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reckless or in bad faith. See United States v. Associated
Convalescent Enters. Inc., 766 F.2d 1342 (9th Cir. 1985); United
States v. Blodgett, 709 F.2d 608 (9th Cir. 1983); Barnd v. City
of Tacoma, 664 F.2d 1339, 1342-1343 (9th Cir. 1982). But cf.
Reliance Ins. Co. v. Sweeney Corp., Maryland, 792 F.2d 1137, 1138
(D.C. Cir. 1986) (adopting a standard of "reckless indifference"
to the merits of a claim).
In Oliveri v. Thompson, supra at 1272, the Court of Appeals
for the Second Circuit likened the imposition of a sanction under
28 U.S.C. section 1927 to the imposition of an award under a
court's inherent power to regulate its own proceedings. The
Court of Appeals identified the circumstances that might lead to
a finding of bad faith as follows:
This bad-faith exception permitting an award of
attorneys' fees is not restricted to cases where the
action is filed in bad faith. An inherent power award
may be imposed either for commencing or for continuing
an action in bad faith, vexatiously, wantonly, or for
oppressive reasons. "'[B]ad faith' may be found, not
only in the actions that led to the lawsuit, but also
in the conduct of the litigation." * * *
Oliveri v. Thompson, supra at 1272 (citations omitted).
Respondent concedes that Messrs. Sims and McWade engaged in
misconduct in the trial of the test cases. We summarized the
Government misconduct in Dixon III as follows:
Messrs. Sims and McWade negotiated a series of
contingent settlement agreements with Mr. DeCastro in
respect of the Thompsons' tax liabilities in advance of
the trial of the test cases. The final Thompson
settlement agreement provided for a reduction in the
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