In Business Guides, Inc v. Chromatic Communications Enterprises, the Ninth Circuit held that clients can be sanctioned under Federal Rule of Civil Procedure 11, if they fail to make an objectively reasonable inquiry to ensure that documents submitted to a court are well grounded in fact. In this case, the Ninth Circuit rejected the subjective good faith standard adopted by the Second Circuit, which held in Calloway v. Marvel Entertainment Group, that clients can be sanctioned only if they knowingly submit claims that are not well grounded in fact. This Note approves of the Business Guides decision, but suggests that courts should be careful to hold clients to a lower level of objectively reasonable inquiry relative to attorneys.
Factual Frivolity: Sanctioning Clients under Rule 11—Business Guides, Inc. v. Chromatic Communications Enterprises, 892 F.2d 802 (9th Cir. 1989), cert. granted, 110 S. Ct. 3235 (1990),
65 Wash. L. Rev.
Available at: https://digitalcommons.law.uw.edu/wlr/vol65/iss4/11