Commercial Litigation and Arbitration

Sanctions — Post-Trial Rule 11 Motion Must Satisfy 21-Day Safe Harbor

The defendant in Saldibar v. Delray One, Inc., 2008 U.S. Dist. LEXIS 61470 (S.D. Fla. Aug. 12, 2008), moved for sanctions after trial on the theory that the plaintiff’s case was doomed to lose at trial. The motion, however, was too late for the plaintiff to correct or withdraw its offending positions because the defendant did not file the motion until after it had won the case. Motion denied for failure to honor safe harbor:

The Eleventh Circuit allows Rule 11 motions to be filed after entry of final judgment. See Baker v. Alderman, 158 F.3d 516, 523 (11th Cir. 1998) ("Rule 11 motions are collateral to an action and are not barred if filed after a dismissal order, or after entry of judgment.") (citations omitted). Although the Eleventh Circuit has not addressed the applicability of the safe harbor period to post-judgment Rule 11 motions, the Seventh Circuit has held that Rule 11 motions filed after entry of a final judgment must still comply with the 21 day safe harbor period. See Divane v. Krull Electric Co., 200 F.3d 1020, 1026 (7th Cir. 1999) (holding that Rule 11 motion filed more than 21 days before entry of final judgment satisfied safe harbor requirement). The safe harbor provision still applies even though the instant motion is a "renewed" motion. See Zhu v. Federal Housing Finance Bd., 2007 U.S. Dist. LEXIS 32398, 2007 WL 675646, *4 (D. Kan., May 1, 2007) (denying renewed motion for Rule 11 sanctions based partly on same conduct as initial motion because renewed motion failed to comply with safe harbor provision). The Court realizes the inconvenience of serving a Rule 11 motion on opposing counsel during the middle of a jury trial, but it has found no authority for the proposition that the 21 day safe harbor period is inapplicable during such time. R.B. Ventures v. Shane, 2000 U.S. Dist. LEXIS 10170, 2000 WL 1010400, *2 (S.D.N.Y., Jul. 20, 2000) recognized that "a factual account first given at mid-trial, in the presence of the jury, obviously cannot be subjected to the 'safe harbor' curative provision[]" of Rule 11, but R.B. Ventures involved oral trial testimony that did not accord with pre-trial depositions or pleadings. Accordingly, R.B. Ventures distinguished the oral testimony from "pre-trial papers" and exempted the testimony from Rule 11. See id. Here, Plaintiff argued both at trial and in numerous written pre-trial filings that he was entitled to FLSA protection.

Defendant has unquestionably failed to comply with the safe harbor provision of Rule 11. Allowing the motion to proceed in this context would vitiate the safe harbor provision because Plaintiff's counsel had no notice that its position at trial would be the target of a future Rule 11 motion: Defendant's prior Rule 11 motion was denied, and Plaintiff reasonably relied on same at trial.

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