Commercial Litigation and Arbitration

Two-Step Approach to Ascertain Compliance with Rule 11: First, Assess Plausibility; If Plausibility Is Wanting, Second, Gauge the Reasonableness of Pre-Assertion Inquiry

From Owensby v. Estate of Phillips, 2010 N.C. App. LEXIS 2302 (N.C. App. Dec. 7, 2010) (decided under the North Carolina equivalent of Fed.R.Civ.P. 11):

The Supreme Court has adopted a "two-part analysis" for use in determining the legal sufficiency of a complaint, under which the trial court "looks first to the facial plausibility of the pleading and only then, if the pleading is implausible under existing law, to the issue of 'whether to the best of the signer's knowledge, information, and belief formed after reasonable inquiry, the complaint was warranted by the existing law.'" Bryson, 330 N.C. at 661, 412 S.E.2d at 336 (quoting dePasquale v. O'Rahilly, 102 N.C. App. 240, 246, 401 S.E.2d 827, 830 (1991), and citing Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse § 17(B)(1) at 94-95 (Supp. 1991)). ————————————————————————————————

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