Petrella v. Metro-Goldwyn-Mayer, Inc., 2012 U.S. App. LEXIS 18322 (9th Cir. Aug. 29, 2012):
The defendants contend they are entitled to sanctions under Rule 11 and attorney's fees for Petrella's alleged unjustified filing and prosecution of this action, and ask that we remand for the district court to reconsider its denial of their sanctions and fees motions. We hold that the district court did not abuse its discretion in denying the motions.***
Federal Rule of Civil Procedure 11 provides for the imposition of sanctions when a filing is frivolous, legally unreasonable, without factual foundation or brought for an improper purpose. See Simpson v. Lear Astronics Corp., 77 F.3d 1170, 1177 (9th Cir. 1996).
The district court cited White v. General Motors Corp., Inc., 908 F.2d 675, 682 (10th Cir. 1990), for the proposition that although "[p]art of a reasonable attorney's prefiling investigation must include determining whether any obvious affirmative defenses bar the case[,] . . . [a]n attorney need not forbear to file her action if she has a colorable argument as to why an otherwise applicable affirmative defense is inapplicable in a given situation." The court found that Petrella had a reasonable belief that she could overcome the laches defense because laches is an equitable doctrine involving many variables, and the case was less clear cut than Danjaq. The district court concluded that sanctions were therefore not appropriate. We agree.
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