A recent decision by the District of Minnesota provides an interesting roadmap for how defendants can use Rule 11 in defending against a frivolous class action.  In Brown v. Ameriprise Financial Services, Inc., 2011 U.S. Dist. LEXIS 101038 (D. Minn. Sept. 7, 2011), the plaintiff filed a putative class action complaint alleging purported racial discrimination.  The defendant discovered that the complaint was copied in large part verbatim from a complaint in a racial discrimination lawsuit filed against Coca-Cola back in 1998.  The plaintiff even copied allegations that were quite specific about alleged employment practices at Coca-Cola, but it turned out had no factual basis with respect to Ameriprise.  During the plaintiff’s deposition, she was unable to identify the factual basis for various allegations in the complaint, and admitted that some of them were flatly wrong.  Id. at *4-6.  Ameriprise served a Rule 11 motion, and after the plaintiff refused to withdraw the complaint within the 21-day period, sought sanctions.

A magistrate judge recommended that the defendant’s Rule 11 motion be granted and that sanctions be awarded for the attorneys’ fees the defendant expended to defend the case (the fees requested were $137,000).  Id. at *9.  The district judge agreed that sanctions were appropriate, stressing that: (1) there was no foundation for a number of the allegations in the complaint; (2) the fact that plaintiff had not moved for class certification was irrelevant because the violation occurred when the complaint was filed and the plaintiff had not availed herself of the “safe harbor” under Rule 11; and (3) the defendants’ objections to discovery were irrelevant because the plaintiff had to adequately plead a claim before being entitled to discovery.  Id. at *13-19.

The district judge, however, concluded that the ultimate sanction – dismissal of the complaint – was appropriate given the degree of malfeasance.  The court concluded that a fee award would not be a sufficient deterrent, but also that a fee award in addition to dismissal was unwarranted because the dismissal was a sufficiently stern sanction.  Id. at *26-28.  I tend to agree with the magistrate judge that a fee award would have been the more appropriate sanction – a plaintiff and his or her lawyers are likely to care less about a dismissal of a frivolous case than they would about having to reach into their pockets to cover the defendants’ fees.  A fee award also provides the defendant with some compensation from having to defend a frivolous case.  Here, Ameriprise apparently spent $137,000 to defend a case that it appears never should have been filed.

Putting the issue of the appropriate sanction aside, the key practice point I see here is that in a case that is suspected to be frivolous, it may make sense to take the named plaintiff’s deposition as early as possible and explore the factual basis for the allegations in the complaint.  Named plaintiffs in class actions typically have little to provide in documents or interrogatory answers that will be useful, so an early deposition rarely will disadvantage the defendant strategically.  Taking the plaintiff’s deposition early may demonstrate that the allegations made in the complaint were unfounded (or even copied from some other unrelated case), and might provide the grounds for a Rule 11 motion.  An early plaintiff’s deposition also prevents the plaintiff from taking discovery from the defendant and trying to use that to try to find support for allegations that had no basis to begin with.

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.