A sua sponte show cause order regarding sanctions deprives a lawyer against whom it is directed of the mandatory 21 day "safe harbor" provision provided by the 1993 amendments to Fed. R. Civ. P. 11. In such circumstances, a court is obliged to use extra care in imposing sanctions on offending lawyers. The Advisory Committee contemplated that a sua sponte show cause order would only be used in situations that are akin to a contempt of court.
Appellant attorney represented workers of appellee employer in a class action. The district court awarded summary judgment to employer and included a sua sponte directive that attorney show cause why sanctions should not be imposed for her conduct in the lawsuit. For over two years from May 1998, no action was taken with respect to the show cause order, during which time attorney filed two other lawsuits against employer. On June 16, 2000 employer filed a motion seeking sanctions. On October 23, 2000, the district court barred attorney from the practice of law for five years. Appellant attorney appealed the suspension from practice imposed upon her pursuant to Fed. R. Civ. P. 11. The court vacated the suspension.
Did the trial court abuse its discretion by suspending an attorney from practice under Fed. R. Civ. P. 11?
The court first addressed the inordinate delay between issuance of the show cause order and entry of the sanctions order, holding that the delay contravened Rule 11's purposes. Employer had waited for 14 months after the court had affirmed the summary judgment award in the first lawsuit to move for sanctions. Although Fed. R. Civ. P. 11 does not establish a deadline for the imposition of sanctions, the Advisory Committee did not contemplate that there would be a lengthy delay prior to their imposition. Furthermore, maintaining a legal position to a court is only sanctionable when, in applying a standard of objective reasonableness, it can be said that a reasonable attorney in like circumstances could not have believed his actions to be legally justified. Although a legal claim may be so inartfully pled that it cannot survive a motion to dismiss, such a flaw will not in itself support Fed. R. Civ. P. 11 sanctions; only the lack of any legal or factual basis is sanctionable. Creative claims, coupled even with ambiguous or inconsequential facts, may merit dismissal, but not punishment. The court found that, while the district court was correct that the legal position it found frivolous had been rejected by the court, there was a good-faith basis for attorney to assert the position, and therefore the suspension of attorney constituted an abuse of discretion.