Price v. Wyeth Holdings Corp.
| Decision Date | 20 September 2007 |
| Docket Number | No. 06-2072.,06-2072. |
| Citation | 505 F.3d 624 |
| Parties | Charles PRICE, Plaintiff-Appellant, v. WYETH HOLDINGS CORPORATION,<SMALL><SUP>*</SUP></SMALL> Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Delmar P. Kuchaes (argued), Crown Point, IN, for Plaintiff-Appellant.
Roger W. Yoerges (argued), Wilmer, Cutler, Pickering, Hale & Dorr, Washington, DC, for Defendant-Appellee.
Before EASTERBROOK, Chief Judge, and CUDAHY and SYKES, Circuit Judges.
Charles Price voluntarily dismissed his Indiana state-court lawsuit against American Cyanamid Company and Lederle Laboratories in 1993. Unbeknownst to the defendants, Price then reinstated the suit five years later and obtained a $5 million default judgment from the state court. Price's attorney gave the defendants no notice of these proceedings until he sought to collect on the judgment in 2004, at which point the defendants quickly removed the case to federal court and had the default judgment vacated based on the lack of notice. The district court ultimately granted summary judgment for the defendants dismissing Price's claim on statute of limitations grounds.
Price has appealed, challenging the removal of the action and the district court's orders granting relief from the default judgment and summary judgment for the defendants. Price's attorney takes the extraordinary position that his ex parte reinstatement of the lawsuit was perfectly appropriate under Indiana law. It certainly was not. The defendants were entitled to notice of the motion to reinstate and all subsequent proceedings under Indiana's trial procedure rules; ex parte conduct of this sort also violates Indiana's Rules of Professional Conduct for attorneys. We affirm the orders of the district court and order Price's attorney to show cause why he should not be sanctioned for filing this frivolous appeal. We also direct the clerk of this court to transmit a copy of this opinion to the Indiana Supreme Court Disciplinary Commission for any action it deems appropriate.
On June 10, 1993, Cathy and Charles Price filed suit in Indiana state court against American Cyanamid Company and Lederle Laboratories (a division of American Cyanamid) after Cathy contracted polio from a child who recently had been vaccinated. Cathy's claim was based on product liability, and Charles's claim was for loss of consortium. The summons and complaint were served by certified mail on June 14, 1993, and a return of service was entered for American Cyanamid on June 23, 1993. On June 25, 1993, the manager of American Cyanamid's legal department faxed a letter to plaintiffs' counsel, Delmar Kuchaes, informing him that the National Childhood Vaccine Injury Act, 42 U.S.C. § 300aa-1 et seq., requires that vaccination claims first be brought in the U.S. Court of Federal Claims ("Vaccine Court") pursuant to the federal vaccination compensation program. The letter provided plaintiffs' counsel with the telephone number and mailing address of the federal program and asked that the lawsuit be terminated as required by the Act. After receiving the facsimile letter, plaintiffs' counsel voluntarily dismissed the suit that same day, before either defendant filed an appearance or responsive pleading. Plaintiffs' counsel sent American Cyanamid a copy of the dismissal order, along with a letter stating that the suit had been "discontinue[d], or non-suit[ed]."
Over the next few years, the Prices pursued their claims in the Vaccine Court, where they ultimately learned that Charles's derivative claim was not compensable under the Vaccine Act.1 Accordingly, in March 1998, Charles voluntarily dismissed his claim in the Vaccine Court. Cathy subsequently obtained a judgment from the Vaccine Court in excess of $1 million. On July 17, 1998, the Prices moved to reinstate their state-court action, but they did not provide any notice of that motion to the defendants. The state court reinstated the case on July 20, 1998, again without notice to either defendant. For the next year and a half, no effort was made to notify the defendants of the reinstated state-court proceedings.
On April 11, 2000, Charles Price filed motions for default judgment against the defendants, stating that process had been served in June 1993 and the defendants had subsequently failed to appear or respond; the motions said nothing about the circumstances of the voluntary dismissal and were not served on the defendants. The court entered default judgments against the defendants on April 26, 2000, and scheduled an evidentiary hearing on damages. At that point, the court (not Price's attorney) forwarded a notice of the damages hearing to Lederle Laboratories at the address on the original summons served in 1993. On July 7, 2000, the notice was returned to sender, stating "no such office in state." As it turned out, the address on the original summons had incorrectly attributed Lederle's New York address to New Jersey, but the post office had delivered it to the New York address anyway, presumably based on the New York zip code. Price's attorney made no attempt to notify Lederle or American Cyanamid of the reinstated proceedings, the default judgment motions, or the damages hearing. The hearing went forward on June 16, 2000, and the court awarded $5 million to Charles Price.2
The default judgments languished in state court for approximately four years until Price initiated garnishment proceedings on June 1, 2004. At that time, Price provided the state court with a new address at which to serve the defendants, that of the registered agent for American Cyanamid and Lederle. Process for the garnishment proceedings was served on June 14, 2004, marking the first time since June 23, 1993, that the defendants received any notice of the proceedings that were taking place in Indiana state court.3
On June 22 the defendants jointly filed a notice of removal to federal court and the case was removed. Price challenged the removal as untimely and sought a remand to state court. The district court denied remand, holding that the removal was timely because the defendants had no notice that the previously dismissed case had been reinstated until a week before they sought removal. The district court then vacated the default judgments due to Price's failure to comply with notice requirements under Indiana law. The defendants moved for summary judgment on statute of limitations grounds; the district court granted the motion, holding that the two-year statute of limitations had expired during the intervening years between the voluntary dismissal and the reinstatement of the lawsuit. Price now appeals the denial of his remand motion, the order vacating the default judgments, and the grant of summary judgment for the defendants.
We review a district court's denial of a motion to remand to state court de novo. Tifft v. Commonwealth Edison Co., 366 F.3d 513 (7th Cir.2004). Price's claim was removable based on diversity of citizenship.4 28 U.S.C. §§ 1332(a), 1441(a). Price argues that the removal was not timely under two provisions of 28 U.S.C. § 1446(b). Because federal procedure does not apply until removal occurs, FED. R.CIV.P. 81(c), we apply state rules to preremoval conduct. Romo v. Gulf Stream Coach, Inc., 250 F.3d 1119, 1122 (7th Cir.2001).
Price first invokes the time limit in 28 U.S.C. § 1446(b), which requires a defendant to file for removal within 30 days of receiving the initial pleading setting forth the claim for relief (or receipt of the summons if the initial pleading is not required to be served). Price argues that this period expired 30 days after the defendants received the complaint in 1993, even though the case was voluntary dismissed two weeks after it was filed. He claims that under Indiana law, a lawsuit is not actually terminated when it is voluntarily dismissed, but rather remains pending indefinitely until such time as the plaintiff may seek reinstatement. He bases this argument on the distinction between a "cause of action" and a "cause" in Indiana law; a "cause" refers to a lawsuit, whereas a "cause of action" refers to an individual theory of liability within a "cause." See e.g., Songer v. Civitas Bank, 771 N.E.2d 61, 66-67 (Ind.2002). Price maintains that he voluntarily dismissed only his "cause of action" in 1993; he insists that his "cause" remained pending (emptied, as it were, of its "cause of action"), and the 30-day removal clock kept on ticking and expired.
What utter nonsense. To the extent there is a difference between a "cause" and a "cause of action" under Indiana law, that difference is completely irrelevant here. Songer defined these terms in the context of determining whether a single lawsuit containing both legal and equitable claims required a jury trial; the case neither involved nor made any mention of voluntary dismissals. See id. at 66. Price cannot identify a single case supporting the notion that a voluntary dismissal terminates the "cause of action" but not the "cause." This is undoubtedly because the idea is so ridiculous; a "cause" (that is, lawsuit) cannot continue to exist once every "cause of action" within it has been dismissed. The Prices' voluntary dismissal terminated the entire case against the defendants. The "cause" did not remain pending, nor did the removal clock continue to run after the voluntarily dismissal.
Based on this same theory of a continuously pending lawsuit, Price also maintains that the defendants had a duty to continuously check the docket and therefore should be charged with constructive notice of the reinstated proceedings. This argument badly misconstrues basic principles of voluntary dismissal under Indiana law. "[O]nce a suit is voluntarily dismissed[,] the situation is just as though the suit has never been filed." Burnett v. Camden, 253 Ind. 354, 254 N.E.2d 199, 201 (1970). A voluntarily...
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