Category: Rule 11 Safe Harbor

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

District Court Declines to Sanction Pro Se Litigants Who Filed a Case Barred by Res Judicata


The plaintiffs are pro se litigants who sued FNMA in federal court in an effort to challenge a prior state court decision which foreclosed on their mortgage. Because the federal case was barred by res judicata (a doctrine prohibiting a party from litigating the same issue a second time after losing a prior case), FNMA filed a motion for Rule 11 Sanctions. The district court denied the sanctions motion because FNMA did not use the 21-day safe harbor provision in Rule 11, which would have given the plaintiffs 21 days to withdraw their case. The court did order that the plaintiffs were barred from filing any future pleadings without leave of court. The court reasoned as follows:

The same Rule “also provides procedural requirements that must be followed before sanctions can be imposed.” Shamoun v. Federal Nat. Mortg. Ass’n, 2013 WL 2237906, *9 (E.D.Mich. May 21, 2013). Among the requirements is a two-step process under 11(c)(2) of the rule, “known as the `safe harbor’ provision” which requires the party intending to make a motion for sanctions “to `first, serve the Rule 11 motion on the opposing party for a designated period (at least twenty-one days); and then file the motion with the court.'” Shamoun at *9 (citing Ridder v. City of Southfield, 109 F.3d 288, 293-94 (6th Cir.1997)). “This two-step procedure allows the opposing party twenty-one days to withdraw the challenged paper, claim, allegation, etc., and thus avoid Rule 11 sanctions.” Id. (citing Ridder at 294).

Defendants have not applied the two-step safe harbor procedure under subdivision (c)(1)(A) but instead, request that the Court issue a show cause order under its own authority. Defendants’ Brief at 17. A Court may impose sanctions sua sponte“after notice and a reasonable opportunity to respond.” Rule 11(c)(1)(3).

The Court declines to impose sanctions. First, Defendants have not applied the twostep safe harbor procedure or made the request for sanctions in a separate motion which are both required by subsection (c)(2). Defendants’ request for the Court to impose sanctions “sua sponte” under (c)(3) amounts to an end run around the safe harbor requirements of (c)(2) for parties seeking sanctions. Further, given that Plaintiffs are proceeding pro se and in forma pauperis, the sanction of costs and fees is inappropriate. See Hiles (declining to impose sanctions but enjoining the plaintiff from filing any additional motions without leave of Court).

Comment: this decision is a merciful application of the law.

Source: LNU v. Federal National Mortgage Association, Dist. Court, ED Michigan 2016 – Google Scholar