Disciplinary Action Against Mooney, In re, 86-2499

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Citation: 841 F.2d 1003
• Docket Number: No. 86-2499,86-2499
• Parties: In re Disciplinary Action Against Paul J. MOONEY, et al., Respondent. ROCKWELL INTERNATIONAL CREDIT CORPORATION, a Delaware corporation, Plaintiff/Appellant, v. UNITED STATES AIRCRAFT INSURANCE GROUP, an insurance company, Defendant/Appellee.
• Decision Date: 15 March 1988

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841 F.2d 1003 10 Fed.R.Serv.3d 778 In re Disciplinary Action Against Paul J. MOONEY, et al.,
Respondent.
ROCKWELL INTERNATIONAL CREDIT CORPORATION, a Delaware
corporation, Plaintiff/Appellant,
v.
UNITED STATES AIRCRAFT INSURANCE GROUP, an insurance
company, Defendant/Appellee. No. 86-2499. United States Court of Appeals,
Ninth Circuit. March 15, 1988.

Before HUG, NELSON and NOONAN, Circuit Judges.

ORDER

This case arises out of Rockwell International Credit Corp. v. United States Aircraft Insurance Group, 823 F.2d 302 (9th Cir.1987). In that case the court on its motion raised the question of jurisdiction and found that no jurisdiction existed. Rockwell International Credit Corporation (Rockwell), a Delaware corporation, had sued United States Aircraft Insurance Group (USAIG) in the Superior Court of Maricopa County, Arizona. USAIG had removed to the federal court, stating that it was "the named defendant" and that the controversy was "wholly between citizens of different states." USAIG, however, had no basis in fact or law for making this assertion. USAIG was a group of independent

Page 1004

insurance companies forming an unincorporated association; all of its members were not diverse in citizenship from Rockwell; it had no right to remove to the federal court. Id. at 304.

After oral argument, this court had noted that "the petition for removal does not clearly allege the corporate or noncorporate nature of USAIG and the citizenship of USAIG or its member companies." We had invited USAIG to amend its petition for removal. USAIG then moved to amend its removal petition by alleging that the proper defendant and real party in interest was United States Aviation Underwriters, Inc. (USAU), a New York corporation. This court, interpreting the policy at issue, held that USAU was not the real party in interest and that an amendment to create jurisdiction was in any event not permitted. Id. at 305.

At the conclusion of our opinion we asked how the removal petition could have stated that the controversy was "wholly between citizens of different states"; how the petition could have reflected reasonable inquiry into the nature of USAIG; and how the petition could have been for a proper purpose. We also noted the motion asserting USAU was the real party at interest appeared to run counter to the record. In the light of these questions and observations, we concluded: "Counsel for USAIG are ordered to show cause why sanctions should not be imposed under Fed.R.Civ.P. 11."

USAIG filed a petition for rehearing and a suggestion for rehearing en banc. The petition was denied. No judge of this court responded affirmatively to the suggestion for rehearing en banc. At the expiration of the period for acceptance of the suggestion, counsel was reminded of the need to comply with the court's order to show cause. On January 28, 1988 a response was filed in the name of "Defendant/Appellee, United States Aircraft Insurance Group." The response concluded with a prayer by USAIG to the court not to impose sanctions.

As the court's order was directed to counsel, the interjection of the client as the respondent is mystifying to the court. We assume the client is not being charged for the work. Rather than conclude as we might that there has been no response to the order, we construe it as the response requested.

The response states that a lawyer admitted to practice in New York and Vice-President in General Aviation Claims at USAU for the past five years, first contacted USAIG's and USAU's local counsel, Fennemore Craig, to discuss the case. Fennemore Craig is a 50-partner law firm in Phoenix, Arizona. Roger C. Mitten, a partner, is a 1961 graduate of Northwestern Law School. Paul J. Mooney, a partner, is a 1980 graduate of Brigham Young University Law School.

As a result of the discussions with Fennemore Craig, USAIG decided to remove the matter to the federal district court. Mooney, who says he had "primary responsibility" in the case, inquired of the USAU Vice-President regarding the citizenship of USAIG. The Vice-President told Mooney that USAIG was not incorporated, had no principal place of business, and was not subject to suit in a common name in Arizona. The Vice-President indicated to Mooney that it was the practice of USAIG to seek removal on the basis of the citizenship of one of its member companies. Mooney further discussed the issue of USAIG's citizenship with Mitten, described in the response as "lead counsel in the case," and then filed the removal petition based on the citizenship not of USAIG but...