Mohamed v. Exxon Corp.

• Decision Date: 07 June 1990
• Docket Number: No. C14-89-00886-CV,C14-89-00886-CV
• Citation: 796 S.W.2d 751
• Parties: 53 Fair Empl.Prac.Cas. (BNA) 261, 58 Empl. Prac. Dec. P 41,238 Makram MOHAMED, et al., Appellants, v. EXXON CORPORATION and Exxon Minerals Company, a Division of Exxon Corporation, and Roger Kust, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 751

796 S.W.2d 751

53 Fair Empl.Prac.Cas. (BNA) 261,

58 Empl. Prac. Dec. P 41,238

Makram MOHAMED, et al., Appellants, v. EXXON CORPORATION and Exxon Minerals Company, a Division of Exxon Corporation, and Roger Kust, Appellees.

No. C14-89-00886-CV.

Court of Appeals of Texas Houston (14th Dist.).

June 7, 1990.

Rehearing Denied Aug. 2, 1990.

Carol Nelkin, Joan Marie Lucci Bain, Houston, for appellants.

Reagan Burch, Paul L. Mitchell, Ingrid J. Blackwelder, Houston, for appellees.

Before J. CURTISS BROWN, C.J., and MURPHY and DRAUGHN, JJ.

OPINION

J. CURTISS BROWN, Chief Justice.

In this civil rights case the trial court ruled that res judicata barred the plaintiffs from litigating state law claims, after a federal court had dismissed an earlier suit grounded on federal law. We must determine the prior judgment's preclusive effect under federal law. The complexity of the inquiry makes us wish there were a state-to-federal counterpart to TEX.R.APP.P. 114, which provides for certification of state law questions from federal appellate courts to the Texas supreme court; such a reverse Erie rule would let us ask the Fifth Circuit about its caselaw. Because there is no such rule, we turn to the facts.

I

In their first lawsuit plaintiffs alleged employment discrimination. They sued Exxon Corp. and Exxon Minerals Co. (Exxon) in state court under 42 U.S.C. § 1981. Exxon removed the case to federal court, and it ended up on the docket of United States District Judge Ross Sterling.

Soon thereafter the plaintiffs exhausted their state administrative remedies and procured a right-to-sue letter from the Texas Commission on Human Rights. They went once again to state court, but in the second suit the plaintiffs alleged violation of state civil rights law. See TEX.REV.CIV.STAT.ANN. art. 5221k. The factual allegations remained essentially the same. In the second suit the plaintiffs also added a new defendant, their supervisor Roger Kust. Although the complaint in the § 1981 case had referred to Kust by name as an alleged wrongdoer, Kust was never officially a party to that proceeding. (This variation comes into play during the analysis whether preclusive effects of the § 1981 case extend to Kust in the art. 5221k case.)

Exxon again sought removal to federal court, and the art. 5221k case was assigned to United States District Judge Carl O. Bue. At this point there existed two separate suits in federal court, each having arrived via removal from state court, each arising out of the same transaction, one stating a § 1981 claim and the other stating an art. 5221k claim. Plaintiffs filed a motion to remand in each case. Defendants went to Judge Sterling and filed a motion to consolidate the two actions into a single proceeding before him. Judge Sterling denied the motion to remand, and he refused to rule on the consolidation request. Judge Bue ultimately granted the motion to remand the art. 5221k case, but not before a complication had arisen in the § 1981 case.

It seems Judge Sterling had ordered an outright dismissal of the § 1981 case for want of prosecution. In all fairness, plaintiffs hardly lacked diligence; they were, after all, prosecuting two lawsuits at once. Instead, it was the defendants who had inadvertently failed to follow Judge Sterling's docket control procedures. Those procedures required the defendants to deliver a docket control order advising plaintiffs of a docket call date. When the plaintiffs did not appear, Judge Sterling dismissed the action. Plainly, due process considerations would not have allowed such an outcome to stand, and the Fifth Circuit would assuredly have found an abuse of discretion if there had not been a change. See Callip v. Harris Cty. Child Welfare Dept., 757 F.2d 1513, 1519 (5th Cir.1985) (recognizing dismissal with prejudice as an extreme sanction, available only in the most egregious cases).

Interestingly, however, plaintiffs decided not to seek reinstatement of the § 1981 case, an avenue they could have taken to remedy the due process problem. They opted instead to accept the dismissal--with one proviso. In their consent to dismissal they asked Judge Sterling to recognize their lack of fault respecting the failure to appear, requesting him to label the dismissal as one without prejudice. If Judge Sterling had granted that motion to modify, this case would not be here today. Alternatively, if he had expressly designated the dismissal as one with prejudice, this case would at least be far simpler. Unfortunately, he did neither. He simply denied the motion.

At the core of the dispute before us is the question whether Judge Sterling's dismissal of the § 1981 case was with prejudice. If it was, then the state district court in the art. 5221k case correctly regarded that prior judgment as a predicate for invocation of res judicata. On the other hand, if Judge Sterling's dismissal was without prejudice, then there was no judgment on the merits upon which to base a finding of res judicata, and we would have to reverse.

II

A

Characterization of the dismissal in the § 1981 case is a matter of federal civil procedure. The governing rule is FED.R.CIV.P. 41, which supplies gap-filling instructions to deal with a dismissal order that fails to specify whether the dismissal was without prejudice. Rule 41 recognizes two types of dismissals, voluntary and involuntary. Generally speaking, under rule 41(a) the plaintiff may voluntarily dismiss his action as of right, and "[u]nless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice." Rule 41(b) addresses the question of involuntary dismissal, including a dismissal for want of prosecution: "[u]nless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule ... operates as an adjudication on the merits." The salient issue is therefore whether the dismissal was voluntary, within the meaning of federal law. Cf. Rizk v. Mayad, 603 S.W.2d 773, 775 (Tex.1980) (dismissal for want of prosecution is not considered on the merits under Texas law); Gracey v. West, 422 S.W.2d 913, 917 (Tex.1968) (same); Texas Atty. Gen. v. Daurbigny, 702 S.W.2d 298, 300 (Tex.App.--Houston [1st Dist.] 1985, no writ) (same).

The parties have cited a considerable number of relevant decisions, virtually all of them coming from the Fifth Circuit. We are quite content to confine our analysis within the boundaries drawn by the litigants in this case, because Fifth Circuit jurisprudence is sufficiently well-developed and coherent to inform our decision today. Moreover, there is every reason to regard that jurisprudence as a reliable guide for interpretation of a decree from one of the District Courts within the Fifth Circuit. Nevertheless we note that Fifth Circuit precedent as such does not bind us. What binds us is federal law--here, a federal judgment whose scope depends on federal rule 41--because the Supremacy Clause says so. See U.S. CONST. art. VI. As has long been recognized, "The laws of the United States are laws in the several States, and just as much binding on the citizens and courts thereof as the State laws are.... The two together form one system of jurisprudence, which constitutes the law of the State; and the courts of the two jurisdictions are not foreign to each other...." Claflin v. Houseman, 93 U.S. 130, 136-37, 23 L.Ed 833 (1876); see Tafflin v. Levitt, 493 U.S. 455, 110 S.Ct. 792, 800-01, 107 L.Ed.2d 887 (1990) (Scalia, J., concurring) (on the authority of federal law in state courts). Our reading of federal law could diverge from that of the Fifth Circuit in a given case; today it does not.

At first glance one might conclude that rule 41(b) obviously applies, since that section classifies dismissals for want of prosecution as involuntary. We believe such an approach unduly facile. In this age of expanded discovery and more or less unsupervised pretrial processes, it is not always clear when it is the court taking the initiative and when it is a litigant. For example, in Plumberman, Inc. v. Urban Sys. Dev., 605 F.2d 161 (5th Cir.1979) an intervenor asked to restructure its pleadings so as to take on plaintiff status, after all other parties had dropped their claims and sought dismissal with prejudice. The trial court granted the intervenor's motion and gave it 10 days to file an amended complaint, lest the intervention be dismissed. The intervenor never filed an amended complaint, and dismissal followed. Two years later litigation resumed but the second trial court found the former intervenor's suit barred by res judicata, in light of the earlier dismissal. The Fifth Circuit reversed. Reasoning that the stipulation to a dismissal if an amended complaint were not filed was voluntary, the court of appeals applied rule 41(a) and held res judicata unavailable.

A contrary result occurred in Dillard v. Security Pac. Brokers, Inc., 835 F.2d 607 (5th Cir.1988). There the trial court had dismissed a litigant's counterclaim as a sanction for failure to appear at a deposition. On appeal the court distinguished Plumberman and squarely held the dismissal to be on the merits under rule 41(b).

Appellants rely on Plumberman as authority for their argument that by consenting to the dismissal, they successfully persuaded Judge Sterling to "transform[ ] the federal court's initial judgment of dismissal from an involuntary dismissal to a voluntary dismissal." This conclusion they derive from his dismissal order, which expressly recognized their refusal to seek reinstatement. That assertion seems to us a non sequitur. True, Judge Sterling recited the positions of the parties; but he never grounded his refusal to modify the order on the offer of plaintiffs' consent. Had he said, "The motion is denied because plaintiffs' consent makes this dismissal voluntary and therefore without prejudice," we would agree with plaintiffs now. He did...