Commercial Litigation and Arbitration

Sanctions — Rule 11 / § 1927 Violation as Affirmative Defense or Counterclaim

The defendant in Crow v. Wolpoff & Abramson, 2007 U.S. Dist. LEXIS 31356 (D. Minn. April 19, 2007), a Fair Debt Collection Practices Act case, was so incensed by the complaint that it filed an affirmative defense asserting that the action was brought in bad in violation of Fed.R.Civ.P. 11 and 28 U.S.C. § 1927. The plaintiff moved to strike the affirmative defense on the ground that it was insufficient as a matter of law and scandalous. Magistrate Judge Janie S. Mayeron agreed that an alleged Rule 11 or Section 1927 violation does not state an affirmative defense as a matter of law, a well-established if little noted aspect of sanctions jurisprudence (Joseph, Sanctions: The Federal Law of Litigation Abuse § 17(A)(9) (3d ed. 2000)). The defendant urged the court, in the alternative, to treat the affirmative defense as a counterclaim. Magistrate Judge Mayeron ruled that this wouldn’t work either, observing, among other things, that it would directly conflict with the separate motion requirement of Rule 11. (See also id. at §§ 17(A)(8) and 25(A)(4).) Crow is a helpful reminder of the limited utility of sanctions powers.

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