How to measure the Rule 11 “safe harbor.”

On September 16, 2013, Defendants obtained a magistrate judge’s report that recommended dismissal of Plaintiffs’ complaint. On September 18, Defendants served – but did not file – a motion for sanctions, stating that it would not be filed until the 21-day Rule 11(c)(2) “safe harbor” period passed. Plaintiffs objected to the report on September 30; Defendants filed their motion on October 18; and after adoption of the report and further briefing, the district imposed $25,000 in sanctions in mid-2014. The Fifth Circuit rejected Plaintiffs’ challenge to the sanction based on the safe harbor period, reasoning — “Given that Plaintiffs could have formally or informally disavowed their claims during the 21-day period after Defendants served their motion, but instead elected to continue pursuing their claims, the district court did not abuse its discretion in rejecting Plaintiffs’ ‘safe harbor’ argument.” Margetis v. Ferguson, No. 16-40563 (Nov. 10, 2016, unpublished).