Opinion ID: 778054
Heading Depth: 2
Heading Rank: 1

Heading: The Safe-harbor Issue

Text: 28 As a threshold matter, we must determine the effect of the district court's dismissal of the underlying complaint, with leave to amend, on the 20th day after service of the motion for sanctions. Where, as here, sanctions are initiated by motion, Rule 11 provides for a mandatory 21 day safe-harbor period before a motion for sanctions is filed with the court. Fed. R.Civ.P. 11(c)(1)(A). The movant serves the allegedly offending party with a filing-ready motion as notice that it plans to seek sanctions. After 21 days, if the offending party has not withdrawn the filing, the movant may file the Rule 11 motion with the court. This period is meant to give litigants an opportunity to remedy any alleged misconduct before sanctions are imposed. Fed.R.Civ.P. 11 advisory committee's notes to 1993 amends. 29 Plaintiff's counsel argues that the district court, by ruling on the 20th day, cut off the last day of this 21-day safe-harbor period. In the circumstances of this case, we disagree. 30 Both technically and practically, Plaintiff's counsel had the full 21-day period that the Rule and our precedents require. As a technical matter, the moving party complied with the Rule's 21-day provision by waiting 27 days to file its motion. As a practical matter, Plaintiff's counsel had the full safe-harbor period in which to withdraw the complaint because the district court's decision on the 20th day dismissed the complaint with leave to amend. 31 In Barber v. Miller, 146 F.3d 707, 710-11 (9th Cir.1998), we recognized that the safe-harbor period is mandatory. We vacated a sanctions order that had been issued when the Rule 11 motion was both served on the allegedly offending party and filed with the court after the offending complaint had been dismissed. Id. at 710. We held that [a] motion served after the complaint had been dismissed deprived opposing counsel of any opportunity to take advantage of the safe-harbor provision. Id. at 710 (emphasis added); see also Radcliffe v. Rainbow Constr. Co., 254 F.3d 772, 789 (9th Cir.) (discussing Barber and emphasizing that a motion for sanctions must be served on the opposing party at least 21 days before it is filed with the court), cert. denied, ___ U.S. ___, 122 S.Ct. 545, 151 L.Ed.2d 423 (2001). 32 Barber concerned the movant's delay in filing a request for Rule 11 sanctions. 146 F.3d at 710-11. We held that a party may not wait to serve its motion for sanctions until the court has ruled on the offending filing. Id.; see also Fed.R.Civ.P. 11 advisory committee's notes to 1993 amends. (stating that, [g]iven the `safe harbor' provisions..., a party cannot delay serving its Rule 11 motion until conclusion of the case (or judicial rejection of the offending contention)). Once the court has dismissed the action with prejudice, counsel cannot withdraw the pleading. Allowing a party to wait until judgment is entered before serving a Rule 11 motion would effectively eliminate the safe harbor altogether. 33 Here, however, Permanente did not delay and thereby negate the safe harbor's protections. Rather, Permanente served its Rule 11 motion on Plaintiff's counsel at the same time it filed a motion to dismiss the complaint. After 27 days passed, Defendant filed the sanctions motion with the district court. Unlike the party that sought sanctions in Barber, Defendant complied with the Rule's 21-day requirement. 34 Nor as a practical matter did the district court cut off the safe-harbor period, because it dismissed the complaint with leave to amend. The court ruled that Plaintiff may file a First Amended Complaint, by no later than May 15, 2001, only if Plaintiff may plausibly allege that [the Union] engaged in discriminatory or bad faith conduct in the pursuit of her termination grievance. Truesdell, 151 F.Supp.2d at 1174 (footnote omitted). Thus, the district court not only allowed Plaintiff an opportunity to amend her complaint to state a claim, but also described exactly how to remedy one of the defects that Permanente had pointed out in its Rule 11 motion. The court noted that the failure to file a First Amended Complaint by the May 15 deadline would result in dismissal of the entire case with prejudice. May 15 was, of course, well beyond the 21-day safe-harbor period. 35 In other words, even after the district court's decision, the safe-harbor period was still running. Plaintiff's counsel had more than the full 21-day opportunity that Rule 11 affords him to withdraw, amend, or disclaim the filing. For example, counsel could have amended the complaint to cure the Rule 11 defects. See Loux v. Rhay, 375 F.2d 55, 57 (9th Cir.1967) (noting that the effect of an amended complaint is to supersede the original and render it non-existent). Counsel could have affirmatively withdrawn the complaint or formally disclaimed any intention of filing an amended complaint, while making clear that he was taking advantage of the safe-harbor period. The mandatory safe-harbor period still was available. Counsel simply elected not to take advantage of it. 36 Having decided that the mandatory safe-harbor period was afforded to counsel here, we proceed to the merits of the sanctions order.