Boyer v. BNSF Ry. Co.

Decision Date01 June 2016
Docket NumberNos. 14–3131 & 14–3182,s. 14–3131 & 14–3182
Citation824 F.3d 694
PartiesBeatrice Boyer, et al., Plaintiffs–Appellants, Cross–Appellees, v. BNSF Railway Company, doing business as Burlington Northern and Santa Fe Railway Company, Defendant–Appellee Cross–Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Christopher D. Stombaugh, Keenan Law Firm, 148 Nassau Street, NW, Atlanta, GA 30303, for PlaintiffsAppellants.

Barry Deacon, Deacon Law Firm, P.O. Box 3000, Jonesboro, AR 72403, Timothy R. Thornton, Jonathan P. Schmidt, Briggs & Morgan, P.A., 80 S. Eighth Street, 2200 IDS Center, Minneapolis, MN 55402–0000, for DefendantAppellee.

Before Bauer, Rovner, and Williams, Circuit Judges.

Rovner, Circuit Judge.

These consolidated appeals are successive to our decision in Irish v. BNSF Ry. Co. , 674 F.3d 710 (7th Cir. 2012). See 7th Cir. Internal Operating Proc. 6 (b). After we concluded that the plaintiffs-appellants in Irish had forfeited the argument they presented on appeal, the plaintiffs' counsel assembled a (mostly) new group of plaintiffs and refiled the same litigation in Arkansas state court in order to pursue that argument. The new suit was removed to federal court and transferred to the Western District of Wisconsin, where the district court dismissed the complaint for failure to state a claim on which relief could be granted. The defendant asked the court to sanction the plaintiffs' counsel pursuant to Federal Rule of Civil Procedure 11 and/or 28 U.S.C. § 1927 for pursuing frivolous claims and engaging in abusive litigation tactics, but the court denied that request, reasoning that although the plaintiffs' claims were all but foreclosed by our decision in Irish, they were not frivolous. The parties have cross-appealed. We affirm the dismissal of the complaint but reverse the denial of sanctions. We believe the record makes clear that the plaintiffs' counsel unreasonably and vexatiously multiplied the proceedings by filing suit in Arkansas, which had absolutely no connection to this case. Pursuant to section 1927, the defendant is entitled to its fees and costs for removing the case to federal court and successfully seeking its transfer to the Western District of Wisconsin.

I.

Like Irish, this suit arises out of a July 2007 flood in Bagley, Wisconsin. Bagley is a small town situated in a valley along the eastern bank of the Mississippi River. Bluffs flank the river valley, and those bluffs are transected by ravines that drain the upper watershed into the river. A 500-year rain that occurred on July 17 and 18, 2007, sent torrents of water down those ravines, among them the Glass Hollow Drain. A Burlington Northern and Santa Fe Railway Company (BNSF) bridge crosses over the Glass Hollow Drain near Bagley. Large amounts of debris swept along by the rainwater clogged the trestle undergirding the railway bridge, causing the water runoff to back up and inundate Bagley. Most of the town's 300 to 400 homes were flooded.

Kenneth Irish and three other Bagley residents filed a class-action suit against BNSF and two of its supervisory employees in Wisconsin state court in 2008. The suit blamed the flood of Bagley on faulty design and maintenance of the trestle by BNSF and its predecessors and sought damages based on theories of negligence and nuisance. BNSF removed the case to federal court where, after some initial procedural skirmishes, the district court dismissed the complaint as to BNSF pursuant to Federal Rule of Civil Procedure 12(b)(6). In relevant part, the court held that Wis. Stat. § 88.87 provides the exclusive remedy when the negligent design and maintenance of a railroad grade has caused an obstruction to a waterway or drainage course and resulted in flooding. That statute authorizes a person injured by such flooding to sue in inverse condemnation or for other equitable relief, but not for money damages; moreover, the statute requires the injured party to first file a claim with the railroad company within three years of the flood. § 88.87(2)(c). Because the plaintiffs had never filed such a claim with BNSF, their suit was barred; and, in any event, the statute foreclosed their claims for money damages.

The Irish plaintiffs appealed, and we affirmed. We began by noting that [o]n its face, the statute would appear to bar the very suit for damages that the plaintiffs are pursuing.” 674 F.3d at 713. According to the plaintiffs, it was BNSF's alleged negligence in maintaining the trestle that caused debris to accumulate and block the natural drainage of water through the Glass Hollow Drain, resulting in the Bagley flood. Wisconsin cases, including, Pruim v. Town of Ashford , 168 Wis.2d 114, 483 N.W.2d 242, 244–45 (Wis. Ct. App. 1992), and Kohlbeck v. Reliance Constr. Co. , 256 Wis.2d 235, 647 N.W.2d 277, 280 (Wis. Ct. App. 2002), indicated that the Wisconsin legislature meant to limit the types of claims that could be brought against governmental entities and, in this case, railroads, whose negligent construction and/or maintenance of roadways and railroad grades resulted in flood damage. Irish , 674 F.3d at 713–14. The district court's holding that the statute controlled the plaintiffs' claims—and foreclosed their request for damages—was consistent with these cases. Id. at 714.

The plaintiffs contended on appeal that section 88.87 had a narrower scope than the courts had attributed to it, one that did not reach their claims for damages; but we found it too late in the day for them to make that argument. The plaintiffs' theory was that the statute was meant only to address construction defects that would give rise to a continuing nuisance—i.e., repeated flooding—rather than shortcomings in maintenance; and the Bagley flood, they argued, was the result of faulty maintenance of the BNSF trestle as opposed to its design. We had some concern that the plaintiffs were making a belated effort to recast their complaint (which was rife with references to the allegedly faulty design and construction of the trestle), but the dispositive point, in our view, was that they had not developed this argument in the district court. The plaintiffs' central argument below had been that section 88.87 was a governmental immunity statute that applied to private parties only when they were affiliated with government entities, which BNSF was not. 674 F.3d at 714–15. Only in a few isolated sentences in their memorandum opposing the motion to dismiss had the plaintiffs hinted at a distinction between design and construction flaws on the one hand and maintenance defects on the other, and this was not enough to have put the district court on notice of the argument they were making on appeal. Id. at 715. The argument was therefore forfeited, and as “this [was] not the rare civil case in which the forfeiture might be overlooked,” there was no need to reach its merits. Id. at 716. The dismissal of the plaintiffs' complaint was affirmed. Id.

Our opinion in Irish opened with this observation: “This is a lawsuit in search of a viable theory of recovery.” Id. at 711. And in discussing the forfeiture of the plaintiffs' appellate argument, we elaborated upon our opening remark:

The short history of this case reflects the ever-shifting nature of the plaintiffs' arguments. When the case was removed to federal court, the plaintiffs dropped their class allegations and disavowed any federal claims, in the hope that the case would be returned to state court. In their amended complaint, the plaintiffs cited section 88.87 as support for their claims, contending that the defendants had violated the obligations imposed by that statute. R. 58 ¶¶ 33(c) and (d), 35, but when Burlington Northern moved to dismiss the complaint on the ground that the relief the plaintiffs were seeking was not authorized, the plaintiffs turned around and contended that the statute did not apply to their claims. See Irish v. BNSF Ry. Co., 2010 WL 4293578, at *4 (Plaintiffs' position is somewhat surprising in light of the fact that they allege in their amended complaint that defendants violated Wis. Stat. § 88.87.”). When the district court, after dismissing the corporate defendant [ ] from the case, solicited supplemental briefing as to the appropriate disposition of the individual defendants, the plaintiffs sought leave to amend their complaint a second time in order to raise the very sorts of federal claims (among others) that they had disavowed when they filed their first amended complaint. They also attempted to make other arguments that the district court appropriately characterized as untimely. And on appeal, as we have discussed, they have attempted to challenge the dismissal of their suit on the basis of an argument that they never developed below. As Judge Crabb so aptly observed, “Although the losses plaintiffs sustained in the 2007 flood are unfortunate, even a sympathetic plaintiff is not entitled to an endless number of chances to reinvent this lawsuit until he discovers a version that leads to victory.” R. 89 at 3.

674 F.3d at 715–16.

These comments fell on deaf ears. Sixteen months after we affirmed the dismissal of the Irish suit, and shortly before the pertinent Wisconsin statute of limitations ran, attorney Christopher D. Stombaugh, one of the lawyers who represented the plaintiffs in the Irish appeal,1 sought a new venue in which to continue the pursuit of relief for the residents of Bagley: in conjunction with local counsel, he filed a virtually identical lawsuit on behalf of a (mostly) different set of current and former Bagley residents, led by Beatrice Boyer, in Arkansas state court. The Boyer complaint expressly invoked Wisconsin law as controlling, and set forth the same four claims under Wisconsin law that had been asserted in the Irish litigation: negligence per se, common law negligence, negligent creation and maintenance of a nuisance, and intentional nuisance. The factual allegations set forth in support of those claims were virtually...

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