Also known as: reasonable inquiry under the circumstances · reasonable inquiry
Written by attorneys · grounded in primary & secondary sources — see below
A standard of investigation that requires a person to gather and consider information sufficient to support a certification, determination, or decision. The depth and scope of the investigation are measured by the facts known at the time, the stakes involved, and the practical ability to obtain additional information.
Select any source to read its text and confirm it supports the definition.
Shareholders of Cedar Mutual allege that directors funneled funds to an affiliate. The board appoints a committee of independent directors. The committee retains counsel and an actuary, interviews witnesses, reviews regulatory files, and concludes that continued litigation would harm policyholder confidence. The court grants the motion to dismiss because the committee reached its conclusion after a reasonable inquiry.
Liberty Pharmaceuticals faces document requests in a whistleblower suit. Counsel interviews project managers and searches active email systems but learns that early trial data may sit on archived servers. Counsel declines to contact IT about restoring the archives and certifies that no further responsive materials exist. The court finds the certification unsupported because counsel failed to pursue a known potential source.
River Therapeutics receives requests to admit the location of archived trial data. Counsel states that the company lacks knowledge after checking only active systems. The answer explains that counsel interviewed employees and searched current servers but could not locate the archives. The court accepts the answer because the denial rests on a reasonable inquiry into accessible information.
A mineral owner learns that a state statute may extinguish unused interests after a period of nonproduction. The owner conducts a title search and contacts local record offices before filing suit. The court upholds the statute because the owner had notice and a reasonable opportunity to inquire into the status of the interests.
An insurer faces a proposed class action under state law. Counsel reviews the complaint and relevant policy files before filing an answer that contests the class allegations. The court finds the objection proper because counsel's position was formed after examining the available facts and governing procedural rules.
A litigant files numerous motions that delay trial and increase costs. Opposing counsel gathers docket entries, correspondence, and hearing transcripts before moving for sanctions. The court imposes sanctions because the motion rests on a documented record developed through reasonable inquiry into the pattern of conduct.
Counsel must take investigative steps that are reasonable in light of the information available at the time, the nature of the claims, and the practical burdens and costs of additional investigation. When counsel learns of a potential source of responsive documents during interviews, a reasonable inquiry ordinarily requires at least preliminary steps to determine whether that source can be examined.
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…have upheld Rules authorizing imposition of sanctions upon those who file frivolous appeals, or who sign court papers without a reasonable inquiry into the facts asserted. Each of these Rules had some practical effect on the parties’ rights, but each undeniably regulated only the process for enforcing those rights; none altered the…
…for conduct which merely fails to meet a reasonableness standard. Rule 11, for example, imposes an objective standard of
…has read the pleading, motion, or other paper; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry
No. The statute requires only that the committee act in good faith after a reasonable inquiry. A committee that interviews witnesses, reviews regulatory correspondence, and weighs litigation risks against corporate interests satisfies the standard even if it does not calculate damages to the last dollar.
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The party must state that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny. A bare assertion of ignorance without any description of the inquiry performed does not comply with the rule.
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When the plaintiff alleges with particularity that a majority of the board was not qualified at the time of the determination, the corporation must prove that the determination was made in good faith after a reasonable inquiry. General allegations of conflict are ordinarily insufficient to shift or defeat the burden.
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No. The rule requires an inquiry reasonable under the circumstances. Counsel may rely on client representations and need not pursue remote or costly sources when the facts known at the time do not indicate that further investigation would be productive.
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