Empower the Taxpayer v. Fong
2013 ND 187
| N.D. | 2013Background
- Plaintiffs Empower the Taxpayer, Charlene Nelson, and Robert Hale sued various state and local officials alleging Corrupt Practices Act violations and sought injunctive relief to bar defendants from advocating against Initiated Constitutional Measure 2 (which voters later rejected).
- Four local officials (the “County Defendants”) had publicly opposed Measure 2 and moved for Rule 11 sanctions, arguing the suit was frivolous and brought for an improper purpose.
- The district court dismissed the underlying action (decision affirmed by this Court in a prior appeal) and then awarded Rule 11 sanctions against the plaintiffs: payment of the County Defendants’ attorney fees and costs and a requirement to publish a written retraction.
- The County Defendants submitted affidavits documenting $25,805.73 in attorney fees and $825.51 in costs; the district court entered those amounts in a later order and denied reconsideration.
- On appeal from the sanctions orders, the Supreme Court concluded the district court’s orders failed to explain which subsection(s) of Rule 11(b) supported the sanctions, which parties (plaintiffs and/or counsel) were responsible, and how the sanctions were limited to deterrence, requiring reversal and remand for clarification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 11 sanctions were warranted for filing the complaint | Plaintiffs contend the suit was nonfrivolous and raised at least arguable legal questions; sanctioning was improper | County Defendants argue the claims against officials for expressing opposition to Measure 2 were frivolous and filed to harass and chill speech | Reversed: appellate court could not discern the basis for sanctions; district court must clarify which Rule 11(b) subsection(s) it relied on and explain its reasoning |
| Whether sanctions were monetary and who could be liable | Plaintiffs: monetary sanctions against represented parties are forbidden under Rule 11(c)(5)(A); court erred if it imposed fees on plaintiffs or counsel without basis | County Defendants: sought fees from plaintiffs and suggested counsel could also be sanctioned | Held: District court failed to specify who was liable; court must account for Rule 11(c)(5)(A) prohibition on monetary sanctions against represented parties if sanction based solely on (b)(2) |
| Whether a published retraction could be ordered as a sanction | Plaintiffs argue publication requirement is improper or not sufficiently justified | County Defendants argue retraction is an appropriate nonmonetary sanction to deter repetition | Held: Majority found the record and orders insufficiently explain the basis and proportionality of the retraction; remand for explanation (dissent would have upheld it) |
| Whether the district court provided sufficient findings to permit meaningful appellate review | Plaintiffs: existing orders lack clear legal and factual reasoning | County Defendants: district court’s statements suffice to show frivolousness and improper purpose | Held: Court ruled the orders lacked adequate explanation as required by Rule 11(c)(6) and precedents, so reversal and remand required |
Key Cases Cited
- Empower the Taxpayer v. Fong, 2012 ND 119, 817 N.W.2d 381 (prior appeal affirming dismissal of the underlying suit)
- Heinle v. Heinle, 2010 ND 5, 777 N.W.2d 590 (standard of review and Rule 11 requirements; need to explain sanctions and limit them to deterrence)
- Simpson v. Chicago Pneumatic Tool Co., 2005 ND 55, 693 N.W.2d 612 (Rule 11(c)(5)(A) bars monetary sanctions against represented parties for violation of Rule 11(b)(2))
- Sateren v. Sateren, 2013 ND 12, 826 N.W.2d 303 (appellate court requires sufficient trial-court explanation to perform review)
- Holkesvig v. Welte, 2011 ND 161, 801 N.W.2d 712 (district court’s discretion to impose Rule 11 sanctions and appellate review standard)