A finding of significant delay or expense is not required under Fed. R. Civ. P. 11. Where the complaint is the primary focus of Rule 11 proceedings, a district court must conduct a two-prong inquiry to determine: (1) whether the complaint is legally or factually baseless from an objective perspective; and (2) if the attorney has conducted a reasonable and competent inquiry before signing and filing it.
The sanctions arose out of the attorney's actions in representing a marketer of dolls against the toy company for copyright infringement. The trial court imposed sanctions after finding that the attorney had filed a meritless claim against the company. The attorney argued, inter alia, that even if the trial court were justified in sanctioning him under Rule 11 based on the complaint and the following motions, its conclusion was tainted because it impermissibly considered other misconduct that could not have been sanctioned under Rule 11, such as discovery abuses, misstatements made during oral argument, and conduct in other litigation.
When a lawyer files a copyright claim, is the lawyer liable for sanctions under the Federal Rule of Civil Procedure 11?
Under this rule, the lawyer has a duty to conduct an investigation to establish facts before filing a complaint. The claim is found to be meritless in this case because Barbie had been manufactured even before Claudene that is not possible for Mattel to copy. Hence the judgment was vacated and the case was remanded.