Business Guides, Inc. v. Chromatic Communications Enterprises, Inc.

In this case we decide whether Rule 11 of the Federal Rules of Civil Procedure imposes an objective standard of reasonable inquiry on represented parties who sign pleadings, motions, or other papers.

I

Business Guides, Inc., a subsidiary of a leading publisher of trade magazines and journals, publishes directories for 18 specialized areas of retail trade. In an effort to protect its directories against copying, Business Guides deliberately plants in them bits of false information, known as “seeds.” Some seeds consist of minor alterations in otherwise accurate listings — transposed numbers in an…