Midlock v. Apple Vacations West, Inc.
Decision Date | 20 April 2005 |
Docket Number | No. 04-2615.,04-2615. |
Citation | 406 F.3d 453 |
Parties | Andrew MIDLOCK, Jr., et al., Plaintiffs-Appellees, v. APPLE VACATIONS WEST, INC., et al., Defendants. Appeal of: William J. Cremer. |
Court | U.S. Court of Appeals — Seventh Circuit |
L. Steven Platt (argued), Arnold & Kadjan, Chicago, IL, for Plaintiffs-Appellees.
William J. Cremer, Cremer, Kopon, Shaughnessy & Spina, Chicago, IL, for Defendants.
Francis A. Spina (argued), Cremer, Kopon, Shaughnessy & Spina, Chicago, IL, for William J. Cremer.
Before POSNER, MANION, and WOOD, Circuit Judges.
William Cremer, the lawyer for all but one of the defendants in this tort suit, appeals from an order fining him $5,000 and directing him to reimburse the plaintiffs $3,285.28 for attorneys' fees. The suit had been filed in a state court in Joliet, Illinois, but Cremer, acting on behalf of one of the defendants whom he represented, removed the case to the federal district court in the Northern District of Illinois, the district in which Joliet is located. The plaintiffs moved to remand the case to the state court because there was no federal jurisdiction. The only possible basis of federal jurisdiction was diversity of citizenship, and Cremer acknowledged that one of the defendants (the one he didn't represent) was a citizen of Illinois, as were the plaintiffs. But he argued that that defendant had been fraudulently joined. The district court disagreed and remanded the case to the state court from which it had been removed; the ruling was pursuant to 28 U.S.C. § 1447(c), which requires the district court to remand a removed case "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." The remand "is not reviewable on appeal or otherwise," § 1447(d), with an immaterial exception. So the case went back to state court—whereupon another defendant whom Cremer represented removed it to the federal district court for the Central District of Illinois. Cremer's ground was the same, that the nondiverse defendant had been fraudulently joined. The district court remanded the case to the state court on the ground that a case can be removed only to the federal district court for the district in which the suit is pending, § 1446(a), which in this case was the Northern District of Illinois, not the Central District. The court then ordered Cremer to show cause why he should not be sanctioned under Fed.R.Civ.P. 11 for his frivolous attempt to remove the case to the Central District; and after a hearing the court imposed the sanctions that Cremer is challenging in this appeal.
The plaintiffs had not asked for sanctions; and while a judge is permitted by Rule 11 to impose sanctions on his own initiative, when he does that he cannot include an award of attorneys' fees. Fed. R.Civ.P. 11(c)(1)(B), (c)(2). But Cremer did not notice this until he filed his reply brief, which was too late. The judge could have awarded fees under 28 U.S.C. § 1447(c) (), but did not invoke that provision, which in any event would not have authorized the fine that he also imposed. See Wisconsin v. Hotline Industries, Inc., 236 F.3d 363, 367 (7th Cir.2000); Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 410 (7th Cir.2000) ( ). Another oversight by the parties is their failure to remark the fact that not all the defendants joined in either removal, as is required, Chicago, Rock Island & Pac. Ry. v. Martin, 178 U.S. 245, 248, 20 S.Ct. 854, 44 L.Ed. 1055 (1900); Hanrick v. Hanrick, 153 U.S. 192, 197-98, 14 S.Ct. 835, 38 L.Ed. 685 (1894); Parrino v. FHP, Inc., 146 F.3d 699, 703 (9th Cir.1998), though the statute does not say so. The requirement—which anyway might not be applicable here if Cremer could show that the only nonremoving defendant was indeed fraudulently joined by, and perhaps acting in cahoots with, the plaintiffs to defeat removal—is not a jurisdictional defect and hence is waivable. McMahon v. Bunn-O-Matic Corp., 150 F.3d 651, 653 (7th Cir.1998). And it was waived. It is even unclear whether all but that defendant actually joined in either removal and, if not, whether the failure of the other defendants to do so might be excused by their not having been served. Boyd v. Phoenix Funding Corp., 366 F.3d 524 529-30 (7th Cir.2004). But, again, the plaintiffs have made no issue of this.
The case is a symphony of frivolousness. The plaintiffs argue that we have no appellate jurisdiction because Cremer did not file his notice of appeal within 30 days of the entry of the order imposing sanctions. The order imposed the $5,000 fine on Cremer but also directed the plaintiffs' lawyer to submit a statement of his expenses in opposing the frivolous removal to the Central District; the parties then stipulated to the amount of those expenses, $3,285.28. The district court entered a new order directing Cremer to pay both the fine and the attorneys' fees, and Cremer filed a notice of appeal within 30 days of that order. The plaintiffs argue that the earlier order, the order to pay just the fine, was final and appealable because a proceeding to obtain an award of attorneys' fees is "collateral" to (that is, separate from) the case out of which the fee proceeding arises.
That is true in general but not in this case. Usually when a judgment is entered and the winning party then seeks an award of attorneys' fees, the pendency of the fee proceeding does not affect the finality of the judgment. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 199-202, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988). The fee proceeding cannot start until the judgment is entered, so allowing the appeal from the judgment to be delayed until the attorneys' fees proceeding was resolved could delay the final resolution of the case indefinitely. See Fed R. Civ. P. 58; Local Union No. 1992 of IBEW v. Okonite Co., 358 F.3d 278, 287 (3d Cir. 2004). Indeed, since "a claim for attorneys' fees (other than an interim claim) cannot be quantified until the entry of final judgment ..., if the pendency of such a claim prevented the judgment from becoming final, it could never become final." Alonzi v. Budget Construction Co., 55 F.3d 331, 333 (7th Cir.1995); see also Houben v. Telular Corp., 231 F.3d 1066, 1071 (7th Cir.2000). But in this case attorneys' fees were not sought for services in obtaining a separate judgment, namely the imposition of the $5,000 fine. They were sought as one component of the sanction for improper removal, the other component being the fine. So when the judge imposed the fine and asked the plaintiffs' lawyer to submit a statement of fees, he was entering an order that would not become final until he determined the amount of attorneys' fees that he would award. Discon, Inc. v. NYNEX Corp., 4 F.3d 130, 132 (2d Cir. 1993); cf. Sonii v. General Electric Co., 359 F.3d 448, 450 (7th Cir.2004).
So we have jurisdiction of Cremer's appeal and move to the merits. The second removal, which was the occasion of the sanction that he is challenging, was doubly frivolous. First, as he admits, he was trying to obtain a second opinion on removability—and that is not permissible, though not, as the plaintiffs seem to think, because section 1447(d) states that an order of remand to a state court "is not reviewable on appeal or otherwise" (emphasis added). While as an original matter "otherwise" might be thought to embrace review by another district judge, we and other courts have held that the reference is to other ways of obtaining appellate review, such as by asking for mandamus (see also In re La Providencia Development Corp., 406 F.2d 251, 252-53 (1st Cir.1969)) or a declaratory judgment (as in New Orleans Public Service, Inc. v. Majoue, 802 F.2d 166 (5th Cir.1986) (per curiam)), and that the provision we quoted does not preclude successive removals. Benson v. SI Handling Systems, Inc., 188 F.3d 780 (7th Cir.1999); Doe v. American Red Cross, 14 F.3d 196, 199-200 (3d Cir. 1993); FDIC v. Santiago Plaza, 598 F.2d 634, 636 (1st Cir.1979) (per curiam). Cases such as Vogel v. U.S. Office Products Co., 258 F.3d 509, 519 (6th Cir.2001); Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 531 (6th Cir.1999); In re Lowe, 102 F.3d 731, 733-36 (4th Cir.1996), and Harris v. Blue Cross/ Blue Shield of Alabama, Inc., 951 F.2d 325, 330 (11th Cir.1992), are in some tension with Benson and its sister cases. But they are distinguishable because they hold only that section 1447(d) strips the district court of jurisdiction to reconsider an order of remand issued by it. The distinction is noted in FDIC v. Santiago Plaza, supra, 598 F.2d at 636.
But the first remand, because it establishes the law of the case, "may be revisited only when intervening events justify that step." Benson v. SI Handling Systems, Inc., supra, 188 F.3d at 783 (citation omitted); to same effect see Doe v. American Red Cross, supra, 14 F.3d at 200 ( ); In re Diet Drugs, 282 F.3d 220, 232 n. 8 (3d Cir.2002); S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 492-94 (5th Cir. 1996). Cremer believes that he can remove the case to federal district court as many times, and in as many districts, as he wants, until he finally finds a judge who will agree with him. The many times is barred by the doctrine of the law of the case and the many districts by the statutory provision limiting the venue of a removed case to the district in which the suit was pending when it was removed. As we noted in Benson, "multiple removals could encounter problems—could even lead to sanctions—if nothing of significance changes between the first and second tries." 188 F.3d at 783 (emphasis added).
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