Case: 12-6082

Document: 006111439426

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UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

CASE NO: 12-6082 v.

Defendants-Appellees

MOTION FOR STAY OF SANCTIONS PENDING APPEAL Pursuant to Federal Rules of Appellate Procedure and this Court’s Rules,

order sanctioning attorney Van Irion. Grounds for this motion are that the

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Appellants are likely to succeed on the merits of their appeal; that Appellants will be irreparably harmed in the absence of the requested stay; that the balance of equities are in Appellants’ favor; and that a stay favors the interests of the public.

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Plaintiffs-Appellants move this Court for an order staying the District Court’s

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NATIONAL DEMOCRATIC PARTY OF THE USA, INC., DEMOCRATIC NATIONAL COMMITTEE, TENNESSEE DEMOCRATIC PARTY, DEBBIE WASSERMAN SCHULTZ and CHIP FORRESTER

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Plaintiffs-Appellants

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LIBERTY LEGAL FOUNDATION, JOHN DUMMETT, LEONARD VOLODARSKY and CREG MARONEY,

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MEMORANDUM IN SUPPORT OF MOTION I. Requirements of FRAP 8(a) Met

entered an order sanctioning attorney Van Irion pursuant to 28 U.S.C. § 1927. See

Court a motion to stay its order pending appeal. See R. 34, attached as Ex.2. Said

instant motion. Id.

established by Federal Rule of Appellate Procedure Rule 4, the Appellants were forced to file the instant appeal, or waive their right to appeal, before any response to their motion was filed by the Defendants or the District court. Therefore, awaiting a ruling on the motion for a stay filed with the District Court was

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II.

Standard for Stay Pending Appeal

To obtain a stay pending appeal the court should consider whether the

moving party is likely to prevail on the merits of the appeal; whether irreparable harm will occur absent a stay; whether or not others will likely be harmed if the court grants the stay; and whether the public interest supports granting the stay.”

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impracticable.

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However, due to the limited time to available to file a notice of appeal, as

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motion asserted grounds and authority essentially identical to that set forth in the

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R. 32, attached as Ex.1. On September 4 the Appellants filed with the District

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On August 24, 2012, the District Court for the Western District of Tennessee

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Mich. Coal. of Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir.1991).

III.

The Appellants are Likely to Succeed on the Merits A. Standard of Review for Grant of Sanctions

A district court's decision to grant or deny sanctions, whether arising under either 28 U.S.C. § 1927 or Rule 11 of the Federal Rules of Civil Procedure, is reviewed under the abuse-of-discretion standard. Mich. Div.-Monument Builders of N. Am. v. Mich. Cemetery Ass'n, 524 F.3d 726, 739 (6th Cir.2008) (citing Ridder v. City of Springfield, 109 F.3d 288, 298 (6th Cir.1997) (“As with Rule 11 sanctions, we review an order awarding attorney fees under § 1927 for an abuse of discretion.”)). An abuse of discretion occurs “when the district court applies the wrong legal standard, misapplies the correct legal standard, or relies on clearly erroneous findings of fact.” Geier v. Sundquist, 372 F.3d 784, 789-90 (6th Cir.2004) (citation omitted).

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Because the District Court’s order sanctioning attorney Irion relies upon

clearly erroneous findings of fact regarding the content of Appellants’ complaint, applies the wrong legal standard, and violates attorney Irion’s procedural due

process rights, the Appellants are likely to prevail on the merits of their appeal.

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B. 28 U.S.C. 1927 to be Strictly Construed 28 U.S.C. 1927 should be construed narrowly and with great caution, so as not to stifle the enthusiasm or chill the creativity that is the very lifeblood of the

law. U.S. v. Ross, 535 F.2d 346 (6th Cir. 1976); Mone v. C.I.R., 774 F.2d 570 (2nd

Constitutional construction.

C. It is Well-Established that One Plaintiff with Standing is Sufficient

reasonably should have known that Plaintiffs lacked standing to pursue their

based on the allegations of the Amended Complaint that Maroney brought suit in his capacity as a concerned citizen and tax payer…On this basis alone, counsel’s

Similarly, the District Court concluded, as grounds for sanctioning attorney Irion,

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“counsel for Plaintiffs should have reasonably concluded that Liberty Legal

Foundation lacked standing to assert any claims in this case.” Id. at 10. Yet, the U.S. Supreme Court has explained that “the presence of one party

with standing is sufficient to satisfy Article III's case-or-controversy requirement.” Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 52 at
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conduct lacked any reasonable justification.” Id. at 8-9 (emphasis added).

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claims.” R.32 at 8. Regarding Plaintiff Maroney “The Court was left to presume

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The District Court’s Order held, “Specifically, counsel for Plaintiffs

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Cir.1985). This is particularly true when sanctioning advocacy of issues related to

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FN2 (2006), citing Bowsher v. Synar, 478 U.S. 714, 721 (1986). When one plaintiff has standing, all plaintiffs may proceed. Id.

This legal conclusion was explicitly pointed out by the Appellants in their response to Defendants’ motion to dismiss: “Because Plaintiff Dummett has standing, all other Plaintiffs in the instant case, including Liberty Legal

Foundation, also have standing.” R.19 at 8, citing Massachusetts v. EPA, 549 U.S.

didn’t address standing for Plaintiffs Maroney and Liberty Legal Foundation, are simply incorrect. Attorney Irion explicitly relied upon Supreme Court precedent, coupled with his arguments that Plaintiff Dummett had competitive-candidate standing. Id.

The District Court’s conclusion that “On this basis alone, counsel’s conduct

statement on exactly this issue, and failed to acknowledge Supreme Court

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precedent exactly on point, which was also expressly pointed out to it by the counsel it sanctioned. See R.32 at 8-9. Because the District Court applied the wrong legal standard, its order

sanctioning attorney Irion is an abuse of discretion. Geier, 372 F.3d at 789-90 (6th Cir.2004). On this basis alone the District Court’s order should be reversed.

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lacked any reasonable justification” failed acknowledge counsel’s explicit

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497, 518 (2007). Therefore, the District Court’s statements that attorney Irion

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D. Advocating a Case of First Impression Cannot Support Sanctions Sanctions under 28 U.S.C. 1927 cannot be found against an attorney relying upon legal arguments of first impression. Smith v. Detroit Federation of Teachers

Local 231, American Federation of Teachers, AFL-CIO, 829 F.2d 1370 (6th Cir.

(E.D.Ky.2008); Asai v. Castillo, 593 F.2d 1222 (D.C.Cir. 1978); Oklahoma ex rel.

(W.D.Okla.2001); Martinez v. Dodge Printing Centers, Inc., 123 B.R. 77

Cir. 1988).

In the instant case the District Court’s order sanctioning attorney Irion for

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“frivolously” asserting Plaintiffs’ standing, cites only two cases that relate to standing. One of the cases, ACLU v. National Security Agency, had nothing to do with competitive-candidate standing, and was a case dismissed at the summary judgment stage rather than upon a Rule 12 motion. See R.32 at FN23, citing 493 F.3d 644, 656-57 (6th Cir. 2007). The other case cited by the District Court was

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“Where plaintiff's original claim for COD charges had never before been litigated and was therefore one of first impression, it was not “frivolous” and plaintiff's attorneys did not “multiply” the proceedings by filing an action in federal district court, notwithstanding prior dismissal of plaintiff's action by Illinois state court.” Overnite Transp. Co. v. Chicago Indus. Tire Co., 697 F.2d 789 (7th Cir. 1983).

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(D.Colo.1991); Smith Intern., Inc. v. Texas Commerce Bank, 844 F.2d 1193(5th

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Bd. of Regents of University of Oklahoma v. Greer, 205 F.Supp.2d 1273

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1987); See also O'Neal v. Kilbourne Medical Laboratories, Inc., 251 F.R.D. 247

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Drake v. Obama, which states “This notion of ‘competitive standing’ has been recognized by several circuits.” See R.32 at 9-10, citing Drake v. Obama, 664 F.3d

F.Supp.2d 63, 68 (D.N.H. 2008); Tex. Democratic Party v. Benkiser, 459 F.3d 582,

The District Court’s order could not rely upon Drake because the Drake

distinguished the instant case from Drake. R.32 at 9-10. However, the fact that the

establishes that the instant case is a case of first impression. See Black’s Law Dictionary 206 (Bryan A. Garner ed., 7th ed., West 1999)(defining case of first impression).

Because the District Court’s order doesn’t cite any precedent directly on

Drake are the Courts only grounds for finding that Plaintiff Dummett lacked

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standing as a competitive candidate. See R.32, Or. Granting Sanctions. While such distinctions may serve to support the District Court’s dismissal of the instant case,

they also establish that the instant case is one of first impression. In other words, by failing to cite any precedent directly on point, and by instead distinguishing the facts of Drake from the facts of the instant case, the District Court’s order

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point, the facts noted by the District Court as distinguishing the instant case from

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District Court distinguished the facts of Drake from the facts of the instant case

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precedent supports Appellants’ assertion of standing. So, the District Court instead

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586-87 & n.4 (5th Cir.2006); and Schulz v. Williams, 44 F.3d 48, 53 (2nd Cir. 1994).

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774, 782-3 (9th Cir. 2011)(emphasis added); citing Hollander v. McCain, 566

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established that attorney Irion did not have precedent upon which to rely that contained identical facts to the instant case. These circumstances are exactly the

A. Garner ed., 7th ed., West 1999).

competitive-candidate standing did not exist in Drake. Nor did the Drake Court, or

the District Court determined were necessary to establish competitive-candidate

case, to support the legal conclusion that a plaintiff must plead “that he was a Tennessee political party’s nominee for the office, that his name would appear on the ballot for Tennessee’s general election in November, that he was campaigning in the state of Tennessee, [or] that any registered voter in Tennessee intended to

At worst, Appellants alleged facts that were not exactly identical to those

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that established competitive-candidate standing in Drake and similar precedent. In other words, attorney Irion has been sanctioned for advocating a legal theory of first impression. The District Court’s sanctions, therefore, violate well-established precedent against sanctioning attorneys for arguing cases of first impression. Smith
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Plaintiff Dummett actually is campaigning in Tennessee and does have several registered voters in Tennessee that intend to campaign for him and plan to vote for him. These allegations would have been included in an amended complaint had the Court allowed an amendment rather than dismissing.

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cast a vote for him.”1 R.32, Or. Granting Sanctions, at FN21.

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standing. To Appellants’ knowledge, no authority can be cited, prior to the instant

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any other court state that a competitive candidate must allege any of the facts that

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The facts relied upon by the District Court as grounds for denying

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definition of “a case of first impression.” See Black’s Law Dictionary 206 (Bryan

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v. Detroit Federation of Teachers Local 231, American Federation of Teachers,

Bank, 844 F.2d 1193(5th Cir. 1988); O'Neal v. Kilbourne Medical Laboratories,

1978); Oklahoma ex rel. Bd. of Regents of University of Oklahoma v. Greer, 205

B.R. 77 (D.Colo.1991).

for advocating issues of first impression, its order sanctioning attorney Irion is an abuse of discretion. Geier, 372 F.3d at 789-90 (6th Cir.2004). On this basis alone the District Court’s order should be reversed.

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The District Court found that Plaintiffs’ assertion of standing was “more

than negligence or incompetence,” and stated as grounds for its finding, that Plaintiff “Dummett had failed to plead…that President Obama’s presence on the ballot would in any way injure his campaign.” R.32 at 8 & FN21. Yet Plaintiffs’ Complaint clearly states:

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E. The District Court’s Order Erroneously States that Factual Allegations Were Absent, When Said Allegations Were Actually in the Complaint

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Because the District Court’s order ignores precedent preventing sanctions

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F.Supp.2d 1273 (W.D.Okla.2001); Martinez v. Dodge Printing Centers, Inc., 123

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Inc., 251 F.R.D. 247 (E.D.Ky.2008); Asai v. Castillo, 593 F.2d 1222 (D.C.Cir.

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Tire Co., 697 F.2d 789 (7th Cir. 1983); Smith Intern., Inc. v. Texas Commerce

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AFL-CIO, 829 F.2d 1370 (6th Cir. 1987); Overnite Transp. Co. v. Chicago Indus.

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accepted as true. See R.32 at FN20, citing DLX, Inc. v. Kentucky, 381 F.3d 511,

adequately review Plaintiffs’ complaint, or a failure to accept Plaintiffs’ allegations

negligent or incompetent, is an abuse of discretion. Geier, 372 F.3d at 789-90 (6th Cir.2004). The District Court either relied upon a clearly erroneous finding of fact, or applied the wrong legal standard. In either case the District Court’s order, on this basis alone, is an abuse of discretion. Id.

F. The District Court’s Order Violates Attorney Irion’s Right to Due Process

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While due process does not always require a hearing prior to imposing

sanctions under 28 U.S.C. 1927, a review of precedent shows that notice of the specific grounds upon which the sanctions are founded, coupled with an

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Again, Plaintiff Dummett actually is campaigning in Tennessee and does have several registered voters in Tennessee that intend to campaign for him and plan to vote for him. These more specific allegations would have been included in an amended complaint had the Court allowed an amendment rather than dismissing.

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as true. In either case, the Court’s finding that attorney Irion was “more than”

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516 (6th Cir. 2004). Therefore, the District Court’s order reflects either a failure to

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As the District Court’s order points out, all of Plaintiffs’ allegations must be

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“Absent this Court’s grant of the requested relief, Plaintiff John Dummett will be concretely and continuously harmed as direct and proximate result of the defendant’s actions and failures to act, because the appearance of Barrack Obama’s name appearing on Tennessee Ballots for the 2012 general election would result in votes for Mr. Obama that would otherwise be cast for Mr. Dummett.” 1 st Amd. Compl. at ¶33.2

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opportunity to respond following such notice, is always required. Ted Lapidus, S.A.

would be imposed under statute making counsel liable for excessive costs for

being sought, and district court went beyond conduct specified in opposing

Contractors Ass'n, 809 F.2d 626 (9th Cir. 1987), (Notice and hearing should

multiplication of proceedings); Mackler Productions, Inc. v. Cohen, 146 F.3d 126 (2nd Cir. 1998); Cook v. American S.S. Co., 134 F.3d 771 (6th Cir.1998). In the instant case the Defendants’ did file a motion for sanctions. However, that motion did not assert that Plaintiffs lacked standing to bring their suit, as

did assert that Plaintiffs’ lawsuit was frivolous. Id. However, the grounds asserted

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in support of this claim were that Plaintiffs’ substantive claim regarding the definition of the term “natural born citizen” was frivolous. Id. Attorney Irion’s response in opposition to Defendants’ motion for sanctions

responded at length to the grounds set forth in Defendants’ motion. By contrast, because Attorney Irion was not given any notice that he might be sanctioned for

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grounds for its sanctions motion. R.28, Def.s’ Mot. Sanct. The Defendants’ motion

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precede imposition of sanction for attorney's alleged unreasonable and vexatious

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counsel's Rule 11 motion); see also T.W. Elec. Service, Inc. v. Pacific Elec.

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multiplying proceedings; attorney was notified only that Rule 11 sanctions were

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process clause, district court failed to give attorney adequate notice that sanctions

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v. Vann, 112 F.3d 91(2nd Cir. 1997), certiorari denied 522 U.S. 932, (Under due

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failing to establish standing, he spent only two paragraphs discussing standing in

because Defendants’ motion cited several similar cases in which the plaintiffs were

his response to Defendants’ motion for sanctions was only intended to distinguish

of their assertion that the underlying substantive issue was frivolous. In other

Defendants never reached the substantive issue because these other cases didn’t have plaintiffs with competitive-candidate standing, while the Plaintiffs in the instant case did. Attorney Irion’s opposition to Defendant’s motion for sanctions didn’t elaborate on the standing issue because attorney Irion didn’t have notice that

The District Court never issued a show cause order clarifying the grounds

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upon which it was considering sanctioning attorney Irion. Finally, the District Court denied attorney Irion’s explicit request for a hearing regarding the sanctions motion.

Because the Defendants’ motion for sanctions never asserted lack of

standing as grounds for finding Plaintiffs’ case frivolous, attorney Irion had no

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he might be found “more than incompetent” based upon this issue.

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words, attorney Irion was simply pointing out that the cases cited by the

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the instant case from these other cases, which were cited by Defendants in support

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not competitive-candidates. Attorney Irion’s very short discussion of standing in

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essentially amounted to quoting the standard from Drake. They were included only

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his opposition to Defendants’ motion for sanctions. Further, these two paragraphs

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notice that the District Court might sanction him based upon these grounds. Because the District Court never issued a show cause notice, attorney Irion had no notice that the District Court might sanction him based upon lack of standing grounds. Therefore, the District Court’s order, citing sua sponte grounds for

opportunity to respond to the Court’s grounds, violates attorney Irion’s right to due

IV.

Irreparable Harm

Attorney Irion’s professional reputation has already been irreparably harmed by the District Court’s finding that attorney Irion is “more than negligent or incompetent.” Allegations of professional incompetence have historically been recognized as per se irreparable harm.

Several articles have already been published by news agencies and internet sources regarding the District Court’s findings. Absent an immediate stay the

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presumption will be that the District Court’s finding is correct. This is likely to lead to more articles and discussions regarding the District Court’s finding. As established above, attorney Irion is likely to prevail on appeal. Granting

the instant motion would begin to limit the irreparable harm done to attorney Irion’s reputation by establishing that the District Court’s findings are likely to be reversed.
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process.

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sanctions without any notice and without a hearing and without any meaningful

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V.

Defendants Will Not Be Harmed By Stay Assuming attorney Irion prevails on appeal, the Defendants will not be

harmed at all by a stay pending appeal because the underlying order will have been an abuse of discretion. If attorney Irion does not prevail on appeal, then the

Defendants will still receive their fees, as ordered by the District Court. Again, no harm will be done to Defendants by GRANTING the instant stay.

VI.

Stay Will Benefit the Public

statute carries with it potential to stifle enthusiasm or chill creativity that is very lifeblood of law. U.S. v. Ross, 535 F.2d 346 (6th Cir. 1976); Mone v. C.I.R., 774 F.2d 570 (2nd Cir.1985). This is particularly true when it comes to advocacy in defense of constitutional issues.

intent of 28 U.S.C. 1927 will be served whether sanctions are instituted

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immediately or six months from now. However, an error in denying the instant stay will, without any doubt, result in permanent chilling of attorney advocacy in defense of the Constitution. Denying the instant motion will have a chilling effect upon Constitutional advocacy regardless of whether the sanctions at issue are eventually reversed.

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An error in granting the instant stay would not harm the public because the

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Great caution should be used before utilizing 28 U.S.C. 1927 because this

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VII. Conclusion For all of the reasons stated herein, the Appellants requests that this Court

GRANT this motion to stay the District Court’s order sanctioning attorney Irion, pending appeal.

Submitted on the 3rd Day of Tisheri, in the year of our Lord 2012 (a.k.a.

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CERTIFICATE OF SERVICE It is hereby certified that on 3rd Day of Tisheri, Year of our Lord 2012 (a.k.a. September 19, 2012), a copy of “Plaintiffs’ Motion for Stay of Sanctions Pending Appeal” was filed electronically. Parties may access this filing through the Court’s electronic filing system. A copy of this motion will also be served upon the Defendants via mail. _s/Van R. Irion_________________ Van R. Irion Liberty Legal Foundation 9040 Executive Park Drive, Ste. 200 Attorney for Plaintiffs (423) 208-9953

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_s/Van R. Irion_________________ Van R. Irion (TNBPR#024519) Liberty Legal Foundation 9040 Executive Park Drive, Ste. 200 Attorney for Plaintiffs (423) 208-9953

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September 19, 2012).

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