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Fed. R. Civ. P. 11 Does Not Apply to Pleadings Filed in State Court and Then Removed by the Defendant, Holds First Circuit


In Guaetta & Benson, LLC v. McArdle, No. 22-1034 (1st Cir. Oct. 28, 2022), the First Circuit reversed Fed. R. Civ. P. 11 sanctions, holding as a matter of law that Rule 11 did not apply to complaints filed in state court and then removed to federal court.

“On February 7, 2017, Nicholas Triantos sued Deutsche Bank National Trust Company and other mortgage lenders and servicers in Massachusetts Superior Court, asserting various claims arising out of a foreclosure on his property. The complaint unusually also named as defendants Guaetta & Benson, LLC [G&B], the firm that had conducted the foreclosure sale on behalf of Deutsche Bank, and three individual partners of that firm, alleging that their actions violated the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p, and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968.”

Defendants removed the case to federal district court. After the case was dismissed for failure to state a claim, the law firm and partners moved for Rule 11 sanctions against plaintiff’s attorney McArdle, counsel on the state court complaint, arguing that there was no legal basis for the claims against them. McArdle did not appear and filed no papers in the removed federal action. Ultimately, the district court granted $10,000 in attorney’s fees and $32 in costs jointly and severally against plaintiff Triantos and McArdle pursuant to Rule 11. McArdle only learned about the Rule 11 order two-and-a-half months later. He moved for post-judgment relief under Fed. R. Civ. P. 60(b), which was denied.

The First Circuit reverses, citing two grounds.

First, “[t]he sanctions order is contrary to the text of Rule 11(b). Rule 11 sanctions are available only for misconduct in ‘presenting to the court a pleading, written motion, or other paper — whether by signing, filing, submitting, or later advocating it.’” McArdle never “present[ed]” the pleading in federal court because he was never counsel in the federal case.

“G&B does not argue that McArdle is subject to Federal Rule 11 sanctions for signing the complaint in state court, and correctly so. The Federal Rules of Civil Procedure do not apply to state court proceedings . . . . An individual cannot be subject to Federal Rule 11 sanctions for conduct in state court.” The panel rejects the argument that the removed state complaint was the “operative pleading” in federal court before plaintiff filed an amended complaint. “While G&B is correct that the state court complaint removed to federal court by the defendants was briefly the operative pleading in federal court, there is no ‘operative pleading’ exception to Rule 11’s ‘presenting’ requirement.”

Second, “Rule 11’s procedural requirements were not met here . . . . Here, G&B did not serve its sanctions motion on McArdle under Rule 5 or afford him the 21-day safe harbor period required by Rule 11(c)(2). The ‘safe harbor’ letter that G&B sent McArdle cannot satisfy these requirements. While parties are encouraged ‘to give informal notice . . . whether in person or by a telephone call or letter’ before serving a Rule 11 motion, this informal notice is not a substitute for actual service of the motion. Fed. R. Civ. P. 11(c)(2) advisory committee’s note to 1993 amendment. Only service of the motion triggers the 21-day safe harbor period.”



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