Question on Twiqbal and R 11

Q. Would using 11(b)(3) and admitting lack of evidentiary support get you in trouble with TwIqbal?

A. I love this question, because it shows how Twiqbal (despite itself being an interpretation of 8(a)) is in tension with the Federal Rules. I agree that there is a problem under Twiqbal with a conclusory allegation of X (e.g. an agreement) even if the P has "proto-evidence" that would allow him to reasonably believe that evidence of X is likely to arise in discovery. An example is Sierocinski, where the fact that the cap blew up is (I think) proto-evidence - making it reasonable to think that evidence of negligence is likely to arise during discovery. The fact that Sierocinski (or his lawyer) satisfied R 11 in this way may not mean he has enough to satisfy Twiqbal concerning the allegation of negligence. That shows something is going wrong with Twiqbal.

 Question on R 11 

Q. How would you avoid rule 11 sanctions if you end up not finding anything in discovery? You can't SJ yourself so would you just try to settle?

A. This is a good point. Of course you can reasonably believed that evidentiary support will arise in discovery and nevertheless not get any, just as I can reasonably believe it will rain even though it ends up staying dry. But I take it your question is what happens at the point you realize after discovery that you have no evidence. Although your absence of evidence does not mean you violated R 11 when you drafted and signed the complaint (provided that you specifically stated that the factual allegation, although lacking evidentiary support, "will likely have evidentiary support after a reasonable opportunity for further investigation or discovery" and it was reasonable for you to believe this) the question is your current advocacy of the complaint. I agree that this advocacy now looks like a violation of R 11, suggesting that you must voluntarily dismiss your case or quickly settle.

Question about sua sponte R 11 motions

Q. I asked if it was possible, even after the 21 day grace period in Rule 11(c)(2) (enacted in 1993), for someone who violated Rule 11 to be sanctioned by the judge sua sponte.  I think this might work, if I understand the Rules correctly.  Rule 11(c)(2) says that a "motion for sanctions" cannot be filed with the court if the challenged paper is withdrawn or appropriately corrected within 21 days after the offender has been served with a motion for sanctions.  But this rule doesn't address the judge.  If I understand correctly, he could issue an order to the attorney to show cause why he has not violated Rule 11.  Rule 11(c)(2) doesn't explicitly include a grace period under these circumstances, so it seems to me that the challenged attorney could be sanctioned, even if he does happen to amend or withdraw his paper within 21 days.

This grace period only seems to apply to a motion served to the offender, not to an order made by the judge sua sponte.  I would be very interested to learn if this is true!

A. You are correct. The language of the rule clearly suggests this and I have found a federal court of appeals making a statement to that effect. Hunter v. Earthgrains Co. Bakery
281 F.3d 144, 151 (4th Cir. 2002). What that means is that if a court brings up R 11 sua sponte, you cannot avoid sanctions by curing the problem in 21 days.

Question about delivering personally

Q. I had a follow-up to my in-class question today.

Suppose a process server goes to D summer house on Martha's Vineyard. I understand that if the server hands the summons and complaint to D himself, it satisfies R (4)(e)(2)(a). However, D has his wife accept the papers from the server while he stands directly behind her and watches. Does this constitute improper service based on a plain text reading of R (4)(e)(2)(b)? While the summer home doesn't come into play when D is served personally, since he doesn't technically touch the papers, does the summer home not serving as his "dwelling or usual place of abode" apply and invalidate service? Or, since he was present and saw the service, despite not actually touching the papers, was he still served based on the (presumed) spirit of R (4)(e)(2)(a)?

 Question about standard of proof for R 11

Q. In regards to Rule 11 sanctions, which party has the burden of proof?

A. The movant (the person asking for R 11 sanctions) clearly has the burden of proof. If D moved for Rule 11 sanctions and no one offered any evidence one way or another about whether sanctions were appropriate, sanctions should surely be denied. But what is the standard of proof? Not much out there (surprisingly). When answering the question in 2011 I found a case assuming the preponderance standard. One case that punted the question is Lucas v. Spellings, 408 F.Supp.2d 8 (D.D.C. 2006) (both standards satisfied). I now have found a case saying that contempt sanctions require clear and convincing evidence, In re Zilog, Inc., 450 F.3d 996, 1007 (9th Cir.2006), and one that suggests that this applies to R 11 too. Fun-Damental Too, Ltd. v. Gemmy Industries Corp., Not Reported in F.Supp., 1996 WL 724734 (S.D.N.Y.,1996).

Question about Mottley

Q. What is the following passage from Mottley about?

"The only way in which it might be claimed that a Federal question was presented would be in the complainant's statement of what the defense of defendants would be, and complainant's answer to such defense. Under these circumstances the case is brought within the rule laid down in Tennessee v. Union & Planters' Bank, supra. That case has been cited and approved many times since."

A. In the review session I suggested that it might be about declaratory judgments: The Mottleys cannot circumvent the well-pleaded complaint rule by asking for a declaratory judgment about whether the federal statute preempted their contract rights. In determining when a declaratory judgment action has SMJ under 1331, you imagine the complaint redrafted such that it asks for concrete relief and then  apply the well-pleaded complaint rule.

Although my point about declaratory judgments is correct, that is not what the passage is about. It is not speaking of a declaratory judgment, but rather of a complaint asking for concrete relief under state law that adds language about what the defendant's federal defense would be and what the plaintiff's response to that defense is. Presumably the Mottley complaint didn't do that. The point is that even if it had, there would still be no SMJ under 1331. That is what the Union & Planters' Bank case says (it basically announces the well-pleaded complaint rule, which was not new to Mottley) - although the Union & Planters' Bank case also goes beyond that to say that federal defenses mentioned by the defendant in state court do not allow for removal to federal court.

Comment about Baker 

Q. I don't believe that refusing diversity jurisdiction to Baker would stray from the intended purpose of diversity jurisdiction (at least with regard to future cases). Let's assume arguendo that we do NOT grant diversity jurisdiction to someone who very obviously changes domicile for the sole purpose of establishing diversity jurisdiction (i.e. Baker). 

It is probably safe to assume that, given prior knowledge that the courts would not allow this type of "manufacturing diversity jurisdiction," Baker would never have changed his domicile. Thus, knowing that they could not succeed in manufacturing diversity jurisdiction in this manner, future parties would have no reason to bother changing domiciles (at least for the purposes of establishing diversity). As a result, the number of parties that would face judicial discrimination based on their "betrayal by moving to another state for the purposes of establishing diversity" would be extremely small, if any. 

A. I agree. Your point can be put this way:  Baker was, in effect, manufacturing state court prejudice (or rather Illinois state court prejudice - he was reducing Oklahoma state court prejudice). A provision meant to protect against prejudice is poorly served when it motivates people to create the very thing it is supposed to protect against. To deter them, they should be forced to suffer the prejudice they created. There are similar ideas at play in other areas of the law. An example is assumption of risk in tort: Roughly, if I voluntarily put myself in the risky situation, I should not be compensated if that risk materializes.