The Third Circuit, in an unpublished nonprecedential opinion, has held that the district court is required to resolve a sanctions motion filed while a case was pending. It must do so even though the underlying case was dismissed. In this particular case, the district court held that the sanctions motion was “moot” after it granted summary judgment. The Third Circuit disagreed:
We hold that the District Court’s refusal to reach the merits of the Rule 11 motion was in error. A district court “must resolve any issues about imposition of sanctions,” including Rule 11 sanctions, “prior to, or contemporaneously with, entering final judgment.” Gary, 517 F.3d at 202. This obligation to resolve “collateral issues” is not mooted “after an action is no longer pending,” Willy v. Coastal Corp., 503 U.S. 131, 137-38 (1992) (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990)), for a district court retains jurisdiction to impose Rule 11 sanctions even when it lacks subject-matter jurisdiction over the claim giving rise to the sanctionable conduct, Lazorko v. Pa. Hosp., 237 F.3d 242, 247 (3d Cir. 2000). Here, therefore, the final judgment on the Brice’s claims against Bauer did not moot Bauer’s Rule 11 motion, and the District Court erred by declining to decide that motion on its merits.
Because we do not ordinarily consider issues not passed upon below, Goldenstein v. Repossessors Inc., 815 F.3d 142, 149 (3d Cir. 2016), and because “motions under Rule 11 must be decided in the first instance by the trial court absent extraordinary circumstances,” Gary, 517 F.3d at 202-03, we will not consider the parties’ arguments on the merits of Bauer’s Rule 11 motion and we will remand for the District Court to address the merits of Bauer’s Rule 11 motion in the first instance. While the Brices object that further proceedings in the District Court may duplicate a parallel sanctions determination in state court under Pennsylvania Rule of Civil Procedure 1023.2, we are persuaded that the proceedings will address—and may impose different sanctions for—different alleged misconduct. That is, the District Court’s Rule 11 determination will address whether the Brices’ earlier filings in federal court warrant sanctions, see Fed. R. Civ. P. 1, while any state court determination under Pennsylvania Rule of Civil Procedure 1023.2 will address whether the Brices’ subsequent filings in state court warrant sanctions, see Robinson v. State Emps.’ Ret. Bd., No. 1136 C.D. 2014, 2015 WL 5314660, at *5 (Pa. Commw. Ct. Mar. 10, 2015). Thus, we perceive no judicial economy concerns arising from the two sanctions determinations proceeding concurrently.
Source: Brice v. Bauer, Court of Appeals, 3rd Circuit 2017 – Google Scholar
Another pro se case of interest. After a storm and serious flooding, the plaintiff had to abandon her vehicle. Her car was then towed by the defendants. Plaintiff sued them in federal court apparently because she believed the defendants stole her personal possessions out of her car. The defendants claimed that they had been authorized to tow the car, but plaintiff challenged the veracity of their claims.
The case was eventually dismissed for lack of subject matter jurisdiction because the alleged damages did not exceed $75,000. The defendants moved for sanctions on the ground that the plaintiff maintained the litigation after she knew it was baseless.
The court denied the motion for sanctions on the ground that the plaintiff did not have a bad motive and that her claims had some basis. The court explained:
Plaintiff’s filings were not made solely for the purpose of harassing these Defendants and increasing the costs of this litigation and her factual contentions did not utterly lack evidentiary support. While some of Plaintiff’s claims were not warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law, the costs to Defendants based on those claims are unclear, and seemingly negligible. Therefore, Defendants’ request for attorneys’ fees and costs is denied
Source: PRIDDLE v. MALANIS, Dist. Court, ND Illinois 2017 – Google Scholar
This is an opinion granting Capital One Bank’s motion for Rule 11 sanctions in the third of three lawsuits that challenged a foreclosure.
The legal doctrine res judicata prohibits the relitigation of claims that have already been litigated by other courts and reached final judgment. Here the plaintiff filed two separate lawsuits against Capital One and MERS (a mortgage recording service) to contest a foreclosure. Judgment was entered against him in both cases. He then filed a third case in federal court to again challenge the foreclosure. The court granted summary judgment to Capital One and dismissed MERS on the ground that the current case was identical to the previous two cases that were dismissed. The court was unpersuaded by the arguments of plaintiff’s counsel that his failure to complete the service of process was a defense to the action. It explained:
Defendants argue that Plaintiff’s counsel, J.J. Sandlin, violated Fed. R. Civ. P. 11 by filing this lawsuit when he knew, based on his involvement in Alexander II and communications with Defendants’ counsel, that the claims asserted in Plaintiff’s complaint were baseless and/or precluded. Defendants further allege that Mr. Sandlin and Plaintiff knowingly filed a baseless lawsuit in an effort to delay the Alexanders’ eviction. See Dkt. # 30, ¶ 4.
In response to Defendants’ motion for sanctions, Plaintiff does not refute Defendants’ claim that a competent inquiry would have revealed this lawsuit to be legally baseless. Rather, Plaintiff explains that it first filed this frivolous lawsuit, then deliberately waited to serve process while Mr. Sandlin investigated whether the suit had any merit. In Plaintiff’s own words: “the efforts of [Plaintiff] and its attorney reflect the essence of good faith. . . . In its conservative position, [Plaintiff] purposefully declined to perfect original service of process, relying upon Rule 4(m) to cause the potential lawsuit to expire by operation of law. . . . As the plaintiff continued to test its position it ultimately determined the action should not be commenced, and deliberately failed to perfect original service of process.” Dkt. # 34 at 11-12. Because service never occurred, Plaintiff argues, this case must be dismissed and the “motion for sanctions should not proceed to judgment.” Dkt. # 34 at 7 n.2.
Plaintiff and Mr. Sandlin have essentially conceded that they intentionally wasted the Court’s time by filing — and then litigating rather than voluntarily dismissing — a frivolous lawsuit. Such conduct is hardly “the essence of good faith.” An award of attorneys’ fees under RCW 4.84.185 and sanctions under Fed. R. Civ. P. 11 are entirely appropriate under the circumstances.
The court awarded sanctions against both the plaintiff and the attorney.
Source: INTEGRITY TRUST v. CAPITAL ONE, NA, Dist. Court, WD Washington 2017 – Google Scholar
For the amount of the award ($55,175) see this link: https://scholar.google.com/scholar_case?case=1154107315227862633&hl=en&lr=lang_en&as_sdt=400006&as_vis=1&oi=scholaralrt
If you sue your lawyer for failing to prosecute your ADA (American’s with Disabilities Act) claim, you do not have federal question jurisdiction. Instead, the claim arises under state law. The explanation:
And, the court explained, plaintiff’s legal malpractice claims arise under state law, not federal law, even though she attempts to invoke the Americans with Disabilities Act (“ADA”). See id. (citing Creamer v. Gen. Motors, Nos. 16-4045-SAC, et al., 2016 WL 3197379, at *5 (D. Kan. May 18, 2016) (concluding that plaintiff failed to allege federal question jurisdiction because her citation to the ADA “has no plausible application to plaintiff’s claims that defendant committed legal malpractice” and “absent diversity of citizenship and an amount in controversy over $75,000—which do not exist here—plaintiff’s state law claims of legal malpractice, assuming of course they have any merit, belong in state court”)).
Plaintiff submitted a response to the Show Cause Order. Doc. 5. But, like her Complaint, her response failed to provide any colorable basis for this court to invoke its limited subject matter jurisdiction. Instead, plaintiff reiterated that she was asserting legal malpractice claims against defendants. Id. at 1-4. She provided no basis for the court to exercise federal question or diversity jurisdictAnd, the court explained, plaintiff’s legal malpractice claims arise under state law, not federal law, even though she attempts to invoke the Americans with Disabilities Act (“ADA”). Sion. See generally id. So, the court dismissed her lawsuit without prejudice for lack of subject matter jurisdiction. Doc. 6.
Source: Creamer v. Martin, Dist. Court, D. Kansas 2017 – Google Scholar
The plaintiff, a resident of California, sued the NRA after the NRA allegedly failed to remove him from a mailing list. Apparently, California Code Section 3344 allows a plaintiff to sue in certain circumstances where the defendant wrongfully implies that the plaintiff endorsed his product. The District Court dismissed the case on the ground that the statute has never been applied where a person is simply included on a mailing list. The District Court also denied the NRA’s sanctions motion on the ground that plaintiff was using a creative approach to expand existing law. In sum, the case was dismissed and all sanctions were denied. The district court also denied a portion of the NRA’s motion for sanctions which alleged that Plaintiff was not a citizen of California, but a citizen of Nevada.
Source: LINLOR v. THE NATIONAL RIFLE ASSOCIATION OF AMERICA, Dist. Court, SD California 2017 – Google Scholar
This lawsuit relates to a suspicious death in Michigan – the death of Joan Matouk Romain. Did she commit suicide or was she murdered? There are two versions of the events.
Ms. Romain’s estate sued a number of individuals who were allegedly involved in her wrongful death, including Timothy Matouk. Matouk moved for sanctions on the ground that his cell phone records and work records show that he was elsewhere when Ms. Romain disappeared. He argued that the plaintiffs had sufficient information that should have led them to remove him from the case because he had no involvement in the wrongful death.
The District Court denied the motion because a witness in the lawsuit has testified that he saw Matouk near the crime scene. Therefore, sanctions under Rule 11 and Section 1927 were denied. The court found an issue of fact and explained it in this fashion:
Matouk and two other individuals may have testified that Matouk was working on a multi-jurisdiction task force in Warren the evening Romain disappeared. Nevertheless, Matouk has not pointed this Court to specific testimony representing that he was elsewhere when Hawk claims to have seen him in Grosse Pointe Farms or accounting for his whereabouts at any specific time. In any event, whether to believe Hawk versus another individual who may testify that Matouk was elsewhere raises a credibly question for a jury. It is not a question for this Court to resolve here and the fact that a question exists suggests that there is no basis for sanctions.
Source: ESTATE OF ROMAIN v. City of Grosse Pointe Farms, Dist. Court, ED Michigan 2017 – Google Scholar