(CN) - The 10th Circuit reversed sanctions Tuesday that a New Mexico federal judge imposed against attorneys he found had "unreasonably and vexatiously" multiplied proceedings in an elections case.
A group of voters brought the underlying case to challenge redistricting in Albuquerque that they claimed disadvantaged Hispanic voters.
In 2013, the voters said they wanted to dismiss their lawsuit and refile if they deemed litigation still necessary after an upcoming fall election.
A federal judge instead stayed the proceedings. Once the election was over, the voters did not respond about whether they wanted to continue litigation, and the judge dismissed the case.
Mayor Richard Berry then moved to sanction the voters' attorneys for dragging the lawsuit out past June 25, 2013, when he had given them an expert report revealing various weaknesses in their case.
The District Court awarded $48,000 in sanctions, covering attorneys' fees dating back to June 25, 2013.
A divided three-judge panel of the 10th Circuit reversed Tuesday, however, since the emphasis of that date implies that the attorneys "did something at that point that multiplied proceedings within the meaning of the statute." (Emphasis in original.)
What that conduct was remains unclear, the majority found.
"Because the voters took no affirmative action on that day, the only potentially sanctionable June 25 'conduct' we can see is their failure to immediately cut the case short - i.e., dismiss the case with prejudice - after receiving [the expert's] damaging report," Judge Timothy Tymkovich wrote for the majority.
Though the court apparently found that the voters were unreasonable in not dismissing the case "the very day they received the report," Tymkovich said "that cannot be reconciled with" a provision in the sanctions statute that strives to avoid "dampen[ing] the legitimate zeal of an attorney in representing his client."
"When new information appears to make it objectively unreasonable to pursue a case, an attorney must have at least some time - surely a day or two - to study that information and make a decision regarding its impact before failing to drop the case becomes sanctionable unreasonable pursuit," the ruling states.
Of course the District Court can still revisit sanctions on remand "if it finds a more appropriate triggering action," Tymkovich added.
"We express no opinion on those possibilities here," he wrote. "We only note that lawyers and litigants generally should have some reasonable leeway to review ostensibly damaging materials, even if the materials are, ultimately, the last straw proving their case's weakness."
Judge Gregory Phillips pushed in dissent for a stronger reversal.
The lawsuit was filed when Albuquerque's elections policies were undergoing revisions related to the percentage of votes a candidate needed to win his seat. As such, a "wait-and-see" approach by voters after receiving the expert report was reasonable, Phillips said.
Furthermore the lower court's issuance of stay pending conclusion of the elections "acknowledged the correctness of the plaintiffs' approach in monitoring the upcoming elections to see whether the charter amendment had solved their concerns," Phillips wrote.
"Obviously, the court assumed that the plaintiffs may well have meritorious claims, and it gave no inkling that sanctions might even be possible," the 17-page dissent states.
"I am wary of the district court's and majority's approach of resolving the sanctions motion as if it were a summary-judgment motion upon which the City must prevail," Phillips added. "I am far from convinced that any of the plaintiffs' claims for relief were meritless."
Attorneys for the voters and the mayor have not returned emails or phone calls seeking comment.
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