Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-02513/USCOURTS-casd-3_16-cv-02513-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA 

SABRINA MUHAMMAD, an individual,

Plaintiff,

v. 

REESE LAW GROUP, APC, 

Defendant.

Case No.: 16cv2513-MMA (BGS)

ORDER DENYING REESE LAW 

GROUP’S MOTION FOR 

SANCTIONS 

[Doc. No. 46]

Plaintiff Sabrina Muhammad (“Plaintiff”) brings two causes of action against 

Defendant Reese Law Group (“Reese”) alleging violations of the Fair Debt Collection 

Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), and California’s Rosenthal Fair Debt 

Collection Practices Act, California Civil Code § 1788 et seq. (“Rosenthal Act”). See 

Complaint. On January 23, 2017, the Court granted Reese’s anti-SLAPP motion, 

dismissing Plaintiff’s Rosenthal Act claims against Reese with prejudice. See Doc. No. 

31. Reese now moves for sanctions against Plaintiff’s counsel pursuant to Federal Rule 

of Civil Procedure 11. See Doc. No. 46. Plaintiff filed an opposition to Reese’s motion, 

to which Reese replied. See Doc. Nos. 49, 52. The Court found the matter suitable for 

determination on the papers and without oral argument pursuant to Civil Local Rule 

7.1.d.1. See Doc. No. 53. For the reasons set forth below, the Court DENIES Reese’s 

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motion for sanctions. 

BACKGROUND

Plaintiff Sabrina Muhammad is an individual residing in Orange County, 

California. Reese is a law firm headquartered in San Diego, California, which conducts 

business in the state of California. 

Plaintiff leased a vehicle from Ford Motor Credit Company, LLC (“Ford”) and 

defaulted on the loan. Reese obtained a judgment on behalf of Ford against Plaintiff in 

the Orange County Superior Court on or about March 30, 2001. Reese then garnished 

Plaintiff’s wages at different times over a period of several years. 

On or about July 17, 2009, Reese renewed the money judgment in the Orange 

County Superior Court. Approximately two years later in November 2011, Reese 

prepared and submitted to the Orange County Superior Court a writ of execution and 

interest calculation. “The clerk of court issued the writ on November 28, 2011.” Doc. 

No. 46-1 at 2. 

Approximately four years later, Reese prepared and submitted another writ of 

execution and interest calculation to the Orange County Superior Court. The clerk of 

court for the Orange County Superior Court issued the writ on December 2, 2015, and 

directed the San Diego County Sheriff to garnish Plaintiff’s wages. 

Plaintiff asserts that Reese “is collecting more than owed.” Doc. No. 49 at 1. 

Moreover, Plaintiff claims that despite having no ties to San Diego County, Reese 

continues to garnish Plaintiff’s wages in a county other than where the debt was created 

or where Plaintiff resides. See id. Plaintiff therefore argues Reese’s actions violate 

various provisions of the FDCPA. 

/ / / 

/ / / 

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LEGAL STANDARD1

Federal Rule of Civil Procedure 11 provides in pertinent part, that when an 

attorney or unrepresented party presents a signed paper to a court, that attorney or 

unrepresented party is certifying that to the best of his or her “knowledge, information 

and belief, formed after an inquiry reasonable under the circumstances” that: 

(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 law 

or by a nonfrivolous argument for extending, modifying, or reversing law or for 

establishing new law; 

(3)the factual contentions have evidentiary support or, if specifically so identified, 

will likely have evidentiary support after a reasonable 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)(1)-(4). 

 When one party seeks sanctions against another, the Court must first determine 

whether any provision of Rule 11(b) has been violated. Warren v. Guelker, 29 F.3d 

1386, 1389 (9th Cir. 1994). A finding of subjective bad faith is not required under Rule 

11. See Smith v. Ricks, 31 F.3d 1478, 1488 (9th Cir. 1994) (quoting Zuniga v. United 

Can Co., 812 F.2d 443, 452 (9th Cir. 1987)) (“Counsel can no longer avoid the sting of 

                                               

1

 Plaintiff claims that in the event Defendant prevails on the instant motion, Defendant “is only 

entitled to attorney fees if they can show the case was filed in bad faith or for the purposes of 

harassment.” Doc. No. 49 at 21. Plaintiff argues the Court should utilize the statutory fee shifting 

provision of 15 U.S.C. § 1692k, as opposed to Rule 11. See id. Plaintiff, however, fails to sufficiently 

demonstrate the applicability of the FDCPA attorney fee provision in this context. In any event, because 

the Court denies Defendant’s motion for sanctions for the reasons set forth below, the Court need not 

analyze this argument. 

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Rule 11 sanctions by operating under the guise of a pure heart and empty head.”). 

“Instead, the question is whether, at the time the paper was presented to the Court (or 

later defended) it lacked evidentiary support or contained ‘frivolous’ legal arguments.” 

Odish v. CACH, LLC, 2012 WL 5382260, at *3 (S.D. Cal. Nov. 1, 2012). 

If the court determines a Rule 11 violation occurred, “the court may impose an 

appropriate sanction on any attorney, law firm, or party that violated the rule or is 

responsible for the violation.” Fed. R. Civ. P. 11(c)(1) (emphasis added). 

DISCUSSION

I. Evidentiary Objections 

As a preliminary matter, both parties filed various evidentiary objections. See Doc. 

Nos. 50, 52-4. The Court addresses the parties’ objections in turn. 

A. Plaintiff’s Evidentiary Objections 

Plaintiff objects to evidence submitted in support of Reese’s motion for sanctions. 

See Doc. No. 50. Specifically, Plaintiff objects to: (1) Harlan Reese’s declaration in its 

entirety; (2) Exhibit 2 to Harlan’s Reese’s declaration; (3) Joseph M. Pleasant’s 

declaration in its entirety, including Exhibit 1; (4) Dana Meyer’s declaration in its 

entirety, including Exhibits 1-3; and (5) Susan Benson’s declaration in its entirety, 

including Exhibits 1-2. See Doc. No. 50. Reese filed an opposition to Plaintiff’s 

evidentiary objections. See Doc. No. 52-3. The Court does not rely on the abovereferenced declarations and exhibits in ruling on the instant motion. Accordingly, the 

Court DENIES AS MOOT Plaintiff’s evidentiary objections. 

B. Reese’s Evidentiary Objections 

Reese objects to evidence submitted in support of Plaintiff’s opposition to Reese’s 

motion for sanctions (objections 1-6). See Doc. No. 52-4. Specifically, Reese objects to: 

(1) six excerpts of William Jarrell’s declaration; and (2) six excerpts of Sabrina 

Muhammad’s declaration (objections 7-12). See id. 

 As to Mr. Jarrell’s declaration, Reese objects to five of the six excerpts on hearsay 

grounds. Hearsay is a statement made out of court offered for the truth of the matter 

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asserted. Fed. R. Evid. 801(c). The Court finds Reese’s hearsay objections to Mr. 

Jarrell’s declaration to be without merit because such statements are based on Mr. 

Jarrell’s personal knowledge and are not offered for the truth of the matter asserted. 

Accordingly, the Court OVERRULES Reese’s hearsay objections to Mr. Jarrell’s 

declaration (objections 1-4, 6). Reese objects to one other portion of Mr. Jarrell’s 

declaration on the ground that the Mr. Jarrell’s testimony calls for a legal conclusion. 

The Court similarly finds this objection to be without merit because Mr. Jarrell simply 

paraphrases relevant California law. As such, the Court OVERRULES Reese’s 

objection on the ground that Mr. Jarrell’s testimony calls for a legal conclusion (objection 

5). 

 As to Ms. Muhammad’s declaration, the Court does not rely on Ms. Muhammad’s 

declaration in reaching its conclusion below. As such, the Court DENIES AS MOOT

Reese’s objections to Ms. Muhammad’s declaration. 

II. Reese’s Motion for Sanctions2

 

The gravamen of Plaintiff’s Complaint is that Reese violated the FDCPA by 

misrepresenting the amount of Plaintiff’s debt, attempting to collect more money than 

owed on the money judgment, and initiating a legal action in an improper venue. See 

Complaint. Reese contends sanctions are proper because there is no evidentiary support 

for Plaintiff’s accounting allegations, there is no legal support for Plaintiff’s venue 

allegations, and Plaintiff’s counsel did not perform a reasonable pre-filing inquiry. See

Doc. No. 46-1. Plaintiff opposes, arguing that Reese’s motion for sanctions is untimely, 

Plaintiff’s claims are warranted by existing law, and Plaintiff’s counsel engaged in a 

reasonable pre-filing inquiry. See Doc. No. 49. The Court addresses each argument in 

                                               

2

 Mr. Howard Smith, one of Reese’s attorneys, avers he complied with the 21-day safe harbor 

provision required by Rule 11(c)(2). Doc. No. 46-2 ¶¶ 2-3 (hereinafter “Smith Decl.”). Mr. Smith sent 

by email and U.S. mail a copy of Reese’s proposed motion for sanctions at least 21 days prior to filing 

the instant motion. Smith Decl. ¶ 2. Plaintiff does not contest that she received a copy of Reese’s 

motion for sanctions, or argue that Reese otherwise failed to comply with the requirements set forth in 

Rule 11. As such, the Court concludes Reese complied with the 21-day safe harbor period requirement. 

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turn. 

A. Reese’s Motion for Sanctions is Timely 

Plaintiff asserts the instant motion is untimely because “it was made after [Reese] 

prevail[ed] on the anti-SLAPP motion.” Doc. No. 49 at 18. Reese, however, contends its 

motion is timely because it was not until Plaintiff produced “no evidence in opposition” 

to Reese’s anti-SLAPP motion that Reese believed “there was no evidentiary basis for the 

filing of the Complaint and that a Motion for Sanctions would be appropriate.” Doc. No. 

52 at 7. 

“Ordinarily the motion [for sanctions] should be served promptly after the 

inappropriate paper is filed, and, if delayed too long, may be viewed as untimely.” Fed. 

R. Civ. P. 11 advisory committee’s note to 1993 amendment. “Motions for Rule 11 

attorney’s fees cannot be served after the district court has decided the merits of the 

underlying dispute giving rise to the questionable filing. This is because once the court 

has decided the underlying dispute, the motion for fees cannot serve Rule 11’s purpose of 

judicial economy.” Islamic Shura Council of S. Cal. v. F.B.I., 757 F.3d 870, 872 (9th 

Cir. 2014). 

Here, the Court finds Reese’s motion is timely because the Court has not decided 

the merits of the underlying dispute. While the Court granted Reese’s anti-SLAPP 

motion on January 23, 2017, the Court only dismissed Plaintiff’s state law claims under 

the Rosenthal Act. See Doc. No. 31. Thus, the Court has not yet addressed Plaintiff’s

federal claims under the FDCPA. See Islamic Shura Council of S. Cal., 757 F.3d at 873 

(reversing an order granting a motion for sanctions where the motion for sanctions was 

filed after the Court ruled on the motion underlying the dispute); Grant v. Bostwick, 2016 

WL 3983075, at *6 (S.D. Cal. July 21, 2016) (denying a motion for sanctions where court 

decided the merits of the underlying motion before the plaintiff filed the motion for 

sanctions). Further, because the Court issued its Order granting Reese’s anti-SLAPP 

motion on January 23, 2017, Reese did not wait an unreasonable amount of time in filing 

the instant motion on March 10, 2017. Cf. MGA Entm’t, Inc. v. Nat’l Prod. Ltd., 2012 

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WL 4052023, at *5 (C.D. Cal. Sept. 14, 2012) (noting the defendants’ motion for 

sanctions was untimely because the defendants did not move for sanctions until more 

than six months after the plaintiffs’ allegedly improper behavior) (emphasis added); 

Netbula, LLC v. Bindview Dev. Corp., 2007 WL 1694820, at *1 (N.D. Cal. June 11, 

2007) (finding Rule 11 motion “untimely because it was not filed until many months after 

Defendants’ offending contentions were made and long after the presiding judge had 

already considered or ruled upon the papers containing the offending contentions.”). 

Accordingly, Reese’s motion for sanctions is timely. 

B. Plaintiff’s Complaint is Not Frivolous 

Reese contends Plaintiff’s counsel committed two sanctionable acts: (1) Plaintiff 

presents no evidence in support of her accounting allegations; and (2) Plaintiff’s venue 

allegations are not supported by existing law, or by a nonfrivolous argument for the 

extension of existing law. See Doc. No. 52 at 6. 

Prior to filing a complaint, “attorneys have a duty, not only to conduct a reasonable 

factual investigation, but also to perform adequate legal research to confirm whether the 

underlying theories of the complaint are warranted by existing law or by a good faith 

argument for an extension, modification, or reversal of existing law.” Smith v. Hunt & 

Henriques, 2013 WL 6141456, at *2 (N.D. Cal. Nov. 21, 2013) (citing Christian v. 

Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir. 2002)). When evaluating whether a complaint 

is frivolous or without evidentiary support, the court “must conduct a two-prong inquiry 

to determine (1) whether the complaint is legally or factually baseless from an objective 

perspective, and (2) if the attorney has conducted a reasonable and competent inquiry 

before signing and filing it.” Christian, 286 F.3d at 1127. The word “frivolous” is a 

shorthand used by courts to “denote a filing that is both baseless and made without a 

reasonable and competent inquiry.” Townsend, 929 F.2d 1358, 1362 (9th Cir. 1990) 

(emphasis added). 

1. Adequate Legal Basis 

First, the Court must determine whether Plaintiff’s Complaint is legally or 

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factually baseless from an objective perspective. See id. at 1362. Reese argues 

“Plaintiff’s attorneys have been advised of the law repeatedly and RLG provided them 

with the evidence and explanations showing that RLG did not misapply collections or 

over collect or violate the FDCPA’s venue provision.” Doc. No. 46-1 at 10. Because the 

presence of a single frivolous or improper claim can give rise to a Rule 11 violation, 

courts must individually assess each claim the movant alleges is frivolous to determine 

whether any claim justifies the imposition of sanctions. See Townsend, 929 F.2d at 1363. 

Therefore, the Court proceeds to analyze Plaintiff’s accounting allegations and venue 

allegations separately. 

a. Alleged Accounting Violation 

Plaintiff alleges Reese misrepresented the amount of Plaintiff’s debt and is 

attempting to collect more money than owed in violation of 15 U.S.C. § 1692f. 

Complaint ¶ 53. Reese claims “there is no evidentiary support for the accounting 

allegations.” Doc. No. 52 at 6. In response, Plaintiff’s counsel assert that they reviewed 

numerous documents which led them to conclude that Defendant attempted to garnish 

more than Plaintiff owed on the judgment. See Doc. No. 49 at 7. 

The FDCPA prohibits a debt collector from using unfair or unconscionable means 

to collect to attempt to collect any debt, including “[t]he collection of any amount 

(including any interest, fee, charge, or expense incidental to the principal obligation) 

unless such amount is expressly authorized by the agreement creating the debt or 

permitted by law. 15 U.S.C. § 1692f(1). 

Here, Plaintiff’s counsel contends that in reviewing various relevant documents, 

including garnishment ledgers produced by the Orange County Superior Court, the San 

Diego County Sheriff’s Levying Office, the IRS, and Reese Law Group, Plaintiff’s 

counsel “discovered an entry where Defendant appeared to erroneously allocate 

Plaintiff’s alleged unpaid interest balance to the alleged outstanding principal balance. 

As such, it appeared Defendant was collecting compound interest, a violation of the 

FDCPA.” See Doc. No. 49-1 at ¶ 32 (hereinafter “Jarrell Decl.”). Upon review of 

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Plaintiff’s Complaint and opposition to the instant motion, the Court finds that Plaintiff’s 

accounting allegations are not objectively baseless. See Prof’l Real Estate Investors, Inc. 

v. Columbia Pictures, Indus., Inc., 508 U.S. 49, 60 (1993) (noting that a claim is typically 

not considered “baseless” unless “no reasonable litigant could realistically expect success 

on the merits.”). 

b. Alleged Venue Violation 

Plaintiff alleges Reese brought a legal action against her in an improper venue in 

violation of 15 U.S.C. § 1692i. Complaint ¶ 52(e). Reese contends “there [i]s no legal 

support for the venue allegations and [Plaintiff has] provided no argument to change or 

modify the law in this regard.” Doc. No. 52 at 6. The FDCPA requires a debt collector 

who brings any legal action on a debt “against any consumer” to “bring such action only 

in the judicial district or similar legal entity (A) in which such consumer signed the 

contract sued upon; or (B) in which such consumer resides at the commencement of the 

action.” 15 U.S.C. § 1692i(a)(2). 

Here, Plaintiff claims Reese obtained the initial judgment in Orange County, but 

that Reese later obtained a writ of execution and used it to garnish wages in San Diego 

County. Plaintiff asserts she never lived in San Diego and did not sign the contract with 

the original debtor (Ford) in San Diego. See Doc. No. 49 at 7. Thus, because Reese’s 

garnishment activity took place outside of Orange County, Plaintiff asserts Reese violated 

§ 1692i of the FDCPA. 

Reese argues Plaintiff’s venue allegations are without merit because the statute 

requires the debt collector bring a legal action on a debt “against any consumer.” 15 

U.S.C. § 1692i(a). Reese cites to authority from the First, Eighth and Eleventh Circuits 

to support its contention that wage garnishment procedures do not qualify as actions 

against consumers, but instead are actions against third parties, for purposes of the 

FDCPA’s venue requirements. See Ray v. McCullough Payne & Hann, LLC, 838 F.3d 

1107, 1111 (11th Cir. 2016); Hageman v. Barton, 817 F.3d 611, 618-19 (8th Cir. 2016); 

Smith v. Solomon & Solomon, PC, 714 F.3d 73, 75-77 (1st Cir. 2013). Plaintiff, however, 

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claims the law in the Ninth Circuit is unsettled on the issue of whether California wage 

garnishment procedures are actions against a consumer or third party.3

 See Doc. No. 49 

at 10 (noting that the Ninth Circuit has “never specifically addressed the issue of whether 

the [wage] garnishment qualified as an action against the consumer or a third party.”). 

Thus, Reese claims Plaintiff’s position is not supported by existing law. The fact that the 

Ninth Circuit has not yet addressed this issue, however, does not mean Plaintiff’s position 

is objectively baseless. Plaintiff need not be correct on her “perception of the law,” but 

need only “state[] an arguable claim.” Riverhead Sav. Bank v. Nat’l Mortgage Equity 

Corp., 893 F.2d 1109, 1115 (9th Cir. 1990) (citation omitted). Moreover, “[a] claim is 

not objectively baseless as long as there is ‘some plausible basis’ for the argument, even 

if that basis is ‘quite a weak one.’” Simpson v. Cal. Pizza Kitchen, Inc., 2013 WL 

12114487, at *3 (S.D. Cal. Oct. 23, 2013) (citing United Nat. Ins. Co. v. R&D Latex 

Corp., 242 F.3d 1102, 117 (9th Cir. 2001) (emphasis in original). In the absence of any 

binding authority to the contrary, Plaintiff’s venue allegations are not objectively 

baseless. 

2. Reasonable Inquiry

Second, the Court must determine if Plaintiff’s counsel conducted a reasonable and 

competent inquiry before signing the Complaint. See Townsend, 929 F.2d at 1362. 

Reese claims Plaintiff failed to conduct an adequate pre-lawsuit investigation because 

Reese’s counsel “explained the accounting issues” to Plaintiff’s counsel prior to Plaintiff 

filing her lawsuit. See Doc. No. 52 at 2-4. “Rule 11’s requirement of a ‘reasonable 

inquiry’ means an inquiry reasonable under ‘all the circumstances of a case.’” Townsend, 

929 F.2d at 1364 (citing Cooter & Gell, 496 U.S. 384, 401 (1990)). This determination is 

                                               

3

 The Court notes that Plaintiff makes repeated references to the Court’s previous ruling that 

“wage garnishment activity against the consumer’s employer is not collection activity against the 

consumer[.]” Doc. No. 49 at 13; see id. at 2, 6, 8, 9, 10. The Court, in granting Reese’s anti-SLAPP 

motion, however, did not rule on this issue. The Court expressly indicated that Plaintiff failed to meet 

her burden under the second prong of the anti-SLAPP analysis. See Doc. No. 31 at 11. As such, the 

Court’s holding is narrower in scope than Plaintiff contends. 

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highly fact-intensive. See id. 

Here, the Court finds Plaintiff’s counsel conducted a reasonable pre-filing inquiry. 

Mr. Jarrell avers he conducted extensive research for several months to determine 

whether Plaintiff had any viable claims. Jarrell Decl. ¶ 12. In fact, Mr. Jarrell reviewed 

hundreds of pages of documents relevant to Plaintiff’s case. Jarrell Decl. ¶ 13. 

Additionally, Mr. Jarrell “performed more than 35 hours of legal services” including 

analyzing Reese’s prospective liability, researching relevant California and federal law, 

and discussing the case with opposing counsel. Jarrell Decl. ¶ 13, 18-20. Further, 

Plaintiff hired a forensic accountant to review the relevant accounting records who 

similarly believed that Defendant improperly classified outstanding interest as principal. 

Jarrell Decl. ¶¶ 34, 36. “Rule 11 is an extraordinary remedy, one to be exercised with 

extreme caution.” Operating Eng’rs Pension Trust v. A-C Co., 859 F.2d 1336, 1345 (9th 

Cir. 1988). Sanctions are reserved “for the rare and exceptional case where the action is 

clearly frivolous. . . .” Id. at 1344. The Court finds that Plaintiff’s counsel conducted a

reasonable pre-filing inquiry; thus, this is not a “rare and exceptional case” warranting the 

imposition of sanctions. 

3. Conclusion 

Accordingly, because Plaintiff’s claims are not objectively baseless, and because 

Plaintiff’s counsel conducted a reasonable inquiry, the Court DENIES Reese’s motion 

for sanctions. 

III. Plaintiff is Not Entitled to Attorneys’ Fees Pursuant to Rule 11(c)(2) 

Finally, Plaintiff asserts that she “is entitled to [attorneys’] fees as the prevailing 

party to this Motion” pursuant to Federal Rule of Civil Procedure 11(c)(2) in the amount 

of $26,280.00. Doc. No. 49 at 5. Rule 11(c)(2) provides in pertinent part that “[a] 

motion for sanctions must be made separately from any other motion and must describe 

the specific conduct that allegedly violates Rule 11(b). . . . If warranted, the court may

award to the prevailing party the reasonable expenses, including attorney’s fees, incurred 

for the motion.” Fed. R. Civ. P. 11(c)(2) (emphasis added). 

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Here, the Court declines to award attorneys’ fees to Plaintiff as the prevailing party 

on Reese’s motion for sanctions. Plaintiff summarily states “Defendant’s Rule 11 

Motion is without merit, and is filed for an improper purpose.” Doc. No. 49 at 2. 

However, “a request for costs . . . requires a showing similar to that required for a motion 

brought under Rule 11.” Simpson, 2013 WL 12114487, at *5. In the absence of any 

evidence to the contrary, and based upon a thorough review of the relevant documents, 

the Court finds Defendant did not bring the instant motion for an improper purpose. 

While Rule 11(c)(2) permits the Court, in its discretion, to award attorneys’ fees to the 

prevailing party, Rule 11 does not require the Court to do so. Accordingly, the Court 

DENIES Plaintiff’s request for attorneys’ fees. 

CONCLUSION

Based on the foregoing, the Court DENIES Reese’s motion for sanctions and 

DENIES Plaintiff’s request for attorneys’ fees. 

IT IS SO ORDERED. 

Dated: June 14, 2017

 _____________________________ 

 HON. MICHAEL M. ANELLO 

United States District Judge 

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