Northern Illinois Telecom, Inc v. PNC Bank
Filing
Filed opinion of the court by Judge Hamilton. The district court s award of sanctions against Riffner is REVERSED. Diane P. Wood, Chief Judge; Richard A. Posner, Circuit Judge, dissenting, and David F. Hamilton, Circuit Judge. [6824980-1] [6824980] [15-2142]
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15 2142
NORTHERN ILLINOIS TELECOM, INC.,
Plaintiff,
and
ROBERT G. RIFFNER,
Respondent Appellant,
v.
PNC BANK, N.A.,
Defendant Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:12 cv 02372 — John Robert Blakey, Judge.
____________________
ARGUED JANUARY 18, 2017 — DECIDED MARCH 10, 2017
____________________
Before WOOD, Chief Judge, and POSNER and HAMILTON, Cir
cuit Judges.
HAMILTON, Circuit Judge. This appeal pivots on the proce
dural requirements of Federal Rule of Civil Procedure 11 for
seeking sanctions against a party and its attorney for asserting
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a frivolous claim or defense. Rule 11(c)(2) requires a party
seeking Rule 11 sanctions first to serve a proposed motion on
the opposing party and to give that party at least 21 days to
withdraw or correct the offending matter. Only after that time
has passed may the motion be filed with the court. To mix na
val metaphors, the party seeking sanctions must first fire a
warning shot that gives the opponent time to find a safe har
bor.
In this case, the party who sought sanctions failed to com
ply with that procedure. It argued, however, that two letters
it sent containing both settlement demands and threats to
seek Rule 11 sanctions if its demands were not met amounted
to “substantial compliance” with Rule 11(c)(2) and thus pre
served its right to move for sanctions after the district court
granted summary judgment in its favor. The district court ac
cepted that argument and imposed sanctions. Northern Illinois
Telecom, Inc. v. PNC Bank, NA (NITEL II), No. 12 C 2372, 2015
WL 1943271, at *9 (N.D. Ill. Apr. 29, 2015).
We reverse. Whether “substantial compliance” with the
warning shot/safe harbor requirement of Rule 11(c)(2) can
ever be sufficient is controversial. We are the lone circuit to
say yes. Compare Penn, LLC v. Prosper Business Dev. Corp., 773
F.3d 764, 768 (6th Cir. 2014) (eight circuits reject substantial
compliance theory), with Nisenbaum v. Milwaukee County, 333
F.3d 804, 808 (7th Cir. 2003) (substantial compliance with
warning shot requirement was sufficient to allow sanctions).
Even assuming substantial compliance is sufficient, the de
fendant’s settlement demands in this case fell far short of sub
stantial compliance. We therefore reverse the district court’s
award of sanctions.
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3
I. Factual and Procedural Background
A. Plaintiff’s Breach of Contract Claim
In 2007, a company called Nexxtworks contracted with
two banks in the Chicago area to upgrade communications
facilities. Northern Illinois Telecom, Inc. v. PNC Bank, NA (NITEL
I), No. 12 C 2372, 2014 WL 4244069 (N.D. Ill. Aug. 27, 2014).
Nexxtworks subcontracted with plaintiff NITEL to install
data and telephone cable at four bank branches. NITEL per
formed the work, but Nexxtworks did not pay NITEL all that
it thought it was owed. Nexxtworks asserted there had been
quality problems that had required it to hire other subcontrac
tors to redo or finish NITEL’s work. In 2009, before their dis
pute was resolved, Nexxtworks filed for bankruptcy protec
tion in Florida and listed NITEL’s claim as a disputed debt.
NITEL filed a proof of claim for $115,000, but the bankruptcy
court disallowed it because it was filed too late.
In 2012, still seeking payment for what it thought it was
owed, NITEL filed this breach of contract suit in an Illinois
state court against PNC Bank, which by that time had ac
quired both of the original banks in whose branches NITEL
had installed the cables. NITEL sought damages of $81,300,
plus late fees, attorney fees, and costs. With the amount in
controversy greater than $75,000, PNC Bank removed the case
to federal court based on diversity of citizenship under 28
U.S.C. § 1332. The problem for NITEL was that it had no con
tract with PNC Bank, which moved for summary judgment
on that basis. District Judge St. Eve granted summary judg
ment for PNC Bank. NITEL I, 2014 WL 4244069. NITEL did
not appeal.
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B. District Court Rule 11 Sanctions Order and Award
The present appeal stems from the district court’s post
judgment award of Rule 11 sanctions against both NITEL and
its lawyer, appellant Riffner. Before discovery began and
again before PNC Bank moved for summary judgment, PNC
Bank’s lawyer sent letters to Riffner asserting that NITEL’s
breach of contract claim was frivolous. Both letters proposed
to settle the case by having NITEL dismiss its suit and pay
PNC Bank its attorney fees. Both letters concluded by threat
ening to seek Rule 11 sanctions if NITEL did not agree to the
demands within a few days. Riffner did not respond to those
letters. Two months after final judgment, PNC Bank moved
for sanctions under Rule 11. The case was reassigned to Dis
trict Judge Blakey.
Judge Blakey awarded sanctions against NITEL and Riff
ner, jointly and severally, for $84,325. The judge held that the
contract claim was frivolous and asserted in bad faith. The
court found “clear evidence that, in fact, NITEL knew Nexxt
works (and not PNC) was contractually obligated to pay for
the work NITEL did at the branches, and even a cursory in
vestigation would have shown that the Nexxtworks email and
the work orders could not support a breach of contract claim.”
NITEL and Riffner both appealed the sanctions order, but
NITEL was later dismissed as an appellant. We have before us
only Riffner’s appeal.
II. Analysis
We review a district court’s grant of Rule 11 sanctions for
abuse of discretion. Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 409 (1990); Mars Steel Corp. v. Continental Bank, N.A., 880
F.2d 928, 933 (7th Cir. 1989) (en banc). An abuse of discretion
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may be established if the district court based its decision on
an erroneous view of the law or a clearly erroneous evaluation
of evidence. Gastineau v. Wright, 592 F.3d 747, 748 (7th Cir.
2010).
Riffner raises both substantive and procedural objections
to the district court’s award of sanctions. The substantive ar
guments are not persuasive, and Riffner’s attempt to walk
away from his and NITEL’s earlier reliance on work orders to
prove it had contracts with the banks is flatly contradicted by
the record.1 The district court did not abuse its discretion in
finding that the breach of contract claim that Riffner pursued
against PNC Bank on behalf of NITEL was objectively base
less because NITEL never had a contract with PNC Bank.
The problem with the sanctions award is procedural. PNC
Bank simply failed to follow the requirements of Rule 11. To
explain, we start with a word about the role of Rule 11 in fed
eral civil litigation and then examine the amendments that led
to the warning shot/safe harbor requirement.
In civil cases within our jurisdiction, federal courts exer
cise considerable discretion and great power. The proper ex
ercise of that power can be essential in preserving the rule of
law and the rights and liberties of the American people, in
cases large and small, landmark and mundane. When a plain
tiff invokes those powers in a civil case, it puts machinery in
gear that can be powerful, intimidating, and often expensive.
1
In its response to PNC Bank’s motion for summary judgment, NITEL,
through Riffner, said: “NITEL’s allegations against MidAmerica and Na
tional City are based on purported work orders for each of the Branches,”
and that “the Work Order acted as a contract for the work done.”
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Those powers and machinery can be abused by litigants. Fed
eral Rule of Civil Procedure 11 seeks to ensure that those pow
ers and machinery are engaged only to address claims and
defenses that have a reasonable basis in fact and law and that
are asserted only for a proper purpose. Because Rule 11 can
affect so powerfully the ability of parties to seek the protec
tion of the federal courts, the details of its provisions have
long been controversial.
In the current version of the rule, the substantive provi
sions are in subsection (b):
(b) Representations to the Court. By presenting
to the court a pleading, written motion, or other
paper—whether by signing, filing, submitting,
or later advocating it—an attorney or unrepre
sented party certifies that to the best of the per
son’s knowledge, information, and belief,
formed after an inquiry reasonable under the
circumstances:
(1) it is not being presented for any improper
purpose, such as to harass, cause unnecessary
delay, or needlessly increase the cost of litiga
tion;
(2) the claims, defenses, and other legal conten
tions are warranted by existing law or by a non
frivolous argument for extending, modifying,
or reversing existing law or for establishing new
law;
(3) the factual contentions have evidentiary sup
port or, if specifically so identified, will likely
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have evidentiary support after a reasonable op
portunity for further investigation or discovery;
and
(4) the denials of factual contentions are war
ranted on the evidence or, if specifically so iden
tified, are reasonably based on belief or a lack of
information.
Subsection (c) then authorizes district courts to impose sanc
tions, including monetary sanctions, against parties, attor
neys, and law firms who violate the substantive standards of
subsection (b), as Riffner and NITEL did in this case. Subsec
tion (c) provides:
(c) Sanctions.
(1) In General. If, after notice and a reasonable op
portunity to respond, the court determines that
Rule 11(b) has been violated, the court may impose
an appropriate sanction on any attorney, law firm,
or party that violated the rule or is responsible for
the violation. Absent exceptional circumstances, a
law firm must be held jointly responsible for a vio
lation committed by its partner, associate, or em
ployee.
(2) Motion for Sanctions. A motion for sanctions
must be made separately from any other motion
and must describe the specific conduct that alleg
edly violates Rule 11(b). The motion must be served
under Rule 5, but it must not be filed or be presented to
the court if the challenged paper, claim, defense, conten
tion, or denial is withdrawn or appropriately corrected
within 21 days after service or within another time the
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court sets. If warranted, the court may award to the
prevailing party the reasonable expenses, including
attorney’s fees, incurred for the motion.
(3) On the Court’s Initiative. On its own, the court
may order an attorney, law firm, or party to show
cause why conduct specifically described in the or
der has not violated Rule 11(b).
(4) Nature of a Sanction. A sanction imposed under
this rule must be limited to what suffices to deter
repetition of the conduct or comparable conduct by
others similarly situated. The sanction may include
nonmonetary directives; an order to pay a penalty
into court; or, if imposed on motion and warranted
for effective deterrence, an order directing payment
to the movant of part or all of the reasonable attor
ney’s fees and other expenses directly resulting
from the violation.
(5) Limitations on Monetary Sanctions. The court
must not impose a monetary sanction:
(A) against a represented party for violating Rule
11(b)(2); or
(B) on its own, unless it issued the show cause or
der under Rule 11(c)(3) before voluntary dismissal
or settlement of the claims made by or against the
party that is, or whose attorneys are, to be sanc
tioned.
(6) Requirements for an Order. An order imposing a
sanction must describe the sanctioned conduct and
explain the basis for the sanction.
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Our focus here is on the procedural requirements in Rule
11(c)(2) for a party’s motion for sanctions. Before filing a mo
tion for sanctions, a party must first serve the motion on the
challenged party, and the motion may not be filed with the
court for 21 days. That gives the challenged party that time to
withdraw or correct the challenged claim, defense, conten
tion, or denial. This combination of a warning shot and a safe
harbor was a critical change adopted in the 1993 amendments
to Rule 11. A little history explains its importance.
As adopted in the original Federal Rules of Civil Proce
dure in 1938, Rule 11 required attorneys to sign all pleadings
and treated the signature as a certificate that the lawyer had
read the pleading and that, to the best of the lawyer’s
knowledge, information, and belief, there was good ground
to support it and it was not interposed for delay. While the
rule authorized sanctions, it did so in only this vague lan
guage: “For a wilful violation of this rule an attorney may be
subjected to appropriate disciplinary action.” Fed. R. Civ. P.
11 (1938), as promulgated at 308 U.S. 645, 676 (1938). The fo
cus on the attorney’s subjective knowledge and the require
ment of willful violation meant that sanctions were very rare
before the rule was amended in 1983. Georgene M. Vairo, Rule
11: A Critical Analysis, 118 F.R.D. 189, 190–92, 205 (1988).
Growing impatience with lawsuits and litigation tactics
perceived as frivolous led to the most controversial amend
ment to the Federal Rules of Civil Procedure since their adop
tion, the 1983 amendment to Rule 11. Id. at 190. The principal
changes were to adopt an objective standard of reasonable
ness, to impose on counsel a pre filing duty of inquiry, and to
add language that the court “shall impose” sanctions when
the rule was violated. Fed. R. Civ. P. 11 advisory committee’s
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note to 1983 amendment. The amendment left no room for an
“empty head, pure heart” defense.
The newly amended Rule 11 quickly became a favorite
weapon in litigators’ briefcases, often used and even more of
ten brandished to threaten. Its use exploded in the late 1980s.
One commentator wrote in 1988 that Rule 11 had become “the
cottage industry of the litigation bar.” Vairo, 118 F.R.D. at 199.
As it turned out, the 1983 amendments had been an over cor
rection. The new problems led to the 1993 amendments at the
heart of this appeal.2 One unintended consequence of the
threat of Rule 11 sanctions was that “parties were sometimes
reluctant to abandon a questionable contention lest that be
viewed as evidence of a violation.” Fed. R. Civ. P. 11 advisory
committee’s note to 1993 amendment.3
2 For detailed accounts of the problems encountered after the 1983 amend
ments, see the following sources cited by the Advisory Committee in 1993:
New York State Bar Committee on Federal Courts, Sanctions and Attorneys’
Fees (1987); Thomas Willging, The Rule 11 Sanctioning Process (1989); Amer
ican Judicature Society, Report of the Third Circuit Task Force on Federal Rule
of Civil Procedure 11 (Stephen Burbank ed., 1989); Elizabeth Wiggins et al.,
Federal Judicial Center, Report on Rule 11 (1991). The 1993 committee also
cited three book length analyses of the case law: Gregory Joseph, Sanc
tions: The Federal Law of Litigation Abuse (1989); Jerold Solovy, The Federal
Law of Sanctions (1991); Georgene Vairo, Rule 11 Sanctions: Case Law, Per
spectives and Preventive Measures (1991). A recent search of Westlaw
showed that Rule 11 was cited in only five appellate decisions in 1978, but
in 236 appellate decisions in 1988. For district courts, the comparable fig
ures are 19 in 1978 and 615 in 1988.
3 For a broader review of the criticisms and process that led to adoption of
the 1993 amendments, see Carl Tobias, The 1993 Revision to Federal Rule 11,
70 Ind. L.J. 171, 174–88 (1994)
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The 1993 amendments preserved the objective standard of
reasonableness and the enhanced duty of pre filing inquiry
into the law and facts. The amendments sought, however, to
constrain the imposition of sanctions and to “reduce the num
ber of motions for sanctions presented to the court.” Id. The
1993 amendments were numerous. They included new proce
dural requirements to enhance due process and fair use of the
rule, and they removed the “shall impose” language to restore
trial judges’ discretion in deciding whether to impose sanc
tions at all.
One of the most important changes was to add the provi
sion at issue in this appeal, the warning shot/safe harbor pro
cedure in Rule 11(c)(2). The Advisory Committee explained:
The rule provides that requests for sanctions
must be made as a separate motion, i.e., not
simply included as an additional prayer for re
lief contained in another motion. The motion for
sanctions is not, however, to be filed until at
least 21 days (or such other period as the court
may set) after being served. If, during this pe
riod, the alleged violation is corrected, as by
withdrawing (whether formally or informally)
some allegation or contention, the motion
should not be filed with the court. These provi
sions are intended to provide a type of “safe harbor”
against motions under Rule 11 in that a party will
not be subject to sanctions on the basis of another
party’s motion unless, after receiving the motion, it
refuses to withdraw that position or to acknowledge
candidly that it does not currently have evidence to
support a specified allegation. Under the former
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rule, parties were sometimes reluctant to aban
don a questionable contention lest that be
viewed as evidence of a violation of Rule 11; un
der the revision, the timely withdrawal of a con
tention will protect a party against a motion for
sanctions.
To stress the seriousness of a motion for sanctions
and to define precisely the conduct claimed to violate
the rule, the revision provides that the “safe harbor”
period begins to run only upon service of the motion.
In most cases, however, counsel should be ex
pected to give informal notice to the other party,
whether in person or by a telephone call or let
ter, of a potential violation before proceeding to
prepare and serve a Rule 11 motion.
Id. (emphasis added). A letter may thus warn about impend
ing service of the motion, but a letter is not a substitute for a
motion.
To return to the case at hand, PNC Bank simply did not
comply with this warning shot/safe harbor requirement. It
did not prepare and serve a Rule 11 motion on NITEL and
Riffner, nor did it allow 21 days for them to withdraw NITEL’s
claims. The district court concluded that PNC Bank’s two set
tlement offers with Rule 11 threats to Riffner were sufficient
warning shots under Rule 11(c)(2) on the theory that they sub
stantially complied with the rule. NITEL II, 2015 WL 1943271,
at *4. To support the substantial compliance approach, the
court cited our decisions in Methode Electronics, Inc. v. Adam
Technologies, Inc., 371 F.3d 923, 927 (7th Cir. 2004) (dicta), and
Matrix IV, Inc. v. American National Bank & Trust Co. of Chicago,
649 F.3d 539, 552–53 (7th Cir. 2011).
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Our line of cases on “substantial compliance” with the
warning shot requirement began with Nisenbaum v. Milwaukee
County, 333 F.3d 804, 808 (7th Cir. 2003), where we concluded
that where the failure to satisfy the warning shot requirement
was only “technical,” the moving party’s substantial compli
ance with the warning shot requirement entitled it “to a deci
sion on the merits.” In Nisenbaum, we held that there was sub
stantial compliance with Rule 11 because the defendants sent
a letter—rather than a motion—that explained the grounds
for sanctions and provided more than 21 days to remedy the
problem. Insisting on a formal motion seemed unduly formal
istic.
In Matrix IV, the moving party similarly sent a letter that
explained the grounds for the sanctions and informed the op
posing party it would seek Rule 11 sanctions if the claim were
not dismissed voluntarily. 649 F.3d at 552. The letter explicitly
asserted that it served “as notice” of the party’s intention to
seek sanctions at the close of the case. We found that this
warning also amounted to substantial compliance with the
warning shot requirement, though we ultimately decided the
case on other grounds, finding that the sanctions were unwar
ranted on the merits. Id. at 553.
There are both legal and factual problems with this theory
of “substantial compliance” to save the sanctions order in this
case. The legal problem is that the substantial compliance the
ory we adopted in Nisenbaum stands alone and is difficult to
reconcile with the explicit requirements of the Rule and the
clear explanation from the Advisory Committee. No other cir
cuit has adopted this approach. See Penn, LLC v. Prosper Busi
ness Dev. Corp., 773 F.3d 764, 767–68 (6th Cir. 2014) (reviewing
circuit split: Second, Third, Fourth, Fifth, Sixth, Eighth, Ninth,
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and Tenth Circuits have rejected “substantial compliance,”
and only Seventh Circuit has adopted it). Our colleagues in
other circuits have been highly critical of the terse treatment
of the issue in Nisenbaum. E.g., Cadle Co. v. Pratt (In re Pratt),
524 F.3d 580, 587–88 (5th Cir. 2008) (Nisenbaum did not ad
dress language of Rule 11, Advisory Committee notes, or
other Rule 11 jurisprudence); Roth v. Green, 466 F.3d 1179, 1193
(10th Cir. 2006) (same). As the Ninth Circuit explained in Bar
ber v. Miller, “warnings were not motions” and “the Rule re
quires service of a motion.” 146 F.3d 707, 710 (9th Cir. 1998).
The 1993 amendment “deliberately imposed” the require
ment of service. Id. “It would therefore wrench both the lan
guage and purpose of the amendment to the Rule to permit
an informal warning to substitute for service of a motion.” Id.4
The Advisory Committee notes warn against treating any
thing less than formal service of a motion as sufficient to com
ply with the warning shot/safe harbor requirement: “To
stress the seriousness of a motion for sanctions and to define
precisely the conduct claimed to violate the rule, the revision
provides that the ‘safe harbor’ period begins to run only upon
service of the motion. In most cases, however, counsel should
4
Accord, Star Mark Management, Inc. v. Koon Chun Hing Kee Soy & Sauce
Factory, LTD, 682 F.3d 170, 175–76 (2d Cir. 2012) (warning letter not suffi
cient; rule requires service of motion to trigger safe harbor provision);
Ettinger & Assocs., LLC v. Miller (In re Miller), 730 F.3d 198, 204 (3d Cir.
2013) (emphasizing importance of the safe harbor provision in analogous
bankruptcy context); Brickwood Contractors, Inc. v. Datanet Engineering, Inc.,
369 F.3d 385, 389 (4th Cir. 2004) (Rule 11 “thus establishes conditions prec
edent to the imposition of sanctions under the rule. If those conditions are
not satisfied, the Rule 11 motion for sanctions may not be filed with the
district court.”); Gordon v. Unifund CCR Partners, 345 F.3d 1028, 1030 (8th
Cir. 2003) (same).
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be expected to give informal notice to the other party, whether
in person or by a telephone call or letter, of a potential viola
tion before proceeding to prepare and serve a Rule 11 mo
tion.” By treating a mere warning letter as sufficient, a stand
ard of substantial compliance leaves the recipient unclear as
to both whether the opposing party is serious and when the
21 day safe harbor clock starts to run.
Despite the criticism, though, Nisenbaum remains control
ling circuit law on this point. We need not revisit here whether
substantial compliance can ever satisfy the warning shot re
quirement of Rule 11(c)(2). PNC Bank’s warning shot letters
fell far short of even the generous target of substantial com
pliance.5
On July 31, 2012, before discovery began, PNC Bank’s law
yer sent a letter to Riffner offering to settle the case. The letter
explained the defects in the breach of contract claim. We as
sume the explanation of those defects was sufficient. The
problems in terms of substantial compliance were that the let
ter demanded dismissal of the suit within eight days, as well
as payment to PNC Bank of $9,195 for its fees and costs. The
letter also demanded within five days a written response
agreeing to the demand. The letter concluded: “If I do not re
ceive written confirmation by that date, please be advised that
PNC will be seeking sanctions under Federal Rule 11 against
NITEL and your firm … .”
5 It should not be difficult for a party who is serious about seeking Rule 11
sanctions to comply with Rule 11(c)(2). Parties and district courts that rely
on a theory of substantial compliance should understand that, at least in
the present landscape, they are inviting possible en banc and/or Supreme
Court review of the question.
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On April 2, 2013, shortly after the close of discovery and
before moving for summary judgment, PNC Bank’s lawyer
sent a second settlement offer. It again reviewed the serious
problems with NITEL’s case and explained why the suit was
frivolous. This letter proposed different settlement terms, de
manding that NITEL dismiss the complaint with prejudice
and pay PNC Bank $24,000. The letter demanded written ac
ceptance within six days. The settlement proposal concluded
much as the earlier letter had: “If I do not receive written con
firmation by that date, please be advised that PNC will seek
sanctions under Federal Rule 11 against your firm and NITEL,
for all fees and costs incurred by the bank in defending your
client’s baseless and patently false complaint.”
The Rule 11 threats did not transform PNC Bank’s settle
ment offers into communications that substantially complied
with the Rule 11(c)(2) warning shot/safe harbor require
ments. Even if we treat the criticisms of NITEL’s case and liti
gation tactics as containing the equivalent of a Rule 11 motion,
the letters simply did not offer NITEL or Riffner the 21 day
safe harbor that was offered in Nisenbaum or Matrix IV. Sub
stantial compliance requires the opportunity to withdraw or
correct the challenged pleading within 21 days without impo
sition of sanctions. Neither PNC Bank letter offered that op
portunity. PNC Bank was entitled, if it chose, to huff and puff
about Rule 11 in its settlement demands for dismissal of base
less claims. But its posturing did not amount even to substan
tial compliance with the warning shot/safe harbor provision,
let alone to the actual compliance that other circuits demand.
The district court’s award of sanctions against Riffner is
REVERSED.
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POSNER, Circuit Judge, dissenting. Federal Rule of Civil
Procedure 11(c)(2), captioned “Motion for Sanctions,” pro
vides, so far as bears on this case, that such “a motion …
must not be filed or be presented to the court if the chal
lenged paper, claim, defense, contention, or denial is with
drawn or appropriately corrected within 21 days after ser
vice … .” Our court has held that “substantial compliance”
with the rule is sufficient. Nisenbaum v. Milwaukee County,
333 F.3d 804, 808 (7th Cir. 2003); Methode Electronics, Inc. v.
Adam Technologies, Inc., 371 F.3d 923, 927 (7th Cir. 2004); Ma
trix IV, Inc. v. American National Bank & Trust Co. of Chicago,
649 F.3d 539, 552–53 (7th Cir. 2011). And this case is a good
example of substantial compliance, as the district judge
found and my colleagues on this panel, enamored as they
appear to be of legal technicalities, or reluctant to punish
misbehaving lawyers, miss.
Lawyer Riffner, representing NITEL, filed this suit on
NITEL’s behalf against PNC Bank, N.A., the appellee, in
February 2012. The district judge correctly deemed the suit
frivolous. Riffner’s irresponsible conduct of it was clearly
sanctionable. PNC sent Riffner a letter in July 2012 explain
ing in detail the legal and factual problems with his lawsuit,
demanding withdrawal of NITEL’s complaint, and advising
Riffner that if it wasn’t withdrawn PNC would seek sanc
tions against him under Rule 11. This placed Riffner on no
tice that if his suit against PNC was indeed frivolous, as it
was, he’d better withdraw it or face Rule 11 sanctions. He
didn’t withdraw the complaint—boorishly, he didn’t even
respond to the letter.
After conducting further discovery, which yielded addi
tional evidence of the frivolousness of NITEL’s suit, PNC
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sent Riffner a second, similar letter in April 2013 outlining
the evidence of its frivolousness in detail and threatening to
file a Rule 11 motion for sanctions against him if he didn’t
dismiss the suit. Not only did he not dismiss the suit, or
withdraw any of the charges made in it; he didn’t even reply
to the letter, thus repeating his earlier rudeness. Although
PNC did not serve a formal Rule 11 motion on Riffner prior
to filing the motion with the court, PNC’s letters were the
equivalent of Rule 11 motions, and gave Riffner two oppor
tunities to abandon or at least curtail his frivolous lawsuit
without having to pay sanctions. Instead he signaled by his
failure to answer either letter that he was persisting in his
frivolous suit—that he really was a boor.
Because PNC’s letters constituted substantial compliance
with Rule 11(c)(2), as permitted by the cases in this court that
I cited earlier and that the majority opinion does not chal
lenge, we should affirm the district court.
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