# LAUTO v. DOVER PUBLIC SCHOOL DISTRICT

> District Court, D. New Jersey · November 16, 2023

URL: https://www.frixlaw.com/law-library/cases/10277767

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** November 16, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

STEVEN CHRISTOPHER LAUTO,
Case No. 21–cv–18246–SDW–ESK
Plaintiff,

v.
OPINION AND ORDER
DOVER PUBLIC SCHOOL
DISTRICT, et al.,
Defendants.
KIEL, U.S.M.J.
THIS MATTER having come before the Court on the motion (Motion) filed
by defendants Dover Public School District, Dover Board of Education, and Dover
High School (School Defendants) for sanctions pursuant to Federal Rule of Civil
Procedure 11 (Rule 11) (ECF No. 25); and plaintiff Steven Christopher Lauto
having filed opposition to the Motion (ECF No. 26); and the School Defendants
having filed a reply (ECF No. 28); and the Court finding:
1. As set forth in the original complaint filed on October 8, 2021 and in
the amended complaint filed on January 5, 2022, Lauto had been employed by
the School Defendants as a teacher and as an accountant for approximately
twenty years. (See ECF No. 6 p. 5; see also ECF No. 1.) Lauto alleges that after
reporting to the School Defendants in 2016 that he had been made aware of
instances of sexual impropriety perpetrated by another staff member against
certain students, the School Defendants subjected him to false accusations,
unjustified investigations, harassment, and retaliatory discipline. (See ECF No.
6 pp. 5–26; see also ECF No. 12 (opinion entered in August 2022 denying School
Defendants’ motion to dismiss).) As a result, Lauto asserts claims concerning
Title VII violations, violations of the Americans With Disabilities Act, violations
of the New Jersey Law Against Discrimination, tortious interference with
contractual relations (Tortious Interference Claim), defamation (Defamation
Claim), and civil conspiracy to commit tortious interference with contract (Civil
Conspiracy Claim). (ECF No. 6 pp. 26–37.)
2. As to the Tortious Interference Claim, Lauto alleges that the School
Defendants engaged in efforts to undermine his reinstatement to his position as
an accountant, and that his position as an accountant ultimately was not
renewed. (Id. pp. 19, 20, 34, 35.) As to the Defamation Claim, Lauto alleges the
School Defendants spread false and damaging rumors about him in official
meetings, through email, through social media, and through an electronic
chatroom. (Id. pp. 18, 35.) As to the Civil Conspiracy Claim, Lauto alleges the
School Defendants sought to undermine the renewal of his entire employment.
(Id. p. 37.)
3. The parties have engaged in discovery. (ECF Nos. 16, 17, 22, 24.)
The School Defendants now move to impose sanctions on Lauto pursuant to Rule
11, arguing that Lauto “failed to properly perform the basic investigation
required under Rule 11” in filing the Tortious Interference Claim, the Defamation
Claim, and the Civil Conspiracy Claim, as those claims are “without evidentiary
or legal support.” (ECF No. 25 pp. 2, 3.) In support of the Motion, the School
Defendants argue that, among other things: (a) Lauto “has failed to adduce a
scintilla of evidence demonstrating that any [d]efendant defamed him” (id. p. 11;
see id. pp. 15–18); (b) Lauto’s “tort claims are clearly barred under the notice
requirements of the [New Jersey Tort Claims Act]” (id. p. 11; see id. pp. 20–22);
and (c) the Defamation Claim “is barred by the statute of limitations[, i.e.,] in
New Jersey [there is] …a one-year statute of limitations,” because Lauto was
aware of the defamatory statements for more than one year before commencing
this action (id. p. 12; see id. pp. 13–15, 18–20). The Court notes that the School
Defendants do not seek the imposition of sanctions as to Lauto’s other claims.
(Id. p. 7 n. 2.)
4. Lauto opposes the Motion, arguing that: (a) he has produced specific
examples of the School Defendants’ allegedly defamatory statements in support
of the Defamation Claim; (b) he has submitted evidence in support of the Tortious
Interference Claim and Civil Conspiracy Claim; and (c) the School Defendants
continue to engage in the alleged violative conduct. (See generally ECF No. 26.)
In reply, the School Defendants accuse Lauto of engaging in “factual
misrepresentations” in his opposition papers. (ECF No. 28 p. 4.)
5. “[T]he determination [whether Rule 11 sanctions should be imposed]
… falls within the sound discretion of the District Court.” Brubaker Kitchens,
Inc. v. Brown, 280 F.App’x 174, 185 (3d Cir. 2008). I intend to exercise my
discretion to deny the Motion, as I find that the arguments of the School
Defendants concern legal and factual issues that would be more appropriately
addressed in a motion for summary judgment. See Marlowe Pat. Holdings v.
Ford Motor Co., No. 11-07044, 2013 WL 6383122, at *5 (D.N.J. Dec. 5, 2013)
(holding a “Rule 11 motion for sanctions is not an appropriate substitute for
summary judgment proceedings, and should not be used to raise issues of legal
sufficiency that more properly can be disposed of by ... a motion for summary
judgment”). Rule 11 “is not an appropriate vehicle for resolving legal or factual
disputes” such as those being raised here in the Motion. StrikeForce Techs., Inc.
v. WhiteSky, Inc., No. 13-01895, 2013 WL 5574643, at *4 (D.N.J. Oct. 9, 2013).
In the absence of an award of summary judgment in the School Defendants’ favor,
“any ruling on this motion for sanctions would inherently also be a premature
ruling on any such final resolution.” Thorner v. Sony Comput. Ent. Am. Inc., No.
09-01894, 2010 WL 904797, at *2 (D.N.J. Mar. 9, 2010) (denying motion for
sanctions). In addition, an award of Rule 11 sanctions is not warranted at this
juncture even if, as the School Defendants essentially argue in their Motion,
Lauto’s allegations in support of the Tortious Interference Claim, the Defamation
Claim, and the Civil Conspiracy Claim are “ineptly … presented.” Cresci v.
Gyess, No. 17-02342, 2019 WL 1529964, at *4 (D.N.J. Apr. 8, 2019).
6. As a result, the Motion is “premature,” because a Rule 11 motion is
inappropriate:
for resolving the merits of the parties’ legal and factual
claims…. Here, [the School] Defendants’ motion for
sanctions is aimed at the merits of their dispute with
[Lauto]. Indeed, [the School] Defendants’ motion reads like
a summary judgment motion pursuant to Rule 56…. But
Rule 11 cannot be used as a substitute for Rule 56.
Tiger Supplies Inc. v. MAV Assocs. LLC, No. 20-15566, 2022 WL 195858, at *1,
*2 (D.N.J. Jan. 21, 2022); see also Oswell v. Morgan Stanley Dean Witter & Co.,
507 F.Supp.2d 484, 489 n. 3 (D.N.J. Sept. 6, 2007) (holding “[the movant for
sanctions] has not sought, much less obtained, summary judgment against [its
adversary on a certain] claim,” and “[a] Rule 11 motion is seldom the proper
crucible for adjudicating underlying claims that have not been subjected to
dispositive motion practice or trial”). The School Defendants’ arguments that
sanctions are necessitated based on statute of limitations grounds are
particularly inappropriate at this juncture, as the Third Circuit has ruled that
Rule 11 “should not be invoked against an attorney who fails to dismiss a case
after the opposing attorney submits evidence that a statute of limitations … bars
the suit.” Gaiardo v. Ethyl Corp., 835 F.2d 479, 484 (3d Cir. 1987); see Mirabella
v. Diversified Glob. Graphics Grp., No. 17-02030, 2018 WL 2012902, at *4 (D.N.J.
Apr. 30, 2018) (denying defendant’s Rule 11 motion, even though plaintiff’s claims
were found to be time-barred). I also note that the School Defendants’ piecemeal
approach to litigation in addressing the Tortious Interference Claim, the
Defamation Claim, and the Civil Conspiracy Claim alone — while remaining
silent as to the viability of the other claims asserted in the amended complaint —
is highly impractical.
7. My denial of the Motion does not leave the School Defendants without
a potential remedy. First, the denial will be without prejudice. Second, the
School Defendants may file a new and separate motion under Rule 11 for
sanctions — if appropriate — simultaneously with a motion for summary
judgment once they are granted leave to do so. See Tiger Supplies Inc., 2022 WL
195858, at *2 (denying motion for Rule 11 sanctions, but noting “the parties may
file motions for summary judgment,” and that the movants seeking sanctions
“may resubmit their motion for sanctions, if they feel it is still appropriate, after
the Court rules on summary judgment”); see also Fed.R.Civ.P. 56(a).1 But the
School Defendants should nonetheless be mindful that Rule 11 “must not be used
as an automatic penalty against an attorney or a party advocating the losing side
of a dispute.” Gaiardo, 835 F.2d at 482.2

1 The School Defendants would be well-advised to follow the guidance provided by
Rule 11 itself:

A motion for sanctions must be made separately from any other
motion and must describe the specific conduct that allegedly
violates Rule 11(b). The motion must be served under Rule 5,
but it must not be filed or be presented to the court if the
challenged paper, claim, defense, contention, or denial is
withdrawn or appropriately corrected within 21 days after service
or within another time the court sets. If warranted, the court
may award to the prevailing party the reasonable expenses,
including attorney’s fees, incurred for the motion.

Fed.R.Civ.P. 11(c)(2); see also D.N.J. L.Civ.R. 11.3.

2 Lauto argues in his opposition that he “requests relief under Rule 11, insofar as
[he] reserves the right to requests [sic] costs and fees associated with responding to [the
Motion].” (ECF No. 26 p. 4.) Lauto has not formally moved for such relief, and thus I
will not rule on this request. In any event, such a motion by Lauto would be premature
at this juncture for the reasons I have discussed in denying the School Defendants’
Motion.
Accordingly,
IT IS on this 16th day of November 2023 ORDERED that:
1. The Motion is DENIED without prejudice.
2. The Clerk is directed to terminate ECF No. 25.
3. The parties are reminded of the telephone status conference scheduled
for November 16, 2023 at 11:15 a.m. (ECF No. 30.)

/s/ Edward S. Kiel
EDWARD S. KIEL
UNITED STATES MAGISTRATE JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10277767. Public record. Not legal advice.