Whitehead v. Food Max of Mississippi, Inc.

• Decision Date: 27 June 2003
• Docket Number: No. 00-60153.,00-60153.
• Parties: BENNIE WHITEHEAD; ET AL., Plaintiffs, v. FOOD MAX OF MISSISSIPPI, INC.; ET AL., Defendants. K MART CORPORATION, Defendant-Appellee, v. PAUL S. MINOR, Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

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BENNIE WHITEHEAD; ET AL., Plaintiffs, v. FOOD MAX OF MISSISSIPPI, INC.; ET AL., Defendants.

K MART CORPORATION, Defendant-Appellee, v. PAUL S. MINOR, Appellant.

No. 00-60153.

United States Court of Appeals, Fifth Circuit.

May 29, 2003.

Revised June 27, 2003.

Appeal from the United States District Court for the Southern District of Mississippi.

Before KING, Chief Judge, and JOLLY, HIGGINBOTHAM, DAVIS, JONES, SMITH, WIENER, BARKSDALE, EMILIO M. GARZA, DeMOSS, BENAVIDES, STEWART, DENNIS, and CLEMENT, Circuit Judges.¹

RHESA HAWKINS BARKSDALE, Circuit Judge:

Pursuant to Federal Rule of Civil Procedure 11, the district court sanctioned Paul S. Minor, an attorney, for obtaining a writ to execute judgment. The primary reason for our en banc review is to decide whether the district court abused its considerable discretion in imposing sanctions for Minor's violation of Rule 11(b)(1) ("improper purpose" in obtaining writ of execution). The district court acted within its discretion. AFFIRMED.

I.

In May 1997, the district court entered an approximate $3.4 million judgment for Minor's clients against Kmart Corporation in an action arising out of heinous acts by two individuals not associated with Kmart: their abduction of a mother and her daughter from a Kmart parking lot in Jackson, Mississippi, and the subsequent rape of the mother. A jury found Kmart negligent in failing to provide adequate parking lot security. See Whitehead v. Food Max of Miss., Inc., 163 F.3d 265 (5th Cir. 1998).

At trial, Minor was sanctioned $1,000 for violating, during his closing argument, an earlier warning by the district court. Id. at 277 n.3. This followed Minor's refusals during trial to follow other court instructions. See id. at 276-77.

In June 1997, shortly after entry of judgment, Kmart moved for a remittitur or, alternatively, a new trial. See FED. R. CIV. P. 59. In addition, pursuant to Federal Rule of Civil Procedure 62(b), it requested a stay of execution of judgment pending resolution of those post-trial motions. That stay motion was not decided, however, until 18 August, when the Rule 59 motions were denied. The accompanying stay motion was then dismissed as moot. That same day, the district court denied Minor's request to reconsider the $1,000 sanctions imposed at trial.

Three days later, using a handwritten request he had signed, Minor obtained from the district court clerk a writ of execution for the judgment (the writ). In addition, Minor notified the media about the pending execution. With media representatives and two United States Marshals, Minor entered the Kmart (the abduction had occurred in its parking lot) and attempted to execute the judgment by seizing currency in the cash registers and vault. The seizure was delayed to allow Kmart's employees a chance to consult with their management and attorneys; shortly thereafter, it was stayed by the district court. No cash was seized.

While at the Kmart, Minor was interviewed by the media; news reports about the writ-execution, including Minor's extremely hyperbolic, intemperate, and misleading comments (improper comments), were, among other media, broadcast in at least three television reports. Minor characterized Kmart's actions as "arrogan[t]" and "outrageous" and asserted Kmart "wo[uld no]t pay" the judgment; claimed Kmart had been "warned" before the abduction that "an event like [that] was going to happen" but "didn't care"; charged his clients had been twice "victimized" by Kmart, once by being abducted there and once by Kmart's "not paying . . . a just debt"; and proclaimed he was there to ensure Kmart did what it was supposed to do.²

That same day, the district court held a teleconference with the parties: Kmart was directed to submit a supersedeas bond (it later did so); and Kmart advised it would seek sanctions against Minor. Kmart soon moved for sanctions, pursuant, inter alia, to Rule 11.

Kmart charged Minor had violated an automatic ten-day stay of execution of judgment, claimed to be in effect pursuant to Federal Rule of Civil Procedure 62(f), which incorporated Mississippi Rule of Civil Procedure 62(a). Federal Rule 62(f) provides:

Stay According to State Law. In any state in which a judgment is a lien upon the property of the judgment debtor and in which the judgment debtor is entitled to a stay of execution, a judgment debtor is entitled, in the district court held therein, to such stay as would be accorded the judgment debtor had the action been maintained in the courts of that state.

FED R. CIV. P. 62(f) (emphasis added). Mississippi Rule 62(a) provides in part:

Automatic Stay; Exceptions. Except as stated herein or as otherwise provided by statute or by order of the court for good cause shown, no execution shall be issued upon a judgment nor shall proceedings be taken for its enforcement until the expiration of ten days after its entry or the disposition of a motion for a new trial, whichever last occurs.

MISS. R. CIV. P. 62(a) (emphasis added).

Kmart maintained: pursuant to Mississippi Rule 62(a), a tenday stay is automatic in state court after disposition of a new trial motion; therefore, application of that rule, through Federal Rule 62(f), resulted in a stay from the 18 August denial of Kmart's new trial motion. Kmart also asserted: Minor, with "numerous newspaper reporters and television interview teams", and without justification, "paraded through [Kmart] in full view of customers and employees . . . orchestrat[ing] damage to Kmart, its business and goodwill"; and his "improper purpose" (proscribed by Rule 11(b)(1)) was obvious from these actions. Provided with the motion were copies of two articles from newspapers in Jackson and another city in Mississippi and a videotape of television broadcasts about the attempted execution. These items included Minor's improper comments.

Minor responded: following denial of the new trial motion, Kmart had not moved, pursuant to Federal Rule 62(f), for the Mississippi Rule 62(a) automatic stay; therefore, no stay had been in effect. (Nothing in the record indicates Minor contended in district court that the judgment did not constitute a lien against Kmart's property (one of the prerequisites for a Federal Rule 62(f) stay).)

Minor also contended: seeking to obtain a portion of the judgment was not an improper purpose proscribed by Rule 11(b)(1); and, "where counsel's action has a reasonable basis under the law, a court will not find an improper purpose. . . ." Minor's affidavit stated he attempted execution in order to obtain a portion of the judgment because: (1) Kmart had not returned his telephone calls concerning potential settlement; and (2) he was concerned that Kmart, which he believed to be self-insured, had not posted a supersedeas bond.

The district court apparently delayed ruling on the sanctions motion pending Kmart's appeal from the judgment in the underlying action. For that appeal, our court held the jury had been influenced by passion and prejudice resulting from Minor's closing argument; the action was remanded in early 1999 for a new trial on damages. See Whitehead, 163 F.3d at 276-78, 281. That March, in the light of extensive briefing, oral argument (January 1998), and painstaking analysis of the authority construing Federal Rule 62(f), the district court ruled on the sanctions motion.

In a well-reasoned opinion, the court concluded: a motion is not a prerequisite to a stay under Federal Rule 62(f); and Kmart was protected by the stay against the attempted execution. Whitehead v. Kmart Corp., 202 F. Supp. 2d 525, 529-32 (S.D. Miss. 1999). Concomitantly, the court concluded that Minor had "failed to make a reasonable inquiry into the law governing execution of judgments. . . ." Id. at 532. The court also ruled Minor "was seeking to embarrass [Kmart] and call attention to himself as a tireless laborer of the bar attempting to obtain justice for his client when, in fact, there was no basis whatsoever in fact or in law for the actions taken. . . ." Id. at 533.

Minor was ordered to pay Kmart approximately $8,000 — its attorney's fees for opposing the execution. Id. Although Kmart had requested a public apology by Minor, the district court determined, and Kmart agreed, that publication of the sanctions opinion would suffice. Id. (The opinion was published in 2002, after rendition of the now-vacated panel opinion for this appeal.)

Following the remand-trial on damages, Minor appealed the Rule 11 sanctions. In January 2002, a divided panel reversed them. Whitehead v. Food Max of Miss., Inc., 277 F.3d 791 (5th Cir.), vacated by 308 F.3d 472 (5th Cir. 2002) (en banc). (The panel majority included a district judge and Judge Henry A. Politz, who authored the opinion. Judge Politz died prior to our deciding to review this appeal en banc.)

Regarding Rule 11(b)(2) (objective reasonableness of inquiry concerning existing law), the panel majority held: as a matter of law, Federal Rule 62(f) does not afford the stay provided by state law unless the judgment debtor files a motion claiming the stay accordingly, no stay was in effect; and the record did not support a conclusion that, before requesting the writ, Minor failed to make a reasonable inquiry into the governing law. Id. at 794-96.

Concerning Rule 11(b)(1) (improper purpose), the panel majority held: Minor's "intentional use of publicity for the purpose of embarrassing an adversary" was "patently inappropriate"; but, absent exceptional circumstances, an ulterior motive should not be read into a document filed for a legitimate purpose; and "any consequences that . . . flow[ed] from such behavior" was a decision for the state bar. Id. at 796-97 (emphasis added).

The dissent urged that the district court did not abuse its discretion in concluding independent subparts (b)(1) and (2) were each violated. Id. at 797-802 (Barksdale, J., dissenting). Regarding subpart (b)(2), the dissent stated: it was not necessary to decide,...