Category: Rule 11 Safe Harbor

Defendant Waited Too Long To File Rule 11 Motion


This case discusses a Rule 11 issue in the context of Bankruptcy Rule 9011. Plaintiff brought an adversary action against Discover Bank and its lawyer, Stephen Bruce, alleging that they violated the automatic stay by maintaining a garnishment over certain funds. The Defendants moved to dismiss the complaint, but their motion was denied. They then answered and served discovery requests. Eventually, the Defendants obtained summary judgment. At the conclusion of the case the Defendants moved for sanctions under Rule 9011. The court’s explanation:

The Sanction Motion was filed by Bruce on August 11, 2017, eighteen-and-a-half (18 ½) months after the filing of the Complaint, seventeen (17) months after the first safe harbor letter, sixteen (16) months after filing the Motion to Dismiss, nine (9) months after the second safe Harbor letter and the filing of the Motion for Summary Judgment and four-and-a-half (4 ½) months after the entry of the judgment in Bruce’s favor. If Bruce truly believed that the Law Firm’s conduct was so abusive and vexatious to warrant service of the safe harbor letters, and this Court has no reason to believe that Bruce wasn’t sincere in that belief, he should have pursued that motion by filing it shortly after the expiration of the twenty-one (21) day safe harbor in either February and/or November 2016. Instead, Bruce elected to wait and spend additional time and money in the discovery process and summary judgment process. The Court doesn’t know the reason for the delay, and the pleadings and oral argument did not enlighten the Court. It may have been because Bruce felt confident of the outcome and wanted to establish a precedent rather than cutting the litigation off at an early stage. “Suffice it to say that [Discover and Bruce] would be better served by reexamining their own litigation tactics rather than condemning plaintiff’s counsel for her litigation tactics.” Thompson v. United Transportation Union, 167 F.Supp.2d at 1260. The Court finds that Bruce’s Motion was not timely filed and can be denied on that basis alone, so is not necessary for the Court to decide the sanction motion on its merits. Accordingly,

IT IS ORDERED that Defendant Stephen L. Bruce Esq.’s Motion for Sanctions [Doc 90] is hereby DENIED.

In Re Waldrop

Nonparty Cannot File Rule 11 Motion


This seems rather obvious. The explanation:

Tokayer asserts that sanctions pursuant to Fed.R.Civ.P. 11 should be imposed on the Nimkoff Parties and their attorneys for filing several “baseless” motions against Tokayer and for filing a lawsuit against Tokayer that has been dismissed (Tokayer Motion at 4).

As an initial matter, Tokayer, as a non-party, lacks standing to seek Rule 11 sanctions in this action. See New York News, Inc. v. Kheel, 972 F.2d 482, 486 (2d Cir. 1992) (non-party attorney did not have right to intervene in action for purpose of seeking Rule 11 sanctions).

The third party, Tokayer, also failed to comply with the safe harbor. Source: NIMKOFF ROSENFELD & SCHECHTER, LLP v. RKO PROPERTIES, LTD., Dist. Court, SD New York 2017 – Google Scholar

Sanctions Denied Where Party Conducted A Pre-Filing Investigation


This was a Fair Debt Collection Practices Act case in which the Plaintiff sued three defendants. Ultimately, the defendants all obtained summary judgment.

One defendant filed a motion for Rule 11 sanctions. She argued that she had sold her interest in the company defendant and was not a proper defendant. She claimed that once the plaintiff was informed of that fact, he had a duty to drop her from the case.

The district court did not agree. First, it concluded that the party, Tauriac, did not meet the requirements of the Rule 11 safe harbor in that she failed to give 21 days notice before seeking sanctions. Second, the District Court concluded that the plaintiff had done a sufficient pre-filing investigation to warrant the inclusion of Tauriac in the complaint. The plaintiff had obtained documentation that appeared to contradict Tauriac’s claims. The court denied the sanctions motion.

The opinion is thoughtful and thorough and discusses all the factors to determine if sanctions were appropriate.

Source: Seamans v. HOFFMAN, SWARTZ AND ASSOCIATES, INC., Dist. Court, ND Illinois 2017 – Google Scholar

Sanctions Motion Denied Where Party Withdrew Claim Within 21 Days Of Receiving Sanctions Motion


Rule 11 contains a safe harbor, which allows a party to withdraw a claim within 21 days of receiving a sanctions motion. In this case, the plaintiff moved to voluntarily dismiss a design patent infringement claim within 21 days of receiving the sanctions motion. Rule 11 did not permit sanctions. The Defendants then sought sanctions under the court’s inherent authority, which the court denied. Sanctions under the court’s inherent authority are exceedingly rare and occur where the court believes that the party committed some egregious misconduct.

In sum, this is a classic example of the Rule 11 safe harbor in action.

Source: CAFFEINATE LABS, INC. v. VANTE INC., Dist. Court, D. Massachusetts 2017 – Google Scholar

3rd Circuit Holds That District Court Erred By Failing to Consider Sanctions Motion


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

To get sanctions you need to file a separate motion


This case is a reminder that a party cannot request sanctions in a reply brief. Rule 11 Sanctions can only be sought in a written motion after the party seeking sanctions complies with the text of the Rule, including the safe harbor. Source: Gonzalez v. PIONEER INDUSTRIAL SYSTEMS, LLC, Dist. Court, ND Illinois 2017 – Google Scholar

Court Dismisses Lawsuit But Declines to Sanction Former Teamster


The plaintiff sued the Teamsters for failing to grant him lifetime retirement benefits and health benefits. The plaintiff, an African American, fell six days short of the requirement for benefits.

The Teamsters contended that he did not have enough service to meet the requirement for a retirement benefit. The court agreed with the Teamsters and dismissed the lawsuit, but declined to sanction.  The court found the complaint untimely and dismissed the lawsuit.

Sanctions were denied because the complaint was not “so far from plausible” to warrant sanctions.

Source: Perry v. International Brotherhood of Teamsters, Dist. Court, Dist. of Columbia 2017 – Google Scholar