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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