Eleventh Circuit Clarifies § 1927 Sanctions: Fees Must Be Tied to Excess Proceedings Caused by Bad-Faith Discovery Conduct—not Pleading Defects

Introduction

This commentary analyzes the Eleventh Circuit’s unpublished, per curiam decision dated October 10, 2025, arising from the competitive false advertising and trade dress dispute between Celsius Holdings, Inc. and A SHOC Beverage, LLC (with Keurig Dr Pepper Inc.), and the post-dismissal sanctions dispute that followed. The appeal—captioned with Celsius as plaintiff and the lawyers and firm (Joel B. Rothman, Craig A. Wirth, and SRIPLAW, P.A., collectively “Sriplaw”) as interested parties-appellants—centers on the scope and calculation of sanctions under 28 U.S.C. § 1927 for alleged discovery misconduct.

After Celsius voluntarily dismissed its case under Rule 41(a)(1)(A)(i), the district court imposed $249,357.50 in sanctions and fees, finding bad-faith litigation conduct that allegedly multiplied proceedings. On appeal, Sriplaw challenged the order on due process grounds, the sufficiency of findings, and the magnitude of the fee award. The Eleventh Circuit affirmed the bad-faith finding and the decision to sanction Sriplaw, but vacated and remanded for recalculation of the award.

The opinion provides important guidance on § 1927’s three-part test—especially the “multiplication” and “financial nexus” elements—and clarifies that sanctions must be limited to fees caused by proceedings that would not have happened but for counsel’s bad-faith conduct, with a particular focus on discovery conduct rather than the alleged weakness of the pleadings.

Summary of the Opinion

• Due process: Sriplaw had fair notice and an opportunity to be heard. Notice came from the court’s scheduling order threatening sanctions against “party or counsel,” A SHOC’s § 1927 motion specifically targeting attorneys, and a hearing at which Sriplaw addressed its conduct.
• Bad faith: The Eleventh Circuit upheld the district court’s finding (reviewed for clear error) that Sriplaw acted in bad faith during discovery by lodging boilerplate objections, failing to meaningfully answer basic requests (including simple requests to admit facts visible on product imagery), missing deadlines, and failing to provide proper expert reports, all in violation of Rule 26’s obligations.
• Multiplication and financial nexus: The Court vacated the fee award because the district court insufficiently tied the sanctioned amount to proceedings that were actually multiplied by the attorneys’ conduct. The panel emphasized that § 1927 sanctions cannot rest on the mere weakness of the complaint or anchor to the filing of a motion to dismiss; they must be limited to excess proceedings resulting from the discovery misconduct itself.
• Result: Affirmed in part (bad faith and decision to sanction), vacated and remanded in part (amount) for recalculation limited to fees and costs caused by the discovery-related multiplication of proceedings.
• Other issues: First Amendment challenge was abandoned due to perfunctory briefing. The Court did not reach the Eighth Amendment excessive fines argument due to the remand for recalculation.

Analysis

Precedents Cited and How They Informed the Decision

• Peterson v. BMI Refractories, 124 F.3d 1386 (11th Cir. 1997): The Court relied on Peterson’s three-part test for § 1927 sanctions:
  1. Unreasonable and vexatious (bad-faith) conduct;
  2. That conduct multiplied the proceedings; and
  3. A financial nexus requiring that the sanction be limited to costs “reasonably incurred because of such conduct.”
  This case supplied the core test and the “but for” style causal linkage; the Eleventh Circuit used it to vacate the award where the district court conflated pleading weaknesses with discovery-related multiplication.
• Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 1230 (11th Cir. 2007): Established that § 1927’s “unreasonable and vexatious” standard is an objective bad-faith test. The panel applied this to discovery behavior—boilerplate objections, non-answers, missed deadlines—as conduct that could satisfy bad faith under Rule 26(g) norms.
• Peer v. Lewis, 606 F.3d 1306 (11th Cir. 2010): Clarifies that even knowingly filing a frivolous claim does not necessarily “multiply” proceedings if the litigation otherwise proceeds within a reasonable timeframe. The panel relied on this to disentangle pleading defects (Rule 11 territory) from § 1927’s focus on prolonging litigation.
• Malautea v. Suzuki Motor Co., 987 F.2d 1536 (11th Cir. 1993): Upheld sanctions for egregious discovery abuses—obstruction, inadequate responses, defiance of obligations—underscoring that discovery violations can be sanctionable under § 1927. The panel analogized Sriplaw’s discovery tactics to Malautea’s obstructive conduct.
• Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980): Sets the due process baseline for sanctions—notice and opportunity to be heard. Followed here to reject Sriplaw’s due process challenge.
• In re Mroz, 65 F.3d 1567 (11th Cir. 1995): Notice can come from the moving party; a hearing suffices. Supported the panel’s conclusion that Sriplaw received adequate process via motion practice and the sanctions hearing.
• Avirgan v. Hull, 932 F.2d 1572 (11th Cir. 1991); Kaplan v. DaimlerChrysler, A.G., 331 F.3d 1251 (11th Cir. 2003); Hudson v. Int’l Computer Negotiations, Inc., 499 F.3d 1252 (11th Cir. 2007): Establish the objective nature of bad-faith assessments in Rule 11 and § 1927 contexts and show that the same factual findings can support both in appropriate cases. Used here to explain how pleading-level frivolousness interacts with § 1927 but does not replace its “multiplication” requirement.
• New England Surfaces v. E.I. DuPont de Nemours & Co., 558 F. Supp. 2d 116 (D. Me. 2008); Dwelling Mgmt., Inc. v. Mission 8, LLC, 2023 WL 8307986 (S.D.N.Y. Dec. 1, 2023): Cited persuasively (not binding) in a footnote to caution against using § 1927 to sidestep Rule 11’s safe harbor. The panel’s recalculation directive harmonizes with that caution by confining § 1927 to excess litigation conduct rather than the filing itself.
• Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678 (11th Cir. 2014): Used to deem Sriplaw’s perfunctory First Amendment argument abandoned.
• Norelus v. Denny’s, Inc., 628 F.3d 1270 (11th Cir. 2010): Notes § 1927’s penal nature and flags but does not resolve whether the Eighth Amendment applies. The panel declined to reach the excessive fines issue in light of remand.
• Standards of review authorities: Gonzalez v. Governor of Georgia, 978 F.3d 1266 (11th Cir. 2020) (abuse of discretion parameters); J.C. Penney Corp. v. Oxford Mall, LLC, 100 F.4th 1340 (11th Cir. 2024) (bad faith is reviewed for clear error); Skanska USA Civ. Se. Inc. v. Bagelheads, Inc., 75 F.4th 1290 (11th Cir. 2023) (clear error definition); Serra Chevrolet, Inc. v. General Motors Corp., 446 F.3d 1137 (11th Cir. 2006) (due process de novo).

Legal Reasoning

1) Due Process

The Court found Sriplaw had “fair notice and an opportunity for a hearing” as required by Roadway Express. Notice was evident from three sources: (a) the court’s scheduling order warning that “party or counsel” could be sanctioned for discovery failures; (b) A SHOC’s § 1927 motion expressly seeking attorney sanctions and detailing counsel-specific conduct; and (c) the sanctions hearing itself, where Sriplaw addressed its discovery choices and acknowledged awareness that § 1927 targeted the attorneys personally.

2) Bad Faith Under § 1927 (Objective Standard)

The panel upheld the district court’s finding that Sriplaw’s discovery conduct—refusal to answer basic requests, repeated boilerplate objections to core issues, failure to serve compliant expert materials, and missed deadlines—violated Rule 26(g)’s expectation that objections not be interposed for improper purposes, and qualified as objectively unreasonable and vexatious. Illustrative examples included refusing to admit visible facts about product imagery (e.g., “multiple shades of orange,” “R logo in uppercase”), objecting to requests for production tied to specific complaint paragraphs, and declining to answer interrogatories seeking the factual basis for alleged consumer confusion.

3) Multiplication of Proceedings and the Financial Nexus

Section 1927 targets litigation-prolonging conduct—“dilatory tactics”—not the infirmity of pleadings. The panel reiterated Peer’s teaching that a frivolous complaint, without more, does not multiply proceedings. The district court erred by effectively using the motion-to-dismiss date as the trigger and by conflating pleading weakness with later multiplication. The correct focus is on discrete proceedings that would not have occurred but for bad-faith discovery conduct—e.g., motions to compel, compelled meet-and-confers that went nowhere, and work necessitated by noncompliance with expert disclosure rules.

Consequently, the sanction must be recalculated to include only fees and costs causally linked to those excess, discovery-related proceedings (Peterson’s “financial nexus”), excluding time spent on work that would have happened regardless, such as briefing a motion to dismiss or other tasks driven by the normal course of litigation.

4) Rule 11 Safe Harbor and § 1927

While not the core holding, the panel’s footnote underscores an important structural point: Rule 11 contains a safe harbor for challenging pleadings; § 1927 does not. Courts should therefore resist using § 1927 to penalize the filing of allegedly frivolous pleadings when Rule 11 provides the designated mechanism. This reinforces why the panel confined § 1927 to discovery multiplication here.

Impact

On Sanctions Practice in the Eleventh Circuit

• Tighter causal accounting for § 1927 awards: Movants must isolate and prove fees traceable to discrete, excess proceedings caused by counsel’s bad-faith conduct, especially in the discovery phase. Global fee requests tied to broad timeframes (e.g., “after the motion to dismiss”) are vulnerable to vacatur.
• Segregation of Rule 11 and § 1927 theories: Parties attacking the pleadings should use Rule 11 and respect its safe harbor; § 1927 should be reserved for conduct that unreasonably prolongs litigation. Attempts to convert a weak complaint into § 1927 liability risk reversal.
• Discovery behavior in the crosshairs: Boilerplate objections, refusal to answer simple factual requests, failure to supply compliant expert reports, and missed deadlines—especially when repeated after extensions and meet-and-confers—are high-risk for § 1927 exposure.
• Due process checklist: Sanctions will withstand due process challenges where notice is provided via orders or motions and the sanctioned party has a hearing (oral or written) to respond.
• Voluntary dismissal does not insulate misconduct: Post-dismissal, courts may still adjudicate § 1927 motions; however, recovery will be limited to fees attributable to multiplied proceedings.

Practical Guidance for Litigators

• Evaluate and avoid “boilerplate” discovery objections. Rule 26(g) certifications carry teeth. Tailor objections and answer straightforward factual requests (e.g., product colors, logos) unless a bona fide privilege or proportionality objection applies.
• Engage in good-faith meet-and-confers that actually narrow issues and yield supplementation. Document concrete progress; repeated nonproductive conferences can be viewed as multiplication.
• Serve compliant expert disclosures. “Proposed” surveys or skeletal outlines risk exclusion and sanctions where the rules require reports/summaries with substantive opinions and bases.
• When seeking § 1927 fees, map time entries to specific multiplied proceedings (motions to compel, conferences, hearings) and exclude work that would have occurred anyway (e.g., normal motion practice unrelated to the misconduct).
• If the core grievance is a frivolous pleading, pursue Rule 11 and honor the safe harbor period.

Complex Concepts Simplified

• “Bad faith” under § 1927 (objective standard): The question is not what the lawyer subjectively intended, but whether, viewed objectively, the conduct falls below reasonable professional standards—e.g., recklessly persisting in obstruction or frivolity.
• “Multiply the proceedings”: Did the conduct cause additional steps—motions, hearings, conferences—that would not have occurred otherwise? Filing a weak complaint alone doesn’t qualify; discovery stonewalling often does.
• “Financial nexus”: The sanction must equal only the reasonable fees and costs caused by the extra proceedings. It is a tight causal fit, not a broad fee-shifting device.
• Rule 11 vs. § 1927: Rule 11 targets defective papers (like frivolous complaints) and includes a 21-day safe harbor to withdraw or correct; § 1927 targets attorney conduct that needlessly prolongs the case and has no safe harbor.
• Due process in sanctions: Before a court sanctions, it must give notice that sanctions are on the table and why, and give the lawyer a chance to respond—often via a hearing.

Conclusion

The Eleventh Circuit’s unpublished decision in the Sriplaw sanctions appeal affirms a vital boundary around § 1927: sanctions must be narrowly tailored to fees caused by proceedings multiplied through counsel’s bad-faith conduct—here, discovery-related obstruction—and cannot be justified by the mere weakness of the complaint or pegged to the filing of a motion to dismiss. The panel’s approach harmonizes § 1927 with Rule 11’s safe harbor framework and reinforces Rule 26(g)’s expectations for discovery practice.

For future litigants, the message is twofold: discovery gamesmanship can readily cross into sanctionable territory, and any § 1927 award must be justified by meticulous causal accounting. For courts, the opinion underscores the need to make specific findings segregating sanctionable acts and to calibrate awards to the precise excess proceedings those acts generated. Even as an unpublished decision, the opinion cogently synthesizes existing Eleventh Circuit doctrine and provides a practical roadmap for both imposing and contesting § 1927 sanctions.