In two previous bouts of guest-posting, I discussed some interesting Seventh Circuit cases about the appropriate sanctions and fees for a frivolous appeal. In my first post, when I defended Judge Posner's opinion in Budget Rent-a-Car, some commenters suggested that I might take a less copacetic view once I had billed time at a law firm myself. In my second post, I asked a few questions about Judge Easterbrook's skepticism of the Tax Division, which claims to spend over 8000 dollars writing an appellate brief in response to a frivolous claim that it has dealt with many times before.

A few days ago, Easterbrook released another opinion for the court, thanking the Tax Division for its accounting, but refusing to fully reimburse them for their alleged costs. There's a lot of interesting stuff in the opinion, including, e.g., Easterbrook's claim that what makes a frivolous appeal frivolous "is that the arguments have been presented and rejected before," sometimes "many times." [An alternative might have been that appeals are frivolous when the authoritative legal materials are clear as day to the contrary, even if those materials don't yet include a judicial opinion.]

But for present purposes, the thing that interests me is that Easterbrook's reaction to the government's bill is basically consistent with my own slightly-more-informed take on the Seventh Circuit sanctions cases. I have no doubt that none of the parties before the Seventh Circuit was lying about the number of hours spent on its filings. I am simply not convinced that all of that attorney time ought to be relevant to the calculation of sanctions and fees, and apparently the Seventh Circuit isn't either. It is a little amusing to see the allegedly-law-and-econ-happy Circuit refusing to take as given the billable figures and times produced by the legal market place, but that critique may be too glib. The tax division contains government lawyers, so the economic pressures are not solely producced by the free market, and even in private law firms, judicial rules about the recoverability of certain time obvious distorts the incentive. Lawyers looking for billable hours to boost their yearly totals might be willing to labor extra-hard dotting i's and crossing t's on a frivolous appeal where the firm is seeking costs, knowing that an unwilling party will be the one to foot the bill.

But this is all on the back of an envelope; what am I missing?