Respondents, the defendants in a District Court suit instituted
by petitioner law firm on behalf of a client, filed a motion to
dismiss the complaint as having no basis in fact and a motion for
sanctions under Federal Rule of Civil Procedure 11 on the ground
that the firm had not made sufficient prefiling inquiries to
support the complaint's allegations. Rule 11 -- after specifying,
inter alia, that an attorney's signature on a pleading
constitutes a certificate that he has read it and believes it to be
well grounded in fact and legally tenable -- provides that, if a
pleading is signed in violation of the Rule, the court "shall"
impose upon the attorney or his client
"an appropriate sanction, which may include an order to pay to
the other party the amount of the reasonable expenses incurred
because of the filing of the pleading, . . . including a reasonable
attorney's fee."
Following petitioner's notice of voluntary dismissal of the
complaint under Rule 41(a)(1)(i), the court held that petitioner's
prefiling inquiries were grossly inadequate and imposed monetary
sanctions upon it and its client. The Court of Appeals affirmed,
holding that the voluntary dismissal did not divest the District
Court of jurisdiction to rule upon the Rule 11 motion; that that
court's determination that petitioner had violated Rule 11 was
substantially justified; and that an appellant who successfully
defends a Rule 11 award is entitled to recover its reasonable
attorney's fees on appeal. The court therefore remanded the case
for the District Court to determine the amount of such fees and to
enter an appropriate award.
Held:
1. A voluntary Rule 41(a)(1)(i) dismissal does not deprive a
district court of jurisdiction over a Rule 11 motion. This view is
consistent with Rule 11's purposes of deterring baseless filings
and streamlining federal court procedure, and is not contradicted
by anything in that Rule or Rule 41(a)(1)(i). Pp.
496 U. S.
393-398.
(a) Rule 41(a) permits a voluntary dismissal without prejudice
only if the plaintiff files a notice of dismissal before the
defendant files an answer or summary judgment motion and the
plaintiff has never previously dismissed an action "based on or
including the same claim." Once the defendant has responded to the
complaint, the plaintiff may dismiss only by stipulation or by
order "upon such terms and conditions as the
Page 496 U. S. 385
court deems proper." Moreover, a dismissal "operates as an
adjudication on the merits" if the plaintiff has previously
dismissed the claim. Pp.
496 U. S.
393-394.
(b) The district court's jurisdiction, invoked by the filing of
the underlying complaint, supports consideration of both the
action's merits and the Rule 11 motion arising from that filing. As
the Rule 11 violation is complete when the paper is filed, a
voluntary dismissal does not expunge the violation. In order to
comply with the Rule's requirement that it "shall" impose
sanctions, the court must have the authority to consider whether
there has been a violation of the signing requirement regardless of
the dismissal. Pp.
496 U. S.
394-395.
(c) The language of Rules 11 and 41(a)(1) is compatible. Like
the imposition of costs, attorney's fees, and contempt sanctions, a
Rule 11 sanction is not a judgment on the action's merits, but
simply requires the determination of a collateral issue, which may
be made after the principal suit's termination. Because such a
sanction does not signify a merits determination, its imposition
does not deprive the plaintiff of his Rule 41(a) right to dismiss
without prejudice. Pp.
496 U. S.
395-397.
(d) Because both Rule 41(a)(1) and Rule 11 are aimed at curbing
abuses of the judicial system, their policies are completely
compatible. Rule 41(a)(1) was designed to limit a plaintiff's
ability to dismiss an action in order to curb abuses of preexisting
state and federal procedures allowing dismissals as a matter of
right up until the entry of the verdict or judgment. It does not
codify any policy that the plaintiff's right to one free dismissal
also secures the right to file baseless papers. If a litigant could
purge his Rule 11 violation merely by taking a dismissal, he would
lose all incentive to investigate more carefully before serving and
filing papers. Pp.
496 U. S.
397-398.
2. A court of appeals should apply an abuse-of-discretion
standard in reviewing all aspects of a district court's decision in
a Rule 11 proceeding. Petitioner's contention that the Court of
Appeals should have applied a three-tiered standard of review -- a
clearly erroneous standard for findings of historical fact, a
de novo standard for the determination that counsel
violated Rule 11, and an abuse-of-discretion standard for the
choice of sanction -- is rejected. Pp.
496 U. S.
399-405.
(a) Appellate courts must review the selection of a sanction
under an abuse-of-discretion standard, since, in directing the
district court to impose an "appropriate" sanction, Rule 11 itself
indicates that that court is empowered to exercise its discretion.
Moreover, in the absence of any language in the Rule to the
contrary, courts should adhere to their usual practice of reviewing
the district court's findings of fact under a deferential standard.
In the present context, the abuse-of-discretion and clearly
erroneous standards are indistinguishable:
Page 496 U. S. 386
a court of appeals would be justified in concluding that a
district court had abused its discretion in making a factual
finding only if the finding were clearly erroneous. Furthermore,
the court of appeals must defer to the district court's legal
conclusions in Rule 11 proceedings, since those conclusions are
rooted in factual determinations, rather than purely legal
inquiries, and the district court, familiar with the issues and
litigants, is better situated to marshall the pertinent facts and
apply the necessary fact-dependent legal standard. If the district
court based its conclusion on an erroneous view of the law, the
appellate court would be justified in concluding that it had abused
its discretion. Pp.
496 U. S.
400-402.
(b)
Pierce v. Underwood, 487 U.
S. 552 -- which held that a District Court's
determination under the Equal Access to Justice Act (EAJA) that
"the position of the United States was substantially justified"
should be reviewed for an abuse of discretion -- strongly supports
applying a unitary abuse-of-discretion standard to all aspects of a
Rule 11 proceeding. Pp.
496 U. S.
403-404.
(c) Adoption of an abuse-of-discretion standard is also
supported by Rule 11's policy goals of deterrence and streamlining
the judicial process. The district court is best situated to
determine whether a sanction is warranted in light of the local
bar's litigation practices, and deference to that court's
determination will enhance its ability to control litigants, free
appellate courts from the duty of reweighing evidence, and
discourage litigants from pursuing marginal appeals. Pp.
496 U. S.
404-405.
(d) The Court of Appeals' determination that the District Court
"applied the correct legal standard and offered substantial
justification for its finding of a Rule 11 violation" was
consistent with the deferential standard of review adopted here. P.
496 U. S.
405.
3. Rule 11 does not authorize a district court to award an
attorney's fee incurred on appeal. Pp.
496 U. S.
405-409.
(a) Neither the language of the Rule's sanctions provision --
when read in light of Rule l's statement that the Rules only govern
district court procedure -- nor the Advisory Committee Note
suggests that the Rule could require payment for appellate
proceedings. Respondents' interpretation that the provision covers
any and all expenses incurred "because of the filing" is overbroad.
A more sensible reading permits an award only of those expenses
directly caused by the filing -- logically, those at the trial
level -- and considers the expenses of defending the award on
appeal to arise from the award itself and the taking of the appeal,
not from the initial filing of the complaint. Pp.
496 U. S.
406-407.
(b) Federal Rule of Appellate Procedure 38 -- which authorizes
courts of appeals to "award just damages and single or double costs
to the appellee" upon determining that an appeal is frivolous --
places a natural limit on Rule 11's scope. If a Rule 11 appeal is
frivolous, as it often
Page 496 U. S. 387
will be, given the district court's broad discretion to impose
sanctions, Rule 38 gives the appellate court ample authority to
award expenses. However, if the appeal is not frivolous, Rule 38
does not require the appellee to pay the appellant's attorney's
fees. P.
496 U. S.
407.
(c) Limiting Rule 11's scope to trial court expenses accords
with the policy of not discouraging meritorious appeals, since many
valid challenges might not be filed if unsuccessful appellants were
routinely required by the very courts which originally imposed
sanctions to shoulder the appellee's fees. Moreover, including such
fees in a Rule 11 sanction might have the undesirable effect of
encouraging additional satellite litigation, since a losing party
subjected to fees on remand might again appeal the award. Even if
disallowing a Rule 11 appellate attorney's fees award would
discourage litigants from defending the award when appellate
expenses were likely to exceed the sanction's amount, the risk of
expending the value of one's award while defending it is a natural
concomitant of the American Rule,
i.e., that the
prevailing litigant is ordinarily not entitled to collect an
attorney's fee. Pp.
496 U. S.
408-409.
277 U.S.App.D.C. 333, 875 F.2d 890 (CADC 1989), affirmed in part
and reversed in part.
O'CONNOR, J., delivered the opinion for a unanimous Court with
respect to Parts I, II, IV, and V, and the opinion of the Court
with respect to Part III, in which REHNQUIST, C.J., and BRENNAN,
WHITE, MARSHALL, BLACKMUN, SCALIA, and KENNEDY, JJ., joined.
STEVENS, J., filed an opinion concurring in part and. dissenting in
part,
post, p.
496 U. S.
409.
Page 496 U. S. 388
Justice O'CONNOR delivered the opinion of the Court.
This case presents three issues related to the application of
Rule 11 of the Federal Rules of Civil Procedure: whether a district
court may impose Rule 11 sanctions on a plaintiff who has
voluntarily dismissed his complaint pursuant to Rule 41(a)(1)(i) of
the Federal Rules of Civil Procedure; what constitutes the
appropriate standard of appellate review of a district court's
imposition of Rule 11 sanctions; and whether Rule 11 authorizes
awards of attorney's fees incurred on appeal of a Rule 11
sanction.*
I
In 1983, Danik, Inc., owned and operated a number of discount
men's clothing stores in the Washington, D.C., area. In June, 1983,
Intercontinental Apparel, a subsidiary of respondent Hartmarx
Corp., brought a breach-of-contract action against Danik in the
United States District Court for the District of Columbia. Danik,
represented by the law firm of Cooter & Gell (petitioner),
responded to the suit by filing a counterclaim against
Intercontinental, alleging violations of the Robinson-Patman Act,
49 Stat. 1526, 15 U.S.C. § 13
et seq. In March, 1984, the
District Court granted summary judgment for Intercontinental in its
suit against Danik, and, in February, 1985, a jury returned a
verdict for Intercontinental on Danik's counterclaim. Both
judgments were affirmed on appeal.
Danik, Inc. v.
Intercontinental Apparel, Inc., 245 U.S.App.D.C. 233, 759 F.2d
959 (1985) (judgment order);
Intercontinental Apparel, Inc. v.
Danik, Inc., 251 U.S.App.D.C. 327, 784 F.2d 1131 (1986)
(judgment order).
While this litigation was proceeding, petitioner prepared two
additional antitrust complaints against Hartmarx and its
Page 496 U. S. 389
two subsidiaries, respondents Hart, Schaffner & Marx and
Hickey-Freeman Co. One of the complaints, the one giving rise to
the Rule 11 sanction at issue in this case, alleged a nationwide
conspiracy to fix prices and to eliminate competition through an
exclusive retail agent policy and uniform pricing scheme, as well
as other unfair competition practices such as resale price
maintenance and territorial restrictions. App. 3-14.
Petitioner filed the two complaints in November, 1983.
Respondents moved to dismiss the antitrust complaint at issue,
alleging, among other things, that Danik's allegations had no basis
in fact. Respondents also moved for sanctions under Rule 11. In
opposition to the Rule 11 motion, petitioner filed three affidavits
setting forth the prefiling research that supported the allegations
in the complaint.
Id. at 16-17, 22-23, 24-27. In essence,
petitioner's research consisted of telephone calls to salespersons
in a number of men's clothing stores in New York City,
Philadelphia, Baltimore, and Washington, D.C. Petitioner inferred
from this research that only one store in each major metropolitan
area nationwide sold Hart, Schaffner & Marx suits.
In April, 1984, petitioner filed a notice of voluntary dismissal
of the complaint, pursuant to Rule 41(a)(1)(i). The dismissal
became effective in July, 1984, when the District Court granted
petitioner's motion to dispense with notice of dismissal to
putative class members. In June, 1984, before the dismissal became
effective, the District Court heard oral argument on the Rule 11
motion. The District Court took the Rule 11 motion under
advisement.
In December, 1987, 3 1/2 years after its hearing on the motion
and after dismissal of the complaint, the District Court ordered
respondents to submit a statement of costs and attorney's fees.
Respondents filed a statement requesting $61,917.99 in attorney's
fees. Two months later, the District Court granted respondent's
motion for Rule 11 sanctions, holding that petitioner's prefiling
inquiry was grossly inadequate.
Page 496 U. S. 390
Specifically, the District Court found that the allegations in
the complaint regarding exclusive retail agency arrangements for
Hickey-Freeman clothing were completely baseless because petitioner
researched only the availability of Hart, Schaffner & Marx
menswear. In addition, the District Court found that petitioner's
limited survey of only four Eastern cities did not support the
allegation that respondents had exclusive retailer agreements in
every major city in the United States. Accordingly, the District
Court determined that petitioner violated Rule 11, and imposed a
sanction of $21,452.52 against petitioner and $10,701.26 against
Danik.
The Court of Appeals for the District of Columbia Circuit
affirmed the imposition of Rule 11 sanctions.
Danik, Inc. v.
Hartmarx Corp., 277 U.S.App.D.C. 333, 875 F.2d 890 (1989).
Three aspects of its decision are at issue here. First, the Court
of Appeals rejected petitioner's argument that Danik's voluntary
dismissal of the antitrust complaint divested the District Court of
jurisdiction to rule upon the Rule 11 motion. After reviewing the
decisions of other circuits considering the issue, the Court of
Appeals concluded that "the policies behind Rule 11 do not permit a
party to escape its sanction by merely dismissing an unfounded
case."
Id. at 337, 875 F.2d at 894. The court reasoned
that, because Rule 11 sanctions served to punish and deter, they
secured the proper functioning of the legal system "independent of
the burdened party's interest in recovering its expenses."
Id. at 338, 875 F.2d at 895. Accordingly, the court held
that such sanctions must "be available in appropriate circumstances
notwithstanding a private party's effort to cut its losses and run
out of court, using Rule 41 as an emergency exit."
Ibid.
Second, the Court of Appeals affirmed the District Court's
determination that petitioner had violated Rule 11. Petitioner's
arguments failed to "cal[l] into doubt" the two fatal deficiencies
identified by the District Court. Rather, petitioner's
Page 496 U. S. 391
"account of their efforts d[id] no more than confirm these
shortcomings."
Ibid.
Third, the Court of Appeals considered respondent's claim that
petitioner should also pay the expenses respondent incurred in
defending its Rule 11 award on appeal. Relying on
Westmoreland
v. CBS, Inc., 248 U.S.App.D.C. 255, 770 F.2d 1168 (1985), the
Court of Appeals held that an appellant who successfully defends a
Rule 11 award was entitled to recover its attorney's fees on appeal
and remanded the case to the district court to determine the amount
of reasonable attorney's fees and to enter an appropriate
award.
II
The Rules Enabling Act, 28 U.S.C. § 2072, authorizes the Court
to
"prescribe general rules of practice and procedure and rules of
evidence for cases in the United States district courts (including
proceedings before Magistrates thereof) and courts of appeals."
The Court has no authority to enact rules that "abridge, enlarge
or modify any substantive right."
Ibid. Pursuant to this
authority, the Court promulgated the Federal Rules of Civil
Procedure to "govern the procedure in the United States district
courts in all suits of a civil nature." Fed.Rule Civ.Proc. 1. We
therefore interpret Rule 11 according to its plain meaning,
see
Pavelic & Leflore v. Marvel Entertainment Group,
493 U. S. 120,
493 U. S. 123
(1989), in light of the scope of the congressional
authorization.
Rule 11 provides, in full:
"Every pleading, motion, and other paper of a party represented
by an attorney shall be signed by at least one attorney of record
in the attorney's individual name, whose address shall be stated. A
party who is not represented by an attorney shall sign the party's
pleading, motion, or other paper and state the party's address.
Except when otherwise specifically provided by rule or statute,
pleadings need not be verified or accompanied by affidavit. The
rule in equity that the averments of
Page 496 U. S. 392
an answer under oath must be overcome by the testimony of two
witnesses or of one witness sustained by corroborating
circumstances is abolished. The signature of an attorney or party
constitutes a certificate by the signer that the signer has read
the pleading, motion, or other paper; that to the best of the
signer's knowledge, information, and belief formed after reasonable
inquiry it is well grounded in fact and is warranted by existing
law or a good faith argument for the extension, modification, or
reversal of existing law, and that it is not interposed for any
improper purpose, such as to harass or to cause unnecessary delay
or needless increase in the cost of litigation. If a pleading,
motion, or other paper is not signed, it shall be stricken unless
it is signed promptly after the omission is called to the attention
of the pleader or movant. If a pleading, motion, or other paper is
signed in violation of this rule, the court, upon motion or upon
its own initiative, shall impose upon the person who signed it, a
represented party, or both, an appropriate sanction, which may
include an order to pay to the other party or parties the amount of
the reasonable expenses incurred because of the filing of the
pleading, motion, or other paper, including a reasonable attorney's
fee."
An interpretation of the current Rule 11 must be guided, in
part, by an understanding of the deficiencies in the original
version of Rule 11 that led to its revision. The 1938 version of
Rule 11 required an attorney to certify by signing the pleading
"that to the best of his knowledge, information, and belief
there is good ground to support [the pleading]; and that it is not
interposed for delay . . . or is signed with intent to defeat the
purpose of this rule."
28 U.S.C., pp. 2616-2617 (1940 ed.) An attorney who willfully
violated the rule could be "subjected to appropriate disciplinary
action."
Ibid. Moreover, the pleading could "be stricken
as sham and false and the action [could] proceed as though the
pleading had not
Page 496 U. S. 393
been served."
Ibid. In operation, the rule did not have
the deterrent effect expected by its drafters.
See
Advisory Committee Note on Rule 11, 28 U.S.C.App., pp. 575-576. The
Advisory Committee identified two problems with the old Rule.
First, the Rule engendered confusion regarding when a pleading
should be struck, what standard of conduct would make an attorney
liable to sanctions, and what sanctions were available. Second,
courts were reluctant to impose disciplinary measures on attorneys,
see ibid., and attorneys were slow to invoke the rule.
Vairo, Rule 11: A Critical Analysis, 118 F.R.D. 189, 191
(1988).
To ameliorate these problems, and in response to concerns that
abusive litigation practices abounded in the federal courts, the
rule was amended in 1983.
See Schwarzer, Sanctions Under
the New Federal Rule 11 -- A Closer Look, 104 F.R.D. 181 (1985). It
is now clear that the central purpose of Rule 11 is to deter
baseless filings in District Court and thus, consistent with the
Rule Enabling Act's grant of authority, streamline the
administration and procedure of the federal courts.
See
Advisory Committee Note on Rule 11, 28 U.S.C.App., p. 576. Rule 11
imposes a duty on attorneys to certify that they have conducted a
reasonable inquiry and have determined that any papers filed with
the court are well-grounded in fact, legally tenable, and "not
interposed for any improper purpose." An attorney who signs the
paper without such a substantiated belief "shall" be penalized by
"an appropriate sanction." Such a sanction may, but need not,
include payment of the other parties' expenses.
See ibid.
Although the rule must be read in light of concerns that it will
spawn satellite litigation and chill vigorous advocacy,
ibid., any interpretation must give effect to the rule's
central goal of deterrence.
III
We first address the question whether petitioner's dismissal of
its antitrust complaint pursuant to Rule 41(a)(1)(i)
Page 496 U. S. 394
deprived the District Court of the jurisdiction to award
attorney's fees. Rule 41(a)(1) states:
"(1)
By Plaintiff; by Stipulation. Subject to the
provisions of Rule 23(e), of Rule 66, and of any statute of the
United States, an action may be dismissed by the plaintiff without
order of court (i) by filing a notice of dismissal at any time
before service by the adverse party of an answer or of a motion for
summary judgment, whichever first occurs, or (ii) by filing a
stipulation of dismissal signed by all parties who have appeared in
the action. Unless otherwise stated in the notice of dismissal or
stipulation, the dismissal is without prejudice, except that a
notice of dismissal operates as an adjudication upon the merits
when filed by a plaintiff who has once dismissed in any court of
the United States or of any state an action based on or including
the same claim."
Rule 41(a) permits a plaintiff to dismiss an action without
prejudice only when he files a notice of dismissal before the
defendant files an answer or motion for summary judgment and only
if the plaintiff has never previously dismissed an action "based on
or including the same claim." Once the defendant has filed a
summary judgment motion or answer, the plaintiff may dismiss the
action only by stipulation, Rule 41(a)(1)(ii), or by order of the
court, "upon such terms and conditions as the court deems proper."
Rule 41(a)(2). If the plaintiff invokes Rule 41(a)(1) a second time
for an "action based on or including the same claim," the action
must be dismissed with prejudice.
Petitioner contends that filing a notice of voluntary dismissal
pursuant to this rule automatically deprives a court of
jurisdiction over the action, rendering the court powerless to
impose sanctions thereafter. Of the Circuit Courts to consider this
issue, only the Court of Appeals for the Second Circuit has held
that a voluntary dismissal acts as a jurisdictional bar to further
Rule 11 proceedings.
See Johnson
Page 496 U. S. 395
Chemical Co., Inc. v. Home Care Products, Inc., 823
F.2d 28, 31 (1987).
The view more consistent with Rule 11's language and purposes,
and the one supported by the weight of Circuit authority, is that
district courts may enforce Rule 11 even after the plaintiff has
filed a notice of dismissal under Rule 41(a)(1).
See Szabo Food
Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1076-1079 (CA7
1987),
cert. dism'd, 485 U.S. 901 (1988);
Greenberg v.
Sala, 822 F.2d 882, 885 (CA9 1987);
Muthig v. Brant Point
Nantucket, Inc., 838 F.2d 600, 603-604 (CA1 1988). The
district court's jurisdiction, invoked by the filing of the
underlying complaint, supports consideration of both the merits of
the action and the motion for Rule 11 sanctions arising from that
filing. As the "violation of Rule 11 is complete when the paper is
filed,"
Szabo Food Service, Inc., 823 F.2d at 1077, a
voluntary dismissal does not expunge the Rule 11 violation. In
order to comply with Rule 11's requirement that a court "shall"
impose sanctions "[i]f a pleading, motion, or other paper is signed
in violation of this rule," a court must have the authority to
consider whether there has been a violation of the signing
requirement, regardless of the dismissal of the underlying action.
In our view, nothing in the language of Rule 41(a)(1)(i), Rule 11,
or other statute or Federal Rule terminates a district court's
authority to impose sanctions after such a dismissal.
It is well established that a federal court may consider
collateral issues after an action is no longer pending. For
example, district courts may award costs after an action is
dismissed for want of jurisdiction.
See 28 U.S.C. § 1919.
This Court has indicated that motions for costs or attorney's fees
are "independent proceeding[s] supplemental to the original
proceeding, and not a request for a modification of the original
decree."
Sprague v. Ticonic National Bank, 307 U.
S. 161,
307 U. S. 170
(1939). Thus, even "years after the entry of a judgment on the
merits," a federal court could consider an award of counsel fees.
White v. New Hampshire Dept.
of
Page 496 U. S. 396
Employment Security, 455 U. S. 445,
455 U. S. 451,
n. 13 (1982). A criminal contempt charge is likewise "
a
separate and independent proceeding at law'" that is not part of
the original action. Bray v. United States, 423 U. S.
73, 423 U. S. 75
(1975), quoting Gompers v. Buck's Stove & Range Co.,
221 U. S. 418,
221 U. S. 445
(1911). A court may make an adjudication of contempt and impose a
contempt sanction even after the action in which the contempt arose
has been terminated. See United States v. Mine Workers,
330 U. S. 258,
330 U. S. 294
(1947) ("Violations of an order are punishable as criminal contempt
even though . . . the basic action has become moot"); Gompers
v. Buck's Stove & Range Co., supra, 221 U.S. at
221 U. S. 451
(when main case was settled, action became moot, "of course without
prejudice to the power and right of the court to punish for
contempt by proper proceedings"). Like the imposition of costs,
attorney's fees, and contempt sanctions, the imposition of a Rule
11 sanction is not a judgment on the merits of an action. Rather,
it requires the determination of a collateral issue: whether the
attorney has abused the judicial process, and, if so, what sanction
would be appropriate. Such a determination may be made after the
principal suit has been terminated.
Because a Rule 11 sanction does not signify a District Court's
assessment of the legal merits of the complaint, the imposition of
such a sanction after a voluntary dismissal does not deprive the
plaintiff of his right under Rule 41(a) to dismiss an action
without prejudice. "Dismissal without prejudice" is a dismissal
that does not "operat[e] as an adjudication upon the merits," Rule
41(a)(1), and thus does not have a
res judicata effect.
Even if a district court indicated that a complaint was not legally
tenable or factually well founded for Rule 11 purposes, the
resulting Rule 11 sanction would nevertheless not preclude the
refiling of a complaint. Indeed, even if the Rule 11 sanction
imposed by the court were a prohibition against refiling the
complaint (assuming that would be an "appropriate sanction" for
Rule 11 purposes), the preclusion of refiling would be neither a
consequence of the
Page 496 U. S. 397
dismissal (which was without prejudice) nor a "term or
condition" placed upon the dismissal (which was unconditional),
see Rule 41(a)(2).
The foregoing interpretation is consistent with the policy and
purpose of Rule 41(a)(1), which was designed to limit a plaintiff's
ability to dismiss an action. Prior to the promulgation of the
Federal Rules, liberal state and federal procedural rules often
allowed dismissals or nonsuits as a matter of right up until the
entry of the verdict,
see, e.g., N.C.Gen.Stat.Ann. § 1-224
(1943), or judgment,
see, e.g., La. Code Prac.Ann., Art.
491 (1942).
See generally Note, The Right of a Plaintiff
to Take a Voluntary Nonsuit or to Dismiss His Action Without
Prejudice, 37 Va.L.Rev. 969 (1951). Rule 41(a)(1) was designed to
curb abuses of these nonsuit rules.
See American Bar
Association, Proceedings of the Institute on Federal Rules,
Cleveland, Ohio 350 (1938) (Rule 41(a)(1) was intended to eliminate
"the annoying of a defendant by being summoned into court in
successive actions and then, if no settlement is arrived at,
requiring him to permit the action to be dismissed and another one
commenced at leisure") (remarks of Judge George Donworth, member of
the Advisory Committee on Rules for Civil Procedure);
id.
at 309;
see also 9 C. Wright & A. Miller, Federal
Practice and Procedure § 2363, p. 152 (1971). Where state statutes
and common law gave plaintiffs expansive control over their suit,
Rule 41(a)(1) preserved a narrow slice: it allowed a plaintiff to
dismiss an action without the permission of the adverse party or
the court only during the brief period before the defendant had
made a significant commitment of time and money. Rule 41(a)(1) was
not designed to give a plaintiff any benefit other than the right
to take one such dismissal without prejudice.
Both Rule 41(a)(1) and Rule 11 are aimed at curbing abuses of
the judicial system, and thus their policies, like their language,
are completely compatible. Rule 41(a)(1) limits a litigant's power
to dismiss actions, but allows one dismissal without prejudice.
Rule 41(a)(1) does not codify any policy
Page 496 U. S. 398
that the plaintiff's right to one free dismissal also secures
the right to file baseless papers. The filing of complaints,
papers, or other motions without taking the necessary care in their
preparation is a separate abuse of the judicial system, subject to
separate sanction. As noted above, a voluntary dismissal does not
eliminate the Rule 11 violation. Baseless filing puts the machinery
of justice in motion, burdening courts and individuals alike with
needless expense and delay. Even if the careless litigant quickly
dismisses the action, the harm triggering Rule 11's concerns has
already occurred. Therefore, a litigant who violates Rule 11 merits
sanctions even after a dismissal. Moreover, the imposition of such
sanctions on abusive litigants is useful to deter such misconduct.
If a litigant could purge his violation of Rule 11 merely by taking
a dismissal, he would lose all incentive to "stop, think and
investigate more carefully before serving and filing papers."
Amendments to Rules, 97 F.R.D. 165, 192 (1983) (Letter from Judge
Walter Mansfield, Chairman, Advisory Committee on Civil Rules)
(March 9, 1982).
We conclude that petitioner's voluntary dismissal did not divest
the District Court of jurisdiction to consider respondent's Rule 11
motion. Although Rule 11 does not establish a deadline for the
imposition of sanctions, the Advisory Committee did not contemplate
there would be a lengthy delay prior to their imposition, such as
occurred in this case. Rather,
"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, and, in the case of motions, at the time when the
motion is decided or shortly thereafter."
Advisory Committee Note on Rule 11, 28 U.S.C.App., p. 576.
District courts may, of course, "adopt local rules establishing
timeliness standards,"
White v. New Hampshire Dept. of
Employment Security, 455 U.S. at
455 U. S. 454,
for filing and deciding Rule 11 motions.
Page 496 U. S. 399
IV
Petitioner further contends that the Court of Appeals did not
apply a sufficiently rigorous standard in reviewing the District
Court's imposition of Rule 11 sanctions. Determining whether an
attorney has violated Rule 11 involves a consideration of three
types of issues. The court must consider factual questions
regarding the nature of the attorney's prefiling inquiry and the
factual basis of the pleading or other paper. Legal issues are
raised in considering whether a pleading is "warranted by existing
law or a good faith argument" for changing the law and whether the
attorney's conduct violated Rule 11. Finally, the district court
must exercise its discretion to tailor an "appropriate
sanction."
The Court of Appeals in this case did not specify the applicable
standard of review. There is, however, precedent in the District of
Columbia Circuit for applying an abuse of discretion standard to
the determination whether a filing had an insufficient factual
basis or was interposed for an improper purpose, but reviewing
de novo the question whether a pleading or motion is
legally sufficient.
See, e.g., International Brotherhood of
Teamsters, Chauffeurs, Warehousemen & Helpers of America
(Airline Div.) v. Association of Flight Attendants, 274
U.S.App.D.C. 370, 373, 864 F.2d 173, 176 (1988);
Westmoreland
v. CBS, Inc., 248 U.S.App.D.C., at 261, 770 F.2d at 1174-1175.
Petitioner contends that the Court of Appeals for the Ninth Circuit
has adopted the appropriate approach. That Circuit reviews findings
of historical fact under the clearly erroneous standard, the
determination that counsel violated Rule 11 under a
de
novo standard, and the choice of sanction under an
abuse-of-discretion standard.
See Zaldivar v. Los Angeles,
780 F.2d 823, 828 (CA9 1986). The majority of Circuits follow
neither approach; rather, they apply a deferential standard to all
issues raised by a Rule 11 violation.
See Kale v. Combined Ins.
Co. of America, 861 F.2d 746, 757-758 (CA1 1988);
Teamsters Local Union No. 430 v. Cement Express, Inc., 841
F.2d 66,
Page 496 U. S. 400
68 (CA3 1988),
cert. denied, 488 U.S. 848 (1988);
Stevens v. Lawyers Mutual Liability Ins. Co. of North
Carolina, 789 F.2d 1056, 1060 (CA4 1986);
Thomas v.
Capital Security Services, Inc., 836 F.2d 866, 872 (CA5 1988)
(en banc);
Century Products, Inc. v. Sutter, 837 F.2d 247,
250 (CA6 1988);
Mars Steel Corp. v. Continental Bank N.A.,
880 F.2d 928, 933 (CA7 1989);
Adamson v. Bowen, 855 F.2d
668, 673 (CA10 1988).
Although the Courts of Appeal use different verbal formulas to
characterize their standards of review, the scope of actual
disagreement is narrow. No dispute exists that the appellate courts
should review the district court's selection of a sanction under a
deferential standard. In directing the district court to impose an
"appropriate" sanction, Rule 11 itself indicates that the district
court is empowered to exercise its discretion.
See also
Advisory Committee Note on Rule 11, 28 U.S.C.App., p. 576
(suggesting a district court "has discretion to tailor sanctions to
the particular facts of the case, with which it should be well
acquainted").
The Circuits also agree that, in the absence of any language to
the contrary in Rule 11, courts should adhere to their usual
practice of reviewing the district court's finding of facts under a
deferential standard. !See! Fed.Rule Civ.Proc. 52(a) ("Findings of
fact . . . shall not be set aside unless clearly erroneous, and due
regard shall be given to the opportunity of the trial court to
judge of the credibility of the witnesses"). In practice, the
"clearly erroneous" standard requires the appellate court to uphold
any district court determination that falls within a broad range of
permissible conclusions.
See, e.g., Anderson v. Bessemer
City, 470 U. S. 564,
470 U. S.
573-574 (1985) ("If the district court's account of the
evidence is plausible in light of the record viewed in its
entirety, the court of appeals may not reverse it even though
convinced that, had it been sitting as the trier of fact, it would
have weighed the evidence differently. Where there are two
permissible views of the evidence, the factfinder's choice
Page 496 U. S. 401
between them cannot be clearly erroneous");
Inwood
Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.
S. 844,
456 U. S.
857-858 (1982). When an appellate court reviews a
district court's factual findings, the abuse of discretion and
clearly erroneous standards are indistinguishable: A court of
appeals would be justified in concluding that a district court had
abused its discretion in making a factual finding only if the
finding were clearly erroneous.
The scope of disagreement over the appropriate standard of
review can thus be confined to a narrow issue: whether the court of
appeals must defer to the district court's legal conclusions in
Rule 11 proceedings. A number of factors have led the majority of
Circuits,
see supra at
496 U. S.
399-400, as well as a number of commentators,
see,
e.g., C. Shaffer & P. Sandler, Sanctions: Rule 11 and
Other Powers 14-15 (2d ed. 1988) (hereinafter Shaffer &
Sandler); American Judicature Society, Rule 11 in Transition, The
Report of the Third Circuit Task Force on Federal Rule of Civil
Procedure 11, 45-49 (Burbank, reporter 1989), to conclude that
appellate courts should review all aspects of a district court's
imposition of Rule 11 sanctions under a deferential standard.
The Court has long noted the difficulty of distinguishing
between legal and factual issues.
See Pullman-Standard v.
Swint, 456 U. S. 273,
456 U. S. 288
(1982) ("Rule 52(a) does not furnish particular guidance with
respect to distinguishing law from fact. Nor do we yet know of any
other rule or principle that will unerringly distinguish a factual
finding from a legal conclusion"). Making such distinctions is
particularly difficult in the Rule 11 context. Rather than
mandating an inquiry into purely legal questions, such as whether
the attorney's legal argument was correct, the rule requires a
court to consider issues rooted in factual determinations. For
example, to determine whether an attorney's prefiling inquiry was
reasonable, a court must consider all the circumstances of a case.
An inquiry that is unreasonable when an attorney has months to
prepare a complaint may be reasonable when he has only a
Page 496 U. S. 402
few days before the statute of limitations runs. In considering
whether a complaint was supported by fact and law "to the best of
the signer's knowledge, information, and belief," a court must make
some assessment of the signer's credibility. Issues involving
credibility are normally considered factual matters.
See
Fed.Rule Civ.Proc. 52;
see also United States v. Oregon Medical
Society, 343 U. S. 326,
343 U. S. 332
(1952). The considerations involved in the Rule 11 context are
similar to those involved in determining negligence, which is
generally reviewed deferentially.
See Mars Steel Corp. v.
Continental Bank, N.A., supra, at 932;
see also 9 C.
Wright & A. Miller, Federal Practice and Procedure § 2590
(1971);
McAllister v. United States, 348 U. S.
19,
348 U. S. 20-22
(1954) (holding that the District Court's findings of negligence
were not clearly erroneous). Familiar with the issues and
litigants, the district court is better situated than the court of
appeals to marshall the pertinent facts and apply the
fact-dependent legal standard mandated by Rule 11. Of course, this
standard would not preclude the appellate court's correction of a
district court's legal errors,
e.g., determining that Rule
11 sanctions could be imposed upon the signing attorney's law firm,
see Pavelic & LeFlore v. Marvel Entertainment Group,
493 U. S. 120
(1989), or relying on a materially incorrect view of the relevant
law in determining that a pleading was not "warranted by existing
law or a good faith argument" for changing the law. An appellate
court would be justified in concluding that, in making such errors,
the district court abused its discretion. "[I]f a district court's
findings rest on an erroneous view of the law, they may be set
aside on that basis."
Pullman-Standard v. Swint, 456 U.S.
supra, at
456 U. S. 287.
See also Icicle Seafoods, Inc. v. Worthington,
475 U. S. 709,
475 U. S. 714
(1986) ("If [the Court of Appeals] believed that the District
Court's factual findings were unassailable, but that the proper
rule of law was misapplied to those findings, it could have
reversed the District Court's judgment").
Page 496 U. S. 403
Pierce v. Underwood, 487 U. S. 552
(1988), strongly supports applying a unitary abuse of discretion
standard to all aspects of a Rule 11 proceeding. In
Pierce, the Court held a District Court's determination
under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d)
(1982 ed.), that "the position of the United States was
substantially justified" should be reviewed for an abuse of
discretion. As a position is "substantially justified" if it "has a
reasonable basis in law and fact," 487 U.S. at
487 U. S. 566,
n. 2, EAJA requires an inquiry similar to the Rule 11 inquiry as to
whether a pleading is "well grounded in fact" and legally tenable.
Although the EAJA and Rule 11 are not completely analogous, the
reasoning in
Pierce is relevant for determining the Rule
11 standard of review.
Two factors the Court found significant in
Pierce are
equally pertinent here. First, the Court indicated that "
as a
matter of the sound administration of justice,'" deference was owed
to the "`judicial actor . . . better positioned than another to
decide the issue in question.'" 487 U.S. at 487 U. S.
559-560, quoting Miller v. Fenton, 474 U.
S. 104, 474 U. S. 114
(1985). Because a determination whether a legal position is
"substantially justified" depends greatly on factual
determinations, the Court reasoned that the district court was
"better positioned" to make such factual determinations.
See 487 U.S. at 487 U. S. 560.
A district court's ruling that a litigant's position is factually
well grounded and legally tenable for Rule 11 purposes is similarly
fact-specific. Pierce also concluded that district court's
rulings on legal issues should be reviewed deferentially. See
id. at 487 U. S.
560-561. According to the Court, review of legal issues
under a de novo standard would require the courts of
appeals to invest time and energy in the unproductive task of
determining "not what the law now is, but what the Government was
substantially justified in believing it to have been."
Ibid. Likewise, an appellate court reviewing legal issues
in the Rule 11 context would be required to determine whether, at
the time the attorney filed the
Page 496 U. S. 404
pleading or other paper, his legal argument would have appeared
plausible. Such determinations "will either fail to produce the
normal law-clarifying benefits that come from an appellate decision
on a question of law, or else will strangely distort the appellate
process" by establishing circuit law in "a most peculiar,
second-handed fashion."
Id. at
487 U. S.
561.
Second,
Pierce noted that only deferential review gave
the district court the necessary flexibility to resolve questions
involving "
multifarious, fleeting, special, narrow facts that
utterly resist generalization.'" Id. at 487 U. S.
561-562. The question whether the government has taken a
"substantially justified" position under all the circumstances
involves the consideration of unique factors that are "little
susceptible . . . of useful generalization." Ibid. The
issues involved in determining whether an attorney has violated
Rule 11 likewise involve "fact-intensive, close calls." Shaffer
& Sandler 15. Contrary to petitioner's contentions, Pierce
v. Underwood is not distinguishable on the ground that
sanctions under Rule 11 are mandatory: that sanctions "shall" be
imposed when a violation is found does not have any bearing on how
to review the question whether the attorney's conduct violated Rule
11.
Rule 11's policy goals also support adopting an
abuse-of-discretion standard. The district court is best acquainted
with the local bar's litigation practices, and thus best situated
to determine when a sanction is warranted to serve Rule 11's goal
of specific and general deterrence. Deference to the determination
of courts on the front lines of litigation will enhance these
courts' ability to control the litigants before them. Such
deference will streamline the litigation process by freeing
appellate courts from the duty of reweighing evidence and
reconsidering facts already weighed and considered by the district
court; it will also discourage litigants from pursuing marginal
appeals, thus reducing the amount of satellite litigation.
Although district courts' identification of what conduct
violates Rule 11 may vary,
see Schwarzer, Rule 11
Revisited,
Page 496 U. S. 405
101 Harv.L.Rev. 1013, 1015-1017 (1988); Note, A Uniform Approach
to Rule 11 Sanctions, 97 Yale L.J. 901 (1988), some variation in
the application of a standard based on reasonableness is
inevitable. "Fact-bound resolutions cannot be made uniform through
appellate review,
de novo or otherwise."
Mars Steel
Corp. v. Continental Bank N.A., 880 F.2d at 936;
see
also Shaffer & Sandler 14-15. An appellate court's review
of whether a legal position was reasonable or plausible enough
under the circumstances is unlikely to establish clear guidelines
for lower courts; nor will it clarify the underlying principles of
law.
See Pierce, supra, 487 U.S. at
487 U. S.
560-561.
In light of our consideration of the purposes and policies of
Rule 11 and in accordance with our analysis of analogous EAJA
provisions, we reject petitioner's contention that the Court of
Appeals should have applied a three-tiered standard of review.
Rather, an appellate court should apply an abuse-of-discretion
standard in reviewing all aspects of a district court's Rule 11
determination. A district court would necessarily abuse its
discretion if it based its ruling on an erroneous view of the law
or on a clearly erroneous assessment of the evidence. Here, the
Court of Appeals determined that the District Court "applied the
correct legal standard and offered substantial justification for
its finding of a Rule 11 violation." 277 U.S.App. D.C., at 339, 875
F.2d at 896. Its affirmance of the District Court's liability
determination is consistent with the deferential standard we adopt
today.
V
Finally, the Court of Appeals held that respondents were
entitled to be reimbursed for attorney's fees they had incurred in
defending their award on appeal. Accordingly, it remanded to the
District Court "to determine such expenses and, ultimately, to
enter an appropriate award."
Id. at 341, 875 F.2d at 898.
This ruling accorded with the decisions of the Courts of Appeals
for the First and Seventh Circuits,
see
Page 496 U. S. 406
Muthig v. Brant Point Nantucket, Inc., 838 F.2d at 607,
and
Hays v. Sony Corp. of America, 847 F.2d 412, 419-420
(CA7 1988), and conflicted with the decisions of the Fourth and
Ninth Circuits,
see Basch v. Westinghouse Electric Corp.,
777 F.2d 165, 175 (CA4 1985),
cert. denied, 476 U.S. 1108
(1986), and
Orange Production Credit Assn. v. Frontline
Ventures Ltd., 801 F.2d 1581, 1582-1583 (CA9 1986).
On its face, Rule 11 does not apply to appellate proceedings.
Its provision allowing the court to include
"an order to pay to the other party or parties the amount of the
reasonable expense, incurred because of the filing of the pleading,
motion, or other paper, including a reasonable attorney's fee"
must be interpreted in light of Federal Rule of Civil Procedure
1, which indicates that the rules only "govern the procedure in the
United States district courts." Neither the language of Rule 11 nor
the Advisory Committee Note suggests that the Rule could require
payment for any activities outside the context of district court
proceedings.
Respondents interpret the last sentence of Rule 11 as extending
the scope of the sanction to cover any expenses, including fees on
appeal, incurred "because of the filing." In this case, respondents
argue, they would have incurred none of their appellate expenses
had petitioner's lawsuit not been filed. This line of reasoning
would lead to the conclusion that expenses incurred "because of" a
baseless filing extend indefinitely.
Cf. W. Keeton, D.
Dobbs, R. Keeton, & D. Owens, Prosser and Keeton, on Law of
Torts § 41, p. 264 (5th ed. 1984) ("In a philosophical sense, the
consequences of an act go forward to eternity. . . . As a practical
matter, legal responsibility must be limited to those causes which
are so closely connected with the result and of such significance
that the law is justified in imposing liability"). Such an
interpretation of the rule is overbroad. We believe Rule 11 is more
sensibly understood as permitting an award only of those expenses
directly caused by the filing, logically, those at the trial level.
A plaintiff's filing requires the defendant
Page 496 U. S. 407
to take the necessary steps to defend against the suit in
district court; if the filing was baseless, attorneys' fees
incurred in that defense were triggered by the Rule 11 violation.
If the district court imposes Rule 11 sanctions on the plaintiff,
and the plaintiff appeals, the expenses incurred in defending the
award on appeal are directly caused by the district court's
sanction and the appeal of that sanction, not by the plaintiff's
initial filing in district court.
The Federal Rules of Appellate Procedure place a natural limit
on Rule 11's scope. On appeal, the litigants' conduct is governed
by Federal Rule of Appellate Procedure 38, which provides:
"If a court of appeals shall determine that an appeal is
frivolous, it may award just damages and single or double costs to
the appellee."
If the appeal of a Rule 11 sanction is itself frivolous, Rule 38
gives appellate courts ample authority to award expenses. Indeed,
because the district court has broad discretion to impose Rule 11
sanctions, appeals of such sanctions may frequently be frivolous.
See 9 J. Moore, B. Ward, & J. Lucas, Moore's Federal
Practice � 238.03[2] pp. 38-13, 38-14 (2d ed. 1989) ("[W]here an
appeal challenges actions or findings of the district court to
which an appellate court gives deference by judging under an abuse
of discretion or clearly erroneous standard, the court is more
likely to find that the appellant's arguments are frivolous"). If
the appeal is not frivolous under this standard, Rule 38 does not
require the appellee to pay the appellant's attorney's fees.
Respondent's interpretation of Rule 11 would give a district court
the authority to award attorney's fees to the appellee even when
the appeal would not be sanctioned under the appellate rules. To
avoid this somewhat anomalous result, Rules 11 and 38 are better
read together as allowing expenses incurred on appeal to be shifted
onto appellants only when those expenses are caused by a frivolous
appeal, and not merely because a Rule 11 sanction upheld on appeal
can ultimately be traced to a baseless filing in district
court.
Page 496 U. S. 408
Limiting Rule 11's scope in this manner accords with the policy
of not discouraging meritorious appeals. If appellants were
routinely compelled to shoulder the appellees' attorney's fees,
valid challenges to district court decisions would be discouraged.
The knowledge that, after an unsuccessful appeal of a Rule 11
sanction, the district court that originally imposed the sanction
would also decide whether the appellant should pay his opponent's
attorney's fee would be likely to chill all but the bravest
litigants from taking an appeal.
See Webster v. Sowders,
846 F.2d 1032, 1040 (CA6 1988) ("Appeals of district court orders
should not be deterred by threats [of Rule 11 sanctions] from
district judges"). Moreover, including appellate attorney's fees in
a Rule 11 sanction might have the undesirable effect of encouraging
additional satellite litigation. For example, if a district court
included appellate attorney's fees in the Rule 11 sanction on
remand, the losing party might again appeal the amount of the
award.
It is possible that disallowing an award of appellate attorney's
fees under Rule 11 would discourage litigants from defending the
award on appeal when appellate expenses are likely to exceed the
amount of the sanction. There is some doubt whether this
proposition is empirically correct.
See American
Judicature Society, Rule 11 in Transition, The Report of the Third
Circuit Task Force on Federal Rule of Civil Procedure 11, p. 15
(Burbank, reporter 1989). The courts of appeals have ample
authority to protect the beneficiaries of Rule 11 sanctions by
awarding damages and single or double costs under Rule 38 -- which
they may do, as we have noted, when the appellant had no reasonable
prospect of meeting the difficult standard of abuse of discretion.
Beyond that protection, however, the risk of expending the value of
one's award in the course of defending it is a natural concomitant
of the American Rule,
i.e., that "the prevailing litigant
is ordinarily not entitled to collect a reasonable attorneys' fee
from the loser."
Alyeska Pipeline Service Co. v. Wilderness
Society, 421 U. S. 240,
421 U. S. 247
(1975). Whenever
Page 496 U. S. 409
damages awards at the trial level are small, a successful
plaintiff will have less incentive to defend the award on appeal.
As Rule 11 is not a fee-shifting statute, the policies for allowing
district courts to require the losing party to pay appellate, as
well as district court attorneys' fees, are not applicable. "A
movant under Rule 11 has no entitlement to fees or any other
sanction, and the contrary view can only breed appellate
litigation." American Judicature Society,
supra, at
49.
We affirm the Court of Appeals' conclusion that a voluntary
dismissal does not deprive a district court of jurisdiction over a
Rule 11 motion, and hold that an appellate court should review the
district court's decision in a Rule 11 proceeding for an abuse of
discretion. As Rule 11 does not authorize a district court to award
attorneys' fees incurred on appeal, we reverse that portion of the
Court of Appeals' judgment remanding the case to the district court
for a determination of reasonable appellate expenses. For the
foregoing reasons, the judgment of the court below is affirmed in
part and reversed in part.
It is so ordered.
* Because petitioners did not raise the argument that Rule 11
sanctions could only be imposed against the two attorneys who
signed the complaint,
see Pavelic & LeFlore v. Marvel
Entertainment Group, 493 U. S. 120
(1990), either in the courts below or in their petition for
certiorari here, we decline to consider it.
See, e.g,
Browning-Ferris Industries v. Kelco Disposal, Inc.,
492 U. S. 257
(1989).
Justice STEVENS, concurring in part and dissenting in part.
Rule 11 and Rule 41(a)(1) are both designed to facilitate the
just, speedy and inexpensive determination of cases in federal
court. Properly understood, the two Rules should work in
conjunction to prevent the prosecution of needless or baseless
lawsuits. Rule 11 requires the court to impose an "appropriate
sanction" on a litigant who wastes judicial resources by filing a
pleading that is not well grounded in fact and warranted by
existing law or a good-faith argument for its extension,
modification or reversal. Rule 41(a)(1) permits a plaintiff who
decides not to continue a lawsuit to withdraw his complaint before
an answer or motion for summary judgment has been filed and avoid
further proceedings on the basis of that complaint. The Court
today, however, refuses
Page 496 U. S. 410
to read the two Rules together in light of their limited, but
valuable, purposes. By focusing on the filing of baseless
complaints, without any attention to whether those complaints will
result in the waste of judicial resources, the Court vastly expands
the contours of Rule 11, eviscerates Rule 41(a)(1), and creates a
federal common law of malicious prosecution inconsistent with the
limited mandate of the Rules Enabling Act.
Prior to the adoption of Rule 41(a)(1), a plaintiff in federal
court could dismiss an action at law up until the entry of the
verdict or judgment. Under that practice, an unscrupulous plaintiff
could harass a defendant by filing repetitive baseless lawsuits as
long as each was dismissed prior to an adverse ruling on the
merits. The Rule is designed to further the just decision of cases
in two significant ways. First, by providing that a second
voluntary dismissal is an adjudication on the merits, and that the
first such dismissal is without prejudice only if the dismissal
precedes the filing of an answer or a motion for summary judgment,
Rule 41(a)(1) satisfies the interest in preventing the abusive
filing of repetitious, frivolous lawsuits. Second, and of equal
importance, by giving the plaintiff the absolute, unqualified right
to dismiss his complaint without permission of the court or notice
to his adversary, the framers of Rule 41(a)(1) intended to preserve
the right of the plaintiff to reconsider his decision to file suit
"during the brief period before the defendant had made a
significant commitment of time and money."
Ante at
496 U. S. 397.
The Rule permits a plaintiff to file a complaint to preserve his
rights under a statute of limitations and then reconsider that
decision prior to the joinder of issue and the commencement of
litigation.
In theory, Rule 11 and Rule 41(a)(1) should work in tandem. When
a complaint is withdrawn under Rule 41(a)(1), the merits of that
complaint are not an appropriate area of further inquiry for the
federal court. The predicate for the imposition of sanctions, the
complaint, has been eliminated
Page 496 U. S. 411
under the express authorization of the Federal Rules before the
court has been required to take any action on it, and the
consideration of a Rule 11 motion on a dismissed complaint would
necessarily result in an increase in the judicial workload. When a
plaintiff persists in the prosecution of a meritless complaint,
however, or the defendant joins issue by filing an answer or motion
for summary judgment, Rule 11 has a proper role to play. The
prosecution of baseless lawsuits and the filing of frivolous papers
are matters of legitimate concern to the federal courts, and are
abuses that Rule 11 was designed to deter.
The Court holds, however, that a voluntary dismissal does not
eliminate the predicate for a Rule 11 violation because a frivolous
complaint that is withdrawn burdens "courts and individuals alike
with needless expense and delay."
Ante at
496 U. S. 398.
That assumption is manifestly incorrect with respect to courts. The
filing of a frivolous complaint which is voluntarily withdrawn
imposes a burden on the court only if the notation of an additional
civil proceeding on the court's docket sheet can be said to
constitute a burden. By definition, a voluntary dismissal under
Rule 41(a)(1) means that the court has not had to consider the
factual allegations of the complaint or ruled on a motion to
dismiss its legal claims.
The Court's observation that individuals are burdened, even if
correct, is irrelevant. Rule 11 is designed to deter parties from
abusing judicial resources, not from filing complaints. Whatever
additional costs in reputation or legal expenses the defendant
might incur, on top of those that are the product of being in a
dispute, [
Footnote 1] are
likely to be either minimal or noncompensable. [
Footnote 2] More fundamentally, the fact that
the
Page 496 U. S. 412
filing of a complaint imposes costs on a defendant should be of
no concern to the rulemakers if the complaint does not impose any
costs on the judiciary: the Rules Enabling Act does not give us
authority to create a generalized federal common law of malicious
prosecution divorced from concerns with the efficient and just
processing of cases in federal court. The only result of the
Court's interpretation will be to increase the frequency of Rule 11
motions and decrease that of voluntary dismissals.
I agree that dismissal of an action pursuant to Rule 41(a)(1)
does not deprive the district court of jurisdiction to resolve
collateral issues. [
Footnote 3]
A court thus may impose sanctions for contempt on a party who has
voluntarily dismissed his complaint or impose sanctions under 28
U.S.C. § 1927 against lawyers who have multiplied court proceedings
vexatiously. A court may also impose sanctions under Rule 11 for a
complaint that is not withdrawn before a responsive pleading is
filed or for other pleadings that are not well grounded and find no
warrant in the law or arguments for its extension, modification or
reversal. If a plaintiff files a false or frivolous affidavit in
response to a motion to dismiss for lack of jurisdiction, I have no
doubt that he can be sanctioned for that filing. In those cases,
the action of the party constitutes an abuse of judicial resources.
But when a plaintiff has voluntarily dismissed a complaint pursuant
to Rule 41(a)(1), a collateral proceeding to examine whether the
complaint is well grounded will stretch out the matter long beyond
the time in which either the plaintiff or the defendant would
otherwise want to litigate the merits of the claim. An
interpretation that can only have the unfortunate consequences of
encouraging the filing of sanction motions and discouraging
voluntary dismissals cannot be a sensible interpretation of Rules
that are designed "to secure the just, speedy, and inexpensive
Page 496 U. S. 413
determination of every action." Fed.Rule Civil Proc. 1.
Despite the changes that have taken place at the bar since I
left the active practice 20 years ago, I still believe that most
lawyers are wise enough to know that their most precious asset is
their professional reputation. Filing unmeritorious pleadings
inevitably tarnishes that asset. Those who do not understand this
simple truth can be dealt with in appropriate disciplinary
proceedings, state law actions for malicious prosecution or abuse
of process, or, in extreme cases, contempt proceedings. It is an
unnecessary waste of judicial resources and an unwarranted
perversion of the Federal Rules to hold such lawyers liable for
Rule 11 sanctions in actions in federal court.
I respectfully dissent.
[
Footnote 1]
It is telling that the primary injury that the respondent points
to is the injury to its reputation caused by the public attention
that lawsuit attracted. Brief for Respondents 19.
[
Footnote 2]
In those rare cases in which the defendant properly incurs great
costs in preparing a motion to dismiss a frivolous complaint, he
can lock in the right to file a Rule 11 motion by answering the
complaint and making his motion to dismiss in the form of a Rule
12(c) motion for judgment on the pleadings.
[
Footnote 3]
I also join Parts IV and V of the Court's opinion.