THE NATIONAL LAW JOURNAL Rule 11 Is BY RUSS M. HERMAN Monday, July 24, 1989 Mr. Herman is a partner in New Or- plaintiffs and their attorneys. One leans' Herman, Herman, Katz & Cotlar study found that sanctions are routineand is incoming president of The Asso- ly requested by defense counsel and ciation of Trial Lawyers of America. He about 80 percent of sanction requests would like to thank Jeffrey White, are against plaintiffs. Moreover, plainATLA associate general counsel, for his tiffs are sanctioned at a higher rate assistance in the preparation of this than defendants.' Because the rule dearticle. seems to depend more upon the num mands that plaintiff's counsel have an accurate knowledge of the facts prior to filing and discovery, we would expect the rule to have a disparate impact on the type of claims in which crucial information is in possession of the defendant. Indeed, Rule 11 sanctions have been LAST YEAR we marked the golden an. The fact is, however, that the draft- imposed disproportionately upon civil niversary of the Federal Rules of Civil ers have labored to solve a problem rights plaintiffs and those claiming Procedure.' I add my applause for the that was not there. There is no doubt employment discrimination.” Such ac original Advisory Committee to the that federal case filings have risen tions are David-and-Goliath misrules. Replacing "trial by ambush" sharply. But it is not sue-happy indi- matches from the start. Civil rights with notice pleading and open discov. viduals who are clogging the courts. advocates generally have less access ery was a dramatic step toward afford- About half the increase in federal suits to support personnel, computerized reing access to justice to all people from 1975 to 1984 was attributable to search, law-office technology and othentitled to use our federal courts. The the flood of suits in which the federal er resources. They are more manifesto in Rule 1, that the purpose of government used the courts as a col- vulnerable to being overpowered by the rules is "to secure the just, speedy, lection agency to recover benefit over their over-lawyered and over-paraleand inexpensive determination of ev- payments to individuals and to galed opponents. ery action," is as concise a statement litigation concerning Social Security of the ideals of a trial lawyer as I payments (notably black lung would hope to find." benefits).' The same is often true of attorneys representing minority shareholders, unsophisticated investors, small busiIt is all the more disturbing, thereMuch of the increase in private liti- nesses and citizens challenging a gov. fore, to observe the rush to abandon gation has been caused by initiatives ernment agency. Add to this imbalance those ideals by the successors of those by businesses and corporations. In- the threat of crippling Rule 11 sancfirst drafters. The amended Rule 11 re- deed, the only area of significant in- tions and the result is clear: Clients quires every attorney who signs a crease in federal suits by tort plaintiffs with complex or novel claims will find pleading, motion or other paper to cer- has been in injury claims related to it ever more difficult to obtain tify "that to the best of his knowledge, asbestos and DES. While these mass representation. information, and belief formed after torts present difficult problems, no one There are suitable sanctions availreasonable inquiry it is well grounded suggests that these claims are able to the court when counsel lacks in fact...and that it is not interposed frivolous. training and experience to act as advofor any improper purpose." In practice, Our courts possess a great deal of cate in these cases. Sanctions such as if not intent, this is a reverse-Robin inherent power, such as the contempt compulsory continuing legal education Hood rule: It punishes the impover power, discovery sanctions, the assess- and clinical training and proctorship." ished and unpopular and gives to the ment of fines and costs, and Invocation Imposing Rule 11 fee sanctions operrich and respectable. of disciplinary rules to direct against ates as an "in terrorem" device that attorneys and litigants who exceed the merely discourages claims without bounds of propriety and ethics. There Improving the level of advocacy. Comis little need for a rule whose primary pounding this problem is the fact that purpose is to act as a sword of Damo- Rule 11 discourages the referral of cles, threatening to impose crushing complex cases to more qualified attor sanctions on an attorney who in good neys. Often the handling attorney refaith makes a zealous presentation of celves the file after initial pleading his client's case. and must rely on referring counsel and It is a Catch-22 rule that punishes an incorrect presentation of the facts, even if supported by good faith, at a time when vested interests are succeeding in closing off access to the truth. If we did not foresee these results in 1983 when the rule was amend ed to its present form, they are apparent to us now and it is time to reevaluate amended Rule 11. Rule 11 is an unfortunate product of the discredited "lawsuit crisis" myth. As one federal judge explained: "The principal problem facing the federal courts in recent years has been the litigation explosion ...The Judicial Conference of the United States and the Advisory Committee of the Federal Rules of Civil Procedure perceived frivolous litigation was a major component of burgeoning case filings."" Even if this premise were true, we should be disturbed by a "solution" that erects barriers in front of the courthouse. We should be disturbed when the merit of federal judges Rule 11 does not so much improve the client for the facts. Experienced clearing of dockets is a desirable end that are novel, unconventional or offen- That vision was the impetus for the adoption of the rules and the values expressed in Rule 1' Rule 11 undermines those values, adding to the inJustice, delay and expense of the civil justice system. Rule 11's Chilling Effect Though it is facially neutral, the im pact of Rule 11 falls most heavily upon sive to well-settled law. It is the impoverished and the powerless who must seek justice through sometimes unconventional theories. It is the lawyers who seek to represent unpopular causes, and especially those working pro bono, who sit most uncomfortably beneath a sword of Damocles. In one study, more than one third of the lawyers expressed concern about potential chilling effects on lawyers' collective willingness to advocate novel theories or to represent unpopular clients." Judge William O. Bertelsen has de clared that "the fears of the Advisory Committee that the rule might result In a chilling of the vigorous advocacy Rule 11 sanctions are that has always been the hallmark of the American lawyer are being unfairly imposed upon realized."" Rule Favors Goliath Rule 11, one commentator concluded, represents a regression back to the "good old pre-1938 days" of trial by am bush. We are not nearly that lucky. At civil rights plaintiffs and upon those who claim the same time that Rule 11 is returning Work discrimination. us to the days of technical fact-pleadIng, powerful vested interests are enjoying alarming success in keeping those facts under lock and key. It is amazing the degree to which a company that sells its customers dangerously defective products, exposes Its neighbors to toxic wastes, discrimi nates against employees and cheats its Investors, can hide its dirty secrets from the world. A recent expose in a Washington Post article documents the use of confidentiality agreements and secrecy orders to hide evidence of wrongdoing from the public, from the victims and from responsible government agencles." As a result, each individual plaintiff must reinvent the wheel in discovery. Numerous courts have held that the sharing of discovered information among those with similar claims serves the Interests of justice and the purpose of the rules." It is hypocrisy to demand that advocates make inquiry into the facts of a plead ing or motion without a coexisting rule that prohibits "blanket" confidentiality agreements and secrecy orders. An additional development in the past two decades is the unhealthy trend toward generalized restrictions on discovery. Not so long ago, a plain tiff could, inexpensively, ask a corporate Goliath 100 questions to be answered under oath or request more than 25 categories of documents. It was not the individual or small business who abused open discovery. Megalitigants multinationals, other corporate giants and sometimes the federal government-waged discovery like a war of attrition. As a result, plaintiffs now are often limited to an initial 25 Interrogatories. The record in the federal courthouse today contains preclous little worthwhile discovery; facts are often hidden by secrecy orders in prior cases or obscured by other means. Shift of Focus A Rule 11 motion for sanctions shifts the focus of the litigation away from the merits. The Advisory Committee's Note to Rule 11 acknowledges the possibility that litigation over the imposi tion of sanctions could well offset any efficiency that the rule might otherwise achieve. Where payment of substantial attorney fees is at stake, the rule guarantees fertile ground for proific "satellite" litigation. already been devoted to exploring the A great deal of judicial energy has substantive and procedural issues." There is at least some indication that Rule 11 claims distort the settlement ney's financial interests with the cllprocess, sometimes placing the attor ents." Nor is there any natural limit to Rule 11 claims. In one recent case, defendant moved for Rule 11 sanctions and plaintiff responded with a motion to sanction the sanction motion. The judge granted the defendant's motion, denied plaintiff's motion and awarded defendant costs incurred in responding to plaintiff's motion. The court of appeals affirmed in part." The Association of Trial Lawyers of America condemns the frivolous claim or defense and the hiding or destruction of evidence and other abuses of the civii justice system. But the tools to punish and deter unethical behavior are available without the chilling ef fect of Rule 11 sanctions. It is time that the Advisory Committee convene open hearings nationwide to reappraise and, if necessary, formulate a new Rule 11. (1) See Re, "Symposium - The Fiftieth Anni versary of the Federal Rules of Civil Procedure," 62 St. John's La Rev. 399 (1988) (Chief Judge Ed. tor's description of the Federal Rules as "one of any group of men since the dawn of civilized (2) Deford v. Schmid Products Co., 120 F.R.D. 48 (D. Md. 1987) (plaintiff's desire to share Infor. by defendant's IUD with other plaintiffs is an ap propriate goal under Rule 1.). mation concerning other claims of injury caused We should reaffirm our commitment to open discovery accompanied by adequate safeguards against abuse as a direct and inexpensive means of arriv. ing at the truth. At the very least, how ever, we should rid Rule 11 of the Catch-22 situation of punishing attor neys who fall to uncover facts that defendants, often alded by the courts Explosion," Institute for Legal Studies, University themselves, have burled. (3) Whittington v. Ohio River Co. 115 F.R.D. 201, of Wisconsin-Madison Law School 25 (1986). (5) P. Reuter. "The Economic Consequences of Expanded Corporate Liability," RAND Corp., In"Product Liability and the Business Sector: Trends In Federal Courts," RAND Corp., Institute for Civil Justice (1988). stitute for Civil Justice (1988); T. Dungworth, ty: Extent of Litigation Explosion' In Federal (6) General Accounting Office, "Product Liabili Courts Questioned, at 2 (1988) (In response to a Congressional request). on with the Administration of Justice." 29 ABA Rep. 395 (1906) (an address to the ABA that has (7) Pound, "The Causes of Popular Dissatisfac been described as the spark that set forth the philosophy ultimately Incorporated into the rules). See Re at 399, supra note 1. cess" 75-76 (Federal Judicial Center, 1988); G. (8) T. Willging, "The Rule 11 Sanctioning ProVairo. "Rule 11: A Critical Analysis," 118 F.R.D. 189, 200-01 (1988). (9) Vairo at 200, supra note & (10) Vairo at 200, supra note 8. See also, S. Re porter, "Rule 11 Transition," (The Report of the Procedure 11, 1989). Third Circuit Task Force on Federal Rule of Civil (11) The American Inns of Court, primarily or ganized by the federal bench, has developed an excellent proctorship program. Unfortunately, such programs are often unavailable to the typl cal civil rights lawyer, sole practitioner or general practitioner. (12) Willging at 9, supra note & (13) Whittington v. Ohio River Co., supra note 3. (14) "Public Courts, Private Justice," Wash. Post, Oct. 23-26, 1958, at 1, col. 8. Ford Motor Co., 85 FRD. 152 (WD. Texas 1980). (15) See, eg, Deford, supra note 2; Patterson v. (16) "Between August 1, 1983, and December 18, 1987, 688 Rule 11 decisions have been reported, 496 district court opinions and 192 elreult court opin. lons." Vairo at 199, supra note & (1) Willging at 119-20, supra note 8. See also, Nelken, "Sanctions Under Amended Rule 11 – Some 'Chilling' Problems in the Struggle Between Compensation and Punishment," 74 Geo. LJ. 1313, 1340 (1986) (highlighting conflict between ethical duty to client and Rule 11 dictates). (18) Stevens v. Lawyers Mut. Liability Ins. Co.. 789 F.2d 1056 (4th Cir. 1986). At its March session, the Judicial Conference of the United States adopted a resolution to seek immediate legislation to restore appropriate levels of compensation for bankruptcy judges and magistrates. The President's January 1987 submission made some modest progress to alleviate the crisis in judicial compensation for U.S. district and circuit judges, but failed to provide any material relief for bankruptcy judges and magistrates. The ability of the judiciary to attract and retain qualified individuals as bankruptcy judges and magistrates is a matter of deep and continuing concern to the Judicial Conference. The judiciary simply cannot continue to compete with the lure of more lucrative private practice. The problem of inadequate compensation for bankruptcy judges and magistrates was exacerbated by the pay adjustment set by the President for these judicial officers. In recent years, their compensation has ranged from 86 to almost 92 percent of that of a district judge. This historical relationship was lost when the President adjusted the salaries for bankruptcy judges and magistrates by only a token amount (2.8 percent). This action resulted in a reduction in the relative salary of these judicial officers to 81 percent of that of a district judge. The Judicial Conference respectfully requests that the Congress address this problem at its earliest opportunity and restore the salary of bankruptcy judges and magistrates to a more appropriate level within the judicial salary structure. Representatives of the judiciary will be available to testify or to provide such other assistance as you may desire in addressing this important issue. I am enclosing an editorial from the December 22nd, 1988 issue of the Sacramento Bee which supports the recommendation of the Quadrennial Pay Commission. Needless to say, I strongly endorse the Commission's recommendation and I appreciate the support of the Bee except for one statement which is "The issue is not what these people deserve ---". That statement runs counter to the editorial's con"One serious error by any of the officials covered by these recommendations will cost the taxpayers far more than all their pay raises put together. The latter statement is true, the former statement is not. All of the federal employees covered by the Commission's recommendations do deserve the recommended salary increases. cluding statement You people in Washington are running the largest business in the world. The decisions you make are no less important than those made by the Presidents, Officers, and C.E.O.'s of our largest corporations. Moreover, you are not only running a business that owns and manages trillions of dollars worth of physical assets, you are also called upon to make decisions concerning the rights, obligations, health, and welfare of human beings from the time they are born until they die. On top of the concerns I have recited add the awesome task you have concerning our relations with other countries. In both hot and cold wars, you must decide whether Americans as well as the citizens of other countries live or die. All of you have tremendous responsibilities and deserve a fair wage for discharging them. - - I am sure there is more to be said to illustrate why you The members of the Federal Judiciary also deserve to be paid what "they deserve". They are not being paid a wage equal to the value of their work which entails difficult and far reaching decisions and requires legal skill and experience, none of which is recognized in the salaries that are now being paid. That members of the Federal Judiciary are being underpaid for what they do can be demonstrated by what is going on in the legal market place. Law firms in San Francisco are paying as much as $55,000.00 a year to men and women who are fresh out of law school. I have been told that in New York, top grade law school graduates receive even greater starting salaries. After being with me for only one year, my most recent law clerk is now receiving a salary of over $50,000.00. Some of my former law clerks who worked for me for 2 years who have been in private practice for 10 or 12 years since leaving, are now netting more than twice the salary paid to District Judges and members of Congress. They have been out of law school less than 15 years. In contrast, I have been an attorney for 48 years and a District Judge for the last 27. I believe the comparison speaks for itself. There is an obvious injustice to be corrected. The Quadrennial Commission has presented a fair correction to that injustice by recommending salaries that the Federal Judges as well as members of Congress and the Executive Branch deserve. I hope that you will approve and urge that you support any salary increases for the Federal Judiciary, Members of Congress, Cabinet Officers and other top executives in Federal Government that the President may include in his forthcoming budget proposal. - Although I have stepped down from membership on the Criminal Justice Act Committee now the Federal Defender Committee I still watch and admire your work on its behalf. Moreover, I am grateful for the tremendous assistance you gave us during the 9 years I chaired the Committee. I hope you are well and that 1989 will be a successful year for you in your work there in Washington. Kindest personal regards. TJM/jdp Sincerely, Dow Thomas J. MacBride |