Sanctions — Exit Exigent Circumstances

Professor Georgene Vairo of Loyola L.A. is fond of dividing the Circuits, for Rule 11 purposes, into hawks and doves. She identifies as the leading hawk Circuit the Seventh. In Malec Holdings II Ltd. v. English, 2007 U.S. App. LEXIS 2349 (7th Cir. Jan. 24, 2007), the Court lived up to its billing. The plaintiff in Malec commenced a frivolous §1983 action to remedy an improperly-obtained state court default judgment (which was vacated by the state courts during the pendency of the federal action), notwithstanding the Rooker-Feldman doctrine, the absence of a state actor and a variety of other deficiencies. Although the District Court explained its rationale, the Court of Appeals faulted the explanation for not addressing each ground asserted in support of Rule 11 sanctions and vacated tis denial of sanctions.

Two interesting aspects to the Seventh Circuit opinion: (i) notable quote in finessing the abuse-of-discretion standard: ‛[d]eferential review will not prevent this court from ensuring that district judges reflect seriously, and consider fully, before imposing (or denying) sanctions“ (citation and quotation omitted); and (ii) the Seventh Circuit rejected a time-honored factor considered by district courts in determining whether sanctions are appropriate — the urgency with which the filing was prepared and filed — in light of the 21-day safe harbor, within which any filing may be withdrawn or corrected. The Malec Court reasoned as follows: ‛The district court also based its decision on Brown v. Federation of State Medical Boards of the United States, 830 F.2d 1429, 1435 (7th Cir. 1987), which held that the amount of time an attorney has to prepare a document is relevant in determining whether Rule 11 sanctions are appropriate. Brown was decided before the 1993 addition of Rule 11's twenty-one -day safe harbor provision. See Fed. R. Civ. P. 11(c)(1)(A). Because Rule 11 now provides an attorney twenty-one days to withdraw or correct a filing before sanctions are imposed, an attorney facing such sanctions can no longer defend a frivolous legal claim by arguing that he or she filed the document in haste.“ Note, however, that this analysis is limited exclusively to Rule 11 sanctions, not those imposed under other powers.

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