Appeal from the United States District Court for the District of Hawaii. D.C. No. CV-90-00748-DAE. David A. Ezra, District Judge, Presiding
Before: Hug, Wiggins, and Thompson, Circuit Judges.
Kevin R. B. Arcume appeals pro se the district court's award of Rule 11 sanctions in the amount of $11,197.64 to defendants. We have jurisdiction under 28 U.S.C. § 1291.*fn1
We review the district court's rulings on Rule 11 sanctions for an abuse of discretion. Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1365-66 (9th Cir. 1990) (en banc). In imposing sanctions, the district court abuses its discretion if it relies on an erroneous assessment of the evidence or an erroneous view of the law. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 L. Ed. 2d 359, 110 S. Ct. 2447 (1990); Townsend, 929 F.2d at 1366.
Rule 11 sanctions must be imposed on the signer of a paper if (1) the paper is filed for an improper purpose, or (2) the paper is frivolous. Townsend, 929 F.2d at 1362. However, a complaint which initiates an action can be sanctioned only if it is frivolous. Id. A filing is frivolous if it is both baseless and made without a reasonable and competent inquiry. Id. Such an inquiry must be objectively reasonable under the circumstances. Business Guides v. Chromatic Communications Ent., 498 U.S. 533, 111 S. Ct. 922, 933, 112 L. Ed. 2d 1140 (1991). The entire complaint need not be frivolous to merit Rule 11 sanctions. Townsend, 929 F.2d at 1363-64.
Here, the magistrate Judge issued an order on February 23, 1992, imposing sanctions against Arcume in the amount of $11,197.64. This order contained no findings of frivolousness, nor any reasoning as to how the magistrate Judge determined that sanctions were appropriate. The magistrate Judge did, however, explain his reasons for awarding sanctions in a letter sent to Arcume and the defendants. This letter was not then a part of the district court record. On May 12, 1993, we remanded this matter to the district court for the limited purpose of determining whether the record should be supplemented to include the magistrate Judge's letter. We further directed the district court to modify the order awarding sanctions to include the court's reasoning, if it was determined that the magistrate Judge's letter should not be made a part of the district court record.
On remand, the district court granted the defendants' motion to supplement the record to include the magistrate Judge's letter. We now consider the propriety of the sanctions award.
The magistrate Judge found that Arcume's complaint was frivolous and that Arcume refused to provide any factual basis for his allegations at his deposition. Based on our review of the record in this case, we agree. Arcume brought a lawsuit seeking more than $30 million in damages based on a disputed charge to his credit card of $950.*fn2 The complaint alleged that the defendants engaged in racketeering, robbery, bribery, extortion, embezzlement, securities fraud, mail and wire fraud, and money laundering, among other things. Arcume admitted at his deposition that he had no information tending to support his allegation of securities fraud, and that he did not recall the incidents of bribery or extortion. He refused to answer a number of questions regarding the factual basis for other allegations in his complaint. In these circumstances, the magistrate Judge did not abuse his discretion by finding that the allegations in Arcume's complaint were both baseless and made without a reasonable objective inquiry. See Business Guides, 111 S. Ct. at 933; Townsend, 929 F.2d at 1362.*fn3