Brief Fact Summary.
A North Carolina attorney filed a class action lawsuit in federal district court in the Western District of North Carolina. The court imposed a five year suspension from practice in the district on her in connection with the filing as a sanction based on what it concluded were frivolous arguments asserted in the litigation. The attorney appealed.
Synopsis of Rule of Law.
Only the lack of legal or factual basis for a claim is sanctionable; lack of thoroughness does not render a position frivolous.
The legal argument must have absolutely no chance of success under the existing precedent to contravene the rule.View Full Point of Law
A North Carolina attorney filed a class action lawsuit in the Western District of North Carolina on behalf of former employees of the Defendant. Summary judgment was granted for the Defendant and, as a sanction under Federal Rule of Civil Procedure 11, the attorney was suspended from the practice of law in the district for five years. The district court found that the attorney had advanced a frivolous argument in the litigation, related to whether the claims at issue in the litigation had to be determined by arbitration, and that the attorney had advanced a legal position that was not the law of the circuit. The attorney appealed from the order imposing the sanction against her.
Was the suspension from practice in the district for a period of five years an appropriate sanction?
No. The district court embraced an erroneous view of the law in its suspension order and imposing the sanction was an abuse of its discretion.
The attorney’s legal contentions on the arbitration issue were not frivolous, so her suspension form practice in the district could not be upheld. While she did not thoroughly provide the court with a full argument regarding a split among the circuits on the arbitration issue, or regarding a recent Supreme Court decision, this did not render her position frivolous.