This paper is evolving into an overview of Rule 11 in the 11th Circuit. Notwithstanding the scholarly review of issues associated with Rule 11, lawyers who call me still say, skip the Law Review, "Just tell me what I need to know."

So we will.

All practioners still want the overview. So, here it is:

I. OVERVIEW

What is important to know about Rule 11? The following:

A. Synopsis of Rule 11

Rule 11 does not Apply to Discovery; Rule 37 applies to discovery.

If your Signature is on the pleading in question, even (Lawyer, signed with express permission), you and your lawfirm are at risk;

Your signature indicates to the Court that you have researched factually and legally the pleading before the Court (duty of reasonable inquiry) and that you stand behind the pleadings;

Your signature is your statement to the Court that your claims are supported by facts (or you have a reasonable belief that discovery will support your claims) and your claims are supported by law (or a good faith request to change the law);

If a Rule 11 Motion is filed, it must be served on opposing Counsel (but not filed with the Court) 21 days before it may be presented to the Court. During that 21 day period, you or your opponent may withdraw the claim or pleading without incurring any Rule 11 sanctions. This 21 period is the "safe harbor." Securities Litigation has no safe harbor and political changes may cause class actions to soon have no safe harbor;

If the Court seeks Rule 11 Sanctions sua sponte, it must provide notice and an opportunity to be heard. Additionally, sua sponte sanctions are governed by imposition of "the lowest sanction necessary to deter [the] conduct";

Types of Sanctions: While evidence is anecdotal, Rule 11 sanctions seem to be used by the Courts to deter abusive conduct and the punishment meted out is usually a threat that you will have to pay the other sides attorney’s fees. Other types of sanctions, creative sanctions, striking pleadings, answers, seem more often to flow from discovery sanctions, not Rule 11 sanctions. However, this author cannot find a formal study of this issue;

11^th Circuit: The 11^th Circuit is currently very concerned with expansive and "Shotgun Pleadings." In the 11^th Circuit plead Complaints and Answers concisely. Beware of charges of extortion in the pleadings, press releases in violation of Court Orders, and do not hesitate to seek motions for a more definite statement. The 11^th Circuit has instructed the District Courts to seek Repleader of vague and overbroad pleadings sua sponte.

Any serious discussion of the Rule, must start with the text of the statute. Rule 11, in its entirety, states as follows:

(a) Signature. Every pleading, written motion, and other paper shall be signed by at least one attorney of record in the attorney's individual name, or, if the party is not represented by an attorney, shall be signed by the party. Each paper shall state the signer's address and telephone number, if any. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party.
(b) Representations to Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, --
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
(c) Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.
(1) How Initiated.
(A) By Motion. A motion for sanctions under this rule shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subdivision (b). It shall be served as provided in Rule 5, but shall not be filed with or presented to the court unless, within 21 days after service of the motion (or such other period as the court may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected. 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. Absent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees.
(B) On Court's Initiative. On its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto.
(2) Nature of Sanction; Limitations. A sanction imposed for violation of this rule shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated. Subject to the limitations in subparagraphs (A) and (B), the sanction may consist of, or include, directives of a nonmonetary nature, an order to pay a penalty into court, or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorneys' fees and other expenses incurred as a direct result of the violation.
(A) Monetary sanctions may not be awarded against a represented party for a violation of subdivision (b)(2).
(B) Monetary sanctions may not be awarded on the court's initiative unless the court issues its order to show cause before a voluntary dismissal or settlement of the claims made by or against the party which is, or whose attorneys are, to be sanctioned.
(3) Order. When imposing sanctions, the court shall describe the conduct determined to constitute a violation of this rule and explain the basis for the sanction imposed.
(d) Inapplicability to Discovery. Subdivisions (a) through (c) of this rule do not apply to disclosures and discovery requests, responses, objections, and motions that are subject to the provisions of Rules 26 through 37.

B. No Application to Discovery

Inapplicability to Discovery. Subdivisions (a) through (c) of this rule do not apply to disclosures and discovery requests, responses objections, and motions that are subject to the provisions of Rules 26 through 37. This rule is self explanatory.

C. Signature

D. Reasonable Inquiry

Section (b) of Rule 11 states that the presenter (movant) of any pleading represents to the court, that the pleading is presented after a reasonable inquiry, that it is not interposed for an improper purpose, that the claims are supported by existing law (or a credible argument to change the law), that real evidence does or will (through discovery) support the pleadings or the denials.

By presenting a pleading to the Court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances and it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

E. Claims Are Supported By Law

By the very act of filing, you make the statement to the Court that your client’s claims and defenses are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.

The allegations and other factual contentions have evidentiary support, or will have support after discovery, and denials are presented with the same contentions or support.

F. Rule 11 Requires A Separate Motion

A motion for sanctions under Rule 11 shall be made separately from other motions and shall describe the specific conduct alleged to be in violation of Rule 11. The Motion may not be filed and pursued, if within 21 days after service of the Motion on the opposing party or the opposing party ceases pursuing the offending claim. The cessation seems to be as simple as a telephone call or letter stating the party no longer intends to pursue that offending claim or a particular course of action.

G. The Safe Harbor

The 21 day waiting period is the safe harbor. 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. In one of the few cases in the 11th Circuit interpreting the "safe harbor" provisions, the 11th Circuit allowed sanctions to stand where the sanctioned plaintiff was only given one (1) day's service of the motion. In Turner v. Sungard Business Systems, Inc., 91 F.3d 1418 (11th Cir. 1996), Sungard served the Rule 11 motion one (1) day before the hearing on sanctions. Turner contended that he was entitled to a 21 day grace period and that it was improper for the district court to punish him without affording him the 21 period. The 11th Circuit has held that if a party or attorney is sanctioned pursuant to a show cause order, the 21 safe harbor of Rule 11 (c)(1)(A) is not required. The rule appears to require a 21 period in the absence of a show cause order. Thus, a show cause order may shorten the 21 day waiting period.

In a new wrinkle, the 4^th Circuit has held that the failure of the target party to object to noncompliance with the 21 day safe harbor is considered a waiver of the 21 day safe harbor. This author is not sure he understands the 4^th Circuit’s rationale (except perhaps they hate the safe harbor), since the language of the statute seems to be mandatory. [The Dissent points the oversight out for the Majority]. However, the 4^th Circuit has held that if your opponent violates the 21 waiting period and merely files the motion, you must object. Otherwise, you have waived the safe harbor. Rector v. Approved Federal Savings Bank, 4^th Cir., Case No. 01-1191 (09.11.01). "Rector and the Trust's failure to raise Approved's failure to comply with the 21-day safe harbor provision in the district court in the first instance constituted a waiver of this argument." Id.

There is no safe harbor in Securities Litigation. The Private Securities Litigation Reform Act of 1995 ("PSLRA") makes Rule 11 sanctions mandatory, if the test for Rule 11 is found by the Court.

In 1995, Congress passed the PSLRA to give "teeth" to Rule 11, "[r]ecognizing . . . the need to reduce significantly the filing of meritless securities lawsuits without hindering the ability of victims of fraud to pursue legitimate claims, and [because] . . . [e]xisting Rule 11 has not deterred abusive securities litigation." Simon DeBartolo Group, L.P. v. Richard E. Jacobs Group. Inc., 186 F.3d 157, 166-67 (2d Cir. 1999) (internal quotation marks omitted). The PSLRA, which added section 21D(c), codified at 15 U.S.C. _ 78u-4(c)(1), to the Exchange Act, requires that a district court make specific findings as to a party's compliance with Federal Rule of Civil Procedure 11(b) at the conclusion of a case arising under the Exchange Act, see Simon DeBartolo Group, L.P., 186 F.3d at 167 (citing 15 U.S.C. _ 78u-4(c)(1)), and also mandates the imposition of sanctions if the court determines that Rule 11 has been violated. See 15 U.S.C. _ 78u-4(c)(2). If a court finds a Rule 11 violation, "a rebuttable presumption [arises] that the appropriate sanction for a complaint that substantially fails to comply with Rule 11(b) 'is an award to the opposing party of the reasonable attorneys' fees and other expenses incurred in the action.'" Gurary v. Winehouse, et al, d/b/a Wall Street Equities, 2^nd Cir., No. 00-7151, (12.19.00).

On its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto. In an effort to curtail the satellite litigation seeking attorney's fees and costs as some type of reparations, the Rule 11 limits and tailors the Sanctions that may be awarded. A district court now is compelled to impose the lowest sanction necessary to deter conduct. The court is expressly allowed to fashion creative sanctions to deter repetition.

J. Type of Sanctions

Monetary sanctions may not be awarded on the court's initiative unless the court issues its order to show cause before a voluntary dismissal or settlement of the claims made by or against the party which is, or whose attorneys are, to be sanctioned.4 As developed in the case law under the Rule 11, no award of sanctions may stand, if the court does not describe in some detail its reasons for imposing sanctions.

The Rule 11 Order must be clear. When imposing sanctions, the court must describe the conduct determined to constitute a violation of this rule and explain the basis for the sanction imposed. It is reversible error for the court to fail to set forth in specific detail the sanctionable conduct. FDIC v. Calhoun, 34 F.3d 1291 (5th Cir. 1994).

II. THE CURRENT STATUS OF RULE 11 IN THE 11^TH CIRCUIT

Last year's review contained the bombshell case of Michael T. Byrne vs. Carman Nezhat, MD, et al, 261 F3d 1075 (11^th Cir. 2001). If you have not read it, you must. It is more important than the updated cases for 2002. The highpoints are Rule 11 sanctions may be awarded for Economic Extortion and filing random Shotgun Pleadings. The District Courts are admonished to wade in on shotgun pleadings, saction counsel and require Repleader.

Three Significant Opinions were issued by the 11th Circuit in 2002. They are:

A. John Martin, Brian Neiman, Saul Smolar vs. Automobili Lamborghini Exclusive, Inc., et al., United States Court of Appeals for the 11th Circuit, Appeal No. 00-12489, No. 01-13659, No. 01-15443, ____ F.3d ____ (2002).

PER CURIAM:

This appeal is about fraud on the courts and about sanctions.

Appellants, Brian Neiman ("Neiman"), Saul Smolar ("Smolar") and John Martin ("Martin"), (together "Appellants"), in Case No. 00-12489, appeal the district court's order sanctioning them for perpetration of fraud on the court. In Case No. 01-13659, Appellants appeal the district court's order awarding more than one and a half million dollars in attorneys' fees and costs to Appellees. In Case No. 01-15443, Neiman appeals the district court's order denying his motions to enforce an alleged agreement with Automobili Lamborghini USA, Inc. and Automobili Lamborghini, SpA for the liquidation of Neiman's property. We affirm in part and vacate in part and remand.

BACKROUND

This case began in June 1998, when Martin, as Plaintiff, filed a complaint against Automobili Lamborghini Exclusive, Inc., Automobili Lamborghini U.S.A., Inc., Automobili Lamborghini, SpA, and Prestige Imports, Inc. (together "Appellees"). Martin alleged claims under the Magnuson-Moss Act, 15 U.S.C. § 2310(d), along with several Florida statutory and common law claims. The claims involved a defective Lamborghini Diablo (the "Diablo") Plaintiff purportedly purchased. While pursuing his case in federal court, Martin filed a claim with a Florida arbitration board pursuant to the Florida Lemon Law. Fla. Stat. § 681.10, et seq. The federal district court enjoined the arbitration board's proceedings. Plaintiff appealed the injunction. We ultimately dismissed that appeal as moot.

The case proceeded on in the district court while the appeal of the injunction was pending here. Discovery in the case was referred to Magistrate Judge Seltzer. During the course of discovery, Magistrate Seltzer sanctioned Appellants five separate times. Evidence emerged during discovery that Martin was not the owner of the Diablo and that the lawsuit was filed in bad faith.

Appellees filed a Motion to Dismiss for Fraud upon the Court. At the end of April 1999, the district court referred all pending motions to Magistrate Judge Johnson. After conducting many hearings, Magistrate Johnson issued her 50-page report and recommendation concluding that the action constituted a fraud upon the court. Magistrate Johnson recommended dismissal of the case along with other severe sanctions on Appellants. The district court adopted the report and recommendations and imposed sanctions on Appellants. Appellants appeal from this order.

The district court directed Appellees to submit fee applications and referred the matter to Magistrate Johnson. After receiving Appellees' applications for attorneys' fees, Magistrate Johnson, although indicating that she was not inclined to consider Appellants' ability to pay in setting the sanctions, allowed Appellants to submit evidence on their financial situation. After conducting hearings, including a session on Appellants' financial situation, Magistrate Johnson issued a report and recommendation. She concluded that Appellees should be awarded the amount of fees and costs sought in the fee applications, less certain deductions which the Appellees had made voluntarily at the fee hearings.

Magistrate Johnson determined that, under the court's inherent powers, the Appellants' ability to pay the sanctions need not be considered. Magistrate Johnson, however, stated that, even if ability to pay were considered, Appellants had failed to demonstrate they lacked the ability to pay the sanctions. Magistrate Johnson concluded that, with their combined assets, Appellants had the ability to pay the full amount of sanctions. The district court adopted Magistrate Johnson's recommendation and held Appellants jointly and severally liable for more than one and a half million dollars in attorneys' fees and costs. Appellants appeal from this order.

After the district court entered its order quantifying the monetary sanctions, Neiman filed an emergency motion to enforce an alleged agreement with Automobili Lamborghini USA, Inc. and Automobili Lamborghini, SpA to liquidate his personal property. The district court denied the motion. The district court concluded that Neiman had failed to evidence a total agreement between the parties. Neiman then filed a "renewed motion" to enforce this alleged agreement, which the district court denied for the same reasons as the first. Neiman appeals. We discuss each of the appeals in turn.

DISCUSSION

* Imposition of Sanctions (Case No. 00-12489)

Courts have the inherent authority to control the proceedings before them, which includes the authority to impose "reasonable and appropriate" sanctions. See Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1545 (11th Cir. 1993). A court also has the power to conduct an independent investigation to determine whether it has been the victim of fraud. See Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S. Ct. 2123, 2132, 115 L.Ed. 2d 27 (1991); see also In re E.I. DuPont De Nemours & Company-Benlate Litigation, 99 F.3d 363, 367 (11th Cir. 1996) (concluding that district court had jurisdiction to conduct an independent civil action for sanctions based upon allegations of fraud in another case).

We review the district court's imposition of sanctions for abuse of discretion. See Barnes v. Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998). To exercise its inherent power a court must find that the party acted in bad faith. See In re Mroz, 65 F.3d 1567, 1575 (11th Cir. 1995).

We are aware that the sanctions ordered in this case are severe. (1) The sanctions, however, reflect Appellants' continual and flagrant abuse of the judicial process in this case. (2) The district court was clearly justified in imposing severe sanctions against Appellants.

The magistrate judge's report of 50 pages and the district court's order of 22 pages adequately present and address all remaining questions of law and fact. We see no reason to expend further judicial resources repeating what other judges have already written. (3)

o Amount of Monetary Sanctions (Case No. 01-13659)

We next consider whether the district court abused its discretion by imposing a monetary sanction of more than one and a half million dollars jointly and severally on Appellants. Each Appellant contends that the district court erred by failing to consider his ability to pay as a limiting factor. (4)

We review for abuse of discretion the district court's imposition of sanctions in a certain amount. See Barnes, 158 F.3d at 1214. "A district court abuses its discretion if it applies an incorrect legal standard, follows improper procedures in making the determination, or makes findings of fact that are clearly erroneous." Chicago Tribune Co. v. Bridgestone/Firestone Inc., 263 F.3d 1304, 1309 (11th Cir. 2001).

This Court has not explicitly determined whether a party's ability to pay must be considered under the court's inherent power to impose a sanction. The Supreme Court has warned that "[b]ecause of their very potency, inherent powers must be exercised with restraint and discretion." Chambers, 501 U.S. at 44, 111 S. Ct. at 2132. The Supreme Court noted that "[a] primary aspect of that discretion is the ability to fashion an appropriate sanction for conduct which abuses the judicial process." Id. at 44-45, 111 S. Ct. at 2132-33.

We conclude that, when exercising its discretion to sanction under its inherent power, a court must take into consideration the financial circumstances of the party being sanctioned. Cf. Baker v. Alderman, 158 F.3d 516, 528-29 (11th Cir. 1998) (imposing sanctions under Civil Rights Act and Rule 11); see also Byrne, 261 F.3d at 1098-99 n. 53 (concluding that the district court's consideration of parties' ability to pay sanctions imposed under Rule 11, 28 U.S.C. § 1927, and the court's inherent power was in accord with Baker). The inherent power to impose sanctions allows courts to vindicate their judicial authority, but such power must be used to fashion "an appropriate sanction." Chambers, 501 U.S. at 44-45, 111 S. Ct. at 2132-33.

Sanction orders must not involve amounts that are so large that they seem to fly in the face of common sense, given the financial circumstances of the party being sanctioned. What cannot be done must not be ordered to be done. Miccosukee Tribe v. South Florida Water Management District, 280 F.3d 1364, 1370 (11th Cir. 2002)(discussing injunctions). And, sanctions must never be hollow gestures; their bite must be real. For the bite to be real, it has to be a sum that the person might actually pay. A sanction which a party clearly cannot pay does not vindicate the court's authority because it neither punishes nor deters. Cf. Malautea, 987 F.2d at 1545 (concluding that sanctions imposed under court's inherent power "justly punished" the offending parties and would hopefully deter others from engaging in similar conduct).

The magistrate judge and the district court did consider Appellants' combined financial ability to pay the sanctions issued in this case and determined that the combined assets of the parties were sufficient to pay the sanctions imposed. Because Appellants were held jointly and severally liable, however, each was individually responsible for the entire obligation. See Black's Law Dictionary, 926 (7th ed. 1999) (defining joint and several liability). Although the district court correctly determined that each Appellant was liable for stern sanctions, the court abused its discretion by imposing joint and several liability without considering whether each Appellant individually had the ability to pay the sanction. See Sassower v. Field, 973 F.2d 75, 81 (2d Cir. 1992) (concluding that imposition of joint liability for full amount of sanctions, imposed in part under the court's inherent authority, was improper in absence of evidence that party's financial resources permitted an award of that size).

Martin's affidavit revealed a net worth of $32,300 and a gross income in 1999 of $43,700. The district court accepted these representations as true. Nothing in the record suggests that Martin is likely to come into serious money in the future. Based upon this record, we now doubt that Martin has the ability to pay a sanction of more than one and a half million dollars, or even his proportionate share of this sanction. For Neiman, if we did not have to remand anyway, we might well say that the record was sufficient to demonstrate no abuse of discretion by the district court. Neiman's affidavit revealed a net worth of more than two million dollars, and he did not appear at the hearing or submit additional evidence showing that he lacked the ability to pay the pertinent sum. Smolar's ability to pay 1.5 million dollars seems the closest question. Although Smolar's affidavit revealed a net worth of $25,415 and an income in 1999 of just over $90,000, he testified that, in 1999, his law office had fee revenues of $939,818. Although Smolar stated that he paid $632,000 of that amount to Neiman, he was unable to provide written financial tabulations for these amounts. Despite these observations, we today make no final decision about ability to pay.

The district court is best suited to determine in the first instance the sanction to be imposed upon each Appellant in the light of their individual financial situation. We therefore vacate the district court's order imposing more than one and a half million dollars in sanctions jointly and severally against Appellants, and we remand for the district court to assess the amount of sanctions against each Appellant as appropriate in the light of his individual resources. (5)

* * *

CONCLUSION

We AFFIRM the district court's order imposing sanctions in Case No. 00-12489, including dismissal of the case with prejudice, we AFFIRM the district court's order denying Neiman's emergency motions in Case No. 01-15443, and we VACATE the district court's order in Case No. 01-13659 awarding more than one and a half million dollars in attorneys' fees and costs as the joint and several obligation of Appellants. We REMAND for a determination of the amount of each Appellant's sanctions, taking into consideration the person's ability to pay.

AFFIRMED IN PART; VACATED IN PART AND REMANDED. (6)

FOOTNOTES

1. Appellants were sanctioned in this way:

1) the case was dismissed with prejudice,

2) Smolar, Neiman, and Martin have joint and several liability for Appellees' attorneys' fees and costs for the entire action,

3) Saul Smolar's actions in this case were called to the attention of the Federal Bar and of the Grievance Committee of the Florida Bar in regard to Smolar's action,

4) Appellants' behavior during the lawsuit was called to the attention of the State Attorney and the United States Attorney to determine if legal violations had been committed.

2. Among the abuses the magistrate and district courts found to have been perpetrated by Appellants are these acts: 1) misleading the court about the real party in interest in the case, 2) engaging in extensive discovery abuse to obstruct revelation of the known falsities in the complaint, 3) using letters threatening class-action litigation to extort settlement offers from Appellees without any intention of filing a case, and 4) filing with the court many documents where the signatures of lawyers were forged by Neiman.

3. Because the district court had the authority under its inherent power to sanction Appellants, we do not discuss Appellants' claims in Case Nos. 00-12489 and 01-13659 that the district court erred under 28 U.S.C. § 1927 and the Federal Rules of Civil Procedure when imposing monetary sanctions. See Chambers, 501 U.S. at 50, 111 S. Ct. at 2135-36 (concluding that federal courts are not forbidden from sanctioning bad-faith conduct under their inherent power simply because the conduct could also be sanctioned under a statute or the Rules); see also Byrne v. Nezhat, 261 F.3d 1075, 1121 (11th Cir. 2001) (stating that, even if monetary sanctions were not justified under Rule 11, the award of sanctions could be affirmed if the sanctions were proper under the court's inherent authority). Smolar also contends that the district court erred by holding him in civil contempt. The magistrate judge recommended that the district court hold Smolar in civil contempt. Although the district court sanctioned Smolar and ordered him to show cause why he should not be held in contempt, the district court did not actually hold Smolar in contempt.

4. To the extent Appellants claim that they did not receive adequate notice the court would impose monetary sanctions under its inherent powers, and that the district court erred in determining their ability to pay without considering whether some assets would be exempt property under bankruptcy law, the claims are without merit.

5. We do not direct the district court to accept additional evidence or to hold additional evidentiary hearings on Appellants' ability to pay, although we do not prohibit the district court from doing so if it chooses. Magistrate Judge Johnson permitted Appellants to submit evidence of their ability to pay and even conducted a hearing on the subject. Because Appellants were provided an opportunity to build a record on their ability to pay, we leave the matter of further hearings and more evidence to the district court's discretion. We also are not limiting the district court's discretion to impose joint and several liability for the sanctions upon the parties. We only say that a party may not be held jointly liable for an amount of sanctions the party does not have the ability to pay.

6. Appellants request that upon remand the case be reassigned to a different district court and magistrate judge to promote neutrality. Appellants have presented no good reason for reassignment.

* * *

B. Oxford Asset Management, LTD., et al., vs. Michael Jaharis, Daniel M. Bell, et al., United States Court of Appeals for the 11th Circuit, Appeals No. 99-11690, No. 00-13220, _____ F.3d ____ (2002).

In this securities action (our No. 99-11690), plaintiff-appellant Oxford Asset Management, Ltd. (Oxford) appeals the dismissal of its 1933 Act claims. (2) We Affirm.

Oxford also appeals (in our No. 00-13220) the district court's award of $520,091.82 in legal fees to the Kos and Underwriter defendants. We affirm in part, reverse in part, and vacate and remand.

Facts and Proceedings Below

1. Appeal of the dismissal (No. 99-11690)

Kos Pharmaceuticals, Inc. (Kos) is a pharmaceutical company that develops and markets prescription drugs. Kos completed an initial public offering of its common stock on March 12, 1997, selling 4,772,500 shares at $15 per share. From October 21, 1997, to October 24, 1997, Kos completed a secondary offering of its common stock. On October 21, 1997, Kos filed the prospectus and registration statement for the secondary offering with the Securities and Exchange Commission. The offering price was $42.75. A total of 3,625,000 shares were sold in the secondary offering. Kos sold 1,085,000 shares. Michael Jaharis, Kos's founder, majority shareholder and chairman, sold 2,390,000 shares. Daniel Bell, Kos's president and chief executive officer, sold 150,000 shares.

Kos's only prescription drug product that was publicly available at the time of the secondary offering was an extended release niacin preparation called Niaspan. Niaspan was approved by the Food and Drug Administration in July 1997. Kos began shipping Niaspan to wholesalers in August 1997, and its sales force began detailing physicians in September 1997. On November 12, 1997, a Salomon Brothers analyst, Robert Uhl, released a report in which he slashed Kos's projected revenue for 1998 by half, from $92 million to $46 million, and changed the rating of Kos's stock from buy to hold. The next day, the price of Kos's stock plummeted from $30-15/16 to $16 9/16 per share. Uhl's report was premised on estimates (3) of the numbers of new and refill prescriptions for Niaspan during the first eight weeks that Kos's sales force marketed Niaspan. Uhl's conclusions were based on the assumption (that he and many other pharmaceutical analysts apparently share) that the number of new prescriptions filled during the eighth week of a new prescription drug product's initial marketing is particularly predictive of the market success the product will enjoy. The eighth week of Niaspan's marketing ended on October 31, 1997. Uhl stated that to achieve the original $92 million revenue projection, 5,000 new prescriptions of Niaspan during the eighth week were needed. IMS America estimated that only 708 new prescriptions for Niaspan were filled during the eighth week. Uhl explained that, considering the small size of Kos's sales force and their program of providing sample packs (which contain a three-week supply of Niaspan) to physicians, he would have been satisfied with 4,000 new prescriptions during week eight. Uhl concluded by noting that due to the sampling program and the anti-niacin bias of many physicians, Niaspan could be the first drug for which the "initial weekly prescriptions are not indicative of the product's ultimate success."

Kos's fifty-two page prospectus, filed October 21, 1997, explained the many risks of investing in Kos, among them: 1) "The Company's ability to successfully commercialize Niaspan will depend significantly on the acceptance of Niaspan by physicians and their patients"; 2) Niaspan has been designed to minimize the severity of the side effect of flushing, but most patients taking Niaspan will experience flushing and "there can be no assurance . . . that patients using Niaspan will not suffer episodes of flushing that they consider intolerable."; 3) Kos's clinical trials indicate that less than one per cent of patients taking Niaspan experience clinically significant elevations in liver enzymes, but physicians have historically been reluctant to prescribe niacin preparations because of such risk and it is possible that the actual incidence of hepatotoxicity will exceed one per cent; 4) Kos has fewer marketing resources than its competitors, a smaller sales force, and "limited" marketing experience, which could prevent Niaspan from achieving "market acceptance"; 5) "during the initial months following the launch of Niaspan, many physicians may start only a limited number of selected patients on Niaspan"; 6) physicians' anti-niacin bias combined with the distribution of three-week starter packs (which are dispensed without prescription) may result in only a modest increase in Niaspan prescriptions for the first three to six months of its marketing; and 7) since its inception, Kos had lost about $80 million and there can be no assurance that Kos will ever achieve profitability.

On August 10, 1998, Oxford and Lowey, Dannenberg & Knapp, P.C. (Lowey) filed this suit in the northern district of Illinois. On December 7, 1998, the action was transferred to the southern district of Florida. Plaintiffs brought this action as a proposed class action. (4) Oxford proposed to represent plaintiffs that purchased Kos stock in the secondary offering. Lowey proposed to represent plaintiffs that purchased Kos stock on the open market between July 29, 1997, and November 13, 1997. The complaint alleged violations of sections 11(a), 12(a)(2) and 15 of the 1933 Act, 15 U.S.C. §§ 77(k)(a), 77l(a)(2) and 77(o), sections 10(b) and 20(a) of the 1934 Act, 15 U.S.C. §§ 78(j)(b) and 78(t)(a), and Rule 10(b)(5), 17 C.F.R. § 240.10b-5. The complaint also alleges common law fraud, negligent misrepresentation and breach of fiduciary duty. All of the causes of action in plaintiffs' original complaint are based on defendants' alleged material misrepresentations and omissions (in press releases, the prospectus, the registration statement, and other SEC filings) concerning the safety, efficacy, tolerability and sales volume of Niaspan. On January 7, 1999, the Kos defendants moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). The Underwriter defendants so moved on February 8, 1999. At the dismissal hearing, the plaintiffs advanced a new basis for recovery, namely that the prospectus should have disclosed the first six weeks of IMS America's estimates of Niaspan's prescription volume. In the interests of justice, the district court considered this as an amended claim. On May 19, 1999, the district court granted the motions to dismiss, holding that the omission of the prescription volume data was immaterial as a matter of law and that plaintiffs' allegations as to the safety, efficacy, tolerability and sales volume of Niaspan were mere legal conclusions masquerading as facts. On August 3, 1999, the district court dismissed the complaint with prejudice.

Oxford appeals the dismissal of its 1933 Act and the common law claims of fraud and negligent misrepresentation, but admits that dismissal of the common law claims was proper if dismissal of the federal claims was proper. Oxford does not appeal the dismissal of its 1934 Act claims. Lowey, which was not named as a plaintiff in the 1933 Act counts, does not appeal to this Court.

2. Appeal of the attorneys' fees award (No. 00-13220)

On July 6, 1999, the Kos defendants moved for sanctions pursuant to the Private Securities Litigation and Reform Act (PSLRA) and Rule 11. On July 16, 1999, the Underwriter defendants so moved. On January 31, 2000, the district court granted the motions for sanctions, finding that the plaintiffs were deliberately indifferent to the lack of factual support for the allegations in the complaint and that, therefore, the complaint was objectively frivolous. On May 22, 2000, the district court awarded $502,576.82 in attorney's fees to the defendants. On June 7, 2000, the district court clarified its earlier order and increased the award to $520,091.82. Oxford appeals the district court's grant of defendants' motions for sanctions and its award of attorney's fees to defendants.

3. Consolidation

This Court subsequently granted Oxford's motion to consolidate the appeals for oral argument.

* * *

IV. Attorneys' Fee Award

15 U.S.C. §§ 77Z-1(c) and 78u-4(c) require the district court, upon final adjudication of claims brought under the 1933 and 1934 Acts, respectively, to include specific findings as to each party's and each attorney's compliance with Fed. R. Civ. P. 11(b). These subsections also provide for a presumption that the proper sanction for a Rule 11(b) violation is an award, to the opposing party, of the reasonable attorney's fees and costs incurred as a direct result of the violation.

The district court found that Oxford's legal arguments were not frivolous and that Oxford performed an adequate investigation before filing its complaint, but that after such investigation a reasonable attorney would have realized that there was no evidentiary support for any of the allegations in the complaint and that such support was unlikely to be unearthed by further investigation or discovery. The district court concluded that the plaintiffs were deliberately indifferent to the lack of evidentiary support for the conclusory allegations in the complaint and that plaintiffs' claims were objectively frivolous under Fed. R. Civ. P. 11(b)(3). The district court awarded $335,686.55 in fees and expenses to the Kos defendants and $184,405.27 to the Underwriter defendants. The plaintiffs and their counsel were each responsible for half of the award, or $260,045.91.

"An appellate court reviews all aspects of the district court's Rule 11 determination for an abuse of discretion." WorldWide Primates, Inc. v. McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996).

The district court concluded that plaintiffs' claim regarding the omission of the prescription data was "not well grounded in fact" because it was essentially an amended claim that was advanced for the first time at the dismissal hearing. In a footnote, the district court observed that: "Just because, 'in the interests of justice,' the Court decided to entertain this 'essentially amended claim' in ruling upon the motions to dismiss, does not mean that the Court has to read Plaintiffs' presentation at oral argument into the Complaint when judging whether Plaintiffs' claims were well grounded in fact." It is true that the complaint's reference to the Uhl report is only in the context of showing that the $1.5 million in Niaspan sales that occurred in September 1997 did not result from prescriptions, and that the plaintiffs did not allege that the prescription data should have been included in the prospectus until the dismissal hearing. The district court appears to have concluded that it is proper to consider such a claim in a motion to dismiss, but then fail to consider the factual allegations advanced in support thereof when resolving a motion for sanctions. The district court certainly did not have to consider the claim in resolving the motions to dismiss. However, in finding that the thus amended claim was without evidentiary support simply because it was not advanced until the dismissal hearing (and without considering the factual allegations advanced in support of the claim at such hearing), the district court abused its discretion. We conclude that this claim had factual support. The claim fails because we reject Oxford's legal argument as to a registrant's duty to disclose the prescription data under Item 303(a)(3)(ii). This argument, though ultimately rejected, was not frivolous and was adequately supported by the pleaded facts concerning the data and its predictive value.

As to plaintiffs' other claims, we cannot say that the district court's findings as to their lack of evidentiary support represented an abuse of discretion. Therefore, the district court's finding that plaintiffs and their counsel violated Rule 11(b)(3) in advancing these other claims is affirmed.

* * *

Conclusion

For the reasons stated, the district court's dismissal of Oxford's federal claims, with prejudice, is affirmed. It follows that the district court's dismissal of Oxford's state and common law claims must also be affirmed.

The district court's finding that the plaintiffs and their counsel violated Rule 11(b)(3) by being deliberately indifferent to the lack of factual support for the claims asserted in the complaint is affirmed, except as to the amended claim concerning the omission of the preliminary prescription sales data, which is reversed. The district court's award of fees and expenses is vacated and remanded so that the district court can properly apportion the award, i.e. exclude fees and expenses incurred in defending against the lone non-frivolous claim.

In No. 00-11690, the judgment is AFFIRMED;

In No. 00-13220, the judgment is VACATED and the

matter is REMANDED for further proceedings consistent herewith

* * *

C. William Riccard, et al. vs. Prudential Insurance Company et al., United States District Court for the 11th Circuit, Appeals No. 01-11373, No. 01-15209, No. 01-15219, ___ F.3d ____ (2002).

CARNES, Circuit Judge:

William Riccard was demoted by his employer, Prudential Insurance Company, and later left its employ after being placed on disability. The result of Riccard's demotion was to lessen the amount of disability payments he received. In response, Riccard launched a bitter campaign against Prudential that has included the filing of four lawsuits; the filing of complaints alleging misconduct by Prudential with the Securities and Exchange Commission, the United States Attorney's Office, the Banking and Insurance Department of one state, and the Agricultural Department of another; the filing of a motion for sanctions against Prudential and some of the attorneys representing it; and the filing of ethical complaints with the Bar Associations of two states against those attorneys. The district court has attempted to dispose of Riccard's lawsuits in a principled fashion and to do what it could to minimize the burden of his many filings on the judicial system and others.

We have before us appeals that Riccard has filed contesting orders and judgments, including sanctions and civil contempt orders, entered against him in the second and third of his four lawsuits. His attorney, Robert Rasch, is also an appellant to the extent necessary to challenge sanctions imposed against Rasch. In all, Riccard and Rasch challenge a total of nine orders the district court entered in the two lawsuits. We will take up each of them after setting out some background.

I. BACKGROUND

Riccard began working for Prudential in 1970 as a sales representative and was eventually promoted to sales manager. In July 1995, he took leave from his job on short-term disability, and in September of that year his doctor informed Prudential that Riccard could return to work. Prudential requested that he return. After two weeks back at work, Riccard allegedly suffered an "industrial accident" and again took a short-term disability leave. In November 1995, he was demoted from his position as sales manager back to sales representative. He was subsequently placed on long-term disability leave and received disability payments from Prudential until November 1999, at which time he began collecting his pension.

Approximately a year after going on long-term disability, Riccard began

filing a series of lawsuits against Prudential. We will refer to them in the order in which they were filed as Riccard I - IV.

* * *

E. The Rule 11 Sanctions Issues in Riccard II

(Orders 5 & 6 )

In Riccard II, attorney Rasch filed on behalf of his client Riccard a motion for Rule 11 motion sanctions against Prudential, alleging that it had misrepresented its NASD membership status to the district court in Riccard I, to the United States Court of Appeals for the Third Circuit in connection with a case brought by former Prudential sales agents alleging retaliation, to the NASD arbitration panel that heard Riccard II, and to the district court when it moved to compel arbitration in Riccard II. Specifically, the motion alleged that Prudential made misrepresentations to the district court by: (1) citing to the Third Circuit decision in In re Prudential Ins. Co. of Am. Litigation, 133 F.3d 225 (3rd Cir. 1998), as support for its arguments in favor of compelling arbitration in Riccard's case, without explaining to the court that the reference in In re Prudential Ins. Co. of Am. Litigation to Prudential's NASD membership was the result of Prudential's admitted failure to correct that court's misunderstanding of Prudential's membership status until after the decision issued; and (2) stating in a February 10, 1998 memo to the court filed in connection with its motion to compel arbitration that it was in the process of "re-registering" with the NASD when it did not file a new application for membership until March 1998.

The district court denied the sanctions motion and, after notice and a hearing, imposed sanctions on Riccard and Rasch for filing it. The court determined the sanctions motion was baseless and filed in bad faith because Riccard and Rasch lacked a reasonable factual basis for the motion. That was true, the court explained, because: (1) Prudential had provided them, prior to the time they filed the Rule 11 motion, with a copy of the February 10, 1998 memo it submitted to the court stating that it had resigned its NASD membership in 1996 but was in the process of re-registering; and (2) they knew that the district court had earlier, in April 1998, compelled arbitration in Riccard II on the basis of Pruco's NASD membership, making any argument about Prudential's own membership irrelevant to the basis of the court's order. As a sanction for filing the Rule 11 motion, Riccard was enjoined from filing any new actions against Prudential without first obtaining leave of court, and Rasch was ordered to pay Prudential $10,000.

Riccard and Rasch challenge both the district court's decision to impose sanctions against them for filing that motion as well as the nature and extent of the sanctions imposed. We review a district court's Rule 11 determinations only for an abuse of discretion. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S. Ct. 2447, 2461 (1990).

Rule 11 requires district courts to impose "appropriate sanctions,"

after notice and a reasonable opportunity to respond, where an attorney or party submits a pleading to the court that: (1) is not well-grounded in fact, i.e., has no reasonable factual basis; (2) is not legally tenable; or (3) is submitted in bad faith for an improper purpose. See Fed. R. Civ. P. 11(b). The objective standard for assessing conduct under Rule 11 is "reasonableness under the circumstances" and "what [it] was reasonable to believe at the time" the pleading was submitted. Baker v. Alderman, 158 F.3d 516, 524 (11th Cir. 1998). Sanctions are warranted when a party exhibits a "deliberate indifference to obvious facts," but not when the party's evidence to support a claim is "merely weak." Id.

The district court did not abuse its discretion in imposing sanctions against them for filing the motion for sanctions. Their motion was part of a pattern of re-argument and re-litigation that has marked their efforts in this lawsuit, and that is not a proper use of Rule 11. See Advisory Committee Notes, 1993 Amendments ("Rule 11 motions [should not] be prepared [in order to] emphasize the merit's of a party's position. . . ."); see also Patterson v. Aiken, 841 F.2d 386, 387 (11th Cir. 1988) (imposition of sanctions was supported by evidence that litigant brought action based on allegations which had been adversely decided against him previously).

And their Rule 11 motion was baseless. When the district court ruled on Prudential's motion to compel arbitration the court had known, and they knew the court had known, that Prudential was not an NASD member. They also knew that the court's ruling on the motion to compel arbitration was based entirely upon a third party beneficiary theory that did not depend at all on whether Prudential was an NASD member. Despite all of this, they filed the Rule 11 motion anyway, requiring the district court and Prudential to spend time and effort dealing with it. They should have been sanctioned for their bad faith motion, as they were. (15)

Riccard and Rasch also contend that even if the imposition of sanctions against them was not an abuse of the district court's discretion, the nature and extent of the sanctions imposed were. A sanction imposed for a violation of Rule 11 must be "limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated." Fed. R. Civ. P. 11(c)(2). Although the sanctions most commonly imposed are costs and attorney's fees, the selection of the type of sanction to be imposed lies with the district court's sound exercise of discretion. See Donaldson v. Clark, 819 F.2d 1551, 1557 (11th Cir. 1987). When imposing sanctions, the district court must describe the conduct determined to constitute a violation of the rule and explain the basis for the sanction imposed. See Fed. R. Civ. P. 11(c)(3).

The district court found that a monetary sanction was insufficient to deter Riccard from future baseless, bad-faith filings and therefore would be insufficient to protect the court's ability to carry out its judicial functions, because: (1) Riccard was not financially well off and could not afford to pay a sanction; and (2) even if he could afford to pay, Riccard would gladly do so in order to "continue his vendetta" against Prudential. The district court reasoned that "given Riccard's near-obsession regarding his former employer, injunctive relief is the only means that offers any chance of preventing further harassment of Prudential, further clogging of the judicial machinery with meritless pleadings, and further overloading of already overloaded court dockets." We cannot fault that reasoning.

Nor can we fault the scope of the injunction, except perhaps for being too narrow - but more about that problem later. The injunction prohibited Riccard from filing any new "action, complaint, or claim for relief" against "Prudential, its affiliates, or subsidiaries [in] federal court, state court, or any other forum" unless he first obtained leave to file from the district court first. The court stated that leave would be freely given if the new action did not involve Riccard's former employment with Prudential. There was no abuse of discretion in the sanction the district court imposed against Riccard. Three or four lawsuits over one employment relationship is enough. (16)

In contrast to its finding with regard to Riccard, the court found that a monetary sanction would be sufficient to deter Rasch from future baseless, bad-faith filings, and it ordered him to pay Prudential $10,000. We do not think the district court abused its discretion in deciding that a monetary levy was an appropriate sanction to dissuade Rasch from further baseless filings, nor is the amount levied out of line with the damage done or the need to deter further damage of the same sort. Ten thousand dollars represents only about one-third of the amount of attorney's fees Prudential incurred in defending the Rule 11 motion Rasch and Riccard filed against it.

F. The Contempt Finding and Award of Attorney's Fees

(Orders 7 & 8)

Approximately four months after the district court enjoined Riccard from

filing any new "action, complaint, or claim for relief" against "Prudential, its affiliates, or subsidiaries [in] federal court, state court, or any other forum" unless he first obtained leave from the district court, Riccard, without obtaining leave of court, filed a host of what he styled "Complaints" against Prudential. Those complaints, signed by Riccard with his "thanks for listening," consisted of court orders, transcript excerpts, letters, pleadings, and affidavits, for a total of two-hundred pages of exhibits, and they complained about Prudential's alleged criminal activity, reiterating Riccard's accusations about Prudential fraudulently misrepresenting its NASD membership status to courts and charging Prudential with obstruction of justice. Riccard filed those complaints with the NASD, the Securities and Exchange Commission, the Commissioner of the New Jersey Department of Banking and Insurance, the United States Attorney's Office for the Middle District of Florida, and the Florida Department of Agriculture, with copies to various newspapers. And Riccard also filed ethical grievances against Prudential's attorneys with the New York State Bar Association and the Florida Bar Association.

Understandably upset, Prudential filed a motion asking the district court to hold Riccard in contempt for violating its injunction. After notice and a show cause hearing, the district court did hold Riccard in civil contempt for filing the complaints and grievances, finding clear and convincing evidence that Riccard had violated a clear, unambiguous, valid, and lawful order of the court - its previously issued injunction against further filings without leave of court.

An injunction can be enforced, if necessary, through a contempt proceeding. Doe v. Bush, 261 F.3d 1037, 1064 (11th Cir. 2001). A finding of civil contempt - willful disregard of the authority of the court - must be supported by clear and convincing evidence. McGregor v. Chierico, 206 F.3d 1378, 1383 (11th Cir. 2000). The clear and convincing evidence must establish that: (1) the allegedly violated order was valid and lawful; (2) the order was clear and unambiguous; and (3) the alleged violator had the ability to comply with the order. Id. In determining whether a party is in contempt of a court order, the order is subject to reasonable interpretation, though it may not be expanded beyond the meaning of its terms absent notice and an opportunity to be heard. United States v. Greyhound Corp., 508 F.2d 529, 537 (7th Cir. 1974); see also Bush, 261 F.3d at 1063-64; Reynolds v. Roberts, 207 F.3d 1288, 1300-01 (11th Cir. 2000). We review a district court's determination of civil contempt only for an abuse of discretion. In re Jove Eng'g, Inc. v. IRS, 92 F.3d 1539, 1545 (11th Cir. 1996).

Earlier in this opinion, we concluded that the district court's injunction against further filings without leave of court was valid. And Riccard does not contend that he lacked the ability to comply with it. Instead, his primary position is that all of his post-injunction filings did not violate any "clear and unambiguous terms" of the injunction. He says that the language prohibiting him from filing in "state court, federal court or any other forum" did not clearly prohibit him from filing complaints against Prudential with administrative agencies and other executive branch departments of state and federal government. We disagree.

Context is often important to meaning, and so it is here. True, the injunction was issued in part to prevent Riccard's bitter campaign from further burdening the federal and state court system (state courts were apparently included based upon a prediction of where else Riccard might take his campaign). But as the district court pointed out in holding Riccard in contempt, the injunction was also issued in part to prevent further harassment of Prudential. That purpose supports interpreting the injunction to cover non-judicial filings. Moreover - and this is more important - the "any other forum" language has to refer to non-judicial fora, because all state and federal courts were already covered by the language which preceded that phrase. If we were to interpret "any other forum" to include only state and federal courts, then the language is meaningless because they are already covered by the words "in state court, federal court." The phrase "any other forum" has to mean something other than state and federal judicial fora, because that is what "other" means, and the meaning of the phrase "any other" is broad because the meaning of the word "any" is broad. See, e.g., CBS Inc. v. Primetime 24 Joint Venture, 245 F.3d 1217, 1223 (11th Cir. 2001) (holding adjective "any" is not ambiguous; it has well-established meaning and means "all"); Coronado v. BankAtlantic Bancorp, Inc., 222 F.3d 1315, 1321 (11th Cir. 2000) ("any" has an "expansive meaning, that is, one or some indiscriminately of whatever kind"). The critical language of the injunction is broad enough to clearly and unambiguously cover all fora to which complaints are made, including federal and state administrative and executive agencies and departments. We agree with the district court about that.

The ethical grievances Riccard filed with the bar associations of two states against attorneys representing Prudential are another matter. They raise a question involving not the "any other forum" language, but the language describing the forbidden targets of any further filings - "Prudential, its affiliates, or subsidiaries." The district court thought that Riccard's ethical complaints against Prudential's attorneys amounted to complaints against Prudential. Maybe. But "maybe" is not close enough when measured against the "clear and unambiguous" standard which we must apply. The injunction prohibited Riccard from filing, without leave of court, any new "action, complaint, or claim for relief" against "Prudential, its affiliates, or subsidiaries." The attorneys who have represented Prudential in its struggles with Riccard are not Prudential, nor are they its affiliates or subsidiaries. The injunction said nothing about Prudential's attorneys. For these reasons, we conclude that it did not clearly and unambiguously prohibit Riccard from filing with bar associations ethical complaints against those attorneys.

To summarize, we have concluded that one basis for the district court's decision that Riccard's post-injunction filings amounted to contempt of court is proper, but the other one is not. The proper basis (Riccard's filing of complaints against Prudential with state and federal administrative agencies and executive departments) being sufficient to support a finding of contempt, and having no doubt that the district court would have reached the same conclusion if it had disregarded entirely the improper basis (Riccard's filing of ethical complaints against Prudential's attorneys), we affirm the order holding him in contempt. The one exception to that affirmance is that we must vacate the district court's order insofar as it required him to send withdrawal letters to the bar associations.

Riccard also challenges the district court's decision to impose as a sanction against Riccard for his contempt of court an award to Prudential of $33,357.00, which represents the attorney's fees and costs it incurred in connection with the contempt proceedings. We cannot tell if the amount awarded would have been less if the district court had known that it could hold Riccard in contempt for only his post-injunction filings against Prudential and not for those against its attorneys. Accordingly, we will vacate the award of attorney's fees as a contempt sanction and instruct the district court to reconsider whether the amount of it should be adjusted in light of our conclusion that Riccard's filings against Prudential's attorneys were not a violation of the injunction.

* * *

III. CONCLUSION

We AFFIRM all the orders and the judgment entered by the district court in Riccard II (Nos. 11373 and 15209), except that we VACATE and REMAND for further proceedings consistent with this opinion the order and so much of the judgment as includes the order setting the amount of attorney's fees awarded in the contempt of court proceedings, and the part of the contempt order requiring Riccard to send letters of withdrawal to the bar associations.

We AFFIRM all of the orders and the judgment entered in Riccard III (No. 15219), except that we REVERSE the judgment on the pleadings as to the retaliation claim contained in the fourth amended complaint to the extent it is inconsistent with this opinion.

III. THE CURRENT STATUS OF RULE 11 IN THE OTHER CIRCUITS

2002 Updates Rule 11

1st Circuit

Fed. R.Civ. P. 11 forbids parties and their counsel from alleging factual contentions that lack evidentiary support. * * *  False allegations in complaint were not excused by allegation that they resulted from miscommunications between counsel and his clients. * * * Plaintiffs' justification for inadequate pleading that their counsel could not contact them to discuss the factual allegations to be included in their complaint because they were on extended world tour was in reality confession of deficiency in pleading, which could not be excused. Top Entm't Inc. v Ortega (2002, CA1 Puerto Rico) 285 F3d 115.

Sanctions under FRCivP 11 were appropriate where attorney raised clearly frivolous apportionment argument during settlement negotiations between insurance company and its insured, and no reasonable attorney would have believed that attorney had any evidence to support claim that insurance company failed to negotiate settlement in good faith on behalf of insured, whose liability was reasonably clear. Nyer v Winterthur Int'l (2002, CA1 Mass) 290 F3d 456.

2002 Updates Rule 11

3rd Circuit

Rule 11 does not preempt claims for abuse of process and similar torts that provide relief for misconduct in federal litigation; therefore, in appropriate circumstances, victims of such misconduct may bring suit to recover damages under state causes of action. U.S. Express Lines, LTD. v Higgins (2002, CA3 Pa) 281 F3d 383.

2002 Updates Rule

4th Circuit

Where defendant waited for fourteen months after summary judgment award in its favor was affirmed to initially move for Rule 11 sanctions against plaintiffs' attorney, defendant failed in its obligation to notify its opponent and court of its intention to pursue sanctions at earliest possible date, and such delay was inexcusable and deprived sanctions of their value as educational tool. Hunter v Earthgrains Co. Bakery (2002, CA4 NC) 281 F3d 144, 87 BNA FEP Cas 1788.

Court should resolve sua sponte Rule 11 issues before resolution of merits of case. * * * District Court was reversed and Order vacated on suspension of attorney for 5 years under Rule 11. The Court of Appeals found that Rule 11 was the wrong vehicle to suspend and attorney, the amount of time between the resolution of the dismissal and the suspension was too great and the caselaw that the district court considered frivolous the CA thought was subject to interpretation. Hunter v Earthgrains Co. Bakery (2002, CA4 NC) 281 F3d 144, 87 BNA FEP Cas 1788.

2002 Updates Rule 11

5th Circuit

District court erred in imposing sanctions on attorney as result of his methodology in executing judgment against store, where attorney's actions were not unreasonable, even though court suspected that execution was carried out in manner intended to embarrass store, since it is not role of Rule 11 to safeguard defendant from public criticism that may result from assertion of non-frivolous claims. Whitehead v Food Max of Miss., Inc. (2002, CA5 Miss) 277 F3d 791, 51 FR Serv 3d 433.    

District court's post-judgment order denying Rule 11 sanctions is properly appealable final order. Friends for Am. Free Enters. Ass'n v Wal-Mart Stores, Inc. (2002, CA5 Tex) 284 F3d 575.

2002 Updates Rule 11

9th Circuit

Order imposing sanctions on attorney in copyright infringement case was vacated and remanded for detailed factual findings because it was not clear from the order what misconduct was considered in the sanctions. Christian v Mattel, Inc. (2002, CA9 Cal) 286 F3d 1118, 2002 CDOS 3176, 2002 Daily Journal DAR 3975, 62 USPQ2d 1385.

2002 Updates Rule 11

Federal Circuit

Although Rule 11 does not apply to documents that are not filed with court, litigant cannot escape Rule 11 sanctions by failing to file papers with court that litigant has served on opponent and is required by order to file with court. Antonious v Spalding & Evenflo Cos. (2002, CA FC) 281 F3d 1258, 62 USPQ2d 1060.

* * *

2002 Updates

District Court Opinions Rule 11

Attorney violated FRCP 11 by bringing civil rights action against police department and its employees under 42 USCS § 1981, Thirteenth Amendment, and state law, where contract element of § 1981 was missing and all but one named plaintiffs were not racial minorities, no facts were proffered to support involuntary servitude element of Thirteenth Amendment claim, and state-law claims did not allege loss of permanent bodily function or disfigurement, as required by state's tort claims statute. Leuallen v Borough of Paulsboro (2002, DC NJ) 180 F Supp 2d 615.
   

Attorney violated FRCP 11 by bringing frivolous § 1983 action against state entities and officers acting in their official capacities and against federal entities and officers, since responsible practitioner in field should have known that § 1983 did not apply to federal government or to states or their officers in their official capacities. Mendez v Draham (2002, DC NJ) 182 F Supp 2d 430.

Cybersquatting claimant's unwarranted factual assertions and unreasonable legal arguments to harass and wear down defendant warranted award of attorney's fees and costs to defendant under FRCP 11. Storey v Cello Holdings, L.L.C. (2002, SD NY) 182 F Supp 2d 355.
 
On motion for sanctions after defendant filed motion with factual inaccuracies, court had discretion to decide whether violation had occurred and what sanctions it would impose if there had been violation. Long v United States DOJ (2002, DC Dist Col) 207 FRD 4.

Fine of $ 1,000 would be assessed under FRCP 11 against law firm representing employee claiming wrongful termination, when firm persisted in factually incorrect claim that employer breached promise to credit former period of employment in determining retirement benefits, as it would be too difficult to determine what percentage of employee's legal fees were incurred in refuting claim. Gambello v Time Warner Communs., Inc. (2002, ED NY) 186 F Supp 2d 209.

 Where relatives had filed several frivolous state and federal actions against a brother with respect to having himself appointed as guardian over his deceased sister and making burial decisions for his sister's body, the court required the relatives to obtain leave of court before filing any other federal court actions against the brother, but denied the brother's request for monetary sanctions. Mazur v Woodson (2002, ED Va) 191 F Supp 2d 676.

IV. FEDERAL REMEDIES THAT EXIST IN ADDITION TO RULE 11

The most well know sanction akin to Rule 11 is 28 U.S.C. § 1927. It provides for sanctions for all unreasonable and vexatious litigation which is brought or conducted in bad faith. It applies to any federal court, unlike Rule 11 which applies only in the district court. It applies only to attorneys and must be strictly constructed; it is a penal statute designed to deter unnecessary delay.

But a the federal courts have a well stocked arsenal to control conduct in addition to Rule 11 and Section 1927. Consider the following:

"A district court can punish contempt of its authority, including disobedience of its process, by fine or imprisonment, 18 U.S.C. 401;"

A district court can, "sanction a party and/or his attorney for failure to abide by a pretrial order, Fed. Rule Civ. Proc. 16(f);

A district court can, "sanction a party and/or his attorney for baseless discovery requests or objections, Fed. Rule Civ. Proc. 26(g);

A district court can, "award expenses caused by a failure to attend a deposition or to serve a subpoena on a party to be deposed, Fed. Rule /Civ. Proc. 30(g);

A district court can, "award expenses when a party fails to respond to discovery requests or fails to participate in the framing of a discovery plan, Fed. Rule Civ. Proc. 37 (d) and (g);"

A district court can, "dismiss an action or claim of a party that fails to prosecute, to comply with the Federal Rules, or to obey an order of the court, Fed. Rule Civ. Proc. 41(b);

A district court can, "punish any person who fails to obey a subpoena, Fed. Rule Civ. Proc. 45(f);

A district court can, "award expenses and/or contempt damages when a party presents an affidavit in a summary judgment motion in bad faith or for the purpose of delay, Fed. Rule Civ. Proc. 56(g);

A district court can, "make rules governing local practice that are not inconsistent with the Federal Rules, Fed. Rule Civ. Proc. 81.

A Court of Appeals possesses, "28 U.S.C. 1912 (power to award just damages and costs on affirmance);

A Court of Appeals can award sanctions, where appropriate, on appeal: "Fed. Rule App. Proc. 38 (power to award damages and costs for frivolous appeal)." See, generally, Chambers v. Nasco, Inc., 501 U.S. 32, 55, 111 S.Ct. 2123, 2138, 115 L.Ed.2d 27, 58 (1991).

A. No Pro Se Attorney's Fees

If you are a licensed attorney and conduct or defend a case on a pro se basis, do not expect to receive an award of attorney's fees under Rule 11. Rule 11 is designed to deter conduct and not to encourage the employment of outside counsel for its prosecution or defense. Massengale v. Ray, 267 F.3d 1298 (11^th Cir. 2001).

B. Bankruptcy Rule 9011

Bankruptcy adversary proceedings are governed by Fed.Rules Bankr. Proc. Rule 9011. The standards for 9011 are similar to Rule 11. "Sanctions under Rule 9011 are warranted when: (1) the papers are frivolous, legally unreasonable or without factual foundation, or (2) the pleading is filed in bad faith or for an improper purpose." In Re: Addon Corporation, 231 B.R. 385 (1999) (USBC NDGa Atlanta Div.). Addon contains a fairly comprehensive overview of the interrelation between Rule 11 and 9011.

C. Rule 11 Applies only in Federal Court

A federal district Court may not threaten or extend the reach of Rule 11 beyond its courtroom or cases. In an Alabama Case, a federal district court remanded the case to state court. It reserved the right to impose Rule 11 sanctions if the plaintiffs pled certain matters in state court. Plaintiffs appealed the retention of jurisdiction by the federal court. The 11^th Circuit reversed holding that as a matter of jurisdiction Rule 11 applies to the cases "before the district court," and cannot be applied to an extrajudicial forum – such as a related state court. Woodward v. STP Corporation, 170 F.3d 1043 (11^th Cir. 1999).

VI. CONCLUSION

Make no bones about it, federal litigation can be a landmine for the uninitiated. Remember: Rule 11 does not apply to discovery. You have 21 days to change your legal position if you are served with a Rule 11 motion. But watch for the disallowed filing of the Motion, you must object or the 21 days may be waived. Show Cause Orders by the Court have no such waiting period. And, in the 11th Circuit, be concise and to the point. It seems that brevity and concise pleading covers many sins in the 11th Circuit.