Court Opinion

ID: 8951626
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:52:33.777139+00
Date Added: 2024-06-11T17:09:58.752005
License: Public Domain

GEORGE C. PRATT, Circuit Judge,
dissenting:
As intimated in the majority opinion, I do not agree that the amount of “a reasonable attorney’s fee” imposed as a sanction under rule 11 should be measured by the severity of an adversary’s misconduct. While it is true, as Judge Newman states, we do not have a “clean slate” to write on, this case seemed to present a unique opportunity to wipe clean a slate that should be an embarrassment to all of us and to start building with amended rule 11 a logical, consistent rationale for the new “Era of Sanctions”. We should end the misleading practice of justifying what are in reality punitive fines by pretending that they represent attorney's fees. Since I have been unable to persuade my colleagues at this time, however, I shall simply record my *125view of the problem for whatever use it may have in the future.
I recognize, as Judge Newman points out, that many courts, our own included, have over the years imposed sanctions of varying amounts under the rubric of “reasonable attorney’s fees”, but without any pretense at determining what compensation for the attorney of the wronged party would be reasonable. However tolerable that kind of approach may have been in former years when sanctions were relatively uncommon, I think it now not only dis-serves both the language and intent of amended rule 11, but also perpetuates disparities in sanctions, encourages arbitrariness in the day-to-day operations of some of our district courts, and runs counter to logic.
In reaching what is essentially a policy-based decision, the majority leans heavily on the punitive aspect of rule 11 sanctions and the need for judicial discretion in calibrating the severity of a penalty; in doing so, however, the majority neglects the second purpose of rule 11: to provide restitution to the victim of the sanctioned conduct. It seems to me that when “a reasonable attorney’s fee” is to be awarded as an appropriate sanction under rule 11, it should, in the absence of a special circumstance, such as an inability to pay that would make the award unjust, be objectively quantified following the standard approach — the lodestar method that has already been developed for determining “a reasonable attorney’s fee” to a prevailing plaintiff under 42 U.S.C. § 1988.
Amended rule 11 was intended to redress two related problems under its overarching goal of eliminating improper litigation tactics. See Schwarzer, Sanctions Under The New Federal Rule 11 — A Closer Look, 104 F.R.D. 181, 201 (1985). The first aim was to deter abusive litigants; indeed, “[t]he word ‘sanctions’ in the caption * * * stresses a deterrent orientation in dealing with improper pleadings, motions or other papers.” Fed.R.Civ.P. 11 advisory committee notes. Rule 11 sanctions are not, however, meant solely to deter those who would abuse our federal system of justice; they serve also to compensate the victims of that abuse. See Taylor v. Prudential-Bache Securities, Inc., 594 F.Supp. 226, 229 (N.D.N.Y.) (Miner, J.), aff'd mem., 751 F.2d 371 (2d Cir.1984). This second aspect of rule 11 is clear from the advisory committee’s recognition that the inclusion of a sanctioning power in amended rule 11 sought to “build[ ] upon and expand[ ] the equitable doctrine permitting the court to award expenses, including attorney’s fees, to a litigant whose opponent acts in bad faith in instituting or conducting litigation.” Fed.R.Civ.P. 11 advisory committee notes (emphasis added); see also Patterson v. Aiken, 111 F.R.D. 354, 356 (N.D.Ga. 1986).
In plain language rule 11 establishes that an appropriate “sanction” and “a reasonable attorney’s fee” are not synonymous, as the rule provides for “an appropriate sanction * * * which may include * * * a reasonable attorney’s fee”. Fed.R.Civ.P. 11 (emphasis added). Thus, congress intended to make available in the universe of sanctions an attorney’s fee as but one example of a wide array of possible monetary and nonmonetary sanctions.
Some examples of nonmonetary sanctions might include requiring continuing legal education course work in areas of acute deficiency; in extreme cases, recommending disciplinary action by the bar; or something as simple as a judicial reprimand, whether rendered in private, in open court, or in a published opinion. Should a district judge believe that a very modest monetary sanction is appropriate under the circumstances, she might, for example, award single, double, or triple costs. Given a different setting, the judge may deem it fitting to award full restitution for the misconduct, i.e., “a reasonable attorney’s fee”.
In addition, while not specifically mentioned in rule 11, the possibility exists that a sum of money unrelated to any such objective figure as expenses or an attorney’s fee — i.e., a penalty in the nature of a fine — could be imposed. Should such a fine be deemed appropriate, the district judge also would have to determine whether the money should be paid into the registry of *126the court, see, e.g., Dore v. Schultz, 582 F.Supp. 154, 158 (S.D.N.Y.1984), or to the opposing party. Of course, the court would realize that while both options would punish the offending party, only the latter option would also help to compensate the party harmed by the improper conduct.
The phrase “a reasonable attorney’s fee” in rule 11 should be interpreted in the same manner as the same phrase in section 1988. While it is true that the policy underlying section 1988 is to encourage meritorious civil rights litigation, and that rule 11 was designed to discourage improper litigation in general, this difference in goals does not suggest that “a reasonable attorney’s fee” should be calculated differently under the two provisions. Both provisions allow an attorney’s fee as an enforcement tool for attaining their respective goals, and both provisions seek to shift to the party or attorney whose conduct imposed the financial burden the cost of an attorney’s fee that, ideally, would never have been incurred. This fee-shifting tool, which is described in the two provisions in identical language, should not be disparately defined simply because the rules it promotes serve different policies. If the lodestar is the appropriate presumptive measure of “a reasonable attorney’s fee” for section 1988, there is no reason it should not be in the rule 11 context as well. Moreover, because in the context of this case the attorney’s fee is being awarded to prevailing defendants rather than prevailing plaintiffs, section 1988 and rule 11 here serve the same goal — the deterring of improper litigation.
I recognize that accepting my view of rule 11 would mark a substantial departure from the past judicial practice of imposing sanctions in arbitrarily determined amounts verbally disguised as “attorney’s fees”, and I can’t be sure that recognizing such sanctions for what they are — fines— would have changed the result in any of the many cases cited in the majority opinion. I am confident, however, that if we were to interpret the statutory term “reasonable attorney’s fees” to mean amounts that represent the reasonable cost of an attorney’s services, we would begin to bring the full dimensions of the problem into the open, we would force district judges to actively consider other types of sanctions, including restitution and various nonmonetary impositions, and we would help reduce the apparent disparities, even capriciousness, that now seem to characterize much of rule 11 jurisprudence.
I therefore cannot agree with the majority opinion because it fails to require the rule 11 sanction of a “reasonable attorney’s fee” to be calculated with reference to the actual cost burden on defendant that was inflicted by plaintiff’s misconduct. To dispose of this appeal, I would direct that the sanction award be increased from the $1,000 found by the district court to constitute “a reasonable attorney’s fee” to the $52,912.50 established by the record to be a reasonable attorney’s fee under the lodestar approach, and remand to the district court for the limited purposes of (1) apportioning the sanction between plaintiffs and their counsel and (2) determining whether the obligation of either should be adjusted for financial inability. To the extent that the majority opinion fails to do this, I dissent.
I agree with the majority that the district court erred in determining that “a reasonable attorney's fee” in this case is only $1,000; such a determination was arbitrary, capricious, and contrary to the intent of rule 11. I cannot, however, accept the $10,000 figure selected by the majority; while closer in dollar amount to a proper sanction, it, too, does not constitute “a reasonable attorney’s fee” under rule 11 and is therefore no less arbitrary in principle than the amount selected by the district court.