Worldwide Primates, Inc. v. McGreal

• Decision Date: 25 July 1994
• Docket Number: No. 93-4094,93-4094
• Citation: 26 F.3d 1089
• Parties: WORLDWIDE PRIMATES, INC., Plaintiff-Appellee, Paul H. Bass, Respondent-Appellee, v. Shirley McGREAL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1089

26 F.3d 1089

29 Fed.R.Serv.3d 832

WORLDWIDE PRIMATES, INC., Plaintiff-Appellee Paul H. Bass, Respondent-Appellee, v. Shirley McGREAL, Defendant-Appellant.

No. 93-4094.

United States Court of Appeals Eleventh Circuit.

July 25, 1994.

Thomas R. Julin, Steel, Hector & Davis, P.A., Miami, FL, for appellant.

Edgar Miller, Kenneth L. Paretti, Coral Gables, FL, for appellee.

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

Before TJOFLAT, Chief Judge, DUBINA, Circuit Judge, and RONEY, Senior Circuit Judge.

RONEY, Senior Circuit Judge:

In this appeal, we reverse the district court's denial of a motion for sanctions under Rule 11 of the Federal Rules of Civil Procedure.

On August 3, 1990, Worldwide Primates, Inc. (Worldwide), a Florida corporation engaged in the commercial wildlife trade, sued Dr. Shirley McGreal in Florida state court for tortious interference with an advantageous business relationship. The single count complaint alleged that McGreal, an animal rights activist and the chairperson of the International Primate Protection League, intentionally and unjustifiably damaged Worldwide's relationship with one of its clients, Delta Primate Center (Delta), by sending two letters critical of Worldwide to Delta's director, Dr. Peter Gerone. The first letter was dated January 15, 1989, and read as follows:

Dear Dr. Gerone:

The International Primate Protection League has just learned that the Delta Primate Center may be attempting to import no less than 150 sooty mangabeys for leprosy experiments, and that a Florida animal dealer (who even attempted to enter the gorilla trade some years ago) has been hired to obtain the animals.

This dealer's firm is Worldwide Primates. The firm has received very damning criticisms from the Department of Agriculture inspectors and has tried to undermine inspectors' authority by going over their heads.

I enclose some relevant documents.

Will you please provide IPPL with answers to the following questions:

1) Is Delta planning to import wild-caught sooty mangabeys?

2) Is the quoted number (150) exact and how was it chosen?

3) In what country will the animals be caught?

4) What capture methods will be used?

5) What price will be paid for these animals?

6) Why does Delta work with commercial wildlife traffickers?

These endangered primates would be far better off living in the wild than in your institution, wouldn't you agree if you were a nonhuman primate?

Yours sincerely,

/s/ Shirley McGreal

Chairwoman, IPPL

A copy of this letter was attached to the complaint. Significantly, however, the enclosures mentioned in the letter were not attached to the complaint. Those enclosures included a memorandum from the United States Department of Agriculture, which, consistent with McGreal's assertions, detailed "major deficiencies" in Worldwide's operation, including unsanitary, inadequate, and damaged animal cages, as well as other deficiencies "too numerous to mention." The memorandum also stated that "[s]o far, Matthew Block has avoided allegations of violation of the Animal Welfare Act by successfully involving seven levels of government in this agency, by invoking complaints, and allegations of everything from over-inspection to bigotry." McGreal's second letter was dated June 18, 1990, approximately 18 months after the first. This is its entire text:

Dear Dr. Gerone:

Should Delta patronize the company Worldwide Primates, we invite you to peruse this animal dealer's notice from the Centers for disease Control suspending his license to import primates.

Yours sincerely,

/s/ Shirley McGreal

Chairwoman, IPPL

This letter, like the first, was attached to the complaint without the document that was enclosed in the letter. That document, a letter from the United States Department of Health and Human Services, notified Worldwide's president, Matthew Block, that "your registration to import nonhuman primates into the United States is revoked for failure to implement appropriate isolation and quarantine procedures." The letter specified no fewer than 46 procedural violations.

McGreal, a South Carolina resident, promptly removed the case to federal court based on diversity jurisdiction, and filed a motion to dismiss the complaint under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. McGreal argued that her letters, being "nonviolent, truthful speech on matters of public concern" were protected by the First Amendment, and therefore could not provide a basis for tort liability. On November 1, 1990, Worldwide filed a memorandum opposing dismissal. The district court, without the benefit of McGreal's enclosures, denied the motion to dismiss on the ground that the letters' truthfulness could not be determined from the face of the complaint.

McGreal thereafter moved for summary judgment, arguing not only that the letters were protected speech, but also that they had caused no damage to Worldwide. When Worldwide failed to file a timely response to that motion, McGreal requested a default. Shortly thereafter, Worldwide moved to voluntarily dismiss the case under Fed.R.Civ.P. 41(a)(2), stating that its president, Matthew Block, had recently been indicted for violating federal laws relating to the sale of animals, and that it could not participate in discovery without potentially affecting the criminal matter. The district court granted Worldwide's motion, over McGreal's objection, and dismissed the lawsuit with prejudice.

Before the dismissal, McGreal had filed a motion for sanctions against Worldwide under Rule 11 of the Federal Rules of Civil Procedure, arguing that the lawsuit was legally and factually baseless and that it had been filed to harass McGreal for exercising her right to free speech. Noting that the dismissal did not foreclose the imposition of sanctions, Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 398, 110 S.Ct. 2447, 2457, 110 L.Ed.2d 359 (1990), the district judge referred the matter to a magistrate judge for a report and recommendation. Following oral argument, the magistrate judge recommended the motion be denied. The district judge, over McGreal's objections, accepted the recommendation and denied the motion for sanctions. This appeal challenges that ruling.

The Rule 11 in place at the time of these proceedings provided that the district court shall impose sanctions when a party files a pleading that has no reasonable factual or legal basis or when the party files a pleading in bad faith for an improper purpose. Pelletier v. Zweifel, 921 F.2d 1465, 1514 (11th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 167, 116 L.Ed.2d 131 (1991). The district court's standard for evaluating an alleged violation is reasonableness under the circumstances. Didie v. Howes, 988 F.2d 1097, 1104 (11th Cir.1993). We review the district court's ruling for abuse of discretion. Cooter & Gell, 496 U.S. at 405, 110 S.Ct. at 2460.

Where, as here, a case is removed from state court, Rule 11 does not apply to pleadings filed before removal. Griffen v. City of Oklahoma City, 3 F.3d 336, 339 (10th Cir.1993). The rule, however, is applicable to papers filed in federal court after removal. Fed.R.Civ.P. 81(c). Thus, although Worldwide's complaint, which was filed in state court, cannot be the basis of a Rule 11 violation, any subsequent federal court filings, such as those in opposition to a motion to dismiss, are sanctionable if they resulted in the continuation of a baseless lawsuit.

In denying McGreal's motion the magistrate judge's report and recommendation recited the following:

Although this Court is sympathetic to the position of Defendant, and agrees that there is a suggestion that Plaintiff may have been motivated by a desire to chill Defendant from expressing her views concerning Plaintiff's activities, there is no evidence of record which would support the imposition of Rule 11 sanctions. Defendant has been unable to establish that Plaintiff's Complaint had no reasonable legal basis, had no reasonable factual basis, or was filed for an improper purpose. Defendant has been unable to provide, and this court has been unable to find, any case which allowed the imposition of Rule 11 sanctions on similar facts.

Contrary to this assessment, the record amply supports the...