dissenting:
Although I share the majority’s view that Levin and Sklar’s conduct fell far short of the ideal, I do not share its belief that Rule 11 sanctions .are appropriate in this situation. Instead, I believe that, when a court finds that an attorney has filed a meritorious complaint, the court should not go on to inquire whether the attorney conducted an adequate investigation prior to filing the complaint. I therefore respectfully dissent.
Except for changes in the named plaintiffs and the number of shares they owned, the complaint filed by Levin and Sklar on behalf of the Garrs was identical to the complaints filed by Malone on behalf of Greenfield and Strunk. As the majority notes, the district court did not dismiss the Strunk complaint, thereby implicitly finding that on its face it stated a valid claim. Presumably, had the district court not determined that Levin and Sklar violated Rule 11, it would not have dismissed the Garr complaint. Thus it is safe to assume that the district court believed that the Garr complaint on its face was meritorious.
In holding that the imposition of sanctions was appropriate in this case, the majority relies on the following statement in an opinion from a district court in another circuit: “A shot in the dark, is a sanctionable event, even if it somehow hits the mark.” Vista *1282Mfg., Inc. v. Trac-4, Inc., 131 F.R.D. 134, 138 (N.D.Ind.1990). Though this statement has the virtue of being colorful, as the basis of the majority's reasoning it suffers from three flaws. First; Vista does not support the‘majority’s position; despite the quoted statement the court imposed no sanctions. Second, in relying on Vista the majority overlooks apparent statements of law to the contrary by the Vista court’s own circuit, the Seventh, and by the Second Circuit. Finally, the majority’s conclusion that the Vista rule is necessary to further the purposes of Rule 11 is the product of an incomplete analysis of both the policies animating Rule 11 and the impact of that rule on the effectiveness of Rule 11. I shall address these latter two points in turn.
The Seventh Circuit, a very aggressive court in terms of enforcing Rule 11, see Lawrence C. Marshall et al., The Use and Impact of Rule 11, 86 Nw.U.L.Rev. 943, 981-82 (1992), observed pre-Visia. that for purposes of Rule 11 “[a]n attorney takes a frivolous position if he fails to make a reasonable inquiry into facts (which later prove false) or takes a position unwarranted by existing law or a good faith argument for its modification.” Magnus Elecs. v. Masco Corp. of Indiana, 871 F.2d 626, 629 (7th Cir.) (emphasis added), cert. denied, 493 U.S. 891, 110 S.Ct. 237, 107 L.Ed.2d 188 (1989). See also Rush v. McDonald’s Corp., 966 F.2d 1104, 1122 n. 67 (7th Cir.1992).
Moreover, in several cases the Second Circuit has suggested that Rule 11 sanctions are inappropriate in cases where, as here, some basis for a claim exists despite the failure of an attorney to undertake an adequate pre-filing investigation into whether that basis actually existed. For example, in Calloway v. Marvel Entertainment Group, 854 F.2d 1452, 1470 (2d Cir.1988), rev’d in part on other grounds sub nom. Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989), Judge Winter noted that
[i]n considering sanctions regarding a factual claim, the initial focus of the district court should be on whether an objectively reasonable basis for the claim was demonstrated in pretrial proceedings or -at trial. Where such a basis was shown, no inquiry into the adequacy of the attorney’s pre-filing investigation is necessary.
See also Greenberg v. Hilton Int’l Co., 870 F.2d 926, 934-35 (2d Cir.1989); Oliveri v. Thompson, 803 F.2d 1265, 1275 (2d Cir.1986) (“[R]ule 11 is violated only when it is ‘patently clear that a claim has absolutely no chance of success.’ ”) (quoting Eastway Const. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir.1985); Wurzberg v. Lapid, 1993 WL 362374, *7, 1993 U.S.Dist. LEXIS 12799, *21 (S.D.N.Y.); Bleckner v. General Accident Ins. Co., 713 F.Supp. 642, 650 (S.D.N.Y.1989).
Indeed, this court has remarked that we “have interpreted [Rule ll’s] language to prescribe sanctions, including fees, only in the ‘exceptional circumstance’ ... where a claim or motion is patently unmeritorious or frivolous.” Doering v. Union County Bd. of Chosen Freeholders, 857 F.2d 191, 194 (3d Cir.1988) (citation omitted). Taken as a whole, these cases support the notion that sanctions are inappropriate where, as here, there was a reasonable basis for a complaint even if the attorney filing it failed adequately to- inquire into the existence of that basis.
I believe the majority is mistaken in asserting that this rule would frustrate the purposes of Rule 11. The Supreme Court has stated that
the central purpose of Rule 11 is to deter baseless filings in the District Court and thus, consistent with the Rule Enabling Act’s grant of authority, streamline the administration and procedure of the federal courts.... Although the rule must be read in light of concerns that it will spawn satellite litigation and chill vigorous advocacy ... any interpretation must give effect to the rule’s central goal of deterrence.
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393, 110 S.Ct. 2447, 2454 (1990). Similarly, the Advisory Committee indicated that the purpose of Rule 11 is “to discourage dilatory or abusive tactics and to help streamline the litigation process by lessening frivolous claims or defenses.” Notes of the Advisory Committee on Rules, 1983 Amendment, Fed.R.Civ.P. 11, reprinted in 97 F.R.D. 165, 200 (1983).
On the whole, the goals of deterring abuses of the system and streamlining litigation would be better served by the standard I *1283advocate. Because the vast majority of “shots in the dark” will not hit their target, almost all of them will be subject to sanction. I find it difficult to believe that this slightly reduced probability of sanction will encourage lawyers to take blind shots. The deterrent function of Rule 11 to prevent baseless filings will not be undermined by not sanctioning when a complaint on its face does have merit. As the Second and Seventh Circuits have implicitly recognized, the best evidence of an inadequate investigation will often be the fact that a complaint states a frivolous claim. Without that evidence, the inquiry becomes considerably more speculative.
Moreover, in cases in which the complaint states a meritorious claim, we must consider whether we want to encourage a secondary line of inquiry into the adequacy of the attorney’s research. I believe that opening up such a line of attack, which will require courts to engage in pure speculation in the worst case and will lead to a waste of the court’s time and resources in the best case, will create a greater clog in the courts’ efficient functioning than will the failure to sanction the rare ease of the successful shot in the dark.
The majority is eager to sanction counsel in this case because it believes sanctions are necessary to discourage the indiscriminate filing of lawsuits. As I have pointed out above, it is unlikely that the- majority’s rule would have a greater effect in this regard than my standard. Ironically, however, the majority’s approach will encourage the indiscriminate filing of motions for sanctions. This ease, in which the motion for sanctions was prepared before defendants had even seen the Garr complaint and was waiting at the courthouse for the complaint to be filed, provides a perfect example of the sort of behavior that the majority’s reasoning will encourage. Were the court to hold that facially meritorious but inadequately investigated complaints are not subject to sanction, defendants would have less incentive to file such motions. Indeed, defendants under such a regime would more likely be subject to sanction for filing an unmeritorious motion for sanctions before conducting an adequate investigation into the merit of the complaint.
Simply stated, I believe that the majority, in its eagerness to uphold sanctions against the inexcusable behavior by the attorneys in this case,, overlooks the fact that its holding will frustrate rather than further the goals of Rule 11. I would reverse the district court’s imposition of Rule 11 sanctions against Levin and Sklar.