Opinion ID: 3034129
Heading Depth: 3
Heading Rank: 2

Heading: Reasonable Inquiry

Text: [5] The reasonable inquiry test is meant to assist courts in discovering whether an attorney, after conducting an objectively reasonable inquiry into the facts and law, would have found the complaint to be well-founded. Christian, 286 F.3d at 1127. The fact that the Holgates’ second counsel recommended that they request voluntary dismissal of the complaint suggests that Levinson did not conduct a reasonable inquiry before filing the complaint. When the plaintiffs filed for voluntary dismissal, no discovery had been conducted. Their new attorney, therefore, did not have the benefit of any information that Levinson could not have acquired through a reasonable legal investigation. Even the most cursory legal inquiry would have revealed the required elements of the federal claims asserted, elements that the Holgates’ complaint did not allege. See Truesdell v. S. Cal. Permanente Med. Group, 293 LEVINSON v. BALDWIN 13745 F.3d 1146, 1153 (9th Cir. 2002). Accordingly, the district court did not abuse its discretion in concluding that Levinson failed to conduct an adequate investigation before filing the complaint. II. Appropriateness of the Sanctions Awarded to Each Defendant The fact that Levinson was allowed to withdraw as counsel due to a conflict of interest does not protect him from sanctions based on a filing that he made before that withdrawal. Bader v. Itel Corp. (In re Itel Sec. Litig.), 791 F.2d 672, 675 (9th Cir. 1986) (observing that case law provides “absolutely no hint . . . that a lawyer may escape sanctions for misconduct simply by withdrawing from a case before opposing counsel applies for sanctions”). The signing requirement in Rule 11 makes clear that any attorney who, at any time, certified to the court that a pleading complies with Rule 11 is subject to the rule, even if the attorney later withdraws from the case.1 Moreover, when Levinson was permitted to withdraw, the district court warned him “that if the [Rule 11] motion is raised again, even though you may be permitted to withdraw, the Court will retain jurisdiction [over] you with respect to the resolution of that motion.” [6] The 1993 Amendments to Rule 11, however, place stringent notice and filing requirements on parties seeking sanctions. When Rule 11 sanctions are initiated by motion of 1 Fed. R. Civ. P. 11(b) provides: By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, . . . the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law. 13746 LEVINSON v. BALDWIN a party, that motion must be separate “from other motions or requests” and must “describe the specific conduct alleged to violate” Rule 11(b). Fed. R. Civ. P. 11(c)(1)(A). In addition, the Rule’s safe harbor provision requires parties filing such motions to give the opposing party 21 days first to “withdraw or otherwise correct” the offending paper. Id. We enforce this safe harbor provision strictly. See Radcliffe v. Rainbow Const. Co., 254 F.3d 772, 788-89 (9th Cir. 2001) (citing Barber v. Miller, 146 F.3d 707, 710-11 (9th Cir. 1998)). We must reverse the award of sanctions when the challenging party failed to comply with the safe harbor provisions, even when the underlying filing is frivolous. Barber, 146 F.3d at 711. A. Baldwin Levinson concedes that Baldwin satisfied the safe harbor provisions of Rule 11. On March 18, 2002, Baldwin first served Levinson with a letter and a copy of the motion he intended to file if the plaintiffs did not remove Baldwin as a defendant or cure the deficiencies in the legal claims against him. Baldwin then waited over 21 days before filing this motion for sanctions with the district court. At the time of filing, Levinson was still acting as counsel for the Holgates and he had not withdrawn or otherwise amended the complaint in response to Baldwin’s letter. On August 22, 2002, the district court denied Baldwin’s initial motion for sanctions without prejudice and allowed Levinson to withdraw as counsel, but retained jurisdiction over Levinson for future Rule 11 motions. This was not the end of the matter. On March 25, 2003, Baldwin re-filed his Rule 11 motion and again served Levinson. [7] We hold that Levinson received all the process due to him when Baldwin initially satisfied the safe harbor requirements of Rule 11. There was no need for Baldwin to satisfy a second safe harbor period when he re-filed his Rule 11 motion in 2003. See Fed. R. Civ. P. 11 advisory committee’s notes to 1993 amends. (“These provisions are intended to proLEVINSON v. BALDWIN 13747 vide a type of ‘safe harbor’ against motions under Rule 11 in that a party will not be subject to sanctions on the basis of another party’s motion unless, after receiving the motion, it refuses to withdraw that position or to acknowledge candidly that it does not currently have evidence to support a specified allegation.”). During the entire safe harbor period in 2002, Levinson was still acting as the Holgates’ counsel and therefore had ample ability and opportunity to avoid Rule 11 sanctions by withdrawing or otherwise correcting the offending paper. B. The Newell Defendants Rather than serving Levinson with a separate notice of their intention to seek Rule 11 sanctions and then waiting 21 days before filing a motion with the district court, on August 19, 2002, the Newell defendants filed a motion to join in Baldwin’s motion for sanctions. Because they served Levinson with their joinder motion the same day they filed it with the district court, the joinder motion was the first notice Levinson had of the Newell defendants’ intention to seek sanctions against him. Three days after receiving this notice, Levinson withdrew as counsel for the Holgates. On April 4, 2003, the Newell defendants filed a second motion with the district court requesting Rule 11 sanctions against Levinson. [8] The safe harbor period commenced when the Newell defendants simultaneously filed their joinder motion and served Levinson. See Fed. R. Civ. P. 11 advisory committee’s notes to 1993 amends. (“[T]he ‘safe harbor’ period begins to run only upon service of the motion.”). Although Levinson remained counsel for the Holgates for only three days after he was served with this motion, there is nothing in the record to indicate that he did anything to withdraw or otherwise correct the complaint in light of this motion. Because Levinson had prior notice of the frivolousness of the complaint (from the Baldwin motion), and notice of a second forthcoming motion 13748 LEVINSON v. BALDWIN for sanctions, we conclude that the district court did not abuse its discretion by awarding sanctions to the Newell defendants.