-FBS Pinpoint IT Services, LLC v. Atlas IT Export Corp., No. 2:2010cv00516 - Document 39 (E.D. Va. 2011)
Court Description: MEMORANDUM OPINION that this Court DENIES Vaughn's Motion for Sanctions. Signed by District Judge Mark S. Davis and filed on 7/28/11. (jcow, )
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i_ FILED UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA JUL 2 8 2011 Norfolk Division CLERK. US DISTRICT COURT NCHr'C): K VA PINPOINT IT SERVICES, L.L.C., Plaintiff, v. Civil Action No. ATLAS 2:10cv516 IT EXPORT CORP., Defendant. MEMORANDUM ORDER This matter is before filed by a non-party to "Vaughn"). ("Atlas" the Vaughn or in it filed filed in Defendant material a alleges a Motion in suit Atlas that otherwise" contentions would not E.D. Va. aid Loc. in are the Civ. case, Set case, to counsel Court. 7(J). and in "made ("Movant" Export Rico. presented Fed. or Corp. to Change Venue In that it response, misrepresentation, examining finds is to documents no After matter IT Sanctions misrepresentations Puerto process. The Atlas as the Court decisional R. in for Vaughn Default well adequately Motion Robert L. Aside as the a material brought its on Defendant, made and the associated memoranda, legal Court that to this contends or this "Defendant"), Court that the that and R. the motion the oral Civ. therefore facts and argument P. 78(b); ripe for decision. For the reasons set forth below, the Court DENIES Vaughn's Motion for Sanctions. I. FACTUAL & PROCEDURAL HISTORY A more complete recitation of in general Order. No. was Pinpoint 2:10cv516, July set 13, forth IT this Services, 2011 2011). in U.S. v. LEXIS only underlying Court's L.L.C. Dist. Therefore, the facts earlier Atlas 75622, those IT at facts the case Opinion Export *2-7 that and Corp., (E.D. are Va. relevant to the Motion for Sanctions are recounted here. This Motion for somewhat unusual Services, L.L.C. Court against which are failed to of Court, Puerto procedural ("Pinpoint" Atlas, respond was well Rico. regarding him communications as in between sanctions under Rule 11 First, motion it Vaughn initially counts, sanctions in filed a district and in statements response to Atlas period and this in this the District made well Vaughn, motion. of to Atlas as this response for that the Federal Rules highlights filed that in IT documents of court filings, Atlas of number a substance time In in Pinpoint the requisite default. Court filed suit several contends these the Initially, "Plaintiff") the be the before present the to Atlas Vaughn in or within found default, as to comes posture. asserting irrelevant consequently entry Sanctions as are of Civil made by Plaintiff's of statements in private worthy of Procedure. Atlas in motion a for default Aside judgment. Default "contacted case, but and one who arrangements for ATLAS for purposes in as file the attorney statement was have Ex. Second, initial failed 2, Vaughn through with to take for follow Court, that that Atlas faxed documents Despite Vaughn's for Sanctions the document's motion and is Supplemental Brief 1 take to the the necessary case pro Def.'s counsel hac not in Mot. vice Set Vaughn that in 26.1 Vaughn had Whitaker, named other contends to the that Court and consequently, through alleged No. it that to was Atlas, Set on any filings Atlas' because Vaughn commitments made 28. case, Mot. he to Although Vaughn was 10. Atlas. the reply. this venue." 1 above, Becker in of Venue ironically, the Jane appear contends Docket misrepresented 1 follow represent to alleged misrepresentation Docket No. misrepresentations, and Change to Motion agreed change quoted a who to a was Virginia, to misrepresentation Sanctions." Atlas motion material agreed to Atlas. Venue, contacted by a could not which in Rico, to filing the Vaughn never a seeking and motion, Change failed Puerto Default named to then of Aside that attorney to in In Atlas above its has by failed again, to making "Opposition According once compounded to that return to Vaughn additional to Motion Vaughn, Vaughn Atlas' the Atlas agreed phone for to calls, to which Vaughn did not 7. title, it in response was to filed by Plaintiff. actually a Motion filed prior for Leave to to File Third, Vaughn also alleges assertions example, in in communications Vaughn contends response to to "derail judgment" by engaging the Code that Atlas' that is, of Ethics." Atlas accused Vaughn quest conduct Ex. 6, assertions were to that Docket "interposed excuse for the failure of to avoid the default Atlas and sent of set is Atlas. about a No. its 28. the with default violation Vaughn contends improper purpose, [Vaughn] its alleged conspiring aside for an For to Vaughn, "flagrant an attempt to cast aspersions upon an and in a letter Atlas [Atlas'] in has made unsupported Vaughn pressing Atlas Pinpoint between that Vaughn misrepresentations, of that Atlas counsel entered against Atlas." Mot. factual on and fashion to act so as for Sanctions I 11. Based Vaughn on these underpinnings, filed the present Motion response, Atlas which was met with a for Sanctions. reply is from Vaughn, Procedure and has increasing of 30. In 29, Vaughn's 11 Rule DISCUSSION of the as preventing recognized the efficiency the 28. addressed below. been Chromatic Commc'ns objective of 2011, Docket No. Docket No. II. purpose 10, Docket No. filed a memorandum in opposition, Motion for Sanctions The June Enters., Rule is of 498 courts. U.S. not Federal to 533, Bus. 553 reward Rules of frivolous Guides, (1991) parties Civil filings Inc. v. ("The main who are victimized by litigation; curb abuses."); 393 (1990) courts."). have the Arthur ed. R. (collecting rule, sanctions Federal may only in under move the notion generally Rule to 11 sanctions. 1983 should that 1983 Fed. amendments give courts overcome notice may the only R. (noting to the impose to P. Rule have that xx [a] decisions general that rule has court and have in New York News, directly Inc. v. on al., a other move for Moore's a non-party Committee Notes support to move the for own courts sanctions party" and "in order to to intervene (emphasis added). been borne 972 seeking offending their of addressed Kneel, to & (3d w[a]s certain standing the reluctance also 1337.1 further party unless requested by one of the parties") This 11 not 11 advisory committee's notes sanctions traditional ยง et Advisory . Alan Wright ("Ordinarily, The 384, does that and Moore and federal case standing Wm. parties Civ. a to the Procedure have 2011) amendments is of to action James {3d ed. 11 establishing an sanctions."). accompanying that to filings 496 U.S. 5A Charles and and 2 Rule procedure Practice 11"); 55.70 of non-party litigation Rule for a cases baseless Hartmarx Corp., sanctions. parties the Practice a not for Federal deter and however, to move participants to purpose administration Miller, 2004) general central Generally, standing is Cooter & Gell v. ("[T]he streamline it the out by issue. F.2d 482 federal For (2d Cir. court example, 1992), a case from the United States Court of Appeals for the Second Circuit, the court held that a non-party generally does not have standing to Rules Civil to of Rule move for sanctions Procedure under unless 24 is brought Id. at 488; see 148, 149 (5th Cir. 1988) non-party has private cause court.2 F.2d Federal a Rules of by the a also Civil Rule motion to non-party Port 11 of the intervene and is of the by the Umphrey, 852 argument that Rule of action from "to enforce Procedure pursuant granted Drum Company v. (rejecting Federal 11 an a the attorney's professional duties"). While courts the have sanctions held in yet in been has that situations participant, participant Court such in as the case, discussed a non-party where a such or joined Westmoreland v. CBS, court against an found that involuntary the as Inc., as or rule standing non-party is is a 770 to F.2d the 1168 contempt participant in the above, to an move case. (D.C. for active that For has a not example, Cir. proceedings case, some involuntary pending a named defendant a party baseless general has witness, served the the 1985), brought non-party 2 Vaughn has not moved to intervene in this case pursuant to Rule 24 of the Federal Rules will only address sanctions and will of Civil Procedure. Therefore, Rule 24). to move a motion for to the Court Rule 11 intervene would have been granted in this case. See Kheel, 972 F.2d at 485-86 (discussing factors to consider in evaluating a Rule 24 motion to intervene and denying such motion on grounds that the non-party had no "significantly protectable interest" within the meaning of Vaughn's standing not decide whether witness, could result attorney's fees in sanctions to be awarded. Winterthur Int'l, after the witness moved for Id^ at 1172-80; 290 F.3d 456, 459-60 see also Nyer v. (1st Cir. 2002) (finding that non-party had standing to move for Rule 11 sanctions since the plaintiff complaint charges 822 and it brought F.2d 882, named sought in a sanctions in 885 the they non-party to prepare an amended defense a in to possible complaint); 1987) complaint though Second the amended (9th Cir. frivolous even add would have never became parties The to (finding that had were Greenburg standing never Sala, the defendants to served v. bring with Rule 11 process and non-parties who to the case). Circuit in Kheel distinguishes are involuntary participants or potential active participants in a 11 case, and sanctions, thus may have standing to move for Rule from non-parties who are merely mentioned in a filing or complaint by one of the parties and thus do not have standing to move Kheel, an for Rule 11 sanctions. Kheel, 972 F.2d at 488-89. a non-party mentioned in a complaint as participating in alleged conspiracy, but not named as a defendant, moved intervene in the case in order to seek Rule 11 sanctions. 484-85. he was The court denied his motion lacked standing not In to seek Rule 11 an involuntary participant a potential defendant in the case. to at intervene and ruled that sanctions in Id. to the since case the non-party or even named as Id^ at 488-89 (distinguishing the non-party in Westmoreland who was an involuntary participant and the non-party in Greenberg who was named as a defendant but not served from a non-party merely mentioned in a complaint). The court in Kheel also noted that denying a non-party, merely mentioned in a complaint, or from ability moving to for protect Rule from intervening under Rule 24 11 sanctions would legal his interest through such as a defamation suit under state law. This case is analogous to who was Kheel not hinder other his avenues, 16^ at 486. since Vaughn was merely mentioned in documents filed by Atlas before this Court and the court in Puerto Rico. defendant was in named as this Vaughn has not been named as a potential case, a defendant involuntary participant in Westmoreland. standing unlike to move Just Rule 11 in this as the for Rule sanctions non-party and then not 11 appeared in the complaint, for the in served, Greenberg nor who is Vaughn an case like the non-party witness non-party sanctions in Kheel did not have merely because his name Vaughn does not have standing to move merely because he memorandum filed by the Defendant with this was mentioned Court. in a Vaughn is a non-party that lacks standing to move for Rule 11 sanctions, deciding that Vaughn has would frustrate the standing to move for Rule 11 main purpose include improving the efficiency of the court noted in Kheel, Vaughn Rule sanctions and aim the federal court system. As pursue to may of and other 11, which avenues protect his professional reputation and to guard against potential damage to the public, such as filing a defamation suit under state law or filing a bar complaint. III. Due to Vaughn's lack of CONCLUSION standing to move for Rule 11 sanctions, this Court DENIES Vaughn's Motion for Sanctions. The Clerk is DIRECTED to send a copy of this Memorandum Order to all counsel of record and to Vaughn. IT IS SO ORDERED. /s Mark S. Davis UNITED STATES DISTRICT JUDGE Norfolk, Virginia July 3% . 2011
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