Peterson v. BMI Refractories

Decision Date21 October 1997
Docket NumberNo. 96-6747,96-6747
Citation124 F.3d 1386
Parties11 Fla. L. Weekly Fed. C 690 Jimmie L. PETERSON; Alonzo Reese, Plaintiffs-Appellants, v. BMI REFRACTORIES, Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Samuel Fisher, Elizabeth Evans Courtney, Birmingham, AL, for Plaintiffs-Appellants.

John J. Coleman, III, Marcel L. Debruge, Balch & Bingham, Birmingham, AL, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before CARNES, Circuit Judge, and HENDERSON and GIBSON *, Senior Circuit Judges.

CARNES, Circuit Judge:

This race discrimination case started out in state court over two years ago. After that much time, this appeal should be about the merits of the plaintiffs' lawsuit, and the litigation process should be winding to a close. Unfortunately, this appeal has nothing to do with the merits of the plaintiffs' lawsuit, which has yet to be tried. Instead, this appeal involves these three preliminary issues: (1) whether the district court had removal jurisdiction over this case, which was removed to it from a state court located in another district, which is contrary to the geographic requirements of 28 U.S.C. § 1441(a); (2) whether the Anti-Injunction Act, 28 U.S.C. § 2283, prohibited the district court (assuming it had jurisdiction) from enjoining further state court proceedings in the removed case; and (3) whether the district court erred by sanctioning plaintiffs' counsel under 28 U.S.C. § 1927 for unreasonable and vexatious multiplication of the proceedings.

We hold that failure to comply with the geographic requirements of 28 U.S.C. § 1441(a) is a procedural defect that does not deprive a district court of subject matter jurisdiction in a removed case. We further hold that the Anti-Injunction Act does not prohibit a federal district court from enjoining state court proceedings in a removed case, because such an injunction is "necessary in aid of its jurisdiction," within the meaning of 28 U.S.C. § 2283. Finally, we hold that despite lamentable lapses in professional courtesy, plaintiffs' counsel did not unreasonably and vexatiously multiply the proceedings in this case within the meaning of 28 U.S.C. § 1927, which is a prerequisite for the imposition of sanctions under that provision.

I. BACKGROUND

This case has a tortured history, which the nature of the issues obliges us to discuss in some detail. That history includes proceedings in two state courts as well as the United States District Court for the Northern District of Alabama. The district court's opinion, published at 938 F.Supp. 767 (N.D.Ala.1996), organizes that history by forum. Because we draw the facts in this section primarily from the district court's opinion, we will adhere to its organizational format. However, we caution that the events in the three forums overlapped each other on occasion, and those overlaps go to the heart of the issues in this appeal. For that reason, we have appended a chronological summary of the events at the end of this opinion for the convenience of the reader.

A. PROCEEDINGS IN JEFFERSON COUNTY CIRCUIT COURT

This case began when Jimmie Peterson and Alonzo Reese filed a complaint against BMI Refractories in the Circuit Court of Jefferson County on February 2, 1995. The plaintiffs' complaint alleged race discrimination claims under Title VII, together with various state law claims. The plaintiffs' attorney, Samuel Fisher, listed BMI's address as "268 Oxmoor Court, Birmingham, AL 35209," and service was attempted at that address.

On April 12, 1995, Fisher received notice from the Jefferson County Circuit Clerk that the summons and complaint had been returned "not found." Thereafter, Fisher caused an alias summons to be issued to an address in Montgomery, where Fisher believed BMI's registered agent was in business. However, that summons was returned unserved on April 28, 1995, with the notation "BMIR Inc. Not agent." On June 9, 1995, the Jefferson County Circuit Court dismissed the case without prejudice for failure of service.

On June 28, 1995, Fisher moved the Jefferson County Circuit Court to reinstate the lawsuit and to appoint a special process server. On July 31, 1995, the court granted those motions. Three days later, on August 3, 1995, the summons and complaint were properly served on BMI in Jefferson County, Alabama. One week after that, on August 10, 1995, the case was transferred to Montgomery County Circuit Court. 1

On September 1, 1995--after the case had been transferred to Montgomery County Circuit Court--BMI filed a notice of removal in federal court. BMI filed that notice in the Northern District of Alabama, which embraces Jefferson County, but not Montgomery County, which lies in the Middle District. On or about the same day it filed its notice of removal in the Northern District, BMI filed a document entitled "Notification of Filing Notice of Removal" with the Clerk of the Jefferson County Circuit Court. 2 That document stated that BMI had filed a notice of removal in federal court.

B. PROCEEDINGS IN MONTGOMERY COUNTY CIRCUIT COURT

On October 2, 1995, Montgomery County Circuit Judge Sally Greenhaw wrote Fisher, stating: "The Summons and Complaint have not been served in the above styled case. The Plaintiff shall respond within ten days of the court's letter, or the case will be dismissed." The court also sent a copy of that letter to "P.O. Box 1667, Mont. 36102, 832-4950," but the record does not show the source of that address or the intended addressee. In any event, it appears that BMI did not receive a copy. Ten days later, Fisher responded with his own letter to the Montgomery County Circuit Court saying: "This will confirm our telephone conversation of this date with the Clerk in which we advised that the above referenced case has been removed to Federal Court by the Defendants." Apparently, Fisher did not send a copy of his letter to counsel for BMI.

Despite Fisher's letter informing the court that the case had been removed, Montgomery County Circuit Judge Eugene Reese (who had taken over the case from Judge Greenhaw) entered an order on February 22, 1996, setting the case for a "status/scheduling" conference to be held on March 20, 1996. A copy of that order was sent to "BMI Refractories, 220 Greenleaf Dr., Montgomery, AL 36106," but the source of that address is unclear. 3 Fisher's copy of the order bears a handwritten note stating: "Peg [Fisher's secretary] called & talked w/law clerk & she said disregard the notice." Consistent with that note, the conference was never held.

On March 12, 1996, "Vonda McLeod," apparently Judge Reese's secretary or law clerk, sent a fax to Fisher's office that stated: "Peggy--this case is currently on our pending list here in Mtgy. Circuit Court. We have no notice of removal in our office, the Circuit Clerks [sic] office or the court file. Please advise!" According to Fisher: "After some back and forth between my office and Montgomery, the message I eventually received from the circuit court was that no evidence of removal existed and the case would be dismissed for lack of prosecution unless I filed a motion for default judgment." BMI has never disputed that Fisher received that message from the Montgomery County Circuit Court.

On March 14, 1996, the plaintiffs filed a form motion for default judgment, signed by Fisher, which stated: "[T]he defendant was served with a copy of the Statement of Claim or Complaint on (date) August 3, 1995 .... [and] has failed to answer or otherwise defend itself against the plaintiff's claim in this case (although a defective removal was attempted on September 1, 1995)." The Alabama Rules of Civil Procedure do not require service of a default motion on a party who has failed to appear, see Ala. R. Civ. P. 5(a), and no courtesy copy of Fisher's motion was served on counsel for BMI, as professional courtesy dictated even if court rules did not.

On April 10, Fisher's secretary sent a letter to the Montgomery Circuit Court stating: "Pursuant to my telephone conversation with Vonda in Judge Reese's office, please find enclosed a copy of the summons in the above referenced case, showing that service was perfected on August 3, 1995. It is my understanding that your office does not have a copy of this summons." About thirty days later, on May 9, 1996, Judge Reese entered a default judgment against BMI and scheduled a damages hearing for May 29, 1996. A copy of the judgment was sent to "BMI Refractories, 268 Oxmoor Court, Birmingham, AL 35209." Although that was not BMI's current address, the document eventually was forwarded to the correct address.

C. PROCEEDINGS IN FEDERAL DISTRICT COURT

After BMI filed its notice of removal on September 1, 1995, the parties engaged in extensive litigation in United States District Court for the Northern District of Alabama. On December 28, 1996, the district court granted BMI judgment on the pleadings as to one claim, and directed the entry of final judgment as to that claim pursuant to Federal Rule of Civil Procedure 54(b). The plaintiffs appealed, and this Court reversed and remanded on August 23, 1996.

Meanwhile, the district court referred the case to mediation on April 3, 1996. At this point, the plaintiffs had (unbeknown to BMI) moved the Montgomery County Circuit Court for entry of a default judgment. Efforts to mediate the case were unsuccessful, and a federal court trial date was set for November 12, 1996.

On May 22, 1996, BMI filed a moved the district court to stay all further proceedings in the Montgomery County Circuit Court, alleging that it had "discovered [Judge Reese's] May 9, 1996, order by accident when one copy was forwarded to it from a former Jefferson County Address." BMI also asked the court to award it the fees, expenses, and costs associated with its prosecution of its motion for a stay. The district court held a hearing on that motion the very next day. Thereafter,...

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