Rule 9011 is Applied Much More Harshly to Bankruptcy Cases than its Rule 11 Counterpart!
At this month’s Southern California Bankruptcy Inn of Court meeting, now called the James T. King Inn of Court, we had a lively discussion regarding whether attorneys may engage in litigation for the purpose of harassing the other party.
The room was fairly evenly split with half saying absolutely not while the other half focused on whether the litigation was meritorious.
It turns out the issue is more complicated than that. In summary, if the litigation is engaged in and proceeds under Bankruptcy Law, then the litigation cannot proceed if brought for an improper purpose such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.
Outside of bankruptcy, litigation may proceed if brought for an improper purpose but ONLY IF it is otherwise meritorious.
To learn more about this unfair distinction, see Marsch v. Marsch (In re Marsch), 36 F.3d 825 (9th Cir.1994) (per curiam). If anyone knows a case to the contrary, please let me know!