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AYoungLawyer'sGuidetoRule11Sanctions
ByMelissaL.StuartJune20,2012

Asayounglawyer,thereisnothingmoreexcitingthanlandingwhatyouthinkmightbe
yourfirstbigcase.Ontheotherhand,asayounglawyer,thereisnothingmorepetrifying
thanlearningthatopposingcounselisseekingRule11sanctionsagainstyoubecauseyou
failedtodoanadequateprefilinginvestigationintoyournewclientsclaims.Thisarticle,
whichisthefirstinatwopartseries,presentsabriefsummaryofRule11andwhatis
reasonableduediligencetoavoidsanctions.Parttwowillexaminewhatisrequiredwhen
seekingsanctions,andwhattodooncesanctionsaresought.
PrefilingInvestigation
Rule11statesinpartthatattorneysmustnotfilesuitwithoutevidentiarysupportforthe
allegationscontainedinthecomplaint.Putsimply,Rule11requiresanattorneytostop,
think,andinvestigatebeforefilingapaperwiththecourt.Thisrequiresanattorneyto
makeanobjectivelyreasonableinquiryintothefactsandlawpriortofilingandnotto
pursueanactionthatisnotobjectivelyreasonablebasedonthefacts.Bothprongsare
highlyfactdependent,withbroaddiscretionreservedtothetrialcourt.
Insomejurisdictions,reasonableinquiryintothefactsisathresholdrequirementthatfirst
examineswhethertheprefilinginvestigationwasunreasonablebasedonthecircumstances
inwhichcasesanctionsshouldbeimposedratherthanwhethertherewasareasonable
beliefthatthefactssupportedtheallegations.SeeChandlerv.Nw.BankMinn.,NatlAssn,
137F.3d1053,1057(10thCir.1998)(imposingsanctionswhenattorneyfailedtoconduct
areasonableinquiry,despiteareasonablebeliefthattheallegationswerebasedinfact)see
Henryv.FarmerCityStateBank,127F.R.D.154(C.D.Ill.1989)(imposingsanctionswhen
claimwasnotwellgroundedinlaw,despitebeingadequatelyinvestigated).Inthese
jurisdictions,onlyafteritisdeterminedthataninitialinvestigationwasreasonable,thefocus
thenshiftstowhetherthereisanyfactualsupportfortheallegations.Thus,sanctionswould
beappropriateonlyifeithertheprefilinginvestigationwasunreasonableortheprefiling
investigationwasreasonablebuttheclaimsarebaseless.

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Bycontrast,otherjurisdictions,suchasthecourtinInreKeeganManagementCo.,
SecuritiesLitigation,78F.3d431,43435(9thCir.1996),treattheconditionsas
disjunctivesuchthatsanctionswouldnotbeappropriatesolongastherewaseithera
reasonableprefilinginvestigationorreasonablefactualsupportfortheallegations.Inother
words,sanctionsareappropriateonlywhentheprefilinginvestigationwasunreasonableand
theallegationsarebaseless.
ReasonableInquiry
Thereareseveralfactorsadistrictcourtcouldconsidertodeterminewhetheran
investigationwasreasonable:
thetimeavailableforinvestigation
theextentoftheattorneysrelianceontheclientforthefactualsupportforthedocument
thefeasibilityofaprefilinginvestigation
whetherthesigningattorneyacceptedthecasefromanothermemberofthebaror
forwardingattorney
thecomplexityofthefactualandlegalissuesand
theextenttowhichdevelopmentofthefactualcircumstancesunderlyingtheclaimrequires
discovery.

Thecourtconsidersthetotalityofthefactorsbasedonthecircumstancesnoonefactoris
dispositiveorgivengreaterweightthananother.However,consideringthedesirefor
restraintonsanctions,inclosecallstheattorneywhosefilingischallengedisentitledtobe
giventhebenefitofthedoubt.
Ingeneral,attorneysshouldattempttocorroboratetheirclientsstory.Whatindiciaof
corroborationareneededdependonthecircumstances,but,generally,anattorneyshould
interviewtheclientindetailreviewavailabledocuments(i.e.,fortheinitialcomplaint,those
withintheclientspossessionorthatarepubliclyavailableandforsubsequentfilings,what
hasbeenproducedthroughdiscovery)interviewwitnessesidentifiedbytheclientand
whennecessary,consultanexpert(especiallyifthecaseislegallyorfactuallycomplex).
However,itisnotnecessarytointerviewallpossiblewitnessesinacase,norisitnecessary
tosearchforandreviewallexistingdocumentsbeforefilingpapers.
Ifanattorneyfailstoreviewrelevantdocumentsinthepublicrecordoravailabletothe
client,orifanattorneyfailstointerviewwitnesses,courtsmaysanctiontheattorney.
Generally,whereaprefilinginvestigationotherthanconversationswithaclientcould
objectivelyestablishwhetheraclaimiswellgroundedinfact,failuretodosuchresearch
mayresultinsanctions.
Discoverymayalsoresultintheneedtofurthercorroboratewhataclienthassaid.For
example,inChildsv.StateFarmMutualAutomobileInsuranceCo.,29F.3d1018(5thCir.
1994),thecourtfoundthattheplaintiffsattorneyhadconductedareasonableinvestigation
beforefilinganactionagainsttheinsurancecompanyonbehalfofhisclient,whohadbeen
involvedinahitandrunaccident.Theinsurancecompanypresentedsubstantialevidence
thattheaccidenthadbeenstaged.Theplaintiffsattorneythenfailedtoconductany
discoveryofhisownintotheinsurancecompanysallegations.Thatfailuretoinvestigateor
withdrawtheclaimledthedistrictcourttoimposesanctions.TheFifthCircuitaffirmed:

Wemustagreethatthisinquirywasdeficient.[Defendants]evidenceoffraudwaspowerful,
andyet,allof[theattorneys]investigativeeffortscanbesummedupasasking[hisclient]
andhisallegedcoconspiratorsiftheywerefraudsandreviewingtheevidence.Neverdid[the
attorney]conductanyaffirmativediscoverytotesttheveracityoftheevidencedevelopedby
[defendant].Heneverconductedasingledeposition.Heneversentoutanyinterrogatories,
requestsforproductionorrequestsforadmission.Lastly,heneverhiredhisownexpertsto
supporthisclientandtorefutethedamagingreportsby[defendants]experts.Inlightofthe
compellingevidenceoffraudinthiscase,[theattorneys]inquirycannotbesaidtobe
reasonable.
29F.3dat1025.
Thus,inmostcases,areasonableinquiryincludesgoingbeyondtheclientsstoryto
corroboratewithdocumentation,witnesses,orexperts.
However,undercertaincircumstances,attorneyshaveavoidedsanctionseventhoughthey
didnotcorroboratetheirclientsstories.Forexample,attorneysmayrelyontheirclients
statementswhenthereisnowaytocorroboratethestory,particularlyincasesinwhichthe
defendantcontrolsmuchoftherelevantevidence.Furthermore,anattorneysfailureto
corroborateastoryhasbeenexcusedwhentheclientdeliberatelymisledtheattorney.
However,tobeonthesafeside,asrecognizedinNassauSuffolkIceCream,Inc.v.
IntegratedRes.,Inc.,114F.R.D.684,689(S.D.N.Y.1987),[w]hentheattorneycan
obtaintheinformationnecessarytocertifythevalidityoftheclaiminpublicfashionand
neednotrelysolelyontheclient,hemustdoso.
AllegationsBasedinFact
ThestandardfordeterminingwhetherapleadingiswellgroundedinfactforRule11
purposesis,accordingtoHillsboroughCountyv.A&ERoadOilingService,Inc.,160F.R.D.
655,659(M.D.Fla.1995),objectivelyreasonableunderthecircumstances.Afilingmeets
thisrequirementifthereissomeevidentiarybasisforthepositiontakenatthetimethe
pleadingissigned.Evenifthefactualassertionsinapaperarelaterdisprovenorare
insufficienttosurviveasummaryjudgmentmotion,thepaperisnotsanctionable.
Whetherornotthereisfactualsupportcanshiftaspartieslearnnewinformation.Thus,the
attorneyhasacontinuingobligationtoensurethattheallegationsarenotbaselesseach
timeheorshefilesapaperwiththecourt.Anattorneymightbesubjecttosanctionsifhe
orshecontinuedtoassertbaselessallegationsafterlearningofthefactsorlegalprecedent
thatunderminedthem.Forexample,inMercuryAirGroup,Inc.v.Mansour,237F.3d542,
549(5thCir.2001),theFifthCircuitaffirmedsanctionsintheformofreasonableattorney
feesandexpensesagainstanattorneywhoconducted150hoursofinvestigationpriorto
filingsuitbutwhocontinuedtopursuetheclaimevenafterlearningthatclaimwasbaseless.
Thesecondarticleinthisserieswillcoverwhattodoafterthedocumenthasbeenfiled.It
willproviderecommendationsforwhattodowhenopposingcounselthreatenssanctionsand
addresstheproceduralrequirementsneededbeforesanctionscanbeimposed.
Keywords:younglawyers,Rule11sanctions,prefilinginvestigation
MelissaStuartisanassociateatCohen&Malad,LLPinIndianapolis,Indiana.


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necessarilyreflectthepositionsorpoliciesoftheAmericanBarAssociation,theSectionof
Litigation,thiscommittee,ortheemployer(s)oftheauthor(s).