GRiD Systems Corp. v. John Fluke Manufacturing Co.
Opinion
Lead Opinion
Fenwick and West, counsel for plaintiff GRiD Systems Corporation (“GRiD”), chai- *1319 lenges the district court’s imposition of sanctions against them pursuant to 28 U.S.C. § 1927 . We have jurisdiction pursuant to 28 U.S.C. § 1291 . We reverse.
I. FACTS
In March, 1990, John Fluke Manufacturing Company, Inc. (“Fluke”) contracted to have GRiD provide an automation system. Dyna-tec Systems Corporation (“Dynatec”) was retained by GRiD to design the software for the new computer system.
Dynatec failed to produce workable software and was discharged by Fluke. Fluke sought indemnification from GRiD by filing a claim with the American Arbitration Association. In addition, Fluke simultaneously brought an action in the district court to enforce a settlement agreement with Dyna-tec.
In-house counsel for GRiD had pursued the arbitration with Fluke for five months when GRiD retained new attorneys, Fenwick & West. At the arbitration hearing, GRiD objected to the authority of the arbitrator and moved to stay the arbitration while GRiD brought suit against Fluke and Dyna-tec in state court. GRiD filed the state court action in an attempt to protect its rights against Dynatec.