Sanctions Imposed for Failing to Withdraw Position during 21-Day Safe Harbor

It used to be the case that there was no duty to withdraw a position From Fabriko Acquisition Corp. v. Prokos, , 2008 U.S. App. LEXIS 16074 (7th Cir. July 29, 2008):

Although Sorenson informed Fabriko of the causation problem in a letter and subsequently in a formal motion for sanctions, Fabriko did not take advantage of the 21-day window to withdraw or correct the claim. Under Rule 11(c)(2), a motion for sanctions that is served on a party cannot be filed or presented to the court if, within 21 days of service, the offending party withdraws or appropriately corrects the challenged paper claim, defense, contention or denial. Fabriko did not take advantage of that 21-day opportunity to withdraw or amend its frivolous claim against Sorenson, and instead ignored the issue to its detriment. The district court appropriately found that plaintiff's counsel "clearly failed to investigate the law or the facts or both when it maintained the suit against Sorenson after being put on notice of the problems with its case." We review a district court's imposition of sanctions under Rule 11 for abuse of discretion ..., and find no such abuse here. We note in passing that in addition to reiterating the merits of its meritless case, Fabriko in arguing the inappropriateness of the sanction focuses solely on the knowledge it had as of the date of its filing of the case. Under Rule 11, however, an attorney violates Rule 11 in maintaining a claim that is unwarranted by existing law or has no reasonable basis in fact, and that applies to claims presented to the court "whether by signing, filing submitting, or later advocating it." Fed. R. Civ. P. 11(b). Fabriko continued to advocate a claim that had no legal basis and refused to alter or withdraw it when that deficiency was pointed out to it. That conduct warranted Rule 11 sanctions.

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