Rule 11 Report: The Undefined Professional Responsibility of Clients: The Furthest Reach of Rule 11
Inside Litigation, April 1991, Volume 5, Number 4
6 Pages Posted: 3 Feb 2013
Date Written: April 1, 1991
This term, the Supreme Court decided its third case involving Rule 11 of the Federal Rules of Civil Procedure, which governs sanctions for filing inadequately investigated motions, pleadings, and other papers in federal court. In Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., the Court extended the reach of Rule 11 sanctions to clients who sign legal papers. The author discusses the significance of this decision, focusing on the potential impact on attorney-client relations.
As almost every litigating attorney knows, the subject of Rule 11 sanctions now haunts bar meetings, continuing legal education programs, local legal watering holes, and courthouse hallways. There is ample reason for this pervasive anxiety: the quality and quantity of lawyers who have been vexed by the rule is impressive. And, like big fish stories, big sanction stories make big headlines, as well as enduring legal lore. Since the amendment of Rule 11 in 1983, federal practitioners have been struggling to conduct their professional livelihoods without running afoul of the provision. And yet thousands of attorneys have been caught up in the Rule 11 maelstrom, attested by the volume of reported and unreported sanctions issuing from federal district judges.
Needless to say, the Court's holding in Business Guides opens new vistas concerning the professional responsibility of lawyers in advising their clients at the threshold of the attorney-client relationship. Must lawyers advise clients that clients are independently sanctionable for signing pleadings, and that any errors on the part of the client, even errors made in good faith, may result in the lawyer giving Rule 11 testimony against the client? In addition, Business Guides seems destined to raise issues implicating attorney-client privilege, and waiver of that privilege. Does the possibility of Rule 11 sanctions constitute a waiver of privilege that is analogous to instances of such waiver in the context of malpractice defense, fee disputes, and bar proceedings?
Finally, the Business Guides decision suggests, by the 5-4 split on the Court, that the Rules Enabling Act challenge to the basic validity of the Rule is by no means a dead letter. If anything, the marshalling of four dissenting justices to agree that the majority's approach stretches the authority of judicial rulemaking to its outermost limits suggests that future litigants will continue to press this argument. In the alternative, the dissenting opinion on the Rules Enabling Act argument may send a signal to the Advisory Committee to think long and hard about recasting certain provisions of the 1983 amended Rule.
Keywords: Federal Rule of Civil Procedure 11, sanctions, professional responsibility, attorney-client relationship, Rule 11, Business Guides v. Chromatic, Supreme Court
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