Dist. Ct. erred in imposing $84,325 Rule 11 sanction against plaintiff for filing frivolous breach of contract action, under circumstances where plaintiff had no contract with defendant. Rule (11)(c)(2) requires party seeking Rule 11 sanctions to first serve proposed motion for sanction on opposing party and give opposing party at least 21 days to withdraw or correct offending pleading, and defendant failed to comply with procedure set forth in Rule 11(c)(2). Moreover, Ct. rejected defendant’s contention that it substantially complied with Rule 11(c)(2) when it sent two letters to plaintiff that contained both settlement demands and threats to file motion seeking Rule 11 sanctions if its demands were not met, since defendant’s Rule 11 threats did not offer plaintiff 21-day safe harbor to withdraw its contract claim. (Dissent filed.)
Federal 7th Circuit Court
Civil Court
Sanctions