Free v. Abbott Laboratories, Inc.

• Decision Date: 19 January 1999
• Docket Number: No. 97-31341,97-31341
• Citation: 164 F.3d 270
• Parties: 1999-1 Trade Cases P 72,406 Robin FREE and Renee Free, Plaintiffs-Appellants, v. ABBOTT LABORATORIES, INC., Bristol-Myers Squibb Company, Inc., and Mead Johnson & Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 270

164 F.3d 270

1999-1 Trade Cases P 72,406

Robin FREE and Renee Free, Plaintiffs-Appellants, v. ABBOTT LABORATORIES, INC., Bristol-Myers Squibb Company Inc., and Mead Johnson & Company, Defendants-Appellees.

No. 97-31341.

United States Court of Appeals Fifth Circuit.

Jan. 19, 1999.

Daniel Adam Small, Matthew F. Pawa, Michael D. Hausfeld, Cohen, Milstein, Hausfeld & Toll, Washington, DC, Patrick W. Pendley, Plaquemine, LA, for Plaintiffs-Appellants.

Frank Brian Cicero, Jr., Craig A. Knot, Leslie M. Smith, Kirkland & Ellis, Chicago, IL, William R. D'Armond, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Baton Rouge, LA, for Abbott Laboratories, Inc.

John M. Landis, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, LA, for Defendants-Appellees.

Max Rees Shulman, Cravath, Swaine, et al., New York City, Phillip A Wittmann, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, LA, for Bristol Myers-Squibb Co., Inc. and Mead Johnson & Co.

Jane Bishop Johnson, Louisiana Dept. of Justice, Baton Rouge, LA, for State of Louisiana, Amicus Curiae.

Appeal from the United States District Court for the Middle District of Louisiana.

Before REYNALDO G. GARZA, JONES and DeMOSS, Circuit Judges.

EDITH H. JONES, Circuit Judge:

In this second appeal generated by an antitrust class action against baby-formula manufacturers, appellants renew their argument that the district court's exercise of diversity jurisdiction was improper because their claims did not satisfy the amount in controversy requirement of 28 U.S.C. § 1332 (1993). They alternatively contend that the district court erred in ruling that Louisiana antitrust law denied them standing due to their status as indirect purchasers. Since the precise issue of jurisdiction was decided by this court before, the law of the case prevents its being reconsidered. In addition, we have determined that the indirect purchaser question and the interstate/intrastate conspiracy question must be certified to the Louisiana Supreme Court because they represent important state antitrust law policy decisions for which no controlling precedent exists. Notwithstanding the certification, we affirm the district court's dismissal of the Frees' other claims.

PROCEDURAL HISTORY

Appellants filed their class action petition against appellees Abbott Laboratories, Bristol-Myers Squibb Company, and Mead Johnson & Company (collectively "Abbott Labs") in Louisiana state court alleging a price-fixing conspiracy. Appellees removed the case to federal district court. The Frees objected to the removal, arguing that the federal court lacked jurisdiction because they sought only $20,000 in damages and thus did not satisfy the $50,000 amount in controversy requirement then prescribed by 28 U.S.C. § 1332. The district court ruled that since Louisiana law provided for attorneys' fees to be awarded to the named plaintiffs and not the attorneys, the amount recoverable by the plaintiffs exceeded the $50,000 threshold. However, the court applied the Colorado River abstention doctrine and tried to remand the case back to state court.

On appeal, this court agreed with the district court's conclusion that diversity jurisdiction existed. See In re Abbott Lab., 51 F.3d 524, 526, on reh'g, 65 F.3d 33 (5th Cir.1995). The court relied upon Article 595 of the Louisiana Code of Civil Procedure, which, together with § 51:137 of the Louisiana Revised Statutes, expressly awards attorneys' fees to the "representatives" of a class and the injured parties. Id. But the panel also held that the district court improperly abstained and accordingly vacated the remand to state court. Id. at 529-30.

Back in the federal district court, the Frees were unable to persuade the court that Louisiana antitrust law, unlike its federal counterpart, granted standing to indirect purchasers. The district court dismissed both the state law antitrust claims and the other state claims asserted by appellants.

DISCUSSION

A. Jurisdiction

Undeterred by this court's previous decision, appellants again contend that the federal courts' exercise of diversity jurisdiction was improper because their claims did not satisfy the amount in controversy requirement of 28 U.S.C. § 1332. The prior panel allegedly erred, according to the Frees, by crediting to them the class attorneys' fees for purposes of calculating the amount in controversy and by applying Louisiana's "procedural" attorneys' fee law (Art. 595) in a federal diversity case. Although appellants' argument bears on federal courts' jurisdiction, this is not an issue that we will reconsider.

Once a panel of this court has decided an issue of law or fact, the decision continues to govern all subsequent stages of the same case. See United States v. Becerra, 155 F.3d 740, 752 (5th Cir.1998); Copeland v. Merrill Lynch & Co. Inc., 47 F.3d 1415, 1423 (5th Cir.1995). Known as the law of the case doctrine, this principle is necessary to bring finality to litigation and to discourage "panel shopping" by litigants. See Becerra, 155 F.3d at 752. While application of the doctrine is discretionary, this court will generally refuse to revisit a prior panel's decision unless "(i) the evidence on a subsequent trial was substantially different, (ii) controlling authority has since made a contrary decision of the law applicable to such issues, or (iii) the decision was clearly erroneous and would work [sic] manifest injustice." Id. at 752-53. (quoting North Miss. Comms., Inc. v. Jones, 951 F.2d 652, 656 (5th Cir.1992)).

The Frees dispute application of the law of the case doctrine on two grounds. First, based on a recent en banc decision of this court, they urge that federal courts must constantly examine each case for subject matter jurisdiction, and if it does not exist, must remand the case to state court. See Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (1998), cert. granted, --- U.S. ----, 119 S.Ct. 589, 142 L.Ed.2d 532, 67 U.S.L.W. 3273 (1998). The Marathon rule does not apply. Certainly, a federal court must always be satisfied that subject matter jurisdiction exists and must even raise the issue sua sponte, Steel Co. v. Citizens For A Better Env't, 523 U.S. 83, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (1998), but Marathon dealt with whether courts must initially determine subject matter jurisdiction before reaching the issue of personal jurisdiction. The Frees advocate a quite different rule of perpetual re-examination of precisely the same issue of subject matter jurisdiction. Other circuits have The Frees' second argument emphasizes that in a lawsuit removed from state court, as this was, "[if] at any time before final judgment it appears that the District Court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). And, reinforcing this language, the Supreme Court has observed that, "[d]espite a federal trial court's threshold denial of a motion to remand, if, at the end of the day and case, a jurisdictional defect remains uncured, the judgment must be vacated." Caterpillar, Inc. v. Lewis, 519 U.S. 61, 117 S.Ct. 467, 477, 136 L.Ed.2d 437 (1996) (emphasis in original) (citing Fed.R.Civ.P. 12(h)(3)). The Frees ignore, however, that our prior panel found that no jurisdictional defect burdens this case. That prior decision was based on a straightforward application of Louisiana law in a diversity context. Had the controlling law or facts changed, or had some glaring error in removal procedure been uncovered, see e.g., Caterpillar, supra, we would be obliged by the foregoing authorities to reassess jurisdiction. To this extent, an issue of jurisdiction imposes a more rigorous inquiry than the ordinary discretion attendant to the law of the case doctrine. But none of the warning signs is present here.

however, refused to recognize a "jurisdiction exception" to the law of the case doctrine. See Ferreira v. Borja, 93 F.3d 671, 674 (9th Cir.1996), cert. denied, 519 U.S. 1122, 117 S.Ct. 972, 136 L.Ed.2d 856(1997) ("Surely a court that has decided that it has jurisdiction is not duty-bound to entertain thereafter a series of repetitive motions to dismiss for lack of jurisdiction."); LaShawn v. Barry, 87 F.3d 1389, 1394 (D.C.Cir.1996), cert. denied, 520 U.S. 1264, 117 S.Ct. 2431, 138 L.Ed.2d 193 ("[T]his court and other courts of appeals routinely apply law-of-the-case preclusion to questions of jurisdiction...."). We see no reason to deviate from the weight of authority. ¹

The only ground of re-examination urged by the Frees, other than their complaint that the prior panel got it wrong on jurisdiction, is the Louisiana appellate court's decision in In re Gas Water Heater Prods. Liab. Litig., 697 So.2d 341 (La.Ct.App.1997), rev'd, 711 So.2d 264 (La.1998), which held that attorneys' fees awarded under Article 595 have no effect on the amount in controversy for state court jurisdiction purposes. Appellants fail to note that the Gas Water Heater court approved of and distinguished the prior decision in this case on the basis that it involved a suit under Louisiana's antitrust laws, which statutorily provide for attorneys' fees as an element of the plaintiffs' damages. See id. at 346 ("[B]ecause attorney's fees are included as a statutory element of a plaintiff's damages, consideration of attorneys' fees was proper to determine the jurisdictional amount for a jury trial."). Gas Water Heater reinforces rather than defeats the prior Fifth Circuit opinion in this case.

The issue of subject matter jurisdiction may not, for all of these reasons, be reconsidered in this appeal.

B. Other State Law Claims

Appellants argue that the district court erroneously dismissed their claims alleging violations of Louisiana's general tort statute, La. Civ.Code Ann. art. 2315 (West 1997), and fraud statute, La. Civ.Code Ann. art. 1953 (West 1997). The appellants' arguments are unpersuasive.

The Frees rely on Loew's, Inc. v. Don George, Inc., 237 La. 132, 110 So.2d 553 (La.195...