The Colorado Supreme Court, in CenturyLink, Inc. v. Houser, held that courts must apply a flexible, context-specific approach when assessing whether attorneys have satisfied their pre-filing obligations under C.R.C.P. 11(a). The Court rejected a categorical rule requiring counsel to independently verify allegations, such as by personally interviewing witnesses, before including them in a complaint.
The case stems from a shareholder suit alleging material misstatements by CenturyLink. Lower courts dismissed the complaint in part because plaintiff’s counsel relied on allegations drawn from other litigation without directly contacting the sources. The Supreme Court found that approach imposed an overly rigid interpretation of Rule 11.
Emphasizing that Rule 11 requires a “reasonable inquiry under the circumstances,” the Court explained attorneys may, depending on context, rely on public filings and other available materials. The Court reversed to the extent the dismissal rested on an improper Rule 11 standard and remanded for further proceedings. The decision underscores that Rule 11 remains an important gatekeeping mechanism without mandating specific investigative steps.