Lucas v. Duncan

• Citation: 574 F.3d 772
• Decision Date: 31 July 2009
• Docket Number: No. 07-5264.,07-5264.
• Parties: Theodore R. LUCAS, et al., Appellants v. Arne DUNCAN, in his official capacity as secretary, U.S. Department of Education, his Agents and Successors, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

574 F.3d 772

Theodore R. LUCAS, et al., Appellants v. Arne DUNCAN, in his official capacity as secretary, U.S. Department of Education, his Agents and Successors, Appellee.

No. 07-5264.

United States Court of Appeals, District of Columbia Circuit.

Argued December 11, 2008.

Decided July 31, 2009.

Appeal from the United States District Court for the District of Columbia (No. 01cv02393).

John F. Karl, Jr. argued the cause and filed the briefs for appellant.

Richard R. Renner was on the brief for amicus curiae National Employment Lawyers Association in support of appellant.

Mercedeh Momeni, Assistant U.S. Attorney, argued the cause for appellee. With her on the brief were Jeffrey A. Taylor, U.S. Attorney, and R. Craig Lawrence and Yule Kim, Assistant U.S. Attorneys.

Before: GINSBURG, GARLAND, and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge.

This is an appeal from an order imposing sanctions against an attorney under Rule 11 of the Federal Rules of Civil Procedure. A magistrate judge imposed the sanctions for statements that the attorney made in pleadings he filed on behalf of his client, the plaintiff in an employment discrimination suit. For the reasons stated below, we vacate the sanctions order.

I

Attorney John F. Karl, Jr.'s client, Theodore Lucas, was an employee in the Department of Education's Office of Civil Rights. In 1998, Lucas applied for a promotion to a position as a management and program analyst. At that time, he was 61 years old and had both a law degree and more than 25 years' experience in civil rights enforcement. The promotion went to Jerelyn Berry, a 43-year-old high school graduate, who had never attended college and who had previously worked as Lucas' secretary.

On November 16, 2001, Lucas sued the Secretary of Education under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621 et seq., alleging that he was denied the promotion because of his age. Pursuant to 28 U.S.C. § 636(c)(1), the parties consented to proceed before a United States magistrate judge for all purposes. Following discovery, the Department filed a Motion for Summary Judgment and a Statement of Material Facts Not in Dispute. The Department's motion asserted that Berry's selection was based principally on interviews with the candidates and that Berry had outperformed Lucas in those interviews.

Karl filed an opposition on Lucas' behalf. The opposition consisted of the following: a 35-page memorandum, entitled Plaintiff's Opposition to Defendant's Motion for Summary Judgment; a 104-paragraph document, entitled Plaintiff's Statement of Material Facts in Dispute and Material Facts Omitted by Defendant; an affidavit by Lucas; and numerous supporting exhibits. Lucas' papers asserted that there was direct evidence of discrimination: he said that at his selection panel interview, the selecting official — Dr. Paul Fairley — called Lucas an "old timer" and told him, "[y]ou know what this is all about." Pl.'s Statement of Material Facts in Dispute and Material Facts Omitted by Def. ¶ 78 [hereinafter Pl.'s Rule 7(h) Statement]. But Lucas primarily relied on circumstantial evidence, including that he was substantially more qualified than Berry and that she had been preselected before the interviews. As to the latter, Lucas contended that there was evidence indicating that Berry had received interview questions in advance and had been coached regarding how to respond, and that Fairley had created after-the-fact interview notes to support the preordained result.

On September 28, 2004, the magistrate judge issued an order requiring Karl to show cause why he had not violated Federal Rule of Civil Procedure 11(b)(3). That rule obligates an attorney to certify as to any written submission that, "to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: ... (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery." FED.R.CIV.P. 11(b)(3). The magistrate judge identified twelve statements in the papers Karl filed on behalf of Lucas that the judge believed ran afoul of Rule 11(b)(3). The order was issued sua sponte, without a motion from the defendant suggesting that there was a Rule 11 problem in the plaintiff's pleadings. Karl filed a response to the order to show cause on December 2, addressing each of the statements that the order had highlighted as problematic.

On January 10, 2006, the magistrate judge issued a Memorandum Opinion and Order, in which he accepted Karl's explanation of a proofreading mistake in one of the twelve statements, but imposed sanctions on the basis of the other eleven. Lucas v. Spellings, 408 F.Supp.2d 8 (D.D.C.2006). The judge held, inter alia, that "Karl's statements obliterate again and again the distinction between drawing an inference and stating a fact and must therefore be condemned as a violation of the requirement of Rule 11 that the factual allegations in a document have evidentiary support." Id. at 13. The judge imposed a monetary sanction of $3000 and referred Karl to the United States District Court's Committee on Grievances to determine whether he violated the District of Columbia Rules of Professional Conduct.¹ Id. at 26-27.

The magistrate judge subsequently denied the Department of Education's summary judgment motion, and the case went to trial. At the close of the bench trial, the judge ruled in favor of the Department, and the plaintiff has filed an appeal that brings before us the interlocutory rulings that preceded the court's final judgment. See Ciralsky v. CIA, 355 F.3d 661, 668 (D.C.Cir.2004). Lucas does not challenge his loss on the merits, and the sole issue on appeal is the appropriateness of the Rule 11 sanctions imposed on attorney Karl.

II

In Cooter & Gell v. Hartmarx Corp., the Supreme Court held that appellate courts "should apply an abuse-of-discretion standard in reviewing all aspects of a district court's Rule 11 determination." 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). The Court noted, moreover, that "[a] district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence." Id.; see FED.R.CIV.P. 11, Advisory Comm. Notes (1993) (same).

Cooter & Gell involved sanctions imposed by the court upon motion of the opposing party. See FED.R.CIV.P. 11(c)(2). This case, by contrast, involves sanctions imposed by the court sua sponte, without motion of the opposing party. See FED. R.CIV.P. 11(c)(3). In recognition of the unusual position of the trial court in such circumstances, serving at once as both prosecutor and judge, the circuit courts have utilized different linguistic formulations to express the same idea: when the trial court imposes sanctions sua sponte, the reviewing court should engage in "careful appellate review" to assess whether there was an abuse of discretion. Young v. City of Providence ex rel. Napolitano, 404 F.3d 33, 40 (1st Cir.2005); see Kaplan v. DaimlerChrysler, A.G., 331 F.3d 1251, 1255 (11th Cir.2003) (holding that "[s]ua sponte Rule 11 sanctions ... must be reviewed with particular stringency" (internal quotation marks omitted)); Hunter v. Earthgrains Co. Bakery, 281 F.3d 144, 153 (4th Cir.2002) (holding that, where a sanction "was imposed sua sponte, we must examine the court's assertion that [the plaintiff's] legal contention was frivolous with particular stringency" (internal quotation marks omitted)).

Although both Karl and the Department of Education agree that this court should review the magistrate judge's order for abuse of discretion with particular care, see Oral Arg. Recording at 32:15-32:30, they disagree as to the substantive standard that the judge should himself have applied. Karl notes that Rule 11(c)(2), which governs Rule 11 sanctions initiated upon a party's motion, contains a "safe harbor" provision that permits the filer to avoid sanctions by withdrawing or correcting the challenged pleading within 21 days. Rule 11(c)(3), which governs sanctions imposed on the court's own initiative, does not contain such a provision. In light of this difference, and citing language in the Advisory Committee notes, Karl argues that only actions "akin to a contempt of court" should be subject to the sua sponte imposition of Rule 11 sanctions.² Citing the language of the rule itself,³ which does not distinguish between sanctions imposed after motion or sua sponte, the Department argues that the standard under which an attorney's actions must be measured is in all cases "an objective standard of reasonableness under the circumstances." Appellee's Br. 6 (citing Bus. Guides v. Chromatic Commc'ns Enters., Inc., 498 U.S. 533, 551, 111 S.Ct. 922, 112 L.Ed.2d 1140 (1991)). That is the standard the magistrate judge applied. See Lucas, 408 F.Supp.2d at 11 ("Rule 11 requires ... a determination as to whether, judged by the standard of a reasonable party or lawyer, the party or lawyer offended one of the rule's provisions.... Rule 11 ... is based upon an objective evaluation of the lawyer's conduct.").

Both sides have support for their positions in the case law.⁴ We need not enter this debate, however, because the sanctions order requires reversal regardless of which standard applies. As discussed below, the determination that the eleven statements violated Rule 11 was premised on two legal errors. And a trial court "necessarily abuse[s] its discretion if it base[s] its ruling on an erroneous view of the law." Cooter & Gell, 496 U.S. at 405, 110 S.Ct. 2447.

A

As the magistrate judge explained, the principal basis upon which he imposed sanctions was his finding that many of the eleven statements that Karl drafted were "classic examples of inferences disguised as...