Amendments to the Federal rules of civil procedure : hearing before the Subcommittee on Intellectual Property and Judicial Administration of the Committee on the Judiciary, House of Representatives, One Hundred Third Congress, first session, June 16, 1993 online

can only be overridden when a party shoulders the additional
expense of making a motion to the court, err towards permitting
stonewalling and the development of less information.

Although the Association would have rewritten Fed. R.
Civ. P. 11 differently than did the Advisory Committee, we are on
the whole satisfied with the changes, particularly the change made
by the Judicial Conference so that a federal judge is not required
to impose a sanction for every violation of the Rule, no matter how
trivial or debatable. Existing Rule 11 has proved problematic and
requires alteration. We thus urge Congress not to interfere with
the pending change to Rule 11.

Other than the points noted above and in our enclosed
comments, the Association has no dispute with the proposed pending
Civil Rules amendments.

In addition, I would like to correct an unfortunate
misconception pronoted by some advocates of the amendments, who
have characterized the proposed "disclosure" mechanism and
discovery changes as benign reforms opposed by a self-interested
bar. See , e.g. , Richard B. Schmitt, "Lawyers Unite Against Plan to
Speed Suits," Wall Street Journal (June 8, 1993) at Bl ("Lawyers of
all stripes are coming together in the name of a major legal-reform
proposal - to kill it"). This portrayal, in addition to being
cynical, is dramatically inaccurate.

The organized bar has not overwhelmingly opposed the
proposed new disclosure rules because we expect them to reduce our
ability to extract fees from hapless clients. Rather, our
Association opposes these changes because we expect them to create
additional litigation "busywork" that increases client costs with
no discernable benefit and significant risk that the new rules
would be used to delay and obfuscate the resolution of disputes.



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Although some advocates of the rules change argue that the bar's
perspective results only from self-interest, this view is refuted
by the dissent against disclosure of Justices Scalia, Thomas and
Souter, who, as lifetime judicial appointees unlikely to enter
private practice, obviously have no financial self-interest in this
matter.

Most important, I want to stress that as a bar
association we strive to ensure that our public interest activity
is divorced from the more narrow concerns of our own pocketbooks or
those of our clients. When acting as the Association, whose 19,000
members have a diverse array of practices, clients, and personal
political preferences, our only client is the public interest in an
effective justice system. Over the years, I believe any reasonable
observer would concur that we have largely achieved that goal and
acted as an expert policy organization rather than a narrow trade
group. It is on behalf of the public interest that we have
criticized the proposed disclosure and discovery changes.

I close by urging Congress not to shrink from exercising
its right to police federal court rulemaking. Recently, one
scholar described the proposed disclosure rules as lacking
persuasive empirical support and being the product of relatively
unguided Advisory Committee and Judicial Conference discretion.

See Laurens Walker, A Comprehensive Reform for Federal Civil

Rulemaking , 61 Geo. Wash. L. Rev. 455, 460-63 (1993). Although
still largely a proponent of judicially led rulemaking. Prof.
Walker found the current situation sufficiently distressful that he
advocated a major revision of the rulemaking process, requiring
administrative agency-like explanations and justifications for any
rules changes.

The Association, of course, takes no position on reform
of the Rules Enabling Act at this time. However, we note that the
traditional wide discretion accorded to the Advisory Committee, the
Standing Committee, and the Judicial Conference (with minimal
review by most members of the Supreme Court) has historically not
been problematic when it reflects the consensus of the legal
profession. But when rulemakers advocate changes opposed by an
overwhelming majority of the legal profession without field testing
of the proposed amendments, this may work considerable mischief.
Ten years ago, Rule 11 was amended without sufficient public
comment or reflection. Today, we are forced by adverse experience
to revise Rule 11. Congress should prevent the same mistakes in
the context of disclosure. The rights of litigants are too
important to keep "learning the hard way" in such matters.



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Please do not hesitate to contact me or the Association
should you or your staff have questions or desire additional
information.

The Association appreciates the care and oversight of
Congress in this matter.

Respectfully,

. . - ■ ' ^ ■■ .• ■ ^- y

Patricia M. Hynes, Chair,
Committee on Federal Courts
-Association of the Bar

of the City of New York



PMH/cpl
Enclosure



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November 19, 1991

The Honorable Robert Keeton, Chair
Committee on Rules of Practice and Procedure
Judicial Conference of the United States
Administrative Office of the United States Courts
1120 Vermont Avenue
Washington, DC 20544

Re: Proposed Amendments to Federal Rules of Civil Procedure
Dear Judge Keeton:

In response to the Rules Committee's Call for Comments
regarding the August 1991 Proposed Amendments to the Federal Rules
of Civil Procedure and the Federal Rules of Evidence, the Committee
on Federal Courts (the "Committee") of the Association of the Bar
of the City of New York submits its comments.

As you may know, the Association has more than 19,000 members,
primarily in the New York City metropolitan area, drawn from law
firms of varying size and types of practice. It also includes
prosecutors and other lawyers employed by government, legal aid
lawyers, law professors, and judges. In short, the Association is
a diverse group whose members' assessments are informed by their
varying practice experience. The Committee mirrors this diversity
in its composition. Although undoubtedly sensitive to the daily
problems confronting working lawyers, neither the Committee nor the
Association attempts to serve as a representative of an interest
group. Rather, the Committee and Association work to improve the
quality of our legal system through educational programs,
legislative reform efforts, continuing study of law in action, and
comments like the following.

This commentary will address the Proposed Amendments seriatim.
Rule 1

The Committee supports the proposed change.
Rule 11

Proposed Amended Rule 11 reflects admirable efforts by the
Rules Committee and the Advisory Committee on the Federal Civil
Rules ("Advisory Committee") to come to grips with the most vexing
civil rule of the 1980s. Since its revision in 1983, Rule 11 has
been at the vortex of a "litigation explosion" regarding sanctions.
In responding to the Advisory Committee's 1990 Call for Comments,



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the Ccnnictae joined a chorus of the profession critical of many
aspects of Rule 11 and proposing several changes in the Rule.'

In addition, the Conmittee proposed an oranibus sanctions rule
governing abusive litigation conduct that would serve as a
substitute for current Rules 11, 26(g) , 37(b) (2) (E) and 56(g) . The
Committee reiterates its earlier comments and renews its call for
a consolidation of civil sanctions in a rule approximating that set
forth in Appendix A to these comments (attached) .

The Rules Committee appears to have rejected the concept of
a consolidated sanctions rule and instead is considering possible
further amendment to "make the sanctions provisions in Rules 26 and
37 the exclusive basis for sanctions involving discovery motions
and papers."' In our view, such disaggregation would be unwise.
One troublesome aspect of civil sanctions practice has been its
inconsistency. Rule 11 has seen explosive growth while discovery
sanctions are rarely imposed at a time when most attorneys believe
there is at least as much discovery abuse as there are frivolous
pleadings and motions. By making Rules 26 and 37 the exclusive
basis for discovery sanctions, the Rules Committee would only
exacerbate this trend.

The practical effect of such unbundling would be to make
discovery sanctions even more of a rarity while pleadings and
motions would remain relatively common sanction targets, even under
the Proposed Amended Rule 11. Although critics of Rule 11 might
approve because there would thus be some net decline in sanction
orders generally, the Committee is troubled by any move that would
increase the asymmetry attending federal practice. Frivolous or
abusive discovery conduct should be placed under at least as much
fire as frivolous or abusive pleadings and motions. We renew our
call for a consolidated, omnibus sanctions rule such as the draft
set forth at the conclusion of Appendix A.

Regarding the particulars of Proposed Amended Rule 11, there
is much to commend. We applaud the Standing Committee and the
Advisory Committee for making substantial strides toward
accommodating the legal profession's criticisms of Rule 11.
Nonetheless, the suggested new rule continues to contain several
troublesome provisions that must be altered if the proposed new
rule is to constitute a genuine improvement over current Rule 11.



' See Committee on Federal Courts, Comments on Fe deral Rule
of Civil Procedure II and Related Rules , 4 6 THE RECORD 2 67
(1991) (hereinafter " Comments " ) .

' See Committee on Rules of Practice and Procedure, Proposed
Amendments to the Federal Rules of Civil Procedure and the Federal
Rules of Evidence at 938 F.2d CL, CLXII (August 1991) (hereinafter
" Proposed Amendments ") .



364



Although we find much merit in the alternative Bench-Bar Rule 11
proposal being circulated by John Frank, Esq. and other prominent
attorneys, for purposes of clarity we favor focusing upon the
Advisory Committee's Proposed Rule.

The "continuing duty" imposed by Proposed Rule 11(b) reflects
a troublesome departure from current Rule 11, where the bulk of
authority squarely holds that Rule 11 duties are measured as of the
time a paper is filed and that there exists no continuing duty to
revise previously submitted papers to accord with Rule 11.^ We
find this proposed revision an unfortunate departure from the bulk
of Rule 11 jurisprudence. In our view, the better reasoned cases
and the ABA have rejected a continuing duty requirement not only
because it is the best technical interpretation of Rule 11 but also
because the imposition of a continuing duty under Rule 11 would be
unwise policy.

Lawyers and litigants saddled with a continuing duty
requirement under Rule 11 would invariably be required to keep
looking over their figurative shoulders throughout the case in
order to protect themselves from eleventh hour sanctions.
Although, it may be true, as the Advisory Committee suggests, that
dropping or modifying frivolous assertions is the normal behavior
of competent and ethical counsel, this continuing revision
throughout the course of litigation usually occurs informally. If
Rule 11 's text imposes a continuing duty, counsel may well feel,
in order to protect themselves, that they must engage in
unnecessary and wasteful remedial activities such as amending
papers and otherwise protecting their flanks through additional
documentation. This would be a most odd result in light of the
Advisory Committee's obvious concern over reducing Rule 11
satellite litigation and Rule 11 costs in general.

For example, one might argue that imposing a continuing duty
would force defense counsel to streamline boilerplate, blunderbuss
form answers that raise a host of often-inapplicable affirmative



' See American Bar Association Section of Litigation,
Standards and Guidelines for Practice Under Rule 11 of the Federal
Rules of Civil Procedure . 121F.R.D. 101, 112-13 (1988) (hereinafter
" ABA Standards ") . See, e.g. . Dahnke v. Teamsters Local No. 695,
906 F.2d 1192, 1200 (7th Cir. 1990); Presiding Bishop of the
Church of Jesus Christ of Latter Day Saints v. Associated
Contractors, 87" F.2d 938, 943 (11th Cir. 1989), cert, denied . 110
S.Ct. 1133 (1990); Thomas v. Capital Securities Servs., 836 F.2d
866, 874-75 (5th Cir. 1988) (en_banc) . But see Anderson v. Beatrice
Foods, 900 F.2d 388, 393 (1st Cir), cert, denied . Ill S.Ct. 233
(1990); Blue v. United States Dep't of the Army, 914 F.2d 525, 544-
46 (4th Cir. 1990), cert, denied . Ill S.Ct. 1580 (1991) (although
unclear on the point, court suggests it read Rule 11 as imposing
a continuing duty) .



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defenses and make repetitive clains that defendant lacks sufficient
infor:nation to admit or deny allegations in the complaint.
Although we agree that modernizing and correcting such vague and
imprecise answers would constitute optimal litigation conduct
(putting aside that in an ideal world such a pleading should not
have been filed in the first place) , it is of little or no benefit
to the plaintiff, who will know full well from discovery which
avenaents are seriously contested and which affirmative defenses
will actually be raised at trial.

Against this negligible benefit must be weighed more serious
costs: the possibility of late-breaking Rule 11 sanctions for the
mere "housekeeping" errors of a party that do not evidence
significant misconduct. Under the continuing duty standard of
Proposed Amended Rule 11, for example, plaintiff could raise and
prove a Rule 11 violation because the defendant did not solidify
waffling responses or drop inapplicable affirmative defenses.
Once detected, of course, this sort of technical but not very
serious Rule 11 "violation" would require the court to sanction the
defendant. A scenario like this could thus impose substantial
collateral costs for no real litigation benefit.

Furthermore, truly egregious continuing conduct will
ordinarily result in the submission to the court of an offending
paper later in the litigation, thus triggering Rule 11 even if Rule
11 lacks the continuing duty language. As drafted, the continuing
duty requirement thus presents the worst of both worlds: it
catches relatively few instances of abusive conduct that would not
already be within the ambit of the Rule but imposes significant
costs upon all lawyers and litigants.

Perhaps more important, a continuing duty requirement may
increase the unfortunate tendency of some courts to view
unsuccessful claims or assertions as frivolous. A court may find
a claim marginal but is constrained to find no Rule 11 violation
when forced to measure counsel's decision to proceed under the
"snapshot" rule of reference to counsel's knowledge at the time of
filing. When permitted to consider additional information and
intervening factors, trial courts will have more opportunity to
deem frivolous the claims they regard as marginal. They will,
invariably, err on occasion and appellate review will not cure all
such errors owing in large part to the liberal "abuse of
discretion" standard of appellate review for Rule 11. If the aim
of Proposed Amended Rule 11 is to bring restraint to Rule 11
practice, this augers in favor of fincing no Rule 11 violation in
close cases. A continuing duty requirement works against these
goals but provides little benefit.

We are also vitally concerned that any continuing duty
requirement not become a trap for the unwary or a means by which
courts may punish lawyers, parties, or claims it has come to
dislike. At a minimum, if the continuing duty language is



366



retained, Proposed Rule 11(b) rausr be hamonized with Rule 15(b)
which states that issues implicitly tried shall be deemed raised
by the pleadings, and Rule 16(e) which provides that pretrial
orders control the subsequent course of the action. These rules
stand for the proposition that the most recent statements or
conduct in litigation pre-empt earJrier statements in the pleadings.
Good faith, legitimate shifts in emphasis or position are hardly
uncommon events in litigation because counsel frequently )cnow far
less about the case at the pretrial stage than after discovery and
interaction with the opposition.

In a similar fashion, a lawyer should not be placed at risk
from Proposed Amended Rule 11(b) when his or her claim, defense,
request, demand, objection, contention, or argument targeted by a
sanction motion was originally in compliance with Rule 11 and has
implicitly been dropped or has not been seriously litigated by the
parties. In our view, a contention has not been "maintained" in
such circumstances. However, the Proposed Rule suggests that any
failure to withdraw the offending assertion violates Rule 11. At
the very least, some further protection for attorneys should be
added to the Proposed Rule either by specific new language or a
strong admonition in the Committee Note that courts must not use
the continuing duty standard to engage in the judicial equivalent
of "Monday morning quarterbacking. "'

Proposed Rule 11(b) and (c) also present an interpretative
question of substantial concern. Although the text does not appear
to require it, some commentators appear to have read the proposal
as requiring that counsel specifically denominate whether they
assert that legal positions are "warranted by existing law" or
instead based on a "nonfrivolous argument for the extension,
modification, or reversal of existing law or the establishment of
new law."' Apparently, this view results from the Draft Committee
Note statement that "the revised rule places equal emphasis on the
duty of candor [as well as on the duty to 'stop-and-think' ] before



* The current draft Committee Note appears to support this
view by suggesting that a party must abandon a frivolous position
either through amendment or "at a pretrial conference" f Proposed
Amendments at 938 F.2d at CLXX^/I) . However, if the continuing duty
language is retained, this aspect of Rule 11 practice should be
addressed in greater detail.

' See , e.g. . J. Frank, J. Napolitano & J. Resnik, Comments on
the Proposed Changes in the Federal Rules of Civil Procedure (Rev.
ed. Oct. 9, 1991) (hereinafter "Frank, et al."); New York State Bar

Association, Commercial and Litigation Section, CoTnments on the

Advisory Committee and Bench-Bar Proposals to Amend Rule 11 of the
Federal Rules of Civil Procedure (October, 1991) (hereinafter New
York State Bar Comments ) .



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submitting a caper to the court.'" The terra duty of candor to some
observers connotes a recmirement that lawyers clearly label whether
their contentions are "existing law" or "law reform" arguments.
Conseouently, some obser/ers fear that proposed revisions to Rule
11 would reinstate and codify the trial court opinion in Golden
Eagle Distributing Corp. v. Burroughs ' rather than endorsing the
Ninth Circuit's refusal to impose such a requirement.' We agree
that Rule 11 should not require counsel to "flag" their legal
arguments with bright lights and ironclad specificity. However,
we do not read either the text of Proposed Amended Rule 11 or the
Draft Committee Note as dictating such a result.' The Advisory
Committee should clarify the intent of the revision regarding
"argument identification" requirements.

Proposed Amended Rule 11(b) (1) is unobjectionable except
insofar as it overlooks an opportunity to clarify practice under
the "improper purpose" prong of Rule 11. As the Rules Committee
is aware, there exists something of a split among courts on the
issue of whether an objectively meritorious paper (i-e. , one
adequately grounded in fact and warranted by law) can nonetheless
violate Rule 11 if it is filed for an improper purpose. Several
courts have found such pacers sanctionable, '" a view endorsed by the
ABA Litigation Section.'' Other courts have viewed objectively
meritorious papers as insulated from Rule 11 notwithstanding any
improper purpose of the filing party or counsel." The Committee



* See 938 F.2d at CLXXV.

' 103 F.R.D. 124, 127 (N.D.Cal. 1984), rev ' d . 801 F.2d 1531
1539 (9th Cir. 1986) .

* Irrespective of whether it is right or wrong on the merits,
the appellate court's Golden Eagle opinion was greeted with a sigh
of relief by practitioners, who viewed the district court as
improperly expanding Rule 11 and placing too many additional
burdens on counsel.

' In context, it seems to us that the Draft Committee Note
was referring to the continuing duty requirement of Proposed
Amended Rule 11 rather than any implicit requirement of arg\:ment
identification.

'" See, e.g. . Brown v. Federation of State Medical Bds. , 830
F.2d 1429 (7th Cir. 1987); Robinson v. National Cash Register Co.,
808 F.2d 1119, 1130 (5th Cir. 1987).

" See, ABA Standards . 121 F.R.D. at 121 (1988).

'' See , e.g. . Rachel v. Banana Republic, Inc., 831 F.2d 1503,
1508 (9th Cir. 1987); Oliveri v. Thompson, 803 F.2d 1265, 1275 (2d
Cir. 1986) , cert, denied sub, nom. Suffolk Co. v. Graseck . 480 U.S.



368



favors the ABA position and views the amending of Rule 11 as an apt
time to clarify the matter through brief discussion in the Advisory
Committee Notes.

Proposed Amended Rule 11(b)(2) makes a positive contribution
by replacing the "good faith argument" for law reform with the term
"nonfrivolous argument." This advances Rule 11 's aspiration to
objective rather than subjective standards governing sanctions
practice and brings greater consistency to the prongs (fact, law,
law reform, improper purpose) upon which sanctions may be imposed.
Unfortunately, the Committee Note provides no guidance regarding
the definition of "nonfrivolous" in this context. Adopting the
"grounded in fact/warranted by law" definition of frivolousness
found elsewhere in current Rule 11 is not ideal because of the
differing nature of law reform arguments. Rather, we propose that
law reform arguments as well as arguments based on existing law be
deemed "nonfrivolous" whenever they could gather the support of a
significant number of competent and well-informed attorneys.

For example, evidence that a law reform argument is
nonfrivolous within the meaning of Rule 11 would include support
in judicial opinions (including dissents), academic commentary', or
the positions of legal organizations ( e.g. . the National Bar
Association, state bar organizations, city bar associations) . In
fact, this type of support for a law reform argument should
constitute a virtual safe harbor "proving" that the argument is
nonfrivolous. However, the converse is not true. The absence of
objective indicia of nonfrivolousness does not imply frivolousness.
The test should be whether a significant number of reasonable
attorneys would find the argument colorable even if they are
unpersuaded by the argument. A definition of nonfrivolousness
along these lines should be set forth in the Committee Notes.

The rewording of the fact prong of the rule in Proposed
Amended Rule 11 (b) (3) is useful in its explicit recognition of the
importance of discovery for the establishment of many claims. In
either the text of the Proposed Rule or the Committee Notes, it
would be useful to state that a court's primary focus in assessing
compliance with Rule 11 should be the conduct of counsel and
parties rather than the resulting product. If, for example, a
lawyer had conducted extensive fact investigation and legal
research but asserted a claim or defense viewed as unjustified by
even a large majority of the bench, a court should hesitate to deem
this a violation of Rule 11, even if it finds the lawyer's legal
reasoning as applied to the fac^s to fall below the standard of the
hypothetical reasonable attorney so long as the claim or defense
was not interposed for an improper purpose. In essence, the
lawyer's conduct is reasonable, clearly so, even if the quality of
his product is subject to dispute. By focusing on conduct rather



918 (1987).



369



than product, Rule 11 jurisprudence would encourage careful
lawyering but minimize the situations in which sanctions are
awarded merely because the court sees things differently fron
counsel .

The Committee continues to believe that Rule 11 practice would
be improved if the Rule were discretionary rather than mandatory,
and thus disagrees with the continuation of mandatory sanctions
contained in Proposed Amended Rule 11(c). The Committee under-
stands the view that conduct violative of Proposed Amended Rule 11
is likely to be sufficiently blameworthy as to justify mandatory
sanction. Nonetheless, we continue to believe that there will
remain a significant number of Rule 11 cases where a party or
lawyer is in violation of the Rule but has not acted in a
reprehensible way. Requiring Rule 11 sanctions in such cases seems