Worldwide Primates, Inc. v. McGreal

• Decision Date: 16 July 1996
• Docket Number: No. 95-4607,95-4607
• Citation: 87 F.3d 1252
• Parties: WORLDWIDE PRIMATES, INC., Plaintiff, Paul Bass, Esq., Plaintiff-Appellant, v. Shirley McGREAL, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1252

87 F.3d 1252

35 Fed.R.Serv.3d 591

WORLDWIDE PRIMATES, INC., Plaintiff Paul Bass, Esq., Plaintiff-Appellant, v. Shirley McGREAL, Defendant-Appellee.

No. 95-4607.

United States Court of Appeals Eleventh Circuit.

July 16, 1996.

Philip D. Parrish, Stephens, Lynn, Klein & McNicholas, P.A., Miami, FL, for appellant.

Thomas R. Julin, Edward M. Mullins, Steel, Hector & Davis, Miami, FL, for appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before COX and BARKETT, Circuit Judges, and BRIGHT ^*, Senior Circuit Judge.

BARKETT, Circuit Judge:

Attorney Paul Bass appeals the imposition of sanctions against him in the amount of $25,000 in favor of Shirley McGreal under Rule 11, Federal Rules of Civil Procedure (1993). ¹ We affirm.

The full factual and procedural background of this case is set forth in Worldwide Primates, Inc. v. McGreal, 26 F.3d 1089 (11th Cir.1994) ("Worldwide I "). Briefly, however, McGreal is an animal rights activist, and Worldwide Primates, Inc., is a Florida corporation engaged in the commercial wildlife trade. McGreal sent two letters to Delta Primate Center, a client of Worldwide. The first letter stated, in part, that Worldwide had "received very damning criticisms from the Department of Agriculture inspectors and has tried to undermine inspectors' authority by going over their heads. I enclose some relevant documents." The enclosures, in essence, verified the truth of McGreal's statements. They included a memorandum from the United States Department of Agriculture, which, consistent with McGreal's assertions, detailed "major deficiencies" in Worldwide's operation, including unsanitary, inadequate, and damaged animal cages, as well as other deficiencies "too numerous to mention." The memorandum stated that "[s]o far, [Worldwide President] Matthew Block has avoided allegations of violation of the Animal Welfare Act by successfully involving seven layers of government in this agency, by invoking complaints, and allegations of everything from over-inspection to bigotry."

The second letter sent by McGreal stated that "[s]hould Delta patronize the company Worldwide Primates, we invite you to peruse this animal dealer's notice from the Centers for Disease Control suspending his license to import primates." Enclosed was a letter from the United States Department of Health and Human Services, notifying Block that "your registration to import nonhuman primates into the United States is revoked for failure to implement appropriate isolation and quarantine procedures." This letter specified no fewer than 46 procedural violations.

Block took the letters to attorney Bass to discuss the possibility of suing McGreal. Block and Bass had known each other for about 15 years, and Bass had represented Block on numerous occasions during that time. Block showed Bass the letters, but not the attachments referenced in the letters that verified the truth of the statements contained in the letters. Nor did Bass ask to see the attachments. Bass testified that Block told him that, as a result of the letters, Worldwide "had to do two transactions with Delta Primates Center ... at no profit, and [had] cost [Block] money in tying up ... facilities and precluded [him] from making money in another endeavor." But Bass did not make any inquiry of Block regarding these damages, such as the manner, nature or amount of money lost.

Thereafter, without doing any further investigation into the facts on which Worldwide's claim was predicated, Bass filed suit on behalf of Worldwide against McGreal in state court for tortious interference with a business relationship. Copies of both letters were attached to the complaint, but the supporting enclosures were not. McGreal removed the case to federal court, where it was subsequently dismissed. The district court denied McGreal's motion for Rule 11 sanctions. McGreal appealed, and we reversed the denial of sanctions against Worldwide and remanded with instructions also to consider whether sanctions would be appropriate against Bass. On remand, the district court assessed $25,000 in sanctions against Worldwide and $25,000 against Bass. Bass now appeals.

An appellate court reviews all aspects of the district court's Rule 11 determination for an abuse of discretion. Jones v. International Riding Helmets, Ltd., 49 F.3d 692, 694 (11th Cir.1995) (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990)).

We have previously stated that "Rule 11 stresses the need for some prefiling inquiry." Mike Ousley Productions, Inc. v. WJBF-TV, 952 F.2d 380, 382 (11th Cir.1992). Rule 11 sanctions are proper "(1) when a party files a pleading that has no reasonable factual basis; (2) when the party files a pleading that is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; or (3) when the party files a pleading in bad faith for an improper purpose." Jones, 49 F.3d at 694. Imposition of sanctions on the attorney rather than, or in addition to, the client is sometimes proper "since it may well be more appropriate than a sanction that penalizes the parties for the offenses of their counsel." See id.

In this circuit, a court confronted with a motion for Rule 11 sanctions first determines whether the party's claims are objectively frivolous--in view of the facts or law--and then, if they are, whether the person who signed the pleadings should have...