Current Status of Rule 11 in the Ninth Circuit and Washington State

• Publication year: 1990

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 14, No. 2WINTER 1991

RECENT DEVELOPMENT

Current Status of Rule 11 in the Ninth Circuit and Washington State(fn1)

Fredric C. Tausend(fn*)

Lisa L. Johnsen(fn**)

I. Introduction

In 1983, Rule ll(fn2) of the Federal Rules of Civil Procedure was amended to provide courts with enforcement bite to control abuses in the filing of frivolous or harassing motions and pleadings. The 1983 amendments to Rule 11 directed the courts' attention away from simply striking the offending material and toward taking disciplinary action against the attorney or party in violation of the rule. In addition to pleadings, which were covered under the rule prior to its amendment, the rule's scope includes the signing of motions and "other papers."(fn3) The drafters' avowed purpose in amending Rule 11 was to "discourage dilatory or abusive tactics and help streamline the litigation process by lessening frivolous claims and defenses."(fn4)

This concern over unreasonable and vexatious litigation is not new.(fn5) The courts have long exercised the "inherent power . . . to levy sanctions in response to abusive litigation practices."(fn6) However, the new emphasis on attorney sanctions, coupled with the opportunity Rule 11 presents for fee-shifting, lifted the rule from obscurity to prominence in the eyes of the courts.

Fordham University Professor George M. Vairo has observed that between August 1, 1983, and December 15, 1987, there were 688 Rule 11 decisions reported in federal courts;(fn7) and sanctions were requested against opposing counsel 680 times.(fn8) Since 1987, the use of Rule 11 to sanction attorney conduct has continued unabated. By August, 1989, the Ninth Circuit Court of Appeals was able to remark that "fully a thousand opinions have been published explaining the Rule and honing its interpretation."(fn9)

For better or worse, the rapid rise of this new enforcement weapon has not resulted in its uniform application. As Judge William W. Schwarzer of the Northern District of California, a noted supporter of a vigorous Rule 11, remarked: "[i]n interpreting and applying Rule 11, the courts have become a veritable Tower of Babel."(fn10) Similarly, a reporter for the Third Circuit Task Force has also concluded that the rule is not uniformly interpreted or enforced.(fn11) In fact, the reporter noted that there is conflict among the circuits on "almost every important issue of Rule 11."(fn12)

Not surprisingly, the confusion surrounding the application of Rule 11 has spawned numerous treatises, commentaries and studies. Unfortunately, there is also little consensus among the commentators: they agree only in advising attorneys to know the standards of their jurisdiction and to be wary when practicing in unfamiliar districts.(fn13) Consequently, it would be a Herculean task to discuss all of Rule ll's unfolding developments. Therefore, this Paper will concentrate on the development of the standards applied in the Ninth Circuit and in the Washington State courts.

II. Purpose and Scope of Rule 11

The Ninth Circuit has recognized that the 1983 amendments to Rule 11 were part of an across the board effort by the courts and Congress to encourage sanctions.(fn14) In addition to the Rule 11 modifications adopted in 1983, Congress also authorized sanctions for abuse of pretrial scheduling(fn15) and abuse of discovery processes.(fn16) Furthermore, Congress did not intend for the amendments to be interpreted as repealing or modifying the "existing authority of federal courts to deal with abuses of counsel under 28 U.S.C. § 1927 . . . or under the court's inherent power to discipline attorney misconduct."(fn17) Accordingly, the Ninth Circuit has limited the scope of Rule 11 to the filing of "pleadings, motions and other papers" when other independent rules do not more directly apply.(fn18)

In contrast to the Ninth Circuit, Washington courts have been less specific in delineating the powers of the court to sanction inappropriate and improper conduct. For example, in Wilson v. Henkle,(fn19) the trial court awarded defendants their attorney's fees and the costs they expended to recover funds that the plaintiffs attorney had fraudulently obtained from the court registry. In upholding the sanction, the Court of Appeals cited as authority both the state's Rule 11 and the court's "inherent power to impose sanctions," but failed to specify which certifications violated the rule.(fn20) Because the court did not specify which "pleadings, motions or other papers" were in question, the Washington courts' interpretation of the Rule's scope is unclear.(fn21)

Thus, to date, Washington courts have been less clear than the Ninth Circuit in identifying the specific conduct that violates Rule 11. Because the Ninth Circuit has limited the rule's application to specific improper conduct, practitioners seeking sanctions in federal court should, out of necessity, closely identify the conduct alleged to violate Rule 11.

III. General Application of Rule 11

Prior to the 1983 amendments, the Ninth Circuit interpreted Rule 11 to require subjective bad faith on the part of the signing attorney to warrant the imposition of sanctions; thus, prior to 1983, good faith was a defense to a Rule 11 motion.(fn22) Subsequently, the Ninth Circuit has recognized that the 1983 amendments eliminated the "long-standing requirement that the subjective bad faith of the pleader be demonstrated."(fn23) The revised rule's focus on reasonableness is said to "admit only of objective inquiryfs]"(fn24) because comparing the meritorious conduct of the reasonable person leaves no room for analyzing the subjective intent of the signer. In particular, the old rule's requirement that an attorney's conduct be a willful violation of the rule has been purposely deleted.(fn25) The new rule imposes a standard of "reasonableness under the circumstances."(fn26) This standard refers to the circumstances of the certification and filing of the pleading, not to the merits of the case as eventually determined at trial.(fn27)

In addition, the Ninth Circuit has recognized that both attornies and parties are held to an objective standard.(fn28) However, the court acknowledges that what is reasonable for an attorney may not necessarily be reasonable for a client.(fn29) Regardless, the standard employed by the Ninth Circuit in examining an attorney's or a party's conduct for violation of the amended Rule 11 is an objective one even though what is reasonable may vary depending on the sophistication of the sanctioned individual.

Like the Ninth Circuit, Washington courts also use an objective standard to evaluate whether the attorney signing the pleading conducted a reasonable inquiry into the factual and legal basis of the action.(fn30) In Bryant v. Joseph Tree, Inc.,(fn31) the court of appeals reversed the trial court's imposition of sanctions after determining that the lower court's findings of fact regarding the appellants' failure to make a reasonable inquiry into the facts and the law were not based on objective considerations.(fn32)

Similarly, in Doe v. Spokane and Inland Empire Blood Bank,(fn33) the court of appeals stated that an attorney's actions at issue must be examined according to a standard of objective reasonableness. The standard, the court continued, is "whether a reasonable attorney in like circumstances could believe his actions to be factually and legally justified."(fn34) Thus, the court remanded the case to the trial court to develop evidence about the attorney's "information, knowledge and belief at the time of filing.(fn35)

In summary, both the Ninth Circuit and the Washington courts use an objective standard to evaluate attorney conduct under Rule 11. Accordingly, sanctions now may be imposed if the attorney's conduct is objectively unreasonable, whether it is in good or bad faith.

IV. The Test for a Rule 11 Violation

The Ninth Circuit has established that sanctions must be imposed on the signer of a paper if either (1) the paper is "frivolous" or (2) the paper is filed for an improper purpose.(fn36) The Ninth Circuit has further divided the frivolousness prong into two parts: (1) filings that are factually frivolous; or (2) filings that are not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.(fn37) Finally, the Ninth Circuit has found that a violation of either the frivolousness prong or the improper purpose prong is sufficient to sustain sanctions.(fn38)

A. The "Frivolousness" Test

The most significant development in the Ninth Circuit during the last year under the Rule 11 frivolousness test, and in Rule 11 generally, arose in the decision of Toumsend v. Holman Consulting Corp. (Townsend II).(fn39) Before that decision, the Ninth Circuit conducted an inquiry for frivolousness by reviewing an entire pleading as a whole and, by so doing, concluded that a single frivolous count or claim in an otherwise valid pleading was insufficient to violate Rule 11.(fn40) Specifically, the Ninth Circuit previously held that "Rule 11 permits sanctions only when the pleading as a whole is frivolous or of a harassing nature, not when one of the allegations or arguments in the pleading may be so characterized."(fn41)

Under this pleading-as-a-whole rule, even where some allegations contained in a complaint were...