Yesterday I introduced King v. Whitmer (E.D. Mich. 8/25/21), the case in which Judge Linda Parker wrote a 110-page opinion awarding sanctions under three separate legal grounds. Today we look at sanctions under Fed.R.Civ.P. 11, the longest section of the opinion, as well as a case where sanctions were assessed under Fed.R.Bankr.P. 9011, its bankruptcy counterpart.
Introduction to Rule 11
Fed.R.Civ.P. 11(b) and (c) and its bankruptcy counterpart, Fed.R.Bankr.P. 9011(b) and (c) each state that:
(b) Representations to the Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,—
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
(c) Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.
Rule 11 in the Michigan Election Case
Rules 11 and 9011 have both a subjective and an objective component. The subjective requirement is that a pleading must not be presented for an improper purpose. The objective component looks at whether the arguments being presented are supported by existing law or a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law and that the allegations being made have evidentiary support, or are likely to have evidentiary support, after further investigation or discovery. According to Judge Linda Parker, the objective standard is intended to “eliminate any ‘empty-head pure-heart’ justification for patently frivolous arguments.” Opinion, p. 25.
Subdivision (c) makes clear that parties that can be sanctioned are “the attorneys, law firm, or parties that have violated subjection (b)” by signing a pleading in violation of Rule 11 or “are responsible for the violation.” The Court used the “responsible for the violation” language to prevent the parties who had authorized the lawsuit, but had not actually signed it, to avoid liability.
The involvement of attorney L. Lin Wood posed a particular issue for the court. He was equivocal as to whether he had participated in drafting the lawsuit or had authorized that his name be included. Mr. Wood said that he was not aware that his name was included but that he would not have objected. He also claimed that he did not know that he was subject to being sanctioned until he read an article in the newspaper.
The Court rejected his arguments because it found that he never notified the court that his name had been included in error. Furthermore, he failed to submit any affidavits that would establish his non-participation despite being given an opportunity to do so. He also tweeted a link to an article referencing the sanctions motion, told a federal judge that the City of Detroit was trying to get him disbarred, and took credit for filing the lawsuit in a brief filed with the Delaware Supreme Court.
Another attorney, who claimed that he did not read the pleading until the day it was filed and spent about an hour reviewing it, did not fare well either. Under Rule 11, an attorney’s signature on a pleading constitutes a certificate that he has read it. The court found it difficult to believe that the attorney read an 830-page pleading in just “well over an hour.”
Rule 11 requires that a “safe harbor” letter be sent with a copy of the proposed motion for sanctions at least twenty-one days before the motion is filed. Because the City of Detroit was the only party that sent a safe harbor letter (and because the court did not issue its own show cause order), the City of Detroit was the only party eligible to seek sanctions under Rule 11.
On substantive grounds, the Court had no trouble finding that Rule 11 had been violated. Judge Parker found that the suit was subject to several obvious defenses. She stated:
The Court said it before and will say it again: At the inception of this lawsuit, all of Plaintiffs’ claims were barred by the doctrines of mootness, laches, and standing, as well as Eleventh Amendment immunity. Further, Plaintiffs’ attorneys did not provide a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law to render their claims ripe or timely, to grant them standing, or to avoid Eleventh Amendment immunity. The same can be said for Plaintiffs’ claims under the Elections and Electors, Equal Protection, and Due Process Clauses, and the alleged violations of the Michigan Election Code. Finally, the attorneys have not identified any authority that would enable a federal court to grant the relief sought in this lawsuit.
Plaintiffs asked this Court to enjoin the State Defendants from sending Michigan’s certified results to the Electoral College; but as reported publicly, Governor Whitmer had already done so before Plaintiffs filed this lawsuit. Plaintiffs sought the impoundment of all voting machines in Michigan); however, those machines are owned and maintained by Michigan’s local governments, which are not parties to this lawsuit. Plaintiffs demanded the recount of absentee ballots, but granting such relief would have been contrary to Michigan law as the deadline for requesting and completing a recount already had passed by the time Plaintiffs filed suit. Further, a recount may be requested only by a candidate. And while Plaintiffs requested the above relief, their ultimate goal was the decertification of Michigan’s presidential election results and the certification of the losing candidate as the winner—relief not “warranted by existing law or a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.” Fed. R. Civ. P. 11(b)(2).
Opinion, pp. 53-55 (record references and citations omitted).
In the ordinary case, it is difficult to see how failing to anticipate an affirmative defense would violate Rule 11. However, standing and the ability to sue a state defendant were both integral to the rights being asserted. Additionally, the lack of authority to overturn an election result is also a pretty big hole in the case being filed.
The Court was even more direct in skewering some of the specific allegations made in the affidavits that the plaintiffs relied upon. For purposes of brevity, I am only going to give a few examples.
- A witness “observed passengers in cars dropping off more ballots than there were people in the car.” Michigan law allowed a household member or family member to drop off a ballot.
- An allegation was made that Michigan law was violated because ballots without postmarks were counted when it was permissible to drop off an absentee ballot in person.
- At the hearing on July 12, the attorneys filing the suit alleging violations of Michigan election law demurred by saying that they were not experts in Michigan election law. The Court stated, “What is sanctionable is counsel’s allegation that violations of the Michigan Election Code occurred based on those facts, without bothering to figure out if Michigan law actually prohibited the acts described.” Opinion, pp. 63-64.
An affiant named Matt Ciantar submitted the following which was attached to the complaint in support:
The afternoon following the election[,] as I was taking my normal dog walk (mid-afternoon), I witnessed a dark van pull into the small post office located in downtown Plymouth, MI. I witnessed a young couple . . . pull into the parking lot . . . and proceed to exit their van (no markings) . . . and open[] up the back hatch and proceed[] to take 3-4 very large clear plastic bags out . . . and walk them over to a running USPS Vehicle that appeared as if it was “waiting” for them. . . .
There was no interaction between the couple and any USPS employee which I felt was very odd. . . . They did not walk inside the post office like a normal customer to drop of[f] mail. It was as if the postal worker was told to meet and standby until these large bags arrived. . . .
[T]he bags were clear plastic with markings in black on the bag and on the inside of these clear bags was another plastic bag that was not clear (could not see what was inside) . . . . [There were] what looked like a black security zip tie on each back [sic] as if it were “tamper evident” type of device to secure the bag. . . . [B]y the time I realized I should take pictures of the bags once I noticed this looked “odd[,]” they had taken off.
The other oddity was that [sic] the appearance of the couple. After the drop, they were smiling, laughing at one another.
What I witnessed and considered that what could be in those bags could be ballots going to the TCF center or coming from the TCF center . . . .
Opinion, pp. 71-72.
The Court stated:
Absolutely nothing about this affidavit supports the allegation that ballots were delivered to the TCF Center after the Election Day deadline. And even if the Court entertained the assertion of Plaintiffs’ counsel that this affidavit “is one piece of a pattern” reflecting fraud or Defendants’ violations of Michigan election laws, this would be a picture with many holes. This is because a document containing the lengthy musings of one dog-walker after encountering a “smiling, laughing” couple delivering bags of unidentified items in no way serves as evidence that state laws were violated or that fraud occurred.
Opinion, pp. 72-73.
Another affiant stated:
There was [sic] two vans that pulled into the garage of the counting room, one on day shift and one on night shift. These vans were apparently bringing food into the building . . . . I never saw any food coming out of these vans, coincidently it was announced on the news that Michigan had discovered over 100,000 more ballots—not even two hours after the last van left.
Opinion, p. 74. The Court countered:
But nothing described by Carone connects the vans to any ballots; nothing connects the illusory ballots to President Biden; and nothing connects the illusory votes for President Biden to the 100,000 ballots “coincidently” announced on the news as “discovered” in Michigan. Yet not a single member of Plaintiffs’ legal team spoke with Carone to fill in these speculation-filled gaps before using her affidavit to support the allegation that tens of thousands of votes for President Biden were fraudulently added.
. . .
And speculation, coincidence, and innuendo could never amount to evidence of an “illegal vote dump”—much less, anything else.
Opinion, pp. 74-75 and 76.
The Court found pervasive violations of Rule 11. The combination of legal theories which were barred by applicable law, theories that were submitted without being investigated and factual allegations relying on speculation, coincidence and innuendo were sufficient to violate the rule.
Rule 11 in Bankruptcy Court
Rule 9011, which applies in bankruptcy court, substantially follows Rule 11. It would be difficult to find a bankruptcy case with facts as outlandish as King v. Whitmer. Instead, I found a much more mundane case in which systems and procedures broke down to the detriment of the debtor and the court.
In re Taylor, 655 F.3d 274 (3rd Cir. 2011) involved a lender and a law firm using an automated system to generate pleadings in bankruptcy court. As a result of glitches in the software, the firm filed a motion for relief from automatic stay which alleged that the debtor had not made any payments since filing chapter 13 and that the debtor had no equity in its property without any factual basis. The law firm also submitted requests for admissions, seeking admission of facts which the law firm knew, or should have known, were false. At one hearing, the court asked an associate why he couldn’t get information from the client and was told that the attorneys were only permitted to speak with the client through the automated query system.
The court initiated an order to show cause under Fed.R.Bankr.P. 9011(c)(1)(B). After multiple hearings, the court awarded sanctions. The court rejected the argument that the law firm was reasonably relying on the information provided by its client. The court focused on Ms. Doyle, a senior attorney with the firm.
Doyle's reliance on HSBC was particularly problematic because she was not, in fact, relying directly on HSBC. Instead, she relied on a computer system run by a third-party vendor. She did not know where the data provided by NewTrak came from. She had no capacity to check the data against the original documents if any of it seemed implausible. She effectively could not question the data with HSBC. In her relationship with HSBC, Doyle essentially abdicated her professional judgment to a black box.
In re Taylor, 655 F.3d at 285.
The bankruptcy court awarded sanctions that could be viewed as creative. The young attorney was questioned by the court was not sanctioned due to his inexperience. The senior attorney was ordered to complete three hours of continuing legal education in professional responsibility. The owner of the firm had to learn how the automated system worked and spend a day observing its use. The court also required the owner of the firm and the senior attorney involved to conduct a training session for all attorneys on their responsibilities under Rule 9011 and procedures for escalating queries under the software system. Lastly, the court ordered the creditor to send a copy of its opinion to all of its attorneys with a letter informing them that they were allowed to contact the creditor directly. On appeal, all sanctions were upheld except for those against the owner of the firm who was found not to have participated in the sanctionable conduct. This was a case where the remedy chosen by the court was aimed at remedying the deficient practices and correcting them rather than financially penalizing the offending parties.
How the Cases are Similar and How They Are Different
In King v. Whitmer,
the plaintiffs sought to overturn an election. In In re Taylor, the creditor
sought to foreclose upon a home. The elections case was marked by a brazen
attempt to ignore both the law and the ethical obligations of the attorneys.
The Taylor case was marked by a series of technological mishaps which
caused the attorneys to file erroneous pleadings and make misrepresentations to
the court. However, in both cases, the opposing party was put through
unnecessary expense and delay due to pleadings which should not have been
filed. As a result, both violated the applicable version of Rule 11.
Tomorrow I will discuss 28 U.S.C. §1927.
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