The opinion of the court was delivered by: David G. Larimer United States District Judge
On March 5, 2010, defendants filed a motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure (Dkt. #26). Specifically, defendants request that the Court impose sanctions on plaintiff Johnson and his counsel, Christina A. Agola, for attempting to introduce an amended pleading that includes allegations wholly lacking in evidentiary or legal support. For the reasons detailed below, that motion is granted.
The Court presumes familiarity with the underlying facts, summarized here. This qui tam action alleged claims of Medicare and Medicaid fraud and retaliation against defendants. On December 31, 2008, in response to a motion to dismiss made by the defendants, Johnson moved to amend the complaint (Dkt. #18) to add supplemental claims of libel per se and prima facie tort against all of the initial defendants, as well as to add Dr. Stewart Lustik as a defendant. The new claims were premised upon plaintiff's allegation that, "Dr. Lustik, despite being previously warned to cease and desist targeting Relator Johnson nonetheless saw fit to publish, in or about the summer of 2008, unsolicited, a negative reference to the State of Delaware Board of Medical Practice, dated November 15, 2006... (Dkt. #18-1) (emphasis in original). It was later revealed, however, that the publication to which plaintiff referred had been solicited by him with the assistance of his counsel, and furthermore that plaintiff had signed a release authorizing its publication in the precise manner of which he complained in the proposed amended complaint.
Fed. R. Civ. Proc. 11, in its most pertinent part, provides that:
By presenting to the court a pleading, written motion, or other paper -- whether by signing, filing, submitting, or later advocating it -- an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances... the claims, defenses, and other legal contentions therein are warranted by existing law [and that] the allegations and other factual contentions have evidentiary support..."
When sanctions are sought for a Rule 11 violation, the Court must focus upon determining "the attorney's knowledge and conduct at the time the [paper] was signed." Savino v. Computer Credit, Inc., 164 F.3d 81, 88 (2d Cir. 1998). In so doing, the court should question whether it was objectively reasonable for counsel to have made the disputed factual contentions, and should avoid imposing sanctions "unless a particular allegations is utterly lacking in support." In re Highgate Equities, Ltd., 279 F.3d 148, 154 (2d Cir. 2002); Margo v. Weiss, 213 F.3d 55, 65 (2d Cir. 2000). Sanctions may be appropriate "where, after reasonable inquiry, a competent attorney could not form a reasonable belief that the pleading is well-grounded in fact and warranted by existing law." W.K. Webster & Co. v. American President Lines, Ltd., 32 F.3d 665, 670 (2d Cir. 1994).
Initially, plaintiff opposes the motion for sanctions on the grounds that the defendants did not achieve full technical compliance with the 21-day "safe harbor" provision of Rule 11(c)(2). Fed. R. Civ. Proc. 11(c)(2). That provision, which requires a party moving for sanctions to serve a copy of the proposed motion on the non-movant at least 21 days prior to moving for sanctions, is designed to provide the non-movant with "notice of the alleged [Rule 11] violation and an opportunity to respond before sanctions are imposed... [thus] a party will not be subject to sanctions [unless] it refuses to withdraw [a baseless] position or to acknowledge candidly that it does not currently have evidence to support a specified allegation." Fed. R. Civ. Proc. 11, Annotations on 1993 Amendments. To this end, strict compliance with Rule 11(c)(2) may be excused where a party has placed its opponent on written notice of its intent to seek sanctions, invoking Rule 11 and describing the deficiencies in the non-movant's claims, and where the opponent had at least 21 days thereafter during which the claims could have been withdrawn. See e.g., Pannonia Farms, Inc. v. USA Cable, 2004 WL 1276842 (S.D.N.Y. 2004); The Carlton Gp., Ltd. v. Tobin, 2003 WL 21782650 (S.D.N.Y. 2003).
Here, defendants requested Rule 11 sanctions relative to plaintiff's proposed new claims at the earliest opportunity after those claims were asserted -- in their papers opposing plaintiff's motion to amend, which were filed on January 14, 2009. (Dkt. #19, #20). Those papers explicitly invoked Rule 11, and exhaustively briefed the legal deficiencies, as well as provided documentary evidence of factual misstatements, in plaintiff's libel per se and prima facie tort claims. Id. In the eleven months that followed, plaintiff declined to file a reply in further support of the motion to amend, or to otherwise respond to the request for sanctions, nor did plaintiff make any attempt to withdraw the motion to amend. Indeed, plaintiff not only permitted the claims to remain during the pendency of the defendants' motion to dismiss and his own cross motion to amend, but continued to press the frivolous claims even after they had been dismissed, filing what amounted to a motion for reconsideration, styled as a motion for relief from the judgment (Dkt. #34) on March 22, 2010, which was subsequently denied (Dkt. #43).
For purposes of Rule 11(c)(2), I therefore find that plaintiff and his counsel were placed on specific written notice concerning the deficiencies in plaintiff's claims and the danger of Rule 11 sanctions, and were thereafter afforded at least 21 days -- indeed, more than eleven months -- to consider and withdraw those frivolous claims prior to any potential imposition of sanctions. Moreover, given plaintiff's dogged attempt to resurrect the frivolous claims even after the Court denied the motion to amend on the grounds that those claims were so legally and factually baseless as to be subject to dismissal, there is no basis to conclude that plaintiff would have acted any differently -- that is, that he would have exercised any opportunity to withdraw his claims -- had strict compliance with Rule 11(c)(2) been effected.
In light of these facts, I find that plaintiff has not been prejudiced by defendants' failure to strictly comply with the technical requirements of Rule 11(c)(2), and such compliance is excused.
Moreover, even if defendants' non-compliance with the 21-day requirement was fatal to their motion for sanctions under Rule 11, the Court would nonetheless be moved to exercise its discretion to levy identical sanctions under 28 U.S.C. §1927, for all of the same reasons. See generally Int'l Brotherhood of Teamsters, 948 F.2d 1138, 1145 (2d Cir. 1991)(an award of sanctions pursuant to Section 1927 is appropriate "when the attorney's actions are so ...