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(excerpted from The Manual for Complex Litigation, '95 ed.)
.151 General Principles
.152 Sources of Authority
.153 Considerations in Imposing
20.151 General Principles
The rules and principles governing the are the same in complex as in
other litigation, but the potential of sanctions requires careful
attention in complex litigation because misconduct may have more severe
consequences. Because the litigation will generally be conducted under
close judicial oversight and control, there should be fewer opportunities
for sanctionable conduct to occur.
If the court's management program is clear, specific, and reasonable -
having been developed with the participation of counsel - the parties
will know what is expected of them and should have little difficulty
complying. The occasions for sanctionable conduct will therefore be
reduced. Indeed, the need to resort to sanctions may reflect a breakdown
of case management. On the other hand, the stakes involved in and the
pressures generated by complex litigation may lead some parties to
violate the rules.
Although as a general matter sanctions should not be a means of
management, the court needs to make clear its willingness to resort to
sanctions, sua sponte if necessary, to assure compliance with the
management program. -fn.19
The design of the case management program should anticipate compliance
problems and include prophylactic procedures, such as requiring parties
to meet and confer promptly in the event of disputes and providing ready
access to the court if they cannot resolve them. In addition, the court
should inform counsel at the outset of the litigation of the court's
expectations about cooperation and professionalism. Perceptions of the
limits of legitimate advocacy differ; advance guidance from the court can
reduce the need for sanctions later. Though at times unavoidable,
sanctions should be considered a last resort.
The court should exercise its discretion with care and explain on the
record or in an order the basis for its action and the purpose to be
achieved. Sanctions may be imposed for general or specific deterrence,
to punish, or to remedy the consequences of misconduct. Sanctions
proceedings can be disruptive, costly, and may create personal antagonism
inimical to an atmosphere of cooperation. Counsel should therefore avoid
moving for sanctions unless all reasonable alternatives have been
20.152 Sources of Authority
The primary codified sources of authority to impose sanctions in civil
litigation are 28 U.S.C. 1927 and Fed. R. Civ. P. 11, 16, 41, and
56(g). -fn.20 Sanctions relating to discovery are authorized by Fed. R.
Civ. P. 26, 30, 32(d), 33(b)(3)-(4), 34(b), 35(b)(1), 36(a), and, most
prominently, Rule 37. -fn.21 Under limited circumstances sanctions may
also be imposed under local rules. -fn.22
Sanctions may also be imposed through the exercise of the court's
inherent powers. -fn.23 The court may resort to this power even where
the conduct at issue could be sanctioned under a statute or rule; the
court should, however, avoid resort to its inherent power if the statute
or rule is directly applicable and adequate to support the intended
The court may assess attorneys' fees pursuant to its inherent power, but
when sitting in diversity should avoid doing so in contravention of
applicable state law embodying a substantive policy, such as a statute
permitting prevailing parties to recover fees in certain classes of
Because the applicable standards and procedures and the available
sanctions will vary depending on the authority under which the court
proceeds, it needs to decide on the choice of the authority on which it
will rely and make that choice clear in its order. For example, 28
U.S.C. 1927 authorizes the assessment of costs and fees against an
attorney only - it therefore cannot provide authority to impose sanctions
on a party.
20.153 Considerations in Imposing
In considering the imposition of sanctions, the judge should take these
factors into account:
* the nature and consequences of the dereliction or misconduct;
* the person(s) responsible;
* the court's discretion under the applicable source of authority to
impose sanctions and to choose which sanctions to impose;
* the purposes to be served by imposing sanctions, and what is the least
severe sanction that will achieve the intended purpose; and
* the appropriate time for conducting sanctions proceedings.
With respect to the consideration of the nature and consequences of the
dereliction or misconduct, the court should take these factors into
* whether the act or omission was willful or negligent;
* whether it directly violated a court order or a federal or local rule;
* its effect on the litigation and the trial participants;
* whether it was isolated or part of a course of misconduct or
dereliction; -fn.26 and
* the existence of any extenuating circumstances.
Rule 11 substantially limits the authority of the court to impose monetary
sanctions, but they may still be available in unusual cases or under other
rules or powers.
If monetary sanctions are warranted, they should generally be imposed
only on the person(s) responsible for the misconduct; if assessed against
counsel, they should be accompanied by a direction not to pass the cost
on to the client.
It may be appropriate to sanction the client or the client and attorney
jointly. If the proper allocation of responsibility between counsel and
client is unclear, its determination may raise problems; by pitting the
attorney against the attorney's client, it can create a conflict of
interest. -fn.27 In addition, it may require inquiry into potentially
privileged communications. -Fn.28 The court should seek the least
disruptive alternative, which may be to impose joint and several
liability on both counsel and client, -fn.29 or to defer the matter of
sanctions until the end of the litigation. -Fn.30
Some types of nonmonetary sanction, such as dismissal, default, or
preclusion of a claim or evidence, will or may affect the outcome. They
should be imposed only in egregious circumstances and only after
consideration of the following factors:
* the policy favoring trial on the merits;
* whether the sanction will further the just, speedy, and inexpensive
determination of the action;
* the degree to which the sanctioned party acted deliberately and knew or
should have known of the possible consequences;
* the degree of responsibility of the affected client;
* the merits and importance of the claim(s) affected;
* the impact on other parties or the public interest; and
* the availability of less severe sanctions to accomplish the intended
In imposing the least severe sanction adequate to accomplish the intended
purpose, the court can select from a broad range of options. -Fn.31
These include the following:
* Reprimand. For most minor violations, particularly a first infraction,
an oral reprimand will suffice. In more serious cases, a written
reprimand may be appropriate.
* Cost shifting. The purpose of Rule 11 sanctions is deterrence rather
than compensation; the rule therefore permits cost shifting only in
"unusual circumstances." -fn.32 In contrast, many of the discovery rules
(primarily Rules 26(g) and 37) and Rule 16(f) (dealing with pretrial
conferences) require or permit cost shifting in specified situations.
Under 28 U.S.C. 1927, Fed. R. Civ. P. 56(g) (depositions), and its
inherent power, the court may order cost-shifting sanctions for actions
taken in bad faith.
* Denial of fees or expenses. The court may decline to award otherwise
recoverable attorneys' fees and expenses, or order counsel not to charge
them to their client, when incurred through dilatory or otherwise
improper conduct, or in proceedings brought on by such conduct.
* Remedial action. Counsel and parties may be required to remedy a
negligent or wrongful act at their own expense, as by reconstructing
materials improperly destroyed or erased.
* Grant/denial of time. Improper delay may justify awarding opposing
parties additional time for discovery or other matters, -fn.33 or denying
otherwise proper requests for extension of time.
More serious sanctions, reserved for egregious circumstances, include the
* Demotion/removal of counsel. An attorney may be removed from a
position as lead, liaison, or class counsel, or (in an extreme case) from
further participation in the case entirely. Such a sanction, however, is
likely to disrupt the litigation, may cause significant harm to the
client's case and the reputation of the attorney or law firm, and can
conflict with a party's right to counsel of its choosing.
* Removal of party as class representative. Before imposing this
sanction, the court should consider ordering that notice be given to the
class under Rule 23(d)(2) to enable them to express their views
concerning their representation or intervene in the action. -fn.34
* Enjoining party from commencing other litigation. While there is a
strong policy against denying access to the courts, a party may be
enjoined from commencing other actions until it has complied with all
orders in the current action, or from bringing, without court approval,
other actions involving the same or similar facts or claims.
* Preclusion/waiver/striking. Failure to timely make required
disclosures or production, raise objections, or file motions may be
grounds to preclude the introduction of related evidence, deem certain
facts admitted and objections waived, strike claims or defenses, or deny
the motions, including those seeking to amend pleadings or join parties.
* Dismissal. This severe sanction should generally not be imposed until
the affected party has been warned and given a chance to take remedial
action, and then only when lesser sanctions, such as dismissal without
prejudice and assessment of costs, would be ineffective.
* Vacation of judgment. The court may vacate a judgment it has rendered
if procured by fraud. -fn.36
* Suspension/disbarment. The court may initiate proceedings to suspend
an attorney from practice in the court for a period of time or for
* Fine. The court may assess monetary sanctions apart from or in
addition to cost shifting, even without a finding of contempt. The
amount should be the minimum necessary to achieve the deterrent or
punitive goal, considering the resources of the person or entity fined. -
* Contempt. The court may issue a contempt order under its inherent
authority, -fn.39 statute, -fn.40 or rule. -fn.41 The order should
indicate clearly whether the contempt is civil or criminal. The
procedure and possible penalties will depend on that determination and
the nature and timing of the contemptuous act. -fn.42
* Referral for possible criminal prosecution. Where the misconduct rises
to the level of a criminal offense, -fn.43 the matter may be referred to
the U.S. Attorney's Office.
The appropriate timing for the imposition of sanctions depends on the
basis for their imposition. Generally sanctions are most effective when
imposed promptly after the improper conduct has occurred. -Fn.44 This
maximizes their deterrent effect in the litigation. Prompt imposition
also allows the court to try to deal with the problem by imposing less
severe sanctions before resorting to more severe measures should they
become necessary. Some sanctions, however, depend for their predicate on
The frivolous nature of a paper may not be established until further
action by the court. Some misconduct or the extent of its consequences
may not become apparent until the litigation has developed further; some
sanctions are expressly conditioned on later developments. -fn.45
Certain facts may have to be established before the court can decide the
sanctions issue, a process which may delay the litigation unless deferred
until its conclusion.
Similarly, as discussed above, deferral is advisable where the decision
may require inquiry into potentially privileged communications and create
a conflict of interest between counsel and client. Delaying rulings on
sanctions may allow the court to consider the issue more dispassionately;
the court must be careful, however, not to apply the wisdom of hindsight.
Sanctions should not be assessed without notice and an opportunity to be
The extent of the process afforded, however, depends on the
circumstances, primarily the type and severity of sanction under
consideration. -fn.47 An oral or evidentiary hearing may not be
necessary for relatively minor sanctions; the issue may be decided on
papers. -fn.48 To provide notice when acting sua sponte, the court
should issue an order to show cause why sanctions should not be imposed,
specifying the alleged misconduct. -Fn.49 To avoid disrupting a
settlement, monetary sanctions should generally not be assessed sua
sponte once the parties have reached agreement. -Fn.50
Unless the sanction is minor and the misconduct obvious, the court should
memorialize its findings and reasons on the record or by written order. -
fn.51 The findings should identify the objectionable conduct clearly,
state the factual and legal reasons for the court's action, including the
need for the particular sanction imposed and the inadequacy of less
severe measures, and the authority relied on. Making such a record will
facilitate appellate review and help the appellate court understand the
basis for the court's exercise of its discretion. -fn.52 Normally the
court need not explain its denial of sanctions. -fn.53
19. See Fed. R. Civ. P. 11(c)(1)(B); Chambers v. NASCO, Inc., 111 S. Ct.
2123, 2131 n.8 (1991).
20. A number of federal statutes allow the court, in its discretion, to
award prevailing parties costs, including attorneys' and sometimes
experts' fees. See, e.g., 42 U.S.C.A. 1988, 2000e-5(k) (West Supp.
1993); 15 U.S.C. 78i(e), 78r(a). Such statutes may expressly predicate
such an award on a finding that the action (or defense) was meritless,
see, e.g., 15 U.S.C. 77k(e), and common law may impose the same
requirement when awards under such statutes are sought by defendants. See
Christansburg Garment Co. v. EEOC, 434 U.S. 412, 416 (1978). But see
Fogerty v. Fantasy Inc., 62 U.S.L.W. 4153 & 4155 n.12 (U.S. March 1,
1994) (same standard applies to plaintiffs and defendants seeking fees in
copyright, patent, and trademark cases). Such awards may therefore be
considered a sanction for meritless litigation.
21. Note that Rule 11 is expressly made inapplicable to discovery. Fed.
R. Civ. P. 11(D).
22. See, e.g., Rule 11.1 of the Local Rules for Civil Cases, E.D. Mich.;
Miranda v. Southern Pacific Transp. Co., 710 F.2d 516 (9th Cir. 1983).
23. See Chambers, 111 S.Ct. at 2132-33, and cases cited therein.
24. Id. at 2135-36 & n.14 (distinguishing Societe Internationale v.
Rogers, 357 U.S. 197 (1958) (Rule 37)); United States v. One 1987 BMW
325, 982 F.2d 655, 661 (1st Cir. 1993) (where civil rule limits sanction
that may be imposed, court may not circumvent by resort to inherent
25. Chambers, 111 S.Ct. at 2136-37.
26. See Fed. R. Civ. P. 11(b), (c) advisory committee's note (listing
these and other considerations).
27. See Healy v. Chelsea Resources, Ltd., 947 F.2d 611, 623 (2d Cir.
1991); White v. General Motors Corp., 908 F.2d 675, 685 (10th Cir. 1991).
28. Though it may be ethically permissible for an attorney to reveal
client confidences to the extent necessary in this context, see Model
Rules of Professional Conduct 1.6(b)(2); Model Code of Professional
Responsibility DR 4-101(c), this does not resolve the privilege issue.
29. See Martin v. American Kennel Club, 1989 U.S. Dist. LEXIS 201, at
*22-23 (N.D. Ill. 1989) ("Absent a clear indication of sole
responsibility" liability should be joint and several).
30. See, e.g., O'Neal v. Retirement Plan for Salaried Employees of RKO
Gen. Inc., 1992 U.S. Dist. LEXIS 237, at *12-13 (S.D.N.Y. 1992); Fed. R.
Civ. P. 11 advisory committee's note.
31. See Chambers v. NASCO, Inc., 111 S. Ct. 2123, 2132-33 (1991) ("a
primary aspect" of court's discretion to invoke inherent sanction power
"is the ability to fashion an appropriate sanction" for abuse of judicial
32. See Fed. R. Civ. P. 11 advisory committee's note (monetary sanctions
ordinarily paid into court, but may be directed to those injured if
deterrence would otherwise be ineffective).
33. See, e.g., Fed. R. Civ. P. 30(D)(2).
34. See Fed. R. Civ. P. 23(d)(2) & advisory committee's note.
35. See, e.g., Fed. R. Civ. P. 37(b)(2), (c)(1).
36. Chambers, 111 S. Ct. at 2132 (inherent power); Fed. R. Civ. P. 60(B).
37. The court has inherent power to suspend or disbar attorneys, but
should follow applicable local rules. See In re Snyder, 472 U.S. 634, 643
& n.4 (1985). For discussion of the standard for taking such action, see
id. at 643-47 (refusal to supplement fee petition or accept CJA
assignment coupled with single instance of discourtesy insufficient to
38. See, e.g., Fed. R. Civ. P. 11(C)(2).
39. See Chambers, 111 S. Ct. at 2132; Roadway Express, Inc. v. Piper, 447
U.S. 752, 764 (1980).
40. See, e.g., 18 U.S.C. 401-403, 28 U.S.C. 1784, and statutes cited
in Fed. R. Crim. P. 42 advisory committee's note.
41. See, e.g., Fed. R. Civ. P. 37(b)(2)(D), 45(e), Fed. R. Crim. P.
42. See Bench Book for United States District Judges 2.08 (civil
contempt), 1.24 (criminal contempt) (Federal Judicial Center 1986)
[hereinafter Bench Book]; 18 U.S.C. 3691 (jury trial of criminal
contempts), 3692 (jury trial for contempt in labor dispute cases),
3693 (summary disposition or jury trial; notice); Fed. R. Crim. P.42
(criminal contempt). Since there is no federal rule establishing a
procedure for civil contempt, the court should follow the procedures of
Fed. R. Crim. P.42 to the extent applicable.
43. In particular, see 18 U.S.C. 1501-1517 (obstruction of justice).
44. See Thomas v. Capital Sec. Servs., Inc., 836 F.2d 866, 881 (5th Cir.
45. See, e.g., Fed. R. Civ. P. 37(c)(2) (recovery of expenses for failure
to admit depends on later proof of matter not admitted); Fed. R. Civ. P.
68 (assessment of costs incurred after settlement offer refused depends
on failure to obtain more favorable judgment).
46. Roadway Express, Inc. v. Piper, 447 U.S. 752, 767 (1980). Some rules
expressly require this. See, e.g., Fed. R. Civ. P. 11(C).
47. See, e.g., Media Duplication Servs. v. HDG Software, 928 F.2d 122,
1238 (1st Cir. 1991) (citing Roadway, 447 U.S. at 767 n.14 (due process
concerns raised by dismissal are greater than those presented by
assessment of attorneys' fees)); G.J.B. Assoc., Inc. v. Singleton, 913
F.2d 824, 830 (10th Cir. 1990) (same); Fed. R. Civ. P. 11 advisory
48. See, e.g., In re Edmond, 934 F.2d 1304, 1313 (4th Cir. 1991); Hudson
v. Moore Bus. Forms, Inc., 898 F.2d 684, 686 (9th Cir. 1990); Fed. R.
Civ. P. 11 advisory committee's note.
49. El Paso v. Socorro, 917 F.2d. 7 (5th Cir. 1990); Maisonville v. F2
Am., Inc., 902 F.2d 746 (9th Cir. 1990); Fed. R. Civ. P. 11(c)(1)(B) &
advisory committee's note
50. See Fed. R. Civ. P. 11(c)(2)(B) & advisory committee's note.
51. See Fed. R. Civ. P. 11(C)(3).
52. The standard of review is abuse of discretion. Chambers v. NASCO,
Inc., 111 S. Ct. 2123, 2138 (1991) (inherent power); Cooter & Gel v.
Hartmax Corp., 496 U.S. 384, 405 (1990) (Rule 11); Blue v. United States
Dep't of the Army, 914 F.2d 525, 539 (4th Cir. 1990) (28 U.S.C. 1927).
53. Fed.R.Civ.P. 11 advisory committee's note. Only the First Circuit has
held to the contrary. See Metrocorps, Inc. v. Eastern Mass. Junior Drum &
Bugel Corps Ass'n, 912 F.2d 1, 3 (1st Cir. 1990); Morgan v. Massachusetts
Gen. Hosp., 901 F.2d 186, 195 (1st Cir. 1990).
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