Pre-Deprivation Notice Required for Rule 11 Sanctions; § 1927 Does Not Reach Initial Pleadings Absent “Multiplying Proceedings”

Introduction

Fletcher v. Experian Info Solutions (5th Cir. Jan. 6, 2026) arises from a Fair Credit Reporting Act (“FCRA”) suit in which Robert Fletcher alleged identity theft: he claimed he never opened an auto finance account that became delinquent and was reported to his credit. Fletcher sued (1) Bridgecrest Credit Company, L.L.C. (holder/servicer of the loan) and (2) Experian Information Solutions, Incorporated (the credit reporting agency that reported the loan).

The district court found the identity-theft theory “baseless” and imposed attorneys’ fee sanctions—against Bridgecrest’s opponent under Federal Rule of Civil Procedure 11 and against Experian’s opponent under 28 U.S.C. § 1927. The Fifth Circuit vacated and remanded, holding that core procedural protections were missing and that § 1927 was misapplied.

The appeal centered not on the merits of the FCRA dispute, but on the proper legal standards and due-process requirements for sanctioning litigants and counsel.

Summary of the Opinion

Rule 11 (counsel): Vacated because the district court imposed sanctions without giving counsel adequate notice and a meaningful pre-deprivation opportunity to be heard on the key Rule 11 question—whether counsel conducted a reasonable pre-suit investigation and reasonably believed the allegations.
Rule 11 (client): Vacated because Fletcher lacked notice that sanctions were contemplated against him personally; Bridgecrest sought Rule 11 relief only against counsel.
§ 1927 (Experian): Vacated because counsel did not “multiply proceedings” within the meaning of § 1927; filing a complaint (or complying with court-ordered early-case steps) is not enough.
Inherent power: Remanded for the district court to consider whether inherent-power sanctions are appropriate; such sanctions require a bad-faith finding, which the district court had not made.

Analysis

Precedents Cited

1) Appellate standards and due process in sanction proceedings

Merriman v. Sec. Ins. Co. of Hartford, 100 F.3d 1187 (5th Cir. 1996): The panel reiterated that “all aspects” of Rule 11 sanctions are reviewed for abuse of discretion. That deferential standard still permits reversal where the district court used the wrong legal framework or denied required process.
Walker v. City of Bogalusa, 168 F.3d 237 (5th Cir. 1999): Defines abuse of discretion in this setting—sanctions grounded in an erroneous view of law or clearly erroneous assessment of evidence.
Veillon v. Expl. Servs., Inc., 876 F.2d 1197 (5th Cir. 1989): Used to anchor the due-process principle that the accused must have an opportunity (oral or written) to justify conduct.
CEATS, Inc. v. TicketNetwork, Inc., 571 F.4th 314 (5th Cir. 2023): Critical to the Fifth Circuit’s holding that a post-deprivation chance to respond is “no substitute” for the pre-deprivation notice and hearing due process requires when sanctions are imposed.

2) What Rule 11 evaluates: the “snapshot” and reasonableness

Thomas v. Cap. Sec. Servs., Inc., 836 F.2d 866 (5th Cir. 1988) (en banc): The court relied on Thomas’s “snapshot” concept—Rule 11 focuses on what was reasonable at the moment the pleading was signed, and it does not impose a “continuing obligation” to reevaluate the pleading after filing.
Childs v. State Farm, 29 F.3d 1018 (5th Cir. 1994) and Skidmore Energy, Inc. v. KPMG, 455 F.3d 564 (5th Cir. 2006): Cited to illustrate that courts assessing pre-suit investigation typically develop a record about what investigation counsel actually performed (including questioning counsel), rather than inferring inadequacy from later-developed defense evidence.

3) Notice when sanctions may be imposed on non-movants or clients

1488, Inc. v. Philsec Inv. Corp., 939 F.2d 1281 (5th Cir. 1991): Emphasized that notice is especially important when sanctions are imposed on clients.
CEATS, Inc. v. TicketNetwork, Inc., 571 F.4th 314 (5th Cir. 2023): Also used for notice specificity—vague references to sanctioning “others” were insufficient there, and here Bridgecrest’s Rule 11 motion did not even gesture at sanctioning Fletcher personally.
Jurisdictional notice-of-appeal cases—Garcia v. Wash, 20 F.3d 608 (5th Cir. 1994) and Batiste v. Lewis, 976 F.3d 493 (5th Cir. 2020)—framed how the panel concluded it had jurisdiction over counsel’s sanctions appeal despite imperfect captioning.

4) The meaning of “multiply proceedings” under § 1927

Procter & Gamble Co. v. Amway Corp., 280 F.3d 519 (5th Cir. 2002) (quoting Browning v. Kramer, 931 F.2d 340 (5th Cir. 1991)): The Fifth Circuit reiterated that § 1927 targets “persistent prosecution of a meritless claim,” not merely bringing a claim.
Nat'l Ass'n of Gov't Emps. v. Nat'l Fed'n of Fed. Emps., 844 F.2d 216 (5th Cir. 1998): Cited (via Procter & Gamble) for the idea that repeated filings, warnings ignored, or “excessive litigiousness” often mark § 1927 violations.
Persuasive out-of-circuit authorities—Zuk v. E. Pa. Psychiatric Inst., 103 F.3d 294 (3d Cir. 1996); In re Yagman, 796 F.2d 1165 (9th Cir. 1986); Steinert v. Winn Grp., Inc., 440 F.3d 1214 (10th Cir. 2006); Jensen v. Phillips Screw Co., 546 F.3d 59 (1st Cir. 2008)—supported the panel’s legal conclusion: § 1927 does not apply to initial pleadings because it addresses the multiplication of proceedings.
Fifth Circuit and district examples of actual multiplication: Vaughan v. Lewisville Indep. Sch. Dist., 62 F.4th 199 (5th Cir. 2023) (harassing conduct lengthening depositions); Morrison v. Walker, 939 F.3d 633 (5th Cir. 2019) (amended complaint adding defendants); Ratliff v. Stewart, 508 F.3d 225 (5th Cir. 2007) (opposing summary judgment despite long-known defect); Religious Tech Ctr. v. Liebreich, 339 F.3d 369 (5th Cir. 2003) (“repetitive motions and filings”).
Jackson Marine Corp. v. Harvey Barge Repair, Inc., 794 F.2d 989 (5th Cir. 1986): Used to reject the notion that a plaintiff must voluntarily dismiss once it decides not to pursue; it is enough not to obstruct the defendant’s path to dismissal—an important backdrop to the court’s rejection of § 1927 liability based on participating in required early litigation steps.
Vaughan v. Lewisville Indep. Sch. Dist., 62 F.4th 199 (5th Cir. 2023): Noted in a footnote for the rule that § 1927 does not allow awards against law firms (though not decided here).

5) Inherent-power sanctions

Carroll v. Jaques Admiralty L. Firm, P.C., 110 F.3d 290 (5th Cir. 1997): Inherent power may be used when conduct is not effectively sanctionable under rules/statutes.
Chambers v. NASCO, Inc., 501 U.S. 32 (1991): Inherent-power sanctions require a finding of bad faith; the district court made no such finding here.

Legal Reasoning

1) Rule 11: the district court asked the wrong question, at the wrong time, with the wrong process

The district court imposed Rule 11 sanctions after asking at a conference whether counsel had “any basis” to dispute that the complaint’s allegations were false. The Fifth Circuit held that this was not the proper Rule 11 inquiry. Under Rule 11(b)(3), the central question is whether, at filing, counsel had a reasonable basis for factual contentions after “an inquiry reasonable under the circumstances.” The opinion highlights two linked errors:

Substantive framing error: Falsity of allegations (as later shown by a defendant’s investigation) does not automatically establish a Rule 11 violation by counsel; the touchstone is the reasonableness of counsel’s pre-suit investigation and contemporaneous belief.
Procedural due-process error: Rule 11 requires “notice and a reasonable opportunity to respond” before sanctions are imposed. Relying on CEATS, Inc. v. TicketNetwork, Inc., the panel held that allowing briefing after the court already granted sanctions (but before fee calculation) does not cure the lack of pre-deprivation process.

The remand instruction is pointed: the district court must allow counsel to introduce evidence of what was done pre-suit, because the record did not support an inference that a reasonable pre-suit investigation would have uncovered the key identity-related documents Bridgecrest later produced.

2) Rule 11: sanctions against a client require specific notice

The panel separately vacated Rule 11 sanctions against Fletcher personally because Bridgecrest’s Rule 11 motion targeted counsel only and did not put Fletcher on notice that he might be sanctioned as a client. The Fifth Circuit reinforced that Rule 11 can reach clients when the client is “responsible for the violation,” but it cannot be sprung on them without clear notice and an opportunity to respond.

3) § 1927: “multiplying proceedings” is not filing (or merely maintaining) a case at the outset

The Fifth Circuit rejected the district court’s § 1927 award to Experian because the record showed no “multiplication” of proceedings. The panel emphasized that § 1927 targets later conduct that unreasonably and vexatiously expands litigation—typically persistent pursuit through repeated filings, obstructive tactics, or needless motion practice. On this record, Experian’s theory boiled down to two actions: filing the complaint and complying with early, court-ordered steps (Rule 26(f) conference and a case management plan). The panel held that is not enough.

4) Inherent power remains available—but only with a bad-faith finding

Because Experian had also sought inherent-power sanctions, the panel remanded for the district court to consider that path. However, it underscored that Chambers v. NASCO, Inc. requires a bad-faith finding, which was absent from the district court’s order.

Impact

Sharper procedural requirements for Rule 11 sanctions in the Fifth Circuit: District courts must provide genuine pre-sanctions process on the correct Rule 11 issue (reasonableness of pre-suit inquiry at signing), not merely ask whether allegations were later disproven.
Clearer warning to movants: Parties seeking Rule 11 sanctions against a client must say so explicitly; seeking sanctions “only against counsel” may foreclose client liability absent renewed notice.
Constrains § 1927 as a substitute for Rule 11 safe harbor: When Rule 11’s safe-harbor timing cannot be met (as with Experian here), § 1927 cannot be used to backfill unless there is post-filing conduct that truly “multiplies” proceedings.
Practical effect in identity-theft/FCRA litigation: Defendants often quickly assemble compelling documentary records. This opinion warns that later-developed documents do not automatically prove counsel’s pre-suit inquiry was sanctionably deficient; courts must make findings grounded in evidence about what counsel did (and what the client disclosed or concealed) before filing.
Unpublished but influential: Although “not designated for publication,” the decision synthesizes binding Fifth Circuit principles (especially CEATS and Thomas) in a way likely to be cited for procedure and statutory interpretation in sanctions disputes.

Complex Concepts Simplified

Rule 11 “snapshot”: Rule 11 generally asks whether the lawyer’s signature was reasonable when filed. Later revelations that the facts were wrong do not automatically mean the filing was sanctionable.
Rule 11 “reasonable inquiry” (Rule 11(b)(3)): Before filing, counsel must take reasonable steps to verify facts, proportionate to the case. What is “reasonable” depends on circumstances—what the client provided, what was accessible pre-suit, and time constraints.
Due process in sanctions: Before imposing sanctions, courts must provide clear notice of what conduct is at issue and a real chance to respond (often with evidence and argument). Letting the party argue only after sanctions are granted is generally not enough.
Rule 11 safe harbor: A Rule 11 movant must serve the motion and wait 21 days before filing it with the court, giving the other side a chance to withdraw or correct the challenged paper.
28 U.S.C. § 1927 “multiplies the proceedings”: § 1927 punishes litigation behavior that makes a case longer or more expensive through unreasonable, vexatious conduct—typically something that happens after the case is underway (e.g., repetitive motions, needless amendments, obstructive filings), not simply filing the complaint.
Inherent power sanctions: Even when rules/statutes do not fit, courts can sanction bad-faith conduct using inherent authority—but only with a specific finding of bad faith and careful adherence to procedural protections.

Conclusion

Fletcher v. Experian Info Solutions reinforces two central constraints on federal sanctions practice in the Fifth Circuit: (1) Rule 11 sanctions must be preceded by real notice and a meaningful opportunity to be heard on the correct inquiry—whether counsel’s pre-suit investigation and belief were reasonable at the moment of signing; and (2) § 1927 cannot be used to sanction mere case initiation or routine compliance with early case-management obligations absent conduct that genuinely “multiplies proceedings.” The decision also underscores that sanctioning a client requires explicit notice, and that inherent-power sanctions remain possible only with a bad-faith finding.