Castleberry v. USAA, No. 16-3382 (8th Cir. 2017)Annotate this Case
The Eighth Circuit found no violation of Fed. R. Civ. P. 11 or abuse of the judicial process in this consolidated appeal involving parties in a putative action. The court held that counsel did not violate Rule 41 in stipulating to the dismissal of the action and counsel had at least a colorable legal argument that the district court’s approval was not needed under Rule 23(e) to voluntarily dismiss the claims of the putative class. Therefore, the district court abused its discretion in finding that counsel acted with an improper purpose under Rule 11 and abused the judicial process by stipulating to the dismissal of the federal action for the purpose of seeking a more favorable forum and avoiding an adverse decision. Consequently, the district court also abused its discretion in imposing sanctions upon plaintiffs' counsel for the purported violation. The court reversed the district court's orders and remanded for further proceedings.