Commercial Litigation and Arbitration

Rule 11 Sanctions — “Court Is Expected to Avoid the Wisdom of Hindsight” — Reasonable Reliance on Others — Burden of Proof (Good Quotes)

Anderson v. Bd. of School Directors of Millcreek Township, 2013 U.S. Dist. LEXIS 116082 (W.D. Pa. Aug. 16, 2013):

In determining whether a document was submitted in violation of Rule 11, the adjudicating court "is expected to avoid the wisdom of hindsight and should test the signer's conduct by [asking] what was reasonable to believe at the time the pleading, motion, or other paper was submitted." CTC Imports & Exports v. Nigerian Petroleum Corp., 951 F.2d 573, 578 (3d Cir.1991) (citing Notes of Advisory Committee on Rules, 1983 Amendment, Fed.R.Civ.P. 11). See also Ellis v. Beemiller, Inc., 287 F.R.D. 326, 329 (W.D. Pa. 2012). In making this determination, the court does not consider whether an attorney filed the document in good-faith; instead, the court must apply an objective standard and consider all of the material circumstances surrounding the submission. See Bradgate, 999 F.2d at 752; Ellis, 287 F.R.D. at 329. Among the relevant considerations is the amount of time the attorney had to conduct an independent investigation prior to filing the document. See Bradgate, 999 F.2d at 752 (citing Advisory Committee Note, 97 F.R.D. 165, 199); Ellis, 287 F.R.D. at 329. "Although Rule 11 does not preclude an attorney from relying on information provided by others, the reasonableness of this reliance depends on the nature of the claim, the time to investigate, and whether the circumstances are such that he cannot reasonably be expected to attain the salient information independently through other means." Ellis, 287 F.R.D. at 329 (citing Garr v. U.S. Healthcare, Inc., 22 F.3d 1274, 1278-79 (3d Cir. 1994)).

The burden of proving a Rule 11 violation falls on the party moving for sanctions under the Rule. See Gary v. Braddock Cemetary and Consol Energy, 334 Fed. Appx. 465, 467 (3d Cir. June 8, 2009) ("[A] review of Third Circuit case law reveals that a court should refuse to impose sanctions unless, as here, the moving party can show a complete lack of factual or legal support for a claim."); National Business Adjusters, Inc. v. NuEnergy Group, Inc., Civil Action No. 06-698(PGS), 2007 WL 2893376 at *4 (D.N.J. Sept. 28, 2007) (acknowledging that defendants would bear the burden of proving that the plaintiffs' motion for summary judgment violated Rule 11); TEGG Corp. v. Beckstrom Elec. Co., Civil Action No. 08-435, 2008 WL 5216169 at *3 (W.D. Pa. Dec. 10, 2008 ) ("[T]he burden of proof and persuasion rests on the party moving for sanctions.") (citing Rich Art Sign Co. v. Ring, 122 F.R.D. 472, 474 (E.D. Pa.1988) and G. Joseph, Sanctions: The Federal Law Of Litigation Abuse, 17(A)(5) (2008)).

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