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Failure to Perform Reasonable Investigation Can Leave Filing Attorney Facing Sanctions

Arthur L Hunter Jr

Failure to Perform Reasonable Investigation Can Leave Filing Attorney Facing Sanctions
ParkerDeen via Getty Images

Rule 11 of the Federal Rules of Civil Procedure imposes an affirmative duty on parties to investigate the factual basis of their claims and defenses before documents are filed with the court. The rule provides, in pertinent part:

(b) Representations to the Court: By presenting or representing to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief...
(3) the allegations or other factual contentions have evidentiary support . . .

Fed. R. Civ. Proc. 11(b)(3). On its own, a court can order an attorney, law firm, or party to show cause as to why a party’s conduct has not violated Rule 11. Fed. R. Civ. Proc. 11(c)(3). Courts can look to certain factors in assessing whether a party has violated Rule 11, including how much time the party or attorney had to investigate the claims, the extent to which the attorney relied on the client for information, the feasibility of investigation, and the complexity of the case, among others. Marceaux v. Lafayette City-Par. Consol. Gov't, 614 F. App'x 705, 709 (5th Cir. 2015) citing Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 875 (5th Cir.1988) (en banc). In determining compliance with Rule 11, “the standard under which an attorney is measured is an objective, not subjective, standard of reasonableness under the circumstances.” Whitehead v. Food Max of Miss., Inc., 332 F.3d 796, 802–03 (5th Cir. 2003).

In the recent Packrite, LLC v. Graphic Packaging Int’l, LLC  decision, the magistrate judge issued an order requiring plaintiff’s counsel to show cause why it did not violate Rule 11 when it filed its motion for spoliation. The court focused its on three key representations underlying the plaintiff’s motion:

  • The defendant “completely lost” and/or “permanently erased” all files stored in the email folders that belonged to Employee #1;
  • the defendant caused the “wholesale deletion” of the e-mail folders of Employee #1; and
  • that it was reasonable to suspect that the “termination” of Employee #2 was relevant to the plaintiff’s business-tort claims.

Packrite, LLC v. Graphic Packaging Int’l, LLC, No. 1:17-cv-1019 (M.D.N.C. Dec. 4, 2020). From the court’s review of the case record, there appeared to be evidence that conflicted with the plaintiff’s counsel’s representations. For example, with the records for Employee #1, the defendant produced over 1,000 of Employee #1’s emails. And with Employee #2, there was uncontested evidence establishing that Employee #2 informed plaintiff’s counsel that he resigned from his job and was not terminated. Further evidence from the records revealed that Employee #2 resigned from his job with the defendant due to a medical issue and that he left the defendant on good terms.

In issuing its show-cause order, the court questioned how plaintiff’s counsel could have met his Rule 11 obligation to perform a reasonable inquiry in light of these clear contradictions. The consequence is that plaintiff not only lost its own motion for spoliation, but also plaintiff’s counsel faces potential sanctions for having brought it in the first place. The court’s eventual determination in Packrite—as to whether plaintiff’s counsel knowingly made false representations—is thus a blunt reminder of the court’s power to ensure that parties make arguments supported by the evidence.