Unanue-Casal v. Unanue-Casal

• Decision Date: 28 March 1990
• Docket Number: No. 89-2042,89-2078.,89-2042
• Citation: 898 F.2d 839
• Parties: Ulpiano UNANUE-CASAL, a/k/a Charles Unanue, Plaintiff, Appellee, v. Francisco UNANUE-CASAL, a/k/a Frank Unanue, Jose Unanue Casal, a/k/a Joe Unanue, Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

898 F.2d 839

Ulpiano UNANUE-CASAL, a/k/a Charles Unanue, Plaintiff, Appellee, v. Francisco UNANUE-CASAL, a/k/a Frank Unanue, Jose Unanue Casal, a/k/a Joe Unanue, Defendants, Appellants.

Nos. 89-2042, 89-2078.

United States Court of Appeals, First Circuit.

Heard March 6, 1990.

Decided March 28, 1990.

Arturo J. Garcia-Sola with whom Manuel Fernandez-Bared and McConnell Valdes Kelley Sifre Griggs & Ruiz-Suria, Hato Rey, P.R., were on brief for defendants, appellants.

Nicolas Nogueras, Jr. with whom Antonio I. Hernandez Rodriguez, Hato Rey, P.R., William M. Vidal Carvajal, and Hernandez & Vidal, San Juan, P.R., were on brief for plaintiff, appellee.

Before BREYER and SELYA, Circuit Judges, and RE,^* Judge.

OPINION

BREYER, Circuit Judge.

The appellants in this case believe that, pursuant to Fed.R.Civ.P. 11, the district court should have required the appellee and his counsel to pay attorney's fees (and imposed other sanctions) for having frivolously and improperly filed a "petition for removal" in the federal district court in Puerto Rico, removing to that court a "will contest" case then pending in a New Jersey state court. See 28 U.S.C. § 1441(a) (permitting a "defendant" to remove "any civil action" over which the federal courts would have "original jurisdiction" to the federal court in "the district ... embracing the place where such action is pending"); id. § 1446(b) (providing that the defendant must file a "notice of removal ... within thirty days" after receiving initial pleadings or summons in the state case); Fed.R. Civ.P. 11 (providing for sanctions). The United States District Court for the District of New Jersey has set forth the underlying background facts in an unpublished opinion, Unanue Casal v. Unanue Casal, No. 89-2887 (D.N.J. Nov. 24, 1989), which we have attached as an appendix.

In essence, the New Jersey state case involves an effort by Charles Unanue to attack a will and trust that his father created (involving assets, which, we are told, amount to hundreds of millions of dollars), and a defense by other children (who are trustees) that Charles received $4.3 million many years ago in return for a promise to refrain from attacks of the sort he now makes. The New Jersey state court set the state case for trial on Monday, July 10. Three days before trial, on Friday, July 7, Charles Unanue filed his removal petition in Puerto Rico's federal district court, thereby automatically preventing the state court from proceeding. See 28 U.S.C. § 1446(d). On Monday the federal district court, recognizing that the removal petition was invalid, dismissed it. Charles Unanue, then apparently acting on his own, immediately filed a removal petition in New Jersey's federal district court. That court dismissed the petition and subsequently ordered Charles Unanue to pay opposing counsel $16,000 in attorney's fees. When appellants made a similar request for attorney's fees in Puerto Rico, however, the district court denied the request, although in doing so it wrote:

Denied. We firmly believe in sanctions as a tool to deal w/ irresponsible litigation. In this case, however, we are convinced that we averted the damage to defendants by acting promptly & dismissing the frivolous filing. We are not prepared to beat a dead horse nor to further sanction irresponsible litigation based on ignorance rather than malice. The biggest sanction imposed has been precisely that of being told quite clearly that movant was acting and pleading ignorant of the basic removal law principles.

(Emphasis added.) Charles' opponents (the other children/trustees) now appeal the district court's sanctions ruling to us.

We hold at the outset that we have jurisdiction of this appeal. Charles, noting that a federal court loses jurisdiction of a "removed" case when it dismisses the removal petition, argues that the court also loses jurisdiction to impose Rule 11 sanctions. We reject this argument, however, for the same reasons we rejected a similar argument in respect to a voluntary dismissal under Fed.R.Civ.P. 41. See Muthig v. Brant Point Nantucket, Inc., 838 F.2d 600, 603-04 (1st Cir.1988). Normally, even after a federal district court determines that it lacks jurisdiction of a case, it retains jurisdiction to consider whether its process was abused during the course of that determination. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980); Muthig, 838 F.2d at 603 ("Courts that lack jurisdiction with respect to one kind of decision may have it with respect to another"); Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1077-79 (7th Cir.1987) (same); cf. Schering Corp. v. Vitarine Pharmaceuticals, Inc., 889 F.2d 490, 494-96 (3d Cir.1989) (court retains jurisdiction to impose Rule 11 sanction following voluntary dismissal) (citing authority from four other circuits). But cf. Johnson Chem. Co., Inc. v. Home Care Prod., Inc., 823 F.2d 28 (2d Cir.1987) (court lacks jurisdiction to impose Rule 11 sanction following a voluntary dismissal). And there is no more reason here than in Muthig to think that Rule 11's sanction power does not reach "improper removal" cases such as this one. See Willy v. Coastal Corp., 855 F.2d 1160, 1172 (5th Cir.1988) (noting, on review of Rule 11 sanctions order, that "we and the district court retain jurisdiction over the Rule 11 aspect of this case, even though we have held that removal was improper").

We also believe that some sanction was legally required in this case, for Rule 11 provides that the court "shall impose" a sanction upon counsel or upon a party, when one or the other files a signed "pleading, motion, or other paper," yet lacks a

belief formed after reasonable inquiry that it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law ...,

or when counsel or the party files such a paper

for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation....

Fed.R.Civ.P. 11. The New Jersey court has explained in detail why Charles could not reasonably believe he had a right to remove the state case to the New Jersey federal court (in brief, no "arising under" jurisdiction, see 28 U.S.C. § 1331; no other basis for removal asserted; "thirty day" time limit long since expired, see id. § 1446(d)). It is still harder to imagine how a lawyer could find any plausible legal basis for removing this New Jersey state case to Puerto Rico's federal court, for the removal statute plainly limits "removal" to the federal court for the district within which the state action is pending. See 28 U.S.C. § 1441(a). We cannot imagine any legal justification, nor can we find one in the briefs or in the record. On the contrary, for reasons set forth in the New Jersey federal court opinion, there is good reason to believe that Charles filed the removal petitions for "an improper purpose," namely, to harass, or to delay the start of the New Jersey trial.

In an effort to justify the removal action, Charles' counsel, at oral argument, pointed out that a lawyer has an obligation to help his client, even where that client's legal case may be weak. We respond to his argument by pointing out that a lawyer also has an obligation to the court, and to the judicial system, to help that system function properly to achieve the just resolution of controversies. As we explained just recently,

While a lawyer must provide "zealous advocacy" for his client's cause, we encourage this only as a means of achieving the court's ultimate goal, which is finding the truth. Deceptions, misrepresentations, or falsities can only frustrate that goal and will not be tolerated within our judicial system. See Wagner v. Williford, 804 F.2d 1012, 1017 (7th Cir.1986) (duty to client cannot override duty to respect system of justice); Steinle v. Warren, 765 F.2d 95, 101 (7th Cir.1985) (as "officer of the court ... lawyer's duty to the court is paramount, even to the interests of his client").

Polansky v. CNA Ins. Co., 852 F.2d 626, 632-33 (1st Cir.1988). This "court officer" obligation is not meant (as Rule 11 explicitly recognizes) to "freeze" existing law (a matter not here at issue); rather, it is meant, in some small degree, to enlist the bar in the enterprise of administering the law, thereby making it more difficult for the strong, or wealthy, to use the very costs of the legal system to undermine its basic objectives. We agree with appellants that the filing of the removal petition, at the eve of trial, many months after the state court suit began, in a clearly improper forum, tended to undermine the goals that Rule 11 seeks to advance.

Nonetheless, we shall not remand this case. As we read the district court's brief explanation, the court denied appellants' motion for attorney's fees and "disbarment" of Charles Unanue's counsel, at least in the alternative, because the court concluded that the explanation itself — a reprimand — constituted the sanction that was "appropriate." See Fed.R.Civ.P. 11 (court shall impose "an appropriate sanction" on person who violates Rule 11); Lieb v. Topstone Indus., Inc., 788 F.2d 151, 157-58 (3d Cir.1986) (reprimand may be an "appropriate" Rule 11 sanction); cf. Ricci v. Key Bancshares of Maine, Inc., 111 F.R.D. 369 (D.Me.1986) (imposing sanction of reprimand); Betances v. Quiros, 603 F.Supp. 201, 211 (D.P.R.1985) (same). The court stated that the "litigation" at issue was "irresponsible," it referred to this public statement as a "sanction," and it said it was not disposed "to further sanction" the appellee.

We cannot overturn a finding that this sanction was "appropriate" within the terms of Rule 11. See Fed.R.Civ.P. 11 advisory committee's note to 1983 amendment (court imposing sanctions "has discretion to tailor sanctions to the particular facts of the case, with which it should be well acquainted"); Anderson v. Beatrice Foods...