4.2 Rule 11 Sanctions

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4.2 RULE 11 SANCTIONS

4.201 Rule 11 of the Federal Rules of Civil Procedure.

Rule 11 reads as follows: ⁹

(a) SIGNATURE. Every pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney's name—or by a party personally if the party is unrepresented. The paper must state the signer's address, e-mail address and telephone number. Unless a rule or statute specifically states otherwise, a pleading need not be verified or accompanied by an affidavit. The court must strike an unsigned paper unless the omission is promptly corrected after being called to the attorney's or party's attention.
(b) REPRESENTATIONS TO THE COURT. By presenting to the court a pleading, written motion, or other paper— whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
	(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

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	(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;
	(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and
	(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.
(c) SANCTIONS.
	(1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee.
	(2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. If warranted, the court may award to the prevailing party the reasonable expenses, including attorney's fees, incurred for the motion.
	(3) On the Court's Initiative. On its own, the court may order an attorney, law firm, or party to show cause why conduct specifically described in the order has not violated Rule 11(b).

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	(4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney's fees and other expenses directly resulting from the violation.
	(5) Limitations on Monetary Sanctions. The court must not impose a monetary sanction:
		(A) against a represented party for violating Rule 11(b)(2); or
		(B) on its own, unless it issued the show-cause order under Rule 11(c)(3) before voluntary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned.
	(6) Requirements for an Order. An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction.
(d) INAPPLICABILITY TO DISCOVERY. This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.
(As amended Apr. 28, 1983, eff. Aug. 1, 1983; Mar. 2, 1987, eff. Aug. 1, 1987; Apr. 22, 1993, eff. Dec. 1, 1993; Apr. 30, 2007, eff. Dec. 1, 2007.)

4.202 Purpose of Rule 11.

A. Litigation Abuse. The primary purpose of Rule 11 is to punish violators and deter parties and their counsel from pursuing unnecessary or unmeritorious litigation. ¹⁰ However, a district court can and should bear in mind that other purposes of the rule include compensating the victims of the Rule 11 violation, as well as punishing present litigation abuse,

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streamlining court dockets, and facilitating court management. ¹¹ The sanction must be sufficient but not more than necessary to deter similar, future conduct and may include monetary penalties. ¹²

B. Additional Purposes. The Notes of the Advisory Committee regarding the 1983 amendments to Rule 11 indicate that the rule was amended to discourage "dilatory or abusive tactics" and "to streamline the litigation process by lessening frivolous claims or defenses." ¹³ The Advisory Committee notes state:

[t]he amended rule attempts to deal with the problem building upon and expanding the equitable doctrine permitting the court to award expenses, including attorney's fees, to a litigant whose opponent acts in bad faith in instituting or conducting litigation. ¹⁴ Greater attention by the district courts to pleading and motion abuses and the imposition of sanctions when appropriate, should discourage dilatory or abusive tactics and help to streamline the litigation process by lessening frivolous claims or defenses.

4.203 Rule 11 Applies to Attorneys, Parties, and Pro Se Parties. While a pro se party should be granted a degree of indulgence greater than a practicing attorney, "a pro se party still must abide by the clear requirements of Rule 11." ¹⁵ The pro se party's conduct must be objectively reasonable. ¹⁶

Inexperienced or incompetent attorneys are not held to a lesser standard under Rule 11. ¹⁷

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While Rule 11(c)(5)(A) requires that a court "not impose a monetary sanction . . . against a represented party for violating Rule 11(b)(2)," where a movant argues that a represented party has personally violated Rule 11(b)(1) and (3), the court may impose an appropriate sanction under Rule 11(c)(1). ¹⁸ As "any party who signs a pleading, motion, or other paper" has "an affirmative duty to conduct a reasonable inquiry into the facts and the law before filing," a court may impose sanctions on a represented party where that party signs a document submitted to the court. ¹⁹

4.204 Filings.

A. Criteria. "[W]hether a civil pleading satisfies the requirements of Rule 11 depends on how it measures up to three criteria. First, the complaint [or pleading or paper] must be filed for a proper purpose. Second, each count of the complaint [or pleading or paper] must have a sufficient basis in law. And third, each of the claims [or pleading or paper] must have a sufficient basis in fact." ²⁰

A motion for sanctions under Rule 11(c)(2) "must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b)." Therefore, "[i]t is clear from the language of the rule that it imposes mandatory obligations upon the party seeking sanctions, so failure to comply with the procedural requirements precludes the imposition of the requested sanctions." ²¹ "However, [under Fed. R. Civ. P. 11(c)(3) ] courts may sua sponte order parties to show cause as to why their conduct does not violate Rule 11(b)." ²²

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B. Relevant Cases. In Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., ²³ the court found, with regard to the second and third criteria, Rule 11 "imposes on any party who signs a pleading, motion, or other paper . . . an affirmative duty to conduct a reasonable inquiry into the facts and the law before filing" and has set the standard as "one of reasonableness under the circumstances."

According to Chaudhry v. Gallerizzo, ²⁴ the requirement imposed by the second criteria is very simple—the cited paper must have evidentiary support.

With regard to the third criteria, the court in Guidry v. Clare ²⁵ found that "[a] legal argument fails to satisfy Rule 11(b)(2) when 'in applying a standard of objective reasonableness, it can be said that a reasonable attorney in like circumstances could not have believed his actions to be legally justified.'"

It should be remembered that inartful pleading, such as through a vague and conclusory complaint, is irrelevant to the factual and legal inquiry under Rule 11. ²⁶ Creative claims, coupled even with ambiguous or inconsequential facts, may merit dismissal, but not punishment. ²⁷

The fact that a legal position is ultimately unsuccessful does not warrant sanctions, as "[a]ttorneys must be allowed to seek good faith expansions and changes of the law." ²⁸

The "proper inquiry in ruling on Rule 11 motions is whether 'a reasonable attorney in like circumstances would believe his actions to be

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factually and legally justified.' If the actions of an attorney or a party fail to meet this standard, an award of sanctions is mandatory under the rule." ²⁹ "When the court is considering sanctions on a factual claim, 'the initial focus of the district court should be on whether an objectively reasonable evidentiary basis for the claim was demonstrated in pretrial proceedings or at trial.'" ³⁰ Sanctions are inapplicable where there is "some information to support the allegations in the complaint." ³¹

In situations where multiple types of Rule 11 violations are alleged, the Fourth Circuit instructs that district courts consider whether the claims advanced in the pleading are supported by the facts and the law (or a reasonable argument for extending, modifying, or reversing the law) before making a...