George J. Malhiot, and Marjorie M. Malhiot v. Southern California Retail Clerks Union and Drug Employer Pension and Trust Fund

Appellant Marjorie Malhiot is a beneficiary of the Southern California Drug Benefit Fund (Fund), created under a collective bargaining agreement. The Fund (appel-lee) denied medical benefits to Marjorie and her husband, George Malhiot. The district court affirmed the denial, and the Malhiots appealed. We affirm. We also assess costs and attorney’s fees against the Malhi-ots’ attorneys.

Facts

Marjorie Malhiot is employed by Thrifty Corporation. Thrifty employees are beneficiaries of the Fund, which receives employer contributions and provides medical benefits to employees, their spouses, and dependents. The Fund is administered under rules and regulations established by its trustees.

The Fund’s eligibility rules provide that a spouse is eligible for benefits “as of the date of the marriage.” The trustees have always defined “spouse” as an individual legally married to a member.

In February, 1981, George Malhiot sought reimbursement from the Fund for medical expenses he incurred in a March, 1980 automobile accident. The Fund’s trustees refused to reimburse him for expenses incurred before December, 1980, the date of his marriage to Marjorie. George and Marjorie Malhiot were…

concurring and dissenting, in part:

I agree with Judge Solomon’s opinion with one exception. I think that we should issue an order to show cause to the attorneys before imposing the sanction of an award of costs and attorney’s fees.

My conclusion is that counsel is entitled to some sort of notice and hearing before this court holds them liable for costs and attorney’s fees under 28 U.S.C. § 1927 . The lead case supporting such a requirement is Roadway Express, Inc. v. Piper, 447 U.S. 752 , 100 S.Ct. 2455 , 65 L.Ed.2d 488 (1980). There, in discussing the “inherent” power of a federal court to assess fees against counsel for bad faith conduct, the Court stated that “[l]ike other sanctions, attorney’s fees certainly should not be assessed lightly or without fair notice and an opportunity for a hearing on the record.” Id. at 767 (footnote omitted). Several Ninth Circuit cases also support the need for a hearing.

In Barnd v. City of Tacoma, 664 F.2d 1339 (9th Cir.1982), the district court ordered defense counsel to pay costs and fees as a sanction. On appeal, in analyzing the court’s power to assess such fees, we noted the Roadway Express qualification regarding necessity of notice…

735 F.2d 1133 George J. MALHIOT, and Marjorie M. Malhiot, Appellants, v. SOUTHERN CALIFORNIA RETAIL CLERKS UNION and Drug Employer Pension and Trust Fund, Appellees. No. 83-6010. United States Court of Appeals, Ninth Circuit. Argued and Submitted March 8, 1984. Decided June 19, 1984. 1 Alan R. Jampol, Beverly Hills, Cal., Nolan F. King, Law Offices of Nolan F. King, Pasadena, Cal., for appellants. 2 Stuart Libicki, Schwartz, Steinsapir, Dohrman, Krepack, Sommers, Edelstein, Los Angeles, Cal., for appellees. 3 Appeal from the United States District Court for the Central District of California. 4 Before SNEED and BOOCHEVER, Circuit Judges, and SOLOMON, * District Judge. SOLOMON, Senior District Judge: 5 Appellant Marjorie Malhiot is a beneficiary of the Southern California Drug Benefit Fund (Fund), created under a collective bargaining agreement. The Fund (appellee) denied medical benefits to Marjorie and her husband, George Malhiot. The district court affirmed the denial, and the Malhiots appealed. We affirm. We also assess costs and attorney's fees against the Malhiots' attorneys. Facts 6 Marjorie Malhiot is employed by Thrifty Corporation. Thrifty employees are beneficiaries of…