Baker v. Alderman , 158 F.3d 516 ( 1998 )

PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 94-3291 10/19/98
____________
THOMAS K. KAHN
D.C. Docket No. 88-1335-CIV-T-17A CLERK
CHARLES N. BAKER,
Plaintiff-Appellant,
KENNAN G. DANDAR,
Movant-Appellant,
versus
RONALD ALDERMAN, individually and officially
as Hillsborough County Property Appraiser, and
HILLSBOROUGH COUNTY CIVIL SERVICE BOARD,
Defendants-Appellees.
No. 95-2983
D.C. Docket No. 88-1335-CIV-t-17A
KENNAN G. DANDAR,
Movant-Appellant,
versus
RONALD ALDERMAN, HILLSBOROUGH COUNTY
CIVIL SERVICE BOARD,
Defendants-Appellees.
No. 95-3055
D.C. No. 88-1335-CIV-T-17A
CHARLES N. BAKER,
Plaintiff-Appellant,
versus
RONALD ALDERMAN, HILLSBOROUGH COUNTY
CIVIL SERVICE BOARD,
Defendants-Appellees.
Appeals from the United States District Court for the
Middle District of Florida
(October 19, 1998)
Before CARNES, Circuit Judge, and CLARK and CAMPBELL*, Senior Circuit Judges.
CLARK, Senior Circuit Judge:
*Honorable Levin H. Campbell, Senior U.S. Circuit Judge for the First Circuit, sitting by
designation.
2
I. BACKGROUND
Plaintiff-appellant Charles Baker and his former attorney, Kennan G.
Dandar (“Dandar”), appeal the district court’s order awarding sanctions in the form
of reasonable attorney’s fees pursuant to Fed.R.Civ.P. 11 in the amount of $37,137.50
to defendant-appellee Ronald Alderman, and pursuant to Rule 11and 42 U.S.C. § 1988in the amount of $89,088.39 to defendant-appellee Hillsborough County Civil Service
Board (“the Board”). They also appeal the denial of Dandar’s motions to dismiss
Alderman’s and the Board’s claims for attorney’s fees and to stay the order awarding
attorney’s fees pending appeal.1
In 1984, Baker was employed by the Hillsborough County Property
Appraiser as a land evaluator. He qualified as a candidate for the office of the
Hillsborough County Property Appraiser and submitted a leave of absence without
pay to the Property Appraiser and to the Board, pursuant to the Hillsborough County
Civil Service Rules (“the local law).2 Prior to the election, Baker took an oath stating
that he “had resigned from any office from which he [was] required to resign pursuant
to Section 99.012 Florida Statutes” (“the statute”).3 The statute required that
“subordinate personnel” resign when qualifying “for a public office which is currently
held by an individual who has the authority to appoint, employ, promote or otherwise
supervise that subordinate personnel.” Baker lost the election, and attempted to return
1
No. 94-3291 (order awarding fees and order awarding amount of fees); Nos. 94-3291, .
95-2983 and 95-3055 (order denying motion to dismiss claims and to stay). The appeals were
consolidated in this court.
2
Hillsborough County Civil Service Rules Law 82-301 § 25 (requiring a person holding
a position with the county to take a leave of absence when qualifying as a political candidate).
3
Baker v. Alderman, 766 F.Supp. 1112, 1113 (M.D. Fla. 1991), aff’d sub nom, Baker v.
Parker, 979 F.2d 1537 (11th Cir. 1992).
3
to work on November 7, 1984. At the Property Appraiser’s office, Baker was
informed that he was no longer an employee pursuant to the statute.
The Property Appraiser filed an action in state trial court seeking a
declaration that Baker had resigned under the statutory provisions. The trial court
entered summary judgment in favor of Baker, finding that the local law governed
because the statute and local law were inconsistent.4 The state appellate court
reversed, concluding that the statute and local law were not inconsistent and the
statute required that Baker resign.5
In 1988, Baker filed an action against Alderman, individually and as
Property Appraiser, and Hillsborough County Civil Service Board (“the Board”),
alleging violations of 42 U.S.C. § 1983.6 Baker alleged that the defendants violated
procedural due process because they terminated him without a hearing and did not
advise him of the existence and application of the statute.7 Baker also alleged that
the defendants: violated substantive due process by terminating him in an arbitrary
and capricious manner; terminated him because of his political party affiliation;
wrongfully discharged him; and violated his equal protection and first amendment
rights.8 The district court granted summary judgment to Alderman and the Board,9
finding that, because Baker had “resigned by operation of Florida law” when he
4
Parker v. Baker, 499 So.2d 843, 844 (Fla.Dist.Ct.App. 1986), review denied, 506 So.2d
1040 (Fla. 1987).
5
Id. at 844.
6
Baker v. Alderman, 766 F.Supp. at 1113.
7
Id.8
Id.9
Id.4
signed the oath of candidate, he could not establish the “discharge” element of his
civil rights claim.10 It also found that Baker had forfeited his right to challenge the
constitutionality of the Florida statute by failing to raise it during the prior state court
proceeding.11 Baker appealed, but this court affirmed.12
Following the disposition of the appeal, the district court granted the
motions for sanctions under Fed.R.Civ.P. 11 filed by Alderman, individually, and
under Rule 11 and 42 U.S.C. § 1988 filed by the Board, stating that sanctions would
“be awarded in the form of reasonable attorney's fees.”13 The district court granted
an award as to Alderman in both his individual and official capacity.14 It granted the
Board’s motion for reasonable cost and attorney's fees, stating that “to avoid
duplicity, attorneys' fees will be awarded only under sanctions.”15 The district court
denied without comment Baker’s motion for rehearing, reconsideration or clarification
which argued, inter alia, that Alderman had not moved for attorney’s fees in his
official capacity. Alderman, in his official capacity, and the Board submitted petitions
for assessment of fees and costs, time sheets, billing statements, and affidavits, and
Baker responded and moved to dismiss the affidavits as untimely. The district court
denied Baker’s motion to dismiss the affidavits as untimely, and awarded Alderman
10
Id. at 1115-1116.
11
Id.12
Baker v. Parker, 979 F.2d 1537 (1992).
13
R3-106.
14
The district court’s order refers to the motion for sanctions filed by Alderman, as
having been filed “individually and in officially as Hillborough County Property Appraiser.”
R3-106 at 17. Alderman’s motion and memorandum were filed only in his individual capacity.
R3-83, R3-84.
15
Id.5
$37,137.50 in attorney's fees, and the Board $89,088.39 in attorney's fees.16 Baker,
represented by attorney Kennan G. Dandar, and Dandar, proceeding pro se
appealed.17 Dandar then moved to withdraw as counsel for Baker, based on the
“inherent conflict of interest.”18 The district court granted the motion, and permitted
Baker thirty days in which to seek other counsel or to notify the court if he would be
proceeding pro se.
In response to the Board’s request for entry of judgment, Dandar moved
for an evidentiary hearing to determine ability to pay, a stay pending the appeal, and
a protective order on discovery sought by the Board, and Baker filed objections pro
se. The district court found that a hearing was not required, noted that it had
jurisdiction to order sanctions despite a pending notice of appeal, and found that a stay
was precluded by the “fact that a party may be unable to pay a judgment.”19 The
district court denied Dandar’s motion to stay and for a protective order, and granted
16
The district court found Alderman’s attorney’s hours expended and hourly rates
reasonable, and awarded Alderman the requested amount. The district court’s order does not
specify whether the fees awarded to Alderman were as to his individual or official capacity, and
following entry of the order, Alderman filed an application for fees and costs in his individual
capacity. Dandar moved to dismiss the claim of Alderman individually as untimely and
unsupported by the evidence, but the motion was denied.
The district court found the Board’s 911 hours expended unreasonable, reduced the
requested hours by 25% as excessive and unnecessary, found the hourly rates reasonable, and
awarded the Board the requested amount with a 25% reduction.
17
This court docketed this appeal as no. 94-3291. After Dandar moved to withdraw,
Baker renewed this notice of appeal pro se.
18
R4-136.
19
No. 94-3291 1SR1-153; Nos. 95-2983 and 95-3055 R1-149.
6
the Board’s motion for entry of judgment. Following the entry of judgment, Baker,
proceeding pro se, and Dandar appealed.20
II. ISSUES AND APPLICABLE STANDARDS OF REVIEW
On appeal, Baker and Dandar raise two issues:
(1) Whether the district court erred by awarding attorney’s fees under
Rule 11 and 42 U.S.C. § 1988; and
(2) Whether the amount of fees awarded by the district court was within
its discretion.
This court reviews the district court’s award of sanctions under Rule 11
and 42 U.S.C. § 1988 for abuse of discretion.21
III. THE IMPOSITION OF SANCTIONS
Baker and Dandar argue that the district court erred in awarding fees
because the motions for sanctions were not timely, Baker's claims were not frivolous,
and there was no hearing on the motions. Baker also argues that he should not be
held liable for the actions of his attorney. Dandar also argues that Alderman failed to
file a motion for sanctions in his official capacity.
Timeliness
20
These appeals were, respectively, docketed in this court as Nos. 95-2983 and 95-3055.
Although Baker filed his notice of appeal and brief pro se, he was represented at oral argument
by attorney Andrew Grosso.
21
Cooter & Gell v. Hartmax Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2461, 110
L.Ed.2d 359 (1990) (an appellate court should apply an abuse-of-discretion standard in
reviewing all aspects of a district court’s Rule 11 determination); Loranger v. Stierheim, 10 F.3d
776, 779 (11th Cir. 1994) (a district court’s order on attorney’s fees in a civil rights action is
reviewed for abuse of discretion).
7
Baker and Dandar claim that the motions for sanctions and petitions for
assessment were untimely, and that they were unfairly surprised and prejudiced by the
delay.
The Board first notified Baker that they intended to seek Rule 11
sanctions if the case was not voluntarily dismissed with prejudice because the claims
were “utterly frivolous” about one year after the district court action was filed.22 In
March 1990, Baker was notified by Alderman, individually, that he would pursue
Rule 11 sanctions.23 The Board requested and Alderman requested reasonable costs
in their answers to the First Amended Complaint.
Within 30 days of the district court’s entry of judgment against Baker,
the Board moved for sanctions, costs, and attorney’s fees pursuant to Rule 11 and 42
U.S.C. § 1988.24 Baker responded, arguing that the Board's motion was untimely.
The district court entered an order ruling that the motion for sanctions would be
deferred pending the disposition of the appeal. About one month later, Alderman, in
his individual capacity, moved for sanctions under Rule 11, and Baker responded.25
Following this court's opinion, the Board filed a "motion for renewed consideration"
of the motion for sanctions, and Baker moved for a hearing on the motions for
sanctions, and filed a supplemental response and affidavit to the motions for sanctions.
Finding the motions for sanctions timely, the district court granted the Board’s and
Alderman’s motions.
22
The action was filed September 6, 1988; the letter was dated July 20, 1989.
23
Alderman, in his official capacity, did not advise Baker that he would seek sanctions.
24
The judgment was entered on June 14, 1991. The Board’s motion was filed on July 8,
1991.
25
Alderman’s motion was filed on August 29, 1991.
8
In finding the motions timely, the district court stated:
. . (T)he question of serving motions for cost and attorney's
fees and sanction on a timely basis is a function of judicial
efficiency. By itself a claim for untimely filing does not
dispose of a claim for sanctions in all cases and does not
apply to this case. Defendants entered motion for summary
judgment, motioned for sanctions, costs and attorneys fees
before entry of final judgment. Motions were made by the
Defendants on a timely basis.26
Baker moved for rehearing, reconsideration, or clarification, and the
district court denied the rehearing motion, by endorsement, on January 26, 1994.27 In
May 1994, the Board filed a Petition for Assessment of Fees and Costs, stating that
the Board’s attorney had conferred with Baker’s counsel, both by telephone and in
writing, in a good faith effort to resolve the issues.28 In August 1994, Alderman’s
attorney filed an affidavit in support of an assessment of fees on behalf of Alderman
“in his capacity as Hillsborough County Property Appraiser.” In response, Baker
moved to dismiss the claims for attorney’s fees, arguing that the affidavits were
untimely.29 The district court denied dismissal of the attorney fee claims, noting that
26
R3-106 at 9.
27
Both Dandar and the Board state that the parties were not notified of the entry of this
order. It is not clear when they learned of its entry.
28
R3-109 at 1-3. The monthly statements attached to the petition for assessment showed
billings on August 20, 1993, August 21, 1993, August 23, 1993, August 24, 1993, August 25,
1993, September 20, 1993, and September 21, 1993, related to the Board’s letters to and
conferences with Dandar.
29
In the motion, Baker explained that Alderman had filed an affidavit in his official
capacity, but had never filed an affidavit in his individual capacity.
9
Baker had presented no support for his argument that “there must be a time limit” on
an award of sanctions, and no specific filing time is mandated by 42 U.S.C. § 1988.30At the time of the proceedings, the local rules provided:
The Court may suspend application and enforcement
of these rules, in whole or in part, in the interests of justice
in individual cases by written order. When a judge of this
Court in some specific case issues any order which is not
consistent with these rules, such order shall constitute a
suspension of the rules with respect to the case only, and
only to the extent that such order is inconsistent with the
rules.31
* **
In accordance with Fed.R.Civ.P. 54, all claims for
costs or attorney fees preserved by appropriate pleading or
pretrial stipulation shall be asserted by separate motion or
petition filed not later than thirty (30) days following the
entry of judgment.32
The 1983 version of Rule 11 required that a motion for sanctions be filed
“separately from other motions or requests.”33 No period is provided for when the
motion should be filed.
30
R3-130 at 4.
31
M.D. Fla. 1.01(c).
32
M.D. Fla. 4.18(a). Prior to 1993, Rule 54 had no provision prescribing a time limit on
claims for attorney’s fees. Fed.R.Civ.P. 54(d)(2) advisory committee notes (1993 amendment).
After the amendment, Rule 54(d)(2)(B) required that attorney fees’ motions be filed within 14
days after entry of judgment, but excepted fees awarded as sanctions. Fed.R.Civ.P.54(d)(2)(E),
advisory committee notes (1993 amendment). Therefore, whether or not the 1993 amendments
were applied, there was no specific time limit provided for the motion for sanctions under Rule
11.
33
Fed.R.Civ.P. 11(c)(1)(1983 amendment).
10
The advisory committee notes state:
A party seeking sanctions should give notice to the
court and the offending party promptly upon discovering a
basis for doing so. The time when sanctions are to be
imposed rests in the discretion of the trial judge. However,
it is anticipated that in the case of pleadings the sanctions
issue under Rule 11 normally will be determined at the end
of the litigation . . . .34
There is no jurisdictional time limit for the filing of a motion for
attorney’s fees in a civil rights action and, absent a local rule establishing a time
limit, a claim for attorney’s fees would be untimely “only on a showing of unfair
surprise or prejudice.”35 Further, this court has held that requests for attorney’s fees
collateral to the action may be made by a motion within a reasonable period of time
after the final judgment.36 The reasonableness of the filing period is determined by
reviewing the prejudice to the plaintiff.37 Rule 11 motions are collateral to an action
and are not barred if filed after a dismissal order,38 or after entry of judgment.39
34
Fed.R.Civ.P. 11 advisory committee notes (1983 amendment).
35
Brown v. City of Palmetto, Georgia, 681 F.2d 1325, 1326-1327 (11th Cir. 1982).
36
Gordon v. Heimann, 715 F.2d 531, 538-539 (11th Cir. 1983) (also noting that fee
requests may be made in the initial pleadings, by motion during the litigation, or in a separate
subsequent action).
37
Id. at 537 (finding no prejudice where the plaintiffs were aware of a request for fees in
a motion to dismiss).
38
Metrocorps, Inc. v. Eastern Massachusetts Junior Drum & Bugle Corps Association,
912 F.2d 1, 3 (1st Cir. 1990), quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 396, 110
S.Ct. 2447, 2456, 110 L.Ed.2d 359 (1990).
39
Community Electric Service of Los Angeles, Inc. v. National Electrical Contractors
Association, Inc., 869 F.2d 1235, 1242 (9th Cir.), cert. denied, 493 U.S. 891, 110 S.Ct. 236, 107
L.Ed.2d 187 (1989).
11
Although the timing of sanctions rests in the district judge’s discretion, Rule 11
sanctions “normally will be determined at the end of litigation.”40
The Board's motion for sanctions was timely filed under the law
governing Rule 11 and § 1988. Based on the district court's grant of Alderman's
motion, the Middle District of Florida provision for suspension of the rules
inconsistent with the order would apply. Further, it appears that Alderman, in his
individual capacity, and the Board complied with the Rule 11 dictates of giving notice
"promptly upon discovering a basis for doing so" by advising Baker that they would
seek fees within the first year that the action was pending, and by requesting costs in
their answers to the first amended complaint. Therefore, it does not appear that Baker
or Dandar suffered any prejudice as a result of any untimeliness of Alderman's
motion in his individual capacity.
Because Baker and Dandar knew that fees had been awarded, they were
unable to show unfair surprise or prejudice from the delayed filing of the affidavits
in support of the assessment of fees. Further, if any prejudice had resulted from the
delayed filing, some of the delay in the submission of the affidavits in support of the
amount of fees may be attributed to the district court's failure to serve the parties with
the denial of the motion for rehearing.
Frivolous claims
Baker and Dandar maintain that sanctions were not warranted because
the action was based on a good faith belief that there was at least a plausible cause of
action for violation of due process and equal protection, and counsel had made a
reasonable inquiry into the facts and law.
40
Donaldson, 819 F.2d 1551, 1555 (11th Cir. 1987).
12
In filing a pleading in a federal court, an attorney certifies that he or she
has conducted a reasonable inquiry and that the pleading is well-grounded in fact,
legally tenable, and “is not presented for any improper purpose.”41 The objective
standard for testing conduct under Rule 11 is “reasonableness under the
circumstances” and “what was reasonable to believe at the time” the pleading was
submitted.42 This court requires a two-step inquiry as to (1) whether the party's claims
are objectively frivolous; and (2) whether the person who signed the pleadings should
have been aware that they were frivolous.43 Rule 11 sanctions are warranted when
a party files a pleading that (1) has no reasonable factual basis; (2) is based on a legal
theory that has no reasonable chance of success and that cannot be advanced as a
reasonable argument to change existing law; and (3) is filed in bad faith for an
improper purpose.44 Although sanctions are warranted when the claimant exhibits a
"deliberate indifference to obvious facts," they are not warranted when the claimant’s
evidence is merely weak45 but appears sufficient, after a reasonable inquiry, to support
41
Fed.R.Civ.P. 11(b); Donaldson, 819 F.2d at 1555; Worldwide Primates, Inc. v.
McGreal, 87 F.3d 1252, 1254 (11th Cir.), reh’g denied, 99 F.3d 1157 (1996) (emphasizing the
need for prefiling inquiry).
42
Aetna Insurance Company v. Meeker, 953 F.2d 1328, 1331 (11th Cir. 1992), citing
United States v. Milam, 855 F.2d 739, 743 (11th Cir. 1988), quoting Donaldson, 819 F.2d at
1556, quoting Fed.R.Civ.P. 11 advisory committee notes (1983 amendment).
43
Worldwide Primates, Inc., 87 F.3d at 1254., quoting Jones v. International Riding
Helmets, Ltd., 49 F.3d 692, 694 (11th Cir. 1995).
44
Didie v. Howes, 988 F.2d 1097, 1103 (11th Cir. 1993), quoting Pelletier v. Zweifel,
921 F.2d 1465, 1514 (11th Cir.), cert. denied, 502 U.S. 855, 112 S.Ct. 167, 16 L.Ed.2d 131(1991); Thomas v. Capital Security Services, Inc., 836 F.2d 866, 874 n. 9 (5th Cir. 1988)
(emphasizing counsel’s continuing obligation to take necessary actions to ensure that the
proceedings do not continue without a reasonable basis in law and fact).
45
Davis v. Carl, 906 F.2d 533, 537 (11th Cir. 1990) (also stating that sanctions are not
warranted if the claim was brought as a result of “poor judgment”); but see Nesmith v. Martin
13
a claim under existing law.46 Sanctions may be appropriate when the plain language
of an applicable statute47 and the case law preclude relief.48 However, the purpose of
Rule 11 is to deter frivolous lawsuits and not to deter novel legal arguments or cases
of first impression.49 The grant of summary judgment, in and of itself, does not mean
that an action is frivolous or warrants the imposition of sanctions.50
Under 42 U.S.C.§ 1988, a prevailing defendant is entitled to recover
attorney's fees if "the plaintiff's action was frivolous, unreasonable, or without
foundation, even though not brought in subjective bad faith."51
The district court analyzed the case under the correct legal standards.
As to the award under § 1988, the district court found that Baker failed to establish a
Marietta Aerospace, 833 F.2d 1489, 1491 (11th Cir. 1987) (indicating that, although the
plaintiff’s claim may have been characterized as without foundation, the court would reverse if
the award were based on Rule 11 only because there was no evidence that the plaintiff , who was
proceeding pro se, brought the action in bad faith or “for any purpose other than to receive what
he thought he was entitled to under the law.”)
46
Threaf Properties, Ltd. v. Title Insurance Company of Minnesota, 875 F.2d 831, 835-
th
836 (11 Cir. 1989).
47
United States v. Milam, 855 F.2d 739, 744-745 (11th Cir. 1988); but see Norton Tire
Co., Inc. v. Tire Kingdom Co., Inc., 858 F.2d 1533, 1536 (11th Cir. 1988) (although binding
precedent plainly foreclosed claim, this court affirmed the district court’s denial of Rule 11
sanctions noting that the district judge, “by virtue of his close contact with the parties is best able
to determine the propriety of sanctions.”
48
Fox v. Acadia State Bank, 937 F.2d 1566, 1571 (11th Cir. 1991).
49
Laborers Local 938 Joint Health & Welfare Trust Fund v. B.R. Starnes Co. of Florida,
827 F.2d 1454, 1458 (11th Cir. 1987)(affirming the denial of sanctions where the issues were
fairly debatable and not easily resolved, and there was no clear binding precedent).
50
O’Neal v. DeKalb County, Georgia, 850 F.2d 653, 658 (11th Cir. 1988) (although the
action may not merit relief, the causes of action may be plausible).
51
Hughes v. Rowe, 449 U.S. 5, 14, 101 S.Ct. 173, 178, 66 L.Ed.2d 163 (1980), quoting
Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978).
14
prima facie case, the defendant did not offer to settle, the district court granted
summary judgment, and Baker "could have attacked the constitutionality of Florida
Statutes 99.012(7) at the time" of the state court action.52 As to the award under Rule
11, the district court found that "after a reasonable inquiry Plaintiff should have
believed that the pleadings he filed were not well-grounded in facts and law."53 It
noted that, after Baker was made aware that he had acknowledged that he had read
Fla. Stat. § 99.012, he "should have known ignorance of the law is no excuse," and
"would have been well advised to move for voluntary dismissal of the action."54
Reviewing the situation under the "warning" standard, it noted that Baker's counsel
was provided notice "on several occasions that his case had no legal basis and was
frivolous" and concluded that "(a)ny reasonably knowledgeable attorney would know
that there is a strong possibility that such response along with a grant of summary
judgment in favor of defendant would more than likely trigger a Rule 11 motion."55
However, the district court rejected the "warning" standard in favor of the "reasonable
inquiry" standard, finding that it was "patently clear that Plaintiff's claim had no
chance of success from very early on when the complaint was filed" and that the law
was very clear concerning Baker's resignation from his job.56
52
No. 94-3291, R3-106 at 6-9.
53
Id. at 13.
54
Id. at 13-14.
55
Id. at 14.
56
Id. at 16-17.
15
After reviewing the record, we conclude that the district court did not
abuse its discretion in granting the motion for sanctions pursuant to Rule 11 and for
attorney’s fees under § 1988.
Hearing
Baker and Dandar argue that the imposition of the amount of fees
violated due process because the district court failed to conduct a hearing.
Though the district court recognized “that, among other factors, the
ability of a sanctioned party to pay may be taken into account in determining the
amount of sanctions,” it denied Dandar’s request, finding that a hearing was not
required.57
This Court has held that:
The accused (under Rule 11) must be given an
opportunity to respond, orally or in writing as may be
appropriate, to the invocation of Rule 11 and to justify his
or her actions. Rule 11 does not require that a hearing
separate from the trial or other pretrial hearings be held on
Rule 11 charges before sanctions can be imposed; indeed
the Advisory Committee Note indicates that the contrary is
preferable . . . (quotation omitted). Whether and to what
extent additional hearing is required will vary depending
upon the nature of the case. The Advisory Committee Note
indicates some of the matters to be considered: (1) the
circumstances in general; (2) the type and severity of the
sanction; and (3) the judge's participation in the
proceedings, the judge's knowledge of the facts, and
whether there is need for further inquiry.58
57
No. 94-3291 1SR1-153 at 5-6; Nos. 95-2983 and 95-3055 R1-153 at 5-6.
58
Donaldson, 819 F.2d at 1560-1561 (noting that “[p]rior opportunities to respond to
Rule 11 charges will also influence the extent to which further hearing is necessary”).
16
Further, "(d)ue process requires notice and an opportunity to respond if
Rule 11 sanctions are imposed."59 This court has stated that, although not mandated
by Rule 11, it considers “it prudent for a district judge to hold a hearing before
imposing sanctions.”60
The imposition of sanctions in this case followed this court's affirmance
of the district court's grant of summary judgment, was limited to attorney's fees, and
was determined by the judge who had handled the underlying action and was familiar
61
with the proceedings. Baker and Dandar were given notice of the motions for
sanctions and both responded. There is no requirement that a hearing be conducted
before sanctions are awarded. Therefore, the district court did not abuse its discretion
by failing to grant a hearing before imposing sanctions.
Award against Baker
Baker argues that he should not be sanctioned because he relied on the
advice of his attorney, Dandar, and never signed any papers filed with the court.
The district court’s award against Baker to the Board was based upon
both Rule 11 and § 1988, while its award against Baker to Alderman in his individual
capacity was based solely upon Rule 11. In granting the sanctions, the district court
found that
59
Attwood v. Singletary, 105 F.3d 610, 613 (11th Cir. 1997).
60
Didie v. Howes, 988 F.2d at 1105 n. 8 (noting that, in the absence of a hearing on
sanctions, a trial or pretrial hearing would provide a basis to rule on a sanctions motion), citing
Donaldson, 819 F.2d at 1560, Threaf Properties, Inc., 875 F.2d at 834, and Milam, 855 F.2d 739at 471.
61
This ruling does not limit the district court’s decision to hold a hearing, if it appears
needed, on matters in which there is a need for further inquiry, including ability to pay.
17
. . . it is clear that after a reasonable inquiry Plaintiff
should have believed that the pleadings he filed were not
well-grounded in facts and law. Plaintiff had also read
Defendants’ response which informed Plaintiff that he had
sworn to the “Resign to Run” Law, Florida Statutes §
99.012 which discharged him from his employment at the
Hillsborough Property Appraiser’s Office by “Operation of
Law.” The Second District Court of Appeals ruled on this.
The Florida Supreme Court denied hearing and so did this
court in its order granting summary judgment to
Defendants. Plaintiff should have known that ignorance of
the law is no excuse. . . . Counsel for Plaintiff would have
been well advised to move for voluntary dismissal of the
action pursuant to Fed.R.Civ.P. 41.62
Following the district court’s order, Baker submitted an affidavit stating
that, “relying upon the advice of counsel,” he “understood that this action was the only
means for me to obtain justice,” and explaining that he was not a college graduate and
was not trained in the law.63 The district court did not address Baker’s argument that
he had relied upon the advice of counsel in its subsequent order.
This case involves the 1983 version of Rule 11. At the time of the
district court’s order, Rule 11 provided for the imposition of sanctions “upon the party
who signed it, a represented party, or both . . . ”64 This court has rejected the
argument that the district court “lacked the authority to sanction a plaintiff because he
62
No. 94-3291 R3-106 at 13-14.
63
No. 94-3291 R4-117 at 2-3. Also see 94-3291 1SR1-151 at 2, ¶ 5, in which Baker
stated “At all times I have relied upon the advice of my counsel, Ken Dandar.”
64
Fed.R.Civ.P. 11 (1983)(amended 1993); also see Kirk Capital Corporation v. Bailey,
16 F.3d 1485, 1487 (8th Cir. 1994).
18
neither is an attorney nor signed any pleadings.”65 The imposition of Rule 11
sanctions against the plaintiff was permitted under the 1983 version of Rule 11 where,
although the plaintiff neither personally drafted or signed the complaint, the complaint
was frivolous or had no basis in law or fact.66 However, a district court abuses its
discretion by imposing sanctions on a plaintiff and his attorney absent findings that
the plaintiff and his attorney violated Rule 11.67
Attorney’s fees under § 1988 are assessed against losing parties, and not
against counsel.68 In deciding whether to assess attorney’s fees against a Title VII
plaintiff, a court should not consider the plaintiff’s counsel’s role in filing or
maintenance of a frivolous, groundless, or unreasonable claim, or the plaintiff’s
apparent lack of personal fault.69
The district court’s findings that the complaint was “not well-grounded
in facts or law” support a Rule 11 sanction against Baker. Further, the district court
properly awarded attorney’s fees under § 1988 against Baker. Despite Baker’s lack
65
Souran v. Travelers Insurance Company, 982 F.2d 1497, 1508 n. 14 (11th Cir. 1993).
66
McGregor v. Board of Commissioners of Palm Beach County, 956 F.2d 1017, 1022
(11th Cir. 1992).
67
Souran, 982 F.2d at 1506-1510 (11th Cir. 1993) (although the court rejected Souran’s
argument, it nonetheless found that sanctions were not proper because "no pleading was signed
in violation of Rule 11.” Id. at 1508 n. 14). Also see Kirk Capital Corporation, 16 F.3d at
1491-1492 (reversing the imposition of Rule 11 sanctions against the plaintiff client where the
plaintiff “did not sign the Complaint and there is no factual basis for concluding he did anything
that would warrant any Rule 11 sanction.”) Id.. at 1492.
68
Durrett v. Jenkins Brickyard, Inc., 678 F.2d 911, 915 (11th Cir. 1982), citing Roadway
Express, Inc. v. Piper, 447 U.S. 752, 761 n. 9, 100 S.Ct. 2455, 2461 n. 9, 65 L.Ed.2d 488 (1980).
69
Durrett, 678 F.2d at 916.
19
of subjective bad faith, the action was frivolous and without foundation. Therefore,
the imposition of sanctions against Baker is affirmed.
Rule 11 Sanctions as to Alderman in his Official Capacity
Dandar argues that the district court erred in imposing Rule 11 sanctions
against him and Baker for Alderman in his official capacity because Alderman’s
motion for sanctions was only filed in his individual capacity.
Alderman advised Dandar and Baker in a March 1990, letter and in the
August 1991, motion that he would, individually, seek sanctions against them.
However, the district court awarded sanctions to Alderman in his individual and
official capacity. Baker’s motion for rehearing and for clarification of the district
court’s order, based on the lack of a motion by Alderman in his official capacity, was
denied.
An attorney or party should be given early notice by the party seeking
sanctions, the court, or the party and the court that his or her conduct may warrant
Rule 11 sanctions.70 Although the notice need not be in writing and with the formality
of pleadings, the notice given, or evidence of the giving of notice, must be a part of
the record.71
Here, Baker and Dandar received no notice that sanctions would be
imposed against them by Alderman in his official capacity. Therefore, the award of
sanctions as to Alderman in his official capacity is reversed.
IV. THE AMOUNT OF FEES
70
Donaldson, 819 F.2d at 1560.
71
Id.20
Dandar argues that, in awarding the amount of fees, the district court
failed to consider their ability to pay the award.72
In response to the petitions for attorney's fees, Dandar submitted an
affidavit addressing his financial ability to pay fees. Dandar's affidavit explained that
he was in practice with his younger brother, and had paid an experienced civil rights
attorney “out of [his] own pocket” to assist with the research and litigation.73 He said
that he was “personally unable to pay any additional sanctions in this matter,” as his
“personal financial situation would render [him] unable to pay a judgment even in the
amount of $10,000-$15,000 without having to resort to borrowing the money,” and
he had “no collateral that [he] solely own[ed] which [he] could use to secure a loan.”74
He explained that his liability insurance carrier had denied coverage based on a policy
exclusion. He argued that the intent of Rule 11 had been met by the consequences he
had suffered as a result of the district court’s published opinion granting sanctions,
and his personal expenditure of $18,531.54 in costs. He stated that the judgment had
been “the greatest embarrassment to [him] personally and professionally” and that he
had also been affected physically.75 In requesting a stay of the judgment pending
appeal, Dandar stated that a judgment “most assuredly will result in bankruptcy action
by the Plaintiff and [Dandar], which is not the intended result of Rule 11.”76
72
Although Baker also raises this issue, it will not be addressed as the fees imposed
against him are reversed.
73
R4-116 at 1-2, ¶¶ 2-3.
74
Id. at 3-4, ¶¶ 10-11, 14.
75
Id. at 3, ¶ 12.
76
No. 94-3291 1SR1-149 at 2, ¶ 1; Nos. 95-2983 and 95-3055 R1-149 at 2, ¶ 1.
21
The district court’s order awarding the requested fees makes no mention
of Dandar’s affidavit as to his financial status. Although Dandar moved to stay entry
of judgment pending appeal, arguing that the district court had failed to conduct a
hearing or provide an opportunity for the submission of financial information to assist
the court in the determination of ability to pay, the district court denied the motion.
The district court found that a hearing was not required, and that a stay without a bond
was precluded by the “fact that a party may be unable to pay a judgment, as in the
present case. . . .”77 Although it appears that the district court recognized that Baker
and Dandar lacked the ability to pay, it made no specific findings as to this issue, and
it was not considered in the determination of the amount of sanctions.
The law in this circuit is clear that ability to pay should be considered in
the award of attorney’s fees under § 1988.78
This court has never required the district court's consideration of the
losing party's financial status in the determination of a Rule 11 sanctions award. It
has, however, held that sanctioning a represented party should only be done with
sensitivity to the facts of the facts of the case and to the party’s financial situation.79
After a court has decided to impose Rule 11 sanctions, the court should explain why
77
No. 94-3291 1SR1-153 at 5-7; Nos. 95-2983 and 95-3055 R1-153 at 5-7.
78
Nesmith, 833 F.2d at 1491 (“the amount of attorney’s fees was properly modified by
the district court in consideration of plaintiff’s ability to pay. See Durrett, 678 F.2d 911, 917
(11th Cir. 1982).” In Durrett, this court stated that “(a)lthough the losing party’s ability to pay is
not among the Johnson factors, we do not believe that Johnson and Jones bar consideration of
the plaintiff’s limited ability to pay as one factor in calculating an attorney’s award to a
prevailing Title VII defendant. Id. at 916.
79
Milam, 855 F.2d at 742-743 ("as appellate review of Rule 11 sanction orders become
more common, the issue of whether a particular sanction is appropriate will develop parts and
sub-parts," including whether the particular sanction imposed was excessive.").
22
the amount of sanctions that it awards will deter unreasonable conduct by the parties.
In determining the amount of sanctions to impose, a district court may take into
account compensation of other parties and punishment of the offender, but deterrence
remains the touchstone of the Rule 11 inquiry.80 The conduct and resources of the
party to be sanctioned are relevant to the determination of the amount of sanctions to
be imposed.81 The district court should also inquire as to the extent to which the
nonviolating party’s expenses could have been avoided, or mitigated, and reduce or
increase the award accordingly.82
Other circuits require consideration of ability to pay before imposing a
monetary sanctions award. The Third Circuit directs the district courts to consider
the “particularly relevant equitable factor” of ability to pay as a mitigating factor in
the calculation of a monetary sanction.83 The Fifth Circuit, affirming the imposition
of Rule 11 sanctions against a pro se litigant, reduced the awarded amount as
excessive based on the plaintiff’s annual earnings.84 The Sixth Circuit considered the
80
Fox, 937 F.2d. at 1571; Advisory Committee Note to Rule 11.
81
Thomas, 836 F.2d at 880.
82
Id. at 878.
83
Doering v. Union County Board of Chosen Freeholders, 857 F.2d 191, 195-196 (3rd
Cir. 1988) (affirming the imposition of sanctions, but vacating the amount of monetary sanctions
imposed and remanded for further evidence. The court noted that the plaintiff’s attorney was a
sole practitioner who had requested mitigation of sanctions in the district court and stated at oral
argument that he had limited financial resources, but that the record was devoid of any evidence
relevant to such an inquiry). Id. at 196. Also see Napier v. Thirty or More Unidentified Federal
Agents, Employees or Officers, 855 F.2d 1080, 1094 n. 12 (3rd Cir. 1988)(“Ability to pay is an
appropriate consideration” when determining the level of a sanction).
84
Coats v. Pierre, 890 F.2d 728, 734 (5th Cir. 1989), cert. denied, 498 U.S. 821, 111 S.Ct.
70, 112 L.Ed.2d 44 (1990) (finding the award of $20,000 excessive, where the plaintiff earned
between $22,200-28,657 per year, and remanding with directions to reduce the award to $1,800).
23
imposition of $15,671.14 in sanctions against the plaintiff and the plaintiff’s attorney
despite the defendants’ submission of a request for $109,305.90 in attorney’s fees and
$5,671.14 in costs.85 Affirming the district court’s award, the Sixth Circuit held that
a party’s financial status is relevant to a sanctions procedure “in order to protect a
party from punitive awards in favor of the deterrent purposes of Rule 11.86 The Sixth
Circuit based its analysis on an earlier decision in which it had held that “a district
court is required to make an inquiry into an attorney’s ability to pay sanctions in order
to prevent Rule 11 from being used ‘as a vehicle to drive an attorney out of
practice.’”87 In Jackson, it noted that it is not an abuse of discretion for a district court
to award “a fraction of the actual and reasonable fees requested” sufficient to deter
future violations.88 The Seventh Circuit has held that the sanctioned party’s or
attorney’s assets are an equitable consideration relevant to the fashioning of an
award.89 The Ninth Circuit views ability to pay as a “factor relevant in determining
reasonableness”
85
Runfola & Associates, Inc. v. Spectrum Reporting II, Inc., 88 F.3d 368, 375 (6th Cir.
1996).
86
Id.87
Jackson v. Law Firm of O’Hara, Rubera, Osborne and Taylor, 875 F.2d 1224, 1230
th
(6 Cir. 1989).
88
Id.89
Brown v. Federation of State Medical Boards of the United States, 830 F.2d 1429,
th
1439 (7 Cir. 1987) (“Although equitable consideration are not relevant to the initial decision to
impose sanctions . . . they may be an ingredient in the discretionary aspect of Rule 11-fashioning
an award.”); also see Munson v. Friske, 754 F.2d 683, 697 (7th Cir. 1985) (Fee awards are
equitable matters permitting the court “to consider the relative wealth of the parties.”)
24
in the assessment of a sanctions award.90 The Tenth Circuit requires ability to pay as
one of four factors a district court should consider in imposing Rule 11 sanctions
reasoning that, because Rule 11 sanctions are analogous to punitive damages, the
financial condition of the offender is an appropriate consideration.91 The Fourth
Circuit adopted the Tenth Circuit’s criteria, holding that “a monetary sanction
imposed without any consideration to pay would constitute an abuse of discretion.
A court should refrain from imposing a monetary award so great that it will bankrupt
the offending parties or force them from the future practice of law.”92
We adopt the rulings of our sister circuits and therefore hold that a
district court must consider financial ability in the award of sanctions. Because the
district court failed to do so in this case, the award of the amount of sanctions is
vacated, and the matter is remanded for further proceedings. On remand, the district
court should permit supplementation of the record with financial affidavits sufficient
to permit consideration of financial ability.
90
Matter of Yagman, 796 F.2d 1165, 1185 (9th Cir.), amended on other grounds on reh’g
denial, 803 F.2d 1085 (1986), mandamus granted on other grounds sub. nom Brown v. Baden,
815 F.2d 575, cert. denied, 484 U.S. 963, 108 S.Ct. 450, 98 L.Ed.2d 390 (1987).
91
White v. General Motors Corp., Inc., 908 F.2d 675, 684-685 (10th Cir. 1990), cert.
denied, 498 U.S. 1069, 111 S.Ct. 788, 112 L.Ed.2d 850 (1991)(the other factors include (1) the
reasonable of the opposing attorney’s fees; (2) the minimum to deter; and (3) factors relevant to
the severity of the Rule 11 violation). In White, the plaintiffs submitted financial affidavits
stating that they would be forced to file bankruptcy is the court imposed the requested fees. Id.Although the Tenth Circuit sympathized that these statements were “general and unhelpful,” it
remanded to permit the plaintiffs to supplement the record, holding that if the plaintiffs remained
uncooperative the court could ignore ability to pay in levying sanctions. Id.92
In re Kunstler, 914 F.2d 505, 524 (4th Cir. 1990), cert. denied sub. nom Kunstler v.
Britt, 499 U.S. 969, 111 S.Ct. 1607, 113 L.Ed.2d 669 (1991).
25
V. CONCLUSION
For the reasons stated above, the district court's award of sanctions as to
Alderman, in his official capacity, is REVERSED and VACATED. The district
court’s award of attorney’s fees as sanctions against Baker and Dandar is
AFFIRMED. However, the district court’s award of the amount of sanctions is
REVERSED, and the matter is REMANDED for further proceedings consistent with
this opinion.93
93
A separate application and affidavit were filed by Alderman, individually, in support
of his claim for attorney’s fees and costs. The district court’s award of the amount fees as to
Alderman will be limited to this application and affidavit.
26