Perkins v. General Motors Corp.
| Decision Date | 22 May 1992 |
| Docket Number | 91-3550,Nos. 91-2825,s. 91-2825 |
| Citation | 965 F.2d 597 |
| Parties | 59 Fair Empl.Prac.Cas. (BNA) 28, 58 Empl. Prac. Dec. P 41,508, 22 Fed.R.Serv.3d 695 Melody PERKINS, Appellant, v. GENERAL MOTORS CORPORATION, Appellee. In re Melody PERKINS, Gwen G. Caranchini, Petitioners. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Gwen T. Caranchini, Kansas City, Mo. (argued), for Melody Perkins.
Robert K. Ball, Kansas City, Mo. (argued), for Gwen T. Caranchini in case 91-3550.
Alleen S. Castellani, Kansas City, Mo. (argued), for appellee.
Before WOLLMAN, MAGILL, and BEAM, * Circuit Judges.
Plaintiff below Melody Perkins and her attorney Gwen G. Caranchini appeal an order of the district court 1 refusing to vacate sanctions. Appellants also seek mandamus relief ordering the district court to lift the sanctions. Appellants argue the sanctions must be lifted because the underlying action on which the sanctions were based has been settled by the parties. The request for mandamus relief is denied and the district court's order imposing the sanctions is affirmed.
Melody Perkins sued General Motors Corporation in 1986 for sexual harassment. The substantive claims, which are no longer at issue, alleged the company subjected Perkins to sexual harassment in the workplace in violation of Title VII. Perkins also attached a diversity state claim that GM negligently retained an employee that sexually harassed Perkins. The district court granted summary judgment on the state claim and proceeded to trial on the Title VII claim. After a six-week bench trial, Perkins lost her Title VII claim.
After the trial concluded, GM moved the court for sanctions against Perkins and attorney Caranchini. The district court granted the motion in part and levied sanctions against Perkins and Caranchini for various abuses during trial and discovery. 2
In an earlier appeal of Perkins' substantive claims, this court upheld the district court's Title VII verdict, but reversed the district court's summary judgment denial of the negligence claim and remanded for trial on that issue. Perkins v. Spivey, 911 F.2d 22 (8th Cir.1990). Meantime, the district court set a hearing for June 27, 1991, to conclude arguments on the attorney's fees requested by GM under the sanction order. One day before this hearing, the parties settled the underlying case. As part of the settlement agreement, GM joined Perkins and Caranchini in moving the court to lift the sanction order. On July 5, 1991, the court refused to lift the order.
Appellants seek a writ of mandamus ordering the district court to lift the sanctions. The writ of mandamus is an extraordinary remedy that should be utilized only in those "exceptional circumstances ... amounting to a judicial usurpation of power." In re Lane, 801 F.2d 1040, 1042 (8th Cir.1986) (quoting Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 35, 101 S.Ct. 188, 190, 66 L.Ed.2d 193 (1980) (per curiam)). A federal court may issue a writ of mandamus only when the appellant has established a "clear and indisputable right" to the relief sought, the court has a nondiscretionary duty to honor that right, and appellant has no other adequate remedy. Lane, 801 F.2d at 1042.
Appellants have met none of these criteria. As we make clear infra, the district court had no duty to lift the sanction order under Willy v. Coastal Corp., --- U.S. ----, 112 S.Ct. 1076, 117 L.Ed.2d 280 (1992), and Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). The district court's decision, therefore, was discretionary. Finally, since we have concluded infra that the district court's sanction order is appealable, appellants have an adequate remedy. The motion for a writ of mandamus, therefore, is denied.
Appellants contend that the district court lost jurisdiction to enforce the sanctions when the parties settled the case. Since the court retained no jurisdiction over the underlying case, appellants argue, the district court was required to dismiss the sanctions as part of the whole case.
In Willy, 112 S.Ct. 1076, the Supreme Court held that a district court is empowered to award Rule 11 sanctions even though it was later found to have lacked subject-matter jurisdiction over the underlying claim.
A final determination of lack of subject-matter jurisdiction of a case in a federal court, of course, precludes further adjudication of it. But such a determination does not automatically wipe out all proceedings had in the district court at a time when the district court operated under the misapprehension that it had jurisdiction.
Id. at 1080. Maintaining jurisdiction over the sanctions is even more appropriate in this case. It is undisputed that the district court had subject-matter jurisdiction over the case when the sanctions were ordered. Jurisdiction over the underlying claim was lost later. The district court order appellants want set aside is collateral to the merits. Id. A federal court may consider collateral issues after an issue is no longer pending. Id.
Moreover, appellants' argument misinterprets the role of sanctions. The purpose of sanctions goes beyond reimbursing parties for expenses incurred in responding to unjustified or vexatious claims. Rather, sanctions are "designed to punish a party who has already violated the court's rules." Willy, 112 S.Ct. at 1081. The interest in having rules of procedure obeyed does not disappear merely because an adversary chooses not to collect the sanctions.
Respondent 3 argues that since the district court never determined the monetary value of the sanctions, there has been no final appealable order from the district court. We disagree. The case below has been settled by the parties and is concluded in its entirety. After briefing and a hearing, the district court on February 26, 1990, issued its order sanctioning Perkins and Caranchini. This order, however, was not a final appealable order because it prescribed procedures to determine the amount of money due under the sanctions. As part of the settlement agreement reached the day prior to the sanction hearing, GM withdrew its motion for sanctions and joined appellants in a motion to drop the sanction order. The court refused and upheld the sanctions in an order issued on July 5, 1991.
We find that the July 5, 1991, order made final the February 26, 1990, sanction order. While the district court did not assess a monetary penalty, GM informed the district court that it had agreed as part of the settlement not to collect any monetary sanctions. Therefore, it was reasonable for the district court to issue the sanction order without monetary penalty. The failure of the district court to go through the motions of assessing a dollar amount to penalties GM had agreed not to pursue does not prevent the sanction order from becoming final. The finality requirement should be given a "practical rather than a technical construction." Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 375, 101 S.Ct. 669, 674, 66 L.Ed.2d 571 (1981).
Moreover, we find compelling policy reasons for exercising jurisdiction over this appeal. If an attorney is unable to appeal a sanction order after the underlying case has been settled, the attorney is left with no avenue of challenging the sanction order. The law encourages parties to settle disputes. An attorney must be free to settle cases when settlement is in the client's best interest. The refusal to grant jurisdiction over an appeal of sanctions after the underlying suit has been settled thrusts a personal conflict upon the attorney--by settling a case in the client's interest he may have to forfeit a personal right to appeal the sanctions levied against him. See Cheng v. GAF Corp., 713 F.2d 886, 889-90 (2d Cir.1983).
Appellants also argue that since GM has agreed not to collect monetary sanctions, there is no longer an adversarial relationship and the sanction order is moot. We disagree. Although GM moved the court for sanctions, it was the district court that imposed them. Appellants are entitled to bargain with adversaries to drop a motion for sanctions, but they cannot unilaterally bargain away the court's discretion in imposing sanctions and the public's interest in ensuring compliance with the rules of procedure. See Kleiner v. First Nat'l Bank of Atlanta, 751 F.2d 1193, 1200 (11th Cir.1985). Contra Riverhead Sav. Bank v. National Mortgage Equity Corp., 893 F.2d 1109, 1113 (9th Cir.1990).
After full briefing and oral argument by the parties, the district court assessed various sanctions against Perkins and attorney Caranchini. The district court found that the tactics of plaintiff's attorney Perkins v. General Motors Corp., 129 F.R.D. 655, 660 (W.D.Mo.1990) (quotations omitted). The district court awarded sanctions based on five separate violations.
First, the district court sanctioned Perkins and Caranchini under Rule 26(g) 5 and Caranchini under 28 U.S.C. § 1927 (1988) 6 for persistently pursuing unsupported factual allegations against GM employee Art Hester during discovery. The unsupported allegations included charges that Hester had been "drummed" out of the United States Army on charges of sexual harassment. Plaintiff also stated under oath in an interrogatory answer that she had personal knowledge that Hester had engaged in sexual harassment and other sexual misconduct at the plant. Id. at 660-61. The court concluded that plaintiff and her attorney produced no factual basis to support the personal...
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