RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 11a0256p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

No. 09-2117

PT PUKUAFU INDAH; PT TANJUNG SERA

PUNG; LEONARD L.J. YOUNG; PT LEBONG

TANDAI; GIDEON MINERALS U.S.A., INC., 

Plaintiffs-Appellants,

v.

UNITED STATES SECURITIES AND EXCHANGE

COMMISSION; MARY L. SCHAPIRO; EXPORT

IMPORT BANK OF THE UNITED STATES; JAMES

H. LAMBRIGHT; JPMORGAN CHASE & CO.;

GOLDMAN SACHS GROUP, INC.;

PRICEWATERHOUSECOOPERS, L.L.C.; JAMES

NELSON LANE; NEW CANAAN SOCIETY,

Defendants,

NEWMONT MINING CORP.,

Defendant-Appellee.

Nos. 09-2570; 10-1477/1837

PT PUKUAFU INDAH; PT TANJUNG SERA

PUNG; LEONARD L.J. YOUNG; PT LEBONG

TANDAI; GIDEON MINERALS U.S.A., INC.,

Plaintiffs-Appellants,

v.

UNITED STATES SECURITIES AND EXCHANGE

COMMISSION; PRICEWATERHOUSECOOPERS,

L.L.C.; JAMES NELSON LANE; NEWMONT

MINING CORP.; NEW CANAAN SOCIETY;

DEVONWOOD CAPITAL PARTNERS, LLC;

GOLDMAN SACHS GROUP, INC.; MARY L.

SCHAPIRO; EXPORT IMPORT BANK OF THE

UNITED STATES; JAMES H. LAMBRIGHT;

JPMORGAN CHASE & CO.,

Defendants-Appellees.

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Nos. 09-2117/2570;

10-1477/1837

1
Nos. 09-2117/2570;

10-1477/1837

PT Pukuafu Indah et al. v. United States

Securities and Exchange Comm’n et al.

Page 2

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 09-10943—Patrick J. Duggan, District Judge.

Argued: March 2, 2011

Decided and Filed: September 6, 2011 

Before: MOORE, COLE, and ROGERS, Circuit Judges.

_________________

COUNSEL

ARGUED: Steven W. Reifman, REIFMAN & GLASS, Southfield, Michigan, for

Appellants. Mark Wielga, TEMKIN WIELGA & HARDT LLP, Denver, Colorado,

Jeffrey G. Raphelson, BODMAN LLP, Detroit, Michigan, Michael J. Dell, KRAMER

LEVIN NAFTALIS & FRANKEL LLP, New York, New York, for Appellees. 

ON BRIEF: Steven W. Reifman, REIFMAN & GLASS, Southfield, Michigan, for

Appellants. Mark Wielga, Radcliffe Dann IV, TEMKIN WIELGA & HARDT LLP,

Denver, Colorado, Jeffrey G. Raphelson, BODMAN LLP, Detroit, Michigan, Thomas

J. Tallerico, BODMAN LLP, Troy, Michigan, Michael J. Dell, KRAMER LEVIN

NAFTALIS & FRANKEL LLP, New York, New York, Kenneth L. Shaitelman,

ASSISTANT UNITED STATES ATTORNEY, Detroit, Michigan, Todd R. Mendel,

BARRIS, SOTT, DENN & DRIKER PLLC, Detroit, Michigan, Diana Lee Khachaturian,

DICKINSON WRIGHT, Detroit, Michigan, Frederick R. Juckniess, MILLER,

CANFIELD, PADDOCK & STONE, P.L.C., Ann Arbor, Michigan, for Appellees. 

_________________

OPINION

_________________

KAREN NELSON MOORE, Circuit Judge. The plaintiffs in this case believe

that they have an ownership interest in several mines in Indonesia. In pursuit of these

interests, they have filed several lawsuits against the Newmont Mining Corporation

(“Newmont”) and others in both state and federal courts in the past ten years. Each of

these lawsuits was found to be completely lacking in merit, however, and sanctions were

imposed on the plaintiffs in two of these prior lawsuits. The present appeals are from

a lawsuit that plaintiffs filed against Newmont and other entities on March 13, 2009. 

The district court dismissed all claims against all of the defendants under Federal Rule
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of Civil Procedure 12(b). Nonetheless, the plaintiffs filed several motions for

reconsideration and relief from judgment, every one of which was denied. Eventually,

Newmont filed a motion for sanctions under Rule 11, which the district court granted. 

The district court ordered that the plaintiffs and their counsel, Steven W. Reifman, pay

over $100,000 to Newmont for its attorney fees and costs in defending against the entire

lawsuit, and the court enjoined the plaintiffs and Reifman from ever filing another

lawsuit arising out of the subject matter of this case in any state or federal court. The

plaintiffs now appeal.

For the reasons that follow, we AFFIRM the dismissal of all claims against all

defendants by the district court, along with the district court’s denial of the plaintiffs’

motion for reconsideration. With respect to the imposition of sanctions, we hold that the

district court erred in its finding of a Rule 11 violation; we therefore REVERSE the

district court’s sanctions holding, VACATE the order of monetary and injunctive

sanctions, and REMAND this case to the district court to consider Newmont’s motion

for Rule 11 sanctions anew in light of this opinion.

I. FACTS AND PROCEDURAL HISTORY

The plaintiffs in this case are PT Pukuafu Indah, PT Lebong Tandai, PT Tanjung

Sera Pung, Gideon Minerals U.S.A., Inc., and Dr. Leonard L.J. Young (collectively,

“plaintiffs”). They filed this suit on March 13, 2009 against the Securities and Exchange

Commission and its Chair, Mary L. Schapiro (together, “SEC”); the Export-Import Bank

of the United States and its Chair, Fred P. Hochberg (together, “ExIm Bank”); and

JPMorgan Chase & Co., alleging that the SEC and ExIm Bank failed to take

enforcement actions against Newmont in connection with allegedly false filings made

by Newmont with the SEC, and that JPMorgan “convert[ed]” a $400 million loan from

ExIm Bank. R.2 (Complaint ¶ 6 at 3). The plaintiffs also sought a temporary restraining

order, but this request was denied by the district court.

On May 4, 2009, the plaintiffs filed an Amended Complaint, in which they added

Newmont Mining Corp., Goldman Sachs Group, Inc., and PricewaterhouseCoopers,
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L.L.C. as defendants. In addition to restating the claim made in the original complaint,

the plaintiffs added five new counts—Counts Two through Six. In Count Two, the

plaintiffs sought relief against the SEC and the ExIm Bank under the Administrative

Procedure Act. In Count Three, the plaintiffs alleged “conversion pursuant to the

Uniform Commercial Code Section 3-420.” R.11 (Amended Complaint ¶ 22 at 10). In

Count Four, the plaintiffs complain that Newmont “created an artifice to convert [certain

Indonesian mineral assets] . . . and to defraud the general and investing public.” Id. ¶ 27

at 11–12. In Count Five, the plaintiffs complain of “theft of Plaintiffs’ financial

identity” and a deprivation of their right to due process under the Fifth Amendment. Id.

¶¶ 29–30 at 12–13. Lastly, in Count Six, the plaintiffs allege that Goldman Sachs

committed fraud and conspiracy.

Eight days later, on May 12, 2009, the plaintiffs filed a Second Amended

Complaint, in which they added Devonwood Capital Partners, L.L.C.; Devonwood’s

CEO, James Nelson Lane; and the New Canaan Society as defendants. To the six counts

already alleged, they added two more: a second Count Six, claiming “investment

advising and securities fraud” against Lane, and Count Seven, claiming that Devonwood,

Lane, and the New Canaan Society violated the Investment Advisers Act of 1940 and

other securities laws. R.13 (Second Amended Complaint ¶¶ 38–42 at 15–17). The

plaintiffs then moved for summary judgment on May 24, 2009. In response, Newmont

filed a motion to dismiss the Second Amended Complaint for lack of personal

jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2), on June 10, 2009. 

JPMorgan followed with its own motion to dismiss, under Rule 12(b)(6), as did the SEC

and ExIm Bank; Goldman Sachs; Lane, Devonwood, and the New Canaan Society; and

PricewaterhouseCoopers.

On July 15, 2009, the district court granted Newmont’s motion to dismiss on the

ground that the court lacked personal jurisdiction over Newmont, and the court also

denied the plaintiffs’ motion for summary judgment. R. 61 (Opinion and Order (“Op.”)

July 15, 2009). Four days later, the plaintiffs filed a motion for leave to amend their

complaint again, this time to file a Third Amended Complaint. The proposed Third
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Amended Complaint makes additional assertions regarding the subject-matter

jurisdiction of the court, but it says nothing new about personal jurisdiction over

Newmont. The plaintiffs also filed a motion for reconsideration of the dismissal of

Newmont, followed by an emergency motion for a preliminary injunction against the

SEC and PricewaterhouseCoopers, both of which were denied.

In response to the manner in which the plaintiffs and Reifman have pursued this

litigation (and similar litigation in other courts in the past), Newmont filed a motion for

Rule 11 sanctions on August 21, 2009. In this motion, Newmont argued that the

attempted filing of the Third Amended Complaint constituted sanctionable conduct, and

Newmont sought attorney fees in defending against the entire case from the beginning

of the suit. Rather than respond to this motion directly, however, the plaintiffs filed an

“emergency motion for reconsideration” of the denial of their emergency motion for a

preliminary injunction. The district court denied the plaintiffs’ motion.

On October 6, 2009, the district court dismissed the remainder of the case. It

granted the remaining defendants’ motions to dismiss, denied the plaintiffs’ motion for

leave to file a Third Amended Complaint, and entered judgment in favor of the

defendants. R. 100 (Op. Oct. 6, 2009). The district court granted Newmont’s motion

for sanctions on November 4, 2009, and ordered “that monetary sanctions in the form

of compensation for Newmont’s reasonable attorneys’ fees and costs will be imposed

against counsel and Plaintiffs upon Newmont’s submission of adequate proofs

establishing those fees and costs.” R.102 (Op. Nov. 4, 2009 at 13). The district court

also ordered “that Plaintiffs are enjoined from filing any lawsuits against Defendants in

this or any federal or state court related to the subject matter of this lawsuit.” Id. at

13–14. Subsequently, Newmont produced a bill of costs, showing that it “has incurred

$107,369.53 in attorneys’ fees, costs and expenses in defending against this lawsuit.” 

R.103 (Bill of Costs at 1). On January 19, 2010, the district court ordered that this full

amount be paid by “Plaintiffs and Plaintiffs’ counsel, Reifman & Glass, P.C. and Steven

W. Reifman,” within thirty days. R.111 (Op. Jan. 19, 2010 at 3).
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Shortly after the district court ordered these sanctions, the plaintiffs filed another

motion—a motion for relief from judgment, focused on the district court’s sanctions

orders. The district court denied this motion. Additionally, because neither the plaintiffs

nor Reifman had paid the $107,369.53 within thirty days, Newmont moved for a

judgment on the monetary award. On April 26, 2010, the district court entered a

judgment against the plaintiffs and Reifman in the amount of $107,369.53.

II. ANALYSIS

The plaintiffs have filed four Notices of Appeal in this case from numerous

different orders of the district court, but we have consolidated the appeals together and

the parties have briefed the consolidated appeal in two groups. First, in Nos. 09-

2117/09-2570, the plaintiffs challenge the district court’s orders (1) granting Newmont’s

motion to dismiss, (2) denying the plaintiffs’ motion for reconsideration in light of their

proposed Third Amended Complaint, (3) granting sanctions, and (4) granting the

remaining defendants’ motions to dismiss. Second, in Nos. 10-1477/10-1837, the

plaintiffs challenge the district court’s order denying the plaintiffs’ motion for relief

from the sanctions orders, and the district court’s separate sanctions judgment. For the

reasons that follow, we affirm the district court’s dismissal of the case, but we reverse

its holding that Rule 11 was violated and its subsequent order of sanctions.

A. Nos. 09-2117/09-2570: Dismissal and the Grant of Sanctions

1. The Dismissal of the Claims Against Newmont

The district court dismissed the plaintiffs’ claims against Newmont on the ground

that the court lacked both general and specific personal jurisdiction over Newmont. We

review de novo a dismissal for lack of personal jurisdiction. Intera Corp. v. Henderson,

428 F.3d 605, 614 (6th Cir. 2005).

To comply with due process, a court’s exercise of its power over an out-of-state

defendant must “not offend ‘traditional notions of fair play and substantial justice.’” 

Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311
Nos. 09-2117/2570;

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U.S. 457, 463 (1940)). This requires that the defendant be shown to have “minimum

contacts” with the forum state, id., ensuring that “the defendant’s conduct and

connection with the forum State are such that he should reasonably anticipate being

haled into court there,” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297

(1980). The exercise of jurisdiction must also be permitted by the state’s long-arm

statute. Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000).1

 Finally,

personal jurisdiction can exist in two forms: specific jurisdiction and general

jurisdiction. “In contrast to general, all-purpose jurisdiction, specific jurisdiction is

confined to adjudication of issues deriving from, or connected with, the very controversy

that establishes jurisdiction.” Goodyear Dunlop Tires Operations, S.A. v. Brown, —

U.S. –—, 131 S. Ct. 2846, 2851 (2011) (internal quotation marks omitted).

“The party seeking to assert personal jurisdiction bears the burden of

demonstrating that such jurisdiction exists.” Bird v. Parsons, 289 F.3d 865, 871 (6th

Cir. 2002). Where the district court has not held an evidentiary hearing on the issue,

however, “the plaintiff need only make a prima facie showing of jurisdiction. In this

situation, we will not consider facts proffered by the defendant that conflict with those

offered by the plaintiff, and will construe the facts in a light most favorable to the

nonmoving party.” Id. (internal citations and quotation marks omitted).

Before the district court, the plaintiffs alleged that Newmont had the following

contacts with Michigan: that (1) Newmont Oil is a registered subsidiary of Newmont

in the State of Michigan, (2) Newmont Indonesia Limited did “major, substantial

business with Ford Motor Company,” a Michigan corporation, (3) Newmont’s sale of

stock to members of the general public included individuals in Michigan, (4) Newmont

made contacts with the State of Michigan by attempting to resolve this dispute, and

1

Michigan’s long-arm statute provides, in relevant part, as follows:

The existence of any of the following relationships between an individual or his agent

and the state shall constitute a sufficient basis of jurisdiction to enable a court of record

of this state to exercise limited personal jurisdiction over the individual and to enable

the court to render personal judgments against the individual or his representative

arising out of an act which creates any of the following relationships:

(1) The transaction of any business within the state. . . .

MICH. COMP. LAWS § 600.705.
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(5) Newmont also made contacts with the State of Michigan by sending “significant and

important documents” to the plaintiffs in Michigan. R. 61 (Op. at 5). The plaintiffs also

argued that personal jurisdiction over Newmont was established under § 27 of the

Securities and Exchange Act of 1934, 15 U.S.C. § 78aa, by this section’s provision of

nationwide service of process.2

The district court first rejected the notion that the contacts by Newmont with

Michigan alleged by the plaintiffs were sufficient to constitute “continuous and

systematic” activities within the State of Michigan such that general jurisdiction was

established. R. 61 (Op. at 5–6). The court then held that these contacts also were

insufficient to establish specific jurisdiction. In the court’s view, the allegations

regarding Newmont Oil, Newmont Indonesia Limited, and Newmont’s disputeresolution activities were not related to the plaintiffs’ claims. The district court found

the third jurisdictional allegation, regarding Newmont’s sale of stock, also insufficient

because no authority supported the proposition that personal jurisdiction may be

established merely as a result of a purchase of stock on a public exchange by a resident

of the forum state, and, in fact, several courts have held the opposite. With respect to

Newmont Oil and Newmont Indonesia’s alleged activities, the plaintiffs asserted

personal jurisdiction under the theory that these subsidiaries acted as the alter-ego of

Newmont. The alter-ego theory provides for personal jurisdiction “if the parent

company exerts so much control over the subsidiary that the two do not exist as separate

entities but are one and the same for purposes of jurisdiction.” Id. at 7 (quoting Thomson

v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 362 (6th Cir. 2008)). In the view of

the district court, however, the plaintiffs “set forth no facts to support the application of

this theory of jurisdiction with respect to Newmont.” Id.

2

Section 78aa of Title 15 provides, in relevant part, as follows:

Any suit or action to enforce any liability or duty created by this chapter or rules and

regulations thereunder, or to enjoin any violation of such chapter or rules and

regulations, may be brought in any such district or in the district wherein the defendant

is found or is an inhabitant or transacts business, and process in such cases may be

served in any other district of which the defendant is an inhabitant or wherever the

defendant may be found.

15 U.S.C. § 78aa.
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The district court found that “Newmont present[ed] uncontroverted evidence that

Newmont Oil has not been its subsidiary since 1988, when it was sold. Further,

Newmont Oil withdrew its Michigan registration in 1990.” Id. (citation omitted). The

district court also rejected the allegation of “major, substantial business” between

Newmont Indonesia Limited and Ford Motor Company. According to the district court,

Newmont Indonesia Limited only “guaranteed an obligation payable by Australia

Magnesium Corporation to Ford Motor Company. In other words, Newmont Indonesia

conducted business with a company (presumably located in Australia, not Michigan) that

in turn conducted business with a Michigan company.” Id. at 8.

The district court held that Newmont’s dispute-resolution activities do not

constitute the type of “purposeful availment” of a forum state that results in personal

jurisdiction. Id. Finally, the district court rejected the plaintiffs’ argument that personal

jurisdiction over Newmont was established under the nationwide-service-of-process

provision in the 1934 Act. According to the district court, although the plaintiffs alleged

that Newmont had filed materially false financial statements in violation of the 1934 Act,

see 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10.b-5, the plaintiffs had not alleged that they

had purchased or sold any Newmont securities—a necessary prerequisite to bringing a

private action of this type. Id. at 10 (citing Blue Chip Stamps v. Manor Drug Stores, 421

U.S. 723 (1975) (holding that only purchasers and sellers of a security have a private

right of action under Section 10(b) and Rule 10b-5)). Consequently, the district court

concluded that the plaintiffs’ securities-fraud claim did not support the exercise of

personal jurisdiction over Newmont.

The plaintiffs make two basic arguments in response to the district court’s

holding. First, they point to the same contacts by Newmont that they presented to the

district court, except for the fourth and fifth (which related to Newmont’s disputeresolution activities), and they claim that these are sufficient “minimum contacts” by

Newmont to fall within Michigan’s long-arm statute. Second, the plaintiffs cite several

cases for the proposition that, under the Securities and Exchange Act of 1934, Newmont

needed to have only “minimum contacts with the United States as a whole, rather than
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with a particular state, in order for a federal court to exercise personal jurisdiction

consistent with the due process clause.” Pl. Br. in No. 09-2117 at xxv–xxvi. We see no

merit in either of these arguments.

With respect to the nationwide-service-of-process provision of the 1934 Act, the

district court was correct in holding that the plaintiffs have failed to state a claim that

Newmont filed materially false financial statements in violation of the 1934 Act. See 15

U.S.C. § 78j(b); 17 C.F.R. § 240.10.b-5. The plaintiffs have not alleged that any of

Newmont’s allegedly false statements were “in connection with” the sale or purchase of

any of its securities, and there is no evidence that the plaintiffs themselves purchased or

sold any Newmont securities. See Blue Chip Stamps, 421 U.S. at 749. Under these

circumstances, the 1934 Act does not establish a basis for finding personal jurisdiction

over Newmont.

The district court correctly rejected the plaintiffs’ arguments that Newmont Oil

is a registered subsidiary of Newmont in the State of Michigan, that Newmont Indonesia

Limited had substantial contacts with Ford Motor Company, and that Newmont’s sale

of stock to the general public included individuals in Michigan. First, although

Newmont Oil formerly was a registered subsidiary of Newmont in Michigan, Newmont

Oil was sold by Newmont in 1988 and Newmont Oil withdrew its Michigan registration

in 1990. Thus, Newmont Oil’s former Michigan registration does not suffice to establish

personal jurisdiction over Newmont in this action that does not relate to Newmont Oil’s

past period of registration. Second, Newmont Indonesia Limited’s contacts with a

Michigan corporation, the Ford Motor Company, were insufficient to meet § 600.705’s

terms. As the district court pointed out, Newmont Indonesia Limited’s activities3

amounted only to conducting business with a non-Michigan company (the Australian

Magnesium Corporation) that, in turn, did business with the Ford Motor Company,

which does not constitute “[t]he transaction of any business within the state.” MICH.

COMP. LAWS § 600.705(1).

3

Newmont points out that it was actually Newmont Australia Limited that guaranteed an

obligation payable by the Australian Magnesium Corporation, not Newmont Indonesia Limited.
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Finally, the fact that Newmont’s sale of stock to the general public may have

included sales to individuals within Michigan does not support specific or general

jurisdiction.4 With respect to specific jurisdiction, although the sale of stock to an

individual in Michigan may, in theory, constitute “[t]he transaction of any business

within the state,” § 600.705(1) grants only “limited” personal jurisdiction as a result of

such a transaction; jurisdiction is granted “to enable the court to render personal

judgments against the individual or his representative arising out of [the transaction of

business within Michigan].” MICH. COMP. LAWS § 600.705 (emphasis added). Here,

the plaintiffs’ only claim that “aris[es] out of” this transaction of business is its claim for

securities fraud in violation of Section 10(b) and Rule 10b-5, but as mentioned above,

the plaintiffs have not alleged that they ever purchased any of these securities in

Michigan. Furthermore, with respect to general jurisdiction, we agree with the district

court that there appears to be no authority for the proposition that a sale of stock to the

general public that includes residents of the forum state constitutes “continuous and

systematic” contact with that state sufficient to confer general personal jurisdiction;

instead, there is authority for the exact opposite conclusion. See Sheldon v. Khanal, 605

F. Supp. 2d 1179, 1185 (D. Kan. 2008) (rejecting the notion “that the sale of shares of

stock through a public exchange supports the exercise of general jurisdiction”); Action

Mfg. Co. v. Simon Wrecking Co., 375 F. Supp. 2d 411, 425–26 (E.D. Pa. 2005) (“The

sale of shares of World Fuel Corp. stock to the national public through the NYSE does

not constitute continuous and systematic contacts with Pennsylvania and is not sufficient

to establish general personal jurisdiction over Corp. in Pennsylvania.”); see also Young

v. Actions Semiconductor Co., 386 F. App’x 623, 626 (9th Cir. 2010) (unpublished

memorandum opinion) (“[A] foreign corporation’s sale of stock in the forum is

insufficient by itself to create general jurisdiction.”). As Newmont states, “Appellants’

argument, if accepted, would subject nearly every public company to [personal]

jurisdiction in all 50 states.” Newmont Br. in No. 09-2117 at 14.

4

The plaintiffs did not inform the district court of the precise manner or forum in which the stock

was sold to the general public.
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In addition, even if Newmont Oil and Newmont Indonesia Limited did have

contact with the State of Michigan, the district court correctly rejected the applicability

of the alter-ego theory. The plaintiffs have not alleged that Newmont “exerts so much

control over” Newmont Oil or Newmont Indonesia Limited that Newmont and either of

the other companies “do not exist as separate entities but are one and the same for

purposes of jurisdiction.” Thomson, 545 F.3d at 362.

We therefore affirm the district court’s dismissal of the claims against Newmont

pursuant to Rule 12(b)(2).

2. The Denial of the Plaintiffs’ Motion for Reconsideration

The plaintiffs next argue that “[t]he District Court erred in granting the motion

for dismissal by Defendant Newmont Mining and den[ying] Plaintiffs’ Motion for

Reconsideration, after Plaintiffs had filed a Motion for Leave to File their Third

Amended Complaint, and such proposed Third Amended Complaint was attached as an

exhibit to Plaintiffs’ Motion for Reconsideration of the dismissal of Defendant Newmont

Mining Corporation.” Pl. Br. in No. 09-2117 at xxix. The plaintiffs appear to argue that

the proposed Third Amended Complaint would have cured the lack of personal

jurisdiction over Newmont.

As an initial matter, the district court’s grant of Newmont’s motion to dismiss

was not improper in light of the Third Amended Complaint because the motion for leave

to file a Third Amended Complaint was not filed until four days after the district court’s

order. Compare R.61 (Op. July 15, 2009) with R. 64 (Motion for Leave July 19, 2009). 

The district court therefore cannot be said to have erred by not taking note of a document

that had not yet been filed. Instead, the plaintiffs’ argument can relate only to the denial

of its motion for reconsideration.

We review for an abuse of discretion a district court’s denial of a motion for

reconsideration, except when the underlying ruling involves the grant of summary

judgment. Gage Prods. Co. v. Henkel Corp., 393 F.3d 629, 637 (6th Cir. 2004). A
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motion for reconsideration is governed by the local rules in the Eastern District of

Michigan, which provide that the movant must show both that there is a palpable defect

in the opinion and that correcting the defect will result in a different disposition of the

case. E.D. Mich. Local Rule 7.1(g).5

 The local rule also specifically states that merely

presenting the same issues that the court previously ruled on is not an acceptable ground

for reconsideration. The district court in this case denied reconsideration on the ground

that the plaintiffs did “not identify any facts that the Court overlooked in analyzing

Newmont’s contacts with the forum, nor do they identify any errors in the Court’s legal

analysis.” R.77 (Op. July 31, 2009 at 2).

The district court did not abuse its discretion in denying reconsideration. On

appeal, just as before the district court, the plaintiffs have failed to identify any facts that

the district court overlooked in holding that personal jurisdiction over Newmont was

lacking. The plaintiffs merely point to the proffered Third Amended Complaint, which,

they say, “bears on jurisdiction, as some of the basis [sic] for jurisdiction were amplified

and clarified in that proposed complaint.” Pl. Br. in No. 09-2117 at xxix–xxx. This

argument has not been developed at all, and we consider it therefore waived. See Dillery

v. City of Sandusky, 398 F.3d 562, 569 (6th Cir. 2005) (“[I]ssues adverted to in a

perfunctory manner, unaccompanied by some effort at developed argumentation, are

deemed waived.”) (quotation marks omitted). In addition, the proposed Third Amended

Complaint provides no basis for personal jurisdiction over Newmont, because it provides

no allegations of any additional contacts of Newmont with the State of Michigan.6

Therefore, we affirm the district court’s denial of the plaintiffs’ motion for

reconsideration.

5

This provision is currently contained in Local Rule 7.1(h).

6

We generally review for abuse of discretion the denial of a motion for leave to amend the

complaint, but we review de novo a district court’s determination that amendment would be futile. Yuhasz

v. Brush Wellman, Inc., 341 F.3d 559, 569 (6th Cir. 2003). The difference between these two standards

does not matter here, however, because we reach the same result under either standard.
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3. The Dismissal of the Claims Against the Remaining Defendants

The plaintiffs’ last argument in Nos. 09-2117/09-2570 is as follows:

The court’s grant of dismissal as to the remaining Defendants is

reversible error since the District Court relied upon a series of court cases

in which there had never been rulings on the merits, nor were several of

the parties herein parties therein, nor were other facts and legal premises

relied upon by the District Court of such probative or legal precedence

to justify such dismissal and a judgment in favor of Defendants.

Pl. Br. in No. 09-2117 at xxxi. It is not clear what “series of court cases” the plaintiffs

are referring to. Nor can we glean from this passage what “other facts and legal

premises” the plaintiffs are thinking of. The defendants therefore suggest—and we

agree—that this argument is too poorly developed to warrant consideration by this court. 

See Dillery, 398 F.3d at 569. Therefore we affirm the district court’s dismissal of the

claims against the remaining defendants.

4. The Order Granting Sanctions

The plaintiffs also challenge the district court’s order of sanctions. Their

argument is as follows:

The court’s grant of sanctions, including what amounts to rulings on the

merits and remedies outside the scope of the claimed infractions, is

reversible error because the court had not granted the request for filing

Plaintiffs Third Amended Complaint and the Defendant Newmont sought

sanctions when it had no obligation to answer or respond to Plaintiffs

request.

Pl. Br. in No. 09-2117 at xxx. They make very similar arguments in appeal Nos. 10-

1477/10-1837, however, and given the lack of development of the argument here, we

will consider the propriety of the sanctions order in appeal Nos. 10-1477/10-1837. See

Part II.B. infra.
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5. Conclusion

For all these reasons, we affirm the district court’s dismissal of all claims against

Newmont and the other defendants, R.61 (Op.), R. 99 (Op. Oct. 6, 2009), as well as the

district court’s denial of the plaintiffs’ motion for reconsideration, R.77 (Op. at 2).7

B. Nos. 10-1477/10-1837: Motion for Relief and the Separate Sanctions Judgment

In Nos. 10-1477/10-1837, the plaintiffs challenge the district court’s order

denying the plaintiffs’ motion for relief from the sanctions orders, and the district court’s

separate sanctions judgment. The plaintiffs’ first argument is that the district court erred

in finding a Rule 11 violation based on conduct that was not specifically identified in

Newmont’s motion for sanctions. We see merit in this argument.

We ordinarily review an order imposing sanctions under Rule 11 for abuse of

discretion. B&H Medical, L.L.C. v. ABP Admin., Inc., 526 F.3d 257, 269 (6th Cir.

2008). In their motion for relief from judgment before the district court, however, the

plaintiffs did not make the argument that the sanctions order was based on conduct that

was not identified in Newmont’s motion for sanctions. See R. 112 (Motion for Relief). 

As a result, we review this claim only for plain error. United States v. Graham, 622 F.3d

445, 455 & n.9 (6th Cir. 2010). “To establish plain error, a defendant must show (1) that

an error occurred in the district court; (2) that the error was plain, i.e., obvious or clear;

(3) that the error affected defendant’s substantial rights; and (4) that this adverse impact

7

In their reply brief, the plaintiffs make an argument regarding their need for discovery on the

issue of personal jurisdiction—a request made to and denied by the district court. R. 81 (Op. Aug. 3,

2009). The plaintiffs fail to preserve this argument, because they did not adequately raise this argument

in their opening brief, preventing the defendants from discussing the issue in their briefs in opposition. 

Furthermore, even if the argument were preserved, the district court did not err in denying the plaintiffs’

motion to obtain further discovery. “The Sixth Circuit generally applies the abuse of discretion standard

to the district court’s decision to deny discovery whether such request was made on a motion or by a Rule

56(f) affidavit.” Ball v. Union Carbide Corp., 385 F.3d 713, 720 (6th Cir. 2004) (holding that “[i]t is not

an abuse of discretion for the district court to deny the discovery request when the party makes only

general and conclusory statements [in its affidavit] regarding the need for more discovery”) (internal

quotation marks omitted; second alteration in original). The plaintiffs’ motion was made on July 29, 2009,

after the district court had dismissed the plaintiffs’ claims against Newmont for lack of personal

jurisdiction; the plaintiffs made no such discovery request before the district court’s order. Moreover, the

request was too vague to permit a discovery order; with respect to personal jurisdiction, the plaintiffs stated

simply that they “wish[ed] to take discovery as to jurisdictional issues.” R.72 (Motion for Discovery). 

The district court therefore did not abuse its discretion in denying the plaintiffs’ motion for discovery.
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seriously affected the fairness, integrity or public reputation of the judicial proceedings.” 

Id. (quotation marks omitted).

Federal Rule of Civil Procedure 11(b) sets certain requirements for

representations to the court, including that “[b]y presenting to the court a pleading,

written motion, or other paper,” “an attorney or unrepresented party certifies that” he or

she has undertaken “an inquiry reasonable under the circumstances” to ensure that (1) “it

is not being presented for any improper purpose”; (2) “the claims, defenses, and other

legal contentions are warranted by existing law or by a nonfrivolous argument for

extending, modifying, or reversing existing 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). A district court may impose sanctions on an attorney who

violates these requirements either on motion by an opposing party or sua sponte. FED.

R. CIV. P. 11(c)(2), (c)(3).

The identification of the specific conduct that is allegedly sanctionable is critical

to a finding of a Rule 11 violation. Where a motion for sanctions is made, it “must

describe the specific conduct that allegedly violates Rule 11(b).” FED. R. CIV. P.

11(c)(2). Similarly, where a court acts sua sponte, it must first issue a show-cause order

requiring the alleged violator “to show cause why conduct specifically described in the

order has not violated Rule 11(b).” FED. R. CIV. P. 11(c)(3). Furthermore, a district

court may not impose a sanction until the violator has had “notice and a reasonable

opportunity to respond.” FED. R. CIV. P. 11(c)(1).

In its motion, Newmont identified the plaintiffs’ attempted filing of the Third

Amended Complaint as the specific conduct that constituted a Rule 11 violation. The

district court agreed with Newmont and found that the motion seeking leave to file the

Third Amended Complaint was “not ‘warranted by existing law’ or the facts alleged”
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and that the proposed Third Amended Complaint “appear[s] to have been presented only

for the improper purpose of harassing Newmont, causing unnecessary delay in these

proceedings, and needlessly increasing the cost of this litigation.” R.102 (Op. at 6). 

After this, however, the district court also stated that it

believes that Plaintiffs failed to conduct a reasonable inquiry before filing

their lawsuit to ensure that their factual allegations and the law supported

this Court’s personal jurisdiction over Newmont. Therefore, the Court

finds that Newmont is entitled to the reasonable attorneys’ fees and costs

and expenses it incurred in defending against the lawsuit.

Id. at 6–7 (emphasis added). The district court therefore entered an injunction

prohibiting the plaintiffs and Reifman “from filing any lawsuits against Defendants in

this or any federal or state court related to the subject matter of this lawsuit,” R.102 (Op.

at 13–14),8

 and it ordered, after Newmont provided a bill of costs, that the plaintiffs and

Reifman pay $107,369.53 for Newmont’s attorney fees, costs, and expenses in defending

against the entire lawsuit, R.111 (Op. Jan. 19, 2010 at 3).

The plaintiffs complain that “the trial [court] broadened the sanctions arena to

the entire period of the litigation from the beginning of the case,” rather than the filing

of the motion for leave to file the Third Amended Complaint, and that the sanctions

included “an extensive monetary award for actions that were not part of the specified

alleged Rule 11 violations that were the subject of the motion for sanctions.” Pl. Br. in

Nos. 10-1477/10-1837 at 10, 17. Newmont responds that the district court’s Rule 11

order was entirely correct because, although the motion seeking leave to file the Third

Amended Complaint was the specific conduct identified as a violation of Rule 11 in the

motion for sanctions, the motion requests relief in the form of attorney fees for the entire

case. This, according to Newmont, was sufficient to permit the district court to order the

8

Of great significance, the district court believed that the reasoning that supported granting an

injunction prohibiting future filings against Newmont applies equally to the other defendants. As a result,

despite the fact that only Newmont had filed a motion for sanctions, the district court “believe[d] that

Newmont’s requested injunction should extend to all of the defendants, not only Newmont.” R. 102 (Op.

at 12).
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plaintiffs and Reifman to pay Newmont’s costs and attorney fees in defending against

the entire case.

We agree with the plaintiffs. The district court did not comply with Rule 11

because it found a Rule 11 violation in conduct that went beyond the specific conduct

identified in Newmont’s motion for sanctions. Although the district court clearly found

that the motion requesting leave to file the Third Amended Complaint violated Rule

11(b)(1) and (2), the court also made a finding that indicates that it believed that the

plaintiffs additionally violated Rule 11(b)’s basic requirement that an attorney must base

his “knowledge, information, and belief” regarding the propriety of a submission to the

court on “an inquiry reasonable under the circumstances.” See R.102 (Op. at 6–7)

(“Plaintiffs failed to conduct a reasonable inquiry before filing their lawsuit to ensure

that their factual allegations and the law supported this Court’s personal jurisdiction over

Newmont. Therefore, the Court finds that Newmont is entitled to the reasonable

attorneys’ fees and costs and expenses it incurred in defending against the lawsuit.”). 

Indeed, the monetary sanctions appear to be directly tied to this finding—that Reifman

did not meet Rule 11(b)’s requirement to make “an inquiry reasonable under the

circumstances”—not the finding that the Third Amended Complaint violated Rule 11.9

The fact that the district court’s finding of a Rule 11 violation includes conduct

that goes beyond the conduct identified by Newmont in its motion for sanctions is

9

We recognize that there may be an alternative way to view the district court’s opinion. The

district court’s opinion may be read to show that the district court believed that only the motion for leave

to file the Third Amended Complaint constituted the Rule 11 violation, as alleged in Newmont’s motion

for sanctions, and that the court’s subsequent statement that the plaintiffs and Reifman “failed to conduct

a reasonable inquiry before filing their lawsuit” was not intended to constitute a finding of a Rule 11

violation. New questions arise under this view, however, including whether attorney fees may be awarded

under Rule 11 for work that was not directly related to sanctionable conduct—here, the Third Amended

Complaint. Compare Giganti v. Gen-X Strategies, Inc., 222 F.R.D. 299, 314 (E.D. Va. 2004) (holding that

Rule 11 does not permit an opposing party to receive attorney fees for fees that were not incurred in

responding to the sanctionable conduct) with Kendrick v. Zanides, 609 F. Supp. 1162, 1173 (N.D. Cal.

1985) (holding that an opposing party may receive attorney fees under Rule 11 for fees that were not

incurred in responding to the sanctionable conduct). Also raised would be important questions over the

propriety of prohibiting future lawsuits against defendants other than Newmont, who did not seek

sanctions, supra note 8, and the propriety of a federal court’s prohibiting future filings in state court. 

Because of the district court’s stated belief that the plaintiffs and Reifman “failed to conduct a reasonable

inquiry before filing their lawsuit,” however, we need not address these significant issues. Instead, we

proceed based on the district court’s determination that the filing of the initial suit—not simply the filing

of the motion for leave to file the Third Amended Complaint—was also a violation of Rule 11.
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especially problematic given that Rule 11 is particularly focused on ensuring that the

alleged violator has notice of the specific conduct that is said to constitute a Rule 11

violation. Even though district courts are given considerable discretion to determine the

proper scope of a sanctions award, see FED. R. CIV. P. 11 advisory committee’s note to

1993 amendments (“Whether a violation has occurred and what sanctions, if any, to

impose for a violation are matters committed to the discretion of the trial court[.]”), Rule

11 is absolutely clear that a motion for sanctions “must describe the specific conduct that

allegedly violates Rule 11(b).” FED. R. CIV. P. 11(c)(2); see also FED. R. CIV. P. 11

advisory committee’s note to 1993 amendments (“Explicit provision is made for litigants

to be provided notice of the alleged violation and an opportunity to respond before

sanctions are imposed.”); id. (same for sanctions imposed on a court’s own initiative). 

As other circuits have recognized, “[t]he purpose of particularized notice is to put

counsel ‘on notice as to the particular factors that he must address if he is to avoid

sanctions.’” Nuwesra v. Merrill Lynch, Fenner & Smith, Inc., 174 F.3d 87, 92 (2d Cir.

1999) (quotation marks omitted); 1-10 Indus. Assocs., LLC v. United States, 528 F.3d

859, 867–68 (Fed. Cir. 2008) (same); Anjelino v. New York Times Co., 200 F.3d 73, 100

(3d Cir. 2000) (same); see also 5A CHARLES ALAN WRIGHT,ARTHUR R.MILLER,MARY

KAY KANE & RICHARD L. MARCUS, FEDERAL PRACTICE AND PROCEDURE §§ 1337,

1337.3 n.1 (3d ed. 2011) (collecting cases holding that procedural due process requires

notice and an opportunity to be heard before sanctions are imposed and that “a failure

to comport with these requirements is enough to merit reversal.”). Furthermore, the First

Circuit has noted, under the pre-1993 Amendment version of Rule 11, that “the

determination of what process is due is, in part, a function of the type and severity of the

sanction.” Media Duplication Servs., Ltd. v. HDG Software, Inc., 928 F.2d 1228, 1238

(1st Cir. 1991).

The plaintiffs and Reifman did not have clear notice that the initial filing of the

lawsuit was the conduct asserted to be the subject of sanctions. Although Newmont’s

motion requested reimbursement for all of its costs in defending against the entire suit,

the only conduct of the plaintiffs and Reifman that was specified as sanctionable was the
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filing of the motion for leave to file the Third Amended Complaint. According to

Newmont, the particular reason why the motion for leave to file was sanctionable was

that it failed to cure the jurisdictional defects in the Second Amended Complaint. 

Indeed, permeating the entire motion for sanctions is the notion that the district court’s

dismissal of the Second Amended Complaint for lack of personal jurisdiction was the

tipping point at which further conduct by the plaintiffs and Reifman would be viewed

as sanctionable. The only other conduct from this lawsuit that the motion for sanctions

refers to is “repeated frivolous filings” in this case, R.89 (Motion for Sanctions at 10-

11), but Newmont did not identify which previous filings in this case were frivolous and

violated Rule 11. The plaintiffs and Reifman therefore did not have sufficient notice that

they might be sanctioned for conduct other than the filing of the motion for leave to file

the Third Amended Complaint, especially given the great severity of the sanctions

awarded—over a hundred-thousand dollars and a complete prohibition against filing

future lawsuits against all defendants arising out of the same issues in both state and

federal courts.

Indeed, this case seems to us to be similar to Thornton v. General Motors Corp.,

136 F.3d 450 (5th Cir. 1998), which involved a sua sponte finding of a Rule 11 violation. 

In Thornton, the district court sanctioned the plaintiff’s attorney “for filing a lawsuit . . .

without first having made a reasonable inquiry into the facts underlying [the plaintiff’s]

claim.” Id. at 451. The Fifth Circuit found it important, however, that this finding

involved conduct that went far beyond the conduct specifically identified in the district

court’s show-cause order. Id. at 454. Rather than inform the attorney that the specific

conduct that was under consideration for sanctions was the attorney’s failure to make a

reasonable inquiry, the district court’s show-cause order noted conduct by the attorney

that was narrower: “his general conduct in failing to produce evidence in support of [the

plaintiff’s] claim prior to the district court’s ruling on [the defendant’s] motion for

summary judgment.” Id. As a result, the Fifth Circuit found that the district court

abused its discretion by failing to give the attorney sufficient notice of the precise

violation of Rule 11 that might be addressed by the district court. Id. at 454–55.
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The situation here is no different. Newmont’s motion, which is analogous to the

district court’s show-cause order in Thornton given that both documents are required to

identify specifically the sanctionable conduct, alleged only that the plaintiffs and

Reifman violated Rule 11(b)(2) and (3), because the Third Amended Complaint was

“presented for an[] improper purpose” and was not “warranted by existing law or by a

nonfrivolous argument for [changing] the law.” Newmont argued that the proposed

Third Amended Complaint completely failed to address the absence of personal

jurisdiction over Newmont that was fatal to the Second Amended Complaint, the

dismissal of which was the tipping point at which further conduct by the plaintiffs and

Reifman would be viewed as sanctionable. The district court’s crucial sanctions finding

here, however—the finding on which it based its monetary sanctions award—was that

the plaintiffs “failed to conduct a reasonable inquiry before filing their lawsuit.” R. 102

(Op. at 6). This goes far beyond the concept that the actions of the plaintiffs and

Reifman became sanctionable in light of the dismissal of the Second Amended

Complaint. It is therefore apparent that the “specific conduct” of the plaintiffs and

Reifman that was found to violate Rule 11 was far broader than that described in

Newmont’s motion. As a result, Newmont’s motion did not provide the plaintiffs and

Reifman with sufficient notice regarding the subject of the Rule 11 proceedings, and the

district court did not ensure that the plaintiffs and Reifman had sufficient notice before

making its Rule 11 finding.

Furthermore, given Rule 11’s clear focus on the specific conduct that is subject

to sanctions and its requirement that the alleged violator be given notice and an

opportunity to be heard, this error was plain. In addition, given the great amount of the

monetary sanction that resulted from the violation, and the difference that may exist

between what is needed to deter a frivolous lawsuit as opposed to a single frivolous

filing, this error affects the plaintiffs’ and Reifman’s substantial rights and “seriously

affected the fairness, integrity or public reputation of the judicial proceedings.” 

Graham, 622 F.3d at 455. We therefore reverse the district court’s finding of a Rule 11

violation, vacate its sanctions orders, and remand for the district court to consider anew
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Newmont’s allegations of a Rule 11 violation by the plaintiffs and Reifman.10 On

remand, the district court will be able to consider the parties’ arguments regarding the

propriety of Rule 11 sanctions and, if sanctions are found to be warranted, the proper

scope of those sanctions, keeping in mind the requirements of Rule 11 and this circuit’s

precedents, especially as they relate to the need to deter sanctionable conduct, the need

to protect the district court’s ruling on personal jurisdiction over Newmont in Michigan,

and the propriety of federal court injunctions against future lawsuits in state court, along

with any other relevant consideration.

III. CONCLUSION

For these reasons, we AFFIRM the dismissal of all claims against all defendants

by the district court, along with the district court’s denial of the plaintiffs’ motion for

reconsideration. With respect to the imposition of sanctions, we hold that the district

court erred in the course of finding a Rule 11 violation; we therefore REVERSE the

district court’s sanctions holding, VACATE the order of monetary and injunctive

sanctions, and REMAND this case to the district court to consider Newmont’s motion

for Rule 11 sanctions anew in light of this opinion.11 Each party is to bear its own costs

on these appeals. See Fed. R. App. P. 39.

10Because we hold that the district court erred in finding a Rule 11 violation based on conduct

that had not been identified in the motion for sanctions or in a show-cause order, we need not consider the

plaintiffs’ remaining arguments in this appeal.

11At oral argument, this court requested a supplemental brief from each side on the question of

whether the plaintiffs preserved the argument that the district court improperly found a Rule 11 violation

that was greater than that identified in Newmont’s motion for sanctions. On March 28, 2011, after these

briefs were submitted, the plaintiffs filed a motion to strike a portion of Newmont’s supplemental brief on

the ground that Newmont’s brief exceeded the allowable page limit. Given our disposition of these

appeals, set out above, we deny this motion as moot.