Wednesday, November 16, 2011

Rule 11 Sanctions: Know When to Drop Your Sails

In Moody v. Arc of Howard Cnty., Inc., 2011 U.S. Dist. LEXIS 73540 (D. Md. July 7, 2011), Judge Bredar sanctioned counsel for the plaintiff under Rule 11 where counsel persisted in contending that individuals are suable under Title VII.  In concluding his opinion, the judge had the following to say, all of which should guide all of us during the heat of litigation:
“A license to practice law brings with it substantial responsibilities, and one of those is an obligation of prudence when bringing and pressing a claim. Attorneys are entitled, and sometimes even obligated, to sail into shallow waters as investigation and discovery reveal weaknesses in the factual and legal theories of a case. However, once the ship has not just bumped a shoal or two, but instead has collided with rocks and begun taking water, the voyage is over and counsel is required to drop his sails. A reasonable and prudent attorney would have known and accepted that his claims were finished — that his voyage had ended — upon reading and reflecting upon the Rule 11 notice filed on February 22, 2011. It was clear then that the plaintiffs had no case, legally or factually. Under generous rules of procedure, safe harbor remained available to Mr. Ostendorf even after this grounding, see Fed. R. Civ. P. 11(c)(2), and had he elected that course and dismissed his claims before March 15, 2011, he would have avoided the wreck that has now ensued.”  Moody, 2011 U.S. Dist. LEXIS 73540 at *27-*28.
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