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THE CURRENT STATUS OF RULE 11 by
Hugh C. Wood, Esq. This
article was written for and presented at the ICLE Seminar: I. Introduction This article will cover the current status of Rule 11, with emphasis on its application in the District Court within the 11th Circuit Court of Appeals. This article will also review the changes made to Rule 11 by the 1993 Amendment and will review the proposed (but not passed) radical 1995 proposals to severely change Rule 11. It will also cover some of the additional remedies for sanctionable conduct available to litigants in federal court above and beyond Rule 11. II. The 1993 Version of Rule 11 A. Signature. Section (a) of 1993 Rule 11 begins with the touchstone of the previous Rule 11, the signature. The signature of the attorney, and in verifications, the client, is the statement to the court that the pleading is well founded. Signature. Every pleading, written motion, and other paper shall be signed by at least one attorney of record in the attorney's individual name, or, if the party is not represented by an attorney, shall be signed by the party. Each paper shall state the signer's address and telephone number, if any. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party. It is difficult to improve on the language employed by Justice O'Connor, "The essence of Rule 11 is that signing is no longer a meaningless act; it denotes merit. A signature sends a message to the district court that this document is to be taken seriously." Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., 498 U.S. 533, 111 S.Ct. 922, 929, 112 L.Ed.2d 1140 (1991). It carries with it the "non-delegable responsibility to the court." Commentary to Rule 11, U.S.C.A., at 72.1 An unsigned pleading may be filed (the practical experience of this author seems to show otherwise), however, the clerk is instructed to strike the pleading if it is not promptly signed. B. Reasonable Inquiry. Section (b) of 1993 Rule 11 states that the presenter (movant) of any pleading represents to the court, that the pleading is presented after a reasonable inquiry, that it is not interposed (1983 language) for an improper purpose, that the claims are supported by existing law (or a credible argument to change the law), that real evidence does or will (through discovery) support the pleadings or the denials. Representations to Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances2, it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; See, Taiyo Corp. vs. Sheraton Savannah Corporation, 49 F.3d 1514 (11th Cir. 1995) (1:93-CV-2813-ODE, NDGa - Atl. Div.), is a recent case (April 17, 1995) the Court of Appeals affirmed the district court's finding that the complaint was filed for an "improper purpose" and was not warranted by existing law or a credible argument for new law. In Battles v. City of Ft. Myers, 127 F.3d. 1298 (11th Cir. 1995), one of the few opinions issued applying the 1993 version of Rule 11, the 11th Circuit affirmed the district court's finding that the attorney should be sanctioned because he had little evidence supporting plaintiff's claim (and was aware that he had little or no evidence) and yet persisted with a trial. The district judge found that: (1) Plaintiff introduced little evidence against one of the officers; (2) the case against that officer was so weak that Plaintiff could not accurately identify the officer; and (3) Plaintiff failed to introduce any evidence to support the § 1983 claim against the City of Ft. Myers. Rule 11 grants courts the power to sanction litigants and attorneys who make assertions without proper evidentiary support. See Fed.R.Civ.P. 11(c). District courts can sanction litigants and/or attorneys under this rule. Fed.R.Civ.P. 11(c); see also United States v. Milam, 855 F.2d 739, 742 n. 6 (11th Cir.1988). A 1993 amendment to Rule 11 emphasizes an attorney's continuing obligation to make inquiries, and thus the rule allows sanctions when an attorney continues "insisting upon a position after it is no longer tenable." Fed.R.Civ.P. 11 advisory committee's note. Id. Any Investigation, however small, may prevent sanctions under the 1993 Rule 11 from being imposed on an attorney or the attorney's firm provided that the attorney ceases to proceed with the case upon discovery that claims are unfounded. See, Turner v. Sungard Business Systems, Inc., 91 F.3d 1418 (11th Cir. 1996). In Turner, plaintiff Turner sued his employer, Sungard Business Systems, Inc. ("Sungard"), for race discrimination under Title VII of the Civil Rights Act of 1964. Employee contended that Employer passed him over for a promotion because he was black and filled the vacancy with a white employee. An attorney named Meelheim filed the action on behalf of Turner. Meelheim withdrew three (3) months later after his investigation showed the claim was meritless and Turner informed Meelheim that he (Turner) intended to pursue the claim. Eight (8) months later another attorney, Penick, filed a Notice of Appearance and appeared for Turner at a pre-trial conference. At that conference, Penick, told the court that he was in possession of evidence to show that Sungard had filled the job opening with a white employee. Sungard moved for summary judgment ("MSJ") immediately after the pre-trial conference. Despite Penick's statements of evidentiary support for Plaintiff's claim, Penick neither filed a response nor appeared at the oral argument on the MSJ. The court granted the motion for summary judgment, in part, finding that the job opening Turner claimed was filled by a white employee was, in fact, still vacant. Sungard moved for Rule 11 sanctions. As opposed to proceeding on motion alone, the Court, under the 1993 version of Rule 11, issued a show cause order against Turner, Penick and Meelheim. Turner and Penick did not respond to the show cause order. Meelheim stated that his basis for filing the complaint was based on conversations with Turner and conversations with another Sungard employee. Based on those discussions, he believed that discovery would provide him with more concrete evidence. The district court awarded $10,000 against Turner and $6,255.00 against Penick for prosecuting an obviously frivolous action. The district court declined to award sanctions against Meelheim, finding: Because Meelheim made some investigation of Turner's claim and withdrew when he learned Turner's claim was meritless, the district court imposed no sanction against him. Id. The moral of the story is that under the 1993 Revision to Rule 11, even minor investigations may prevent the imposition of sanctions. C. Claims Are Supported By Law There are no significant 11th Circuit cases interpreting these three (3) provisions under the 1993 version of Rule 11. The claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief. D. Sanctions Section (c) of 1993 Rule 11, states that if the court determines that Section (b) has been violated, it may impose sanctions. Under the 1993 Rule 11 (in contrast to the 1983 Rule 11), notice and opportunity to respond is mandatory. Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation. Section (c)(1) provides the mechanics of the filing and prosecution of a 1993 Rule 11 Motion for Sanctions. Attorneys may no longer follow the 1983 practice of simply filing a Motion for Sanctions (which practice spawned an enormous amount of satellite litigation). A 1993 Rule 11 Motion for Sanctions shall be prepared separately from all other motions. It may not be included with any other motions, e.g., motion to dismiss, motion for summary judgment, etc. It is a stand alone motion. Once it is prepared, it must be served upon the opposing party in the same fashion as any other motion, however, the motion shall not be filed with the court. [There are few other situations where a pleading is served, but not filed.] The motion may be filed only after the expiration of the 21-day safe harbor. See, § F, Infra. The notice cases in the 11th Circuit decided under the Pre-1993 Rule 11 held notice was an essential prerequisite to an award of sanctions. Didie v. Howes, 988 F.2d 1097 (11th Cir. 1993) (error to award sanctions without a hearing where both parties had requested hearing); Transamerica Comm Fin. Corp. v. Banton, Inc., 970 F.2d 810 (11th Cir. 1992) (error to award sanctions without notice, without hearing and out of the presence of the parties to be sanctioned).3 E. 1993 Rule 11 Requires A Separate Motion How Initiated. (A) By Motion. A motion for sanctions under this rule shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subdivision (b). The 1993 Rule 11 contains the fairly well known, twenty-one (21) day safe harbor (which is anathema to Justice Scalia). The Motion may not be filed and pursued, if within 21 days after service of the Motion on the opposing party, the opposing party ceases pursuing the offending claim. The cessation seems to be as simple as a telephone call or letter stating the party no longer intends to pursue that offending claim or a particular course of action. F. The Safe Harbor It [the motion] shall be served as provided in [in the Rules], but shall not be filed with or presented to the court unless, within 21 days after service of the motion (or such other period as the court may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected. If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion. In one of the few cases in the 11th Circuit interpreting the "safe harbor" provisions, the 11th Circuit allowed sanctions to stand where the sanctioned plaintiff was only given one (1) day's service of the motion. In Turner v. Sungard Business Systems, Inc., 91 F.3d 1418 (11th Cir. 1996), Sungard served the Rule 11 motion one (1) day before the hearing on sanctions. Turner contended that he was entitled to a 21 day grace period and that it was improper for the district court to punish him without affording him the 21 period. The 11th Circuit has held that if a party or attorney is sanctioned pursuant to a show cause order, the 21 safe harbor of Rule 11 (c)(1)(A) is not required. The rule appears to require a 21 period in the absence of a show cause order. G. Attorneys And Firms May Be Sanctioned The advisory committee wrote specific language into the 1993 Rule 11, that the signing attorney and his or her firm shall be jointly responsible. Absent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees. This language specifically overrules so much of Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989), as is inconsistent with this Rule. It seems that this particular portion of the Rule may cut across the boundaries erected by the new LLC's. While Rule 11 sanctions generally do not threaten a firm the way an adverse malpractice award threatens a firm, does new Rule 11 set forth a standard whereby sanctions imposed on the overzealous litigation section are to be born equally by the trust and estates department of a firm? Is the result the same if the trust & estates section has no idea what the litigation section was filing in federal court? If so, this development runs contra to the current and ongoing segmentation and protectionist developments of overlapping LLC, LLPs and PCs. Section (c)(1)(B) provides a method for the court to impose sanctions on its own. However, the advisory committee drafted changes into the 1993 version of Rule 11, that prevent a surprise sua sponte unexpected award of sanctions. A district court may only award sanctions after the issuance of a show cause order and after offering the offending party an opportunity to explain itself, either in open court or by brief. The notes to the advisory committee clearly indicate that the drafters preferred the opportunity for the alleged offender to be heard in open court. H. Court Sanctions: Show Cause Order On Court's Initiative. On its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto. The nature of sanctions changed significantly from the 1983 version of Rule 11 to the 1993 Rule 11. In an effort to curtail the satellite litigation seeking attorneys fees and costs as some type of reparations, the new Rule limits and tailors the Sanctions that may be awarded. A district court now is compelled to impose the lowest sanction necessary to deter conduct. The court is expressly allowed to fashion creative sanctions to deter repetition. The most numerous alternative sanctions that are being awarded appear to be orders to counsel to attend ethics classes or classes focused on the corpus of the law breached. Under the 1993 version, the sanctions are usually paid to the Registry of the Court. The advisory committee's notes make clear that this is not a revenue raising measure, but rather a change to allow the sanction to be imposed (and thus deter conduct) and to avoid providing monetary incentives for movants to pursue Rule 11 partly or solely for pecuniary purposes. The court does still retain the power to command payment to a successful movant, however, the amount of the award is limited to reasonable attorneys fees and costs. One of the more colorful recent "show cause," opinions issued by the 11th Circuit is Washington v. A.A. Alaimo, et al., 934 F.3d. 1395 (11th Cir. 1996), where, Washington, a prisoner convicted of murdering a Savannah police officer, filed numerous federal habeas corpus petitions in the Southern District. The district court was affirmed in entering a special order, pursuant to a show cause order, that restricted petitioners further access to the federal system, unless and until he posed a $1,500.00 cash bond for contempt, prior to further filings. In reviewing the pleadings, the court was forced to review the following interesting motions: A "Motion to Kiss My Ass," "Motion to Behoove an Inquisition," "Motion for Judex Delegatus," "Motion for Publicity," "Motion for Psychoanalysis," "Motion to Impeach Judge Alaimo," "Motion to Renounce Citizenship," "Motion for Catered Food Service," (the Court hinted that there may have been some merit to this motion) and another "Motion to Kiss My Ass? [strong language omitted]." Id. I. Type of Sanctions Nature of Sanction; Limitations. A sanction imposed for violation of this rule shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated. Subject to the limitations in subparagraphs (A) and (B), the sanction may consist of, or include, directives of a nonmonetary nature, 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 some or all of the reasonable attorneys' fees and other expenses incurred as a direct result of the violation. The commentators are clear in their statements that one of the broadest changes to Rule 11 is its shift away from compensation and toward deterrence. Wright & Miller, Fed. Practice and Procedure, Vol. 5A, § 1331 (1997). Monetary sanctions may not be awarded against a represented party for a violation of subdivision (b)(2). In order to prevent a district court from sanctioning conduct that it deems to be abusive (but from which the underlying parties reached a resolution), the district court may not subsequently punish litigants who settle their differences while their allegedly frivolous pleadings are still before the court. The notes of the advisory committee indicate that the drafters wanted to end the power of the court to punish sua sponte, if the litigants reached a settlement. Monetary sanctions may not be awarded on the court's initiative unless the court issues its order to show cause before a voluntary dismissal or settlement of the claims made by or against the party which is, or whose attorneys are, to be sanctioned.4 As developed in the case law under the 1983 Rule 11, no award of sanctions may stand, if the court does not describe in some detail its reasons for imposing sanctions. Order. When imposing sanctions, the court shall describe the conduct determined to constitute a violation of this rule and explain the basis for the sanction imposed. It is reversible error for the court to fail to set forth in specific detail the sanctionable conduct. FDIC v. Calhoun, 34 F.3d 1291 (5th Cir. 1994). J. No Application to Discovery On of the masterful improvements in the 1993 Rule 11 is that it is not to be utilized for simple discovery fights. Litigants are required to seek sanctions under the discovery rules, not Rule 11. It is the belief of this author that the advisory committee intended to elevate a Rule 11 motion to the status of more serious Motion for Sanctions, rather than allow it to be filed in every garden variety discovery fight. Inapplicability to Discovery. Subdivisions (a) through (c) of this rule do not apply to disclosures and discovery requests, responses objections, and motions that are subject to the provisions of Rules 26 through 37. This change is self explanatory and is designed to curtail the use of Rule 11 related to discovery disputes. K. Miscellaneous Odds & Ends Under the 1993 Rule 11 There is no safety in an "empty head, pure heart," defense. The new rule establishes an objective standard. Rule 11, U.S.C.A., at 71. Attorneys cannot be forced to reveal attorney-client communications to defend clients or their firm from a Rule 11 attack. The Advisory Committee Notes show that the in camera provisions previously used with sensitive discovery documents, should be employed. Id., at 67. The Committee Notes indicate that Oral Argument is not within the ambit of Rule 11. However, Nota Bene, the 2nd Circuit has held otherwise. O'Brien v. Alexander, 898 F. Supp. 162 (S.D.N.Y. 1995), affirmed in part and reversed in part, 101 F.3d 1479 (2d Cir. 1996). With regard to Notice, the Committee Note calls for a two (2) step notice process: 1) informal notice on your opponent by telephone or letter, and 2) the formal service of the Rule 11 motion. The informal notice is not part of the Rule. Standard of Review. The 11th Circuit reviews a district court's imposition of sanctions pursuant to Rule 11 under an abuse of discretion standard. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359, 369 (1990); Jones v. International Riding Helmets, Ltd., 49 F.3d 692 (11th Cir. 1995); Attwood v. Singletary, 105 F.3d 610 (11th Cir. 1997); Turner v. Sungard Business Systems, Inc., 91 F.3d 1418 (C.A. 11th 1996); Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir. 1987). A Petition for Removal to Federal Court is subject to the requirements of Rule 11. A "defendant [no longer] file[s] a 'verified petition' in federal court but rather a 'notice of removal signed pursuant to Rule 11.'" 28 U.S.C. § 1446(a). [FN 2] [Under former law, the procedure was a 'verified petition' rather than a mere signed notice. The verification requirement has been eliminated and the reference to Rule 11 added.] "Congress changed the 'verified petition' to a 'notice' in order to make removal simpler and in 'keeping with the modern distaste for verified pleading' ... The change also makes the removal document subject to the standards of care and integrity demanded of any 'pleading, motion, or other paper' by Rule 11 and eliminates the bond requirement." Standridge v. Wal-Mart Stores, Inc., 945 F.Supp 252 (1996). Prisoner Pleading. In Attwood v. Singletary, 105 F.3d 610 (11th Cir. 1997), the Northern District of Georgia consolidated forty (40) similar suits all arising out of the same prison fact pattern. The 11th Circuit affirmed the dismissal of all claims (it is interesting to note that this particular prisoner had 61 claims dismissed in prior years) based on the prisoner's false statements on pauper's affidavit. The district court grounded its dismissal on both the false affidavit, 28 U.S.C. § 1915(d) and Rule 11. With regard to the Rule 11 dismissal the 11th Circuit wrote: Federal Rule of Civil Procedure 11(b) provides in part: By presenting to the court ... a pleading, written motion, or other paper, an ... unrepresented party is certifying 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 or to cause unnecessary delay or needless increase in the cost of litigation; ... (3) the allegations and other factual contentions have evidentiary support.... Fed.R.Civ.P. 11(b). Under the 1993 amendments to Rule 11, a party is responsible for reaffirming all contentions in papers filed before the court and informing the court of any changes of circumstances that would render a contention meritless. Fed.R.Civ.P. 11 advisory committee's note. Rule 11 sanctions are proper "when a party files a pleading that has no reasonable factual basis" and "when the party files a pleading in bad faith for an improper purpose." Pelletier v. Zweifel, 921 F.2d 1465, 1514 (11th Cir.), cert. denied, 502 U.S. 855, 112 S.Ct. 167, 116 L.Ed.2d 131 (1991). Attwood contended, as may have been the rule under the 1983 Rule 11, that it was error for the court to dismiss his complaint under Rule 11, because (or so the opinion appears) he was without funds at the time he filed the complaints. However, the 11th circuit showed the that under the 1993 Rule 11 the duty is a continuing one. Under Rule 11, pleadings are no longer to be viewed in a vacuum as of the date of filing concerning whether they are frivolous, rather there is a continuing duty on the movant each and every time movant relies upon the pleadings. Much of the relevance to Rule 11 in regard to prisoner suits may have been superseded by the recent enactment of the Prison Litigation Reform Act. The federal court no longer first looks at the merit of the prisoner's claim, but rather the prisoner's financial ability to pay the filings fees. Pauper waivers have been severely restricted. Thus, the application of Rule 11 to this area of the law may, in the coming years, be of lesser relevance. A lengthy explanation and analysis has been published by the 6th Circuit.5 III. Decisions Under 1983 Rule 11 While Rule 11 was amended effective December 31, 1993, the bulk the case law is still grounded on the 1983 version. Even some of most recent 11th Circuit opinions state that the fact pattern in question occurred prior to December 1, 1993, and thus, they must apply the former rule. The are substantial differences in the prior and present rule. The 1983 version of Rule 11 read. Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record and in the attorney's individual name, whose address shall be stated. A party who is not represented by an attorney shall sign the party's pleading, motion or other paper and state the party's address. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. The rule in equity that the averments of an answer under oath must be overcome by the testimony of two witnesses or one witness sustained by corroborating circumstances is abolished. The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion or other paper; that to the best of the signer's knowledge, information and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. If a pleading, motion, or other paper is not signed, it shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader or movant. If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee. (Amended, April 28, 1983. Effective, August 1, 1983). One of the most oft cited (and continuously cited) cases concerning pre-1993 Rule 11 is Jones v. International Riding Helmets, Ltd., 49 F.3d 692 (11th Cir. 1995) (1:91-cv-1533-ODE. NDGa - Atl. Div.). In Jones, plaintiffs, represented by Attorney Roseman, brought suit in federal court in Atlanta, alleging that their child, Jessica, suffered head injuries in a horseback riding accident in 1989. They contended that the helmet was defective, in that the helmet failed to prevent her injuries. Roseman, for the plaintiffs, sued a number of helmet manufacturers, one of whom was International Riding Helmets ("IRH"). After discovery, IRH moved for summary judgment on the ground that the helmet in question was manufactured in 1985 and that IRH did not come into corporate existence and begin producing helmets until after 1986. IRH further showed that Roseman, either knew this fact at the outset of the case or learned it early on in discovery. The court granted summary judgment and awarded Pre-1993 Rule 11 sanctions against Roseman and Jones, in the amount of $16,415.94, based on their conduct. The court in sanctioning Roseman was not convinced of his belief that the helmet in questions could have been manufactured after 1986. All of Plaintiff's discovery focused on helmets manufactured prior to December 31, 1985. Further, the court indicated that the simple perusal of a public document, IRH's certificate of incorporation should have been enough to eliminate them as a target defendant. Given that Plaintiff continued to pursue IRH, knowing that it did not exist in 1985, the court found the violation "objectively frivolous." In another oft cited case, the 11th Circuit stressed the need for a pre-signing investigation to avoid sanctions. In Worldwide Primates, Inc. v. McGreal, 87 F.3d 1252 (11th Cir. 1996), the 11th Circuit affirmed the award of $25,000 of Rule 11 fees against plaintiff and plaintiff's counsel. In that case, McGreal was a animal rights activist. Worldwide Primates imported exotic animal in furtherance of its commercial wildlife trade. McGreal sent two (2) letters to a client of Worldwide severely criticizing the practices of Worldwide and alleging that Worldwide violated the Animal Welfare Act. McGreal attached significant exhibits to her letters, one of which, contained criticisms against Worldwide by the Department of Agriculture. Worldwide took the letters to its longtime attorney and asked its attorney to file suit against McGreal. Worldwide indicted to its attorney that the letters would adversely affect its business. Without any investigation on his part, the attorney for Worldwide filed suit in Florida state court. McGreal removed the case to federal court, where it was subsequently dismissed. The district court declined initially to award Rule 11 sanctions. The 11th Circuit returned the case to the district court to consider sanctions. Reviewing the evidence under the pre-1993 Rule 11 standard, the district court considered. [Pre-1993] Rule 11 sanctions are proper "(1) when a party files a pleading that has no reasonable factual basis; (2) when the party files a pleading that is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; or (3) when the party files a pleading in bad faith for an improper purpose." Jones, 49 F.3d at 694. Imposition of sanctions on the attorney rather than, or in addition to, the client is sometimes proper "since it may well be more appropriate than a sanction that penalizes the parties for the offenses of their counsel." See id. In this circuit, a court confronted with a motion for Rule 11 sanctions first determines whether the party's claims are objectively frivolous in view of the facts or law and then, if they are, whether the person who signed the pleadings should have been aware that they were frivolous; that is, whether he would have been aware had he made a reasonable inquiry. Id. If the attorney failed to make a reasonable inquiry, then the court must impose sanctions despite the attorney's good faith belief that the claims were sound. Id. The reasonableness of the inquiry "may depend on such factors as how much time for investigation was available to the signer; whether he had to rely on a client for information as to the facts underlying the [violative document]; ... or whether he depended on forwarding counsel or another member of the bar." Ousley Productions, 952 F.2d at 382 (quoting Advisory Committee Note to Rule 11, as amended in 1983). Id. Amount of Damages. Not enough cases have made their way to the 11th Circuit to gauge whether the 11th Circuit will shy from upholding significant sanctions. Under the Pre-1993 Rule 11, it upheld sanctions excess of a million dollars. Avirgan v. Hull, 932 F.2d 1572, cert. denied, 112 S.Ct. 913, 502 U.S. 1048, 116 L.Ed.2d 813 (1991). IV. The Rejected 1995 Changes to Rule 11 Fortunately for the Bar and litigants alike, the Senate decided to conduct further study before simply passing the Attorney Accountability Act of 1995 ("AAA of 1995"). The act, which did not become law, contained three (3) provisions: 1) The "Unreasonable Party Pays" Rule (loser pays or the "English Rule"; 2) Honesty in Evidence (significant restrictions upon the introduction of scientific evidence) (Some changes have since been enacted by case law. See, General Electric, et al. v. Robert Joiner, ___ U.S.____, ___ S.Ct. ____, ____ L.Ed.2d ____ (1997), creating a new court driven review of "junk science" experts.7); and, 3) Rule 11 Sanctions (far reaching changes were proposed to the Advisory Committee's 1993 version of Rule 11). The backers of the AAA of 1995 felt that the advisory committees recommendation rendered Rule 11 "toothless." H.R. 988, the Attorney Accountability Act of 1995, House Report: 104-62.8 V. Federal Remedies that Exist in Addition to Rule 11 Many times litigants will be faced with abusive activity on the part of an opponent that does not fit neatly into a Rule 11 motion. While the full panoply of alternatives available to counsel is well beyond the scope of this article, some additional remedies are presented here for the benefit of the participants. In a case that is oft cited with Rule 11, but is not technically a Rule 11 case, the United States Supreme Court affirmed a Louisiana district court's imposition of $1,000,000.00 million dollars of attorney's fees against Chambers and his attorneys. Chambers v. Nasco, Inc., 501 U.S. 32, 55, 111 S.Ct. 2123, 2138, 115 L.Ed.2d 27, 58 (1991). Chambers entered into an agreement to sell television stations that he owned, then reneged on the contract. He spent years frustrating the purchaser's ability to gain control of the televisions stations for which conduct the district court sanctioned him. The district court, for reasons that are not elucidated in the opinion (Chambers spent part of his legal activity attempting to deprive the district court of jurisdiction), did not follow the requirements of Rule 11, rather the Judge imposed sanctions under its "inherent powers." Justice White writing for the majority in a badly fractured (5-4) opinion argued, in essence, that district courts have inherent powers to punish contemptuous conduct before them and if the statutes provided by Congress are not up to the task, they must resort to their "inherent powers." Id. Justice Kennedy authored a lengthy and caustic dissent in which his accused the Majority of creating, "a vast expansion of the power of the federal courts, unauthorized by rule or statute." Id., at, 111 S.Ct. 2142. A. Remedies In Addition to Rule 11 Justice Kennedy's dissent did provide the Bar with an overview of the constellation of powers available to the court and to the Bar to punish outrageous conduct. Those powers are discussed below: 1) "A district court can punish contempt of its authority, including disobedience of its process, by fine or imprisonment, 18 U.S.C. 401;" 2) A district court can, "award costs, expenses, and attorney's fees against attorneys who multiply proceedings vexatiously, 28 U.S.C. 19279;" 3) A district court can, "sanction a party and/or the party's attorney for filing groundless pleadings, motions, or other papers, Fed. Rule Civ. Proc. 11;" 4) A district court can, "sanction a party and/or his attorney for failure to abide by a pretrial order, Fed. Rule Civ. Proc. 16(f);" 5) A district court can, "sanction a party and/or his attorney for baseless discovery requests or objections, Fed. Rule Civ. Proc. 26(g);" 6) A district court can, "award expenses caused by a failure to attend a deposition or to serve a subpoena on a party to be deposed, Fed. Rule Civ. Proc. 30(g);" 7) A district court can, "award expenses when a party fails to respond to discovery requests or fails to participate in the framing of a discovery plan, Fed. Rule Civ. Proc. 37 (d) and (g);" 8) A district court can, "dismiss an action or claim of a party that fails to prosecute, to comply with the Federal Rules, or to obey an order of the court, Fed. Rule Civ. Proc. 41(b);" 9) A district court can, "punish any person who fails to obey a subpoena, Fed. Rule Civ. Proc. 45(f);" 10) A district court can, "award expenses and/or contempt damages when a party presents an affidavit in a summary judgment motion in bad faith or for the purpose of delay, Fed. Rule Civ. Proc. 56(g);" 11) A district court can, "make rules governing local practice that are not inconsistent with the Federal Rules, Fed. Rule Civ. Proc. 81." 12) A Court of Appeals possesses, "28 U.S.C. 1912 (power to award just damages and costs on affirmance);" 13) A Court of Appeals can award sanctions, where appropriate, on appeal: "Fed. Rule App. Proc. 38 (power to award damages and costs for frivolous appeal)." Chambers, at 111 S.Ct. 2142. B. Doubtful Longevity of Nasco While this author doubts the longevity of Nasco, given its 5-4 origin, it has been cited with approval by the United States Supreme Court in, William Jefferson Clinton v. Paula Corbin Jones, ___ U.S. ____, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997), and, Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Even if Nasco does not stand, do not expect the Supreme Court to give up its power to sanction. In Willy v. Coastal Corporation et al., 503 U.S. 131, 112 S.Ct. 1076, 117 L.Ed.2d 280 (1992), a Texan brought a completely state based claim against his Texas employer. The employer removed. The federal court dismissed the case, but sanctioned the Texas plaintiff at the time of this dismissal. The United States Supreme Court held that, notwithstanding that the federal court had no jurisdiction over the subject matter of plaintiff's wrongfully removed claim, the district court could still impose $19,000 of sanctions against the plaintiff. In an opinion that is substantively muddy and mysterious, Justice Rehnquist, states that even if the court is mistaken as to its jurisdiction, the rules, including Rule 11 have to be obeyed during the time the litigants are before the court. Id. There are a number of cases in the 11th Circuit referring to the district court's power to sanction pursuant to 28 U.S.C. § 1927. One of the most recent review of the 11th Circuit's position these types of sanctions arose in a bankruptcy appeal styled, In Re: Mroz, 65 F3d. 1567 (11th Cir. 1995).10 VI. Conclusion The 1993 Amendments are having the effect of reducing collaterally motivated and fee motivated Rule 11 litigation. The filing of a Rule 11 motion is now held to a higher standard and a 1993 Rule 11 motion that actually matures to a hearing is an event not to be taken lightly. The safe harbor provisions and modifications of the types of penalties the district courts may award is still deterring, contrary to the pundits, vast amounts of frivolous filings. When Rule 11 is considered, not in a vacuum but in addition to the arsenal of weapons available (discovery sanctions, dismissal, 28 U.S.C. § 1927, etc.) to the courts and aggrieved litigants, it is apparent that the 1993 amendments to Rule 11 have not weakened the system nor encouraged more filing. Quite the contrary, the 1993 Amendments to Rule 11 amendments have improved the rules and discouraged frivolous filings. Footnotes 1. Query: Does granting another attorney the right to sign your name with express permission "wep," relieve the signer of responsibility? Business Guides and other commentators seem to suggest that the signer of the pleading has a non-delegable duty to the court and the attorney granting express permission for a document that he or she may have not read is not relieved of the signing (and now under the 1993 amendments) continuing duty to the court. 2. "[R]easonable inquiry under the circumstances," seems to be language that the Advisory Committee decided to adopt from a consensus of Circuit Court decisions and restated in Business Guides v. Chromatic Enterprises, Inc., 498 U.S. 533, 111 S.Ct. 922, 112 L.Ed.2d 1140 (1991). 3. For a recent Northern District Sanction Order, See, Wrightson v. Shingler, 1:97-CV-466-JEC (ND Ga., July 31, 1997). 4. It may be that part of the genesis of this rule flows out of the possibility for unfairness since a federal court retains the power to grant sanctions after a party dismisses -- as was the case in Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) (however, the conduct in Cooter was certainly sanctionable). 5. The Document, In Re: Prision Litigation Reform Act: Admisitrative Order 97-01, (Feb. 4, 1997) is available on the 6th Circuit's Public Internet Database. The address to reach the 6th Circuit Search Engine is: http://www.law.emory.edu/6Circuit 6. The pre-1983 Amendment (that being in effect from the enactment of the rules in, approximately, 1936 to 1983) read as follows: Every pleading of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. A party who is not represented by an attorney shall sign his pleading and state his address. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. The rule in equity that the averments of an answer under oath must be overcome by the testimony of two witnesses or of one witness sustained by corroborating circumstances is abolished. The signature of an attorney constitutes a certificate by him that he has read the pleading; that to the best of his knowledge, information and belief there is good ground to support it; and that it is not interposed for delay. If a pleading is not signed or is signed with intent to defeat the purpose of this rule, it may be stricken as a sham and false and the action may proceed as though the pleading had not been served. For a willful violation of this rule and attorney may be subjected to appropriate disciplinary action. Similar action may be taken if scandalous or indecent matter is inserted. 7. The underlying opinions may be found at 78 F.3d 524 (11th Cir. 1996) and 864 F.Supp. 1310, 1329 (ND Ga. 1994). 8. For a broader discussion of the AAA of 1995, See, Tobias, Why Congress Should Reject Revision of Rule 11, 1995, 160 F.D.R. 275. 9. Any attorney or other person admitted to conduct cased in any Court of the United States or any Territory thereof who so multiplies the proceedings in andy case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorneys' fees reasonably incurred because of such conduct. 10. In Chambers v. NASCO, Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991), the Supreme Court addressed the nature and scope of a federal court's inherent power to control the proceedings and the conduct of the parties involved. The Court acknowledged that " "certain implied powers must necessarily result to our Courts of justice from the nature of their institution,' powers "which cannot be dispensed with in a Court, because they are necessary to the exercise of all others.' " Id., 501 U.S. at 43, 111 S.Ct. at 2132, 115 L.Ed.2d at 44 (quoting United States v. Hudson, 11 U.S. (7 Cranch) 32, 34, 3 L.Ed. 259, 260 (1812)) (other citation omitted). These powers are necessarily vested in courts to manage their affairs to "achieve the orderly and expeditious disposition of cases." Id. These inherent powers, which are incidental to a federal court, include the power to control and discipline attorneys appearing before it. Id. (citing Ex parte Burr, 22 U.S. (9 Wheat.) 529, 531, 6 L.Ed. 152, 152 (1824)).[9] However, because of their potent nature, "inherent powers must be exercised with restraint and discretion." Id., 501 U.S. at 42-43, 111 S.Ct. at 2131-32, 115 L.Ed.2d at 45 (citing Roadway Express, Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 2463, 65 L.Ed.2d 488, 499-500 (1980)). "A primary aspect of that discretion is the ability to fashion an appropriate sanction for conduct which abuses the judicial process." Id. For example, circumstances which may dictate the exercise of inherent power to assess attorney's fees against counsel, include those where a party has acted in "bad faith, vexatiously, wantonly, or for oppressive reasons." Id. (citations omitted). The imposition of sanctions in that circumstance "transcends a court's equitable power concerning relations between the parties and reaches a court's inherent power to police itself, thus serving the dual purpose of "vindicat[ing] judicial authority without resort to the more drastic sanctions available for contempt of court and mak[ing] the prevailing party whole for expenses caused by his opponent's obstinacy.' " Id., 501 U.S. at 46, 111 S.Ct. at 2133, 115 L.Ed.2d at 46 (citation omitted). In Re: Mroz, 65 F3d 1567 (11th Cir. 1995). TABLE OF CONTENTS Page I. Introduction 1 II. The 1993 Version of Rule 11 1 A. Signature 1 B. Reasonable Inquiry 2 C. Claims Are Supported By Law 5 D. Sanctions 6 E. 1993 Rule 11 Requires A Separate Motion 7 F. The Safe Harbor 8 G. Attorneys And Firms May Be Sanctioned 9 H. Court Sanctions: Show Cause Order 10 I. Type of Sanctions 12 J. No Application to Discovery 13 K. Miscellaneous Odds & Ends Under the 1993 Rule 11 14 III. Decisions Under 1983 Rule 11 17 IV. The Rejected 1995 Changes to Rule 11 21 V. Federal Remedies that Exist in Addition to Rule 11 22 A. Remedies In Addition to Rule 11 23 B. Doubtful Longevity of Nasco 25 VI. Conclusion 26 TABLE OF AUTHORITIES United States Supreme Court: Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., 498 U.S. 533, 111 S.Ct. 922, 929, 112 L.Ed.2d 1140 (1991) 2 Chambers v. Nasco, Inc., 501 U.S. 32, 55, 111 S.Ct. 2123, 2138, 115 L.Ed.2d 27, 58 (1991) 22, 23, 25 Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359, 369 (1990) 14 General Electric, et al. v. Robert Joiner, ___ U.S.____, ___ S.Ct. ____, ____ L.Ed.2d ____ (1997) 22 Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) 25 Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989) 9 William Jefferson Clinton v. Paula Corbin Jones, ___ U.S. ____, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997) 25 Willy v. Coastal Corporation et al., 503 U.S. 131, 112 S.Ct. 1076, 117 L.Ed.2d 280 (1992) 25 11th Circuit Court of Appeals: Attwood v. Singletary, 105 F.3d 610 (11th Cir. 1997) 14, 15 Avirgan v. Hull, 932 F.2d 1572, cert. denied, 112 S.Ct. 913, 502 U.S. 1048, 116 L.Ed.2d 813 (1991) 21 Battles v. City of Ft. Myers, 127 F.3d. 1298 (11th Cir. 1995) 3 Didie v. Howes, 988 F.2d 1097 (11th Cir. 1993) 7 Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir. 1987) 15 FDIC v. Calhoun, 34 F.3d 1291 (5th Cir. 1994) 13 Jones v. International Riding Helmets, Ltd., 49 F.3d 692 (11th Cir. 1995) 14, 18, 20 Taiyo Corp. vs. Sheraton Savannah Corporation, 49 F.3d 1514 (11th Cir. 1995) (1:93-CV-2813-ODE, NDGa - Atl. Div.) 3 Transamerica Comm Fin. Corp. v. Banton, Inc., 970 F.2d 810 (11th Cir. 1992) 7 Turner v. Sungard Business Systems, Inc., 91 F.3d 1418 (11th Cir. 1996) 4, 5, 8, 15 United States v. Milam, 855 F.2d 739, 742 n. 6 (11th Cir.1988) 3 Washington v. A.A. Alaimo, et al., 934 F.3d. 1395 (11th Cir. 1996) 11 Worldwide Primates, Inc. v. McGreal, 87 F.3d 1252 (11th Cir. 1996) 19, 21 United States District Courts: In Re: Mroz, 65 F3d. 1567 (11th Cir. 1995) 26 O'Brien v. Alexander, 898 F. Supp. 162 (S.D.N.Y. 1995), affirmed in part and reversed in part, 101 F.3d 1479 (2d Cir. 1996) 14 Standridge v. Wal-Mart Stores, Inc., 945 F.Supp 252 (1996) 15 United States Code: 28 U.S.C. § 1446(a) 15 28 U.S.C. § 1927 26 Rule 11 U.S.C.A., at 67 14 Rule 11, U.S.C.A., at 71 14 Rule 11, U.S.C.A., at 72 2 Other Authorities: Wright & Miller, Fed. Practice and Procedure, Vol. 5A, § 1331 (1997) 12 Notice: The information presented herein is the opinion of the author and does not necessarily reflect the opinions of the management or staff of Shapiro & Swertfeger, LLP. These articles are not intended to provide specific legal or tax advice, but are intended only to generally familiarize the reader with the subject matter. Matters of specific legal or tax nature should be discussed with a competent attorney or tax professional specializing in that particular field or practice. Allowing the authors and/or their companies to post articles herein and the provision of return links to them, does not constitute an endorsement or recommendation of their products or services. 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