Opinion ID: 485541
Heading Depth: 2
Heading Rank: 2

Heading: Reasonableness of the Sanctions

Text: 114 Papo contends that imposition upon him of $14,167.50 in attorneys' fees and costs is unreasonable and excessive, contravening Rule 11's mandate. Our review of the amount of sanctions, however, is restricted to an abuse of discretion standard. 115 In exercising its discretion in awarding reasonable fees and costs, a district court must consider Rule 11's goals to deter and punish offenders and to compensate victims for expenditures of time and resources in responding to unreasonable pleadings or motions. See, e.g., Westmoreland, 770 F.2d at 1179-80; Itel Containers International Corp. v. Puerto Rico Marine Management, Inc., 108 F.R.D. 96, 104-07 (D.N.J.1985); United Food & Commercial Workers Union, Local No. 115 v. Armour & Co., 106 F.R.D. 345, 348-49 (N.D.Cal.1985); Taylor v. Prudential-Bache Securities, Inc., 594 F.Supp. 226, 229 (N.D.N.Y.) aff'd without opinion, 751 F.2d 371 (1984)); see generally Schwarzer, supra, 104 F.R.D. at 201. Furthermore, the district court should not assume that reasonable means actual fees. See, e.g., In re TCI, Ltd., 769 F.2d 441, 448-49 (7th Cir.1985); Local No. 115, 106 F.R.D. at 349; see generally Schwarzer, supra, 104 F.R.D. at 203. Thus fees sought by plaintiff's counsel may be awarded only if deemed reasonably necessary to defend against unwarranted and meritless actions of the opponent. When counsel is called upon to defend against its opponent's unreasonable filings, it must mitigate damages by not claiming an excessive amount of hours and funds in responding to patently unmeritorious claims or positions. The mitigation requirement prevents a party from abusing Rule 11 sanctions to benefit from opposing counsel's mistakes, errors or overly aggressive claims. The rule's purpose would be frustrated if it encouraged the offended party to play the very game at which it is aimed. Schwarzer, supra, 104 F.R.D. at 201; see also TCI, 769 F.2d at 448-49; Local No. 115, 106 F.R.D. at 349-50. Compensation to the victim is a factor to be considered in awarding Rule 11 sanctions, but courts and commentators have stressed that the Rule is intended to penaliz[e] the offender to achieve special and general deterrence. Schwarzer, 104 F.R.D. at 201 (1985); Westmoreland, 770 F.2d at 1180. The district court must therefore balance carefully these interests in making a determination of sanctions. 116 Defendant contends that even if the district court properly determined that Rule 11 mandated sanctions, the amount the court awarded, was excessive and unreasonable. Viewing Rule 11 sanctions as primarily a mode of compensating the opposing party, defendant urges the court to reject as excessive the district court's award because plaintiff was not prejudiced by defendant's actions and because plaintiff failed to mitigate damages by not seeking an earlier resolution of defendant's meritless issues by a status conference or motions to dismiss or for summary judgment. Papo and counsel do not, however, challenge the reasonableness of the time spent by Olga's counsel in preparing the case for trial. Defendant also claims that defendant and counsel did not engage in flagrant and willful violations of Rule 11. 117 In sum, the district court did not abuse its discretion in determining that plaintiff was entitled to some fees and costs as sanctions. We have some question about the $1,000 fine. 12 We conclude, in summary, that the imposition of sanctions should be limited to $16,012.66 in this case. 118 We AFFIRM the district court in its determination of the legal issues resulting in an order directing payment to Papo of $25,711.44 for moveable equipment and delinquent interest. We REVERSE, however, with respect to the amount of sanctions imposed and limit sanctions to be paid to plaintiff by defendant and his counsel in fees and costs of $16,012.66.