Tenorio v. Superior Court

CLERK OF COURT SUPREME COURT. CNMI FILED F..OR PUBUCATION IN THE SUPREME COURT OF THE COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS JOSE C. TENORIO, et al., ) ORIGINAL ACTION NO. 89-002 ) Petitioners, ) ) vs. ) ) SUPERIOR COURT OF THE ) COMMONWEALTH OF THE ) DECISION and ORDER NORTHERN MARIANA ISLANDS, ) ) Respondent, ) ) and ) ) L & W Corporation; et al., ) ) Real Parties ) In Interest, ) ) and ) ) The Board of Elections of ) t.u� Commonwealth of the ) Northern Mariana Islands, ) et al., ) ) Real Parties ) In Interest. ) ____ ) BEFORE: Dela cruz, Chief Justice; Villagomez and Borja, Associate Justices. DELA CRUZ, Chief Justice: We are asked to rule upon two separate motions for sanctions brought by two attorneys representing the opposing 114 parties in a writ of mandamus proceeding.� Pursuant to R.App.Pro. 38(b), the petitioners have moved for sanctions against the respondent real parties in interest (L & W Corporation, et al, hereafter "respondents'') and their attorney, Mr. Robert O'Connor (hereafter "O'Connor"). The respondents have, in t�rn, filed a cross-motion for sanctions against the petitioners and their attorney, Mr. Theodore Mitchell (hereafter "Mitchell"). Mitchell and O'Connor each accuse the other of sanctionable misconduct relating to the writ of mandamus proceeding and events subsequent thereto. It is necessary to review the mandamus proceeding in order to evaluate the merits of each motion. I. In the original action filed in Superior Court, the respondents had challenged the Attorney General's certification of a popular initiative petition to ban most forms of gambling in the Commonwealth. Their challenge was based on several grounds, including a contention that the Board of Election regulations that the Attorney General applied in certifying the popular initiative violated the Commonwealth Constitution. Another ground was predicated on assertions of fraud and other 11 We granted the writ on November 2, 1989. An opinion setting forth our reasons for granting the writ was handed down 1n Tenorio, et al. v. Superior Court, et al., Original Action No. 89-002 (N.M.I. November 14, 1989) . 1 15 improper conduct by initiative proponents during the signature- gathering drive. On October 17, 1989, the Superior Court entered an order denying a motion to dismiss for lack of subject matter juris- diction.�/ Two days later, the court ruled that NNI Constitution, Article XVIII, § 4(a) required the popular initiative petition to contain a certain minimum number of valid signatures as of the date that the petition was resubmitted for certification. The government conceded that if that date was used as the basis for certification, then the petition as submitted did not contain the constitutional minimum. Accordingly, the court issued an injunction preventing the submission of the initiative to the electorate in the November 4, 1989, election. � The Superior Court thus did not make any findings as to most of the respondents' factual assertions. Following the issuance of the injunction, the petitioners filed a motion in Superior Court to intervene. On October 27, the Superior Court granted the petitioner's motion. on the same day, the petitioners filed a petition for a writ of mandamus (hereafter "petition") with this Court. The petition requested a writ directing the Superior Court to vacate its 2/ L & W Cor12oration v. Board of Elections, Civil Action No. 89-957 (NMI superior Court, oct. 17 , 1989) . 3/ L & W cor12oration v. Board of Elections, Civil Action No. 89-957 (NMI Superior Court, oct. 19, ]_.989) . 1 16 injunction, dismiss the respondents' complaint with prejudice for lack of subject matter jurisdiction, and to retain jurisdiction over the parties and their attorneys for the purpose of ruling upon any motions for sanctions. The petitioners argued that the Superior Court lacked jurisdiction to entertain the complaint because it was filed after the 30-day limit for challenges to agency actions under the Administrative Procedure Act (hereafter "APA") . See 1 CMC § 9112 (b) . The respondents answered the petition on October 3l with a brief in opposition (hereafter "opposition brief") . The opposition brief opened with a statement of the case reciting many of the assertions of fraud and improper conduct on the part of the initiative proponents that were originally raised in the Superior Court proceeding. The respondents argued, inter alia, that the Superior Court rulings should not be set aside because they properly held that the action was not barred by the APA' s 30-day limit and that the regulations violated the Constitution. Following a hearing, we granted a writ of mandamus on November 2, 1989. The writ directed the Superior Court to vacate its order enjoining the Board of Elections from submitting the anti-gambling initiative to the electorate in the November 4 election. We declined to rule upon the other relief requested in the petition. On November 4, election day, the petitioners filed a "Second Supplemental Petition for Writ of Mandamus" (hereafter 117 "second petition"). In the second petition, the petitione rs requested that we consider setting aside the results of the election "(i]f the (initiative] fails by a very close margin". Second petition at 7. The basis for this conditional request was certain out-of- court statements made by O'Connor to the news media that the pe titioners believed were so pre judicial to the passage of the initiative that they "may turn out to be the sole cause of failure at the polls''· Second petition at 2. The petitioners cited Sheppard v. Maxwell, 384 U. S. 3 33 (1966), apparently for the proposition that adverse publicity could warrant setting aside the result of the election. Second petition at 7. The popular initiative was defeated in the November 4 general election. On Nove mber 6, the respondents voluntarily dismissed their original action in Superior Court and also filed with this court a short reply to the petitioners' second petition. The reply ("Remarks Regarding Second Supplemental Petition for Writ of Mandamus; Exhibits" -- hereafter "reply brief") noted that the original action had been,dismissed and requested dismissal of the second petition as a frivolous and improper "campaign ploy". Reply brief at 3. The respondents also requested the Court to consider imposing sanctions against Mitchell. II. On November 8, the petitioners filed a motion for sanctions against the respondents and O'Connor, specifying four 118 grounds arising from O'Connor's opposition brief and reply brief: ( 1) factual misrepresentations; (2) irrelevant allegations; (3) legally implausible arguments; and (4) use of the legal process for an improper purpose. The first ground is based upon the assertions of fraud and other improper conduct on the part of the initiative proponents that were set forth· in the opposition brief. The petitioners contend that the assertions were stated as established facts, and constituted misrepresentations to this Court because they were never established to be facts by the Superior Court after an evidentiary hearing. Second, the petitioners contend that these statements were irrelevant because they did not relate to the argument in the petition that the respondents' challenge was barred by the 30-day APA time limit. The third ground for sanctions, the asserted implausibi- lity of the legal arguments in the opposition brief, is chiefly based on the claim that no valid argument was advanced tp counter the argument that the certification challenge was barred by the 30-day time limit. �/ Finally, the petitioners claim that O'Connor misused the legal process to harass them. Statements in the opposition 4/ Mitchell also claims that other legal arguments advanced in O'Connor's opposition brief were frivolous, including a contention that the Attorney General lacked jurisdiction to certify a petition that did not contain adequate valid signatures and a contention that the 30-day time limit was extended by an official reconsideration of the certification. 119 brief and in the reply brief are cited: "(p]e titione r is not se eking justice, pe titione r is see king to fool this court" and "childish and frivolous". Opposition brie f at 48, reply brie f at 2. The petitioners ask for imposition of a fine after a he aring, for a separate monetary sanction payable by re sponde nts' counse l to deter future misconduct, a re primand, and an award of costs and attorne y's fe e s. III. On Nove mber 24, the re sponde nts file d a cross-motion for sanctions against the pe titioners and Mitchell. The re spon­ de nts spe cify four grounds: (1) imprope r out-of-court conduct by Mitche ll; (2) use of the le gal process for an imprope r purpose ; {3) raising of legally implausible arguments; and (4) factual misrepresentations. The re spondents allege out-of-court incidents in which Mitchell addre ssed O' Connor and a represe ntative of one of the re spondents in obscene and abusive language , and offe red to physically fight the latte r. The responde nts do not sugge st that such conduct violated R.App.Proc. 38(b). Inste ad, they invoke this Court's inherent authority to impose sanctions whe n an attorney conducts himself in a manne r unbecoming to a member of the bar. The se cond ground for sanctions is based on the allegation that Mitchell told O'Connor that his only reason for inte rvening in the case was to see k sanctions against O' Connor. 120 The re spondents conte nd that Mitchell was thus using the legal process for the improper purpose of harassing O' Connor. The third ground, advancement of le gally implausible arguments, is based on two claims. The re sponde nts contend that the petitioners' se cond pe tition ("Second supplemental Pe tition for Writ of Mandamus") was so legally implausible that it was frivolous and that the pe titione rs should be sanctioned. The y also contend that the pe titioners' motion for sahctions is in itself sanctionable be cause it frivolously claims that O'Connor's opposition brief argume nts were le gally implausible. The re sponde nts note that the Supe rior court had rule d in their favor by granting the injunctive relie f they sought. Finally, the re spondents claim that Mitchell misrepr�­ sented the facts in his motion for sanctions against O'Connor. The y contend that the factual asse rtions in the opposition brie f which the pe titioners complain of were supported by exhibits and affidavits filed with the Supe rior Court and were part of the re cord conside re d by that court and, later, by this court in the mandamus proceeding. The y argue that ne ither court conclude d that the state me nts we re incorrect or unsubstantiated. The respondents ask us to award attorne ys' fe e s and costs against the pe titioners and Mitchell� IV. The basis for most of the sanctions claims, R. App. Proc. 38(b), provide s, in pertinent part: 121  The signature of an attorney or party [on a brief, motion or any other pleading] constitutes a certifi­ cation by the signer that the signer has read the brief, motion or any other pleading; that to the best of the signer's knowledge, information, and belief, formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law (or a good faith argument for the amendment or repeal of existing law can be made) and that it is not inter­ posed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. If a brief, motion, or any other pleading is signed in violation of this rule, the Court, upon motion or upon its own initiative, shall impose upon the signer, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the brief, motion, or any other pleading, including a reasonable attorney' s fee. This language is patterned after Federal Rule of Civil Proce­ dure 11, which applies to trial practice.�/ Case law construing Fed.R.Civ.P. 11 is cited by both parties to aid the Court in construing R.App.Proc. 38 (b) . We find this appropriate. "[I)n interpreting local rules [of appellate procedure), this Court looks to the federal appellate rules for guidance in di$cerning what the purpose is behind a particular rule". South Seas Corporation v. Sablan, 1 CR 122 (D.NMI App. Div., 1981) . Sanctions may be imposed under Fed.R.Civ.P. 11 if a document is not well grounded in fact. An objective reason- 5/ Neither party relies on R.App.Proc. 38(a) , which i� patterned after Federal Rule of Appellate Procedure 38. Sanctions are imposed under this rule for many of the reasons that sanctions are imposed under Fed.R.Civ.P. 11. See, e.g. Casper v. Commissioner of Internal Revenue, 805 F.2d 902, 907 (lOth Cir. 1986) . 122 able ne ss test is used to determine whether · an adequate pre filing inquiry has occurre d. Eastway Construction Corp. v. City of Ne w York, 762 F.2d 243 (2d Cir. 1985 ). The circum­ stances of each case are considered, including the time available for prefiling inquiry and the source and complexity of available pre filing information. Brown v. Fede ration of State Me dical Boards of the Unite d States, 830 F.2d 1429, 1435 (7th Cir. 1987). Furthermore, a document is not well grounded in fact if an attorne y has misrepre sented the e vide nce . In re Discinlinary Action of Curl, 803 F.2d 1004 (9th Cir. 1986). Sanctions may also be imposed under Fe d.R.Civ.P. 11 if a document is not we ll grounde d in law. A position is warranted by e xisting law if it is supported by a non-frivolous legal argument. A le gal argume nt is non-frivolous if it is likely to succe e d on the merits or if reasonable pe rsons could differ as to the like lihood of its success on the merits. Se e Ame rican Bar Association Se ction of Litigation, Standards and Guidelines for Practice Unde r Rule 11 of the Fede ral Rules of Civil Proce dure , 121 F.R.D. 101, 119 (June 1988) (hereinafter "ABA standards"). A good faith argument for a change of e xisting law may also be advanced. An obje ctive reasonableness test include s analysis of whe the r the docume nt candidly acknowledge s the current adverse law and argue s for a change in e xisting law. Id., at 120, 121. Finally, sanctions may be imposed unde� Fed.R.Civ.P. 11 if a document is interposed for an improper purpose. Even a document well grounded in fact and law can violate this rule 123 if there is e vidence of the signer's bad faith. Se e Chevron U.S.A • . Inc. v. Hand, 763 F.2d 1184 (lOth Cir. 1985 ). Whe ther a signer acted with an imprope r purpose is judge d unde r an ob jective standard. Brown, 830 F.2d at 1436. v. In analyzing the pe titione rs' motion for sanctions, we find that most of the grounds asse rte d do not warrant the imposition of sanctions. We are persuaded, however, that O'Connor crosse d the line of permissible advocacy in his recitation of the facts in the opposition brief to the petition for mandamus. The pe titioners• first contention is based on the pre mise that a document is not well grounded in fact if an attorne y has misrepre sente d the e vidence . In re curl, 803 F.2d at 1006. We note that the Supe rior Court orders neve r addressed the tactual as�ertions of fraud and othe r improper conduct se t forth in the opposition brief. Despite this fact, the opposition brie f presented the assertions in a conclusionary manner, giving the impre ssion that the asse rtions were e stablished facts. or were uncontested. An example : " This pe tition was over 1,000 signatures short." Another e xample: "The petition circulators purpose ly lie d about the content of t:qe petition " A third e xample: "There are no less than 78 fc;lrged signatures on this petition • • • • " Many of these assertions were still conte sted by the petitioners when the y filed their petition with this Court. 124 Respondents nevertheless represented the assertions as facts, when it is quite clear that they were merely allegations. This manner of presenting factual allegations is unacceptable and sanctionable because it is misleading. In re Curl, supra. Ordinarily, a party's factual presentation in the initial pleadings in a writ should be liberally construed as allegations subject to a factual finding by the trier of fact. Here, the respondents misleadingly presented their allegations as if they were established facts. Nowhere in the statement of the case could we find any qualification that the facts as presented were simply allegations. �/ We find that an attorney has a duty to present a client' s position in a manner that does not suggest that allegations are established facts. O' Connor was overzealous in his advocacy, and crossed the line of permissible pleading. It may well be that, h&d there been a hearing on the disputed facts before the Superior Court, the respondents might have proven the allegations to be true and thus factually conclusive. However, there was no evidentiary hearing below. The assertions were never found to be facts, and their presentation to this Court as established facts was misleading and sanctionable. In re Curl, supra. With respect to the petitioners' second contention, we decline to find that the statements were irrelevant. In order 61 The fact that we treated the assertions as allegations in the mandamus proceeding does not excuse the respondents and O'Connor from compliance with standards of permissible advocacy. 125  to counter the petitioners• main argument, the respondents had to allege facts to show why the Superior Court asserted jurisdiction over the case and issued an injunction. The assertions of fact were relevant to the respondents' characterization of the case as a constitutional challenge, and not strictly an APA action that was barred by the 30-day time limit as the petitioners had contended. We are also not persuaded by the petitioners' contention that the opposition brief was so legally implausible that it is sanctionable; Given our prior ruling th at the Superior Court's assumption of jurisdiction was "not clearly erroneous", ?/ '"e cannot find that the respondents' arguments were so "obviously and wholly without merit" that they were frivolous. ABA Standards, 121 F.R.O. at 119. Finally, we are not persuaded b y the petitioners• last contention: that the two statements cited from the opposition and reply briefs constituted harassment. such statements do reflect the inability of the attorneys to professionally relate to each other. "A lawyer should demonstrate respect for the legal system and for those who serve it, including . . • other lawyers." Preamble, M9del Rules of Professional Qonduct, American Bar Association (1983).�/ Attorneys should be zealous advocates, 1/ Tenorio. et al v. Superior Court, et al, Original Action No. 89-002, slip op. at 9 (N.M.I. Nov. 14, 1989). 8/ The ABA's Model Rules are applicable in the CNMIT pursuant to Rule 2, Disciplinary Rules andProcedures for Persons Practicing Law in the Courts of theCotnlllonwealth (effective December 17, 1989). 126 , , but they should also refrain from making personal attacks upon each other. Where appropriate, we will not hesitate to impose sanctions on counsel in matters before us by applying R.App.Proc. 38 or by exercising our inherent authority. VI. With respect to respondents• cross-motion for sanctions, most of the grounds asserted do not justify the imposition of a sanction. lve do find, however, that petitioners• second supplemental petition had no basis, factually or legally, and is therefore sanctionable under R.App.Proc. 38(b). Further, the Court � sponte finds that the cross-motion's allegations of out-of-court misconduct allegedly committed by petitioners• counsel were inappropriately raised and were irrelevant to these proceedings. We deem the raising of such allegations in this manner t o b e sanctionable. First, as we just noted, we do have the inherent authority to impose sanctions that are not specifically addressed b y rule. In r e Villanueva, 1 CR 952 (O.NMI App. Oiv., 1984). We decline to sanction the petitioners or Mitchell for the out-of-court matters complained of in this case for several reasons. First, the allegations should properly have been presented to the Disciplinary Committee of the Commonwealth of the Northern Marianas Bar Association for investigation.�/ The Disciplinary Committee, not this Court, should appropriately be 91 The Court ha·s been advised that this is now the case. 127 the initial forum for evaluating such charges. Se cond, the allegations were irrelevant to the case before us. Third, we believe that they were raised not as an appropriate response to the petitioners' motion for sanctions, but appare ntly to deflect from it in a distracting manner. We accordingly conclude that the raising of this claim of out-of-court misconduct was imprope r in purpose and sanctionable against O'Connor. Brown, 830 F.2d at 1436. We also de cline to sanction the pe titioners based on the re spondents' a. =gation of Mitchell's improper purpose in filing the motion to inte rve ne . We are not satisfie d that the pe titione rs filed the ir motion to intervene so that the re spondents' counsel would be sanctioned. In light of what had transpired in this case , we find that pe titioners' motion to interve ne and to pe tition this Court were not file d to harass O'Connor. As to the respondents' third contention, we find that it has me rit. We agree that the petitioners' se cond pe tition was lacking in legal plausibility. We also §YS sponte find that it was factually groundless. We, the refore , find that the filing of the se cond petition is sanctionable on these base s. The latter basis will be e xamined first. Analysis of the second petition raises serious que stions concerning the adequacy of the factual allegations to support a request for relief. "Claims based mere ly upon assumed potential invasions of rights are not e nough to warrant judicial intervention." Ashwande r v. Te nne ssee Valley 128 Authority, 297 U.S. 288, 324, 80 L.Ed. 688, 699 (1936). The relie f requested in the se cond pe tition was conditioned on a hypothetical result of the e le ction. Even if it did have a legal basis, it was factually speculative and pre mature. The document was thus not well grounded in fact, and is sanction­ able on that basis. The se cond petition was also not warranted by e xisting law. The petitioners' authority for setting aside the re sults of the e le ction, Shepnard v. Maxwell, 384 U.S. 333 (1966), held that a criminal conviction could be se t aside because of inflammatory, pre judicial trial publicity. Sheppard does not stand for the proposition that the re sults of an e le ction may be set aside be cause of prejudicial pre-ele ction publicity. The petitioners cite d no authority for this claim, nor did they argue for the e xtension, modification, or reve rsal of e xisting law. Judge d objectively, this second petition is legally implausible, and is also sanctionable on that basis. Finally, we addre ss the re spondents' fourth contention: that the pe titione rs should be sanctioned for raising the claim in their motion for sanctions that the opposition brief was factually misleading. On this matte r, our de cision to sanction the re sponde nts is conclusive. To reiterate , we find that the re sponde nts' factual assertions were misleading. The petitioners appropriately raise d the claim that the asse rtions were grounds for sanctions. There is no basis for sanctioning the pe titioners for rai�ing this claim. 129  VII. This Court has broad discretion to fashion an appropriate sanction for violation of R.App.Proc. 38(b). Sanctions may be imposed on the attorney, on the client, or both. See Chevron, U.S.A.. Inc., supra. Sanctions should be allocated among the persons responsible for the offending document, based on their relative culpability. Id. We believe that it would be inappropriate to sanction the petitioners, the respondents, or the attorney representing O'Connor in this sanctions proceeding. Instead, we find that Mitchell and O'Connor were responsible for the sanctionable conduct we have determined and should be held personally accountable.1Q/ Accordingly, we impose a fine on Mitchell for signing the second petition--a document that was neither well grounded in fact nor well grounded in law. We also impose a fine on O'Connor for (1) raising a claim for an improper purpose and (2) for factual misrepresentations. Our next consideration is the amount of the fine. This Court recently imposed a sanction sua sponte. Commonwealth v. Kawai, No. 89-11 (N.M.I. Jan. 17, 1990). The sanctioned attorney was ordered to pay a $1,000 fine, escalating by $25 each day if the fine became delinquent. Id., slip op. at 6, 7. The circumstances of that case are quite different from those in this action. In Kawai, an appeal was brought before 10/We decline to award costs, attorneys fees or any other penalty or relief sought in the motions. 130 this Court on a normal schedule. The attorney for the appel- lant had thirty days to consider filing an appeal, sufficient time to discover upon cursory research that any appeal would be frivolous. In contrast, the writ of mandamus proceeding that provided the grist for this action took place under severe time constraints caused by the proximity of the November 4 election. The petitioners• petition was filed on October 27, eight days after the Superior Court issued its order of October 19. We required the respondents to file their opposition brief within four days, a task they accomplished on October 31. Given the time constraints, we determine that a fine of $25 0 is appropriate for each sanctionable offense: $25 0 for Mitchell and $5 00 for O'Connor. Fed.R.Civ.P. 11 "imposes on counsel a duty to look before leaping and may be seen as a litigation version of the familiar railroad crossing admonition to •stop, look and listen.'" Lieb v. Topstone Industries, Inc., 788 F.2d 15 1, 15 7 (3d Cir. 1986). This rule has also been described as the "stop and think" rule. We apply the same rationale to R.App.Proc. 38(b). The attorneys in this case should have stopped and thought before they filed the sanctionable documents we have analyzed in this action. We expect all attorneys who file documents in this Court to adhere to R.App.Proc. 38. If they do not, they risk imposition of an appropriate sanction. IT IS ORDERED that petitioners' counsel, Theodore Mitchell, pay a fine of TWO HUNDRED FIFTY DOLLARS ($25 0. 00) and 13 1 that respondents• counsel, Robert J. O'Connor, pay a fine of FIVE HUNDRED DOLLARS ($5 00. 00). Payments shall be made to the Clerk of this Court within fiftee n (15 ) days he reof. I tJ/!:..;. Entere d this ---- day of __ M ....;.A:...;.R.=C.;_H.;._ ____ , 1990. ---+/-6""'e-L - L_ .-·- � JOSE S. DELA CRUZ, Chief RAMON G. Justice 132