§11.6 Analysis

• Jurisdiction: Washington

§11.6ANALYSIS

CR 11(a) and (b) apply to every "pleading, motion, and legal memorandum," whereas FED. R. CIV. P. 11 applies to "every pleading, written motion, and other paper." Note, however, that there are inconsistencies within the first sentence of CR 11(b) that create some uncertainty about its scope. Specifically, the first part of that sentence refers to every "pleading, motion or document," whereas the second part refers to every "pleading, motion, or legal memorandum." These minor variations in the language of CR 11(b) do not appear intentional. The differences between CR 11 and FED. R. CIV. P. 11, however, may indicate that FED. R. CIV. P. 11 applies more broadly. For example, Division I of the Washington Court of Appeals has suggested that "legal memorandum" is less broad than "other paper," and CR 11must therefore be applied in fewer circumstances. Miller v. Badgley, 51 Wn.App. 285, 299 n.10, 753 P.2d 530, review denied, 111 Wn.2d 1007 (1988); see also Clipse v. State, 61 Wn.App. 94, 97 n.1, 808 P.2d 777 (1991). This may, however, in a practical sense, be a distinction without a significant difference. Although Washington courts must apply other applicable rules rather than CR 11 if such rules are more appropriate under the circumstances, see Bryant v. Joseph Tree, Inc., 119 Wn.2d 210, 223, 829 P.2d 1099 (1992), the result may ultimately be the same. In Clipse, for example, the challenged paper was a discovery disclosure; the court held that sanctions awarded under CR 11 were inappropriate, but it then applied a similar standard under CR 26(g) and substantially upheld the sanctions. Clipse, 61 Wn.App. at 97-98; see also Wash. State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wn.2d 299, 341, 858 P.2d 1054 (1993) (citing similar purposes behind CR 26 and CR 11 and following federal courts that have incorporated FED. R. CIV. P. 11 standards when applying FED. R. CIV. P. 26). Although the reach of FED. R. CIV. P. 11 may be broader than CR 11 on its face, Washington courts use other rules to ensure the sanctity of the legal process.

Further, a court is not limited to CR 11 and its discovery counterparts in imposing sanctions. A judge sufficiently offended by counsel's conduct but restrained by the narrower language of CR 11 may resort to the court's inherent power to impose sanctions. Chambers v. NASCO, Inc., 501 U.S. 32, 46, 111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991) ("[W]hereas each of the other mechanisms reaches only certain individuals or conduct, the inherent power extends to a full range of litigation abuses.").

Although some Washington courts have upheld sanctions under both CR 11 and the court's inherent authority to control litigation abuse, see, e.g., Skilcraft Fiberglass, Inc. v. Boeing Co., 72 Wn.App. 40, 48 n.6, 863 P.2d 573 (1993), the better standard is that "[w]here conduct occurring during the course of litigation can be adequately sanctioned under court rules, a court should ordinarily rely on the rules rather than the inherent power of the court." Fisons, 122 Wn.2d at 340 n.72. Moreover, sanctions awarded under the court's inherent power require a finding of subjective bad faith prior to awarding sanctions. See, e.g., State v. S.H., 102 Wn.App. 468, 473-76, 8 P.3d 1058 (2000); see also In re Pearsall-Stipek, 136 Wn.2d 255, 267, 961 P.2d 343 (1998) ("Both CR 11 and our inherent equitable powers authorize the award of attorney fees in cases of bad faith."); Chambers, 501 U.S. at 45-47, 49; Roadway Express, Inc. v. Piper, 447 U.S. 752, 764-77, 100 S. Ct. 2455, 65 L. Ed. 2d 488 (1980). If the trial court fails to enter a finding that amounts to a finding of bad faith or allows an obvious inference of bad faith, remand is required. See S.H., 102 Wn.App. at 475-76.

Practice Tip: When requesting sanctions in the trial court, at a minimum prepare a proposed order with the necessary finding so as to allow for effective appellate review. When challenging the imposition of a particular sanction on appeal, focus on the lack of findings below.

CR 11 expressly permits sanctions to be awarded against a party, the party's attorney (if represented), or both. Cf. Loc Thien Truong v. Allstate Prop. & Cas. Ins. Co., 151 Wn.App. 195, 207, 211 P.3d 430 (2009) (stating that an award of fees under CR 11 may be made against an attorney or a party, but an award of fees under RCW 4.84.185 may only be made against a party). Pro se litigants in Washington are held to the same objective standard as attorneys. Harrington v. Pailthorp, 67 Wn.App. 901, 911-12, 841 P.2d 1258 (1992) (stating that pro se plaintiff 's exhaustive review of law review articles was to no avail; "[N]o reasonable attorney would have made the wholly unsubstantiated allegations contained in this case."), review denied, 121 Wn.2d 1018 (1993).

The particular facts determine who should be sanctioned. Fisons, 122 Wn.2d at 355. In general, however, Washington courts have tended to view CR 11 as primarily directed toward attorney conduct, in contrast to other statutes, such as RCW 4.84.185, that call for sanctions directed toward the nonprevailing party. See, e.g., Havsy v. Flynn, 88 Wn.App. 514, 521, 945 P.2d 221 (1997); Suarez v. Newquist, 70 Wn.App. 827, 833, 855 P.2d 1200 (1993).

Washington courts also have extended CR 11 liability beyond the attorney who physically signed the pleading, motion, or other memorandum. Although the language of CR 11, unlike FED. R. CIV. P. 11, mentions only the "attorney" or "person" signing, the court in Jones v. Halvorson-Berg, 69 Wn.App. 117, 130, 847 P.2d 945 (citing William W. Schwarzer, Sanctions Under the New Federal Rule 11 – A Closer Look, 104 F.R.D. 181, 185 (1985)), review denied, 122 Wn.2d 1019 (1993), used agency principles to hold a law firm partner solely liable for a pleading that an associate signed on his behalf. In Madden v. Foley, 83 Wn.App. 385, 392, 922 P.2d 1364 (1996), the court extended this principle and held the signer's law firm liable because the signature block indicated that "the individual attorney who signed the pleading did so as an agent of the law firm."

(1)The test for a CR 11 violation

Washington courts have articulated three distinct duties imposed by CR 11 on the signer of a pleading, motion, or legal memorandum. The signing party or attorney must (1) conduct a reasonable inquiry into the facts supporting the pleading or paper; (2) conduct a reasonable inquiry into the law to ensure that the pleading or paper as filed is warranted by existing law, or a good faith argument for the extension, modification, or reversal of existing law; and (3) avoid interposing the pleading or paper for any improper purpose, such as delay, harassment, or increasing the costs of litigation. Miller, 51 Wn.App. at 300. These three duties fit neatly under the two main purposes of CR 11 the Washington Supreme Court identified in Bryant, 119 Wn.2d at 219: The first two duties deter baseless filings, and the third curbs abuses of the judicial system. See also Blair v. GIM Corp., 88 Wn.App. 475, 482, 945 P.2d 1149 (1997). The 2005 amendments to CR 11 added a fourth duty: to assure that denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.

Comment: One of the most significant CR 11 opinions, at least in terms of financial sanctions, is not a published appellate decision, but rather an opinion of the King County Superior Court. After hearing eight to nine days of testimony on a motion for CR 11 sanctions the superior court issued a lengthy memorandum opinion in October 2003, and in December 2003 entered findings of fact and conclusions of law that incorporated and expanded upon that opinion. See Revised Findings of Fact and Conclusions of Law Supporting CR 11 Ruling, Kirlan Venture Capital, Inc. v. Regis, No 00-2-14333-8SEA (Dec. 11, 2003). In the opinion, the superior court assessed $100,000 as sanctions against the plaintiff (and associated third-party defendants) and $400,000 as sanctions against their attorney. The court reasoned that sanctions were appropriate under CR 11 because certain of the claims in the Fourth Amended Complaint were "without sufficient basis in law or fact," and other claims were "added to the complaint ... for the improper purpose of harassing the individual defendants." Id. The opinion—like all superior court rulings—is neither published nor a source of binding precedent, but it has been the subject of much discussion in the bar, and practitioners should be aware of it and its holdings.

(a)"Baseless" filings

A filing is "baseless" if it is (1) not well grounded in fact and (2) not warranted by existing law or a good faith argument for the alteration of existing law. Bryant, 119 Wn.2d at 219-20. To pass muster—that is, to satisfy CR 11—a filing must meet both the fact and the law standard. Id. A pleading, motion, or other memorandum is not well grounded in fact unless a competent attorney would believe his or her actions to be factually justified. Id. at 220. A pleading, motion, or other memorandum meets the legal minimum if it is based on a plausible view of existing law or a good faith argument for extension, modification, or reversal of existing law. State ex rel. Quick-Ruben v. Verharen, 136 Wn.2d 888, 904, 969 P.2d 64 (1998). To impose sanctions, a court must find not only that the filing in question is baseless, but also that it was signed without a reasonable and competent inquiry into its factual and legal basis. Bryant, 119 Wn.2d at 220. In determining whether sanctions are appropriate, courts tend to focus on the reasonableness of the inquiry. Cases addressing legal and factual baseless ness are discussed below.

At one time, there was some confusion as to whether a claim was sanctionable if it lacked either a legal or factual basis, or...