In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 03-1338

THOMAS G. VOLLMER, PEGGY R. POSPESHIL, 

MARY KENNAH, ET AL.,

Plaintiffs-Appellees,

and

PUBLISHERS CLEARING HOUSE AND CAMPUS

SUBSCRIPTIONS, INCORPORATED,

Defendants-Appellees,

v.

LYNDE SELDEN, II AND RICHARD H. ROSENTHAL,

Respondents-Appellants.

____________

Appeal from the United States District Court

for the Southern District of Illinois.

No. 99 C 434—G. Patrick Murphy, Chief Judge.

____________

ARGUED SEPTEMBER 9, 2003—DECIDED NOVEMBER 26, 2003

____________

Before CUDAHY, EASTERBROOK, and RIPPLE, Circuit

Judges.

CUDAHY, Circuit Judge. Frederick L. Hawk, represented

by his counsel, Lynde Selden II and Richard H. Rosenthal,
2 No. 03-1338

attempted to intervene in this class action. The district

court denied the motion to intervene and sua sponte levied

$50,000 in sanctions against Selden and Rosenthal under

Federal Rule of Civil Procedure 11 (Rule 11). The district

court found that they had failed to properly investigate Mr.

Hawk’s claims and had filed pleadings on his behalf for the

sole purpose of extracting a fee. Selden and Rosenthal

appealed the district court’s imposition of sanctions and

Hawk appealed the denial of intervention. This court

affirmed the denial of intervention but vacated the imposition of sanctions, finding that the district court improperly

relied on evidence outside of the record and failed to provide

a detailed explanation as to why an “extremely large” sua

sponte levy of sanctions was appropriate. See Vollmer v.

Publishers Clearing House, 248 F.3d 698, 709-12 (7th Cir.

2001) (Vollmer I). On remand, the district court reduced the

sanctions to $35,000 but provided no additional explanation

for the amount and continued to rely on evidence outside of

the record. This appeal followed.

As in most sequels, virtually nothing has changed since

we last met the characters, precious little of the content

is novel and we find ourselves asking “why are we back

here?” Unlike most sequels, however, we do not lay the

groundwork for a trilogy. For the reasons that follow, we

vacate the district court’s imposition of Rule 11 sanctions.

I

BACKGROUND

We will assume familiarity with our prior opinion in this

matter and will repeat only those facts necessary to understand the issues presented in this appeal. See Vollmer I,

248 F.3d at 701-05. On February 3, 1998, Thomas G.

Vollmer filed this class action lawsuit against Publishers

Clearing House (PCH), alleging violations of Illinois
No. 03-1338 3

consumer protection laws. The complaint claimed that PCH

fraudulently induced customers to purchase magazines by

falsely suggesting in its advertising that customers could

increase their chances of winning a sweepstakes by making

purchases.

After a failed motion to dismiss, the parties entered into

a stipulation of settlement, filed with the district court on

June 23, 1999. The district court conditionally certified a

class for settlement purposes and granted preliminary approval of the settlement. The settlement included remedial

undertakings by PCH aimed at addressing the allegations

raised in the complaint and also provided monetary relief in

the form of refunds for class members who filed a claim

during the claim period. Initially, the settlement contained

a $10 million cap on refunds.

Hawk, a farm equipment salesman from San Diego,

California, was a past customer of PCH and had received a

notice of settlement in early August 1999. Hawk testified

that shortly thereafter, he contacted Selden, his lawyer and

an appellant. Hawk knew Selden because Hawk’s wife was

an administrator in Selden’s office. Selden, joined by

Rosenthal, contacted class counsel requesting information

and access to documents regarding the settlement, ostensibly to determine whether it would be in Hawk’s best

interest to opt out of the settlement class. These requests

were denied by class counsel.

As a result, on September 13, 1999, Hawk filed a “Petition

to Intervene for Limited Purposes of Viewing Document

Depository,” claiming that intervention was appropriate

under Rule 24(a) (intervention of right) and Rule 24(b)

(permissive intervention). The petition noted that “[b]efore

Intervenor accepts the proffered settlement . . . [he] wants

to view the document depository defendant has made

available to class counsel.” Both class counsel and the

defendants opposed the motion, asserting that Selden and
4 No. 03-1338

Rosenthal were “professional objectors” or “claim jumpers”

who filed such claims often in the past, usually without

merit. 

On October 4, 1999, Hawk filed “Intervenor’s Motion to

Invervene” in which he sought to intervene for all purposes.

At that point, the district court seemed inclined to believe

that Hawk meant to intervene to represent others in the

action. 

AARP (formerly known as the American Association of

Retired Persons), along with more than twenty attorneys

general of various states and other individuals who had a

separate class action currently pending against PCH, also

sought to intervene. One month after Hawk sought to intervene, when it became clear that claims would exceed the

$10 million cap, PCH agreed to pay all approved claims in

full.

At a hearing held regarding the motions to intervene,

Hawk testified that he believed $10 million was insufficient

and would provide only pennies on the dollar. However,

Hawk also testified that he did not know what his losses

were or what he would claim; he enjoyed the magazines he

ordered; he may have entered the sweepstakes as many as

twelve times without purchasing a magazine; he was totally

unaware of the injunctive relief portion of the settlement;

and he did not know what his basis was for asking to

represent other individuals in the lawsuit. Moreover, Hawk

did not recall ever reading the “Motion to Intervene” filed

on his behalf.

The district court denied Hawk’s motion to intervene and

sua sponte ordered that Selden and Rosenthal show cause

why they had not violated Rule 11(b) and should not be

sanctioned. On February 25, 2000, the district court held a

hearing on Selden and Rosenthal’s objection to the imposition of Rule 11 sanctions. The district court imposed

$50,000 in sanctions against Selden and Rosenthal, stating
No. 03-1338 5

that Hawk’s lack of a “passing understanding” about the

nature of the settlement showed that he was put forth to

cause delay and increase the cost of litigation so that his

lawyers could extract a fee. The district court judge also

asserted that it had “made it the court’s business to find out

all I can” about the attorneys’ legal practice and that “I

haven’t been able to find anyone anywhere that say these

are recognized class counsel.” The district court concluded

that Selden and Rosenthal were “not real class action

lawyers” but instead that “they follow people around the

country, . . . and then they stick their nose in [a case] and

they extract money.” The district court used the amount of

attorney’s fees necessary to defend against the intervention

as a “marker” in determining the amount of the sanctions

and also said that the amount was necessary to deter such

conduct, given the huge fees available in class action

litigation. See Vollmer I, 248 F.3d at 705.

On appeal, in an opinion by Judge Ripple, we affirmed the

district court’s denial of the motion to intervene but reversed and remanded to address concerns about the

sanctions. This court found, in relevant part, that it was

improper for the district court to rely on evidence not in the

record and the “extremely large” sanctions required a

detailed explanation by the district court—not merely

“cursory” reasoning. Id. at 710-11. 

On remand, the district court issued a new order to show

cause why sanctions should not be imposed. The appellants

provided a written response and also spoke at a hearing on

the imposition of such sanctions. In an order dated January

15, 2003, the district court re-imposed sanctions. While the

new order omitted the previous language suggesting that

the district court had considered facts not within the record,

it nonetheless stated that it “conducted its own research

into other class action litigation involving Selden and

Rosenthal.” App. at 559. Additionally, the district court

reduced the sanctions to $35,000 but provided no additional
6 No. 03-1338

explanation for the amount. Instead, the district court judge

stated, “we’ll see how that fares.” App. at 553. This appeal

followed.

II

DISCUSSION

Rule 11 provides that, if an attorney presents a motion to

a court for “any improper purpose, such as to harass or to

cause unnecessary delay or needless increase in the cost of

litigation,” monetary sanctions may be imposed.

Fed. R. Civ. P. 11(b)(1) & (c); Vollmer I, 248 F.3d at 709.

The district court found that Selden and Rosenthal encouraged Hawk to intervene for such purposes, solely to enable

themselves to receive a fee as part of this litigation. As

a result, the court, on its own initiative, imposed monetary

sanctions under Rule 11(c)(1)(B), requiring Selden and

Rosenthal to pay $35,000 to the district court. We review all

aspects of the district court’s decision to impose Rule 11

sanctions for abuse of discretion. See Cooter & Gell v.

Hartmarx Corp., 496 U.S. 384, 405 (1990); Vollmer I, 248

F.3d at 709.

We begin our analysis by noting that a judge can sanction

a litigant for filing a frivolous suit or claim regardless of the

motives for such filing. See Reed v. The Great Lakes Co.,

Inc., 330 F.3d 931, 936 (7th Cir. 2003). In this case, however, the judge never made a finding that Hawk’s intervention was frivolous. App. at 559-60. Such a finding

of frivolousness would have been inappropriate here in light

of the fact that (a) AARP, along with a large number of

attorneys general, also sought to intervene and their claims

were not found frivolous; and (b) the settlement was

significantly improved in favor of the class after Hawk

and the others sought to intervene. See Gottlieb v. Westin

Hotel Co., 990 F.2d 323, 327 (7th Cir. 1993) (“Where Coun-
No. 03-1338 7

sel’s inquiry was objectively reasonable under the circumstances of the case . . . Rule 11 sanctions are inappropriate.”). Thus, because Selden and Rosenthal’s attempt to

intervene was not frivolous, this court must decide whether

sufficient evidence supports the district court’s finding of an

improper purpose.

The district court found that Selden and Rosenthal’s improper purpose was seeking to intervene “solely to extort a

fee for themselves.” App. at 599. Certainly, it is not improper to file a non-frivolous claim in the hope of getting

paid. If it were, every motion for attorney’s fees would

result in sanctions. There are two ways, however, in which

an intervenor might get paid. An intervenor might get paid

by raising the value of a class action settlement and receiving a percentage of the increase in value or a fixedpayment for having improved the settlement; on the other

hand, he might intervene and cause expensive delay in the

hope of getting paid to go away. The former purpose for

intervening would be entirely proper, while the latter would

not. 

While the parties to a class action start out in an adversarial posture, once they reach the settlement stage,

incentives have shifted and there is the danger of collusion.

See In re General Motors Corp., 55 F.3d 768, 778 (3d Cir.

1995) (noting that class actions can become a vehicle for

collusive settlements); see also Deborah R. Hensler et al.,

Class Action Dilemmas: Pursuing Public Goals for Private

Gain, 27 (RAND Institute for Civil Justice, 2000) (same).

Class counsel, for instance, might settle claims for significantly less than they are worth, not because they think it is

in the class’s best interest, but instead because they are

satisfied with the fees they will take away. See Rand v.

Monsanto Co., 926 F.2d 596, 599 (7th Cir. 1991) (“[T]he

representative and counsel may be tempted to sell out the

class for benefits to themselves.”).
8 No. 03-1338

Intervenors counteract any inherent objectionable tendencies by reintroducing an adversarial relationship into the

settlement process and thereby improving the chances that

a claim will be settled for its fair value. See, e.g., Crawford

v. Equifax Payment Services, Inc., 201 F.3d 877, 882 (7th

Cir. 2000) (reversing an order approving settlement based

on an intervenor’s appeal); General Motors, 55 F.3d at 803

(“[W]here there is an absence of objectors, courts lack the

independently-derived information about the merits to

oppose proposed settlements.”). Intervenors have the

potential to play this important role even in the numerous

valid class actions where each plaintiff is seeking to be

compensated only by a few dollars. Cf. Crabill v. Trans

Union, L.L.C., 259 F.3d 662, 665 (7th Cir. 2001) (“[T]he core

function of [the class action] is to enable the litigation of

claims too small to warrant the costs of prosecuting a

separate suit for each claim.”); Rand, 926 F.2d at 599

(“Class actions assemble small claims—usually too small to

be worth litigating separately, but repaying the effort in the

aggregate.”). The slightness of individual recovery does not

make the counsel’s purpose invalid nor his role as objector

less vital. Thus, it would have been proper for Selden and

Rosenthal to file a non-frivolous objection with the purposes

of increasing the value of the settlement and thereby

deriving a fee.

The district court, however, found that Selden and

Rosenthal’s purpose in seeking to intervene was extortion.

See App. at 559. Extortion is the act or practice of obtaining

something or compelling some action by illegal means, as by

force or coercion. Black’s Law Dictionary (7th ed. 1999). In

the context of intervening in a class action settlement,

extortion would mean intervening not to increase the value

of the settlement, but in order to get paid to go away. As the

district court’s order correctly suggested, this would be an

improper purpose for intervening. This is, in part, because

it would benefit only the intervenors at the expense of all
No. 03-1338 9

other parties to the litigation. Cf. Jeffrey N. Gordon, Ties

That Bond: Dual Class Common Stock and the Problem of

Shareholder Choice, 76 Cal. L. Rev. 1, 12-13 (1988) (noting

in an analogous situation that “greenmailers” who threaten

disruption unless “paid to go away” may decrease shareholder value). 

Therefore, we must determine whether there is sufficient

evidence in the record to show that Selden and Rosenthal

intervened for the purpose of getting paid to go away. We

find that there is not. The district court relied on (a) Hawk’s

testimony, which it found demonstrated a lack of familiarity

with basic components of the settlement, as well as (b) the

fact that Selden and Rosenthal have sought to intervene in

a number of nationwide class actions. See App. at 559.

A. Hawk’s Testimony

Let us assume for the moment that Hawk knew nothing

at all about the settlement in which he was intervening and

in fact thought he was appearing in court on October 4,

1999 to contest a traffic ticket. What would that teach us

about Selden and Rosenthal’s purpose for seeking intervention? Certainly, we could infer that whatever Selden and

Rosenthal’s purpose was in seeking intervention, it was

their own and was not attributable to Hawk. However, it

would be improper to infer from this evidence alone that

Selden and Rosenthal’s purpose was extortion. Selden and

Rosenthal may have been legitimately concerned that the

settlement was inadequate and initiated the intervention

for that reason. Even if they were not, they may have been

motivated to improve the settlement for the class and to

thereby recover a fee, which, as discussed supra, is not

improper if the objection is non-frivolous.

Although it involves an award of attorney’s fees rather

than Rule 11 sanctions, we find Rothenberg v. Security
10 No. 03-1338

Mgmt. Co., Inc. to be instructive on this point. See 736 F.2d

1470, 1472 (11th Cir. 1984). In Rothenberg, Jack and

Shirley Rothenberg had filed individual and derivative

actions against Security Management Corporation. When

their derivative actions were dismissed, the district court

awarded attorney’s fees to the defendant finding that the

derivative actions were brought in bad faith. On appeal, the

Eleventh Circuit considered the two sets of findings on

which the district court based its award:

In the first set, the [district] court recited those facts

which supported dismissal of both Jack’s and Shirley’s

derivative actions: Jack did not own stock in the corporation at the time the derivative suit was filed and

Shirley had not read the complaint, had no personal

knowledge of the facts surrounding the allegations made

in the complaint, and “displayed an obvious unwillingness to learn about the suit by not acquiring more than

a rudimentary understanding of the case.” (citation

omitted) The second set of findings relates

to appellants’ motive for bringing the suit: the

Rothenbergs brought the derivative actions as “leverage” to enhance their personal claims.

Id. (emphasis added). The Eleventh Circuit vacated the

district court’s award, holding that in determining the propriety of the bad faith fee award, the inquiry should focus

primarily on the conduct and motive of a party (the second

set of findings) rather than on what it called the “validity of

the case” (the first set of findings). Id. (citations omitted).

The Eleventh Circuit, found, in essence, that Shirley’s

complete lack of familiarity with the details of the suit was

of minimal relevance in determining whether she brought

the suit for an improper purpose. 

If it is fruitless for a court to attempt to determine the

motive of a named plaintiff based on his or her ignorance of

the case, it would be an even greater inferential leap to use
No. 03-1338 11

1 By so holding, this court does not intend in any way to endorse

the practice of putting an ill-informed and ill-prepared plaintiff

before the court. While it may reveal little about whether an

attorney’s purpose in bringing the suit is proper, it may itself be

independently sanctionable conduct. See Vollmer I, 248 F.3d at

709 (“On its own, Mr. Hawk’s testimony and the circumstances

surrounding it would provide sufficient justification for the

imposition of Rule 11 sanctions.”). We decline to remand this issue

to the district court, however, since any proper sua sponte

sanction based solely on Hawk’s testimony would necessarily be

too low to warrant further expenditure of resources. See, e.g.,

Kotsilieris v. Chalmers, 966 F.2d 1181, 1188 n.2 (7th Cir. 1992)

(“Considering the amount of judicial resources that have already

been expended in reviewing this issue, and considering that it

may cost more than the few thousand dollars at stake for courts

and counsel to address this issue on remand, we will not remand.”). 

the named plaintiff’s ignorance to determine the motive of

his or her attorney. In fact, the district court implicitly

recognized the limited value of determining an attorney’s

motive on the basis of the breadth of his client’s knowledge

when it declined to impose sanctions on another intervenor,

Mr. Hoy, who saw his own complaint for the first time when

he appeared for the hearing on the order to show cause. See

App. at 241; cf. App. at 206-08 (class counsel also asserted

that Hawk was “better prepared in his questions” than Hoy

and another intervenor who was not sanctioned). We find

that, in and of itself, the plaintiff’s level of familiarity with

the details of his case to be of little relevance in determining the specific purpose of his counsel in initiating such

case.1

 It certainly does not show that Selden and Rosenthal

were attempting extortion.

B. History of Intervening

The district court’s only other given explanation for its

holding that Selden and Rosenthal intervened “solely to
12 No. 03-1338

extort a fee for themselves” was its finding that “[t]hese

attorneys have seemingly made intervening in nationwide

class actions a routine practice.” App. at 599. The district

court apparently based this finding on four cases, which it

cited in its order. See In re Synthroid Marketing Litig., 201

F. Supp. 2d 861 (N.D. Ill. 2002); French v. Selden, 59

F. Supp. 2d 1152 (D. Kan. 1999); In re The Prudential Ins.

Co. of Am. Sales Practices Litig., 962 F. Supp. 450 (D.N.J.

1997); White, III v. General Motors Corp., 718 So.2d 480

(La. Ct. App. 1998).

Even assuming that Selden and Rosenthal have routinely

engaged in a practice of intervening, this finding teaches us

little about the propriety of their motives for intervening in

this case. Each of these past interventions may have been

made out of concern for the class members or at least with

the intention of increasing the value of the settlement. In

fact, with the exception of the case at bar, none of Selden

and Rosenthal’s interventions have ever been found to be

frivolous or motivated by an improper purpose. 

In a recent case, this court reviewed a district court’s sua

sponte award of $1,000 in Rule 11 sanctions based on its

finding that the plaintiff was an “extortionist.” See Reed,

330 F.3d at 936-37. The district court based its finding that

the plaintiff was an extortionist on his 15-year history of

bringing similar lawsuits. This court vacated the district

court’s award because none of the plaintiff’s previous cases

had been adjudged frivolous and the district court did not

find them to be frivolous. Id. (“[T]he sanctions order thus

appears to rest on nothing more solid than the speculation

that Reed is an extortionist. This speculation is too thin to

sustain that order.”). So too, in this case Selden and

Rosenthal’s past objections, which have never been adjudged frivolous, cannot form the proper basis of a sanctions

award. 
No. 03-1338 13

Although the district court cited no other evidence supporting its finding of an improper motive, we have considered the record in its entirety and see no other basis upon

which to support the proposition that either Selden or

Rosenthal sought to intervene in order to get paid to go

away or for other improper purposes. At oral argument,

class counsel suggested that the improper purpose could be

inferred from the fact that Selden and Rosenthal ultimately

declined to intervene. We find this fact to be of little

relevance as well. By the time Selden and Rosenthal

declined to intervene, there were numerous good reasons for

them to do so, including the amount of time and effort they

had already expended, and the fact that other capable

objectors had emerged. In sum, we find no evidence in the

record supporting the finding that Selden and Rosenthal

intervened solely to extort a fee, and the imposition of

sanctions was therefore an abuse of discretion. 

Further, the district court disregarded this court’s instructions in Vollmer I, in which we indicated that it was

inappropriate for the district court to rely on evidence outside of the record and that the court had to provide a more

detailed explanation for such a large award of sanctions.

The district court ignored both instructions. Even after

remand, the district court’s opinion indicated that it “conducted its own research into other class action litigation

involving Selden and Rosenthal” but failed to cite to any

of this research or to indicate what part of the research,

if any, the district court relied on in imposing sanctions.

App. at 559. The few cases cited by the district court in

which Selden and Rosenthal allegedly intervened were not

the result of the court’s “own research,” since they had been

repeatedly cited by the class since the two filed objections

with the court. Further, the district court failed to provide

any additional explanation for the exceptionally large

sanctions. Instead, the district court arbitrarily reduced its

sanctions from $50,000 to $35,000 stating, “we’ll see how
14 No. 03-1338

that fares.” Given that in Vollmer I we suggested that $500-

$1,000 was an appropriate amount for sanctions imposed

sua sponte, we find that $35,000 in sanctions fares pretty

poorly.

Finally, we reiterate that even if we had found sanctions

to be appropriate in this case, absent extraordinary circumstances not shown here, sua sponte sanctions are generally limited to several thousand dollars. See, e.g., In re

Bagdade, 334 F.3d 568, 571-72 (7th Cir. 2003) (imposing a

$1,000 sua sponte sanction); Powers v. Duckworth, No. 90-

2492, 1995 WL 496751, at *3 (7th Cir. 1995) (upholding

$500 sua sponte sanctions); Burda v. M. Ecker Co., 2 F.3d

769, 776 (7th Cir. 1993) (reducing sua sponte sanction from

$2,500 to $1,000). Given the resources already devoted to

this issue and the potential additional costs of litigating it

further, we would decline to remand. See Kotsilieris, 966

F.2d at 1188 n.2 (declining to remand sanctions in a case

where the court found it would not be worth the expenditure of further resources).

CONCLUSION

For the foregoing reasons, we VACATE the imposition of

Rule 11 sanctions. 

RIPPLE, Circuit Judge, concurring in the judgment. In my

view, the district court could have sustained Rule 11

sanctions solely on the fact that counsel had offered

Mr. Hawk as a party. However, the district court was not
No. 03-1338 15

required to rest its determination solely on this factor, and,

indeed, it did not. Rather, it premised its imposition of

sanctions not only on that ground but also on the ground

that counsel had engaged in a pattern of conduct that

amounted to “claim jumping.” This latter reason is certainly

not supported by the record.

Having afforded the district court a second opportunity to

ground the award of sanctions on a specific and appropriate

basis, I do not think that we need to give it a third chance.

See Kotsilieris v. Chalmers, 966 F.2d 1181, 1188 n.2 (7th

Cir. 1992). Accordingly, I join the judgment of the court.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—11-26-03