Opinion ID: 697268
Heading Depth: 3
Heading Rank: 2

Heading: Improper Purpose as Sanctionable

Text: 40 The question remains whether the court could properly impose sanctions for the filing of a nonfrivolous complaint which resulted in the court's award of some benefits to plaintiffs, on the basis of its finding that plaintiffs also had a purpose that was not proper. This Court has not squarely addressed the question. In one case we stated that [e]ven if there is an arguable legal and factual basis for a motion, an attorney or party violates Rule 11 by presenting that motion to the court for an improper purpose, Pierce v. F.R. Tripler & Co., 955 F.2d 820, 831 (2d Cir.1992); but that statement was dictum, since we overturned the award of sanctions because the challenged motion had a reasonable legal basis and the district court had not found an improper purpose, see id. In a later decision in Knipe v. Skinner, we expressly declined to reach the question of whether a complaint that is warranted by existing law may be sanctionable if filed for the improper purpose of harassment, because in that case the complaint both lacked a good faith basis and had been filed to harass. 19 F.3d at 77. 41 In the article relied on in Eastway 's discussion of the 1983 change from a subjective to an objective standard in Rule 11 analysis, Judge Schwarzer emphasized that an objective standard of analysis is required even with respect to whether a filing was made with an improper purpose. See Schwarzer, A Closer Look, 104 F.R.D. at 195. Thus, the court is not to delve into the attorney's subjective intent in filing the paper, but rather should assess such objective factors as 42 whether particular papers or proceedings caused delay that was unnecessary, whether they caused increase in the cost of litigation that was needless, or whether they lacked any apparent legitimate purpose. Findings on these points would suffice to support an inference of an improper purpose. The court can make such findings guided by its experience in litigation, its knowledge of the standards of the bar of the court, and its familiarity with the case before it, and by reference to the relevant criteria under the Federal Rules such as those in Rule 1 and Rule 26(b)(1). 43 It is crucial to the effectiveness of Rule 11 that this approach be followed. Were a court to entertain inquiries into subjective bad faith, it would invite a number of potentially harmful consequences, such as generating satellite litigation, inhibiting speech and chilling advocacy.... 44 .... 45 .... If a reasonably clear legal justification can be shown for the filing of the paper in question, no improper purpose can be found and sanctions are inappropriate. 46 Schwarzer, A Closer Look, 104 F.R.D. at 195-96 (footnote omitted). 47 The courts have expressed somewhat divergent views as to whether an improper purpose can warrant the imposition of sanctions for a nonfrivolous filing. In Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1083 (7th Cir.1987), cert. dismissed, 485 U.S. 901, 108 S.Ct. 1101, 99 L.Ed.2d 229 (1988), the Seventh Circuit stated that filing a colorable suit for the purpose of imposing expense on the defendant rather than for the purpose of winning would be sanctionable under Rule 11. Several other Circuits have distinguished between complaints and other court papers, taking the view that, whatever the analysis applicable to motions and other papers filed after the commencement of the litigation, special care must be taken to avoid penalizing the filing of a nonfrivolous complaint, for otherwise a plaintiff who has a valid claim may lose his right to vindicate his rights in court, National Association of Government Employees, Inc. v. National Federation of Federal Employees, 844 F.2d 216, 224 (5th Cir.1988); see also Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1362 (9th Cir.1990) (en banc) (imposition of sanctions inappropriate for filing of a nonfrivolous complaint even when the motives for asserting those claims are not entirely pure); Burkhart v. Kinsley Bank, 852 F.2d 512, 515 (10th Cir.1988) (if complaint filed were not frivolous, then any suggestion of harassment would necessarily fail). 48 In Townsend v. Holman Consulting Corp., the Ninth Circuit's analysis was as follows: 49 Although the improper purpose and frivolousness inquiries are separate and distinct, they will often overlap since evidence bearing on frivolousness or non-frivolousness will often be highly probative of purpose. The standard governing both inquiries is objective.... With regard to complaints which initiate actions, we have held that such complaints are not filed for an improper purpose if they are non-frivolous....  Since subjective evidence of the signer's purpose is to be disregarded, ... the improper purpose inquiry subsumes the frivolousness inquiry in this class of cases. The reason for the rule regarding complaints is that the complaint is, of course, the document which embodies the plaintiff's cause of action and it is the vehicle through which he enforces his substantive legal rights. Enforcement of those rights benefits not only individual plaintiffs but may benefit the public, since the bringing of meritorious lawsuits by private individuals is one way that public policies are advanced.... [I]t would be counterproductive to use Rule 11 to penalize the assertion of non-frivolous substantive claims, even when the motives for asserting those claims are not entirely pure. 50 .... [A] determination of improper purpose must be supported by a determination of frivolousness when a complaint is at issue. 51 Id. at 1362 (footnote omitted). 52 We are in agreement with the Townsend analysis, especially in circumstances such as those present here, where the court not only did not find the claims to be objectively unreasonable but imposed restrictions on defendants in an effort to ensure that plaintiffs would have an adequate opportunity to have their claims adjudicated on the merits. A party should not be penalized for or deterred from seeking and obtaining warranted judicial relief merely because one of his multiple purposes in seeking that relief may have been improper. 53