Academic journal article Harvard Law Review

Magistrate Law - Rule 11 Sanctions - Second Circuit Leaves Classification of Magistrate Judges' Rule 11 Sanctions Unresolved: Kiobel V. Millson

Academic journal article Harvard Law Review

Magistrate Law - Rule 11 Sanctions - Second Circuit Leaves Classification of Magistrate Judges' Rule 11 Sanctions Unresolved: Kiobel V. Millson

Article excerpt

The Federal Magistrates Act (1) of 1968 created a class of legal officers whose role is to promote judicial economy by decreasing the burgeoning strain on federal district courts. (2) The Act established that magistrate judges may issue only "recommendations" for dispositive judgments, to be reviewed de novo by district courts, but may issue "order[s]" for non dispositive determinations, to be reviewed only for clear error. (3) Recently, in Kiobel v. Millson, (4) the Second Circuit reversed a magistrate judge's grant of a motion for Rule 11 sanctions. The panel unanimously held the district judge's affirmance of those sanctions to be an abuse of discretion (5) but fractured over the mooted question of whether the magistrate judge's initial determination constituted a dispositive or non dispositive judgment. (6) While the court rightly found that the allegations in question did not merit sanctions, the concurrences addressing the standard of review potentially undercut the efficiency purpose of the Federal Magistrates Act by inviting increased litigation and functionally mandating review under both standards. The panel should have either declined to reach the question or classified Rule 11 sanctions as non dispositive and reviewable only for clear error to facilitate district court administration.

In Kiobel, the plaintiffs moved for class certification in the Southern District of New York against Royal Dutch Petroleum Co. and two affiliated corporations, alleging violations of the Alien Tort Statute arising from the company's oil exploration in Nigeria. (7) The district court referred the motion to a magistrate judge under 28 U.S.C. [section] 636(b)(1)(B). (8) Magistrate Judge Pitman recommended that the motion be denied, and plaintiffs objected. (9) Defendants filed a response alleging, among other things, that several of the plaintiffs' witnesses were paid for their testimony, that those witnesses were "giving testimony that [plaintiffs'] counsel knows to be false," and that plaintiffs' counsel wired $15,195 for the witnesses' benefit. (10) Plaintiffs charged defense counsel with violating Rule 11(b)(3), (11) which requires that "factual contentions have [or are likely to have] evidentiary support." (12)

Magistrate Judge Pitman issued an opinion and order finding that defense counsel's first allegation had sufficient evidentiary support in the record, but that the second and third allegations "lacked an evidentiary basis" and thus warranted imposition of sanctions. (13) He found these violations after applying both the "utterly lacking in support" (14) standard and the "objective reasonableness" standard, under which a lawyer faces liability for claimed evidentiary support that is not objectively reasonable. (15) Defense counsel appealed to the district court, which affirmed the sanctions. (16)

The Second Circuit reversed. (17) Writing for a unanimous panel, (18) Judge Cabranes found that the district court's decision had "no support in law or logic" and thus constituted an abuse of discretion. (19) Although the magistrate judge had found that defense counsel had no support for their claim that plaintiffs' counsel knew the testimony to be false, the panel noted evidence giving rise to an inference in support of the claim. (20) Accordingly, the court held that the magistrate judge had incorrectly sanctioned defense counsel by requiring them to have proof for their allegations rather than merely an evidentiary basis. (21) In addressing the other allegation found by the district court to violate Rule 11 (though not sanctioned), the panel clarified the standard in the Second Circuit: "Rule 11 neither penalizes overstatement nor authorizes an overly literal reading of each factual statement." (22)

Because the Second Circuit held that the district court had abused its discretion, the panel would have reversed under any standard of review and so did not need to determine the correct standard. …

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