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8. May the court impose this monetary sanction on the man?
Soon thereafter, the court issued an order requiring the man and his attorney to show cause why they should not be sanctioned under Rule 11 and required to pay a monetary penalty to the court for filing a frivolous complaint. The order cited several recent judicial decisions holding that rate increases such as the one proposed do not violate federal law.
A man asked his attorney whether he had a legal basis to challenge a rate increase proposed by his electric utility company. The attorney said that he did and filed a federal action seeking a declaratory judgment that the proposed increase would violate federal law.
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A is incorrect. FRCP 11(c)(3) authorizes the court on its own initiative to issue a show-cause order as to why conduct specifically described in the order has not violated Rule 11(b).
C is incorrect. Although there may have been a sanctionable violation of FRCP 11(b)(2), the court may not impose a monetary sanction on a represented party for such a violation. Fed. R. Civ. P. 11(c)(5)(A).
D is incorrect. A show-cause order issued by the court provides a party with notice of a possible infraction and an opportunity to argue against it. It does not by itself decide that a sanction should be imposed, as additional facts must be considered before making that determination.