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April 27, 2017 Practice Points

Motions for Rule 11 Sanctions Should Conserve Rather Than Misuse Judicial Resources

When might sanctions be awarded under Fed. R. Civ. P. 11? A recent Third Circuit case provides an example of when such a motion should not be made.

Ronald Hedges

When might sanctions be awarded under Fed. R. Civ. P.11? Moeck v. Pleasant Valley School District,844 F.3d 387 (3d Cir. 2016), provides an example of when such a motion should not be made.

Moeck arose out of allegations of physical mistreatment and gender discrimination suffered by two minor siblings at a high school. The siblings and their mother brought suit against the school district and several individuals. After discovery was completed, the defendants moved for summary judgment. Before that motion was decided, the defendants moved for Rule 11 sanctions, arguing that discovery had shown that the plaintiff’s pleadings included false statements and that their claims were meritless. Separately, the defendants sought Rule 11 sanctions for alleged false statements made by the plaintiffs in opposition to summary judgment. The district court found the sanctions motions to be meritless, “noting that these Rule 11 motions tax judicial resources and emphasizing that the truth of the allegations in a case of this sort is revealed through discovery and addressed at summary judgment or trial, not via motions for sanctions.” The defendants were granted summary judgment and they appealed the denial of sanctions. The Third Circuit Court of Appeals affirmed.

After addressing a procedural question the circuit held that the district court had not abused its discretion in denying the sanctions motion: “Some discrepancies exist between the complaints and Plaintiffs’ submissions ***, on the one hand, and facts elicited through discovery, on the other, but Plaintiffs’ pleadings have a factual basis and are not ‘patently unmeritorious or frivolous.’” The Circuit had this to say about the district court’s finding that the motions were baseless:

The District Court also did not err in noting that Defendants’ Rule 11 motions were, essentially, a waste of judicial resources, and that counsel in this case “ha[d] clogged the docket with numerous motions for sanctions, motions for discovery and even a motion to disqualify counsel.” *** While the focus of Rule 11 is on whether a claim is wholly without merit, and is not dictated by whether resources will be expended in deciding the motion, Rule 11 motions should conserve rather than misuse judicial resources. See Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 99 (3d Cir. 1988) (“Rather than misusing scarce resources, [the] timely filing and disposition of Rule 11 motions should conserve judicial energies.”). Thus, the District Court appropriately noted the history of counsels’ conduct in this case and the importance of deciding the merits of the dispute, rather than ancillary issues.

Moeck teaches that careful consideration should be given to bringing a Rule 11motion. First, Rule 11 does not reach alleged misrepresentations that arose “in the context of discovery” because these are not within the scope of the rule. Second, the alleged misrepresentations must be “patently unmeritorious or frivolous” rather than “fact-sensitive issues” to be addressed on the merits. Third, courts hold Rule 11 motions to “stringent” standards because they run the risk of spawning collateral litigation as well as increasing “tensions” among litigators and between bench and bar.

Ronald Hedges is with Dentons in New York, New York.

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