RUSK v. FIDELITY BROKERAGE SERVICES (2021)

United States Court of Appeals, Tenth Circuit.2021-06-15No. No. 20-4104

Summary · law.co

Holding. The court affirmed the district court's denial of Rusk's motion for sanctions, finding both that he failed to timely serve the motion as required and that he filed it impermissibly late after judgment had already been entered.

Zachary Rusk appealed the dismissal of his discrimination case against his former employer and sought sanctions against opposing counsel under Federal Rule of Appellate Procedure 11, claiming they had made misrepresentations. The district court denied his sanctions motion on three separate grounds: he failed to serve the motion on opposing counsel at least 21 days before filing it, he waited approximately 16 months after judgment to file the motion, and he did not adequately explain how defense counsel caused the dismissal through misrepresentations.

On appeal, Rusk did not challenge the third reason for denial. The court found that because the district court provided three independent grounds for its decision, Rusk was required to address all three to prevail on appeal. The court could have affirmed on this basis alone but examined the first two grounds anyway. It found that Rusk's prior letter threatening to sue did not satisfy the requirement to serve the actual sanctions motion 21 days in advance, and that filing the motion 16 months after judgment was untimely under circuit precedent, which requires such motions to be filed before judgment enters.

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Key issues

Whether prior notice through a threat-to-sue letter satisfies the requirement to serve a Rule 11 sanctions motion 21 days before filing
Whether a sanctions motion filed 16 months after entry of judgment is timely
Whether an appellant must challenge all independent grounds cited by a district court to prevail on appeal

Procedural posture

Rusk appealed the district court's denial of his motion for sanctions filed in connection with the dismissal of his employment discrimination suit.

Authorities cited

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Opinion · public domain

ORDER AND JUDGMENT *

This appeal grew out of Mr. Zachary R.E. Rusks suit for discrimination by his former employer, Fidelity Brokerage Services. The district court dismissed the suit, and Mr. Rusk moved for sanctions under Federal Rule of Appellate Procedure 11. The district court denied the motion, and Mr. Rusk challenges the denial of his motion for sanctions.

We affirm.

The district court denied the motion on grounds that Mr. Rusk had

• failed to serve opposing counsel at least 21 days before filing the motion,

• waited too long by moving for sanctions roughly 16 months after dismissal of the action, and

• failed to explain how defense counsel had caused the dismissal by making misrepresentations to the court.

Mr. Rusk waived a challenge to the third reason, and we agree with the first two reasons.

Because the district court gave three independent reasons for denying the motion, Mr. Rusk had to challenge all of the reasons. See Lebahn v. Natl Farmers Union Unif. Pension Plan, 828 F.3d 1180, 1188 (10th Cir. 2016) (“When a district court dismisses a claim on two or more independent grounds, the appellant must challenge each of those grounds.”). Given Mr. Rusks failure to challenge the third reason for dismissal, we could affirm on this basis alone. See Starkey ex rel. A.B. v. Boulder Cnty. Soc. Servs., 569 F.3d 1244, 1252 (10th Cir. 2009) (“When an appellant does not challenge a district courts alternate ground for its ruling, we may affirm the ruling.”).

Despite this failure by Mr. Rusk, we address his challenges to the first and second rationales. In assessing the correctness of these rationales, we apply the abuse-of-discretion standard. Roth v. Green, 466 F.3d 1179, 1187 (10th Cir. 2006). Under this standard, the district court did not err in denying Mr. Rusks motion for sanctions based on the first two rationales.

The federal rules require service of a motion for sanctions at least 21 days before filing it. Fed. R. Civ. P. 11(c)(2). Despite this requirement, Mr. Rusk did not serve his motion before filing it.

He argues that he substantially complied with the requirement by sending counsel a letter, which threatened to sue him for his misrepresentations. This argument fails factually and legally. The argument fails factually because Mr. Rusks threat did not mention Rule 11, identify any misrepresentations, demand their withdrawal, or say that he was going to move for sanctions. The argument fails legally because our precedent requires service of the actual motion to be filed; warning letters are insufficient. Roth v. Green, 466 F.3d 1179, 1192 (10th Cir. 2006). Under this precedent, Mr. Rusks threat to sue did not relieve him of the obligation to serve his sanctions motion 21 days before filing it. We thus uphold the district courts first rationale for denying the motion.

The courts second rationale is also sound. Mr. Rusk not only failed to serve the motion in advance but also filed it too late. In our circuit, a sanctions motion must be filed before the entry of judgment. Id. at 1193. But Mr. Rusk waited to file the motion for sanctions until roughly sixteen months after the entry of judgment. The court thus acted within its discretion in reasoning that Mr. Rusk had waited too long to file the motion for sanctions. Cf. id. (holding that the district court had abused its discretion by granting a motion for sanctions under Rule 11 that had been filed after the entry of judgment).

* * *

We affirm the denial of Mr. Rusks motion for sanctions. The district court gave three reasons for denying the motion, and Mr. Rusk did not address one of these reasons. We could affirm on this basis alone. But even if we were to disregard this omission, his challenges would fail: His threat to sue did not satisfy the duty to serve the motion for sanctions, and he improperly waited to file the motion until after the court had already entered the judgment.

FOOTNOTES

. In the course of appealing the denial of sanctions, Mr. Rusk complains about three other rulings:1. Dismissal of the suit (April 30, 2019)2. Denial of the first motion to reopen (May 22, 2019)3. Denial of the second motion to reopen (November 19, 2019)The appeal is late for a challenge to the first two rulings. See Fed. R. App. P. 4(a)(1)(A) (providing a general 30-day deadline for appeals in civil cases), (a)(4)(A)(vi) (stating that a timely Rule 60 motion tolls the start of the appeal deadline until entry of the order on this motion), (a)(4)(B)(ii) (providing a 30-day period to appeal the denial of a Rule 60 motion).The appeal is timely as to the third ruling, but he waived this issue by failing to develop a related argument. See United States v. Wooten, 377 F.3d 1134, 1145 (10th Cir. 2004) (declining to consider “issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation” (internal quotation marks omitted)).

Robert E. Bacharach, Circuit Judge