Rule 11 face-off ends in a draw

In the film version of A Civil Action, the great non-fiction book about toxic torts litigation in Massachusetts, the lawyer played by John Travolta sheepishly told the judge that he had to look up Rule 11 when defense counsel filed a motion against him. The Judge said that he, too, had to look up the rule. Rule 11 has since taken on a more prominent role in litigation, used as a weapon to sanction frivolous lawyering. But questions about its application still exist, as shown by a debate in the Second Circuit on a magistrate judge's authority to impose this punishment.

The case is Kiobel v. Royal Dutch Petroleum Company, decided on January 8. The only holding in the case is that the trial court should not have imposed sanctions against some of the lawyers in the case, a decision that once again reminds us that it's difficult to sanction lawyers in this Circuit. But larger issue -- whether magistrate judges have independent authority to award Rule 11 sanctions -- was unresolved.

Magistrate judges have taken on greater authority over the years. They often supervise discovery and make recommendations to the district judges. Or the parties consent to have the magistrate handle the case for all purposes, allowing the magistrate to resolve motions for summary judgment and try cases. Magistrate judges also see their fair share of Rule 11 sanctions motions. When can they grant them?

Judge Cabranes says they cannot grant Rule 11 motions unless the magistrates have the case for all purposes. If the magistrate is simply supervising discovery, she can only recommend to the judge that sanctions be granted. This approach would lead to fewer sanctions, since the attorney under fire has two chances to talk the courte out of this punishment. Judge Cabranes reaches this conclusion because, under 28 U.S.C. 636 (which grants magistrates their authority), these judges cannot resolve dispositive motions, such as motions "for injunctive relief, for judgment on the pleadings, for summary judgment," etc. These motions are the subject of Reports and Recommendation (or, "R&R's") which the district court resolves. As Judge Cabranes sees it, Rule 11 motions are dispositive because these motions "are the functional equivalent of an independent claim," or a "separate and independent proceeding at law that is not part of the original action." This is because Rule 11 addresses the conduct of lawyers, not the parties. The rule covers collateral conduct in the case.

Judge Leval sees it differently. He says that magistrates can award Rule 11 sanctions even if they do not have the case for all purposes. He points out that the list of motions that magistrates cannot normally decide under 28 U.S.C. 636 does not include sanctions motions, and that in 2000, Congress authorized magistrates to issue civil and criminal contempt adjudications. He adds,

in the statute’s only reference to the question of the authority of magistrate judges to impose sanctions under the Federal Rules, the new § 636(e)(4) expressly stated that its grant of civil contempt authority in consent cases “shall not be construed to limit the authority of a magistrate judge to order sanctions under any other statute, the Federal Rules of Civil Procedure, or the Federal Rules of Criminal Procedure.” While these words do not explicitly confer on magistrate judges the power to impose sanctions, they seem to express Congress’s understanding that magistrate judges possess that power. This passage says, in effect, “The fact that we expressly confer civil contempt power on magistrate judges should not be taken to imply that they lack the power to impose sanctions.”

Judge Leval infers from the above language in the 2000 law that "Congress expressed a very much enhanced trust in magistrate judges, granting them considerable punitive powers." He adds, "the grant of contempt powers to magistrate judges in 2000 now powerfully supports the conclusion that Congress intended to confer sanctioning power. It is an a fortiori case. The power to impose a criminal conviction and a sentence of imprisonment is very substantially more awesome than the power to impose a noncriminal sanction. If Congress conferred on magistrate judges the power to impose criminal convictions for contempt, and to put contemnors in jail, why would we interpret Congress’s silence on the issue of noncriminal sanctions as an implicit denial of that power?"

Chief Judge Jacobs also speaks up, but he does not take sides. This leaves us with a very interesting discussion about the authority to award Rule 11 sanctions, a discussion which does not have the force of law in the Second Circuit. Judge Cabranes says that "Judge Leval and I have now provided some modest assistance to notes and comments editors of law reviews in search of an agenda." I am sure that law students around the country are anxious to get started on their own dissertations on this issue. Then again, maybe not. Instead, as Judge Jacobs suggests in noting that courts around the country are split on the issue, "I respectfully suggest that this knot needs to be untied by Congress or by the Supreme Court." That seems more likely.