Opinion ID: 454301
Heading Depth: 2
Heading Rank: 1

Heading: Whether the District Court Abused its Discretion in Imposing Sanctions

Text: 16 After examining counsels' written statements and briefs and after hearing oral arguments, the federal district court determined that Wagner's petition for removal was without merit and filed in bad faith. The federal district court imposed sanctions under Rule 11. Record Vol. II at 35. Rule 11 provides for an appropriate sanction in that, 17 Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated.... The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. 18 Fed.R.Civ.P. 11 (emphasis added). The comments to the 1983 amendments to Rule 11 state that the rule stresses the need for some prefiling inquiry into both the facts and the law. The standard is one of reasonableness under the circumstances. Moreover, the comments to the amendments instruct, This standard is more stringent than the original good-faith formula and thus it is expected that a greater range of circumstances will trigger its violation. 4 The comments emphasize that while the amendments are not intended to chill an attorney's enthusiasm or creativity, the district court's determination to impose sanctions may depend on whether the pleading, motion, or other paper was based on a plausible view of the law. 5 Fed.R.Civ.P. 11 (comment to 1983 amendment) (emphasis added). See generally Elliot v. Perez, 751 F.2d 1472 (5th Cir.1985) (interpreting Rule 11 in context of deciding specificity required for pleading in cases involving judicial immunity). In determining whether the district court erred in imposing such sanctions, this Court's review is limited to determining whether the district court abused its discretion. Warren v. Reserve Fund, Inc., 728 F.2d 741, 748 (5th Cir.1984). 6 19 Wagner argues that the district court abused its discretion in imposing sanctions in that its petition for removal was warranted by existing law or a good faith argument for the extension ... of existing law. See Fed.R.Civ.P. 11. Wagner's petition for removal was based on diversity jurisdiction. While the presence of the Texas defendants clearly prevented removal based on diversity because of the lack of complete diversity of citizenship, see Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806), Wagner argues that its counsel reasonably believed that plaintiff Davis' arguments to the jury abandoned her claims against the Texas defendants and made the case removable to federal court. Wagner states that it based this belief on the district court opinion in Heniford v. American Motors Sales Corp., 471 F.Supp. 328 (D.S.C.1979), appeal dism'd, 622 F.2d 584 (4th Cir.1980). 7 20 In Heniford, plaintiff's counsel stated, I don't want you to give a verdict against Ralph Cook [the resident defendant]. No, we don't want a verdict against [him] because we have now determined that this man is telling the truth and he has all along.... Id. at 332. The Heniford court held that this closing argument effectively and expressly dismissed the resident defendant from the case and removed any controversy between the plaintiff and the resident defendant, thus making the case removable to federal court, even though no formal order of dismissal had been entered by the state court. Id. at 333. 21 Even assuming the persuasive value of the Heniford opinion--a question this Court need not reach here--plaintiff Davis' arguments to the jury plainly failed to create the abandonment of claims against the Texas defendants that counsel for Wagner related in its removal petition. 8 Wagner's contention that Davis abandoned her claims against the resident defendants rested on statements purportedly made by Davis' counsel that it was inconceivable that the resident defendants caused the accident and that his imagination was boggled by the idea that the resident defendants might be responsible. Wagner Brief at 11. When the use of these words is examined in context, however, it becomes evident that no such abandonment of claims against defendants Veslan and Collins occurred. Rather, plaintiff Davis' closing arguments to the jury continued her basic theme at trial that, while the negligent conduct of the driver Collins may have also led to the accident, the primary cause of the accident was the defective brake. For instance, counsel for plaintiff Davis argued: 22 There can be more than one contributing cause to [a] collision. Maybe when Mr. Collins came down toward this intersection, he applied his brakes, had this condition of no brakes, this condition of honking, and he panicked and [let] off on his brakes and tried to get through the intersection. Or maybe he stayed on it all the way trying to get his truck to stop. But, either way, when he first applied his brakes, and had that honk, had that sound, and didn't have brakes, that was a producing cause of this accident. 23