Sig Try Sig, Inc. v. Philippine Airlines, Inc.

MEMORANDUM **

The district court did not abuse its discretion by imposing sanctions on Plaintiffs and their attorneys. Sanctions may properly be imposed if either (1) the complaint is legally or factually baseless, or (2) the complaint was filed for an improper purpose. See Zaldivar v. City of Los Angeles, 780 F.2d 823, 832 (9th Cir.1986).

The relief requested by Plaintiffs in their original complaint and in their first amended complaint (“FAC”) directly violated an order issued by the Bankruptcy Court of the Northern District of California, which prohibited Plaintiffs from bringing suit against Philippine Airlines (“PA”) in order to enforce a General Sales Agency (“GSA”) Agreement that Plaintiffs had entered into with PA several years earlier. The complaints were therefore filed for an improper purpose.

In addition, the claims asserted by Plaintiffs in their original complaint were legally and factually baseless. The changes made by Plaintiffs in the FAC did not adequately strengthen their claims or address the concerns of the district court regarding the viability of those claims. The frivolousness of Plaintiffs’ claims provides another justification for the district court’s…