St Paul Mercury Ins v. Williamson ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS May 27, 2003
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
__________________________
No. 01-30648
No. 01-30879
No. 02-30215
__________________________
ST PAUL MERCURY INSURANCE COMPANY; ET AL,
Plaintiffs,
HAYNES BEST WESTERN OF ALEXANDRIA; H L HAYNES;
AMERICAN GENERAL INSURANCE CO; MARYLAND CASUALTY CO;
H L & H HOLDING CO,
Plaintiffs-Appellees,
v.
SONYA WILLIAMSON, Individually and on behalf of her minor
children; ROBERT T WILLIAMSON, Individually and on behalf of
his minor children,
Defendants-Appellants,
ABNER WILLIAMSON,
Appellant.
__________________________
No. 02-30298
__________________________
ST PAUL MERCURY INSURANCE COMPANY; ET AL,
Plaintiffs,
HAYNES BEST WESTERN OF ALEXANDRIA INC; H L HAYNES, MR;
H L HAYNES, MRS; AMERICAN GENERAL INSURANCE CO; MARYLAND
CASUALTY CO; H L & H HOLDING CO,
Plaintiffs-Appellants-Cross-Appellees,
v.
SONYA WILLIAMSON, Etc; ET AL,
Defendants,
SONYA WILLIAMSON, Individually and on behalf of her minor
children; ROBERT T WILLIAMSON, Individually and on behalf of
his minor children,
Defendants-Appellees-Cross-Appellants,
and
ABNER WILLIAMSON; DIXIE WILLIAMSON,
Appellants.
___________________________________________________
Appeals from the United States District Court for the
Western District of Louisiana
___________________________________________________
Before JONES, WIENER, and DeMOSS, Circuit Judges.
WIENER, Circuit Judge:
The case before us must be the nadir in a seemingly unending
series of lawsuits and counter-lawsuits in federal and state courts
over the past thirteen years. In this latest iteration, Sonya and
Robert Williamson (“the Williamsons”), appeal from a district
court’s order preliminarily enjoining them from prosecuting one of
the many actions they have filed in Louisiana state court against
St. Paul Mercury Insurance Co. (“St. Paul”), Haynes Best Western of
Alexandria Inc. (“Haynes Best Western”), Best Western International
(“BWI”), H.L. Haynes, Mrs. H.L. Haynes, American General Insurance
Co. (“American General”), and Maryland Casualty Co. (“Maryland”)
2
(collectively, “the insurance parties”).1 For their part, the
insurance parties have cross-appealed the district court’s denial
of their request for a permanent injunction against the Williamsons
in this same state action. As we determine that the district court
properly refused to issue a permanent injunction against the
Williamsons, which makes the district court’s preliminary
injunction against the Williamsons moot, we affirm.
I.
FACTS and PROCEEDINGS
The genesis of this appeal is a 1990 lawsuit that the
Williamsons filed in Louisiana state court against the insurance
parties (the “original lawsuit”). In that lawsuit, the Williamsons
alleged that Sonya Williamson suffered injuries resulting from an
electrical shock that she purportedly incurred while all were
living at the Haynes Best Western in Alexandria, Louisiana. In
September 1994, a jury found that Sonya Williamson was injured, but
that the injuries arose from a staged accident or fraud. The state
trial court entered judgment in favor of the insurance parties, a
Louisiana Court of Appeal affirmed the judgment in January 1997,2
and the Louisiana Supreme Court denied the Williamsons’ writ
1
St. Paul and BWI subsequently settled their claims with
the Williamsons and have been dismissed from the appeal.
American General and Maryland are now represented by their
successor-in-interest, Zurich Insurance Company (“Zurich”),
although for ease of reference, Zurich is included in the
“insurance parties” designation.
2
See Williamson v. Haynes Best Western, 688 So. 2d 1201(La. Ct. App. 1997).
3
applications in June 1997.
Harken back to November 1993. While the original lawsuit was
pending in the state trial court, St. Paul filed suit in federal
district court against the Williamsons, claiming violations of the
Racketeer Influenced and Corrupt Organizations Act (“RICO”),3 and
alleging fraud and conspiracy under Louisiana law (the “RICO
suit”). St. Paul alleged that the Williamsons had a lengthy and
well-documented history of purposefully defrauding insurance
companies through the filing of claims based on staged accidents
and non-existent injuries. The Williamsons promptly reconvened
against St. Paul; they also separately sued all of the insurance
parties, making identical claims for violations of RICO and
Louisiana fraud and conspiracy statutes. The RICO suit and the
Williamsons’ counter-lawsuits were consolidated; and, on pre-trial
motions, the district court dismissed all claims, except one: It
granted summary judgment to St. Paul on its claim against the
Williamsons for malicious prosecution.4 The district court set the
case for trial solely on the issue of damages. In November 1997,
a jury awarded damages of $411,166.56 to St. Paul. The Williamsons
appealed the malicious prosecution judgment, and St. Paul appealed
the dismissal of its RICO claims.
Now back to November 1995, when the RICO suit was still
3
18 U.S.C. §§ 1961-68 (2000).
4
See St. Paul Mercury Ins. Co. v. Williamson, 986 F. Supp.
409 (W.D. La. 1997).
4
pending in the district court and the original lawsuit was
proceeding through the state appellate courts. The Williamsons
filed a petition in Louisiana state court invoking Louisiana Code
of Civil Procedure (“LCCP”) article 2004 to annul the judgment in
the original lawsuit that found Sonya Williamson’s injuries to be
the result of either a staged accident or fraud (the “nullification
suit”). Under LCCP article 2004, a “final judgment obtained by
fraud or ill practices may be annulled.”5 Although the
nullification suit remained dormant for several years, it was
revived when the Williamsons filed a third supplemental and
amending petition in March 1998.
This revival apparently prompted the insurance parties to file
a new complaint in federal district court to enjoin the state
nullification suit (the “injunction suit”). In it, the insurance
parties contended that the Williamsons —— via the nullification
suit —— were attempting to relitigate the district court’s judgment
in the RICO suit (which dismissed the Williamsons’ claims against
the insurance parties). In October 1998, the district court issued
a preliminary injunction enjoining the Williamsons from litigating
the nullification suit in state court (the “first preliminary
injunction”). The Williamsons timely appealed.
As the two appeals from the RICO suit and the appeal from the
injunction suit derived from the same set of facts (and prior
5
LA. CODE CIV. P. art. 2004 (emphasis added).
5
lawsuits), we consolidated them in 1999. In August 2000, we issued
our first opinion in this epic, vacating in part and affirming in
part the various judgments of the district courts.6 Specifically,
in the RICO suit, we affirmed the dismissal of the Williamsons’
claims, but vacated the judgment in favor of St. Paul on its
malicious prosecution claim; we also vacated in part the district
court’s dismissal of St. Paul’s RICO claims against the
Williamsons. In the injunction suit, we vacated the first
preliminary injunction against the Williamsons, which had prevented
them from prosecuting their nullification suit in state court.
Of relevance here is the portion of our August 2000 judgment
that vacated the district court’s first preliminary injunction.
The district court had agreed with the insurance parties that the
Williamsons were attempting to relitigate the dismissal of their
claims in the RICO suit, which permitted the court to issue an
injunction under the relitigation exception in the Anti-Injunction
Act.7 We held that the relitigation exception in the Anti-
Injunction Act was inapplicable; noting that, under Louisiana law,
a nullification action could be based on either fraud or ill
practices.8 Although we recognized that the district court
“considered and adjudged the issue of fraud” in the RICO suit, we
6
See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425(5th Cir. 2000).
7
28 U.S.C. § 2283 (2000).
8
Williamson, 224 F.3d at 448-49.
6
also recognized that the record revealed that “the district court
did not actually litigate an ultimate issue of fact that precludes
the possibility of litigating the issue of ill practices and the
corresponding nullification claim.”9 Thus, we concluded that on
remand the district court could enjoin the Williamsons from
relitigating the issue of fraud in the nullification suit as
grounds for annulling the judgment under LCCP article 2004, but
that it could not enjoin the Williamsons from prosecuting the
nullification suit based on their claim that the insurance
companies engaged in ill practices, the other nullification ground
under that article.10
We thus remanded the case to the district court, and the
insurance parties promptly filed a motion for a permanent
injunction against the Williamsons to prevent them from further
prosecuting the nullification suit. Before a hearing could be held
on the insurance parties’ request for a permanent injunction,
however, the Williamsons returned to the state courts in search of
a default judgment in the nullification suit. After some palpable
forum shopping, the Williamsons eventually convinced a judge in the
Civil District Court for the Parish of Orleans to issue an order,
ex parte, granting them a default judgment.11 This effectively
9
Id. at 449 (emphasis added).
10
See LA. CODE CIV. PROC. art. 2004.
11
See In re Williamson, No. 01-30533 (5th Cir. July 25,
2001) (DeMoss, J., specially concurring) (noting that, despite
7
nullified the judgment in favor of the insurance parties in the
original lawsuit.12
When the insurance parties discovered what the Williamsons had
done, they responded by filing (1) a motion in state court
requesting a new trial and (2) motions in district court requesting
sanctions and a contempt order against the Williamsons. In April
2001, the district court held hearings on the insurance parties’
motions; the result was another preliminary injunction, which
effectively enjoined the enforcement of the default judgment in the
nullification suit (the “second preliminary injunction”). The
Williamsons timely filed a notice of appeal.
While the Williamsons’ appeal was pending before us, the state
court that had issued the default judgment continued proceedings
apace, ignoring the second preliminary injunction. In May 2001,
the state court denied the insurance parties’ motion for a new
trial. The insurance parties thus returned to the district court
and requested that the second preliminary injunction be amended to
cover any state appellate proceedings. In June 2001, the district
court agreed, expanding the scope of the second preliminary
injunction accordingly.
The Williamsons petitioned us for a writ of mandamus to order
being denied a default judgment by one Louisiana judge, the
Williamsons “continued mightily with their search until they
found a receptive ear”).
12
Id.8
the district court to vacate the second preliminary injunction. We
denied the petition, reasoning that the Williamsons had timely
filed their notice of appeal, which provided them with an adequate
remedy.13
In January 2002, before we heard the Williamsons’ appeal on
the second preliminary injunction, the district court, on remand
from our Williamson opinion, permanently enjoined the Williamsons
from relitigating the issue of fraud in the nullification suit (the
“permanent injunction”). In March 2002, the district court issued
another order that (1) denied the insurance parties’ request for a
permanent injunction to enjoin the Williamsons from pursuing their
“ill practices” claim in the nullification suit, and (2) enjoined
the Williamsons, pursuant to Federal Rule of Civil Procedure 62(c),
from prosecuting the nullification suit in state court while their
appeal of the district court’s second preliminary injunction was
pending before us. The insurance parties timely filed their notice
of appeal of the order denying their request for a permanent
injunction of the Williamsons’ “ill practices” claim. We again
consolidated the appeals, and here we are.
II.
ANALYSIS
A. The insurance parties’ request for a permanent injunction of
the Williamsons’ nullity action ground in alleged “ill
practices.”
13
See In re Williamson, No. 01-30533 (5th Cir. July 25,
2001) (order denying petition for writ of mandamus).
9
1. Standard of review.
We review for abuse of discretion a district court’s denial of
a motion for a permanent injunction.14 The application of the
relitigation exception to the Anti-Injunction Act, however, is a
question of law that we review de novo.15
2. The district court correctly refused to enjoin the
Williamsons from pursuing their “ill practices” claim.
Under the Anti-Injunction Act, a “court of the United States
may not grant an injunction to stay proceedings in a State court
except as expressly authorized by Act of Congress, or where
necessary, in aid of its jurisdiction, or to protect of effectuate
its judgments.”16 This statute is generally recognized to permit
a district court to enjoin state court proceedings on only three
bases: When it is (1) expressly authorized by a federal statute,
(2) necessary to assert jurisdiction, or (3) necessary to protect
or effectuate a prior judgment by a federal court.17
The insurance parties urge that a permanent injunction of the
Williamsons’ entire nullification suit is justified under the third
14
Regions Bank of La. v. Rivet, 224 F.3d 483, 489 (5th Cir.
2000).
15
Id.16
28 U.S.C. § 2283 (2000).
17
Atlantic Coast Line R.R. Co. v. Bhd of Locomotive Eng’rs,
398 U.S. 281, 286 (1970) (noting that the Anti-Injunction Act
establishes “an absolute prohibition against enjoining state
court proceedings, unless the injunction falls within one of
three specifically defined exceptions”).
10
condition —— protection or effectuation of a federal court’s
judgment —— commonly called the “relitigation exception.”18 The
religitation exception “is founded in the well-recognized concepts
of res judicata and collateral estoppel.”19 “[A]n essential
prerequisite for applying the relitigation exception is that the
claims or issues which the federal injunction insulates from
litigation in state proceedings actually have been decided by the
federal court.”20
The insurance parties contend that the district court erred in
denying their request for a permanent injunction against the
Williamsons’ litigating their “ill practices” claims in the
nullification suit. In support of this contention, they maintain
in the alternative that either (1) the relitigation exception in
the Anti-Injunction Act is applicable, or (2) the district court
addressed the underlying facts of the “ill practices” claim when it
adjudicated the “fraud” claim. The Williamsons respond that the
insurance parties’ contentions here amount to nothing more than a
thinly veiled attempt to circumvent our prior ruling in
18
Next Level Comms. L.P. v. DSC Comms. Corp., 179 F.3d 244,
249 (5th Cir. 1999).
19
J.R. Clearwater, Inc. v. Ashland Chem. Co., 93 F.3d 176,
179 (5th Cir. 1996) (quoting Chick Kam Choo v. Exxon Corp., 486
U.S. 140, 147 (1988)).
20
Assurance Co. of Am. v. Kirkland, 312 F.3d 186, 189 (5th
Cir. 2002) (quoting Chick Kam Choo, 486 U.S. at 148).
11
Williamson.21 At a minimum, urge the Williamsons, the insurance
parties’ claims are precluded by the Anti-Injunction Act. In the
alternative, the Williamsons suggest that we should reject the
insurance parties’ argument for an injunction here because the law
of the case doctrine applies.
Given our earlier holding in Williamson, we find ourselves
compelled to agree with the Williamsons that the law of the case
doctrine applies here. We previously determined that the
relitigation exception in the Anti-Injunction Act is inapplicable
to the Williamsons’ “ill practices” claim in the nullification
suit.22 “Under the law of the case doctrine, an issue of fact or
law decided on appeal may not be reexamined either by the district
court on remand or by the appellate court on a subsequent appeal.”23
Neither the law nor the underlying facts have changed since
Williamson. Thus, we are shackled by the law of the case doctrine
and forced to affirm the district court’s order denying the
insurance parties’ request to enjoin the Williamsons from pursuing
an “ill practices” claim in the nullification suit.
B. Did the district court err in preliminarily enjoining the
Williamsons from prosecuting their nullification action?
The resolution of the insurance parties’ appeal concerning the
21
224 F.3d at 448-49.
22
Id.
23
United States v. Matthews, 312 F.3d 652, 657 (5th Cir.
2002) (quoting Tollett v. City of Kemah, 285 F.3d 357, 363 (5th
Cir. 2002)).
12
permanent injunction has made the Williamsons’ appeal from the
order granting the preliminary injunction moot. The preliminary
injunction was superceded by the district court’s orders that (1)
granted a permanent injunction prohibiting the Williamsons from
pursuing a “fraud” claim in the nullification suit, and (2) denied
the insurance parties’ request for a permanent injunction that
would have prohibited the Williamsons from pursuing an “ill
practices” claim in the nullification suit. These orders
effectively ended the operation of the preliminary injunction that
prohibited the Williamsons from prosecuting their default judgment
in the nullification suit as such. Therefore, we need not address
this issue.24
III.
CONCLUSION
As Judge Jones noted in her dissent from the panel majority
decision in Williamson: “To stage an accident for insurance tribute
is reprehensible. But it’s also hard to see what good, or what
collectable money judgment, may come of a RICO suit against these
pathetic plaintiffs. This litigation . . . should end!”25 We
wholeheartedly agree. If it were not for our obligation to abide
by the law of the case doctrine, we would gladly bury this black-
flag pettifoggery, born and nurtured as it was of the parties’
24
Obviously, all motions carried with the appeal are also
denied as moot.
25
Williamson, 224 F.3d at 450 (Jones, J., dissenting).
13
amalgam of lawsuits and counter-lawsuits filed and prosecuted over
the past thirteen years.
Regrettably, however, we are constrained from playing Hercules
to this juridical Hydra: Lest anyone forget, we function under the
stricture of federalism and the principle of comity that is
exemplified in the Anti-Injunction Act.26 Thus, our decision to
affirm the district court should not be seen in anyway as an
imprimatur of what has occurred here. Simply put, the time has
long since passed for this litigation to end, but the hemlock is
not ours to administer: At this juncture, only the courts of
Louisiana can euthanize this unseemly saga. We remain nonetheless
confident that, even absent the mandate of a federal injunction,
the Louisiana courts will timely drive a stake through the heart of
this heretofore immortal vampire when the Williamsons further seek
to prefect and enforce their ill-practices default judgment in the
nullification suit.
AFFIRMED.
26
See Chick Kam Choo, 486 U.S. at 146 (discussing the
constitutional and policy justifications for the Anti-Injunction
Act).
14