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No Rule 11 Sanctions for “Incorrect Belief” about the Law, Instead of “Callous Disregard” of It

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From Akins-Brakefield v. Philip Envt’l Servs., 2010 U.S. Dist. LEXIS 25062 (S.D. Ill. Mar. 17, 2010):

[Defendant] PESC contends that Plaintiff's claims for Assault (Count V), Battery (Count VI), Negligent Supervision (Count VII) and Willful FMLA violations (Count VIII) were, on the face of her Second Amended Complaint, wholly devoid of merit and time-barred, thus Plaintiff's counsel has violated Rule 11. ***

Plaintiff's counsel argues that he did, in fact, have a reasonable basis in the law for filing the claims of assault, battery and negligent supervision, despite PESC’s admonishments that they were time-barred. Plaintiff's counsel makes an argument that because under Illinois law, a battery consists by "making physical contact of an insulting or provoking nature," that this insulting and provoking nature of the conduct continued after the date of Plaintiff's employment, and therefore, it was his good faith belief that these claims would be timely (Doc. 91, p. 4, emphasis in original, citing Jenkins v. Nelson, 157 F.3d 485, 497 (7h Cir. 1998) and 720 Ill. Comp. Stat. 5/12-3).

***[T]he Court finds [this argument] unavailing, as the statute cited for battery is from the Illinois criminal code. The Jenkins case also cited by Plaintiff is, in fact, a habeas case dealing with the petitioner's conviction for criminal aggravated battery. Not quite the same circumstances with this case and the Court does not believe such a definition of battery applies here — Plaintiff has also not shown otherwise. However, this hardly amounts to a "callous disregard for the governing law" so as to warrant Rule 11 sanctions, which is more properly used to deter baseless and frivolous behavior, not to punish an attorney for his incorrect belief regarding the application of a law. See Harris v. Franklin-Williamson Human Servs., 97 F. Supp. 2d 892, 908-09 (S.D. Ill. 2000) (Herndon, J.) (citing Fries v. Helsper, 146 F.3d 452, 458 (7th Cir. 1998) (internal citation omitted)); see also Allison v. Dugan, 951 F.2d 828, 834 (7th Cir. 1992). As the Seventh Circuit previously reasoned:

While the Rule 11 sanction serves an important purpose, it is a tool that must be used with utmost care and caution. Even where, as here, the monetary penalty is low, a Rule 11 violation carries intangible costs for the punished lawyer or firm. A lawyer's reputation for integrity, thoroughness and competence is his or her bread and butter. We may not impugn the reputation without carefully analyzing the legal and factual sufficiency of the arguments.

FDIC v. Tekfen Construction and Installation Co., Inc., 847 F.2d 440, 444 (7th Cir. 1988).

The Seventh Circuit also explained:

[S]anctions do not inevitably flow from being wrong on the law. Otherwise Rule 11 sanctions would be imposed whenever a complaint was dismissed, thereby transforming it into a fee shifting statute under which the loser pays. T his circuit has made it clear the Rule may not be so interpreted.

Harlyn Sales Corp. Profit Sharing Plan v. Kemper Fin. Servs., 9 F.3d 1263, 1270 (7th Cir. 1993) (citing Mars Steel Corp. v. Continental Bank, N.A., 880 F.2d 928, 932 (7th Cir. 1989)).

Therefore, PESC's Motion for Rule 11 Sanctions (Doc. 89) is DENIED.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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