Plaintiffs’ Counsel Complies with Safe Harbor = Rule 11 Sanctions Denied


Rule 11 contains a safe harbor under which a party can serve a sanctions motion on the opposing party. That party has 21 days to withdraw the complaint or other offending paper.

Here, Defendant served the Rule 11 motion and the Plaintiffs complied and withdrew the complaint.  Understandably, the court rejected the request for sanctions.  The reasoning is simple – because plaintiffs complied with the Rule, there is no motion for them to answer:

The Court finds that Rule 11 sanctions are unavailable in light of the Patels’ voluntary withdrawal of the complaint. See Hockley by Hockley v. Shan Enter. Ltd. P’ship, 19 F. Supp. 2d 235, 240 (D.N.J. 1998) (citing Fed. R. Civ. P. 11 Advisory Committee Notes (1993 Amendment) at 89 (West 1998)) (“The court can impose sanctions only if, after twenty-one days, the non-moving party has not withdrawn the offending petition or acknowledge[d] candidly that it does not currently have evidence to support a specified allegation.'”). To impose sanctions here under Rule 11 would undermine the purpose of the safe harbor provision, which is to curb apprehension that withdrawal may be viewed as evidence of a violation. See Fed. R. Civ. P. 11 Advisory Committee Notes (“Under the former rule, parties were sometimes reluctant to abandon a questionable contention lest that be viewed as evidence of a violation of Rule 11.”). In any event, the rule is clear: “If the pleading is withdrawn in timely fashion, the matter is at an end and sanctions become unavailable; a `safe harbor’ is provided.” Thomas v. Treasury Mgmt. Ass’n, Inc.,158 F.R.D. 364, 366 (D. Md. 1994)See Fed. R. Civ. P. 11 advisory committee’s note (“If, during this period, the alleged violation is corrected, as by withdrawing . . . some allegation or contention, the motion should not be filed with the court.”).

Further, Defendants provide no past examples of sanctions imposed for threatening to refile a complaint that has been voluntarily dismissed without prejudice. Indeed, even a successful Rule 11 motion does not preclude the sanctioned party from refiling its complaint. See Cooter & Gell v. Hartmarx Corp.,496 U.S. 384, 396 (1990). That does make defendants answerable to a unending sequence of abortive litigation. Rather, the threat of successive withdraw-and-refiling is met by Rule 41(a)(1), which provides that voluntary dismissal counts as a final adjudication if “the plaintiff previously dismissed any federal- or state-court action based on or including the same claim . . . .” Fed. R. Civ. P. 41(a)(1)(B). See Cooter & Gell, 496 U.S. at 397 (citations omitted) (“Rule 41(a)(1) was intended to eliminate the annoying of a defendant by being summoned into court in successive actions and then, if no settlement is arrived at, requiring him to permit the action to be dismissed and another one commenced at leisure.”). Defendants’ Rule 11 motions are therefore denied.

The court also denied a motion for Section 1927 sanctions because there was no multiplication of the proceedings. The court noted that such a motion could be brought if the Plaintiffs refiled their complaint.

via Patel v. COLE SCHOTZ, PC, Dist. Court, D. New Jersey 2018 – Google Scholar

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