Sterne, Agee & Leach, Inc. v. U.S. Bank Nat'l Ass'n (Ex parte U.S. Bank Nat'l Ass'n)

• Decision Date: 07 February 2014
• Docket Number: 1120904.
• Citation: 148 So.3d 1060
• Parties: Ex parte U.S. BANK NATIONAL ASSOCIATION and U.S. Bancorp. (In re Sterne, Agee & Leach, Inc. v. U.S. Bank National Association and U.S. Bancorp).
• Court: Alabama Supreme Court

148 So.3d 1060

Ex parte U.S. BANK NATIONAL ASSOCIATION and U.S. Bancorp.

(In re Sterne, Agee & Leach, Inc.

v.U.S. Bank National Association and U.S. Bancorp).

1120904.

Supreme Court of Alabama.

Feb. 7, 2014.

Larry B. Childs and Christopher A. Driskill of Waller Lansden Dortch & Davis, LLP, Birmingham, for petitioners.

J. Michael Rediker, Peter J. Tepley, Reginald L. Jeter, and Benjamin M. Slaughter of Haskell Slaughter Young & Rediker, LLC, Birmingham, for respondent.

Opinion

BOLIN, Justice.

U.S. Bank National Association and U.S. Bancorp (hereinafter collectively referred to as “U.S. Bank”) seek a writ of mandamus ordering the Jefferson Circuit Court to dismiss the malicious-prosecution case filed against them by Sterne, Agee & Leach, Inc. (“Sterne Agee”), that arose out of a lawsuit prosecuted by U.S. Bank entirely in the State of Washington.

Facts and Procedural History

In 2002, Sterne Agee, a Delaware corporation with headquarters in Alabama and offices in Seattle, Washington, acted as the underwriter in Washington for securities offered by a Washington business entity. Under the Washington State Securities Act, Sterne Agee was a “seller” of the securities. In 2004, in federal district court in Washington, U.S. Bank sued Sterne Agee, among others, alleging that the defendants had violated the Washington State Securities Act through a series of material omissions in the securities offering. U.S. Bank obtained default judgments or entered into settlement agreements with all the defendants except Sterne Agee. In 2006, U.S. Bank's claims against Sterne Agee proceeded to trial. The trial court granted Sterne Agee's motion for a judgment as a matter of law. U.S. Bank appealed, and the United States Court of Appeals for the Ninth Circuit vacated the federal district court's order and remanded the case to the federal district court. Following a second trial in 2009, the federal district court entered a judgment in favor of Sterne Agee. U.S. Bank appealed, and the Court of Appeals for the Ninth Circuit affirmed the judgment in 2011.

On July 1, 2011, Sterne Agee sued U.S. Bank in the Jefferson Circuit Court, alleging malicious prosecution arising out of the lawsuit prosecuted by U.S. Bank in Washington. The case was removed to the United States District Court for the Northern District of Alabama, which subsequently remanded the case to Jefferson Circuit Court. On January 31, 2013, U.S. Bank filed a motion to dismiss, arguing that under Alabama's choice-of-law rules applicable when two or more jurisdictions have an interest in the outcome of a dispute, Alabama would apply the law of the state where the injury occurred. Because this is a malicious-prosecution action, U.S. Bank argued, the injury was forcing U.S. Bank to defend an allegedly malicious securities action in Washington state and the injury thus occurred in Washington state. On April 11, 2013, the circuit court denied U.S. Bank's motion to dismiss. On April 16, 2013, U.S. Bank moved the circuit court to certify its order for a permissive interlocutory appeal pursuant to Rule 5, Ala. R.App. P. On April 16, 2013, the circuit court denied the motion. On May 1, 2013, U.S. Bank petitioned this Court for a writ of mandamus.

Standard of Review

U.S. Bank sought to have the circuit court certify the conflict-of-laws issue for a permissive appeal pursuant to Rule 5, Ala. R.App. P. Rule 5 allows for an appeal of an interlocutory order involving a controlling issue of law as to which there is substantial ground for difference of opinion when an immediate appeal would materially advance termination of the litigation and would avoid protracted and expensive litigation. This Court has allowed permissive appeals to address conflict-of-laws situations where the trial court has certified the issue for permissive appeal under Rule 5. See, e.g., Precision Gear Co. v. Continental Motors, Inc., 135 So.3d 953 (Ala.2013) ; Fitts v. Minnesota Min. & Mfg. Co., 581 So.2d 819 (Ala.1991).

In the present case, the circuit court refused to certify the conflict-of-laws issue for a permissive appeal. We recognize that a certification allowing a party to seek a permissive appeal under Rule 5(a) is discretionary with the trial court. Ex parte Burch, 730 So.2d 143 (Ala.1999). In Ex parte Burch, we treated a mandamus petition addressed to a trial court's denial of a motion in limine as a petition seeking a permissive appeal. Even though the petitioner in Burch had not asked the trial court to certify the issue for permissive appeal, the transcripts from the hearing on the motion in limine revealed the trial court's belief that this Court's resolution of the motion in limine was important to materially advance the litigation. We note that here the trial court stayed the taking of depositions until this Court ruled on the mandamus petition.

In Ex parte Liberty National Life Insurance Co., 825 So.2d 758 (Ala.2002), three of the eight sitting Justices agreed that mandamus would lie to direct a trial court to certify an interlocutory order for permissive review when the trial court had refused to do so upon a showing that the court had clearly exceeded its discretion, a showing not apparent on the face of the complaint in that case. Two Justices wrote separately to explain their belief that a Rule 5 certification was entirely discretionary “in the [trial] judge's opinion,” Rule 5(a), Ala. R.App. P., and that an appellate court could not force a trial judge to hold any certain opinion. In his special writing, Justice Harwood wrote that appellate courts should resist asserting mandamus power to compel certification of an interlocutory order for permissive appeal. He noted that it would be a truly rare situation in which it would be appropriate for this Court to require certification of an issue of compelling importance, “comparable at the State level to ‘a controlling issue of national significance,’ ” and he cited Fernandez–Roque v. Smith, 671 F.2d 426, 431 (11th Cir.1982), a case that involved deportation, jurisdiction, and a foreign forum. 825 So.2d at 768–69 (Harwood, J., concurring specially). However, U.S. Bank is not seeking mandamus to compel the circuit court to certify the conflict-of-laws issue for permissive appeal. Instead, U.S. Bank seeks mandamus as its only remedy to review the conflict-of-laws issue raised in its motion to dismiss because its certification to seek permissive appeal has been denied and because this Court and the Court of Civil Appeals have granted mandamus review in cases involving conflict-of-laws issues. See Ex parte Exxon Corp., 725 So.2d 930 (Ala.1998), and Batey & Sanders, Inc. v. Dodd, 755 So.2d 581 (Ala.Civ.App.1999), respectively.

In Ex parte Exxon, supra, this Court held that a mandamus petition is an appropriate method by which to seek review of a trial court's misapplication of conflict-of-laws analysis in a class-action certification. Although the Court in Exxon recognized the well settled principle that mandamus is a proper tool by which to challenge certification of a class action, it also recognized that, in determining whether there is a common question of law for class-certification purposes, Alabama will determine the rights of an injured party according to the law of the state where the injury occurred.

In Batey & Sanders, supra, an employee sued his employer seeking worker's compensation benefits; he also sought damages for an alleged retaliatory discharge for seeking worker's compensation benefits. The employer had an office in Alabama and one in Georgia, and it hired the employee to work out of its Georgia office. The trial court originally dismissed the employee's retaliatory-discharge claim but later reinstated it. The employer petitioned this Court for a writ of mandamus, and we transferred the case to the Court of Civil Appeals. The Court of Civil Appeals held that under the rule of lex loci delicti the law of Georgia governed the employee's tort claim of retaliatory discharge because his employment had been terminated in Georgia. The Court of Civil Appeals stated that, “[b]ecause the wrong complained of occurred in Georgia, the law of Georgia applies,” and it granted the petition and ordered the trial court to dismiss the retaliatory-discharge claim because Georgia law does not recognize a cause of action for retaliatory discharge. 755 So.2d at 583.

This Court has held that a writ of mandamus is an appropriate means by which to review the following: subject-matter jurisdiction, Ex parte Johnson, 715 So.2d 783 (Ala.1998) ; standing as a component of subject-matter jurisdiction, Ex parte HealthSouth Corp., 974 So.2d 288 (Ala.2007) ; nonjusticiability as a component of subject-matter jurisdiction, Ex parte Valloze, 142 So.3d 504 (Ala.2013) ; personal jurisdiction, Ex parte Duck Boo Int'l Co., 985 So.2d 900 (Ala.2007) ; immunity, Ex parte Butts, 775 So.2d 173 (Ala.2000) ; failure to exercise due diligence in identifying, before expiration of the statute of limitations, a fictitiously named defendant as the party to be sued, Ex parte Chemical Lime of Alabama, Inc., 916 So.2d 594 (Ala.2005) ; a denial of a motion for a change of venue when venue has been challenged as improper, Ex parte Daniels, 941 So.2d 251 (Ala.2006) ; a denial of a motion to dismiss where the doctrine of forum non conveniens is applicable, Ex parte Kia Motors America, Inc., 881 So.2d 396 (Ala.2003) ; a refusal to enforce an outbound forum-selection clause when the issue is presented in a motion to dismiss, Ex parte Bad Toys Holdings, Inc., 958 So.2d 852 (Ala.2006) ; class certification, Ex parte Caremark RX, Inc., 956 So.2d 1117 (Ala.2006) ; a motion to dismiss an action based on abatement, Ex parte J.E. Estes Wood Co., 42 So.3d 104 (Ala.2010) ; the grant of a motion adding a real party in interest, Ex parte Tyson Foods, Inc., 146 So.3d 1041 (Ala.2013) ; the availability of a jury trial, Ex parte BancorpSouth Bank, 109 So.3d 163 (Ala.2012) ; a ruling on a motion to dismiss a counterclaim...