Court ends sanctions on local lawyers

Ruling: District judge abused his discretion

Sanctions imposed last year on five lawyers, including two in Texarkana, have been lifted by the federal Eighth Circuit Court of Appeals.

U.S. District Judge P.K. Holmes III in the Fort Smith Division of the Western District abused his discretion when he imposed sanctions last year on Texarkana lawyers Matt Keil and John Goodson, and three other lawyers involved in a class action lawsuit, according to the Eighth Circuit Court of Appeals’ ruling.

The class action lawsuit centered around property insurance. Holmes found that the lawyers acted in bad faith when they removed the case from federal court to a state court in Polk County, Ark., where it was quickly settled.

Holmes ruled that the court transfer was done to achieve a better result in the case and

that the lawyers violated certain procedural rules when both sides of the case agreed to dismiss the federal case and file it in state court. The appellate court disagreed, finding that the lawyers—Keil, Goodson, Jason Roselius of Oklahoma, Martin Weber Jr. of Houston and Richard Norman of Houston— neither violated procedural rules nor abused the judicial process.

“Therefore, we hold that the district court abused its discretion in determining that counsel violated Rule 11 and abused the judicial process. As a result, it also abused its discretion in imposing sanctions upon the plaintiffs’ counsel for the purported violation. Accordingly, we reverse the judgment of the district court and remand for further proceedings consistent with this opinion,” the 8th Circuit opinion states.

If Holmes’ sanctions of the lawyers had stuck, it could have made it difficult for the attorneys to represent parties involved in other class action cases in other courts.