Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_03-cv-05439/USCOURTS-caed-1_03-cv-05439-7/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1961 Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

FOX HOLLOW OF TURLOCK )

OWNERS’ASSOCIATION, et al., )

)

)

)

Plaintiffs, )

)

v. )

)

RICHARD SINCLAIR, et al., )

)

)

)

Defendants. )

 )

1:03cv5439 OWW DLB

ORDER GRANTING PLAINTIFFS’ 

MOTION FOR SANCTIONS

(Document 124)

Plaintiffs filed the instant Motion for Sanctions Based on Defendants’ Doe Amendment

and Motion to Disqualify Plaintiffs’ Counsel Timothy Ryan on April 27, 2005. The motion was

heard on May 27, 2005, before the Honorable Dennis L. Beck, United States Magistrate Judge. 

Timothy Ryan (“Ryan”) appeared on behalf of Plaintiffs and Richard Sinclair (“Sinclair”)

appeared on behalf of Defendants. 

BACKGROUND

The parties are familiar with the procedural and factual background of the action. The

Court will only summarize the facts relevant to the instant motion. 

On March 16, 2005, Defendants filed an “Amendment to First Amended Complaint”

naming Ryan as a doe defendant. On that same day, Defendants filed a Motion to Disqualify

Ryan as Plaintiffs’ Counsel based on (1) Ryan’s status as a potential witness; and (2) Ryan’s

alleged conflict of interest. 

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On March 28, Plaintiffs served the instant Motion for Sanctions on Sinclair. The motion

is based on Defendants’ March 16, 2005, Doe Amendment and Motion to Disqualify Ryan.

On April 1, 2005, Plaintiffs filed their opposition to the Motion to Disqualify Ryan and a

Motion to Drop Ryan as an Improper Party. 

On April 27, 2005, Plaintiffs filed the instant Motion for Sanctions.

On May 6, 2005, Defendants filed their reply to the opposition to the Motion to

Disqualify Ryan and their Statement of Non-opposition to Plaintiffs’ Motion to Drop Ryan as an

Improper Party. 

Defendants filed their opposition to the instant motion on May 13, 2005.

On May 24, 2005, the Court denied Defendants’ Motion to Disqualify Ryan.

On May 25, 2005, the Court entered Findings and Recommendation that the Motion to

Drop Ryan as an Improper Party be granted.

Plaintiffs filed their reply on May 26, 2005. 

DISCUSSION

A. Legal Standard

Federal Rule of Civil Procedure 11(a) requires that “[e]very pleading, written motion, and

other paper shall be signed by at least one attorney of record in the attorney’s individual name...” 

Rule 11(b) further provides that by presenting a pleading or written motion to the Court, an

attorney is certifying that the motion is not being presented for “any improper purpose, such as to

harass or to cause unnecessary delay or needless increase in the cost of litigation” and that the

“allegations and other factual contentions have evidentiary support . . .” Fed.R.Civ.Proc.

11(b)(1) and (3). 

Rule 11 is intended to deter dilatory or abusive pretrial tactics and to streamline litigation

by excluding baseless filings. Cooter & Gell v. Hartmarx Corp, 496 U.S. 384 (1996). Rule 11

provides for the imposition of sanctions when a filing is frivolous, legally unreasonable, or

without factual foundation, or is brought for an improper purpose. Estate of Blue v. County of

Los Angeles, 120 F.3d 982, 985 (9th Cir. 1997). Frivolous filings are “those that are both

baseless and made without a reasonable and competent inquiry.” Id. (internal citations omitted). 

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Whether Rule 11 has been violated is measured by an objective standard. Zaldivar v. City of Los

Angeles, 780 F.2d 823, 831 (9th Cir. 1986). 

Rule 11 has a “safe harbor” provision. Pursuant to Rule 11(c)(1)(A), a motion for

sanctions may not be filed until 21 days after it is served. During this time, the party served with

the motion has the opportunity to correct the violation by withdrawing the offending pleading. 

Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998). 

If a violation is found, the Court may, in its discretion, impose an “appropriate sanction.” 

The sanction must be limited to “what is sufficient to deter repetition of such conduct or

comparable conduct by others similarly situated.” Fed.R.Civ.Proc. 11(c)(2). 

B. Analysis

Plaintiffs contend that Defendants’ Doe Amendment had no reasonable basis in law and

was only intended to delay, harass and increase Plaintiffs’ legal fees. Plaintiffs argue that the

Doe Amendment was improper because (1) Sinclair is not the attorney of record and therefore his

signature on the Doe Amendment does not satisfy the certification aspects of Rule 11(a); (2) the

amendment was not filed pursuant to Rules 15 and 21; and (3) even if the correct procedure was

used, the amendment is a “sham” because Sinclair was not ignorant of Ryan’s existence and role

as attorney for the Association when he filed the original complaint (or at least when he filed the

First Amended Complaint). 

As to Defendants’ Motion to Disqualify Ryan, Plaintiffs assert that the motion was

supported by “some mythical conflict of interest” supported by neither facts nor law. Plaintiffs

contend that the motion was based on nothing more than “outright speculation” and was based on

a conflict manufactured for the sole purpose of bringing the motion.

Sanctions are proper for Defendants’ Doe Amendment and Defendants’ Motion to

Disqualify Ryan. That the procedurally improper Doe Amendment and the Motion to Disqualify,

which was based in part on Ryan’s alleged new status as a defendant, were filed on the same day

is suggestive of the questionable motive behind the pleadings. It is obvious that this action and

the involved parties are quite contentious, and the timing of these pleadings illustrates the heated

nature of this action. Given this background, the Doe Amendment and the related Motion to

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 Because the Court decided to award sanctions pursuant to Rule 11, it will not review Plaintiffs’ request for

sanctions under 28 U.S.C. § 1927.

4

Disqualify appear to be frivolous and brought for an improper purpose. Insofar as the Motion to

Disqualify also alleges a conflict of interest, the Court determined that the arguments were

factually and legally baseless in the order denying the motion, and it does not alter the decision to

award sanctions.

1

 

Defendants argue that Plaintiffs’ motion should be denied because it failed to comply

with the 21 day safe harbor provision of Rule 11. However, a review of the time frame set forth

above confirms that Defendants were provided with the requisite safe harbor period yet chose not

to withdraw the offending pleadings. The motion was filed more than 21 days after it was

served. The motion was served 14 days after Defendants’ Doe Amendment and Motion to

Disqualify Ryan were filed. Defendants did not withdraw or correct either pleading. As a result,

Plaintiffs’ counsel was forced to oppose the Motion to Disqualify and file a Motion to Drop Ryan

as an Improper Party. Although Defendants eventually filed a Statement of non-opposition to the

Motion to Drop Ryan as an Improper Party, Plaintiffs had to file the motion in the first instance. 

C. Sanctions

Plaintiffs request sanctions in the amount of $5,400.00. According to his declaration,

Ryan’s hourly rate is $225.00. Declaration of Timothy Ryan (“Ryan Dec.”), ¶ 3. He spent seven

hours opposing the Motion to Disqualify, for a total of $1,575. He spent five hours opposing the

Doe Amendment, for a total of $1,125. He spent six hours drafting the instant Motion for

Sanctions, for a total of $1,350. He anticipates spending another three hours drafting a reply and

another three hours preparing for and attending the hearing on the motion, for an additional

$1,350. Ryan Dec., ¶¶ 3-6.

Plaintiffs are entitled to recover the costs associated with opposing the Motion to

Disqualify ($1,575.00), opposing the Doe Amendment ($1,125.00), and drafting the instant

motion ($1,350.00). Plaintiffs’ counsel anticipated an additional three hours to draft a reply and

three hours to prepare for and attend the hearing. Plaintiffs filed a reply brief and may therefore

recover the anticipated three hours ($675.00). However, because counsel appeared at the hearing

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telephonically and the hearing was extremely brief, Plaintiffs cannot recover any costs related

thereto. Accordingly, the Court finds that sanctions in the amount of $4,725.00 are sufficient to

deter similar conduct in the future.

ORDER

Plaintiffs’ motion for sanctions is GRANTED. Defendants SHALL PAY SANCTIONS

to Plaintiffs’ counsel in the amount of $4,725.00. This amount shall be paid on or before June

30, 2005. Failure to comply with this order will result in further sanctions.

IT IS SO ORDERED.

Dated: June 1, 2005 /s/ Dennis L. Beck 

3b142a UNITED STATES MAGISTRATE JUDGE

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