The Honor able Ann A ldrich, United States District J udg e for the Norther n District of Ohio, * sitti ng by desig nation. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION File Na me: 07a0029n.06 Filed: January

9, 2007 No. 05-4342 U N IT E D S T A T E S C O U R T O F A P P E A LS F O R T H E S IX T H C IR C U IT I DA S. K

AT Z , Plaintif f-Appellee

, On Appea l from the v. United States District Court for the Sou the rn

Di str ic t of

Oh io A R NOL D RA B K IN , E T AL ., De fe nd an t- Ap pe lla nts .

______________________________ Be fo re : KE NN E DY an d

GIBBO NS , C i rc u i tJ u d ges ; ALDR I C H, Di s t ri ct J u d ge * KENN EDY, J. Ar

no ld M . Rab kin , et al . s e e k r e vie w o f t he dis tr ic t c ourt ’s de nia l of the ir motion to assess monetary and non-mone tary sanctions ag ainst I da S. Katz pursuant to Fe d. R. Civ. P. 1 1. Th is a

pp e a l is ba se d o n a sse rt ion s th a t th e dis tr ic t c ourt abu sed it s d isc re tio n b e c a us e its ref usal to g rant sanctions was based upon err oneous determinations that (1) Katz’s claims had not be e n f ull y lit ig a te d in

state c ourt

a nd (2 ) t he e vid e nc e in t

he re c or d w a s in su ff

ic ie nt t o d e mon str a te Katz’s improper pur

pose in bring ing her case in f eder al court. We here by

assess monetar

y sanctions
a g a ins t K a tz f

or fi lin g a fr ivo lou s a

pp e a l a nd re mand to the dis tr ic t c ourt to d e te rm ine wh e the r i t is appropr iate to assess f

ees f or the trial c ourt proce eding s following appellants’ motion for summar y jud g me nt.2 BACK GR OUND I da Katz, the fo un de r an d for me r dir e c tor of the Sa ve the An ima ls F ound a tio n, a no n- pr of it
c ha ri ta ble or g a nizatio n, a lle g e s that a pp e lla nts , the Sa ve the An ima ls F ound a tio n a nd se ve ra l of

its board me mbers (he reina fter “ STAF” ), have committed a my ri ad of improprieties r elated to the
mana g e me nt o f t

he fo un datio n. Katz has ins tit ute d sta te a nd fe de ra l cou rt lit ig a tio n, in ad dit ion

to attempting various administrative r emedies, e ssentially alleg ing the same improprie ties ag ainst the same defenda

nts, all to no avail. The Court of Common P leas, Ha milton C ounty , Ohio, dismiss ed Katz’ s st a te a c tio n in

its e nti re ty . T he state a

pp e llate c ourt

up he ld t he dis mis sa l of

the va st m a

jor ity of Ka tz’s ca

uses of action but r emande d for further proce eding on two claims. Katz did not appeal the af firmanc e of the state district court’ s dismis sal of t he majority of her claims, and the Court of Com mon Ple a s f or Ha mil ton County , O hio , p ro vid e d f ina l r e so lut ion

of the tw o r e mand e d c la ims , dis mis sin g the m on

the me ri ts p ur suant to O hio Civ il Ru le 41 (B )( 1) ba se d o n K a tz’ s f a ilure to prosec ute following her attorney ’s withdraw al from the c ase. Despite the r esolution of all of her claims on the merits and a lack of any source of fe dera l jurisdiction, Katz filed her ca se i n fe d er al court be fore the United States District Court for the Southern District of Ohio. I n agr ee ment with the mag istrate’s r ecommendation, the district court dismiss ed the c omplaint for lack of subject-matter

jurisdiction and for f

ailure to state a c laim upon which re lief ca

n be g rante d over K atz’s objections. A separ ate pa nel of this court aff

irmed the dis mis sa l ba se d o n p la int if f’ s f a ilure to e sta

bli sh a ny state a c tio n f

or he r 4 2 U .S. C. § 19 83 c la im. Ex pressing frustration at the consid e r a ble time and money

expended to defe nd ag ainst Katz’s jurisdictionally -insufficie nt a nd essentially duplicative fede ral suit, S TAF moved the district cour t3

to assess sanc tions, seeking rec oupment of the a t t o rn ey s’ fe es incurr ed in moving to dismiss the fede ral a ction and in filing the motion for sanc tions, as well as an injunction to preve nt Katz from fi lin g fu tur e su its a g a ins t STA F wi tho ut a ma g istra te ’s pr e -a pp ro va l. T he dis tr ic t c ourt de nie d th is mot ion fo r s a nc tio ns . STA F he re a pp e a ls that de nia l, a sse rt ingthat K a tz’ s d e c isi on to s ig n a nd fi le the c omp la int

in f e de ra l c ourt wa s no t re a so na ble un de r the c ir c ums tanc e s w ith in t he te rm s o f R

ule 11 jurisprudenc e. Union Planters Bank v. I & J De v. Co. , 115 F.3d 378, 384 ( 6th Cir. 1997)(citation omitted.). AN AL YSI S We h e re by

de te rm ine tha

t K a tz’ s a c tio ns do wa

rr a nt t he a sse ssm e nt o f m on e tary sanc tio ns . Although w e re view the district cour t’s sanctions deter

mination with the defere nce prescr ibed by the
a bu se of dis c re tio n sta

nd a rd , w e mus t c on du c t a tho ro ug h e xami natio n b a se d o n th is c ir c uit ’s Rul e 11 jurisprudenc e and the rec ord before us. See Apostolic Pe nte c os tal Chu rc h v . Co lbe rt , 169 F.3d 40 9, 41 7 ( 6th

Cir . 1 99 9) . Ru le 11 re qu ir e s th a t: . . . to the best of [an unrepr esente d party ’s] knowledg e, information, and belief, formed a fter a

n inquiry rea sonable unde r the c ircumstance s, . . . claims . . . [presented to the court in a pa

per] are war

rante d by exis ting law

or by a nonfr ivolous arg ument for the e x tension, modification or rev ersa l of exist ing la w or the e stablishment of new law [and] the alleg ations and other f actua l contentions have e videntiary support or, if spec ifically

so identified, ar e likely to have e videntiary

sup p o rt afte r a rea sonable opportunity

for f urther inve stigation or discovery
. . . . Fe d. R. Civ. P . 11(b). As the district court cor rec tly noted, “[i] n this circui t , t h e t es t for the imposit ion of Rule 11 sanctions is ‘whethe r the individual’s conduc t was re asonabl e u nder the circ umstances.’ ” Tropf v. Fid. Nat ’l Titl e Ins. Co. , 289 F.3d 929, 939 ( 6th C i r. 2 0 0 2 ) (c itation omi tte d) . H e re , e ve n if Katz poss e sse d an ini tia l go od -f a ith be lie f that her

c la ims we re c og niza

ble4

in f e de ra l c ourt , ST AF ’s mot ion to d ism iss re a so na

bly sh ou ld h a ve pu t he r on no tic e that th e se claims wer e leg ally

insufficient. Acc ording ly , the law aff orded her twe nty -one da

y s after service of the motion for sanc tions to wit hdrawthe complaint. Fe d. R. Civ. P . 11(c) (1)( A). Although the district court did not find sanctions to be appropr iate, it failed to c onsider the fac t that Katz’s underlying c omplaint had no leg ally viable basis for

fede ral jurisdiction. Whil e the
c ourt mig ht have c on sid e re d it re a so na ble fo r the pla int if

f to be lie ve , a s sh e a rgue d, that th e fa vo ra ble tax t reatment STAF re ceive d as a nonpr ofit would make it subjec t to suit in fede ral c ourt, STAF’ s motion to di smiss the case and the district cour t’s decision to g rant that motion surely was suff icient to notify Katz that her c laim was g roundless. I nstead of resting its decision on t his issue, the district
c ourt c a me to its c on c lus ion that Katz wa s no t be havin g un re a so na bly in br ing ing the fe de ra l c a se based on: (1) the notion that all of her state court claims wer e not dismissed on the merits, which wa s
an er roneous inter

pretation of Ohio law, and (2) the fac t that discovery had not y et occ urre d in the
case . See Oh io C iv. R. 4 1( B ) ( statin g that “ [a] d ism iss a l un de r d ivi sio n ( B ) [p ert aini ng to involuntary dismiss al] of this rule [for dismis sal of ac tions] , ope r at e s as an adj udic at ion upon t he
m e r it s unless the cour

t, in its order

for dismissal, otherwise spe cifies” ) (e mphasis added)
. We find the district court’s an al y sis and conclusion to the contra ry to be an a

buse of discretion. F urther, the dist ri ct cour t’s prior dismissal of Katz’s claims based on the absenc e of jurisdiction and failure to state a claim was sufficie nt to aler t a rea sonable plaintiff to the frivolous nature of her

case . Neve rtheless, Katz, i n filing a g roundless appe al, forc ed STAF to inc ur additional expenses and wa ste eve n more time to continue to def end the c ase. Ba sed on our c oncl u s i o n t h at Katz’s frivolous appe al satisfies the standa rd set in Rule 11,
we a ssess monetary sanctions in the amount of $500 to de ter Katz f rom institut ing f

urther c ostly

and5

un me ri tor iou s li tig a tio n. Ad dit ion a lly , we re mand the c a se to t he dis tr ic t c ourt

wi th i ns tr

uc tio ns to
awa rd monetar

y sanctions to the defe ndants for attorney s’ fe es incurr ed in the trial c ourt following the fi lin g of

the mot ion

to d ism is s. I t is pr

ud e nt t o p e rm it the dis tr ic t c ourt to d e te rm ine the fu ll
amou n t o f t h e s anctions, as it could conside r the plaintiff’ s financia l situation and other re levant fac tors unknown to this court in doing so. B eca use we trust that issuing monetary sanctions in the form of attorney s’ fe es would suffic iently deter Katz from filing additional frivolous actions, we f ind it unnecessa

ry to enjoin the plaintiff from instituting future litigation ag ainst the defe ndants without
a ma g istrate ’s a

pp ro va l.

CO NC LU SION For the fore g oing r easons, we RE VE RSE the di strict court’s judg ment and REMAND for further proce eding s in acc ordanc e with this opinion.