UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
January 27, 2005
MARWAN AHMED HARARA, ON BEHALF OF HIMSELF AND THE GENERAL PUBLIC OF THE STATE OF CALIFORNIA, PLAINTIFF,
CONOCOPHILLIPS COMPANY, A TEXAS CORPORATION, DEAN RICHARD MASTERTON, [AND DOES 1 THROUGH 100, INCLUSIVE], DEFENDANTS. CONOCOPHILLIPS COMPANY, A TEXAS CORPORATION, COUNTERCLAIMAINT,
MARWAN AHMED HARARA, INDIVIDUALLY AND ON BEHALF OF HIMSELF AND THE GENERAL PUBLIC OF STATE OF CALIFORNIA. COUNTERDEFENDANT.
ORDER DENYING SANCTIONS AND GRANTING REASONABLE FEES FOR OPPOSING MOTION
On December 27, 2004, Plaintiff and Counterdefendant Marwan Ahmed Harara moved for sanctions against Defendant and Counterclaimant ConcoPhillips Company ("Conoco") pursuant to Federal Rule of Civil Procedure 11. Harara claims that Conoco's counterclaims are frivolous and that it failed to conduct a reasonable inquiry prior to asserting its counterclaims. He seeks a dismissal of Conoco's first, third, fourth and fifth counterclaims, and attorneys' fees and costs.
The court has broad authority to impose sanctions under Rule 11. Cooter v. Gell, 496 U.S. 384, 407 (1990). Sanctions may be imposed under where the pleading is either frivolous or brought for an improper purpose. Townsend v. Holman Consulting, 929 F.2d 1358, 1362 (9th Cir. 1990) (citing Zaldivar v. City of Los Angeles, 780 F.2d 823, 832 (9th Cir. 1986) overruled on other grounds by Cooter & Gell v. Hartmax Corp., 496 U.S. 384 (1990)). "Rule 11 is intended only for exceptional circumstances." Teamsters Local Union No. 430 v. Cement Express, Inc., 841 F.2d 66, 68 (3d Cir. 1988). "Rule 11 sanctions should not be employed . . . to test the legal sufficiency or efficacy of the of allegations in the pleadings." Fed R. Civ. P. 11 advisory committee's note. "Even in its amended form, Rule 11 should not be used to raise issues as to the legal sufficiency of a claim or defense that more appropriately can be disposed of by a motion to dismiss, a motion for judgment on the pleadings, a motion for summary judgment, or a trial on the merits." 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 1336.6. Harara's motion for sanctions does little more than restate the arguments in his motion to dismiss. He has not presented any evidence that Conoco failed to engage in a reasonable and competent inquiry prior to the filing its counterclaims nor has he established that its counterclaims are baseless. See Townsend, 929 F.2d at 1362 (noting that a frivolous filing is one that is "both baseless and made without a reasonable and competent inquiry"). To the extent that Harara argues that Conoco's claims are frivolous, his motion is denied for the reasons stated in my January 27, 2005 order denying Harara's motion to dismiss.
Harara has also failed to establish that the counterclaims were brought "for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation." Fed. R. Civ. P. 11(b). With respect to complaints, a finding of frivolousness is a necessary prerequisite to an award of sanctions under the improper purpose clause of Rule 11. Townsend, 929 F.2d at 1362. As Harara has not established that the counterclaims are frivolous, he cannot claim that they were brought for any improper purpose. In addition, Harara has provided no evidence which demonstrates that Conoco filed its counterclaims for any improper purpose. Finally, to the extent that Harara's motion seeks sanctions for Conoco's failure to respond to discovery propounded in this case, Harara should follow the discovery procedures set forth in my June 16, 2004 order. For the foregoing reasons, Harara's motion to dismiss is DENIED, and the hearing on the motion currently scheduled for February 2, 2005 is VACATED.
Conoco requests reasonable expenses and attorney's fees incurred in responding to Harara's motion for sanctions. "If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion." Fed. R. Civ. P. 11(c)(1)(A). Mr. Friedenberg reasonably expended five hours opposing the motion for sanctions, for a total of $975.00 in attorney's fees. See Declaration of Adam Friedenberg in Support of Conoco's Opposition to Plaintiff's Motion for Sanctions ¶4. I therefore award Conoco $975.00 in attorney's fees for successfully opposing the motion pursuant to Federal Rule of Civil Procedure 11, and not as a sanction against Harara.
Bernard Zimmerman United States Magistrate Judge
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