the practice is such that this issue is unlikely to arise in the context of public defender representation. But never say never, hence the post.

The decision also contains a discussion of the supervisory writ of prohibition, ¶¶48-56 – the facts are sufficiently idiosyncratic as to make the case sui generis, but the general standards for the writ are efficiently recited.

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