UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
IN RE: BARBARA RUBIN HUDSON,
Appellant,
BEVERLY LYNN BELTON, R.N.;
BRENDA WADE NEELY, R.N.; SHIRLEY
BAUMGARDENER, R.N.; DEBRA HALL;
KATHRYN REBECCA POOLE,
Plaintiffs,
v.
LELAND J. SIGMON, in his individual
capacity and as President and co-
owner of S & S Health Care, No. 98-2821
Incorporated; THOMAS H. SUMMERS,
in his individual capacity and as
Vice-President, Treasurer and co-
owner of S & S Health Care,
Incorporated; S & S HEALTH CARE,
INCORPORATED, d/b/a Interim Health
Care, a Virginia corporation,
Defendants.
UNIVERSITY OF VIRGINIA APPELLATE
LITIGATION CLINIC,
Amicus Curiae.
Appeal from the United States District Court
for the Western District of Virginia, at Danville.
Norman K. Moon, District Judge.
(CA-97-53-D)
Argued: June 9, 2000
Decided: December 13, 2001
2 IN RE: HUDSON
Before WIDENER and NIEMEYER, Circuit Judges, and
Irene M. KEELEY, Chief United States District Judge
for the Northern District of West Virginia,
sitting by designation.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Barbara Rubin Hudson, Chatham, Virginia, for Appel-
lant. John Chadwick Johnson, FRITH, ANDERSON & PEAKE, Roa-
noke, Virginia, for Appellee. Neal Lawrence Walters, UNIVERSITY
OF VIRGINIA SCHOOL OF LAW APPELLATE LITIGATION
CLINIC, Charlottesville, Virginia, for Amicus Curiae.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Attorney Barbara R. Hudson, counsel for plaintiffs in Belton v. Sig-
mon, No. 97-CV-53 (W.D.Va. Jan. 22, 1999), appeals the district
court’s order imposing sanctions against her pursuant to Fed. R. Civ.
P. 11. For the following reasons, we affirm.
I.
Plaintiffs, Beverly Lynn Belton, R.N., Brenda Wade Neely, R.N.,
Shirley Baumgardener, R.N., Debra Hall, and Kathryn Rebecca
Poole, filed a complaint against defendants, S & S Healthcare, Inc. (S
IN RE: HUDSON 3
& S Healthcare) and its co-owners, Leland J. Sigmon and Thomas H.
Summers, alleging that defendants violated the Fair Labor Standards
Act, 29 U.S.C.A. § 201 (the Act), by engaging in fraudulent practices.
Plaintiffs alleged that defendants unlawfully required plaintiffs to
work uncompensated overtime hours and that they were entitled to
compensatory, liquidated, and punitive damages, as well as, an
injunction, costs, attorneys’ fees, interest, and a declaration that
defendants’ employment contract was void as against public policy.
Plaintiffs alleged that defendants hired each of them as salaried
employees, but that each worked overtime hours on a daily basis, and
on weekends, without compensation. Plaintiffs’ complaint also con-
tained an allegation that defendants retaliated against plaintiffs for fil-
ing this action under the Act.
During discovery, certain plaintiffs attached to their interrogatory
answers lists indicating their "documented overtime hours worked"
and "average undocumented hours worked."1 While deposing some
plaintiffs, the defendants learned that several plaintiffs did not actu-
ally work at S & S Healthcare on their scheduled work days, yet these
plaintiffs received pay from S & S Healthcare for those days. Also,
defendants discovered that Miss Belton and Miss Neely claimed over-
time hours to be paid by the defendants on days they worked at Dan-
ville Regional Medical Center (Danville Regional), an unrelated
health care facility. Defendants moved for summary judgment claim-
ing that plaintiffs were exempt employees under the Act and thus,
they were not entitled to overtime pay under the Act. Defendants
attached plaintiffs’ self-generated overtime lists to their summary
judgment motion and memorandum in support thereof. In a letter,
defendants requested that Miss Hudson, as counsel to plaintiffs, with-
draw the claims and terminate the litigation because defendants
believed that the inaccurate overtime lists rendered plaintiffs’ claims
unwarranted.
1
Plaintiffs Belton and Neely made their calculations on a month to
month basis for the relevant time periods. The "documented hours" rep-
resented hours on the time sheets that plaintiffs worked, while "undocu-
mented hours" reflected time that did not appear on any time sheet, but
that plaintiffs claimed represented overtime hours worked.
4 IN RE: HUDSON
Instead of withdrawing these claims, or correcting any inaccuracies
regarding plaintiffs’ overtime hours, Miss Hudson filed a memoran-
dum in opposition to defendants’ motion for summary judgment and
continued to pursue plaintiffs’ claims that defendants owed them
compensation for overtime hours despite the inaccuracies. On
November 17, 1998, the district court granted summary judgment to
defendants finding that although defendants had made some improper
pay deductions in violation of the Act, defendants could avail them-
selves to the "window of corrections" because the improper pay
deductions were made for reasons other than lack of work. It also held
that the nurse plaintiffs were exempt as in a bona fide executive
capacity, and the others were in a bona fide administrative capacity.
At that time, the district court did not address defendants’ allegations
that plaintiffs’ claimed overtime hours were fraudulently recorded.
On November 2, 1998, defendants had filed a motion for Rule 11
sanctions alleging that "plaintiffs’ allegations and factual contentions
do not have evidentiary support and that fact was brought to the atten-
tion of plaintiffs in the defendants’ summary judgment memorandum
and exhibits in support." Defendants argued that Rule 11 sanctions
were appropriate because plaintiffs continued to pursue the overtime
hours claim in subsequently filed documents despite inaccuracies in
the supporting evidence. On January 22, 1999, after a hearing, the dis-
trict court entered its opinion and order in writing in which it made
factual findings concerning the days on which plaintiffs Belton and
Neely made claims for documented overtime hours and on which they
were also employed at Danville Regional. Consequently, the district
court imposed sanctions on Miss Hudson for failing to withdraw the
claims for these overtime hours.2 Miss Hudson appeals the district
court’s order.
We review the award of sanctions under Rule 11 for abuse of dis-
cretion. Chaudhry v. Gallerizzo, 174 F.3d 394, 410 (4th Cir. 1999).
2
The district court imposed sanctions on Miss Hudson of $500.00 to
be paid to the Clerk of the Court.
IN RE: HUDSON 5
II.
Miss Hudson asserts that the sanctioned conduct was actually a dis-
covery abuse and therefore sanctions under Rule 37 should have been
considered, rather than sanctions under Rule 11. Federal Civil Proce-
dure Rule 11(b) states in pertinent part:
[b]y presenting to the court (whether by signing, filing, sub-
mitting, or later advocating) a pleading, written motion, or
other paper, an attorney or unrepresented party is certifying
to the best of the person’s knowledge, information, and
belief, formed after an inquiry reasonable under the circum-
stances, —
(1) it is not being presented for any improper purpose, such
as to harass or to cause unnecessary delay or needless
increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein
are warranted by existing law or by a nonfrivolous argument
for the extension, modification, or reversal of existing law
or the establishment of new law;
(3) the allegations and other factual contentions have evi-
dentiary support of, if specifically so identified, are likely to
have evidentiary support after a reasonable opportunity for
further investigation or discovery . . . .
Fed. R. Civ. P. 11(b) (emphasis added). Rule 11(d) goes on to state
that subdivisions (a) through (c) of Rule 11 do not apply to "disclo-
sures and discovery requests, responses, objections, and motions that
are subject to the provisions of Rules 26 through 37." Fed. R. Civ. P.
11(d).
The district court awarded Rule 11 sanctions because Miss Hudson
failed to reduce the number of claimed overtime hours or demonstrate
that plaintiffs accounted for those hours in their initial estimate.3 Miss
3
The district court did not award sanctions sua sponte as Miss Hudson
argues in her brief. The defendants filed a motion for Rule 11 sanctions,
prompting the district court to hold a hearing on the matter.
6 IN RE: HUDSON
Hudson continued to argue in her opposition to the defendants’
motion for summary judgment that plaintiffs’ claimed overtime hours
were only an estimate; however, the district court specifically pointed
out that hours worked at Danville Regional were recorded as hours
worked at S & S Healthcare and that these hours were not general
estimates as Miss Hudson continued to assert. Even at oral argument
before the district court Miss Hudson refused to acknowledge that the
claimed overtime was inaccurate.
MISS HUDSON: Well, again, when they did their esti-
mates of overtime, they did not have
their personal records, they don’t have
their time records, they don’t have all
this documentation . . . .
COURT: Well, she was confronted by this infor-
mation and did not correct it.
MISS HUDSON: There was nothing to correct, Your
Honor.
We find that the district court’s imposition of Rule 11 sanctions was
justified by Miss Hudson’s failure to withdraw or correct the claims
for compensation for overtime. Plaintiffs’ opposition to defendants’
motion for summary judgment constituted a written motion or other
paper under Rule 11(b). The claims relating to the overtime hours in
this motion were not warranted by law, and the factual contentions
therein could not have been shown as correct by Miss Hudson given
the development of the surrounding facts in plaintiffs’ interrogatories
and deposition testimony. See Fed. R. Civ. P. 11(b). The sanctions
imposed by the district court were a direct result of plaintiffs’ opposi-
tion to defendants’ summary judgment motion, not a result, as Miss
Hudson argues, of discovery abuses.
Miss Hudson also contends that she was denied due process
because the district court imposed Rule 11 sanctions upon a different
ground than was stated in defendants’ motion for Rule 11 sanctions.
The district court awarded Rule 11 sanctions based on a ground
clearly mentioned in defendants’ memorandum in support of their
motion for Rule 11 sanctions; "by signing and filing the plaintiffs’
IN RE: HUDSON 7
response to the defendants’ motion for summary judgment, plaintiffs’
counsel continued to pursue the overtime claims not warranted by
existing law and not supported by the evidence . . . ." So Miss Hud-
son’s assertion is without merit.
III.
In her brief to this court, Miss Hudson asserts that the district court
abused its discretion in denying plaintiffs’ motion for an enlargement
of time to respond to defendants’ motion for summary judgment. The
pursuit of this claim was not consistent with the parties’ settlement
agreement in Belton v. Sigmon.4 After the parties reached their settle-
ment agreement, this court entered an order dismissing all matters
properly appealed except for the Rule 11 sanctions issue. Belton v.
Sigmon, No. 98-2821 (4th Cir. Mar. 8, 1999). For this reason, we
decline to address the enlargement of time issue.
We are thus of opinion that the district court did not abuse its dis-
cretion in awarding Rule 11 sanctions in this case.
The judgment of the district court is accordingly
AFFIRMED.5
4
After the district court granted summary judgment to defendants,
plaintiffs filed a notice of appeal from that judgment. A Fourth Circuit
Court of Appeals Mediator conducted a mediation of that matter on Janu-
ary 15, 1999. As a result of that mediation, the parties agreed that all
matters were settled except the Rule 11 sanctions issue.
5
The plaintiffs’ motion for sanctions on the defendants for violating
the confidentiality of the mediated settlement is denied.
The defendants’ motion for double costs and attorneys fees on appeal
is denied.