The following question is one I taught in Civil Procedure earlier this semester:
May a motion for Rule 11 sanctions be granted when the moving party fails to serve the motion on the nonmoving party prior to filing?
In my class, I taught that R.11(c)(2) prohibits a party from filing a R.11 motion for sanctions without first serving “the motion” on the non-moving party (and waiting 21 days).
- My students: What if we the moving party provides notice by sending an email to say that they are planning to file a motion and explaining the reasons?
- Crouch: No, the rule says that you have to serve “the motion;” not just provide notice of your concern.
In Khan v. Hemosphere, Inc., the Federal Circuit disagreed with my analysis of the rule. In particular, the court held that the Khans were sufficiently “on notice of [defendants’] intent to seek sanctions” based upon a series of letters sent to the Khans indicating that a sanctions-motion was coming. Thus, although the Khans were not served with “the motion” they were sufficiently on notice.
Khan Petition for Rehearing: In their petition, the Khans argue that the Federal Circuit’s “conclusion that warning letters of the type at issue here can take the place of the ‘motion’ required by Rule 11(c)(2) breaks sharply with the text of the Rule, and with every other Court of Appeals to consider the issue—including the Seventh Circuit.” Here, the 7th Circuit is important because this case arose in Illinois and the regional circuit’s law should apply to this non-patent related issue. The 7th Circuit is also important because it is an outliner in allowing “substantial compliance” with the R. 11 rather than sticking to “the motion” rule. The 7th Circuit’s approach appears to have begin with a flippant ruling by Judge Easterbrook in Nisenbaum v. Milwaukee County, 333 F.3d 804, 808 (7th Cir. 2003). In that case the court decided without any analysis that “substantial compliance” with the notice requirement is sufficient.
In its decision, the Federal Circuit cited to Matrix IV, Inc. v. Am. Nat’l Bank & Tr. Co., 649 F.3d 539, 552–53 (7th Cir. 2011), which stated that “a letter informing the opposing party of the intent to seek sanctions and the basis for the imposition of sanctions” was sufficient. In its petition for rehearing, Khan explains that the Matrix IV statement was dicta and insufficient to overcome other 7th Circuit decisions which require the to-be-sanctioned-party an “opportunity to withdraw or correct the challenged pleading within 21 days without imposition of sanctions.” Khan argues that the 21-day opportunity was not given here.
Wright & Miller suggest that informal notice as provided here is insufficient:
Note that informal notice—rather than formal service—of a potential violation is insufficient to trigger the beginning of the twenty-one day safe harbor period. The Advisory Committee Note explains that although informal notice does not trigger the safe harbor period, it usually is expected that informal notice will be given before a party prepares and serves a formal motion under Rule 11 for sanctions.
§ 1337.2Procedural Aspects of Rule 11 Motions—The Safe Harbor Provision, 5A Fed. Prac. & Proc. Civ. § 1337.2 (4th ed.).
I hope the Khans win here, otherwise I’ll be forced to change my syllabus.