District Court Declines to Sanction Pro Se Litigants Who Filed a Case Barred by Res Judicata


The plaintiffs are pro se litigants who sued FNMA in federal court in an effort to challenge a prior state court decision which foreclosed on their mortgage. Because the federal case was barred by res judicata (a doctrine prohibiting a party from litigating the same issue a second time after losing a prior case), FNMA filed a motion for Rule 11 Sanctions. The district court denied the sanctions motion because FNMA did not use the 21-day safe harbor provision in Rule 11, which would have given the plaintiffs 21 days to withdraw their case. The court did order that the plaintiffs were barred from filing any future pleadings without leave of court. The court reasoned as follows:

The same Rule “also provides procedural requirements that must be followed before sanctions can be imposed.” Shamoun v. Federal Nat. Mortg. Ass’n, 2013 WL 2237906, *9 (E.D.Mich. May 21, 2013). Among the requirements is a two-step process under 11(c)(2) of the rule, “known as the `safe harbor’ provision” which requires the party intending to make a motion for sanctions “to `first, serve the Rule 11 motion on the opposing party for a designated period (at least twenty-one days); and then file the motion with the court.'” Shamoun at *9 (citing Ridder v. City of Southfield, 109 F.3d 288, 293-94 (6th Cir.1997)). “This two-step procedure allows the opposing party twenty-one days to withdraw the challenged paper, claim, allegation, etc., and thus avoid Rule 11 sanctions.” Id. (citing Ridder at 294).

Defendants have not applied the two-step safe harbor procedure under subdivision (c)(1)(A) but instead, request that the Court issue a show cause order under its own authority. Defendants’ Brief at 17. A Court may impose sanctions sua sponte“after notice and a reasonable opportunity to respond.” Rule 11(c)(1)(3).

The Court declines to impose sanctions. First, Defendants have not applied the twostep safe harbor procedure or made the request for sanctions in a separate motion which are both required by subsection (c)(2). Defendants’ request for the Court to impose sanctions “sua sponte” under (c)(3) amounts to an end run around the safe harbor requirements of (c)(2) for parties seeking sanctions. Further, given that Plaintiffs are proceeding pro se and in forma pauperis, the sanction of costs and fees is inappropriate. See Hiles (declining to impose sanctions but enjoining the plaintiff from filing any additional motions without leave of Court).

Comment: this decision is a merciful application of the law.

Source: LNU v. Federal National Mortgage Association, Dist. Court, ED Michigan 2016 – Google Scholar

Minnesota Suspends Paul Hansmeier From the Practice of Law


On September 12, 2016, the Minnesota Supreme Court issued an order indefinitely suspending Paul Hansmeier from the practice of law. Hansmeier has “no right to petition for reinstatement for 4 years from the effective date of his suspension.”

The Minnesota Supreme Court can be complimented for its pithy (2 and a half pages) rendition of the major ethical violations of Hansmeier. The description is quoted in full below:

Hansmeier committed misconduct in the first matter by bringing a lawsuit for the sole purpose of conducting discovery to find the identity of others against whom claims could be made, making misrepresentations to the tribunal. filing articles of termination for a corporation that contained false statements, failing to comply with discovery requests, failing to pay attorney fees assessed against him, and transferring funds out of his law firm in order to avoid paying sanctions. In a second matter, Hansmeier committed misconduct by participating in the initiation of a lawsuit without a basis in law and fact, making false and misleading statements to the court, failing to pay attorney fees assessed against him by the court. and submitting to the court a financial statement that was false, misleading, and deceptive. In a third matter, Hansmeier committed misconduct by bringing a frivolous action for an improper purpose. And in a fourth matter. Hansmeier committed misconduct by testifying falsely during a deposition, bringing a frivolous claim, and perpetrating a fraud upon the court. See Minn. R. Prof. Conduct 3.1, 3.3(a)(l), 3.4(c), 3.4(d), 4.1, 8.4(c),and 8.4( d); Ill. R. Prof. Conduct 3.1, 3.3(a), 3 .4( c ), 4.1, 8.4( c ), and 8.4( d); and Cal. R. Prof. Conduct 3-200 and 5-200. 1.

Law Firm’s Request For Rule 11 Sanctions Against Pro Se Litigant Goes Nowhere


The plaintiff filed a pro se employment discrimination complaint against Reed Smith and other defendants (apparently employees or partners of Reed Smith). The defendants moved to dismiss the complaint under Rule 12(b)(6). The court granted the motion in part and dismissed some claims. However, it held that other claims were well pleaded and raised an issue for trial.

The court denied the Defendants’ Motion for Rule 11 sanctions on the ground that the pleading was not frivolous. Moreover, the court clearly believed that the motion for sanctions was a reach given that it was filed shortly after the complaint was filed. The court reasoned that the EEOC’s decision to reject the discrimination claim was not binding on the court and did not support an award of sanctions. Further, the court noted that pro se litigants are held to a relaxed standard of pleading.

The key paragraph of the opinion is quoted here:

59. Although pro se litigants are not immune from such sanctions, see Unanue Casal v. Unanue Casal, 132 F.R.D. 146, 151 (D.N.J. 1989), aff’d, 898 F.2d 839 (3d Cir. 1990), this Court has noted that the standard for sanctions is “relaxed considerably when the offending party is unrepresented by counsel.” Talley v. City of Atlantic City, No. 04-1146, 2007 WL 2021792, at *4 (D.N.J. July 10, 2007) (Simandle, J.). This is because pleadings by pro se plaintiffs must first be read “with greater latitude and liberality,” and a pro se plaintiff “cannot reasonably be held to the same standards of knowledge of legal process as an attorney.” Id.; see also Bacon v. Am. Fed. of State, Cnty., and Mun. Empls. Council, No. 13, 795 F.2d 33, 35 (7th Cir. 1986) (“A layman cannot be expected to realize as quickly as a lawyer would that a legal position has no possible merit, and it would be as cruel as it would be pointless to hold laymen who cannot afford a lawyer . . . to a standard of care that they cannot attain even with their best efforts.”). Sanctions will be appropriate against a pro se plaintiff when she persists in a hopeless cause after her claims have repeatedly been rejected by court, because then, it should have been clear to her as a reasonable (though not law-trained) person that her cause was indeed hopeless. Talley, 2007 WL 2021792, at *4.

In sum, this motion for sanctions was filed too soon to be granted. It may have been used as a tool to encourage the pro se litigant to drop the claim. If so, that idea did not work.

Source: ROSS-TIGGETT v. REED SMITH LLP, Dist. Court, D. New Jersey 2016 – Google Scholar

District Court Denies Rule 11 Motion As Untimely Where The Case Had Been Dismissed


Under Rule 11, the party seeking sanctions must serve the motion on the opposing party and give that party 21 days to withdraw the offending pleading. Here, the defendants apparently served the sanctions motion, but they failed to file it before the plaintiffs’ complaint was already dismissed by the district court. The district court refused to hear the motion. The court explained its ruling in this passage:

Courts have uniformly denied Rule 11 motions where, as here, a motion was not filed until after the case was dismissed. See Roth v. Green, 466 F.3d 1179, 1193 (10th Cir. 2006) (motions for Rule 11 sanctions filed after district court dismissed complaint should have been denied; citing cases from four other circuits); VanDanacker, 109 F.Supp.2d at 1054.

The courts have reasoned that to grant Rule 11 sanctions based on a motion filed post-dismissal would defeat the purpose of the safe harbor provision. The advisory committee notes to Rule 11 provide strong support for this conclusion:

Ordinarily the motion should be served promptly after the inappropriate paper is filed, and, if delayed too long, may be viewed as untimely. . . . Given the “safe harbor” provisions . . . [in Rule 11(c)(2)], a party cannot delay serving its Rule 11 motion until conclusion of the case (or judicial rejection of the offending contention).Fed. R. Civ. P. 11, Advisory Committee Notes (1993 Amendments). A leading federal practice treatise explains the rationale for this rule: “if the court disposes of the offending contention within the 21-day safe-harbor period after service, it becomes impossible under the provision of Rule 11(c)(2) to file the motion or otherwise present it to the court.” 2 James Wm. Moore et al., Moore’s Federal Practice § 11.22[1][c] (3d ed. 2014); see also 5A Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure § 1337.2, at 727 (3d ed. 2004) (“[S]ervice of a sanctions motion after the district court has dismissed the claim or entered judgment prevents giving effect to the safe harbor provision or the policies and procedural protections it provides, and it will be rejected.”).

Because defendants’ motion for Rule 11 sanctions was not filed until after the Court dismissed plaintiff’s complaint with prejudice, the motion is untimely and must be denied because it defeats the purpose of the safe harbor provision ofRule 11.[3]

It makes perfect sense that the court did not want to waste further time on a case it had already dismissed. To do so, would be a waste of judicial resources.

Edward X. Clinton, Jr.

Source: Noonan v. CACH, LLC, Dist. Court, ED Missouri 2016 – Google Scholar

District Court Awards Google and YouTube Sanctions For Frivolous Allegations


This is apparently an antitrust case against Google and YouTube, a subsidiary of Google. The plaintiff also included other allegations against the two defendants that the court deemed to be frivolous. Plaintiff alleged that the defendants conspire to “game” the view counts of certain videos posted on YouTube. There were also certain allegations that the defendants wrongfully remove “independent” music videos.

The court concluded that, although portions of the complaint stated a claim, these particular allegations violated Rule 11 and awarded sanctions. The court explained:

Defendants take issue with paragraphs 19(a), 22-24, 30, 38, 44, 91, 92, 103, 109 and 110 of Plaintiffs’ 3AC. Together, these paragraphs alleged that Defendants and their named executives agreed to permit certain record labels to game the view count without enforcement. First, Defendants argue that Plaintiffs have no evidentiary basis for this theory. Plaintiffs respond that significant circumstantial evidence supported their theory. For example, the 3AC described very high view counts for certain videos, and noted that Defendants would have benefitted from such a conspiracy because they shared in advertising revenue. The Court concludes that it was baseless to allege that Defendants conspired to game view counts—the circumstantial evidence does not provide a basis for such an allegation. These allegations violate Rule 11.

Second, Defendants argue that, contrary to Plaintiffs’ allegations, YouTube has taken action against the alleged conspirator record labels. See 3AC ¶ 22 (alleging that “G-Y and the G-Y Executives refrain from 4H TOS enforcement action against the Major Labels and the other Conspiring Entities”). Publicly-available information demonstrates that Plaintiffs’ counsel could not have undertaken an objectively reasonable inquiry before presenting this allegation. For example, Defendants submit an online news article entitled: “YouTube cancels billions of music industry video views after finding that they were fake or `dead,'” discussing a video by Rihanna, a Universal artist. Haas Dec. Ex. 5. Huffington Post published a similar story the following day. Id. Ex. 6. Paragraph 22 violates Rule 11.

Third, Defendants argue that Plaintiffs have insufficient factual support for their allegations regarding Google and YouTube executives’ actions. Plaintiffs make two arguments in response. They argue that David Drummond’s inaction following Plaintiffs’ counsel’s May 12, 2014 letter to him outlining the sequence of events giving rise to their legal claims could be construed as evidence of his and others’ prior awareness of the conspiracy. See Docket No. 101-9. The lack of response to this letter does not serve as a basis for Plaintiffs’ specific claims about Defendants’ executives’ participation in and knowledge of a view count gaming conspiracy. Next, Plaintiffs argue that, if there were a conspiracy, it must have been at the direction of senior management. However, as explained above, there was no basis to allege the view count gaming conspiracy. For these reasons, the allegations pertaining to the actions and knowledge of particular Google and YouTube executives violate Rule 11.

The court also discussed other examples of false allegations in the complaint. The court then awarded the defendants their costs and legal fees in bringing the motion for sanctions. Obviously, when battling a powerful defendant such as Google, which has access to excellent lawyers and has first class discovery technology tools available to it, a lawyer must be exceedingly careful to make sure that allegations are well-grounded in fact before they are pleaded. These plaintiffs lawyers apparently failed to do that and were sanctioned as a result.

Source: SONG FI, INC. v. GOOGLE, INC., Dist. Court, ND California 2016 – Google Scholar

District Court Holds That Rule 37 Does Not Allow Sanctions In The Absence of A Court Order


The underlying dispute concerned an inspection of Chevron’s premises in Nigeria. Plaintiffs’ experts were initially denied access, but Chevron claimed that it cleared up the problem almost immediately and obtained access for the experts.

In any event, the sanctions motion was denied because the defendant did not violate or refuse to comply with a specific court order. The court explained:

Plaintiff seeks sanctions under Federal Rule of Civil Procedure 37, which governs “failure to comply with a court order.” Defendant contends that Rule 37 does not apply because the December 2015 trip was not scheduled pursuant to a specific court order. The Court agrees. In Unigard Sec. Ins. Co. v. Lakewood Engineering & Mfg. Corp., 982 F.2d 363 (9th Cir. 1992), the Ninth Circuit held that a district court could not sanction a party under Rule 37 for the party’s destruction of evidence prior to filing suit. The court explained,

This court has foreclosed the application of Rule 37 sanctions in cases such as this where a party’s alleged discovery-related misconduct is not encompassed by the language of the rule. The definition of “order” in Rule 37(b) has been read broadly. See, e.g., Henry v. Sneiders, 490 F.2d 315, 318 (9th Cir.), cert. denied, 419 U.S. 832, 95 S.Ct. 55, 42 L.Ed.2d 57 (1974) (Rule 37 sanctions may be imposed on a party for disobedience to a court’s request in oral proceedings, so long as those proceedings give the party unequivocal notice that a court has asked that certain documents be produced.). But Rule 37(b)(2)’s requirement that there be some form of court order that has been disobeyed has not been read out of existence; Rule 37(b)(2) has never been read to authorize sanctions for more general discovery abuse.Id. at 368.

Here, plaintiff acknowledges that there is no court order that Chevron has disobeyed. Instead, plaintiff asserts that Chevron’s United States counsel either negligently or intentionally failed to coordinate with Chevron’s Nigerian representatives to ensure that plaintiff’s experts would be able to access the explosion site. Under Unigard, Rule 37 sanctions are unavailable for this conduct.

Source: GBARABE v. CHEVRON CORPORATION, Dist. Court, ND California 2016 – Google Scholar

Prompt Remedial Action Avoids Rule 11 Sanctions


Here, plaintiff tendered a Rule 11 safe harbor notice, giving the defendant 21 days to remedy the alleged violation. The defendant did its research and amended the complaint promptly, avoiding sanctions. The court explains:

“Plaintiff’s motions additionally seek Rule 11 sanctions against the attorneys representing ORNTIC and BONY on the grounds that their submissions have been fraudulent and/or frivolous because they misrepresented the existence of BONY and ORDMS and because the attorneys have no legal services agreements with BONYMCorp or ORNTIC. BONY’s counsel maintains that BONY is the proper defendant in this case and argues that Plaintiff has failed to prove otherwise. In support, BONY notes that the Clerk of the Court has declined to grant default against BONY on two occasions. See ECF 64, 123. Having reviewed the record, the Court agrees with BONY’s counsel that Plaintiff has failed to establish that BONY is the improper party. See BONY’s RJN Exh. C (SOT listing BONY as the assignee of Plaintiff’s DOT). Accordingly, the Court DENIES Plaintiff’s motion for sanctions against BONY’s counsel.

As for ORNTIC, its counsel explains that, after receiving Plaintiff’s Safe Harbor Notice for her Rule 11 motion, counsel contacted ORDMS who then researched the issue and concluded that ORNTIC is in fact the proper party defendant in this case. Upon learning this, counsel immediately filed a Notice of Errata to advise the Court of the error and filed a “corrective” Motion to Dismiss the SAC. ORNTIC’s counsel argues that this remedied any offensive pleading within the time allotted in Plaintiff’s Safe Harbor Notice and the Court agrees. Accordingly, Plaintiff’s motion for sanctions against ORNTIC’s counsel is DENIED.”

Source: Cox v. OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, Dist. Court, ND California 2016 – Google Scholar