ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.
Scalia, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Brennan, White, Blackmun, Stevens, O'connor, and Kennedy, JJ., joined. Marshall, J., filed a dissenting opinion, post, p. 127.
JUSTICE SCALIA delivered the opinion of the Court.
Federal Rule of Civil Procedure 11 provides in part: "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 . . . ." In this case we must determine whether Rule 11 authorizes a court to impose a sanction not only against the individual attorney who signed, but also against that attorney's law firm.
The action giving rise to the current controversy was instituted by plaintiff Northern J. Calloway against respondents for willful copyright infringement of his motion picture script and other related claims. The original complaint -- signed and filed by Calloway's attorney, Ray L. LeFlore -- alleged that Calloway had developed an idea for a motion picture and written a script, and that respondents had begun to develop this work without his permission. Respondents filed a motion to dismiss, pointing to a series of documents annexed to the complaint that gave them the right to develop the work commercially. The District Court dismissed the complaint (with leave to refile), not on the ground that the documents authorized the alleged infringement, but because Calloway's complaint had failed to specify the registration number of his copyright and the dates upon which the alleged acts of infringement had occurred.
An amended complaint, again signed by LeFlore, was filed several weeks later. In addition to remedying the defects that were the basis of dismissal, it newly asserted that Calloway's signatures on the documents purporting to grant an option had been forged by respondents, and included that among the actions for which damages were sought. Plaintiff relied on this forgery claim in opposing respondents' motions to dismiss and motions for summary judgment.
In October 1984, LeFlore joined with Radovan Pavelic to form the law partnership of Pavelic & LeFlore. Thereafter, all court papers in the case were signed:
Attorneys for Plaintiff."
Several of these papers, including interrogatory responses and a proposed pretrial order, continued to rely upon the allegation of forgery. At trial, the District Court found insufficient evidence to support that contention, and directed a verdict in favor of respondents on that issue. The jury returned a verdict against plaintiff on all remaining claims.
Upon respondents' motion and after a hearing, the District Court imposed a Rule 11 sanction in the amount of $100,000 against Pavelic & LeFlore on the ground that the forgery claim had no basis in fact and had not been investigated sufficiently by counsel. Radovan Pavelic moved to relieve the firm of the sanction, contending that (1) the firm did not exist during a major portion of the litigation and therefore was not fully responsible for the Rule 11 violations, and (2) Rule 11 empowers the court to impose a sanction only upon the attorney who signed the paper, not upon that attorney's law firm. The District Court accepted the first contention, and therefore amended its order to shift half of the sanction from the firm to LeFlore. It rejected the second contention, however, concluding that Rule 11 sanctions may ...