Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S. Ct. 2447, 110 L. Ed. 2d 359 (1990)


Appeal was taken from order of the United States District Court for the District of Columbia, Oliver Gasch, Senior District Judge, imposing Rule 11 sanctions in antitrust action, 120 F.R.D. 439. The United States Court of Appeals for the District of Columbia Circuit affirmed and remanded, 875 F.2d 890. On certiorari, the Supreme Court, Justice O'Connor, held that: (1) district court could impose Rule 11 sanctions after plaintiff voluntarily dismissed action; (2) Court of Appeals properly applied deferential standard of review; and (3) Rule 11 did not authorize award of attorney's fees incurred on appeal.

Affirmed in part and reversed in part.


Walton v. Walton, 44 So. 3d 1035 (Miss. Ct. App. 2010)


Background: Nephew sought to set aside warranty deed that conveyed to uncle a life estate that had been reserved by prior warranty deed to nephew's grandmother. Uncle filed motion to dismiss, and moved for sanctions. The Chancery Court, Hinds County, William H. Singletary, J., granted motions. Nephew appealed.

Holdings: The Court of Appeals, Roberts, J., held that:

1 allegations in nephew's complaint were insufficient to state a claim upon which relief could be granted;

2 chancellor's award of attorney fees in excess of proof, as sanction for nephew's filing of frivolous complaint, amounted to plain error; and

3 chancellor's implied decision that nephew's filing of complaint was frivolous was not improper.

Affirmed in part, reversed in part, and remanded.


In re Kunstler, 914 F.2d 505 (4th Cir. 1990)


Following voluntary dismissal of civil rights action, Rule 11 sanctions were imposed against plaintiffs' attorneys by the United States District Court for the Eastern District of North Carolina, at Fayetteville, Malcolm J. Howard, J., and attorneys appealed. The Court of Appeals, Chapman, Circuit Judge, held that: (1) record supported conclusions that complaint was not well grounded in fact or law and was filed for improper purpose; (2) due process did not entitle attorneys to evidentiary hearing on whether to impose sanctions, but they should be permitted to contest fee statements submitted where monetary sanction was largely the result of those statements; (3) amount of monetary sanction should always reflect the primary purpose of deterrence; (4) in determining reasonableness of opposing party's attorney fees, only attorney time which is response to that which has been sanctioned should be evaluated; (5) monetary sanction without any consideration of ability to pay would constitute an abuse of discretion; and (6) sanction may not be based in part on publication of baseless claims through the media.

Affirmed in part, vacated in part, and remanded with instructions.


ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 579 F.3d 143 (2d Cir. 2009)


Background: Action for misrepresentations in connection with securities transactions and market manipulation in violation of federal securities laws. The United States District Court for the Southern District of New York, 357 F.Supp.2d 712, granted defendants' motions to dismiss, and the Court of Appeals, 493 F.3d 87, affirmed. Market-maker moved for sanctions pursuant to the mandatory sanctions provision of the Private Securities Litigation Reform Act (PSLRA). The District Court, Kaplan, J., 2008 WL 850473, imposed sanctions on three attorneys who represented the corporation. Attorneys appealed, and, after reaching a settlement agreement, the parties jointly moved for vacatur of the District Court's judgment sanctioning the attorneys.

Holdings: After denying the motion to vacate, 547 F.3d 109, the Court of Appeals, Dennis Jacobs, Chief Judge, held that:

1 District Court was not required to make a finding of subjective bad faith before imposing sanctions;

2 attorneys did not act objectively reasonable in bringing suit against market-maker; but

3 District Court was required to consider whether the failure to move for Rule 11 sanctions more promptly might have unnecessarily increased the costs, and thereby unnecessarily increased the sanctions.

Affirmed in part, vacated in part, and remanded.


Star Mark Mgmt., Inc. v. Koon Chun Hing Kee Soy & Sauce Factory, Ltd., 682 F.3d 170 (2d Cir. 2012)


Background: Distributor of hoisin sauce, which was allegedly counterfeit, brought action against owner of trademark for brand of hoisin sauce seeking cancellation of the mark on theory that use of word “hoisin,” which translates to “seafood,” was deceptive because sauce did not contain seafood. The United States District Court for the Eastern District of New York, Kiyo A. Matsumoto, J., 2009 WL 2922851, granted defendant's motion to dismiss and motion for Rule 11 sanctions, 2010 WL 3924674, awarded total of $10,000 for fees and costs, and, 2010 WL 3924674, denied reconsideration. Both parties appealed.

Holdings: The Court of Appeals held that:

1 defendant met the procedural requirements of Rule 11's safe harbor provision;

2 district court did not abuse its discretion in determining that plaintiff's claim was frivolous; and

3 district court did not abuse its discretion in lowering Rule 11 sanctions amount.



Bus. Guides, Inc. v. Chromatic Commc'ns Enterprises, Inc., 498 U.S. 533, 111 S. Ct. 922, 112 L. Ed. 2d 1140 (1991)



Publisher of business directory brought action against competitor alleging copyright infringement. The United States District Court for the Northern District of California, 121 F.R.D. 402, dismissed action and imposed sanction against publisher. Appeal was taken. The Court of Appeals for the Ninth Circuit, 892 F.2d 802, affirmed in part, reversed in part, vacated in part, and remanded. Writ of certiorari was granted. The Supreme Court, Justice O'Connor, held that Rule 11 imposed an objective standard of reasonable inquiry on represented parties who signed papers or pleadings, whether signatures were voluntary or mandated.



Truesdell v. S. California Permanente Med. Grp., 293 F.3d 1146 (9th Cir. 2002)

Employee, who was terminated from her employment for unsatisfactory work performance but was reinstated by an arbitrator without back pay, brought action challenging the propriety of the arbitration process as violating provisions of her collective bargaining agreement, and also brought action against employer for allegedly violating the Labor Management Relations Act of 1947 (LMRA), and her union, for breaching its fiduciary duty to her. Following dismissal of the complaint with leave to amend, employer moved for imposition of sanctions against employee's lawyer. The United States District Court for the Central District of California, Audrey B. Collins, J., 151 F.Supp.2d 1174, granted motion and ordered sanctions of $4,945 to cover employer's fees. Employee's counsel appealed. The Court of Appeals, Graber, Circuit Judge, held that: (1) by dismissing the underlying complaint on the 20th day of the 21-day safe-harbor period before a sanctions motion is filed with the court, with leave to amend, the district court did not cut short the mandatory safe-harbor period; (2) the district court did not err in ruling that employee's complaint was both legally frivolous and factually misleading; and (3) on this record, remand for reconsideration in light of the Ninth Circuit's decision in Christian v. Mattel, Inc. was warranted.

Vacated and remanded.

In re Miller, 414 F. App'x 214 (11th Cir. 2011)

Background: Trustee for debtor's estate filed adversary complaint against purchaser of real property conveyed by debtor. The United States Bankruptcy Court for the Northern District of Florida granted purchaser's motion for sanctions against trustee's attorney for filing allegedly frivolous complaint. The United States District Court for the Northern District of Florida, Maurice M. Paul, Senior District Judge, 2010 WL 1713232, affirmed. Attorney appealed.

Holding: The Court of Appeals held that motion's deficiencies under bankruptcy rule's safe harbor provision were not cured.