Matthew Edwin Gronda, et al. v. Title Check, LLC

An attorney must never be sanctioned under 28 U.S.C. § 1927 for good faith arguments in areas of first legal impression. Even isolated breaches of that principle will “stifle the enthusiasm or chill the creativity that is the very lifeblood of the law.” Mone v. Comm’r, 774 F.2d 570, 574 (2d Cir. 1985) (observing that the statute must be “narrowly construed and with great caution.”). Here, the lower courts breached that critically important principle by granting and later upholding a sanction under 28 U.S.C. § 1927 based upon a clear misunderstanding of the law and without any finding of subjective bad faith or objective recklessness. The questions presented are: I. May attorneys be sanctioned pursuant to 28 U.S.C. § 1927 for filing a complaint which raises a good faith and legally supportable issue of first impression? II. Is subjective bad faith or objective recklessness a mandatory requirement before imposing any sanctions on attorneys pursuant to 28 U.S.C. § 1927?