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Finding that a western Pennsylvania lawyer pursued a series of “unquestionably frivolous” appeals in a suit over a toxic waste cleanup, the 3rd U.S. Circuit Court of Appeals has ordered that the lawyer herself must pay nearly $45,000 in damages under Rule 38 of the Federal Rules of Appellate Procedure. In its eight-page decision in Grine v. Coombs, a unanimous three-judge panel concluded that plaintiffs attorney Janice Haagensen of Enon Valley, Pa., “repeatedly used improper litigation techniques and filed improper appeals, ultimately extending this case unnecessarily over an eight-year period.” Writing for the court, U.S. Circuit Judge Richard L. Nygaard said, “it should have been evident to a reasonable attorney that the appeals in this case were frivolous. On five occasions, including two for which we have awarded attorney’s fees, the orders appealed from were not appealable.” Nygaard, who was joined by U.S. Circuit Judges Theodore A. McKee and Michael Chertoff, found that Haagensen — and not her clients — should pay the Rule 38 damages. “A party is entitled to rely on his or her attorney for sound legal advice. Although a party should also be diligent in pursuing its claims, they are not expected to understand procedure or law to the same extent as their counsel, particularly in the courts of appeal,” Nygaard wrote. “We have repeatedly placed responsibility for Rule 38 damage awards on counsel when a frivolous appeal is the result of counsel’s professional error, and we will do so here,” Nygaard wrote. Haagensen, reached yesterday, said she intends to ask for rehearing before the full 3rd Circuit. The order that imposed Rule 38 damages was improper, she said, because there was never any factual finding that the appeals were frivolous, and the 3rd Circuit rejected her request for a hearing on that issue. “We did everything we had to do and we did so within the rules of procedure,” Haagensen said. Nygaard said the case has “languished in the federal court system for more than eight years,” and noted that, during that time, “there have been eight appeals to this court, seven petitions for rehearing, and five petitions for certiorari to the United States Supreme Court.” Of the eight appeals to the 3rd Circuit, Nygaard said, “all but three have been dismissed in whole or in part as premature,” and every petition for reconsideration and petition for certiorari has been denied. In the suit, Haagensen represented Robert W. Grine II and JoAnne Grine, residents of Tionesta Borough in Forest County, Pa., who claim their land was contaminated from hazardous substances on an upgradient property. Originally named as defendants in the suit were Billie M. Yost-Hepfer, who owns a parcel of land immediately adjacent to the Grines’ property on an up-gradient slope; her father, William Coombs, who owned the property prior to 1990; and Jack W. Shrum, the son-in-law of William Coombs, who owns a separate tract of land adjacent to the Grines’ property that was also previously owned by Coombs. The suit was later amended to add as defendants the Borough of Tionesta, the Pennsylvania Department of Environmental Protection and the U.S. Environmental Protection Agency. In May 2003, U.S. District Judge Sean McLaughlin dismissed the entire case, finding that Haagensen had failed to respond to defense motions for summary judgment. McLaughlin was harshly critical of Haagensen’s handling of the case. “Although at first blush the size of this case file and length of the docket sheet would suggest a high degree of diligence on the part of all parties, on closer inspection the record bespeaks a history of vexatious conduct on the part of plaintiffs and their counsel which has greatly impeded the progress of this case,” McLaughlin wrote. Although dismissal of the case was a harsh sanction, McLaughlin found that no lesser sanction would be suitable. “Ms. Haagensen has previously been advised about the level of decorum expected of all counsel in this case and she has also been warned that unprofessional conduct would not be tolerated by this court. Nevertheless, Ms. Haagensen’s behavior throughout these proceedings has been consistently belligerent toward opposing counsel and, at times, disrespectful of this court,” McLaughlin wrote. “She has consistently displayed a tendency to lodge hyperbolic accusations of misconduct against the defendants and their counsel without the support of competent record evidence. … Quite frankly, in light of counsel’s historic behavior in this case, there is little reason for this court to believe that counsel will change her ways in the face of lesser sanctions,” McLaughlin wrote. In a May 2004 decision, the 3rd Circuit upheld McLaughlin’s ruling, saying “we are in full agreement with the district court’s thoughtful and searching analysis. Consequently, we need not engage in a redundant analysis simply to reach the same results.” But the May decision included an ominous footnote that said Rule 38 “provides a remedy of damages for a party who is required to defend a legitimate judgment from a frivolous appeal. We will leave it to the appellees to determine whether they wish to petition for such an award.” Lawyers for the EPA and Tionesta Borough later filed motions for damages under Rule 38. Now the 3rd Circuit has granted the motion and ordered Haagensen to pay $44,936.13 in damages — $42,317.13 to the EPA and $2,691 to the borough. Nygaard noted that Rule 38 provides that “if court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee.” Under Rule 38, Nygaard said, damages “are not awarded as a punishment or a sanction,” but instead are “awarded based on the merits of the appeal, without consideration as to whether appellant acted with malice, ignorance or deceit.” Rule 38 damages, Nygaard said, are designed “to compensate a party when they ‘suffer pecuniary loss by paying attorney fees to defend a valid judgment against a frivolous appeal,’ because the party is ‘entitled to be awarded damages as is a victim seeking compensation for any other financial loss incurred by the acts of a tortfeasor.’” The purpose of Rule 38, Nygaard said, is “to make a party whole after it has been forced to expend money to protect a valid judgment in its favor from a meritless appeal.” Haagensen argued that, even if some of her appeals were found to be premature, that finding was “not the equivalent of frivolity or lack of merit.” Nygaard agreed in theory, but said “her appeals in this case were so patently premature, they were unquestionably frivolous.”

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