Johkie LEE, on behalf of himself, FLSA Collective Plaintiffs and the Class, Plaintiff,
GRAND SICHUAN EASTERN (NY) Inc., et al., Defendants.
OPINION & ORDER
SARAH NETBURN, Magistrate Judge.
After satisfying the safe harbor notice period, and coincident with the filing of his opposition brief to the defendants' motion for summary judgment, Lee filed a motion for sanctions against the defendants and the defendants' counsel, jointly and severally, pursuant to Rule 11 of the Federal Rules of Civil Procedure, for what he alleges to be their "frivolous filing of [the] motion for summary judgment." (Rule 11 Mot. at 1.) The defendants opposed the motion and seek expenses and attorneys' fees incurred in their defense of the motion. (Song Decl. ¶ 2.)
I. Law Governing Sanctions Motions
Under Rule 11, "[s]anctions may be-but need not be-imposed when court filings are used for an improper purpose, ' or when claims are not supported by existing law, lack evidentiary support, or are otherwise frivolous." Ipcon Collections LLC v. Costco Wholesale Corp. , 698 F.3d 58, 63 (2d Cir. 2012) (citing Fed. R. Civ. Proc. 11(b)-(c)). The Supreme Court has cautioned that Rule 11 "must be read in light of concerns that it will... chill vigorous advocacy." Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 393 (1990). Thus, courts must "resolve all doubts in favor of" the party against whom sanctions are sought. Rodick v. City of Schenectady , 1 F.3d 1341, 1350 (2d Cir. 1993). "Sanctions should be imposed only where it is patently clear that a claim has absolutely no chance of success.'" Abdelhamid v. Altria Grp., Inc. , 515 F.Supp.2d 384, 392 (S.D.N.Y. 2007) (quoting Caisse Nationale de Credit Agricole-CNCA v. Valcorp, Inc. , 28 F.3d 259, 264 (2d Cir. 1994)) (internal quotation marks omitted). The general standard for finding a violation of Rule 11 is one of objective unreasonableness; courts need not make a finding of subjective bad faith. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd. , 579 F.3d 143, 150-51 (2d Cir. 2009); In re Pennie & Edmonds LLP , 323 F.3d 86, 90 (2d Cir. 2003). District courts have "significant discretion in determining what sanctions, if any, should be imposed for a violation, subject to the principle that the sanctions should not be more severe than reasonably necessary to deter repetition by the offending person or comparable conduct by similarly situated persons.'" Id . (quoting Rule 11 Advisory Committee Note).
Rule 11 further provides that, "[i]f warranted, [a] court may award to the prevailing party [on the Rule 11 motion] the reasonable expenses, including attorney's fees, incurred for the motion." Fed.R.Civ.P. 11(c)(2). That is, a Rule 11 motion that itself does not comply with Rule 11 can warrant sanctions against the moving party. See Safe-Strap Co., Inc. v. Koala Corp. , 270 F.Supp.2d 407, 421 (S.D.N.Y. 2003) (citing Rule 11 Advisory Committee Note). "Thus, where a party's motion for Rule 11 sanctions is not well grounded in fact or law, or is filed for an improper purpose, a court my find itself in the position of imposing Rule 11 sanctions on the moving party and/or her attorney." Id .; see Indus. Tech. Ventures LP v. Pleasant T. Rowland Revocable Trust, 08 Civ. 6227 (CJS)(MWP), 2012 WL 777313, at *7 (W.D.N.Y. Mar. 8, 2012) (awarding costs and attorneys' fees against the party filing a Rule 11 motion where the Rule 11 motion was "utterly without support"). It is improper for a party to file a Rule 11 motion for the purpose of emphasizing the merits of the party's position. On Time Aviation, Inc. v. Bombardier Capital Inc. , 570 F.Supp.2d 328, 331 (D. Conn. 2008) aff'd, 354 F.Appx. 448 (2d Cir. 2009) (citing Rule 11 Advisory Committee Note). A non-moving party seeking costs and attorneys' fees rarely needs to file a cross-motion under Rule 11. Carlton Grp., Ltd. v. Tobin, 02 Civ.5065 (SAS), 2003 WL 21782650, at *7 (S.D.N.Y. July 31, 2003) (citing Rule 11 Advisory Committee Note).
II. Whether Sanctions Are Appropriate
A. Lee's Rule 11 Motion
Lee argues that the Court should award sanctions against the defendants because, had they conducted a reasonable inquiry into the facts before filing their summary judgment motion, "they would have determined that such motion for summary judgment would surely be denied." (Rule 11 Mot. at 5.) To support this argument, Lee extensively paraphrases the magistrate judge who conducted the parties' settlement conference and who, according to Lee, strongly suggested that defendants' motion would be denied.
As discussed in a separately filed order, Wang is entitled to summary judgment and Lee narrowly survived summary judgment as to American Hoist. American Hoist's evidence consisted of declarations, time sheets signed by Lee indicating that there was no FLSA violation, and facially adequate employment records. Lee's evidence consisted of three sentences from his declaration that the Court found to just meet the minimum requirements for a declaration to raise a triable issue of fact. The defendants' motion for summary judgment, which was partially successful, plainly was neither frivolous nor filed for an improper purpose. Lee's Rule 11 motion is denied.
B. Costs and Attorneys' Fees for the Prevailing Party
Pursuant to Rule 11(c)(2), the defendants seek costs and attorneys' fees incurred in defending against Lee's Rule 11 motion. The court may grant such an award if it finds that Lee's motion is objectively unreasonable or filed for an improper purpose. See Safe-Strap Co., Inc , 270 F.Supp.2d at 421.
Lee's Rule 11 motion, filed on the same days as his summary judgment opposition, relies on two categories of evidence. Both are improper. In the first category, Lee submits that the issues in this action are triable issues of fact and not appropriate for summary judgment. To support this, Lee cites to his summary judgment opposition and states that its "arguments are fully incorporated herein." (Rule 11 Mot. at 6.) Similarly, in his opposition, Lee attempts to incorporate the arguments made in his Rule 11 motion. (Opp'n at 1.) In fact, Lee's opposition refers to his Rule 11 motion multiple times, including in the final sentence, in which Lee requests that the Court "grant Plaintiff's motion for sanctions." (Id. at 13; see also id. at 1, 2, 12.)
As to the second category of evidence, in his Rule 11 motion and his opposition, Lee quotes or paraphrases extensively from the Honorable Frank Maas, the United States magistrate judge who conducted the parties' October 2, 2013 settlement conference. In both his Rule 11 motion and summary judgment opposition, Lee repeatedly cites comments Judge Maas allegedly said during a settlement conference that was off-the-record and plainly intended to be confidential.
Lee's arguments based on the first category of evidence simply repeat the arguments from his opposition as to why the defendants' motion for summary judgment should be denied; indeed, both filings purport to incorporate the other. In On Time Aviation, Inc. v. Bombardier Capital, Inc ., the Court of ...