Monday, April 18, 2016

Rule 11 Sanctions Imposed On Attorney Who Filed Diversity Suit That Was Not

Rule 11 Sanctions Imposed On Attorney Who Filed Diversity Suit That Was Not
      In a recent decision from a Federal District Court in New Jersey, where a plaintiff's attorney filed a lawsuit in federal court based on diversity jurisdiction where it was manifestly clear that diversity did not exist, Rule 11 sanctions were awarded. Singh v. Diesel Transportation, LLC, Civil Action No. 15-7930 (JLL), 2016 WL 901834 (D. N.J. March 8, 2016).
      This dispute arose out of a trucking accident that occurred in Nebraska. The plaintiff filed an action alleging claims in negligence and seeking to impose liability by means of respondeat superior. The complaint was filed on the basis of diversity jurisdiction, 28U.S.C. § 1332. However, that complaint alleged that the plaintiff was resident in New Jersey even as identified two defendants as likewise being resident in New Jersey. As such:
Plaintiff has alleged that he and two Defendants reside in New Jersey, thereby negating any grounds for diversity jurisdiction. 2016 WL 901834, *2.
On that basis the Defendant’s motion to dismiss for lack of subject matter jurisdiction was granted.
      From there, the court turned its attention to a motion for sanctions under Rule 11 against the attorney who filed the defective complaint. In determining that Rule 11 sanctions were appropriate, it observed:
The Court finds that Plaintiff’s counsel failed to make the appropriate inquiry into the law of diversity jurisdiction prior to filing the instant Complaint on Plaintiff’s behalf.
As discussed above, the jurisdictional defect here-namely, the lack of complete diversity-was apparent from a plain reading of the Complaint. The Court finds that the obviousness of this error of law, in conjunction with Plaintiff’s Council's failure to withdraw the Complaint even after being apprised of its deficiencies by Defense counsel, as well as Plaintiff’s counsel repeated failure to oppose the pending Motions, necessitates the “fashioning [of] sanction[s] adequate to deter undesirable future conduct.” 2016 WL 901834, *2 (citation omitted).
      On that basis, the defendant’s motion for sanctions against that attorney was granted.

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