Category: Rule 11 Safe Harbor

Dershowitz Sanctioned By Arizona District Court

Dershowitz Sanctioned By Arizona District Court

On July 14, 2023, the District Court for Arizona issued an order denying Alan Dershowitz’ Application for an Order to Show Cause. The effect of this order is that Mr. Dershowitz was sanctioned by the district court for signing pleadings in the case captioned Kari Lake, et al. v. Adrian Fontes. No. 22-cv-00677-PHX-JJT. The plaintiff is a former candidate for governor of Arizona. The defendants are Maricopa county election officials.

The procedural history of the lawsuit is complicated. In April 2022, Lake filed suit against Maricopa County election officials to prohibit the use of electronic voting machines. The Court dismissed the case on August 22, 2022. Lake v. Hobbs, 623 F.Supp. 3d 1015 (D. Ariz. 2022). The Defendants moved for sanctions under Rule 11(b)(3). They “argued that Plaintiffs and their counsel made false allegations about Arizona elections in violation of Rule 11(b)(3) and brought this case for the improper purpose of ‘sowing doubts about the reliability and trustworthiness of elections for own financial and political benefit’ in violation of Rule 11(b)(1). Defendants further argued that the lawyers violated Rules 11(b)(2) and (3) and 28 U.S.C. § 1927. After briefing the court granted the motion and held that sanctions were warranted under Rule 11 and Section 1927. Dershowitz then filed an Application for Order to Show Cause to order the Maricopa Defendants to “show cause as to why an award of sanctions should be entered against Mr. Dershowitz personally or his consulting firm.” Dershowitz argued that his role in the matter was very limited and noted that he signed the complaint and first amended complaint as “of counsel.” Dershowitz argued that the words “of counsel” meant that his involvement was too limited for him to be sanctioned.

On May 20, 2022, the Maricopa Defendants sent Dershowitz and the other lawyers for Kari Lake a safe-harbor letter advising them that the Defendants believed the lawsuit was frivolous.

The District Court rejected Dershowitz’s argument that he did not violate Rule 11. To be sanctioned under Rule 11, the lawyer had to have signed the pleading. Here, Dershowitz signed both the original complaint and the amended complaint. By signing a complaint, the lawyer certifies that the filing is “not being presented for an improper purpose” and that the “legal contentions are warranted by existing law or by a non frivolous argument for extending, modifying, or reversing existing law or for establishing new law” and “the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.” Once the lawyer signs the pleading, Rule 11 applies even if the lawyer later withdraws from the case.

The District Court rejected the argument that Dershowitz had very limited involvement in the case because Dershowitz did sign the complaint and the amended complaint. The Court also rejected Dershowitz’s argument that he was listed as “of counsel” on the Complaint. “A contrary ruling here could diminish the significance of attorney signatures and cause courts to question whether they can be relied upon with confidence. If would offer safe harbor to attorneys who designate themselves ‘of counsel’ no matter the inadequacy of the filings they sign.” p. 23.

“Failing to impose meaningful sanctions here might very well encourage others to follow suit by lending their credibility to documents filed in court without facing any real consequence if their certifications prove hollow or incomplete. The need for general deterrence is therefore significant.” p. 25.

The Court upheld the Rule 11 sanctions and the 28 U.S.C. §1927 sanctions against Dershowitz. Because of his limited involvement, the court held that Dershowitz would only be held responsible for 10% of the attorney fee award in favor of the Defendants. Dershowitz has the right to appeal the decision and the Ninth Circuit may view matters differently.

Comment: the opinion is thoughtful and well-written. Generally, sanctions cases come down to a number of factors. In this case, the Defendants warned the lawyers that Defendants believed the lawsuit was frivolous and the lawyers did not heed those warnings. Additionally, I agree with the Court’s holding that listing a lawyer as “of counsel” should not give that lawyer a defense to sanctions litigation. The opinion also recognizes the limited role that Dershowitz played in the litigation and it reduces his portion of the attorney fee award. Increasingly, courts and attorney disciplinary bodies have been highly unsympathetic to lawyers who made false allegations about voting machines and the conduct of recent elections. Courts may regard these lawsuits as a threat to the fabric of democracy. Numerous lawyers for former President Trump have been sanctioned by courts and subjected to attorney disciplinary investigations.

Before you sign a complaint, consider whether you have a factual basis to claim that the allegations in the complaint are true. If you do not have any such basis, do not sign. Ask yourself “Is there evidence that voting machines miscount votes or favor candidates of one party over another party?” Is the evidence credible or is it merely conjecture?

Failing to File Separate Motion for Sanctions Fatal to Sanctions Claim

Failing to File Separate Motion for Sanctions Fatal to Sanctions Claim

The Rule 11 safe harbor provision requires a party seeking sanctions to file a separate motion for sanctions. Here, the party seeking sanctions combined the request for sanctions with a motion to dismiss. Result: sanctions denied. In Hison v. Lloyd, No. 22-10943 (E.D. Mich. 2023), the court ruled as follows:

“The Court denies Defendants’ request for sanctions under Fed. R. Civ. P. 11 because Defendants failed to strictly comply with Rule 11’s “safe-harbor provision” which states as follows:

A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets.

Fed. R. Civ. P. 11(c)(2) (emphasis added). Thus, Rule 11 expressly requires that a “motion for sanctions must be made separately from any other motion.” Fed. R. Civ. P. 11(c)(2). Here, however, Defendants combined their motion seeking Rule 11 sanctions with their Motion to Dismiss. As such, Defendants failed to strictly comply with Rule 11’s safe-harbor provision and that failure “precludes imposing sanctions on [Defendant]’s motion.” Penn, LLC v. Prosper Business Dev. Corp.,773 F.3d 764,767 (6th Cir. 2014).”

Comment: failing to follow the rule gives the district court an easy way to avoid spending time on a sanctions motion.

A Nasty Letter Isn’t A Sanctions Motion

A Nasty Letter Isn’t A Sanctions Motion

Rule 11 has a safe harbor that allows the opposing party to withdraw an offending pleading within 21 days after he is served with the motion for sanctions. Many sanctions motions are denied because the party seeking sanctions writes a letter to the opponent, but does not actually serve a motion for sanctions. This court discussed this common problem and denied the motion for sanctions.

“Rule 11(b) provides that by presenting a pleading to a court, an attorney certifies that, after conducting a reasonable inquiry, evidentiary support exists for the factual allegations pled in the complaint. Fed. R. Civ. P. 11(b)(3). If a party believes that it has been served with a complaint for which no reasonable inquiry had been conducted, or for which no evidentiary support existed, then he may move for sanctions pursuant to Rule 11(c). Fed. R. Civ. P. 11(c)(1). The movant may not, however, file the motion for sanctions with the court unless the motion has been served on the non-moving party at least twenty-one (21) days prior to filing, and the non-moving party has not withdrawn or otherwise corrected the challenged writing within the twenty-one-day period. Fed. R. Civ. P. 11(c)(2). Compliance with the “21-day safe harbor” rule is a condition precedent to sanctions. RMC Publ’ns, Inc. v. Doe, No. 3:07-cv-3170-JFA, 2008 WL 11472127, at *3 (D.S.C. Feb. 5, 2008) (citing Brickwood Contractors, Inc. v. Datanet Eng., Inc., 369 F.3d 385, 393 (4th Cir. 2004)).

There is no dispute that Defendant failed to serve the motion for sanctions and memorandum prior to filing it with the Court. Instead, Defendant sent a letter to Plaintiff’s counsel on December 15, 2021, discussing the purported flaws in Plaintiff’s claims and demanding that she dismiss her claims with prejudice or Defendant “intends to file . . . a Rule 11 motion for sanctions…”. (Doc. No. 10-6, pp. 1, 6). Defendant argues that this letter satisfied the Rule 11 the safe harbor requirements. The Court disagrees. The Fourth Circuit has stated:

The requirements of the rule are straightforward: The party seeking sanctions must serve the Rule 11 motion on the opposing party at least twenty-one days before filing the motion with the district court, and sanctions may be sought only if the challenged pleading is not withdrawn or corrected within twenty-one days after service of the motion.

Brickwood, 369 F.3d at 389 (emphasis added); see also Hamlin v. TD Bank, No. 1:13-CV-00200-MR-DSC, 2014 WL 3101942, at *3, n.2 (W.D.N.C. July 4, 2014) (“The motion for sanctions must be served on the offending party at least twenty-one days before filing and must describe in detail the alleged offending conduct. Therefore, counsel’s letter threatening to file a motion for Rule 11 sanctions in the event that the motion to dismiss was granted was not sufficient to trigger the safe harbor provision of Rule 11(c)(2).”).”

McFee v. Carolina Pad, LLC, 3:21-cv-633-GCM (W.D. North Carolina February 15, 2022).

So the procedure is simple: prepare a motion for sanctions and serve it on the other party and wait 21 days before filing it with the court.

Ed Clinton, Jr.

Federal Judge Sanctions Lin Wood, Sidney Powell and other lawyers

Federal Judge Sanctions Lin Wood, Sidney Powell and other lawyers

In King v. Whitmer, No. 20-13134, Judge Linda Parker issued a 110 page opinion sanctioned several lawyers who filed the complaint and the amended complaint under Rule 11, the Court’s inherent authority and 28 U.S.C. §1927. This opinion is very significant and it may cause changes in the way election law is practiced in the future. The Court found that the allegations in the Complaint lacked a good faith basis in law and fact and that the lawyers vexatiously multiplied the proceedings. The court used every possible ground to support the sanctions award and made credibility findings.

A link to the opinion is here: https://www.michigan.gov/documents/ag/172_opinion__order_King_733786_7.pdf

At the time these lawsuits were brought, they appeared to me to be reckless and risky. It is one thing to allege that a voter was disenfranchised. It is another thing all together to allege that the entire election was a fraud.

Can you file a Rule 11 Motion After Judgment Is Entered?

Rule 11 contains a number of procedural requirements. You must serve the motion for sanctions 21 days before you file it to give the other party an opportunity to withdraw the pleading. One question that has received different answers is whether ot not you can file a motion for sanctions after final judgment is entered.

The case, Blue Heron Commercial Group, Inc. v. Lee Webber, 18-cv-467 (MD Florida June 20, 2019) holds that the motion for sanctions must be filed before final judgment is entered. It is noteworthy that the defendants obtained summary judgment against Blue Heron before they filed the sanctions motion.

As to the timeliness of a Rule 11 motion, the Eleventh Circuit has analyzed Rule 9011 of the Federal Rules of Bankruptcy Procedure, which is “substantially identical” to Rule 11, and “agree[d] with the Second, Fourth, and Sixth Circuits that the service and filing of a motion for sanctions must occur prior to final judgment or judicial rejection of the offending motion.” In re Walker, 532 F.3d 1304, 1309 (11th Cir. 2008)(emphasis added)(quotation and citation omitted). The Eleventh Circuit in Walker thus affirmed the bankruptcy court’s denial of a motion for sanctions because the “motion for sanctions was filed after the offending motion had been denied.” Id.

Here, although it is undisputed that Defendants complied with Rule 11’s safe harbor provision, the Court finds that Defendants’ Motion for Sanctions is due to be denied because Defendants filed the motion after the Court granted summary judgment, entered final judgment, and disposed of Blue Heron’s alleged frivolous pleading. Id. Defendants, however, contend that Walker is inapplicable under the instant facts because, unlike this case, the movant in Walker sought sanctions prior to the conclusion of the 21-day safe harbor provision. The Court does not find that distinction to be determinative in this case because, although the court discussed the safe harbor provision in its analysis, the Eleventh Circuit in Walker did not ultimately base its ruling on the movant’s failure to satisfy the safe harbor provision. Walker, 532 F.3d at 1309. Rather, as discussed above, the court affirmed the bankruptcy court’s denial of sanctions because the “motion for sanctions was filed after the offending motion had been denied.” Id.

The Seventh Circuit follows a different rule, allowing a motion for sanctions to be filed after judgment.

The Blue Heron court also declined to award sanctions under its inherent powers on the ground that the arguments raised by Blue Heron were not frivolous.

The issue as to whether you must file a sanctions motion before judgment is entered is an unsettled question of law. The rules in one circuit may differ from the rules in another circuit. Someday the Supreme Court may resolve this conflict.

Ed Clinton, Jr.

http://www.clintonlaw.net

Federal Court Sanctions Attorney For Time-Barred Lawsuit

The case is Doe v. Albuquerque Public Schools, 18 cv 85 (D. New Mexico April 3, 2019). Plaintiff claimed that she was raped by one of the defendants when she was a student. The rape claim was alleged under 42 USC Section 1983. Unfortunately for the plaintiff the her claims were time-barred and the court entered judgment for the defendants.

Because the Defendant did not comply with the Rule 11 safe harbor (giving 21 days to the other side to withdraw the pleading), the Rule 11 motion was denied.

The court, however, elected to award sections pursuant to 28 U.S.C. §1927 because it should have been clear to the lawyer for plaintiff that the claims were time-barred. The court explained its ruling in this passage of the opinion:

The Court agrees with Defendant’s counsel that Plaintiff’s counsel failed to stop, think and investigate before filing the complaint, and the Court finds that sanctions under 28 U.S.C. §1927 are appropriate in order to deter such a cavalier approach to litigation. The Court is guided in particular by the heinous nature of the alleged acts, and acknowledges the damaging effect such acts can have on victims in general.

The complaint in this case alleges horrendous acts of sexual abuse perpetrated by Defendant upon the Plaintiff which occurred approximately twenty years ago but allegedly were only discovered by Plaintiff in 2014 through therapy. While the Court is mindful of the damage that can be done to victims of sexual abuse, the Court also acknowledges that there are occasions when defendants are falsely accused in these types of cases. Under these circumstances, Plaintiff’s counsel was obliged to exercise vigilance and thoroughness before filing a complaint of this nature, but instead, counsel forged ahead without caution or care and filed a complaint on behalf of an anonymous Plaintiff accusing Defendant Beems of terrible conduct that supposedly happened many years ago but surfaced for the first time in 2018 when the complaint was filed as a public document.

In bringing these federal claims and in failing to adequately examine the claims before filing the case, counsel for Plaintiff has shown an indifference to the law that saddled the opposing party, Mr. Beems, with unproven allegations that may follow him for years. This is not to say that Plaintiff’s claims were frivolous, but they do not need to be frivolous to warrant sanctions under §1927. See Mark Ind., Ltd. v. Sea Captain’s Choice, Inc., 50 F.3d at 732. Unmindful of the possible consequences, Plaintiff’s counsel proceeded to include federal claims in the complaint without seriously examining them to see whether they were viable even on threshold timeliness issues. In doing so and in continuing to pursue these claims, Plaintiff’s counsel’s zealousness in representing his client gave way to recklessness, which in turn led to conduct that is proscribed by §1927.

Ed Clinton, Jr.

The Clinton Law Firm

Sanctions Awarded For Frivolous Counterclaim

Procedural Default Defeats Sanctions Motion

If you wish to move for Rule 11 sanctions, you must take the time to (a) give the other party 21 days to withdraw the offending paper or pleading; and (b) file the motion for sanctions as a separate motion. Failure to do that risks defeat.

This is the case King v. Wang S.D. New York 2018. King argued that Wang had presented frivolous legal theories in an amended pleading. The court never reached those arguments because King did not comply with the procedural requirements of Rule 11. The explanation for the ruling:

This Court declines to discuss the merits of the Kings’ arguments for sanctions because it finds that the Kings have failed to comply with Rule 11’s strict procedural requirements. Specifically, they failed to make their motion “separately from any other motion.” Fed. R. Civ. P. 11(c). Rather, they tacked their motion for sanctions onto their motion to strike the Amended TPC. See Bower, 2015 WL 10437758, at *3 (denying a motion for sanctions where the defendants’ “purported Rule 11 motion consist[ed] of a single, conclusory sentenced” added to the end of a brief); see also Williamson, 542 F.3d at 51 (affirming district court’s decision to deny request for sanctions pursuant to Rule 11 because the defendants failed to “make a separate motion for sanctions”).

The Kings also failed to comply with Rule 11(c)’s safe harbor provision. The parties do not dispute that the Second Circuit held in Lawrence v. Richman Grp. of CT LLC, 620 F.3d 153, 158 (2d Cir. 2010), that “the filing of an amended pleading resets the clock for compliance with the safe harbor requirements of Rule 11(c)(2) before a party aggrieved by the new filing can present a sanctions motion based on that pleading to the district court.” The parties dispute, however, whether Lawrence applies when a party has unilaterally amended its pleading, as opposed to when a party was granted leave to replead and then filed a new complaint, as was the case in Lawrence.

This Court finds that the rule in Lawrence applies to “all pleadings” and, therefore, applies even when a party has exercised its right to amend its pleading as a matter of course.[1] Lawrence, 620 F.3d at 157. Other courts in this district have applied Lawrence to pleadings amended as a matter of course under Federal Rule of Civil Procedure 15(a). See e.g., Rates Tech. Inc. v. Broadvox Holding Co., LLC, No. 13 CIV. 0152 SAS, 2014 WL 46538, at *5 (S.D.N.Y. Jan. 6, 2014) (holding that defendants were required to serve a new sanctions motion after plaintiffs, who had amended their complaint as a matter of course, filed a new complaint). This Court, like the district court in Lawrence, may be faced with “relentless motion practice”; however, as cautioned by the Second Circuit, that does not give this Court — or the Kings — the ability to “negate the safe harbor requirements of Rule 11(c)(2).” Lawrence, 620 F.3d 160.

Because the Kings have failed to meet the procedural requirements of Rule 11(c)(2) Court is barred from granting “any award of sanctions” and this motion is denied. Targum v. Citrin Cooperman & Co., LLP, No. 12 CIV. 6909 SAS, 2013 WL 6087400, at *9 (S.D.N.Y. Nov. 19, 2013).

Failure to Observe 21-day Safe Harbor Dooms Sanctions Motion to Defeat

A defendant who obtained dismissal of the claims against her on the ground that the diversity amount was not met. The plaintiff sued the Defendant for failing to return his dog to him. (The dog eventually ended up in a shelter in Canada).

Because the defendant did not serve her Rule 11 Sanctions motion and give the plaintiff 21 days to drop her from the case, the sanctions motion was denied.

via Barringer v. Whitworth, Dist. Court, ED Michigan 2018 – Google Scholar

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

An Old But Important Sanctions Case Where Sanctions Were Defeated Because the Defendant Did not Comply with the Safe Harbor.

This is a case where the Defendant sought sanctions from an attorney but never complied with the safe harbor required by Rule 11(c)(2). The safe harbor requires the party seeking sanctions to serve an actual motion on the other side. Instead, the Bank argued that it had “substantially complied” by writing two letters to the lawyer. The District Court awarded sanctions, but the Seventh Circuit reversed the award. The explanation follows:

To return to the case at hand, PNC Bank simply did not comply with this warning–shot/safe–harbor requirement. It did not prepare and serve a Rule 11 motion on NITEL and Riffner, nor did it allow 21 days for them to withdraw NITEL’s claims. The district court concluded that PNC Bank’s two settlement offers with Rule 11 threats to Riffner were sufficient warning shots under Rule 11(c)(2) on the theory that they substantially complied with the rule. NITEL II, 2015 WL 1943271, at *4. To support the substantial compliance approach, the court cited our decisions in Methode Electronics, Inc. v. Adam Technologies, Inc., 371 F.3d 923, 927 (7th Cir. 2004) (dicta), and Matrix IV, Inc. v. American National Bank & Trust Co. of Chicago, 649 F.3d 539, 552–53 (7th Cir. 2011).

Our line of cases on “substantial compliance” with the warning–shot requirement began with Nisenbaum v. Milwaukee County, 333 F.3d 804, 808 (7th Cir. 2003), where we concluded that where the failure to satisfy the warning–shot requirement was only “technical,” the moving party’s substantial compliance with the warning–shot requirement entitled it “to a decision on the merits.” In Nisenbaum, we held that there was substantial compliance with Rule 11 because the defendants sent a letter—rather than a motion—that explained the grounds for sanctions and provided more than 21 days to remedy the problem. Insisting on a formal motion seemed unduly formalistic.

……

PNC Bank’s warning–shot letters fell far short of even the generous target of substantial compliance.5

On July 31, 2012, before discovery began, PNC Bank’s lawyer sent a letter to Riffner offering to settle the case. The letter explained the defects in the breach of contract claim. We assume the explanation of those defects was sufficient. The problems in terms of substantial compliance were that the letter demanded dismissal of the suit within eight days, as well as payment to PNC Bank of $9,195 for its fees and costs. The letter also demanded within five days a written response agreeing to the demand. The letter concluded: “If I do not receive written confirmation by that date, please be advised that PNC will be seeking sanctions under Federal Rule 11 against NITEL and your firm ․ .”

On April 2, 2013, shortly after the close of discovery and before moving for summary judgment, PNC Bank’s lawyer sent a second settlement offer. It again reviewed the serious problems with NITEL’s case and explained why the suit was frivolous. This letter proposed different settlement terms, demanding that NITEL dismiss the complaint with prejudice and pay PNC Bank $24,000. The letter demanded written acceptance within six days. The settlement proposal concluded much as the earlier letter had: “If I do not receive written confirmation by that date, please be advised that PNC will seek sanctions under Federal Rule 11 against your firm and NITEL, for all fees and costs incurred by the bank in defending your client’s baseless and patently false complaint.”

The Rule 11 threats did not transform PNC Bank’s settlement offers into communications that substantially complied with the Rule 11(c)(2) warning–shot/safe–harbor requirements. Even if we treat the criticisms of NITEL’s case and litigation tactics as containing the equivalent of a Rule 11 motion, the letters simply did not offer NITEL or Riffner the 21–day safe harbor that was offered in Nisenbaum or Matrix IV. Substantial compliance requires the opportunity to withdraw or correct the challenged pleading within 21 days without imposition of sanctions. Neither PNC Bank letter offered that opportunity. PNC Bank was entitled, if it chose, to huff and puff about Rule 11 in its settlement demands for dismissal of baseless claims. But its posturing did not amount even to substantial compliance with the warning–shot/safe–harbor provision, let alone to the actual compliance that other circuits demand.

The district court’s award of sanctions against Riffner is REVERSED.

via ROBERT RIFFNER v. PNC BANK | FindLaw