its carriers is irrelevant to ServiceMaster. The rates ServiceMaster agreed to pay FTR for acting as a transportation broker were negotiated between the parties. These rates are not regulated. Accordingly, summary judgment must be granted to FTR on ServiceMaster's claim for broker liability.
2. State Law Claims
ServiceMaster alleges alternative breach of contract claims in Counts II and III, and misrepresentation in Count IV. ServiceMaster pled that the Court has jurisdiction pursuant to 49 U.S.C. § 11705(b)(2) and 28 U.S.C. § 1337. I have determined that the dispute between the parties does not arise under federal law and have dismissed the only claim over which I had original jurisdiction. When a district court has dismissed all claims over which it has original jurisdiction, the court may decline to exercise supplemental jurisdiction over pendent state law claims. 28 U.S.C. § 1337(c)(3). Accordingly, Counts II, III and IV are dismissed without prejudice as to their refiling in state court.
B. Motion for Sanctions
Also before the Court is FTR's Motion for Sanctions. Rule 11 provides that, in presenting to the court a pleading or other filing, the attorney certifies that the claims are not presented for any improper purpose, that the claims are warranted by existing law or by a nonfrivolous argument for the extension of existing law, and that the factual allegations have evidentiary support, or if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for discovery. Fed. R. Civ. P. 11(b)(1), (2) and (3).
"An attorney's signature certifies that the attorney has satisfied three duties: (1) that he has read the documents; (2) that he has made a reasonable inquiry; and (3) that he is not acting in bad faith." CTC Imports & Exports v. Nigerian Petroleum Corp., 951 F.2d 573, 578 (3d Cir. 1991), cert. denied sub nom, Aham-Neze v. Sohio Supply Co., 118 L. Ed. 2d 554, 112 S. Ct. 1950 (1992). Sanctions are appropriate "only if the filing of a complaint constitutes abusive litigation or misuse of the Court's process." CTC Imports, 951 F.2d at 579 (quoting Teamsters Local Union No. 430 v. Cement Express, Inc., 841 F.2d 66, 68 (3d Cir.), cert. denied, 488 U.S. 848, 102 L. Ed. 2d 101, 109 S. Ct. 128 (1988)).
The standard for testing an attorney's conduct is reasonableness under the circumstances. Gaiardo v. Ethyl Corp., 835 F.2d 479, 482 (3d Cir. 1987). In determining the reasonableness of the attorney's pre-filing inquiry, a court is to consider the amount of time available to the signer for reasonable investigation, the necessity of reliance on the conduct for underlying factual information, whether the case was referred to the signer by another member of the bar, and the plausibility of the legal position advocated. Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 95 (3d Cir. 1988).
FTR contends that it is entitled to reasonable attorney's fees in connection with the defense of ServiceMaster's claims in that the filing of ServiceMaster's amended complaint was unreasonable under the circumstances and was a clear violation of Federal Rule of Civil Procedure 11. Specifically, FTR contends that ServiceMaster should have realized at the end of discovery that it had no factual basis to support the allegations of the complaint, and that its pleadings lacked legal justification.
After consideration of ServiceMaster's view of the facts, it appears to the Court that ServiceMaster had a factual basis to support its allegations. Furthermore, ServiceMaster obtained two expert opinions, both of which supported its view of the facts. Therefore, I find that ServiceMaster's pre-filing inquiry was reasonable under the circumstances.
ServiceMaster has acknowledged that its position as to broker liability is unique and a case of first impression. In spite of the absence of case law governing broker liability for overcharges, I find that ServiceMaster's arguments are not frivolous contentions, but rather are good faith arguments for the extension of existing law. I do not find that ServiceMaster has acted so unreasonably as to justify the imposition of Rule 11 sanctions. Accordingly, FTR's motion will be denied.
An appropriate Order follows.
AND NOW, this 7th day of September, 1994, in consideration of the Motion for Summary Judgment of Defendant FTR Transport, Inc., ("FTR"), Plaintiff The ServiceMaster Company, L.P.'s ("ServiceMaster") Response, and all supplemental replies thereto; and in consideration of the Motion for Sanctions of Defendant FTR, and Plaintiff ServiceMaster's Response thereto, and for the reasons set forth in the foregoing Memorandum, it is hereby ORDERED that:
1. Defendant FTR's Motion for Summary Judgment is GRANTED for Count I. Counts II, III and IV are DISMISSED WITHOUT PREJUDICE pursuant to 28 U.S.C. § 1367(a).
2. Judgment is entered in favor of Defendant FTR and against Plaintiff ServiceMaster as to Count I.
3. Defendant FTR's Motion for Sanctions is DENIED.
BY THE COURT:
JAMES McGIRR KELLY, J.