Chambers v. NASCO, Inc.

Brief Fact Summary.

NASCO, Inc. sued Russell Chambers (Chambers) for breach of contract after Chambers decided not to sell his radio and television station, as agreed upon. 

Synopsis of Rule of Law.

A court may sanction a party who acts in bad faith. 

Facts.

Russell Chambers (Chambers) agreed to sell his radio and television along with his license to NASCO, Inc. (NASCO) for $18 million. NASCO filed suit for breach of contract after Chambers changed his mind about selling the station. The district court and court of appeals found for NASCO and NASCO moved for sanctions. 

Issue.

Whether a court can sanction a party who acts in bad faith?

Held.

Yes. Where the Federal Rules of Civil Procedure prove insufficient to remedy a party’s misconduct, the court maintains inherent power to sanction the party for bad behavior. The judgment of the lower courts are affirmed. 

Dissent.

(Kennedy, J.) The Federal Rules of Civil Procedure created boundaries for the judiciary when dealing with misconduct. The judiciary in this case violates the boundaries created by the Federal Rules of Civil Procedure and blurs any defined standard of bad faith conduct. 

Discussion.

A court is not restricted for the Federal Rules of Civil Procedure when sanctioning a party for their misconduct. The court has the inherent powers to assess attorney’s fees, govern admission to the bar, and punish contempt.