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Frantz v. United States Powerlifting Fed'n - No. 85 C 6132, 1988 U.S. Dist. LEXIS 5694 (N.D. Ill. June 10, 1988)

Rule:

Fed. R. Civ. P. 11 requires that each joined claim, under the liberal joinder policy of Fed. R. Civ. P. 18(a), which is a potential basis for separate litigation, must have the same foundation it would have needed if the claims had been pursued separately.

Facts:

Several plaintiffs, including Ernie Frantz and Diane Frantz, individually and d/b/a Ernie Frantz Health Studio, a sole proprietorship; Maris A. Sternberg and Felicia Johnson, individually; and the American Powerlifting Federation, a New Hampshire corporation, filed this action against defendant United States Powerlifting Federation alleging anti-trust violations. Subsequently, defendants filed motions to dismiss the complaint. Instead of filing an answering brief, plaintiffs filed a motion for leave to file an amended complaint. The district court dismissed with leave to plaintiffs to file an amended complaint within 20 days. Some monthslater, defendants requested that Fed. R. Civ. P. 11 sanctions be imposed against plaintiffs' attorney for naming both the Federation and its president as party defendants in an anti-trust action. The district court granted the motion as to naming the corporate president, but declined to impose Rule 11 sanctions for naming the Federation on the ground that the complaint had stated a plausible theory against the Federation, viz., illegal boycott. On appeal, the United States Court  of Appeals for the Seventh Circuit reversed and remanded after concluding that the district court failed to conduct a factual inquiry as to whether counsel had made a sufficient investigation to verify that the theories set forth in the complaint were well-grounded in fact and in law. Defendants' counsel also sought attorneys' fees.

Issue:

Did plaintiffs' counsel violate Fed. R. Civ. P. 11 when he filed the alleged frivolous complaint against the corporation and its officers?

Answer:

Yes

Conclusion:

On remand, the district court found that the complaint was filed against defendants in violation of Fed. R. Civ. P. 11 because all but one of the claims made by plaintiffs in the complaint were not well-grounded in law. The attorneys' fees requested by defendants for obtaining dismissal of the complaint were unjustifiably high because plaintiffs' theories were directly contrary to existing law and the case did not proceed beyond the pleading stage. The attorneys' fees requested by defendants for the Fed. R. Civ. P. 11 proceedings were unreasonable. Defendants' attorney also violated Fed. R. Civ. P. 11 and was subject to sanctions for making bloated attorneys' fees requests. The purpose of Rule 11, at least in part, is to enable the court to protect itself and litigants in other cases from the burdens that frivolous or vexatious filings make on the court's limited time. By imposing sanctions attorneys are supposed to be deterred from such conduct. Dealing with a bloated request for attorney's fees is every bit as time consuming, if not more so, than dealing with an obviously deficient complaint.The court ordered that plaintiffs' counsel pay the corporation and president sanctions and attorneys' fees. The court ordered that the corporation and president's counsel pay plaintiffs a penalty as a sanction for filing a bloated fee request necessitating costs to plaintiffs.

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