LITIGATORS, CHOOSE YOUR SANCTIONS
Most attorneys know that sanctions are available in federal court
under Fed. R. Civ. P. Rule 11. But should Rule 11 be used for
discovery sanctions or should you use Rules 26(g) or 37? How bad
must the conduct be in order to get sanctions? Is one violation
enough or does there have to be pattern? How do you know which
sanctions rule to choose?
There is an arsenal of weapons to use in the sanctions battle.
Some are akin to shotguns in that they cover an array of abuses.
Others pinpoint a specific prohibited activity. The means chosen
should fit the target.
The Ninth Circuit has carved out an exception to this general
rule. Filing a non-frivolous complaint is not sanctionable in
the Ninth Circuit if the complaint is well supported by law and
facts, even if it is filed for an improper purpose.
Subjective good faith is not a defense to a request for
sanctions: Objective good faith is required. The test is one of
"reasonableness under the circumstances." As the Seventh Circuit
noted, "An empty head but a pure heart is no defense." Thornton
v. Wahl, 787 F.2d 1151, 1154 (7th Cir. 1986), cert. denied, 107
S.Ct. 181 (1986). Both parties and counsel are held to this
standard. Business Guides, supra.
Generally, the paper as a whole must be frivolous or harassing:
A frivolous argument will not render an entire paper
sanctionable.
How much legal and factual research is enough to avoid sanctions
under Rule 11's "reasonable inquiry" requirement? There is no
one test. But Ninth Circuit courts have considered the following
to decide if the inquiries made were reasonable: (1) Did the
attorney speak directly with the client or just rely on
information supplied by forwarding counsel; (2) Did the attorney
conduct personal interviews of the parties and witnesses; (3) Was
it reasonable to rely on the client for information when there
were alternate sources of information; and, (4) Is the attorney
experienced in this type of matter?
Local counsel may be sanctioned for filing a sanctionable paper
for out of town attorneys. Read and think about all you sign and
file for other lawyers!
Another scatter shot rule is 28 U.S.C 1927 which warrants
sanctions for all unreasonable and vexatious litigation
multiplication which is in bad faith. Section 1927 applies only
to attorneys and is strictly construed. There is no signing
requirement under Section 1927, so it extends to any misconduct
which multiplies litigation unreasonably. It is a penal statute
enacted to deter unnecessary delay. This section applies to
cases in any federal court of the United States, unlike Rule 11
which is confined to district courts.
When there is no rule defined deterrent suited to bad faith
conduct, the court may invoke its own "inherent power" to control
counsel and parties. Inherent power sanctions are limited to
willful abuse of judicial process or bad faith litigation: There
must be "clear evidence" that the actions are for harassment,
delay, or another improper purpose. It is sometimes called "the
bad faith exception to the American Rule" that parties normally
bear the expenses of their own litigation.
No one can hide: The court has the power to sanction counsel and
clients, prevailing and non-prevailing parties, those in federal
civil or criminal court, in any stage of the proceedings. It may
award a fine, require payment of reasonable attorneys' fees and
expenses, disqualify counsel, preclude claims or defenses,
dismiss the action, or enter a default judgment.
Then, there is the special forces arsenal. Whenever possible,
use sanctions rules that apply to specific instances of
misconduct: failing to appear at a pre-trial conference, to file
proper discovery papers, to comply with proper discovery, and for
affidavits submitted pursuant to a summary judgment motion.
Under Fed R. Civ. P. Rule 16 (f), reasonable attorneys' fees may
be awarded for failing to cooperate in good faith in a scheduling
or a pre-trial order. In addition, an attorney may be sanctioned
for failing to appear at a scheduling or pre-trial conference.
The party or a party's attorney may be sanctioned if they are
substantially unprepared to participate in a scheduling
conference.
Fed R. Civ. P. Rule 26(g) can be described as a Rule 11 that
applies specifically to signed discovery documents such as
discovery requests, responses, and objections to requests. Much
of the language of Rule 26(g) is identical to Rule 11. Both
require a reasonable inquiry into the factual and legal basis of
a paper filed, and certification that the papers are not being
filed for an proper purpose. The attorney's signature on a
written discovery document also certifies that the papers are not
unreasonable or unduly burdensome or expensive in light of the
case. Like Rule 11, Rule 26(g) sanctions are mandatory once the
court finds that there has been sanctionable conduct.
Discovery abuses that do not involve a signed document may be
sanctioned under Rule 37. Specific sanctions may be awarded for
failure to comply with an order, failure to admit the genuineness
of a document which is later proven true, for a party's failure
to attend its own deposition or to serve answers to
interrogatories, and for failure to participate in the framing of
a discovery plan. It should be noted that some Rule 37 sanctions
are mandatory, while others are within the court's discretion.
Rule 37 and 26(g) cover different aspects of discovery abuse
sanctions. Rule 37 does not apply to papers that are signed,
while Rule 26(g) covers all signed discovery documents.
Likewise, Rule 26(g) does not allow sanctions for failure to
serve a response to a document request, but Rule 37 does apply in
this case. Be sure that you tailor your requests for sanctions
to the appropriate discovery sanctions rule.
Rule 56(g) also requires sanctions for an affidavit submitted
pursuant to a summary judgment motion that is presented in bad
faith or solely for the purpose of delay. The court may order
sanctions of reasonable expenses, or may hold the offending party
or attorney in contempt.
by
Sheldon Mak Rose & Anderson
Lawyers who know how to use sanctions are able to recover fees
and costs otherwise charged to their clients due to unnecessary
litigation. This is an impressive achievement in our American
system of jurisprudence, where each party usually bears its own
expenses. SOURCES OF POWER & HOW TO TAP THE FOUNTAIN-HEAD
Rule 11 sanctions cover any signed papers filed in federal
district court. Sanctions may be awarded for filing three types
of papers: factually frivolous (not "well grounded in fact");
legally frivolous (not "warranted by existing law or a good faith
argument for the exclusion, modification or reversal of existing
law."); and papers "interposed for an improper purpose." Business
Guides, Inc. v. Chromatic Comm. Entr. Inc., 892 F.2d 809 (9th
Cir. 1989). Reasonable expenses and fees may be awarded under
this Rule, and both the attorney and party are vulnerable. CONCLUSION
There are established rules of conduct for litigation.
Unfortunately, the tactics adopted by some are akin to guerilla
warfare. It has been laughingly suggested that we should put
aside the rules and let counsel choose their own weapons. As an
alternative, the litigation "weapons" outlined above may make
opposing parties and counsel pay for frivolous pleadings and
vexatious litigation conduct.