United States District Court, N.D. California
SUZANNE D. JACKSON, Plaintiff,
WILLIAM FISCHER, et al., Defendants.
ORDER DENYING MOTION FOR RULE 11 SANCTIONS
PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE
motion of defendant Joshua Rosen (“Rosen”) for
sanctions pursuant to Federal Rule of Civil Procedure 11 came
on for hearing before this court on January 11, 2017.
Plaintiff Suzanne D. Jackson (“Jackson”) appeared
by her counsel Alan Kaufman and Robert Stumpf, and Rosen
appeared by his counsel Mark Peterson and Matthew Cate.
Having read the parties' papers and carefully considered
their arguments and the relevant legal authority, the court
hereby DENIES the motion.
the Private Securities Litigation Reform Act
(“PSLRA”), “upon final adjudication of the
action, the court shall include in the records specific
findings regarding compliance by each party and each attorney
representing any party with each requirement of Rule 11(b) .
. . as to any complaint, responsive pleading, or dispositive
motion.” 15 U.S.C. § 78u-4(c)(1). In the present
motion, Rosen seeks sanctions against Jackson under Rule 11,
for filing a frivolous motion for summary judgment.
Rule of Civil Procedure 11 imposes upon attorneys a duty to
certify that they have read any pleadings or motions they
file with the court and that such pleadings and motions are
well-grounded in fact, have a colorable basis in law, and are
not filed for an improper purpose. Fed.R.Civ.P. 11(b);
see also Business Guides, Inc. v. Chromatic Comm.
Enters., Inc., 498 U.S. 533, 542 (1991). If a court
finds Rule 11(b) has been violated, the court may impose
appropriate sanctions to deter similar conduct. Fed.R.Civ.P.
11(c)(1); see also Cooter & Gell v. Hartmarx Corp.,
496 U.S. 384, 393 (1990) (“[T]he central purpose of
Rule 11 is to deter baseless filings in district
“Rule 11 is an extraordinary remedy, one to be
exercised with extreme caution.” Operating
Eng'rs Pension Trust v. A-C Co., 859 F.2d 1336, 1345
(9th Cir. 1988). Rule 11 sanctions should be reserved for the
“rare and exceptional case where the action is clearly
frivolous, legally unreasonable or without legal foundation,
or brought for an improper purpose.” Id. at
1344. “Rule 11 must not be construed so as to conflict
with the primary duty of an attorney to represent his or her
client zealously.” Id. Courts should
“avoid using the wisdom of hindsight and should test
the signer's conduct by inquiring what was reasonable to
believe at the time the pleading, motion, or other paper was
submitted.” Fed.R.Civ.P. 11 Advisory Comm. Notes (1993
addition, Rule 11 provides a 21-day safe harbor period.
Sneller v. City of Bainbridge Is., 606 F.3d 636,
638-39 (9th Cir. 2010). That is, Rule 11 sanctions may not be
imposed if the challenged claim is withdrawn within 21 days
after service of the sanctions motion. Fed.R.Civ.P. 11(c)(2);
see also Sneller, 606 F.3d at 639.
argues that Jackson's motion for summary judgment was
frivolous, and was also a "thinly-disguised motion for
reconsideration, " which was untimely and
unsubstantiated, and which violated the Local Rules of this
court. He seeks sanctions in the form of an award of the
attorney's fees and costs he incurred in opposing
Jackson's motion and in bringing the present Rule 11
opposition, Jackson asserts that the motion should be
“stricken” because it is premature, in that under
the PSLRA, Rule 11 reviews are to be conducted upon
"final adjudication, " meaning a "terminating
decision" such as a verdict, summary judgment, or
dismissal with prejudice. 15 U.S.C. § 78u-4(c)(1);
see also Great Dynasty Int'l Fin. Holdings Ltd. v.
Haiting Li, 2014 WL 3381416 at *4-5 (N.D. Cal. July 10,
also contends that the motion should be
“stricken” because Rosen failed to respect her
offer to withdraw the motion under the safe-harbor provision
of Rule 11(c)(2). On November 29, 2016, Jackson's counsel
sent an email to Rosen's counsel stating,
For reasons unrelated to your Rule 11 motion and its merits,
we will withdraw our summary judgment motion if you will
confirm that (1) you will not file the Rule 11 motion or (2)
seek compensation for either (a) the cost and fees for the
drafting of your Rule 11 motion or (b) the costs and fees for
preparation of the merits opposition to our motion, which we
presume you have already done or is substantially underway.
Jackson claims that Rosen ignored this offer to withdraw the
summary judgment motion, and filed his opposition to the
motion one day early - on the evening of November 29 - and
then, three days later, on December 2, 2016, filed the Rule
11 motion based on a summary ...