In re Special Task Force- proposed amends. to Ark. R. Civ. P. 11 & 12

2014 Ark. 344

• Court: Supreme Court of Arkansas
• Decided: August 7, 2014
• Status: Published

Opinion

Cite as 2014 Ark. 344

SUPREME COURT OF ARKANSAS No.

Opinion Delivered August 7, 2014

IN RE SPECIAL TASK FORCE ON PRACTICE AND PROCEDURE IN CIVIL CASES – PROPOSED AMENDMENTS TO ARK. R. CIV. P. 11 AND 42

PER CURIAM

Among the recommendations of the Special Task Force on Practice and Procedure in

Civil Cases were proposed amendments to Ark. R. Civ. P. 11 and 42. See In re Special Task

Force on Practice & Procedure in Civil Cases, 2014 Ark. 5 (per curiam). The proposals were

referred to the Committee on Civil Practice along with the other recommendations of the

Task Force. (Today, the court by separate per curiam orders addresses the other rules

proposed by the Task Force.) The Committee considered these proposals and the numerous

comments that were received after the proposal had been published for comment.

Rule 11, which addresses signing of pleadings and sanctions, has been revised by the

Committee to include a new subsection (b)(5) because of the overwhelming number of

negative comments received from both the plaintiff and defense perspective on the rule

proposed by the Task Force, Rule 11.1. This revision replaces that proposed rule, which

provided for a certificate of expert consultation. The proposed revision reads as follows:

(b) Certificate. The signature of an attorney or party constitutes a certificate by the Cite as 2014 Ark. 344

signatory that to the best of his or her knowledge, information, and belief, formed after an

inquiry reasonable under the circumstances:

...

(5) when a party’s claim or affirmative defense may only be established in whole or in

part by expert testimony, the party has consulted with at least one expert, or has learned in

discovery of the opinion of at least one expert, who (i) is believed to be competent under Ark.

R. Evid. 702 to express an opinion in the action and (ii) concludes on the basis of the

available information that there is a reasonable basis to assert the claim or affirmative defense;

and

The entire rule as revised by the Committee appears below and is being published for

comment; however, the only substantive change to the Task Force’s draft is the addition of

subsection (b)(5).

The Task Force proposed to amend Rule 42 to address the bifurcation of punitive-

damages claims.1 The Committee concluded that the rule should be revised to afford the

1 Task Force’s version: Rule 42. ... (2) Notwithstanding paragraph (1), all actions tried before a jury in which punitive damages are sought shall, on motion of any party, be conducted in a bifurcated trial before the same jury. The jury shall first determine the liability of the defendant or defendants for compensatory damages, the amount of compensatory damages to be awarded, and the liability of the defendant or defendants for punitive damages. If necessary, the jury will then determine, in a separate proceeding, the amount of punitive damages to be awarded. Evidence of a defendant’s financial condition shall not be admitted in the first proceeding unless relevant to an issue other than the amount of punitive damages.

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circuit court more discretion. The Committee’s recommendation appears below and is also

being published for comment.

Comments should be submitted in writing to Clerk of the Supreme Court, Attention:

Task Force Rules, Justice Building, 625 Marshall Street, Little Rock, AR 72201. The

comment period expires on September 30, 2014. (The underlines and strikeouts illustrate

changes from the current rules – not from the Task Force’s proposals.) The Reporter’s Notes

provide further explanation of the respective rules.

Rule 11. Signing of Pleadings, Motions, and Other Papers; Sanctions.

(a) Signature. Every pleading, written motion, and other paper of a party represented

by an attorney shall be signed by at least one attorney of record in his or her individual name,

whose address shall be stated. A party who is not represented by an attorney shall sign his or

her pleading, motion, or other paper and state his or her address and telephone number, if

any. Except when otherwise specifically provided by rule or statute, pleadings need not be

verified or accompanied by affidavit. The signature of an attorney or party constitutes a

certificate by him that he has read the pleading, motion, or other paper; that to the best of his

knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact

and is warranted by existing law or a good faith argument for the extension, modification, or

reversal of existing law, that it is not interposed for any improper purpose, such as to harass

or to cause unnecessary delay or needless increase in the cost of litigation, and that it complies

with the requirements of Rule of Civil Procedure 5(c)(2) regarding redaction of confidential

information from case records submitted to the court. If a pleading, motion, or other paper

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is not signed, it shall be stricken unless it is signed promptly after the omission is called to the

attention of the pleader or movant. If a pleading, motion, or other paper is signed in violation

of this rule, the court, upon motion or upon its own initiative, shall impose upon the person

who signed it, a represented party, or both, an appropriate sanction, which may include an

order to pay to the other party or parties the amount of the reasonable expenses incurred

because of the filing of the pleading, motion, or other paper, including a reasonable attorney's

fee.

(b) Certificate. The signature of an attorney or party constitutes a certificate by the

signatory that to the best of his or her knowledge, information, and belief, formed after an

(1) the pleading, motion, or other paper is not interposed for any improper purpose,

such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or

by a nonfrivolous argument for extending, modifying, or reversing existing law or for

establishing new law;

(3) the factual contentions have evidentiary support;

(4) the denials of factual contentions are warranted on the evidence or, if specifically

so identified, are reasonably based on belief or a lack of information;

(5) when a party’s claim or affirmative defense may only be established in whole or in

part by expert testimony, the party has consulted with at least one expert, or has learned in

discovery of the opinion of at least one expert, who (i) is believed to be competent under Ark.

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R. Evid. 702 to express an opinion in the action and (ii) concludes on the basis of the

available information that there is a reasonable basis to assert the claim or affirmative defense;

(6) the pleading, motion, or other paper complies with the requirements of Rule

5(c)(2) regarding redaction of confidential information from case records submitted to the

court.

(c) Sanctions. (1) If a pleading, motion, or other paper is not signed, it shall be stricken

unless it is signed promptly after the omission is called to the attention of the pleader or

movant. If a pleading, motion, or other paper is signed in violation of this rule, the court,

upon motion or upon its own initiative, shall impose upon any attorney or party who violated

this rule an appropriate sanction.

(2) Sanctions that may be imposed for violations of this rule include, but are not

limited to:

(A) an order dismissing a claim or action;

(B) an order striking a pleading or motion;

(C) an order entering judgment by default;

(D) an order to pay to the other party or parties the amount of the reasonable expenses

incurred because of the filing of the pleading, motion, or other paper, including a reasonable

attorney’s fee;

(E) an order to pay a penalty to the court;

(F) an order awarding damages attributable to the delay or misconduct;

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(G) an order referring an attorney to the Supreme Court Committee on Professional

Conduct or the appropriate disciplinary body of another state.

(3) The court’s order imposing a sanction shall describe the sanctioned conduct and

explain the basis for the sanction. If a monetary sanction is imposed, the order shall explain

how it was determined.

(4) The court shall not impose a monetary sanction against a represented party for

violating subdivision (b)(2), or on its own initiative, unless it issued the show-cause order

under subdivision (c)(6) before voluntary dismissal or settlement of the claims made by or

against the party that is, or whose attorneys are, to be sanctioned.

(5) (b) A motion for sanctions under this rule shall be made separately from other

motions or requests and shall describe the specific conduct alleged to violate subdivision (a)

(b). It shall be served as provided in Rule 5 but shall not be filed with or presented to the

court unless, within 21 days after service of the motion, (or such other period as the court

may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not

withdrawn or appropriately corrected. If warranted, the court may award to the party

prevailing on the motion the reasonable expenses and attorney’s fees incurred in presenting

or opposing the motion.

(6) On its own initiative, the court may order an attorney or party to show cause why

conduct specifically described in the order has not violated subdivision (b). The order shall

afford the attorney or party a reasonable time to respond, but not less than 14 days.

Addition to Reporter’s Notes (2014 amendment): The amendment reorganizes

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and clarifies the rule. Several revisions are based on language in Ark. R. App. P.–Civ. 11,

which applies when frivolous appeals are taken or other misconduct occurs at the appellate

level. Other changes are based on Fed. R. Civ. P. 11, but overall this rule differs significantly

from its federal counterpart.

With the adoption of these revisions, section 21 of the Civil Justice Reform Act of

2003, codified at Ark. Code Ann. § 16-114-209, is superseded pursuant to Ark. Code Ann.

§ 16-11-301. The Supreme Court invalidated a portion of the statute in Summerville v.

Thrower, 369 Ark. 231, 253 S.W.3d 415 (2007).

Subdivision (b) of the revised rule, which describes the certification made by the

person who signs a pleading, motion, or paper, does not substantially change current law. It

is based on the federal rule but modified to reflect the requirement of fact pleading under the

Arkansas rules. Also, subsection (b)(5) makes plain that an attorney or a party certifies that he

or she has consulted with and obtained an opinion from an expert, or learned the opinion of

an expert in discovery, as to the reasonableness of a claim or affirmative defense, which may

only be established, in whole or in part, by expert testimony. This provision replaces the

affidavit requirement for medical injury cases invalidated in Summerville v. Thrower, supra, but

is not limited to cases of that type.

As under former Rule 11(a), subdivision (c)(1) requires the trial court to impose “an

appropriate sanction” upon finding that the rule has been violated. Subdivision (c)(2) sets out

a non-exclusive list of seven sanctions, six of which are identical or analogous to those in Ark.

R. App. P.–Civ. 11(c). The other sanction, referring counsel to the Committee on

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Professional Conduct, is clearly within the power of the trial court. See Ligon v. Stilley, 2010

Ark. 418, 371 S.W.3d 615. The introductory clause in subdivision (c)(2) is taken from Ark.

R. App. P.–Civ. 11(c) and does not limit a sanction to that sufficient to serve as a deterrent.

Compare Fed. R. Civ. P. 11(c)(4) (sanction “must be limited to what suffices to deter

repetition of the conduct or comparable conduct by others similarly situated”).

In Crockett & Brown v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995), the Supreme

Court held that an order imposing monetary sanctions under Rule 11 must explain the basis

for the trial court’s decision. This requirement, the court said, is necessary for effective judicial

review. Id. at 159, 901 S.W.2d at 830. Because this rationale applies whether the sanction is

monetary or nonmonetary, subdivision (c)(3) requires an explanation regardless of the sanction

imposed. It also leaves intact the additional requirement from Crockett & Brown that the order

must explain the manner by which the amount of a monetary sanction is determined. Id. at

159, 901 S.W.2d at 830–31 (listing the factors to be considered).

Under former Rule 11(a), the trial court could act “upon its own initiative” to impose

sanctions, without waiting for a motion. However, the rule was silent as to the appropriate

procedure. Subdivision (c)(6), which is based on Ark. R. App. P.–Civ. 11(d), fills this gap.

See also Fed. R. Civ. P. 11(c)(3).

Rule 42. Consolidation; Separate Trials.

(b) Separate Trials. (1) The court, in furtherance of convenience or to avoid prejudice,

or when separate trials will be conducive to expedition and economy, may order a separate

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trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or

any number of claims, cross-claims, counterclaims, third-party claims, or issues.

(2) Notwithstanding paragraph (1), all actions tried before a jury in which punitive

damages are sought shall, on the motion of any party and if warranted by the evidence, be

conducted in a bifurcated trial before the same jury. The jury shall first determine the liability

of the defendant or defendants for compensatory damages, the amount of compensatory

damages to be awarded, and, at the discretion of the circuit court, the liability of the

defendant or defendants for punitive damages. Should it be necessary, the jury will then

determine, in a separate proceeding, the liability of the defendant or defendants for punitive

damages, if that issue was not decided previously, and the amount of punitive damages to be

awarded. Evidence of a defendant’s financial condition shall not be admitted in the first

proceeding unless relevant to an issue other than the amount of punitive damages.

Addition to Reporter’s Notes (2014 amendment): New paragraph (2) has been

added to subdivision (b), with its original text designated as paragraph (1). In jury trials,

paragraph (2) requires a separate trial, on motion of any party, to determine the amount of

punitive damages. The circuit court, in the exercise of its discretion, determines whether

liability for punitive damages is to be decided in the first or second phase of the bifurcated

proceeding. With the adoption of this amendment, Ark. Code Ann. § 16-55-211 is

superseded pursuant to Ark. Code Ann. § 16-11-301.

Section 16-55-211 required bifurcation of the entire punitive-damages claim on

motion of a party, as do statutes elsewhere. E.g., Minn. Stat. Ann. § 549.20(4); S.C. Code

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§ 15-32-520. By contrast, other states require a separate trial only as to the amount of punitive

damages. E.g., Mo. Stat. Ann. § 510.263(1)-(3); Tenn. Code Ann. § 29-39-104(a).

The amendment stakes out a middle ground between these approaches; codifies the

pre-2003 practice in Arkansas; and, except as to the amount of punitive damages, leaves the

extent of bifurcation to the discretion of the circuit court.

HOOFMAN, J., not participating.