Pelfresne v. Village of Williams Bay

• Decision Date: 13 January 1989
• Docket Number: No. 88-1010,88-1010
• Citation: 865 F.2d 877
• Parties: Donald W. PELFRESNE, Plaintiff-Appellant, v. VILLAGE OF WILLIAMS BAY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 877

865 F.2d 877

Donald W. PELFRESNE, Plaintiff-Appellant, v. VILLAGE OF WILLIAMS BAY, et al., Defendants-Appellees.

No. 88-1010.

United States Court of Appeals Seventh Circuit.

Argued Nov. 28, 1988.

Decided Jan. 13, 1989.

Arthur M. Scheller, Jr., Park Ridge, Ill., for plaintiff-appellant.

Richard R. Grant, Consigny Andrews Hemming & Grant S.C., Janesville, Wis., for defendants-appellees.

Before CUDAHY and MANION, Circuit Judges, and WILL, Senior District Judge. ^*

CUDAHY, Circuit Judge.

In this diversity action, plaintiff-appellant Donald W. Pelfresne seeks temporary and permanent injunctive relief barring the Village of Williams Bay (the "Village") and its officers from demolishing certain buildings on property owned by Pelfresne. The Village's authority to raze the buildings derives from a state-court proceeding in which the Village won a judgment that the buildings were subject to demolition under Wisconsin nuisance law. The district court denied Pelfresne a preliminary injunction, finding that he would not likely succeed on the merits, that Pelfresne would not suffer irreparable injury through the demolition of the buildings and that the public interest weighed in favor of allowing the Village to raze the structures. Pelfresne appeals. We have determined that the Anti-Injunction Act, 28 U.S.C. section 2283, may prohibit the injunctive relief Pelfresne seeks. However, since additional factfinding is necessary to fully resolve this issue, we do not finally decide whether the Act applies to this action. On the merits of Pelfresne's request for a preliminary injunction, we affirm the district court's denial of preliminary relief.

I.

On November 8, 1984, the Village instituted a proceeding in state court against Michael Schiessle, then the owner-of-record of six buildings in the Village. The Village sought a declaration that four of the buildings owned by Schiessle were a public nuisance, and an order authorizing the Village to raze the buildings if necessary repairs were not performed. In December of 1984, Schiessle transferred the property on which the buildings are located to Loman Eley and John Koch, who were added as parties defendant in the state nuisance suit. The state court entered a judgment authorizing the Village to raze the buildings. This judgment was affirmed by the Wisconsin Court of Appeals on March 4, 1987; on July 29, 1987, the Wisconsin Supreme Court denied further review.

On February 6, 1986, while the nuisance action was pending, Eley and Koch apparently transferred the property to one Anita Catania, although this transfer was not recorded at that time. Then, between September 15 and September 18, 1987, the property was the subject of a flurry of activity. Deeds transferring the property from Eley and Koch to Catania, from Catania to Allen L. Veren, and from Veren to Pelfresne were all recorded within this four-day period. On September 28, 1987, Pelfresne filed suit in the federal district court, alleging that he was a bona fide purchaser without record or actual notice of the judgment in the Village's favor. On December 4, 1987, the district court entered an order denying a preliminary injunction from which the present appeal is taken.

II.

A crucial issue for our disposition of this appeal is Pelfresne's relationship to Eley and Koch, who were defendants in state court. Michael Schiessle, the initial transferor, is Pelfresne's uncle. Both Michael Schiessle and Pelfresne are beneficiaries of trusts created by the will of Eleanor Schiessle. Eley and Koch served as trustees for the trusts. The Village contends that Eley and Koch purchased the property as trustees of the trust of which Pelfresne is the beneficiary. As we shall see, if this is in fact the case, Pelfresne is barred by the Anti-Injunction Act from obtaining injunctive relief in federal court.

The Anti-Injunction Act, 28 U.S.C. section 2283, provides:

A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.

Originally enacted in 1793, the Anti-Injunction Act expresses Congress' recognition of "the fundamental constitutional independence of the States and their courts," Atlantic Coast Line R.R. Co. v. Brotherhood of Locomotive Engrs., 398 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970); it is designed "to prevent needless friction between state and federal courts." Oklahoma Packing Co. v. Oklahoma Gas & Elec. Co., 309 U.S. 4, 9, 60 S.Ct. 215, 218, 84 L.Ed. 537 (1940); see also Chick Kam Choo v. Exxon Corp., --- U.S. ----, 108 S.Ct. 1684, 1689, 100 L.Ed.2d 127 (1988); Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 630, 97 S.Ct. 2881, 2887, 53 L.Ed.2d 1009 (1977) (plurality opinion); Village of Bolingbrook v. Citizens Util. Co. of Illinois, 864 F.2d 481, 483 (7th Cir.1988).

Pelfresne's amended complaint seeks a temporary restraining order and preliminary and permanent injunction "enjoining and restraining the defendants ... from demolishing any of the houses on the property of the plaintiff." Pelfresne concedes that the state-court judgment specifically authorizes the Village to "raise [sic] and remove the buildings" on his property. Therefore, the relief Pelfresne seeks would prevent a successful state-court plaintiff from executing the judgment obtained in a prior state-court proceeding. It appears that the grant of such relief may be prohibited by the Anti-Injunction Act.

By its terms, the prohibition of section 2283 applies only to injunctions designed "to stay proceedings in a State court." In this case the judgment of the state court became final on July 29, 1987, when the Wisconsin Supreme Court denied review of Eley and Koch's appeal. However, the term "proceedings" in the Anti-Injunction Act does not merely apply to ongoing litigation before a state tribunal--the Act also bars injunctive relief which prevents a victorious state litigant from executing a state judgment.

In a classic statement of the scope of (a predecessor of) section 2283, Justice Brandeis explained:

The prohibition of [section 2283] is against a stay of "proceedings in any court of a State." That term is comprehensive.... It applies alike to action by the court and by its ministerial officers; applies not only to an execution issued on a judgment, but to any proceeding supplemental or ancillary taken with a view to making the suit or judgment effective. The prohibition is applicable whether such supplementary or ancillary proceeding is taken in the court which rendered the judgment or in some other. And it governs a privy to the state court proceeding ... as well as the parties of record.

Hill v. Martin, 296 U.S. 393, 403, 56 S.Ct. 278, 282, 80 L.Ed. 293 (1935) (emphasis added; footnotes omitted). More recently, the Supreme Court has made clear that section 2283 also applies to injunctions which may be directed at the victorious state court litigants, rather than at the state court itself. "It is settled that the prohibition of Sec. 2283 cannot be evaded by addressing the order to the parties or prohibiting utilization of the results of a completed state proceeding." Atlantic Coast Line R.R. Co. v. Brotherhood of Locomotive Engrs., 398 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970). ¹

Based on the foregoing it would appear that Pelfresne's suit falls squarely within the prohibition of section 2283. Although the suit is nominally directed at the victors in a concluded state-court action, it is clear that the effect of injunctive relief in this case would be to completely nullify the results of the prior state proceeding. ² However, our inquiry does not end here.

In County of Imperial v. Munoz, 449 U.S. 54, 101 S.Ct. 289, 66 L.Ed.2d 258 (1980), the Supreme Court held that the Anti-Injunction Act only bars a federal litigant from obtaining an injunction against the execution of a state-court judgment if the federal litigant was a party to the state-court proceeding, or in privity with such a party. Id. at 59, 101 S.Ct. at 292 (quoting Hale v. Bimco Trading, Inc., 306 U.S. 375, 377-78, 59 S.Ct. 526, 527, 83 L.Ed. 771 (1939)). See also Chase Nat'l Bank v. City of Norwalk, 291 U.S. 431, 437-38, 54 S.Ct. 475, 477-78, 78 L.Ed. 894 (1934) (Brandeis, J.); Colorado Eastern R.R. Co. v. Chicago, Burlington & Quincy Ry. Co., 141 F. 898, 903 (8th Cir.1905) (suggesting that applying Anti-Injunction Act to "strangers" to state proceeding would deny due process). The Court remanded in County of Imperial because

[n]either the District Court nor the Court of Appeals addressed the question whether respondents in this case were "strangers to the state court proceeding" who were not bound "as though [they were parties] to the litigation in the state court." Unless respondents were such "strangers," the injunction was barred by the Act.

449 U.S. at 59-60, 101 S.Ct. at 292-93 (footnotes omitted).

There is a dearth of federal case law specifying criteria for determining whether a litigant is a "stranger to the state court proceeding" for the purposes of section 2283. The extant decisions do indicate, however, that the doctrine of "privity" as applied to claims of collateral estoppel should guide the decision whether a federal litigant is a "stranger" under the Anti-Injunction Act. See Chase Nat'l Bank, 291 U.S. at 438, 441, 54 S.Ct. at 478, 479; Munoz v. County of Imperial, 667 F.2d 811, 815-16 (9th Cir.) (decision on remand from Supreme Court; " 'strangers' are non-parties who are not bound to previous litigation by collateral estoppel."), cert. denied, 459 U.S. 825, 103 S.Ct. 58, 74 L.Ed.2d 62 (1982). Therefore, in order to determine whether the Anti-Injunction Act bars the relief Pelfresne seeks, we must determine whether Pelfresne was in privity with a party to the state proceeding for the purposes of collateral estoppel.

As noted, the Village...