Cherokee Exp., Inc. v. Cherokee Exp., Inc.
| Decision Date | 24 January 1991 |
| Docket Number | No. 90-1233,90-1233 |
| Citation | 924 F.2d 603 |
| Parties | CHEROKEE EXPRESS, INCORPORATED, a Michigan corporation, Plaintiff-Appellee, v. CHEROKEE EXPRESS, INCORPORATED, a Pennsylvania corporation; A.R.L. Incorporated, a Pennsylvania corporation, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Robert L. Mercado, Robert I. Hunter, Eric J. Henning, Dean & Fulkerson, Troy, Rex Eames, John W. Bryant (argued), Neill T. Riddell, Eames, Wilcox, Mastej & Bryant, Detroit, Mich., for plaintiff-appellee.
John D. Mabley (argued), John M. Ketcham, Hill, Lewis, Adams, Goodrich & Tait, Detroit, Mich., for defendants-appellants.
Before NELSON, Circuit Judge; PECK and LIVELY, Senior Circuit Judges.
The defendants, found in contempt by the district court for violating the terms of a preliminary injunction, attempt to avoid the consequences of their conduct by questioning the jurisdiction of the district court in the injunction proceeding. The defendants failed to file a timely appeal from the order granting the preliminary injunction. Although the present appeal is timely insofar as it relates to the order finding the defendants in contempt and awarding attorney fees to the plaintiff, the defendants have not appealed the merits of the contempt order. Instead, they have sought to use this appeal from that order as a springboard for an attack on the injunction that they failed to appeal.
The plaintiff, Cherokee Express, Inc., a Michigan corporation, is a motor contract carrier that operates under a certificate issued by the Interstate Commerce Commission (ICC). The defendant, Cherokee Express, Inc., a Pennsylvania corporation, claims that it is a subsidiary of the defendant A.R.L., Inc., a Pennsylvania corporation with an ICC certificate to operate as a motor common carrier. The defendant Cherokee does not hold a certificate from the ICC authorizing any motor carrier operations. It operated as a motor carrier of general commodities, however, claiming the right to do so under the ICC certificate issued to A.R.L.
Section 10921 of the Interstate Commerce Act (the Act), 49 U.S.C. Sec. 10921, requires a person to obtain a certificate of authorization as a condition for providing any transportation or service subject to the jurisdiction of the ICC. The plaintiff sued the defendants under the Act seeking to enjoin the defendant Cherokee from operating without a certificate. The plaintiff based the claim that is involved in this appeal on 49 U.S.C. Sec. 11708(a), which creates a private right of action on behalf of a person injured by another person's clear violation of various sections of the Act, including Sec. 10921. Section 11708(a) provides:
Sec. 11708. Private enforcement: motor carrier and household goods freight forwarder licensing
(a) If a person provides transportation by motor vehicle or service of a household goods freight forwarder in clear violation of section 10921-10924, 10927, 10930-10932, or 11323 of this title, a person injured by the transportation or service may bring a civil action to enforce any such section. In a civil action under this subsection, trial is in the judicial district in which the person who violated that section operates.
In its complaint, filed in November 1988, the plaintiff alleged that the defendant Cherokee engaged in the transportation of general commodity freight in clear violation of the Act and that this unauthorized operation "has caused and will continue to cause injury to Plaintiff through diversion of traffic that Plaintiff otherwise would handle." The complaint sought a preliminary and permanent injunction against further violations of the Act by the defendants and against the defendant Cherokee's further soliciting of business under the trade name "Cherokee Express" or any imitation thereof.
The district court held an evidentiary hearing on a motion for preliminary injunction and found that the defendant Cherokee was not subject to the control of A.R.L. Thus, the court determined that the defendant Cherokee was operating without authority from the ICC and in clear violation of Sec. 10921. The court also found that the defendant Cherokee operated in the same market area as the plaintiff, seeking to compete with the plaintiff and actively soliciting business in the geographic area where the plaintiff operates. The defendant Cherokee stipulated that it did not have an ICC certificate and that it actively solicited business from a major customer of the plaintiff, General Motors Corporation, under the trade name "Cherokee Express, Inc."
The district court entered a preliminary injunction as requested by the plaintiff on December 19, 1988, and denied the defendants' motion for reconsideration on March 6, 1989.
On April 3, 1989, almost four months after entry of the preliminary injunction, the defendants filed a notice of appeal from the order "denying Defendants' Emergency Motion to Reconsider or Suspend Injunction entered in this action on March 6, 1989." This court determined that the notice of appeal was not timely and dismissed the appeal, stating in its unpublished order:
An appeal of right under [28 U.S.C.] Sec. 1292(a)(1) must be taken from the order granting or denying injunctive relief, not from a motion for reconsideration. F.W. Kerr Chemical Co. v. Crandell Associate, Inc., 815 F.2d 426, 428-299 [sic] (6th Cir.1987) (per curiam). Accordingly, the notice of appeal filed April 3, 1989 is untimely because it was filed more than 30 days from the date of the appealable order, and does not confer jurisdiction on this Court. 28 U.S.C. Sec. 2107; Fed.R.App.P. 4(a)(1).
Cherokee Express, Inc. v. Cherokee Express, Inc., 872 F.2d 1024. (6th Cir.1989).
The plaintiff moved the district court to hold the defendants in contempt for continuing violations of the preliminary injunction. At the contempt hearing the defendants sought to avoid sanctions by asserting that the district court lacked subject matter jurisdiction over the plaintiff's Sec. 11708 claim, and that consequently the preliminary injunction was unlawfully issued. The basis for this argument was the claim that the plaintiff was not a "person injured" by the defendants' unauthorized activities, and that Sec. 11708(a)'s requirement that a private action be brought by a "person injured" created a limitation on the district court's jurisdiction.
Following an evidentiary hearing the district court issued a memorandum opinion and order in which the court found that the plaintiff had demonstrated sufficient injury to satisfy the contested requirement of Sec. 11708(a). Accordingly, the district court found the defendants in contempt in a memorandum opinion and order dated July 13, 1989, and filed July 14. The court ordered each defendant to pay $2500 in contempt fines and held them responsible for the plaintiff's attorney fees incurred in the action subsequent to issuance of the preliminary injunction. Following determination of the amount and award of attorney fees the defendants filed the present appeal from the contempt judgment and the order awarding attorney fees.
This appeal does not challenge the merits of the July 13, 1989, judgment of contempt or the amount of the attorney fees awarded by the district court. Rather, the defendants attempt to relitigate the legality of the injunction issued by the district court on December 19, 1988. In their opening brief in this Court the defendants presented a single issue, stated as follows:
Did the District Court err in finding that Appellee was injured within the meaning of Sec. 11708 of the Interstate Commerce Act, 49 U.S.C. Sec. 11708 (1982 & Supp. IV 1986), thereby giving Appellee standing to bring Count I of its complaint pursuant to that section?
Although the defendants initially characterized the issue as one of "standing," the argument portion of their brief contends that the "person injured" requirement of Sec. 11708(a) is a jurisdictional limitation on the district court's power to entertain a private cause of action for a violation of Sec. 10921.
The plaintiff responded that the injury requirement of Sec. 11708(a) is not jurisdictional. The legislative history discloses, according to the plaintiff, that Congress intended to create only one jurisdictional limitation on the right to bring a private action under Sec. 11708(a)--that there be a "clear violation" of one or more enumerated sections of the Act. In the alternative, the plaintiff argues that if the "person injured" requirement is jurisdictional, it pled and proved sufficient facts to sustain the district court's jurisdiction.
The present appeal is limited to the finding that the defendants are in contempt for violation of the preliminary injunction, the fines imposed for contempt, and the award of the attorney fees. The defendants do not raise any issues, however, with respect to these rulings of the district court. Rather, they are attempting to attack the validity of the underlying injunction collaterally by questioning the jurisdiction of the district court to issue the injunction. As we have noted, this court dismissed an earlier, untimely appeal by the defendants in which they sought to have the preliminary injunction set aside. Under general res judicata principles, the judgment imposing the preliminary injunction became final with the dismissal of that untimely appeal, and any later attempt to contest its validity would be barred. Nevertheless, "in order that the doctrine of res judicata apply, the court whose judgment is asserted as an adjudication, must have been one of competent jurisdiction." Ellerd v. Southern Pac. R.R. Co., 241 F.2d 541, 545 (7th Cir.1957).
The general rule is that even though a judgment of contempt and an underlying injunction whose violation is the basis of the contempt finding are related, nevertheless each is a separate judgment and each must be appealed within the...
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