Rule 11 Sanctions — Refiling Impertinent, Scandalous Allegations, Despite Warning, Violates 11(b)(1) — Refiling and Issuing Multiple Subpoenas Suggests Improper Purpose — No Rule 38 Sanctions If Chances Are Merely Slim

Marceaux v. Lafayette City-Parish Consolidated Govt., 2015 U.S. App. LEXIS 9540 (5th Cir. June 8, 2015):

Plaintiffs are fifteen current and former officers of the Lafayette Police Department suing the local government, the department, and other officers and city officials for numerous alleged violations of their constitutional rights and of state law. Adopting the report and recommendations of the magistrate judge ("MJ"), the district court dismissed most claims under Federal Rule of Civil Procedure 12(b)(6) and the remaining First Amendment claims on sum-mary judgment. In addition to those rulings, the plaintiffs appeal the imposi-tion of sanctions under Federal Rule of Civil Procedure 11 and the grant of costs and attorney's fees to the defendants. The defendants seek costs on appeal under Federal Rule of Appellate Procedure 38. We affirm in all respects and deny the Rule 38 motion.

I.

The facts are disputed, but in general, the plaintiffs maintain that Police Chief Jim Craft and Lafayette City-Parish Consolidated Government Chief Administrative Officer Dee Stanley led a sort of cabal within the police department that engaged in "gross misconduct and rampant abuse of authority." The plaintiffs contend that this "Stanley-Craft Organization" sought reprisals [*2] against the plaintiffs, after they revealed the misconduct, by subjecting them to internal investigations, transfers, demotions, and terminations from their jobs as police officers.

The original complaint proved problematic. The defendants moved to strike various parts and dismiss the suit, but the MJ instead granted the plaintiffs leave to amend, advising them that many impertinent and scandalous parts should be removed. Instead of omitting the controversial parts, the plaintiffs added to it, and with their amended complaint they stated that they "amend, revise, restate, and generally supplement" their original complaint. Plaintiffs' counsel confirmed that the amended complaint supplemented the original when he later explained at a hearing that the amended complaint controlled "to the extent that it may be inconsistent with allegations contained in the original complaint that was filed."

Defendants then re-urged their motions to [*3]  strike and dismiss, and the MJ ultimately struck 102 paragraphs from the original and amended complaints as immaterial, impertinent, and scandalous. The MJ issued a report, adopted by the district court, recommending that substantially all the claims be dismissed. The court dismissed all state-law claims, all claims under the Fourth, Fifth, and Fourteenth Amendments, and all claims under 42 U.S.C. § 1985, and dismissed many plaintiffs and most defendants from the suit. What remained were six plaintiffs' claims against the city and against Stan-ley, Craft, and Alfred, in their individual capacities, for allegedly violating their First Amendment rights through adverse employment actions.

At the same time, the defendants moved for attorney's fees under 28 U.S.C. § 1927 and sanctions under Rule 11 because of plaintiffs' failure to amend properly. The MJ concluded that plaintiffs' counsel had violated Rule 11(b), and he recommended-and the district court agreed-that they be ordered to pay $2,500 to the court and reimburse $5,000 to the defendants. The motion for attorney's fees under § 1927 was denied.

Later, the remaining First Amendment claims were dismissed on summary judgment, and the defendants moved again for costs and attorney's fees under Federal Rule of Civil Procedure 54 and 42 U.S.C. § 1988. The plaintiffs filed no opposition to those motions, so the district court granted them and assessed costs of $17,041.19 and attorney's fees of $91,035. The plaintiffs appealed the dismissal of all the claims and the Rule 11 sanctions and the order taxing costs and awarding fees.

II.

In a seventy-three-page report on the Rule 12(b)(6) motion, the MJ meticulously analyzed every claim in the original and amended complaints. He identified the numerous insufficiencies with many of the plaintiffs' claims, including asserting legal claims that cannot be applied to state actors, redundantly suing the municipality and individuals in [*5]  their official capacities, and failing to allege essential elements. We find it unnecessary to repeat that discussion in detail; reviewing the issue de novo, we affirm the dismissal of those claims under Rule 12(b)(6) for essentially the same reasons provided in the MJ's thorough report adopted by the district court. See Woodard v. Andrus, 419 F.3d 348, 352-54 (5th Cir. 2005). The district court did not abuse its discretion in not granting a second opportunity to amend the complaint. See Ashe v. Corley, 992 F.2d 540, 542-43 (5th Cir. 1993).

We review for abuse of discretion the imposition of sanctions for violation of Rule 11. Haase v. Countrywide Home Loans, Inc., 748 F.3d 624, 630 (5th Cir. 2014). The rule provides in part:

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper-whether by signing, filing, submitting, or later advocating it-an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing [*6]  law or by a nonfrivolous argument for extending, modi-fying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifi-cally so identified, will likely have evidentiary support after a rea-sonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

FED. R. CIV. P. 11(b).

A violation of any subpart of the Rule 11(b) is sanctionable, and courts use an objective standard, looking to the state of affairs at the time the filing was signed.3 "[W]hether a reasonable inquiry into the facts has been made in a case will, of course, be dependent upon the particular facts." Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 875 (5th Cir. 1988) (en banc). But the district court can look to certain factors in assessing whether a party has violated Rule 11, including how much time the party or attorney had to investigate the claims, the extent to which the attorney relied on the client for information, the feasibility of investigation, and the complexity of the case, [*7]  among others. Id. Relying on the factors in Thomas, the MJ concluded that plaintiffs' counsel had violated subsections (b)(1) and (b)(2).

3Whitehead v. Food Max of Miss., Inc., 332 F.3d 796, 802-05 (5th Cir. 2003) (en banc); Skidmore Energy, Inc. v. KPMG, 455 F.3d 564, 569 (5th Cir. 2006).

First, the MJ reasoned that plaintiffs' counsel had resubmitted their original complaint with the amended complaint, in addition to other filings, for the improper purpose of causing unnecessary delay or needlessly increasing the cost of litigation. See FED. R. CIV. P. 11(b)(1). In particular, by reasserting the same impertinent, immaterial, and scandalous allegations—against which they had been warned—the plaintiffs forced further filings from the defendants and increased the cost and effort required by the court to comb through the complaint. Furthermore, the MJ concluded that refiling the complaints, as well as issuing multiple subpoenas that were quashed, suggested an improper purpose to harass some defendants.

Second, the plaintiffs violated Rule 11(b)(2) by filing complaints replete with obviously deficient claims. For instance, they asserted Fifth Amendment due-process claims, but no defendant is a federal actor. See Jones v. City of Jackson, 203 F.3d 875, 880 (5th Cir. 2000). They asserted claims under the Fourth Amendment, state law, and 42 U.S.C. § 1985 that were not supported by the allegations. Given the circumstances, many of the claims raised were not warranted by existing law or a plausible extension [*8]  of the law made after a reasonable inquiry.

We agree with the MJ's conclusion that, under Thomas, plaintiffs' counsel had ample time to investigate the relatively straightforward events underlying this case, which at its core involves alleged adverse-employment actions. The plaintiffs also unnecessarily increased the length of proceedings and asserted unwarranted claims. Either violation of Rule 11 would be a sufficient basis for sanctions,4 and the district court did not abuse its discretion in adopt-ing the recommendation to do so in the face of such "obviously defective" complaints. Skidmore Energy, 455 F.3d at 570.

4 The plaintiffs do not dispute the amount of the sanctions, but only their imposition.

***

Though plaintiffs' chances of success on appeal were slim, their appeal is not so wholly without legal merit that Rule 38 sanctions are warranted. In particular, the issues relating to the First Amendment retaliation and Rule 11 sanctions are not entirely frivolous. Therefore, we exercise our discretion not to impose damages or costs under Rule 38.

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