Ex Parte Bon Secours–st. Francis Xavier Hosp. Inc.

Decision Date01 August 2011
Docket NumberNo. 27016.,27016.
Citation393 S.C. 590,713 S.E.2d 624
CourtSouth Carolina Supreme Court
PartiesEx Parte BON SECOURS–ST. FRANCIS XAVIER HOSPITAL, INC., Julia P. Copeland, and James J. Hinchey, Appellants,In re Thomas R. Wieters, M.D., Respondent,v.Bon Secours–St. Francis Xavier Hospital, Inc., Allen P. Carroll, William B. Ellison, Jr., Jeffrey M. Deal, M.D., and Sharron C. Kelley, Defendants.

393 S.C. 590
713 S.E.2d 624

Ex Parte BON SECOURS–ST. FRANCIS XAVIER HOSPITAL, INC., Julia P. Copeland, and James J. Hinchey, Appellants,In re Thomas R. Wieters, M.D., Respondent,
v.
Bon Secours–St. Francis Xavier Hospital, Inc., Allen P. Carroll, William B. Ellison, Jr., Jeffrey M. Deal, M.D., and Sharron C. Kelley, Defendants.

No. 27016.

Supreme Court of South Carolina.

Heard March 2, 2011.Decided Aug. 1, 2011.


[713 S.E.2d 625]

Timothy W. Bouch and Amy E. Melvin, both of Leath, Bouch & Seekings, of Charleston, for Appellants.Gregg Meyers, of Charleston, for Respondent.Chief Justice TOAL.

[393 S.C. 592] Appellant Bon Secours–St. Francis Xavier Hospital (the Hospital) was a defendant at trial 1 in the underlying civil case. On March 2, 2010, the morning of the trial, Appellants removed the case to federal court for the second time and on the [393 S.C. 593] same grounds as the initial removal. The federal district court judge again remanded the case to state court. Judge Baxley, the state trial judge, imposed severe sanctions against the Appellants for the delay created by the second removal. Appellants appeal the order for sanctions. We affirm as modified.

Facts/Procedural Background

The underlying case is a state law civil suit for defamation and civil conspiracy. In 2002, Dr. Thomas R. Wieters was suspended from the medical staff by the Hospital for unprofessional, threatening, and disruptive behavior.

[713 S.E.2d 626]

In April 2003, the Hospital, pursuant to the Health Care Quality Improvement Act of 1986 (HCQIA) found at 42 U.S.C. §§ 11101–52, filed a report regarding Dr. Wieters's status with the National Practitioners Data Bank (NPDB).2 In November 2004, Dr. Wieters filed the underlying action in state court.3 The Hospital's Answer presented many affirmative defenses, including immunity under the HCQIA for any statement reported to the NPDB. In December 2004, Appellants removed the case to federal court for the first time under 28 U.S.C.A. § 1441(b),4 alleging Dr. Wieters's “right to relief necessarily depends upon resolution of a substantial question of federal law.” Dr. Wieters filed a Motion to Remand, asserting the Complaint alleged only state causes of action, and the Hospital could not defend its way into federal court. United States District Court Judge Weston Houck granted Dr. Wieters's motion to remand in January 2005. Five years of discovery and mediation ensued. In 2009, the case was assigned to the Charleston County State Court multi-week docket, and a [393 S.C. 594] detailed scheduling order was issued setting the trial date for March 8, 2010. In early 2010, the defendants at trial filed Motions for Summary Judgment, and the court denied the motions of the Hospital and four senior executives (defendants Carroll, Ellison, Deal, and Kelley).

The state court trial was re-scheduled to begin at 2 p.m. on March 2, 2010. In his February 8 Memo in Opposition to the Motions for Summary Judgment, Dr. Wieters disputed the Hospital's alleged immunity under the HCQIA, stating at several points that the HCQIA expressly allows defamation suits, and further referenced the HCQIA. The trial judge denied the Hospital's motion for summary judgment. On March 1, Dr. Wieters filed his Pretrial Brief and Proposed Jury Instructions, all of which again stated the HCQIA allows for suit when party knowingly makes false statements to the NPDB.

On the morning of March 2, 2010, three hours before the trial was scheduled to begin, Appellants removed the case to the federal district court for the second time, relying upon Dr. Wieters's Pretrial Brief filed the evening before. Appellants claimed the Pretrial Brief, along with the jury instructions and February 8 Memo in Opposition to the Motions for Summary Judgment, constituted “other paper” under 28 U.S.C. § 1446(b).5 This “other paper,” they claimed, indicated that Dr. Wieters was bringing a case under the HCQIA, thereby making removable a previously non-removable case. Thus, Appellants' argument went, Dr. Wieters presented a question of federal law by referencing the HCQIA, and removal then was proper. State Circuit Court Judge Baxley held a hearing at 2 p.m. on March 2 to question the Appellants regarding the removal and to make clear that if the case was remanded back to the jurisdiction of the state court, Appellants could expect sanctions for its misbehavior in waiting until the last minute before trial to remove the case again when Appellants had the [393 S.C. 595] information regarding Dr. Wieters's references to the HCQIA since early February and the grounds for removal were the same as in 2004.

As Judge Baxley expected, United States District Court Judge Houck remanded the case to state court on March 18, 2010. Judge Houck explained in his Order that the Complaint

[713 S.E.2d 627]

does not state a federal question, nor can one be inferred, and the Complaint has never been amended since his original remand order in 2005. Further, he stated whether the HCQIA creates a private right of action such that Dr. Wieters could bring a claim under the HCQIA has not been determined by the Fourth Circuit Court of Appeals, but that the First, Eighth, Tenth, and Eleventh Circuit Courts of Appeals have all determined that it does not. Judge Houck noted the Hospital raised federal law as a defense, and that is insufficient to create federal question jurisdiction under 28 U.S.C. § 1331 to justify removal. Judge Houck found that “[b]ecause a potential defense will not support federal question jurisdiction under Section 1331, it follows that federal question jurisdiction will not obtain by a mere reference to the HCQIA” in the filing relied upon by the Hospital.

As promised, Judge Baxley issued a Notice of Sanctions Hearing on March 24 for the Appellants to show cause as to why sanctions should not be ordered “for delaying the trial of this case by frivolously filing for removal to the Federal Court on the morning of the day this jury trial was to begin.” Dr. Wieters filed for Rule 11 sanctions the following day, requesting reasonable expenses and attorneys' fees. The sanctions hearing was held on April 19, 2010, and Judge Baxley issued his Order for Sanctions on July 1. In his Order, Judge Baxley found the Hospital's second removal was based upon the same grounds as the first removal, was without merit, and was interposed solely for delay. In ordering the sanctions, Judge Baxley considered the complexity of the multi-week docket and the difficulty and expense involved in cancelling one case and calling another. He appeared particularly perturbed by the inference that Appellants had been considering removal since Dr. Wieters filed his February 8 Memo in Opposition, and that the hassle and expense could have been avoided if [393 S.C. 596] Appellants had been upfront with the court regarding its intentions to remove a second time.6

The sanctions ordered totaled roughly $68,000.00 and are summarized as follows:

• $53,685.65 for lost income to Dr. Wieters, trial costs and fees, and reasonable attorneys' fees; 7

• $6,313.00 payable to the South Carolina Judicial Department to reimburse the cost of the salary and benefits of Judge Baxley, his law clerk, and the court reporter for being unable to operate the week for which trial was scheduled;

• $5,000.00 to the Access to Justice Commission for denying the public access to the court during the scheduled trial week, along with a letter to Executive Director Robin Wheeler explaining the reason for the payment;

• $2,550.00 to the Charleston County Clerk of Court to reimburse the cost of summoning and administering the jury panel for that week; and

• $50.00 to each juror for the inconvenience they suffered, along with a letter of apology and explanation.

Appellants appeal those sanctions beyond the lost income, costs, and fees, arguing a good faith removal to federal court cannot be the basis for sanctions, and that the trial judge abused his discretion in the order of sanctions.

Issues

Appellants present the following issues for review:

[393 S.C. 597] I. Can removal be the basis for an order of sanctions?II. Did the trial judge abuse his discretion in ordering sanctions?
Standard of Review

A trial court may impose sanctions on a party, a party's attorney, or both for

[713 S.E.2d 628]

filing a pleading, motion, or other paper to cause delay or when no good grounds exist to support the filing. See Rule 11, SCRCP; Runyon v. Wright, 322 S.C. 15, 19, 471 S.E.2d 160, 162 (1996). “A court imposing sanctions under Rule 11 should, in its order, describe the conduct determined to constitute a violation of the Rule and explain the basis for the sanction imposed.” Runyon, 322 S.C. at 19, 471 S.E.2d at 162. When reviewing judge's order of sanctions, the appellate court takes its own view of the facts. Father v. S.C. Dep't of Soc. Servs., 353 S.C. 254, 260–61, 578 S.E.2d 11, 14 (2003). “[W]here the appellate court agrees with the trial court's findings of fact, it reviews the decision to award sanctions, as well as the terms of those sanctions, under an abuse of discretion standard.” Id. at 261, 578 S.E.2d at 14. An abuse of discretion may be found if the trial court's conclusions lack reasonable factual support. Runyon, 322 S.C. at 19, 471 S.E.2d at 162.

Analysis
I. Ability to Sanction

Appellants argue they should not have been sanctioned for the second removal because it was done in good faith. We disagree.

Rule 11 states,

The signature of an attorney or party constitutes a certificate by him that he has read the pleading,...

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