Commercial Litigation and Arbitration

Transferee Court Has Power to Sanction Frivolous Filings Made in Transferor Court

From Anderson v. Wade, 2008 U.S. App. LEXIS 24772 (4th Cir. Dec. 5, 2008):

In determining that it lacked authority to impose sanctions against Anderson for filings that were made in the Virginia district court, the district court relied on Edwards v. General Motors Corp., 153 F.3d 242 (5th Cir. 1998), In re Allnutt, 155 F.3d 557, 1998 WL 414248 (4th Cir. July 16, 1998) (unpublished) (No. 97-2613), and Green v. Foley, 907 F.2d 1137, 1990 WL 86210 (4th Cir. June 6, 1990) (unpublished) (Nos. 88-2666, 88-2667). In those cases, however, the respective federal courts refused to impose sanctions for filings made in state courts prior to removal to federal court. See Edwards, 153 F.3d at 245-46 (holding that Rule 11 applies only to federal filings and not to state filings made prior to removal to federal court); Allnutt, 155 F.3d 557, 1998 WL 414248, at *2 ("[T]he signing of a pleading in a state court action cannot be the basis for imposition of sanctions pursuant to Rule 11."); Green, 907 F.2d 1137, 1990 WL 86210, at *7 (holding that the district court should limit sanctions to legal fees expended in the federal system, and exclude those incurred in a related state proceeding). We find those cases to be inapposite.

Accordingly, because a transferee district court has authority to impose Rule 11 sanctions for sanctionable filings made in the federal transferor court, we find that the district court erred in denying Godley's motion for sanctions on that ground.

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