Representing St. Charles Health System, Mark Hutcheson of Davis Wright Tremaine sought an injunction to prevent a strike by 156 medical technicians and therapists. The filing failed to disclose settled caselaw for the proposition that only the National Labor Relations Board has standing to seek such an injunction. Having dismissed the action, Judge McShane, of the District of Oregon, ordered Hutcheson to appear and show cause why he should not be sanctioned for violating his ethical duties to the Court, and/or for filing the action in bad faith.
Sanctioning counsel $40,625.52 to cover the defendant’s fees, the Court explained as follows:
“In eight years on the federal bench, this action is this Court’s first experience dealing with section 10(j) of the National Labor Relations Act. The reason federal courts rarely see these cases is simple: section 10(j) provides that only the National Labor Relations Board may seek an injunction to prevent an unfair labor practice under the National Labor Relations Act. One fact influencing this Court’s determination that Plaintiff here acted in bad faith is the fact that although Plaintiff raised Section 10(j) in an earlier motion (at the administrative level) asking the National Labor Relations Board to enjoin the strike, it omitted any mention of Section 10(j) in its motion for emergency relief before this Court. In his response, Hutcheson states: ‘Under this extreme and once-in-a-century pandemic situation, we believed that even though a court might well decline to grant the relief we were requesting on jurisdictional or other grounds, we were entitled to try to seek such relief on our client’s behalf.’ The problem for Hutcheson is that nowhere in his briefings did he alert the Court to the fact that existing caselaw – caselaw that any attorney practicing in this area of law would certainly be well-aware of – presented huge jurisdictional issues that Plaintiff could only clear by first obtaining an ‘extension’ of existing caselaw. The American Bar Association publishes the Model Rules of Professional Conduct. ‘Rule 3.3(a)(3) prohibits an attorney from knowingly failing to disclose controlling authority directly adverse to the position advocated. The rule is an important one, especially in the district courts, where its faithful observance by attorneys assures that judges are not the victims of lawyers hiding the legal ball.’ The Court finds that Hutcheson knowingly failed to disclose controlling authority directly adverse to the position advocated. It is not credible to believe this was merely an inadvertent omission…. Hutcheson writes: ‘I also accept full responsibility for the fact that we did not initially address the jurisdictional questions that arise under Section 10(j) of the National Labor Relations Act, 29 U.S.C. § 160(j) or application of the Norris-LaGuardia Act, 29 U.S.C. § 107. In the very limited period of time in which we had to put our pleadings together, we focused on perceived harm instead of jurisdictional issues.’ That time was of the essence, however, is the reason that Plaintiff’s intentional omission of jurisdictional issues is so concerning. As noted in the show cause order, had the defense not cobbled together a quick brief, the Court was prepared to issue a completely illegal order based on the law as presented by the hospital; law the court later learned to be a fiction.
“In addition to being subject to the sanctions under the Court’s inherent authority, Hutcheson is liable under 28 U.S.C. § 1927…. As noted, the fact that the hospital cited Section 10(j) in its motion asking the National Labor Relations Board to enjoin the strike yet omitted any mention of that section in its motion for emergency injunctive relief, confirms that both the motion and the complaint itself were filed in bad faith. On this record, taking note of the tense negotiations going on behind the scenes, the Court finds that the goal of this action was not to advance a valid legal argument or claim, but rather to gain a valuable negotiating chip (in the form of an injunction prohibiting a rapidly approaching strike) during longstanding discussions with the union. Additionally, the Court expressly finds that this was not an action filed to pursue an ‘extension’ of existing law. After all, Plaintiff never alerted the Court to the fact that it sought such an extension…. Hutcheson argues that, considering he merely sought an extension of existing caselaw, his filings were not frivolous. The Court once again disagrees. Had Hutcheson raised the (insurmountable) jurisdictional hurdles imposed by decades of existing precedent, the Court would have denied the emergency motion via a minute order. While perceived harm clearly may, in some circumstances, justify injunctive relief, those harms do not trump the fact that the Court here lacked jurisdiction to remedy such harms. The Court finds that Hutcheson unreasonably multiplied proceedings in this case merely by filing the case in the first place, and then moving for emergency injunctive relief without alerting the Court to the jurisdictional issues. By filing the Complaint, Hutcheson forced the Defendant Union to respond, on extremely short notice, to the request for injunctive relief. This case should have never progressed beyond Plaintiff’s administrative filing.”
St. Charles Heath System v. Oregon Federation of Nurses and Health Professionals, No.21-304, 2021 WL 5986813 (D.Ore. Dec. 16, 2021).