111 F.R.D. 444 | N.D. Ill. | 1986
Memorandum
Plaintiff, the assignee of hospital insurance benefits under defendants’ health and welfare plan, filed suit in the circuit court of Cook County, seeking remedies under state law for defendants’ allegedly wrongful denial of benefits. Defendants removed the suit to this court, relying on Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) for the proposition that the dispute was governed by federal law; specifically, § 502 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132 and § 301 of the Labor Management Relations Act, 29 U.S.C. § 185.
Plaintiff did not file an amended complaint following removal. Defendants then moved to dismiss contending: (1) that the state law remedies sought were preempted
On April 29, 1986, the parties were directed to address the question whether a party or his attorney can be subjected to sanctions under Rule 11 for filing a complaint in state court that was subsequently removed to this federal court. Rule 81(c), Fed.R.Civ.P., provides that the federal rules apply to civil actions removed to United States district courts and govern procedure after removal. Once removed, the complaint becomes subject to the requirements of the federal rules as if it had originally been commenced in this court. See e.g., Pittsburgh National Bank v. Welton Becket Assoc., 601 F.Supp. 887, 889 (W.D.Pa.1985). Some courts have interpreted this rule broadly, concluding that the court should treat everything that occurred in state court as if it had taken place in federal court. See Feller v. National Enquirer, 555 F.Supp. 1114, 1118 (N.D.Ohio 1982). Other courts have held that only pleadings filed subsequent to removal must conform to the requirements of the federal rules. See Istituto Per Lo Sviluppo Económico Dell’Italia Meridionale v. Sperti Products Inc., 47 F.R.D. 310, 312 (S.D.N.Y.1969).
Under Rule ll,
By contrast, the law that was applicable when plaintiff filed its complaint in state court was Ill.Rev.Stat. ch. 110, § 2-611.
As can be seen from this discussion, Rule 11 imposes a much stricter standard; faulty legal reasoning as well as frivolous allegations can expose a party and his attorney to sanctions. Under these circumstances, imposing sanctions under Rule 11 in this case would be analogous to applying an ex post facto law. Cf: Jensen v. Schweiker, 709 F.2d 1227, 1230 (8th Cir. 1983). It would serve to punish plaintiff for acts it committed prior to the time it became subject to the more stringent requirements of the federal rules.
For similar reasons, the court determines it will not condition plaintiff’s voluntary dismissal on the payment of attorneys’ fees and costs under Rule 41(a)(2). Under the Illinois Code of Civil Procedure which plaintiff was subject to when it filed its complaint, a defendant is entitled only to court costs when a suit is voluntarily dismissed. See Ill.Rev.Stat. ch. 110 II5116. It would thus be unfair to now condition plaintiff’s voluntary dismissal on the payment of attorneys’ fees and costs.
So ordered.
. Cf: Porte v. Home Federal Savings & Loan Ass'n of Chicago, 409. F.Supp. 752, 753 (N.D.Ill. 1976). The court in Porte held that under Rule 81(c) removed actions are to be governed by the federal rules at least in regard to matters involving more than mere form.
. Rule 11, Fed.R.Civ.P., states, in pertinent part, Signing of Pleadings, Motions and Other Papers; Sanctions.
Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name ... The signature of an attorney or other party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law and that it is not interposed for any improper purpose, such as to harass, or to cause unnecessary delay or needless increase in the cost of litigation ... If a pleading, motion or other paper is signed in violation of this rule the court, upon motion or upon its own initiative, shall impose upon the person who signed it, ... an appropriate sanction, which may include an order to pay the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.
. Ill.Rev.Stat. ch. 110, § 2-611 states;
Untrue Statements.
Allegations and denials, made without reasonable cause and found to be untrue, shall subject the party pleading them to the pay
. One magistrate appears to have resolved this dilemma by applying the state rules of procedure to a complaint that was originally filed in state court and later removed to federal court. See Crowell v. The Holy Order of Man, 39 Fed.R. Serv.2d 1223, 1224 (D.Mass.1984) cited in Parness, Groundless Pleadings and Certifying Attorneys in the Federal Courts, 1985 Utah L.Rev. 325, 330 n. 19. However, the author notes that Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), appears to foreclose application of state law to procedural matters in federal court. But see Knorr Brake Corp. v. Harbil, Inc., 556 F.Supp. 484, 486-87 (N.D.Ill.1983), rev’d on other grounds, 738 F.2d 223 (7th Cir. 1984) (applying Illinois statute regarding false pleadings to diversity case).
. Even if the court were to conclude that plaintiff was subject to Rule 11, it cannot conclude that the rule was violated in this instance. An attorney may on occasion fail to find an important case, especially if it is recent. See Schwarzer, Sanctions, 104 F.R.D. at 194. Once aware of the fairly recent controlling authority in this case, plaintiff moved promptly for a voluntary dismissal. This is not a case where the party has continued to pursue a legally unsupportable position. Thus, sanctions would not be warranted in any event.
. Moreover, the purpose of an award of attorneys’ fees under Rule 41(a)(2) is to reimburse the defendant for expenses incurred in preparing work that will not be useful in subsequent litigation. Cauley v. Wilson, 754 F.2d 769, 772 (7th Cir. 1985). Much of defendants’ work in this case going to the merits of plaintiff’s claim can be used in their defense at the administrative level.