Rule 11 Motion Denied Where It Was Used Incorrectly to Substitute for A Dispositive Motion


This is an intellectual property dispute, where the defendant answered the complaint alleging trademark infringement and then moved for Rule 11 sanctions. The case caption is FCOA, LLC v. Foremost Title and Escrow Services, LLC,  Case No. 17-Civ-23971-WILLIAMS/TORRES.  United States District Court, S.D. Florida.

Plaintiff claimed that the defendant’s use of the term “Foremost” infringed Plaintiff’s trademarks and other intellectual property rights.

Defendant did not file a dispositive motion. Instead, it filed a Rule 11 motion. Defendant argued that the lawsuit was frivolous, given that the two companies were in different lines of business and there was no likelihood of confusion.

The court denied the Rule 11 motion on two grounds. First, it noted that the use of Rule 11 was improper because Rule 11 is not designed to serve as a dispositive motion. The court explained:

Defendant’s motion is unpersuasive for at least two independent reasons. First, the motion represents an improper attempt to convert a disagreement over the factual allegations and legal arguments in Plaintiff’s complaint into a sanctions dispute. Defendant’s motion is merely an attempt to seek disposition on the merits of this case via Rule 11. Yet, a Rule 11 motion is not an avenue to seek judgment on the merits of a case. Instead, its purpose is to determine whether an attorney has abused the judicial process. See Bigford v. BESM, Inc., 2012 WL 12886184, at *2 (S.D. Fla. Oct. 12, 2012) (“`Rule 11 should not be used to raise issues as to the legal sufficiency of a claim or defense that more appropriately can be disposed of by a motion to dismiss, a motion for judgment on the pleadings, a motion for summary judgment, or a trial on the merits.'”) (quoting In re New Motor Vehicles Canadian Export Antitrust Litigation, 244 F.R.D. 70, 74 (D. Me. 2007) (denying Rule 11 motion without prejudice to its renewal “if and when [Defendant] obtains summary judgment”) (citations omitted)); see also Safe-Strap Co., Inc. v. Koala Corp., 270 F. Supp. 2d 407, 417-21 (S.D.N.Y. 2003) (discussing that Rule 11 sanctions are not a substitute for motions for summary judgment).

As the plain language of Rule 11 indicates, “an attorney . . . certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances” that a court document “is not being presented for an improper purpose”, “the claims, defenses, and other legal contentions are warranted by existing law,” and the “factual contentions have evidentiary support. . . .” Fed. R. Civ. Pro. 11(b). Instead of relying on a Rule 11 motion to dispose of this case, Defendant should have filed a dispositive motion — such as a motion to dismiss — rather than answering Plaintiff’s complaint. Because Defendant relies on the wrong type of motion for the relief sought, Defendant’s motion must be DENIED.

The second reason for the denial was that the motion was premature. Again the explanation:

Second, Defendant’s motion must be denied because it is premature at this stage of the litigation. As the Eleventh Circuit has found, Rule 11 sanctions are ordinarily not determined until the end of a case:

Although the timing of sanctions rests in the discretion of the trial judge, it is anticipated that in the case of pleadings the sanctions issue under Rule 11 normally will be determined at the end of the litigation, and in the case of motions at the time when the motion is decided or shortly thereafter.Donaldson v. Clark, 819 F.2d 1551, 1555 (11th Cir. 1987) (quotation marks and citation omitted). The Eleventh Circuit’s position is consistent with the Rules Advisory Committee which “anticipated that in the case of pleadings the sanctions issue under Rule 11 normally will be determined at the end of the litigation. . . .” Fed. R. Civ. P. 11 (Advisory Committee Notes, 1983 Amendment); see also Lichtenstein v. Consolidated Serv. Group, Inc., 173 F.3d 17, 23 (1st Cir. 1999)(

In other words, if the Defendant had filed and won a summary judgment motion, it would be able to seek sanctions. Using Rule 11 was improper as the case had not been decided.

Edward X. Clinton, Jr.

https://scholar.google.com/scholar_case?case=16660803745935797275&hl=en&lr=lang_en&as_sdt=400006&as_vis=1&oi=scholaralrt

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