4.2 Sanctions

Updated 2013 by Jeffrey S. Gutman

Federal courts generally have three sources of power from which to impose sanctions:

    1.  Rule 11 of the Federal Rules of Civil Procedure;

    2.  28 U.S.C. § 1927; and

    3.  The inherent power of the court.

These sources of power overlap and are not necessarily mutually exclusive.1 The legal aid attorney should consider all three carefully when asking for sanctions or when faced with the threat of sanctions. This chapter explores each of these grounds for imposing sanctions as well as the ethical issues inherent in ghostwriting filings for pro se litigants.

4.2.A. Federal Rule of Civil Procedure 11

Federal Rule of Civil Procedure 11 authorizes federal courts to issue sanctions against parties or their attorneys who file pleadings, motions, or other papers that are filed for an improper purpose or lack a required level of evidentiary or legal support. Rule 11 sanctions are not available for other sorts of misconduct, like discovery abuse or actions during a trial.2 The aim of Rule 11 is to deter frivolous filings, to "curb abuses of the judicial system,”3 and to require litigants to refrain from conduct that frustrates Rule 1’s goal of the “just, speedy, and inexpensive determination of every action.”4

Rule 11 states that “[e]very pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney's name--or by a party personally if the party is unrepresented."5 That is, counsel must sign every document filed with the court.6 A typed name is not a signature.7 But, courts may by local rule establish electronic filing policies consistent with technical standards adopted by the Judicial Conference of the United States that permit electronic signature.8 The signer’s address, e-mail address, and telephone number must be included.9 Additionally, local rules of court may require further identifying information to accompany the signature, such as fax numbers.10 In Business Guides Inc. v. Chromatic Communications Enterprises, the Supreme Court noted that “[t]he essence of Rule 11 is that signing is no longer a meaningless act; it denotes merit. A signature sends a message to the district court that this document is to be taken seriously."11

4.2.A.1   Standards for Making Representations to the Court

Rule 11(b) provides that,”[b]y 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” that the material presented is not filed for an improper purpose and has the requisite degree of evidentiary and legal support.12 This language raises two interpretive questions: what "later advocating" means and what "a reasonable inquiry under the circumstances" entails.

The “later advocating” requirement was added to Rule 11(b) in 1993 to emphasize that Rule 11 obligations continue throughout the litigation process.13 This amendment “subjects litigants to potential sanctions for insisting upon a position after it is no longer tenable.”14 Although an attorney must discontinue advocating a position that the attorney later learns is invalid, Rule 11 does not require a formal amendment or withdrawal of the initial filing.15 Nor does Rule 11 cover contentions made before the court at oral argument regarding matters not previously raised because attorneys may have lacked time to research their validity.16 However, oral statements that repeat baseless assertions earlier made in writing are sanctionable.17

The "reasonable inquiry" requirement imposes on the attorney a duty to stop and investigate the legal and factual basis for a claim or defense before making it in writing.18   How much and what type of inquiry is required depends on the circumstances. As one might expect, important circumstances include the amount of time the attorney has to make the investigation, the complexity of the matter, the party's familiarity with the matter, and the degree of access to relevant information.19 A pending expiration of a statute of limitations or situation in which the client is facing irreparable or grave harm may justify a less robust investigation. If there is sufficient time to conduct a full investigation, an attorney is expected to interview relevant witnesses, review pertinent documents, and discuss the case with prior counsel if the case has been referred.20 Generally, an attorney may rely upon the reasonable representations of their client, but good practice is to seek verification of those facts when it is possible to do so.21 Lack of experience is not a relevant factor, as inexperienced attorneys are expected to seek guidance from seasoned attorneys. At bottom, absolute certainty of the facts following a reasonable investigation is not required.22

Rule 11(b) enumerates four standards to which litigants and counsel must adhere when presenting materials to the court. First, Rule 11(b)(1) requires that the papers not be presented for an improper purpose. Prohibited improper purposes include harassment, unnecessary delay, and the needless increase in the cost of litigation.23 Despite the subjective connotation of “improper purpose,” most courts agree that the test is an objective one based upon a totality of the circumstances at the time the paper is filed.24 Courts adhering to the objective test will look to "objective indicators of purpose from which to infer improper purpose” and will not consider or attempt to divine an individual litigant's subjective purpose.25 Frivolousness alone is not a basis for inferring improper purpose. Courts using this test must identify specific “unusual circumstances” that show an improper purpose, such as excessive filing of motions that are substantially similar to earlier, unsuccessful motions.26 While most circuits addressing the issue agree that finding an improper purpose is a purely objective task, a few courts disagree, leaving unresolved the question of whether, and to what extent, subjective intent should be considered as a factor in determining the litigant's purpose.27

Complicating the improper purpose standard has been how to evaluate cases involving a mix of proper and improper purposes and cases involving the filing of non-frivolous documents which may nevertheless be filed for an improper purpose. The language of Rule 11 plainly states that papers presented for "any" improper purpose will be sanctionable.28 However, the courts have split on mixed motive cases.29 Whether non-frivolous filings made for improper purposes are sanctionable has also split the circuits. The Second, Ninth, and Tenth Circuits have held that sanctions may not be imposed in connection with the filing of a non-frivolous complaint, even if filed for an improper purpose.30 These courts have found that that “[a] party should not be penalized for or deterred from seeking and obtaining warranted judicial relief merely because one of his multiple purposes in seeking that relief may have been improper.”31 Alternatively, the Fourth, Fifth and Seventh Circuits have held that counsel filing a non-frivolous complaint for improper purposes may be sanctioned.32 The Fourth Circuit has adopted a balancing test of sorts, stating that “the purpose to vindicate rights in court must be central and sincere.”33 The Fifth Circuit has adopted a “but for” test to determine when a party may be sanctioned for filing a document with an improper purpose.34 This test requires the movant to prove, through objectively ascertainable evidence, that “but for” the improper motive, the filing would not have been filed.35 In contrast, courts have held that sanctions may be awarded against attorneys filing non-frivolous motions for an improper purposes.36

Second, Rule 11(b)(2) states that any claims, defenses, or legal contentions presented to the court must be grounded in existing law, asserted to extend, modify, or reverse existing law, or establish new law.37 This requires attorneys to make an objectively reasonable inquiry under the circumstances into the state of the law. The standard is not met when the legal assertion is (1) objectively baseless and (2) the attorney has not made a “reasonable and competent inquiry” before making it.38 The notion is that sanctions are warranted when a reasonable inquiry would reveal frivolousness to a comptent attorney.39 A court need not find bad faith to issue sanctions; good faith is no defense.40 Thus, an "empty head, pure heart" defense to a motion for sanctions must fail.  A legal position will be sanctionable only when it can be said that a “reasonable attorney in like circumstances could not have believed his actions to be legally justified.”41

When the prevailing law is unsettled, a well-supported but unsuccessful argument should not be subject to sanctions.  When the existing law is clear, but contrary to the position of the legal aid attorney, courts have held that plausible arguments to extend, modify, or reverse existing law are not subject to Rule 11 sanctions.42 Such arguments, though, should be grounded in favorable precedent in other circuits or academic literature.  Reliance on policy or logic alone raises the risk of sanctions. The legal argument must have "absolutely no chance of success under the existing precedent" to contravene Rule 11.43 Nonetheless, advancing an argument for the purpose of preserving it for appellate review is permissible, so long as the argument is not frivolous.44 Legal services attorneys should document the legal research performed and consultations with other attorneys before filing because these efforts are subject to scrutiny should a Rule 11 motion be filed.45 When an argument is foreclosed by existing law, the legal aid attorney should be careful to explain that the attorney is advancing a novel legal argument aimed at reversing existing law or establishing new law.46

Third, Rule 11(b)(3) requires that any factual allegation either have evidentiary support or, if identified as such, be “likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.”47 Evidentiary support can include reasonable inferences from facts or circumstantial evidence.48 This requires attorneys to make an objectively reasonable inquiry under the circumstances into the facts of the case. As noted above, to determine whether factual assertions are supported by an objectively reasonable factual inquiry, courts will look to several factors, including:

whether the signer of the documents had sufficient time for investigation; the extent to which the attorney had to rely on his or her client for the factual foundation underlying the pleading, motion or other paper; whether the case was accepted from another attorney; the complexity of the facts and the attorney’s ability to do a sufficient pre-filing investigation; and whether discovery would have been beneficial to the development of the underlying facts.49

The Second Circuit recently held that “[a] statement of fact can give rise to the imposition of sanctions only when the particular allegation is utterly lacking in support."50 It is not a violation of Rule 11 to fail to indentify the support for the fact as either based on direct evidence or inference.51 Nor is it generally a violation not to disclose contrary factual evidence.52 Generally, isolated factual errors are not sanctionable, so long as the error was made in good faith and in a context in which the filing as a whole had factual support.53 However, courts have on occasion held such errors to be deserving of sanctions.54 Factual assertions should, at bottom, be made with extreme care and after review by others in the legal aid office.

Fourth, Rule 11(b)(4) states that any denials of factual contentions must be either “warranted on the evidence” or, if identified as such, “reasonably based on a lack of information or belief.”55 Thus, denials of fact are treated like factual assertions and must be objectively reasonable. The addition of this fourth requirement to the 1993 amended rule ensures an equal application to both plaintiffs and defendants. 

4.2.A.2.  Sanctions

Rule 11(c) permits, but no longer requires, the court to issue sanctions to attorneys, law firms, or parties in violation of the rule or responsible for the violation.56 The 1993 amendments made the issuance of sanctions, whether prompted by motion or by the court’s own initiative, discretionary rather than mandatory.57 The advisory committee’s notes list several factors that the courts should consider in deciding whether to issue a sanction and, if appropriate, the kind of sanction to impose:

Whether the improper conduct was willful, or negligent; whether it was part of a pattern of activity, or an isolated event; whether it infected the entire pleading, or only one particular count or defense; whether the person has engaged in similar conduct in other litigation; whether it was intended to injure; what effect it had on the litigation process in time or expense; whether the responsible person is trained in the law; what amount, given the financial resources of the responsible person, is needed to deter that person from repetition in the same case; what amount is needed to deter similar activity by other litigants.58

The 1993 amendments also stress that the purpose of sanctions is deterrence rather than compensation and highlight the availability of non-monetary sanctions for the court's consideration.59 Consistent with this deterrence function, “if a monetary sanction is imposed, it should ordinarily be paid into court as a penalty.”60 These amendments lessen the incentive for a litigant to file a motion for sanctions because the litigant is less likely to profit financially if a Rule 11 violation is found by the court. Rule 11, however, also authorizes the direct payment of fees and expenses to the moving party when “warranted for effective deterrence.”61 At bottom, “sanctions should not be more severe than reasonably necessary to deter repetition of the conduct by the offending person or comparable conduct by similarly situated persons.”62 This deterrence function permits the court to account for the attorney's resources when setting a monetary sanction.63

Rule 11 authorizes the court to sanction both attorneys and their clients.64 Rule 11(c)(1)(A) further provides that, “[a]bsent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees.”65 Although this provision has apparently not been applied to a legal services organization, it does suggest that such an entity could be regarded as a law firm and, therefore, subject to sanctions when an attorney it employs violates Rule 11.66 The advisory committee’s notes state that the court may appropriately inquire whether “institutional parties” impose restrictions on the discretion of individual attorneys.67 To the extent that such restrictions minimize the risk of institutional sanctions, legal aid organizations may wish to consider imposing them.

Rule 11(c)((1)(A) requires that a party seeking sanctions must serve a separate motion68 identifiying the conduct that is alleged to have violated Rule 11 on the alleged offender twenty-one days before filing the motion in court.69 During this twenty-one-day period,70 the party served may withdraw or correct any challenged material, thus eliminating the need for the motion to be filed with the court.71 This “safe harbor” period aims to decrease the volume of Rule 11 motions that come before the court. Litigants may avoid potential sanctions by withdrawing or amending improper materials without the court's involvement. The court in Barber v. Miller discussed the rationale for the safe-harbor provision as follows:

 These provisions are intended to provide a type of “safe harbor” against motions under Rule 11 in that a party will not be subject to sanctions on the basis of another party’s motion unless, after receiving the motion, it refused to withdraw that position or to acknowledge candidly that it does not currently have evidence to support a specified allegation. Under the former rule, parties were sometimes reluctant to abandon a questionable contention lest that be viewed as evidence of a violation of Rule 11; under the revision, the timely withdrawal of a contention will protect a party against a motion for sanctions.72

 

A court may also levy sanctions sua sponte but may do so only after issuing a specific order describing the perceived misconduct and allowing the possible offender an opportunity to show cause why the sanction should not be issued.73 The rule incorporates a measure of due process protection.74 However, because a sua sponte order to show cause does not allow an attorney the opportunity to withdraw the offending filing, courts are cautioned to “reserve such sanctions for situations that are akin to a contempt of court.”75 Furthermore, to facilitate appellate review, the rule requires the court to describe the sanctionable conduct and the basis for the sanction imposed.76

While the matter may turn on particular facts, Rule 11 sanctions are not generally immediately appealable under the collateral order doctrine.77 On appeal,”[a]ll aspects of a district court’s Rule 11 determination are examined under the abuse of discretion standard.”78 However, when sanctions are levied sua sponte, they will be reviewed with “particular stringency” due to the “unusual position of the trial court in such circumstances, serving at once as both prosecutor and judge . . . .”79

4.2.B. 28 U.S.C. § 1927

Another basis for sanctions lies in 28 U.S.C. § 1927, which serves “to deter unnecessary delays in litigation.”80 The statute authorizes sanctions in the form of “excess costs, expenses, and attorneys fees” against any attorney who “multiplies the proceedings in any case unreasonably and vexatiously.”81 Courts are divided on whether law firms (and, by extension, legal aid offices) may be subject to sanctions under § 1927 in addition to individual attorneys.82 Courts have resorted to § 1927 more frequently since the statute was amended to include attorney fees.83

The scope of authority to sanction under § 1927 is both broader and narrower than Rule 11.84 Section 1927 is broader in that the attorney’s behavior is examined throughout the entire litigation, as a “course of conduct,”85 while Rule 11 applies to individual filings.  The filing of a frivolous complaint, alone, may violate Rule 11, but not § 1927 because such a complaint does not "multiply" the proceedings.86 Conversely, a course of conduct can be sanctionable under § 1927 even though the individual filings during that conduct comport with Rule 11 standards.

Section 1927 is narrower because, unlike Rule 11 requirement of objective reasonableness, § 1927 generally requires subjective bad faith.87 Some courts, however, interpret § 1927 as authorizing sanctions when attorney conduct falls short of bad faith: “viewed objectively, manifests either intentional or reckless disregard of the attorney’s duties to the court.”88 For these courts, malicious intent or bad purpose is not required. Thus, the "circuits are split as to whether § 1927 requires a showing of subjective bad faith or whether mere recklessness is sufficient."89

Since Rule 11 and § 1927 have different standards, courts deciding whether to issue sanctions under both may conduct a separate inquiry into § 1927 and Rule 11, but a court proceeding sua sponte under either rule must give the subject attorney notice and an opportunity to respond.90 The resulting findings must detail the basis for the sanctions, link the conduct to the sanctions awarded, and distinguish among sanctions awarded under different theories.91 Sanctions under § 1927 serve both deterrence and compensatory functions. As a result, the amount awarded need not be the least amount necessary to deter subsequent misconduct and is approrpiately payable to the opposing party.92 The circuits are divided on whether it is not an abuse of discretion for a trial court to reduce a fee award to account for the sanctioned attorney's ability to pay it.93

4.2.C.  The Inherent Power of the Court

The sanctioning power of the federal courts "is not limited to what is enumerated in statutes or in the rules of civil procedure."94 Federal courts have the inherent power to punish persons who abuse the judicial process.  The inherent power of the court is an "implied power squeezed from the need to make the courts function."95 Rule 11 and § 1927 do not displace the court's inherent power, but instead they exist concurrently.96

The inherent power to sanction is broad.97 The scope of the power reaches "any abuse" of the judicial process.98 This includes the authority to sanction for conduct that occurs outside of the courtroom and is not limited to attorneys or parties.99 Courts also have broad discretion to determine the appropriate sanction to be imposed.100 Where appropriate, courts may impose attorney fees representing the entire cost of litigation.101 However, the courts' inherent power to impose attorney fees "is limited to those cases where the litigant has engaged in bad-faith conduct or willful disobedience . . . ."102

Given the broad authority granted, a court's use of the inherent power should be used cautiously.103 Any use must comply with due process.104 Use of the power will be reviewed under the abuse of discretion standard.105

Table of Comparison:

 

 Rule 11

 28 U.S.C. §1927

 Inherent Power

Applicable Conduct:

Pleadings, written motions, and other papers filed in a civil action for an improper purpose or without a reasonable inquiry into the facts and law.

Any conduct which so multiplies the proceedings in any case unreasonably and vexatiously.

Any abuse of the judicial process.

Legal Standard Triggering Liability:

Objective reasonableness

Circuit Split:
Subjective bad faith or mere recklessness.

Bad faith required to award expenses including attorney fees.

Who Can Be Sanctioned:

Attorneys, their law firms, parties, and pro se litigants.

Attorneys only.

Broad authority.

Procedural Requirements:

Must be in separate motion, which must be served on the offending party 21 days before filing with the court.  If offending filing is withdrawn, the matter is concluded.  Court may demand attorney, law firm, or party show cause why conduct does not violate Rule 11(b) of its own initiative.

No specific requirements.  Must comport with due process. No specific requirements.  Must comport with due process.

4.2.D. Ghostwriting

As increasing numbers of litigants proceed pro se, many lawyers and legal offices offer "unbundled legal services" also known as limited scope representation.106 Limited representation is permissible if reasonable and the client consents.107 In such representation, attorneys and clients agree that the attorneys will provide discrete and limited services for the clients as part of the clients' efforts to represent themselves.  One such service is ghostwriting, which occurs when an attorney prepares documents for filing by a party who otherwise appears unrepresented in the litigation.108

Initially, the attorney must consider what amount of assistance constitutes ghostwriting in the jurisdiction. Courts generally find "that an attorney must play a substantial role in the litigation" to be considered a ghostwriter.109 Petitions and briefs that are "manifestly written" or prepared in "any substantial way" by an attorney will cross this threshold.110

Ghostwriting has been defended as a practice that improves client satisfaction, helps parties advance meritorious claims or defenses that would otherwise not be made, and increases access to civil representation for clients who would otherwise be unable to afford full-service representation.111 However, courts and bar ethics committees have criticized the practice as duping courts into giving pro se litigants undeserved leniency and allowing attorneys to avoid procedural rules and ethical obligations.112 Ghostwriting therefore raises both ethical and procedural concerns.113

4.2.D.1. Ethical Concerns

Various courts and ethics committees have found the practice of ghostwriting to be in conflict with the duty of candor owed to the court by giving a "false impression of the real state of affairs."114 They regard ghostwriting as violating Model Rules of Professional Conduct Rule 3.3(a)(1) (candor to the tribunal) and/or 4.1 (truthfulness in statements to others)./115/ Additionally, ghostwriters may run afoul of Model Rule 8.4(c)'s admonition against "conduct involving dishonesty, fraud, deceit or misrepresentation" by not disclosing their participation in drafting the document.115  

In 2007 the ABA released a formal opinion finding that "[a] lawyer may provide legal assistance to litigants appearing before tribunals 'pro se' and help them prepare written submissions without disclosing or ensuring the disclosure of the nature or extent of such assistance."116 The ABA committee therefore found that providing undisclosed legal assistance to pro se litigations does not violate the Model Rules of Professional Conduct so long as the assisting lawyer does not violate rules that otherwise apply to their conduct.117 The ABA committee was not persuaded that undisclosed assistance gives an advantage to pro se litigants whose filings are generally construed liberally since the background help by a lawyer should be clear if the document is drafted effectively. Nor did the committee view ghostwriting as a violation of Model Rule 8.4 or of rules, like Rule 11, that require attorneys to assume responsibility for documents filed with a court.  Somewhat begging the question, the committee concluded that such a duty is assumed only when the attorney signs the document as counsel.

State ethics committees continue to reach divergent conclusion about the propriety of ghostwriting.118 Some state committees have adopted the ABA position and state that no disclosure is ethically required.119 Others have taken a more moderate view, requiring attorneys only to inform the court that the pro se litigant received professional help, for example, by including the statement "prepared by counsel" in the ghostwritten filing.120 Other committees go further, demanding ghostwriting attorneys to reveal their full identities.121 There is some academic support for the notion that attorneys should be required to disclose their involvement but that it should be regarded as a limited appearance that does not require a subsequent motion to withdraw.122

Given the wide diversity of opinion on ghostwriting, before engaging in the practice, it is strongly recommended that you review any ethics opinions involving ghostwriting in your jurisdiction or seek such an opinion if there is not one on point. 

4.2.D.2 Procedural Concerns

Federal courts have been hostile to the practice of ghostwriting, finding that it violates the spirit of Rule 11 by circumventing the attorney's signature requirement.123 Courts have specifically interpreted the purpose of Rule 11(a) as requiring attorneys to sign court documents that they prepared “in any substantial part.”124 However, one court acknowledged that if a ghostwriter no longer represented a litigant when the complaint is filed, the author’s failure to sign a complaint “is not at odds with the plain language of Rule 11.”125 Advocates should be especially wary in jurisdictions that have already addressed ghostwriting since some courts served notice that it will be sanctionable.126 For example, a particularly detailed and recent opinion finding that ghostwriting in New Jersey violated state ethics rules and the spirit of Rule 11 is Delso v. Trustees for the Retirement Plan for the Hourly Employees of Merck.127

Even though most federal courts addressing ghostwriting concluded that it violates Rule 11, the same courts declined to sanction the anonymous authors. The courts cited insufficient evidence,128 or a lack of clearly defined precedent.129 Courts have, however, ordered pro se litigants to disclose the source of their assistance.130 However, as more jurisdictions confront ghostwriting, attitudes are changing. Some courts have adopted the policy of striking ghostwritten submissions and indicated their willingenss to levy sanctions.131 Although nascent in development, the authority to sanction ghostwriting includes:

  • the inherent power of the court,132

  • local rules governing withdrawal of representation,133

  • the ethical rules,134 and

  • the signature requirement of Rule 11.135

At least one court offered a preventive approach for attorneys caught between protecting a pro se litigant from default and not being bound to represent the litigant throughout the entire case.136 The suggested remedy is simply to sign and file the pleading and “simultaneously fil[e] a motion to withdraw as counsel accompanied by an appropriate explanation and brief.”137 However, this theoretical escape hatch poses unique problems for legal aid attorneys, who often provide limited service arrangements to clients. In such cases, withdrawal may run afoul of the duty not to withdraw if it would cause a “material adverse effect on the interests of the client.”138

Updated 2013 by Jeffrey S. Gutman