Federal Rule of Civil Procedure 11 provides, in relevant part,
that "[t]he signature of an attorney or party constitutes a
certificate by the signer that the signer has read the pleading,
motion, or other paper" and "to the best of the signer's knowledge,
information, and belief
formed after reasonable inquiry it
is well-grounded in fact," and that a court shall impose an
appropriate sanction "
upon the person who signed" a
pleading, motion, or other paper in violation of the Rule.
(Emphasis added). After finding that there was no basis in fact for
the copyright infringement action and request for a temporary
restraining order (TRO) filed by petitioner, through its counsel,
against respondents, the District Court imposed Rule 11 monetary
sanctions against petitioner on the ground that it had failed to
make a reasonable inquiry before its president signed the initial
TRO application and its research director signed a supplemental
affidavit. The Court of Appeals affirmed.
Held:
1. Rule 11 applies to represented parties. The Rule's relevant
portion unambiguously states that a party who signs a pleading or
other paper without first conducting a reasonable inquiry shall be
sanctioned, and there is nothing in the Rule's full text that
detracts from this plain meaning. The reading urged by petitioner
-- that since the Rule does not require a represented party to sign
most pleadings, a party who chooses to sign need not comply with
the certification procedure -- is inconsistent with the Rule's
language and purpose. That a represented party may not be required
to sign a pleading does not prohibit that party from attesting to
the merit of a document filed on its behalf, and the signature of
"an attorney
or party" conveys the same message of
certification. Thus, whether it is required or voluntary, a
represented party's signature is capable of violating the Rule. A
represented party's signature would fall outside the Rule's scope
only if the phrase "attorney or party" were given the unnatural
reading "attorney or
unrepresented party." Had the
Advisory Committee responsible for the Rule intended to limit the
certification requirement's application to
pro se parties,
it would have expressly distinguished between represented and
unrepresented parties, which it did elsewhere in the Rule, rather
than lumping
Page 498 U. S. 534
the two types together. Including all parties is also an
eminently sensible reading of the Rule, since the Rule's essence is
that signing denotes merit.
Pavelic & LeFlore v. Marvel
Entertainment Group, 493 U. S. 120,
which held that the Rule contemplates sanctions against an attorney
signer rather than the law firm of which he or she is a member, is
entirely consistent with the result here that a represented party
who signs his or her name bears a personal, nondelegable
responsibility to certify the document's truth and reasonableness.
The issue whether the signatures of petitioner's agents can be
treated as its signature need not be resolved here, since it was
not raised below. Pp.
498 U. S.
540-548.
2. The certification standard for a party is an objective one of
reasonableness under the circumstances. The Rule speaks of
attorneys and parties in a single breath, and unambiguously states
that the signer must conduct a "reasonable inquiry" or face
sanctions. In amending the Rule in 1983, the Advisory Committee
specifically deleted the existing subjective standard and replaced
it with an objective one at the same time that it amended the Rule
to cover parties. There is no public policy reason not to hold
represented parties to a reasonable inquiry standard. The client is
often better positioned to investigate the facts supporting a
pleading or paper, and the fact that a represented party is less
able to investigate the legal basis for a paper or pleading means
only that what is objectively reasonable for a client may differ
from what is objectively reasonable for an attorney. Pp.
498 U. S.
548-551.
3. The imposition of sanctions against a represented party that
did not act in bad faith does not violate the Rules Enabling Act.
Rule 11 is not a fee-shifting statute. The sanctions are not
designed to reallocate the burdens of litigation, since they are
tied not to the litigation's outcome, but to the issue whether a
specific filing was well-founded; they shift only the cost of a
discrete event, rather than the litigation's entire cost, and the
Rule calls only for an appropriate sanction, but does not mandate
attorney's fees.
Alyeska Pipeline Service Co. v. Wilderness
Society, 421 U. S. 240,
421 U. S. 247,
421 U. S.
258-259, distinguished. Also without merit is
petitioner's argument that the Rule creates a federal common law of
malicious prosecution. The Rule's objective is not to reward
parties who are victimized by litigation; it is to deter baseless
filings and curb abuses. While the Rule may confer a benefit on
other litigants, the Rules Enabling Act is not violated by
incidental effects on substantive rights where the Rule is
reasonably necessary to maintain the integrity of the federal
practice and procedure system. Pp.
498 U. S.
531-534.
892 F.2d 802 (CA9 1989), affirmed.
O'CONNOR, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and WHITE, BLACKMUN, and SOUTER, JJ., joined.
KENNEDY, J.,
Page 498 U. S. 535
filed a dissenting opinion, in which MARSHALL and STEVENS, JJ.,
joined, and in Parts I, III, and IV of which SCALIA, J., joined,
post, p.
498 U. S.
554.
Justice O'CONNOR delivered the opinion of the Court.
In this case, we decide whether Rule 11 of the Federal Rules of
Civil Procedure imposes an objective standard of reasonable inquiry
on represented parties who sign pleadings, motions, or other
papers.
I
Business Guides, Inc., a subsidiary of a leading publisher of
trade magazines and journals, publishes directories for 18
specialized areas of retail trade. In an effort to protect its
directories against copying, Business Guides deliberately plants in
them bits of false information, known as "seeds." Some seeds
consist of minor alterations in otherwise accurate listings --
transposed numbers in an address or zip code, or a misspelled name
-- while others take the form of wholly fictitious listings
describing nonexistent businesses. Business Guides considers the
presence of seeds in a competitor's directory to be evidence of
copyright infringement.
*
On October 31, 1986, Business Guides, through its counsel
Finley, Kumble, Wagner, Heine, Unterberg, Manley, Myerson, and
Casey (Finley, Kumble), filed an action in the United States
District Court for the Northern District of
Page 498 U. S. 536
California against Chromatic Communications Enterprises, Inc.,
claiming copyright infringement, conversion, and unfair
competition, and seeking a temporary restraining order (TRO). The
TRO application was signed by a Finley, Kumble attorney and by
Business Guides' president on behalf of the corporation. Business
Guides submitted under seal affidavits in support of the
application. These affidavits charged Chromatic with copying, as
evidenced by the presence of 10 seeds in Chromatic's directory. One
affidavit, that of sales representative Victoria Burdick,
identified the 10 listings in Business Guides' directory that had
allegedly been copied, but did not pinpoint the seed in each
listing.
A hearing on the TRO was scheduled for November 7, 1986. Three
days before the hearing, the District Judge's law clerk phoned
Finley, Kumble and asked it to specify what was incorrect about
each listing. Finley, Kumble relayed this request to Business
Guides' Director of Research, Michael Lambe. This was apparently
the first time the law firm asked its client for details about the
10 seeds. Based on Lambe's response, Finley, Kumble informed the
court that Business Guides was retracting its claims of copying as
to three of the seeds. The District Court considered this
suspicious, and so conducted its own investigation into the
allegations of copying. The District Judge's law clerk spent one
hour telephoning the businesses named in the "seeded" listings,
only to discover that 9 of the 10 listings contained no incorrect
information.
Unaware of the District Court's discovery, Finley, Kumble
prepared a supplemental affidavit of Michael Lambe, identifying
seven listings in Chromatic's directory and explaining precisely
what part of each listing supposedly contained seeded information.
Lambe signed this affidavit on the morning of the November 7
hearing. Before doing so, however, Lambe crossed out reference to a
fourth seed that he had determined did not in fact reflect any
incorrect information, but which Finley, Kumble had not
retracted.
Page 498 U. S. 537
At the hearing, the District Court, based on its discovery that
9 of the original 10 listings contained no incorrect information,
denied the application for a TRO. More importantly, the judge
stayed further proceedings and referred the matter to a Magistrate
to determine whether Rule 11 sanctions should be imposed. The
Magistrate conducted two evidentiary hearings, at which he
instructed Business Guides and Finley, Kumble to explain why 9 of
its 10 charges of copying were meritless. Both claimed it was a
coincidence. Doubting the good faith of these representations, the
Magistrate recommended that both the law firm and the client be
sanctioned.
See App. to Pet. for Cert. 64a-75a.
Later, claiming to have uncovered the true source of the errors,
the parties asked for and received a third hearing. Business Guides
explained that, in compiling its "master seed list," it had
departed from its normal methodology. Usually, letters and numbers
were transposed deliberately and recorded on the seed list before
the directory was published. In this case, the company had compiled
the master seed list after publication by looking for unintended
typographical errors in the directory. To locate such errors, sales
representative Victoria Burdick had compared the final version of
the directory against initial questionnaires that had been
submitted to Business Guides by businesses that wanted to be
listed. When Burdick discovered a disparity between a questionnaire
and the final directory, she included it on the seed list. She
assumed, without investigating, that the information on the
questionnaires was accurate. As it turned out, the questionnaires
themselves sometimes contained transposed numbers or misspelled
names, which other employees had corrected when proofreading the
directory prior to publication. Consequently, many of the seeds
appearing on the master list contained no false information. The
presence of identical listings in a competitor's directory thus
would not indicate copying, but rather accurate research.
Page 498 U. S. 538
The Magistrate accepted this explanation, but determined that
sanctions were nonetheless appropriate.
Id. at 48a. First,
he found that Business Guides, in filing the initial TRO
application, had "failed to conduct a proper inquiry, resulting in
the presentation of unreasonable and false information to the
court."
Id. at 53a. The Magistrate did not recommend that
Finley, Kumble be sanctioned for the initial application, however,
as the firm had been led to believe that there was an urgent need
to act quickly, and thus relied on the information provided by its
sophisticated corporate client.
Id. at 54a-55a. Next, the
Magistrate recommended that both Business Guides and Finley, Kumble
be sanctioned for having failed to inquire into the accuracy of the
remaining seeds following Michael Lambe's discovery, based on only
a few minutes of investigation, that 3 of the 10 were invalid.
Id. at 55a-56a. Finally, the Magistrate recommended that
both the law firm and its client be sanctioned for their conduct at
the first two evidentiary hearings. Instead of investigating the
cause of the errors in the seed list, Business Guides and Finley,
Kumble had relied on a "coincidence" defense.
Id. at 51a.
The Magistrate determined that
"[n]o reasonable person would have been satisfied with these
explanations. . . . Finley, Kumble and Business Guides did not need
this court to point out the blatant errors in the logic of their
representations."
Id. at 59a.
The District Court agreed with the Magistrate, stating:
"The standard of conduct under Rule 11 is one of objective
reasonableness. Applying this standard to the circumstances of this
case, it is clear that both Business Guides and Finley Kumble have
violated the Rule."
119 F.R.D. 685, 688-689 (ND Cal.1988). The court reiterated the
Magistrate's conclusion that: (1) Business Guides violated Rule 11
by filing the initial TRO application; (2) Business Guides and
Finley, Kumble violated the Rule by failing to conduct a reasonable
inquiry once they were put on notice of several inaccuracies; and
(3) Business Guides and Finley, Kumble violated
Page 498 U. S. 539
the Rule in their arguments to the Magistrate at the first two
evidentiary hearings.
Id. at 689. Rather than impose
sanctions at that time, the District Court unsealed the proceedings
and invited Chromatic to file a motion requesting particular
sanctions.
Id. at 690.
Chromatic brought a motion for sanctions against both Business
Guides and Finley, Kumble. It later moved to withdraw the motion
with respect to Finley, Kumble, after learning that the law firm
had recently dissolved and that all proceedings against the firm
were stayed under § 362 of the Bankruptcy Code. 121 F.R.D. 402, 403
(ND Cal.1988). The District Court accepted this withdrawal and
issued its ruling without prejudice to Chromatic's right to pursue
sanctions against Finley, Kumble at a later date.
Ibid.
Before ruling on the motion for sanctions against Business
Guides, the District Court made additional fact findings. It
observed that, of the 10 seeds that had originally been alleged to
be present in Chromatic's directory, only one actually contained
false information.
Ibid. This seed was a wholly fictitious
listing for a company that did not exist. Chromatic denied that it
had copied this listing from Business Guides' directory; it offered
an alternative explanation -- that Business Guides had "planted"
the fake listing in Chromatic's directory. A Business Guides
employee had requested a copy of Chromatic's directory, filled out
a questionnaire providing information about the nonexistent
company, and mailed this questionnaire to Chromatic, intending that
the company publish the false listing in its directory.
Id. at 403-404. Business Guides did not deny the truth of
these charges, and the District Court found that petitioner's
silence amounted to a "tacit admission."
Id. at 404. In
light of this finding, the court had no choice but to conclude that
"Business Guides' entire lawsuit has no basis in fact. . . .
[T]here was, and is, no evidence of copyright infringement."
Ibid.
The court then ruled on Chromatic's motion for sanctions. Citing
"the rather remarkable circumstances of this case, and
Page 498 U. S. 540
the serious consequences of Business Guides' improper conduct,"
it dismissed the action with prejudice.
Id. at 406.
Additionally, it imposed $13,865.66 in sanctions against Business
Guides, the amount of Chromatic's legal expenses and out-of-pocket
costs.
Id. at 405.
The Court of Appeals for the Ninth Circuit affirmed the District
Court's holdings that Business Guides was subject to an objective
standard of reasonable inquiry into the factual basis of papers
submitted to the court, and that Business Guides had failed to
conduct a reasonable inquiry before (1) signing the initial TRO
application, and (2) submitting Michael Lambe's supplemental
declaration. 892 F.2d 802, 811 (1989). The court relied on the
plain language of Rule 11, which
"draws no distinction between the state of mind of attorneys and
parties. . . . On the contrary, the rule, by requiring any 'signer'
of a paper (attorney
or party) to conduct a 'reasonable
inquiry,' would appear to prescribe similar standards for attorneys
and represented parties."
Id. at 809 (emphasis original). The Court of Appeals
reversed, however, the District Court's holding that oral
representations and testimony before the Magistrate violated Rule
11.
Id. at 813. Because it reversed one of the three bases
on which Business Guides had been sanctioned, the Court of Appeals
vacated the order of sanctions and remanded to the District Court
for reconsideration.
Id. at 813-814. We granted certiorari
to determine whether the Court of Appeals properly held Business
Guides to an objective standard of reasonable inquiry. 497 U.S.
1002 (1990). Subsequently, the District Court issued an order
reaffirming the dismissal and monetary sanctions. App. to Pet. for
Cert. 1a-2a.
II
A
"We give the Federal Rules of Civil Procedure their plain
meaning."
Pavelic & LeFlore v. Marvel Entertainment
Group, 493 U. S. 120,
493 U. S. 123
(1989). As with a statute, our inquiry
Page 498 U. S. 541
is complete if we find the text of the Rule to be clear and
unambiguous. Rule 11 provides in relevant part:
"The signature of an attorney
or party constitutes a
certificate by the signer that . . . to the best of the signer's
knowledge, information, and belief
formed after reasonable
inquiry it is well-grounded in fact. . . . If a pleading,
motion, or other paper is signed in violation of this rule, the
court . . . shall impose
upon the person who signed it . .
. an appropriate sanction."
(Emphasis added). Thus viewed, the meaning of the Rule seems
plain: a party who signs a pleading or other paper without first
conducting a reasonable inquiry shall be sanctioned. Business
Guides argues, however, that the Rule's meaning is not so clear
when one reads the full text. Accordingly, we reproduce below the
full text of Rule 11, adding bracketed numbers before each sentence
to clarify the discussion that follows:
"[1] 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. [2] 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. [3] Except when otherwise specifically provided by
rule or statute, pleadings need not be verified or accompanied by
affidavit. [4] The rule in equity that the averments of an answer
under oath must be overcome by the testimony of two witnesses or of
one witness sustained by corroborating circumstances is abolished.
[5] 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
Page 498 U. S. 542
as to harass or to cause unnecessary delay or needless increase
in the cost of litigation. [6] 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. [7] 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."
We find nothing in the full text of the Rule that detracts from
the plain meaning of the relevant portion quoted initially. Rule 11
is "aimed at curbing abuses of the judicial system."
Cooter
& Gell v. Hartmarx Corp., 496 U.
S. 384,
496 U. S. 397
(1990). To this end, it sets up a means by which litigants certify
to the court, by signature, that any papers filed are well-founded.
The first three sentences of the Rule explain in what instances a
signature is mandatory. Sentence [1] states that, where a party is
represented by counsel, the party's attorney must sign any motion,
pleading, or other paper filed with the court. Sentence [2]
provides that, where a party is proceeding
pro se, the
unrepresented party must sign the documents. Sentence [3]
acknowledges that, in some situations, represented parties are
required by rule or statute to verify pleadings or sign affidavits.
Sentence [4] explains that certification by signature replaces some
older forms of oath and attestation.
The heart of Rule 11 is sentence [5], which explains in detail
the message conveyed by the signing of a document. A signature
certifies to the court that the signer has read the document, has
conducted a reasonable inquiry into the facts and the law and is
satisfied that the document is well-grounded in both, and is acting
without any improper motive.
Page 498 U. S. 543
See 5A C. Wright & A. Miller, Federal Practice and
Procedure § 1335, pp. 57-58 (2d ed. 1990) (hereinafter Wright &
Miller). This sentence, by its terms, governs any signature of "an
attorney or party," thereby making it applicable not only to
signatures required by sentences [1], [2], and [3], but also to
signatures that are not required, but nevertheless present.
"The certification requirement now mandates that
all
signers consider their behavior in terms of the duty they owe to
the court system to conserve its resources and avoid unnecessary
proceedings."
Id. at 21, § 1331 (emphasis added). The final two
sentences describe the means by which the Rule is enforced.
Sentence [6] dictates that, where a required signature is missing
and the omission is not corrected promptly, the document will be
stricken. Sentence [7] requires that sanctions be imposed where a
signature is present but fails to satisfy the certification
standard.
Business Guides proposes an alternative interpretation of the
text. As mentioned, sentence [1] indicates that a party who is
represented by counsel is not itself required to sign most papers
or pleadings; generally, only the signature of the attorney is
mandated. Business Guides concludes from this that a represented
party may, if it wishes, sign a document, but that this signature
need not comply with the certification standard described in
sentence [5]. Because a client's signature is not normally required
by Rule 11, the occasional presence of one cannot run afoul of the
Rule. In short, Business Guides maintains that a represented party
is free to sign frivolous or vexatious documents with impunity,
because its signature on a document carries with it no additional
risk of sanctions.
This reading is inconsistent with both the language and the
purpose of Rule 11. As an initial matter, it is not relevant that
represented parties rarely sign filed documents, because Business
Guides did sign in this case. Indeed, it was required to do so.
Rule 65(b) of the Federal Rules of Civil Procedure provides
specifically that a TRO application must be
Page 498 U. S. 544
accompanied by an affidavit or verified complaint that sets
forth the facts. A TRO application is thus one of the situations
provided for in sentence [3], where a party's verification or
signed affidavit is mandatory. Even if Business Guides had not been
required to sign the TRO application, but did so voluntarily, the
language of Rule 11 would still require that the signature satisfy
the certification requirement. Sentence [1] may not require a
represented party to sign papers and pleadings, but neither does it
prohibit a represented party from attesting to the merit of
documents filed on its behalf. "When a party is represented by
counsel, it is unnecessary, but not improper, for the represented
party to sign as well." Wright & Miller § 1333, at 47.
Accordingly, sentence [5] declares that the signature of a party
conveys precisely the same message as that of an attorney:
"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 . . . it is well-grounded in fact and
is warranted by existing law."
(Emphasis added). It seems plain that the voluntary signature of
a represented party, no less than the mandatory signature of an
attorney, is capable of violating the Rule.
The only way that Business Guides can avoid having to satisfy
the certification standard is if we read "attorney or party" as
used in sentence [5] to mean "attorney or
unrepresented
party." Only then would the signature of a represented party fall
outside the scope of the Rule. We decline to adopt this unnatural
reading, as there is no indication that this is what the Advisory
Committee intended. Just the opposite is true. Prior to its
amendment in 1983, sentence [5] referred solely to "[t]he signature
of an attorney" on a "pleading." The 1983 amendments deliberately
expanded the coverage of the Rule. Wright & Miller § 1331, at
21. Sentence [5] was amended to refer broadly to "[t]he signature
of an attorney
or party" on a "pleading, motion,
or
other paper" (emphasis added). Represented parties, despite
having counsel,
Page 498 U. S. 545
routinely sign certain papers -- declarations, affidavits, and
the like -- during the course of litigation. Business Guides, for
example, submitted to the District Court no fewer than five signed
papers in support of its TRO application. The amended language of
sentence [5] leaves little room for doubt that the signatures of
the "party" on these "other papers" must satisfy the certification
requirement.
Had the Advisory Committee intended to limit the application of
the certification standard to parties proceeding
pro se,
they would surely have said so. Elsewhere in the text, the
Committee demonstrated its ability to distinguish between
represented and unrepresented parties. Sentence [1] refers
specifically to "a party represented by an attorney," while
sentence [2] applies to "[a] party who is
not represented
by an attorney" (emphasis added). Sentence [5], however, draws no
such distinction; it lumps together the two types of parties. By
using the more expansive term "party," the Committee called for
more expansive coverage. The natural reading of this language is
that
any party who signs a document, whether or not the
party was required to do so, is subject to the certification
standard of Rule 11.
Leading scholars are in accord. Professors James Wm. Moore and
Jo Desha Lucas, authors of Moore's Federal Practice, state:
"The current Rule places an affirmative duty on the attorney or
party to investigate the facts and the law prior to the
subscription and submission of any pleading, motion or paper. . . .
The rule applies to attorneys, parties represented by attorneys,
and parties who appear pro se."
2A J. Moore & J. Lucas, Moore's Federal Practice � 11.02[3],
pp. 11-15 to 11-17, (2d ed. 1990) (footnotes omitted). Professors
Charles Alan Wright and Arthur R. Miller describe in their treatise
on Federal Practice and Procedure "seven major alterations" of Rule
11 practice occasioned by the 1983 amendments, one of which is
that
"the range of people covered by the certification requirement .
. . has been expanded. Now,
all signers, not just
attorneys, are on notice
Page 498 U. S. 546
that their signature constitutes a certification as to the
contents of the document."
Wright & Miller, § 1331, at 21.
"The expansion of the scope of the certification requirement to
include non-attorney signers was accomplished by changing
'signature of an attorney' in the fifth sentence of the rule to
'signature of an attorney or party.'"
Id. at 21-22, n. 54 (emphasis added).
In addition to being the most natural reading, it is an
eminently sensible one. The essence of Rule 11 is that signing is
no longer a meaningless act; it denotes merit. A signature sends a
message to the district court that this document is to be taken
seriously. This case is illustrative. Business Guides sought a TRO
on the strength of an initial application accompanied by five
signed statements to the effect that Chromatic was pirating its
directory. Because these documents were filed under seal, the
District Court had to determine the credibility of the allegations
without the benefit of hearing the other side's view. The court
might plausibly have attached some incremental significance to the
fact that Business Guides itself risked being sanctioned if the
factual allegations contained in these signed statements proved to
be baseless. Business Guides asks that we construe Rule 11 in a way
that would render the signatures on these statements risk-free.
Because this construction is at odds with the Rule's general
admonition that signing denotes merit, we are loath to do so absent
a compelling indication in the text that the Advisory Committee
intended such a result. Because we find no such indication,
compelling or otherwise, we conclude that the word "party" in
sentence [5] means precisely what it appears to mean.
The dissent contends that this conclusion is inconsistent with
our decision last Term in
Pavelic & LeFlore. See post,
at
498 U. S. 556,
498 U. S.
562-564. Just the opposite is true; our decision today
follows naturally from
Pavelic & LeFlore. We held in
Pavelic & LeFlore that Rule 11 contemplates sanctions
against the particular individual who signs his or her name, not
against
Page 498 U. S. 547
the law firm of which that individual is a member, because
"the purpose of Rule 11 as a whole is to bring home to the
individual signer his personal, nondelegable responsibility . . .
to validate the truth and legal reasonableness of the papers
filed."
493 U.S. at
493 U. S. 126.
This is entirely consistent with our decision here that a
represented party who signs his or her name bears a personal,
nondelegable responsibility to certify the truth and reasonableness
of the document. The dissent agrees that a party proceeding without
the benefit of legal assistance bears this responsibility, but
insists that a party represented by counsel -- even one whose
signature is mandatory -- is absolved from any duty to vouch for
the truth of papers he or she signs because he or she has delegated
this responsibility to counsel.
See post at
498 U. S.
556.
The dissent's dichotomy between represented and unrepresented
parties is particularly troubling, given that it has no basis in
the text of the Rule. Sentence [5] refers to "[t]he signature of an
attorney
or party" (emphasis added). We emphasized in
Pavelic & LeFlore that this Court will not reject the
natural reading of a rule or statute in favor of a less plausible
reading, even one that seems to us to achieve a better result. 493
U.S. at
493 U. S.
126-127. Yet Justice KENNEDY proposes that we construe
"party" to mean "unrepresented party" -- notwithstanding the
Advisory Committee's ability, demonstrated only three sentences
earlier, to distinguish between represented and unrepresented
parties -- because he thinks it unwise to punish clients.
See
post at
498 U. S.
556-558.
The dissent also criticizes us for treating the signatures of
Business Guides' president and director of research as signatures
of the company. Justice KENNEDY suggests that this is "in square
conflict" with our holding in
Pavelic & LeFlore that
"
the person who signed'" was the individual attorney, not the
law firm. Post, 498 U. S. 563.
The dissent overlooks an important distinction. In Pavelic
& LeFlore, we relied in part on Rule 11's unambiguous
statement that papers must be signed by an attorney "in the
attorney's individual name."
Page 498 U. S. 548
493 U.S. at
493 U. S. 125
(emphasis omitted). A corporate entity, of course, cannot itself
sign anything; it can act only through its agents. It would be
anomalous to determine that an individual who is represented by
counsel falls within the scope of Rule 11, but that a corporate
client does not, because it cannot itself sign a document. In any
event, the question need not be resolved definitely here; Business
Guides concedes that it did not raise this argument in the courts
below. Brief for Petitioner 35, n. 38.
B
Having concluded that Rule 11 applies to represented parties, we
must next determine whether the certification standard for a party
is the same as that for an attorney. The plain language of the Rule
again provides the answer. It speaks of attorneys and parties in a
single breath and applies to them a single standard:
"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."
As the Court of Appeals correctly observed: "[T]he rule draws no
distinction between the state of mind of attorneys and parties."
892 F.2d at 809. Rather, it states unambiguously that any signer
must conduct a "reasonable inquiry" or face sanctions.
Business Guides devotes much of its brief to arguing that
subjective bad faith, not failure to conduct a reasonable inquiry,
should be the touchstone for sanctions on represented parties. It
points with approval to Rule 56(g) of the Federal Rules of Civil
Procedure, which appears to subject affidavits in the summary
judgment context to a subjective good faith standard. This argument
is misdirected, as this Court is not
Page 498 U. S. 549
acting on a clean slate; our task is not to decide what the rule
should be, but rather to determine what it is. Once we conclude
that Rule 11 speaks to the matter at issue, our inquiry is
complete.
See Pavelic & LeFlore, 493 U.S. at
493 U. S. 126.
As originally drafted, Rule 11 set out a subjective standard, but
the Advisory Committee determined that this standard was not
working.
See Cooter & Gell, 496 U.S. at
496 U. S.
392-393. Accordingly, the Committee deleted the
subjective standard at the same time that it expanded the rule to
cover parties.
See 5A Wright & Miller, at 58-60, §
1335. That the Advisory Committee did not also amend Rule 56(g)
hardly matters. Rather than fashion a standard specific to summary
judgment proceedings, the Committee chose to amend Rule 11, thereby
establishing a more stringent standard for all affidavits and other
papers. Even if we were convinced that a subjective bad faith
standard would more effectively promote the goals of Rule 11, we
would not be free to implement this standard outside of the
rulemaking process. "Our task is to apply the text, not to improve
upon it."
Pavelic & LeFlore, supra, 493 U.S. at
493 U. S.
126.
Nor are we convinced that, as a policy matter, represented
parties should not be held to a reasonable inquiry standard. Quite
often it is the client, not the attorney, who is better positioned
to investigate the facts supporting a paper or pleading. This case
is a perfect example. Business Guides brought the matter to Finley,
Kumble and requested the law firm to obtain an immediate injunction
against Chromatic. Given the apparent urgency, the District Court
reasoned that the firm could not be blamed for relying on the
factual representations of its experienced corporate client.
Rather, the blame -- and the sanctions -- properly fell on Business
Guides:
"This case illustrates well the dangers of a party's failure to
act reasonably in commencing litigation. Here Business Guides, a
sophisticated corporate entity, hired a large, powerful and
nationally known law firm to file suit against a competitor for
copyright infringement.
Page 498 U. S. 550
This competitor happened to be a one-man company operating out
of a garage in California. Two years later, after extensive time
and effort on the part of the court, the various counsel for
Business Guides, as well as various counsel for Business Guides'
counsel, it turns out there was no evidence of infringement. The
entire lawsuit was a mistake. In the meantime, the objects of this
lawsuit have spent thousands of dollars of attorney's fees and have
suffered potentially irreparable damage to their business. This
entire scenario could have been avoided if, prior to filing the
suit, Business Guides simply had spent an hour, like the court's
law clerk did, and checked the accuracy of the purported
seeds."
121 F.R.D. at 405.
Where a represented party appends its signature to a document
that a reasonable inquiry into the facts would have revealed to be
without merit, we see no reason why a District Court should be
powerless to sanction the party in addition to, or instead of, the
attorney.
See Wright & Miller § 1336, at 104. A
contrary rule would establish a safe harbor such that sanctions
could not be imposed where an attorney, pressed to act quickly,
reasonably relies on a client's careless misrepresentations.
Of course, represented parties may often be less able to
investigate the legal basis for a paper or pleading. But this is
not invariably the case. Many corporate clients, for example, have
in-house counsel who are fully competent to make the necessary
inquiry. Other party litigants may have a great deal of practical
litigation experience. Indeed, Business Guides itself is no
stranger to the courts; it is a sophisticated corporate entity that
has been prosecuting copyright infringement actions since 1948.
App. 105-106. The most that can be said is that the legal inquiry
that can reasonably be expected from a party may vary from case to
case. Put another way, "what is objectively reasonable for a client
may differ from what is objectively reasonable for an
attorney."
Page 498 U. S. 551
892 F.2d at 810. The Advisory Committee was well aware of this
when it amended Rule 11. Thus, the certification standard, while
"more stringent than the original good faith formula," is not
inflexible. "The standard is one of reasonableness
under the
circumstances" (emphasis added). Advisory Committee's Note to
Fed.Rule Civ. Proc. 11, 28 U.S.C.App., p. 576. This formulation
"has been embraced in all thirteen circuits." Wright & Miller §
1335, at 61-62. This is a far more sensible rule than that proposed
by Business Guides, which would hold parties proceeding
pro
se to an objective standard, while applying a lesser
subjective standard to represented parties. As noted by the Court
of Appeals,
"We fail to see why represented parties should be given the
benefit of a subjective bad faith standard whereas
pro se
litigants, who do not enjoy the aid of counsel, are held to a
higher objective standard."
892 F.2d at 811.
Giving the text its plain meaning, we hold that it imposes on
any party who signs a pleading, motion, or other paper -- whether
the party's signature is required by the Rule or is provided
voluntarily -- an affirmative duty to conduct a reasonable inquiry
into the facts and the law before filing, and that the applicable
standard is one of reasonableness under the circumstances.
III
One issue remains: Business Guides asserts that imposing
sanctions against a represented party that did not act in bad faith
violates the Rules Enabling Act, 28 U.S.C. § 2072. The Act
authorizes the Court "to prescribe general rules of practice and
procedure," but provides that such rules "shall not abridge,
enlarge, or modify any substantive right." Business Guides argues
that Rule 11, to the extent that it imposes on represented parties
an objective standard of reasonableness, exceeds the limits of the
Court's power in two ways: (1) it authorizes fee shifting in a
manner not approved by Congress; and (2) it effectively creates a
federal tort
Page 498 U. S. 552
of malicious prosecution, thereby encroaching upon various state
law causes of action.
We begin by noting that any Rules Enabling Act challenge to Rule
11 has a large hurdle to get over. The Federal Rules of Civil
Procedure are not enacted by Congress, but "Congress participates
in the rulemaking process." Wright & Miller § 1332, at 40, and
n. 74, citing Amendments to the Rules of Civil Procedure for the
United States District Courts, H.R. Doc. No. 54, 98th Cong., 1st
Sess., 3-25 (1983). Additionally, the Rules do not go into effect
until Congress has had at least seven months to look them over.
See 28 U.S.C. § 2074. A challenge to Rule 11 can therefore
succeed
"only if the Advisory Committee, this Court, and Congress erred
in their
prima facie judgment that the Rule . . .
transgresses neither the terms of the Enabling Act nor
constitutional restrictions."
Hanna v. Plumer, 380 U. S. 460,
380 U. S. 471
(1965).
This Court's decision in
Burlington Northern R. Co. v.
Woods, 480 U. S. 1 (1987),
presents another hurdle. There, the Court considered the Act's
proscription against interference with substantive rights and held,
in a unanimous decision, that
"Rules which
incidentally affect litigants' substantive
rights do not violate this provision if reasonably necessary to
maintain the integrity of that system of rules."
Id. at 5 (emphasis added). There is little doubt that
Rule 11 is reasonably necessary to maintain the integrity of the
system of federal practice and procedure, and that any effect on
substantive rights is incidental.
See id. at 8. We held as
much only last Term in
Cooter & Gell:
"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."
496 U.S. at
496 U. S.
393.
Petitioner's challenges do not clear these substantial hurdles.
In arguing that the monetary sanctions in this case constitute
impermissible fee-shifting, Business Guides relies
Page 498 U. S. 553
on the Court's statement in
Alyeska Pipeline Service Co. v.
Wilderness Society, 421 U. S. 240,
421 U. S. 247
(1975), that, in the absence of legislative guidance, courts do not
have the power "to reallocate the burdens of litigation" by
awarding costs to the losing party in a civil rights suit; they
have only the power to sanction a party for bad faith.
See
id. at
421 U. S.
258-259. The initial difficulty with this argument is
that
Alyeska dealt with the courts' inherent powers, not
the Rules Enabling Act. Rule 11 sanctions do not constitute the
kind of fee-shifting at issue in
Alyeska. Rule 11
sanctions are not tied to the outcome of litigation; the relevant
inquiry is whether a specific filing was, if not successful, at
least well-founded. Nor do sanctions shift the entire cost of
litigation; they shift only the cost of a discrete event. Finally,
the Rule calls only for "an appropriate sanction" -- attorney's
fees are not mandated. As we explained in
Cooter &
Gell: "Rule 11 is not a fee-shifting statute. . . .
A
movant under Rule 11 has no entitlement to fees or any other
sanction.'" 496 U.S. at 496 U. S. 409,
quoting American Judicature Society, Rule 11 in Transition, The
Report of the Third Circuit Task Force on Federal Rule of Civil
Procedure 11, p. 49 (Burbank, reporter 1989).
Also without merit is Business Guides' argument that Rule 11
creates a federal common law of malicious prosecution. We rejected
a similar claim in
Cooter & Gell. But see 496
U.S. at
496 U. S.
411-412 (STEVENS, J., dissenting). The main objective of
the Rule is not to reward parties who are victimized by litigation;
it is to deter baseless filings and curb abuses.
See id.
at
496 U. S. 393,
496 U. S. 409.
Imposing monetary sanctions on parties that violate the Rule may
confer a benefit on other litigants, but the Rules Enabling Act is
not violated by such incidental effects on substantive rights.
See Woods, supra, 480 U.S. at
480 U. S. 5,
480 U. S. 8.
Additionally, we are confident that District Courts will resist the
temptation to use sanctions as substitutes for tort damages. This
case is a good example. Chromatic asked that the sanctions award
include consequential damages, but the District Court refused.
"[W]hile sympathetic to [Chromatic's]
Page 498 U. S. 554
plight," the court was "not persuaded that such compensation is
within the purview of Rule 11." 121 F.R.D. at 406. In the event
that a District Court misapplies the Rule in a particular case, the
error can be corrected on appeal.
"But misapplications do not themselves provide a basis for
concluding that Rule 11 was the result of . . . distinct errors in
prima facie judgment during the development and
promulgation of the rule."
Wright & Miller § 1332, at 40.
In sum, we hold today that Rule 11 imposes an objective standard
of reasonable inquiry on represented parties who sign papers or
pleadings. We have no occasion to determine whether or under what
circumstances a nonsigning party may be sanctioned. The District
Court found that Business Guides failed to conduct a reasonable
inquiry before signing the initial TRO application and before
submitting the signed declaration of its Director of Research,
Michael Lambe. Consequently, the District Court imposed $13,865.66
in sanctions against Business Guides and dismissed the action with
prejudice. The Court of Appeals affirmed each of these rulings. For
the reasons stated herein, the judgment of the Court of Appeals
is
Affirmed.
* Given the posture of this case, we have no occasion to
consider whether the information contained in such a directory
would actually be copyrightable.
See Feist Publications, Inc.
v. Rural Telephone Serv. Co., cert. granted, post, p.
808 (1990).
Justice KENNEDY, with whom Justice MARSHALL and Justice STEVENS
join, and with whom Justice SCALIA joins as to Parts I, III, and
IV, dissenting.
The purpose of Federal Rule of Civil Procedure 11 is to control
the practice of attorneys, or those who act as their own attorneys,
in the conduct of litigation in the federal courts. Extending
judicial power far beyond that boundary, the Court, relying only on
its rulemaking authority, now holds that citizens who seek the aid
of the federal courts may risk money damages or other sanctions if
they do not satisfy some objective standard of care in the
preparation or litigation of a case. This holding is an
extraordinary departure from settled principles governing liability
for misuse of the courts, just as it departs from the structure of
the Rule itself.
Page 498 U. S. 555
The result is all the less defensible in that the sanctions will
apply quite often to those so uninformed that they sign a paper
without necessity. Where the rules or circumstances require a
verified complaint or affidavit, the majority's construction of
Rule 11 affords no avenue of escape from this most troubling and
chilling liability.
In my view, the text of the Rule does not support this extension
of federal judicial authority. Under a proper construction of Rule
11, I should think it an abuse of discretion to sanction a
represented litigant who acts in good faith, but errs as to the
facts.
I
Though the case turns upon a single sentence in Rule 11, the
majority recognizes that the whole text of the Rule must be
considered, not just the sentence in isolation.
See Richards v.
United States, 369 U. S. 1,
369 U. S. 11
(1962). The majority errs, however, in its interpretation of the
text which precedes and the text which follows the sentence in
question. And the result is quite contrary to the Rule's history
and the commentary that accompanied its adoption. The majority in
the last analysis can rely only upon the following sentence from
the rule:
"The signature of an attorney or
party constitutes a
certificate by the signer . . . that to the best of the signer's
knowledge, information, and belief
formed after reasonable
inquiry it is well-grounded in fact. . . ."
Fed.Rule Civ.Proc. 11 (emphasis added). From this it reasons:
Business Guides is a party; agents of Business Guides signed papers
submitted on the company's behalf; therefore, Business Guides
assumed a duty of reasonable inquiry.
But Rule 11's fifth sentence must be construed in light of its
first two sentences, which provide that "[e]very pleading, motion,
and other paper of a party represented by an attorney shall be
signed by at least one attorney of record," and that "[a] party who
is not represented by an attorney" shall sign the papers in person.
Fed.Rule Civ.Proc. 11. Neither of the first two sentences requires,
or even contemplates,
Page 498 U. S. 556
a signature by a represented party. Nor is a represented party's
signature required by any later portion of the Rule. In context,
then, one may with reason correlate "[t]he signature of an attorney
or party" that constitutes a Rule 11 certification with the
signatures of attorneys and
unrepresented parties provided
for earlier in the Rule. We employed just such an analysis last
Term in
Pavelic & LeFlore v. Marvel Entertainment
Group, 493 U. S. 120,
493 U. S. 124
(1989), reasoning that
"in a paragraph beginning with a requirement of individual
signature, and then proceeding to discuss the import and
consequences of signature, . . . references to the signer in the
later portions must reasonably be thought to connote the individual
signer mentioned at the outset."
As we concluded in
Pavelic & LeFlore, I would again
hold the drafters of Rule 11 intended to bind those whose
signatures are provided for in the Rule itself. The disjunction
between represented parties and those whose signatures are
significant for purposes of the Rule is borne out by the Rule's
last sentence, which provides for sanctions upon "the person who
signed [the paper], a represented party, or both." Fed. Rule
Civ.Proc. 11. In my view, this sentence contemplates that the
represented party and the person who signs will be different
persons.
All would concede the primary purpose of the Rule is to govern
those who practice before the courts, and the history of Rule 11's
certification requirements illustrates the radical nature of the
change wrought by the majority's construction. At least since Sir
Thomas More served as Chancellor of England, bills in equity have
required the signature of counsel. Risinger, Honesty in Pleading
and Its Enforcement: Some "Striking" Problems with Federal Rule of
Civil Procedure 11, 61 Minn.L.Rev. 1, 10-12, and n. 22 (1976).
Counsel could be required to pay the costs of an aggrieved party if
a bill contained "irrelevant, impertinent, or scandalous" matter.
J. Story, Equity Pleadings § 47, pp. 41-42 (1838). Justice Story
explained that the purpose of the required signature was
"to secure regularity, relevancy and decency in the
allegations
Page 498 U. S. 557
of the Bill, and the responsibility and guaranty of counsel,
that upon the instructions given to him, and the case laid before
him, there is good ground for the suit in the manner in which it is
framed."
See Risinger,
supra, at 9-13. Justice Story's
explanation for counsel's signature was incorporated into Rule XXIV
of the Equity Rules of 1842, [
Footnote 1] and the certification requirements were
expanded in Rule 24 of the 1912 Equity Rules. [
Footnote 2]
See Risinger,
supra,
at 13. Rule 11, adopted in 1938, extended the signature requirement
beyond attorneys to encompass unrepresented parties as well.
[
Footnote 3]
Page 498 U. S. 558
But it did not apply the certification requirements to
unrepresented parties until 1983.
The 1983 amendments made substantial changes in Rule 11,
expanding the duties imposed by the certification provisions,
extending the certification requirements to unrepresented parties,
and establishing that sanctions could, at least in some
circumstances, be imposed on represented parties. But in light of
the history of Rule 11's certification provisions as a set of
duties imposed on counsel, I see no reason to believe that the Rule
as amended attaches any particular significance to the signature of
a represented party. It is more plausible that the language relied
upon by the majority was designed to bring the signatures of
unrepresented parties, already required by the Rule, within the
certification provisions. This ensures that every pleading, motion,
or other paper filed in federal court bears at least one signature
constituting a Rule 11 certification. Applying the certification
requirements to those who appear on their own behalf preserves the
Rule's well-understood object of imposing obligations on those who
practice before the court. A
pro se litigant in essence
stands in the place of an attorney. By its uncritical extension of
the Rule's certification provisions to represented parties, the
majority's reading severs the certification requirements from their
purpose and origin.
If the drafters of the 1983 amendments had intended a radical
departure from prior practice by imposing duties on represented
parties that before had been imposed only on attorneys, one might
expect discussion of the change in the Advisory Committee's Notes
accompanying the 1983 amendments. But the Notes say nothing of the
kind. They refer instead to "the standard of conduct expected of
attorneys who sign pleadings and motions," or the
"expanded nature of the
lawyer's certification," or employ
similar phrases indicating that the Rule's certification duties
relate to attorneys and those who perform the functions of
attorneys. Advisory Committee's Notes on Fed.Rule Civ.Proc. 11, 28
U.S.C.App.,
Page 498 U. S. 559
pp. 575-576 (emphasis added). [
Footnote 4] In fact, the Notes imply that Rule 11
certification requirements were not intended to attach to the
signature of a represented party, and that a represented party may
be held liable for sanctions only when his attorney has signed a
paper in violation of the Rule. For instance, the Notes
provide:
"If the duty imposed by the rule is violated, the court should
have the discretion to impose sanctions on either the attorney,
the party the signing attorney represents, or both, or on
an unrepresented party who signed the pleading, and the new rule so
provides."
Id. at 576 (emphasis added). The failure to mention the
signature of a represented party is a startling omission if such a
signature could violate the Rule. The assumption of this passage,
that a represented party can be sanctioned in some instances
because his attorney signed in violation of the Rule, not because
the party did, finds further support in the next paragraph of the
Notes. It begins,
"
[e]ven though it is the attorney whose signature violates
the rule, it may be appropriate under the circumstances of the
case to impose a sanction on the client."
Ibid. (emphasis added).
Consider as well the portion of the Notes indicating that
"[a]mended Rule 11
continues to apply to anyone who signs
a pleading, motion, or other paper."
Ibid. (emphasis
added). Since Rule 11 did not impose any duties on a represented
party who signed papers prior to 1983, it is difficult to fathom
what this passage means if the 1983 amendments had the effect
attributed to them by the majority. The passage makes sense only if
it means that Rule 11 continues to apply to anyone whose signature
is provided for in the Rule itself.
Page 498 U. S. 560
With little support for its views in the text of Rule 11 or the
Advisory Committee's Notes, the majority turns to the works of
scholars. Even here, though, the passages quoted from the treatise
authored by Professors Wright and Miller do not seem to me
unambiguous endorsements of the majority's position. They speak of
Rule 11's expansion to "all signers, not just attorneys" or
"non-attorney signers."
Ante at
498 U. S.
545-546 (quoting 5A C. Wright & A. Miller, Federal
Practice and Procedure § 1331, pp. 21-22, and n. 54 (2d ed. 1990)).
But "signer" is a term of art in Rule 11, and, under a proper
interpretation, it applies to those whose signatures the Rule
itself requires. In any event, these snippets from a multivolume
treatise do not reflect studied consideration of the precise
question before the Court, whether a represented party's signature
comes within the Rule 11 certification requirements. The only
explicit reference I find in that treatise to the signature of a
represented party is the statement that such signatures are
"unnecessary, but not improper." 5A Wright & Miller,
supra, § 1333, at 47. This falls far short of the
majority's position.
The majority's construction can draw scant support from the
deterrent policies of Rule 11.
See Cooter & Gell v.
Hartmarx Corp., 496 U. S. 384,
496 U. S. 393
(1990) ("[A]ny interpretation [of Rule 11] must give effect to the
Rule's central goal of deterrence"). Since the Rule does not
require represented parties to sign pleadings, motions, or other
papers, the certification requirements will apply in many instances
to a represented party who signs a paper as a volunteer. Given the
majority's holding, enlistees will be few and far between. It can
be supposed that, after today's decision, most represented parties
who sign papers without necessity will do so unaware that they
subject themselves to the risk of sanctions. If so, their conduct
will not be affected by the duties assumed. If the Rule 11
certification requirements were intended to apply to represented
parties, its provisions would require them to sign papers covered
by the Rule, not leave it as an option. I
Page 498 U. S. 561
can imagine no plausible reason for leaving it to the discretion
of a represented party whether to assume Rule 11 certification
duties and the concomitant risk of sanctions. The majority's
suggestion that a represented party's signature might induce a
court to give greater credence to a submitted paper,
ante
at
498 U. S. 546,
provides little justification for construing Rule 11 to become a
trap for the unwary. Rule 11 already requires a represented party's
attorney to sign, and few courts will be swayed by the fact that a
pleading bears two Rule 11 signatures rather than one.
The majority errs in suggesting that Rule 11's third sentence,
coupled with Rule 65(b), "required" the signature of Business
Guides.
Ante at
498 U. S. 543.
Rule 65(b) requires that applications for temporary restraining
orders be verified or
supported by affidavit. Since, as I
explain below,
infra, at
498 U. S. 562,
affidavits are not "papers" within the meaning of the Rule, and are
often signed by individual witnesses and not parties, the rules did
not require Business Guides to sign here.
Moreover, the majority's suggestion that Rule 11's third
sentence "require[s],"
ante at
498 U. S. 543,
or "provide[s] for,"
ante at
498 U. S. 544,
signatures by represented parties ignores the evident fact that
this sentence abolishes any verification or affidavit requirement
"[e]xcept when otherwise specifically provided by rule or statute,"
Fed.Rule Civ.Proc. 11. Of course, the sentence in question
recognizes that certain rules and statutes, such as Rule 65(b),
still provide for complaints verified by parties or accompanied by
affidavits.
See, e.g., Fed.Rule Civ. Proc. 23.1
(shareholder derivative suit); Fed.Rule Civ.Proc. 27(a)(1)
(perpetuation of testimony); Fed.Rule Civ.Proc. 65(b) (
ex
parte request for temporary restraining order); 28 U.S.C. §
1734(b) (application for order establishing lost or destroyed
record); § 2242 (application for writ of habeas corpus);
see
generally 5A Wright & Miller,
supra, § 1339. It
is not plausible to argue that Rule 11 seeks to bring those
documents within its ambit, however, for this portion of the Rule
existed prior to 1983, when represented
Page 498 U. S. 562
parties were mentioned for the first time. Wrongful verification
already subjects one to potential prosecution for perjury, 18
U.S.C. §§ 1621, 1623, and it is not clear why Rule 11 would impose
additional duties on represented parties in those few instances
where verification is necessary. Further, if the drafters of Rule
11 had intended to subject a verifying party to the duties imposed
on a Rule 11 signer, a plain statement to that effect in the text
of the Rule would have accomplished that result without the odd
consequences of the majority's analysis.
The majority's holding that affidavits are included among the
"pleadings, motions, or other papers" covered by Rule 11 will
doubtless be the portion of its opinion having the greatest impact,
and will come as a surprise to many members of the bar. An
affidavit submitted in support of a represented party's position
will now have to be signed by at least one attorney, or else must
be stricken pursuant to Rule 11's sixth sentence. I would construe
the "papers" covered by Rule 11 to be those which, like pleadings
or motions, invoke the power of the court, as distinct from
supporting affidavits alleging factual matters as in this case or
under Federal Rule of Civil Procedure 56. Pursuant to Rule 11, one
who signs a paper certifies that it "is warranted by existing law
or a good faith argument for the extension, modification, or
reversal of existing law." Since it would be meaningless to make
such a certification with respect to an evidentiary document, I do
not believe affidavits come within the intended scope of the Rule.
As the majority all but admits,
ante at
498 U. S. 549,
its holding renders superfluous Rule 56(g), which imposes sanctions
for summary judgment affidavits submitted in bad faith, since any
affidavit submitted in bad faith will also fail the Rule 11
certification standards.
Though it seems unnecessary to the proper resolution of the
case, I feel compelled to point out one further difficulty with the
majority's analysis. The majority reasons that Business Guides here
incurs liability under the portion of the
Page 498 U. S. 563
Rule's last sentence permitting a court to sanction "the person
who signed" a pleading. But the majority's conclusion is in square
conflict with our interpretation of that phrase last Term in
Pavelic & LeFlore, 493 U. S. 120
(1989). There we construed the authority to sanction "the person
who signed" to extend only to an individual attorney, and not to
the firm on whose behalf he signed. Though a law firm cannot be a
"person who signed," the majority now says that a corporation may.
But the gist of our rationale in
Pavelic & LeFlore was
that the duties imposed by Rule 11's certification requirements
attach to an
individual signer, rather than an entity the
signer represents. We said:
"It is as strange to think that the phrase 'person who signed'
in the last sentence refers to the partnership represented by the
signing attorney, as it would be to think that the earlier phrase
'the signer has read the pleading' refers to a reading not
necessarily by the individual signer, but by someone in the
partnership."
Id. at
493 U. S. 124.
It is just as strange, I submit, to assert that here a corporation
is the "person who signed," and that the corporation thereby
represented that it "ha[d] read the pleading."
In
Pavelic & LeFlore, moreover, we rejected an
appeal to "
long and firmly established legal principles of
partnership and agency:'"
"We are not dealing here . . . with common law liability, but
with a Rule that strikingly departs from normal common law
assumptions such as that of delegability. The signing attorney
cannot leave it to some trusted subordinate, or to one of his
partners, to satisfy himself that the filed paper is factually and
legally responsible; by signing, he represents not merely the fact
that it is so, but also the fact that he personally has applied his
own judgment."
Id. at
493 U. S. 125.
The majority seeks now to resurrect the same principles of agency
we put to rest last Term. The president of Business Guides and
other employees signed papers submitted in support of the company's
position, and the Court holds the company
Page 498 U. S. 564
assumed a duty, perhaps delegable to other agents, to comply
with the Rule 11 certification requirements. Either the Court was
wrong last Term or it is wrong now. The duties imposed by Rule 11
either apply to corporate entities or they do not. The better
resolution would be to hold that the signatures of represented
parties, including corporations and partnerships, have no
significance for Rule 11 purposes.
II
Applied to attorneys, Rule 11's requirement of reasonable
inquiry can be justified as within the traditional power of the
courts to set standards for the bar. Our decisions recognize
the
"disciplinary powers which English and American courts (the
former primarily through the Inns of Court) have for centuries
possessed over members of the bar, incident to their broader
responsibility for keeping the administration of justice and the
standards of professional conduct unsullied."
Cohen v. Hurley, 366 U. S. 117,
366 U. S.
123-124 (1961). An attorney acts not only as a client's
representative, but also as an officer of the court, and has a duty
to serve both masters. Likewise, applying this duty of reasonable
inquiry to
pro se litigants, as amended Rule 11 does, can
be viewed as a corollary to the courts' power to control the
conduct of attorneys. Requiring
pro se litigants to make
the Rule 11 certification ensures that, in each case, at least one
person has taken responsibility for inquiry into the relevant facts
and law.
But it is a long step from this traditional judicial role to
impose on a represented party the duty of reasonable inquiry prior
to the filing of a lawsuit, measured by an objective standard
applied in hindsight by a federal judge. Until now, it had never
been supposed that citizens at large are, or ought to be, aware of
the contents of the Federal Rules of Civil Procedure, or that those
rules impose on them primary obligations for their conduct. This
new remedy far exceeds any previous authority of a federal court to
sanction a represented party. The rules we prescribe have a
statutory authorization,
Page 498 U. S. 565
and need not always track the inherent authority of the federal
courts.
See Sibbach v. Wilson & Co., 312 U. S.
1 (1941). At the same time, the farther our rules depart
from our traditional practices, the more troubling becomes the
question of our rulemaking authority.
In the Rules Enabling Act, Congress has delegated to this Court
authority to prescribe "general rules of practice and procedure,"
28 U.S.C. § 2072(a), which may not "abridge, enlarge or modify any
substantive right," § 2072(b). The grant of authority to regulate
procedure and the denial of authority to alter substantive rights
expresses proper concern for federalism and separation of powers.
See 19 C. Wright, A. Miller, & E. Cooper, Federal
Practice and Procedure § 4509 (1982). Congress desired the courts
to regulate "practice and procedure," an area where we have
expertise and some degree of inherent authority. But Congress
wanted the definition of substantive rights left to itself in cases
where federal law applies, or to the States where state substantive
law governs.
In my view, the majority's reading of Rule 11 raises troubling
concerns with respect to both separation of powers and federalism.
At the federal level, the new duty discovered by the majority in
the text of the Rule is one that should be created, if at all, by
Congress. In
Alyeska Pipeline Co. v. Wilderness Society,
421 U. S. 240
(1975), while confirming the authority of the courts to award
attorney's fees against a party conducting vexatious or bad-faith
litigation, we reversed an award of attorney's fees made on the
theory that the prevailing party had acted as a "private attorney
general." We reaffirmed the American Rule that litigants in most
circumstances must bear their own costs, and noted that Congress
had itself provided for fee awards under various statutes when it
thought fee-shifting necessary to encourage certain types of
claims. We held that "it [was] not for us to invade the
legislature's province by redistributing litigation costs in the
manner" proposed in that case.
Id. at
421 U. S.
271.
Page 498 U. S. 566
As interpreted by the majority, Rule 11 "redistribut[es]
litigation costs" much like the fee-shifting theory rejected in
Alyeska Pipeline. The majority's distinction between an
"appropriate sanction" under Rule 11 based on a "discrete event"
and the fee-shifting at issue in
Alyeska Pipeline, ante at
498 U. S. 553,
breaks down in a case like this one where the "discrete event" was
the filing of the lawsuit and the "appropriate sanction" was the
payment of respondents' attorney's fees coupled with dismissal of
the suit. Any mechanism for redistributing costs, even the inherent
sanctioning authority of the federal courts, has the potential to
affect decisions concerning whether and where to file suit. But the
risk of deterring a meritorious suit is slight where sanctions are
only available for bad-faith or frivolous claims. On the other
hand, when a party's prefiling conduct is subject to evaluation for
objective reasonableness by the court, the risk of filing suit
changes, and there arises a real risk of deterring meritorious
claims. Under the majority's holding in this case, the deterrent
effect will arise most often where the rules require verification
of complaints.
See supra, at
498 U. S. 562.
In particular, one may expect reticence to seek temporary
restraining orders, since the time pressures inherent in such
situations create an acute risk of sanctions for unreasonable
prefiling inquiry.
The majority does not tell us what standard it thinks should be
applied in deciding whether to sanction a represented party who has
not signed a Rule 11 paper.
Ante at
498 U. S. 554.
The chilling impact of the majority's negligence standard will be
much greater if the majority applies it in that circumstance as
well. This result seems a plausible consequence of the majority's
reasoning.
See ante at
498 U. S.
549-550. It is not the business of this Court to
prescribe rules "redistributing litigation costs" in a manner that
discourages good-faith attempts to vindicate rights granted by the
substantive law.
Kaiser Aluminum &
Chemical Corp. v. Bonjorno, 494
Page 498 U. S. 567
U.S. 827,
494 U. S. 835
(1990) ("[T]he allocation of the costs accruing from litigation is
a matter for the legislature, not the courts").
Our potential incursion into matters reserved to the States also
counsels against adoption of the majority's rule. Just as the
various statutory fee-shifting mechanisms reflect policy choices by
Congress regarding the extent to which certain types of litigation
should be encouraged or discouraged, state tort law reflects
comparable state policies. As interpreted by the majority, Rule 11
places on those represented parties who sign papers subject to the
Rule duties far exceeding those imposed by state tort law. In
general, States permitting recovery for malicious prosecution or
abuse of process require the plaintiff to prove malice or improper
purpose as a necessary element. W. Keeton, D. Dobbs, R. Keeton
& D. Owen, Prosser and Keeton on Law of Torts §§ 120-121 (5th
ed. 1984); 1 F. Harper, F. James, & O. Gray, The Law of Torts §
4.8 (2d ed. 1986); Restatement (Second) of Torts § 676 (1977). As
interpreted by the majority, Rule 11 creates a new tort of
"negligent prosecution" or "accidental abuse of process,"
applicable to any represented party ignorant enough to sign a
pleading or other Rule 11 paper.
Cf. Response to a
Practitioner's Commentary on the Actual Use of Amended Rule 11, 54
Ford.L.Rev. 28, 29-30 (1985) (remarks of Judge Charles Sifton);
Brief for Petitioner 40.
In this case, the District Court imposed sanctions on a
corporation for the actions of its agents taken in reliance on
business records developed to safeguard the company's property
rights in its own research. The decision to impose sanctions
required the court, sitting without a jury, to make judgments about
the skill and care that companies of this kind must use in their
business practices. We tolerate judgments about the care an
attorney must use because we deem judges to know the standards
appropriate for the practice of law. We do not have similar
expertise in the workings of private enterprise or the conduct and
supervision of investigations made by a company to protect and
defend its rights. And
Page 498 U. S. 568
though the majority would seem to suggest it, I should not have
thought that, before a person or entity seeks the aid of the
federal courts, it ought to know the contents of the Federal Rules
of Civil Procedure, rules that, at least until now, were the domain
of lawyers and not the community as a whole.
A rule sanctioning misconduct during the litigation process will
often satisfy the Rules Enabling Act because it "affects only the
process of enforcing litigants' rights and not the rights
themselves."
Burlington Northern R. Co. v. Woods,
480 U. S. 1,
480 U. S. 8
(1987). As applied to attorneys, and perhaps those who act as their
own attorneys, the same can be said of Rule 11's sanctions for
failure to conduct a reasonable prefiling inquiry. That much we
established in
Cooter & Gell v. Hartmarx Corp., 496
U.S. at
496 U. S. 393.
See ante at
498 U. S. 552.
But the presumption that a Federal Rule is valid carries less
weight in a case such as this, where "the intended scope of [the]
Rule is uncertain," 19 Wright, Miller, & Cooper, at 147-148,
and the construction of Rule 11 adopted today extends our role far
beyond its traditional and accepted boundaries. Whether or not Rule
11 as construed by the majority exceeds our rulemaking authority,
these concerns weigh in favor of a reasonable, alternative
interpretation, one which, as I said at the outset, is more
consistent with the text of the Rule.
See Cooter & Gell,
supra, at
496 U. S. 391
("We . . . interpret Rule 11 according to its plain meaning, . . .
in light of the scope of the congressional authorization [in the
Rules Enabling Act]"); 19 Wright, Miller, & Cooper, at 148 ("If
a federal court concludes it is uncertain whether a Civil Rule
truly governs a given question of practice, and if a relevant state
rule of law differs, the extent to which application of the Civil
Rule would interfere with substantive rights is certainly one of
the factors that should be considered in deciding whether the Civil
Rule applies. In effect, the
substantive rights'
Page 498 U. S.
569
limitation, and the concern it reflects for the integrity of
state substantive policies, is relevant to determining the scope of
the Civil Rules").
III
Under my analysis, an attorney must violate Rule 11 before a
represented party can be sanctioned. Regardless of the standard of
conduct applicable to represented parties, I would reverse because
it has not been shown on this record that an attorney signed a
paper in violation of the Rule. A Finley, Kumble attorney did sign
the original complaint and application for a temporary restraining
order. However, the District Court did not find that Finley, Kumble
lawyers had violated the Rule at the time the complaint was
submitted.
The District Court did conclude that Finley, Kumble attorneys
failed to conduct a reasonable inquiry prior to submission of the
Lambe declaration. The Lambe declaration was not itself signed by
an attorney, however, and, under my analysis of the Rule, could not
serve as a basis for sanctions.
See also supra at
498 U. S. 562.
Indeed, Mr. Lambe's signature was not even the signature of a
party. Certainly, a corporation only acts through its agents; that
does not mean that all actions by a corporation's agents are
actions on behalf of the corporation. Unlike the signature of the
company's president verifying the complaint, Mr. Lambe's signature
was on his own behalf, and did not in any way purport to bind the
corporation.
I doubt that the papers submitted to the court with the Lambe
declaration violate Rule 11. The only action these documents
requested of the court was that it accept the Lambe declaration
under seal and review it
in camera. The relief requested
was in no sense dependent on the accuracy of the representations
made by Lambe. Given the purpose of these documents, they were
well-supported by fact and existing law, and an attorney's
signature on these papers
Page 498 U. S. 570
would not seem to me a violation of Rule 11 certification
requirements. [
Footnote 5]
Even were I to find an attorney violation, I would view it as an
abuse of discretion to sanction a represented party if the party
has acted in good faith. I recognize that an objective standard
does, and should, govern the conduct of the attorney. With respect
to a represented party, though, I would reverse the decision below
for having applied a standard of objective reasonableness rather
than some subjective bad faith standard.
IV
Just as patience is requisite in the temperament of the
individual judge, so it must be an attribute of the judicial system
as a whole. Our annoyance at spurious and frivolous claims, and our
real concern with burdened dockets, must not drive us to adopt
interpretations of the rules that make honest claimants fear to
petition the courts. We may be justified in imposing penalties on
attorneys for negligence or mistakes in good faith; but it is quite
a different matter, and the exercise of a much greater and more
questionable authority, for us to impose that primary liability on
citizens in general. These concerns underscore my objections to the
majority's holding. With respect, I dissent.
[
Footnote 1]
"Every bill shall contain the signature of counsel annexed to
it, which shall be considered as an affirmation on his part, that
upon the instructions given to him and the case laid before him,
there is good ground for the suit, in the manner in which it is
framed."
Rules of Practice for the Courts of Equity of the United States,
1 How. xxxix, xlviii (1842).
[
Footnote 2]
"Every bill or other pleading shall be signed individually by
one or more solicitors of record, and such signatures shall be
considered as a certificate by each solicitor that he has read the
pleading so signed by him; that upon the instructions laid before
him regarding the case there is good ground for the same; that no
scandalous matter is inserted in the pleading; and that it is not
interposed for delay."
Rules of Practice for the Courts of Equity of the United States,
226 U.S. 627, 655 (1912).
[
Footnote 3]
Prior to 1983, Rule 11 read:
"Every pleading of a party represented by an attorney shall be
signed by at least one attorney of record in his individual name,
whose address shall be stated. A party who is not represented by an
attorney shall sign his pleading and state his 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 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 constitutes a certificate by him that he has read the
pleading; that to the best of his knowledge, information, and
belief there is good ground to support it; and that it is not
interposed for delay. If a pleading is not signed or is signed with
intent to defeat the purpose of this rule, it may be stricken as
sham and false and the action may proceed as though the pleading
had not been served. For a wilfull violation of this rule an
attorney may be subjected to appropriate disciplinary action.
Similarly [
sic] action may be taken if scandalous or
indecent matter is inserted."
Fed.Rule Civ.Proc. 11, 28 U.S.C.App. (1982 ed.).
[
Footnote 4]
See Advisory Committee's Notes on Fed.Rule Civ.Proc.
11, 28 U.S.C.App. p. 575 ("The new language is intended to reduce
the reluctance of courts to impose sanctions by emphasizing the
responsibilities of the
attorney and reenforcing those
obligations by the imposition of sanctions") (emphasis added;
citation omitted).
[
Footnote 5]
It might be argued that the attorney's signature on the original
filings created a continuing duty to conduct reasonable inquiry and
to amend or withdraw the pleadings as new facts came to light.
Compare Thomas v. Capital Security Serv., Inc., 836 F.2d
866 (CA5 1988) (en banc), with
Herron v. Jupiter Transp.
Co., 858 F.2d 332, 335-336 (CA6 1988).
See Burbank,
The Transformation of American Civil Procedure: The Example of Rule
11, 37 U.Pa.L.Rev. 1925, 1930, n. 27 (1989). However, I would be
unwilling to adopt such a construction of the Rule in a case such
as this, where the issue has not been briefed.