Taylor v. Charter Medical Corp ( 1998 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
______________________________________
No. 97-10084
______________________________________
DAVID TAYLOR,
Plaintiff-Appellant,
versus
CHARTER MEDICAL CORPORATION,
and CHARTER PROVO SCHOOL, INC.
d/b/a PROVO CANYON SCHOOL
Defendants-
Appellees.
_____________________________________________
Appeal from the United States District Court
for the Northern District of Texas
_____________________________________________
December 9, 1998
Before SMITH, DUHÉ, and WIENER, Circuit Judges.
Wiener, Circuit Judge.
Plaintiff-Appellant David Taylor (“Taylor”) appeals the
district court’s grant of partial summary judgment in favor of
Defendant-Appellee Charter Provo School, Inc. d/b/a Provo Canyon
School (“New Provo Canyon”), holding that New Provo Canyon is not
a state actor for purposes of 42 U.S.C. § 1983. Concluding that
the district court’s holding is correct, we affirm.
I.
FACTS AND PROCEEDINGS
This case involves claims arising from the psychiatric
treatment Taylor received while a student/patient at New Provo
Canyon, a wholly-owned subsidiary of Defendant-Appellee Charter
Medical Corporation (“CMC”) and a private, adolescent,
residential hospital in Provo Canyon, Utah. Taylor was a minor
when his mother voluntarily admitted him to New Provo Canyon
where he was a residential patient from October 1990 to August
1991.
After attaining the age of majority, Taylor filed suit in
state court in 1995 against New Provo Canyon and CMC, alleging
various state law claims —— fraud, medical negligence, false
imprisonment, breach of fiduciary duty, and gross negligence ——
arising from his treatment at New Provo Canyon. After the
defendants removed the case to district court on diversity
grounds, Taylor amended his complaint to add specified § 1983
claims.1 New Provo Canyon then moved for partial summary
judgment as to the § 1983 claims only, insisting that it was not
“acting under color of state law” when it treated Taylor and was
thus not liable as a state actor under § 1983. Taylor countered
that consideration of New Provo Canyon’s position on the “state
1
The district court dismissed Taylor’s claims —— including his § 1983 claims ——
against CMC, holding that Taylor had failed to plead either a
viable claim against CMC as a separate entity or grounds for
disregarding CMC’s and New Provo Canyon’s corporate formalities.
2
actor” issue is foreclosed by the Tenth Circuit case of Milonas
v. Williams.2
Milonas was a class action suit brought against the Provo
Canyon School (“Old Provo Canyon”) in 1980. In Milonas, a
district court in Utah found that Old Provo Canyon —— an
independent institution not then affiliated with New Provo Canyon
or CMC in any way —— was a state actor for the purposes of § 1983
and enjoined Old Provo Canyon from continuing specified
practices. The Tenth Circuit affirmed.3 In the instant
litigation, which commenced after CMC formed New Provo Canyon to
acquire the assets of Old Provo Canyon, Taylor asked the district
court to take judicial notice of the state actor holdings in both
the district and the appellate court decisions in Milonas to
establish that New Provo Canyon is a state actor for purposes of
the present suit.4 The district court rejected Taylor’s argument
and granted New Provo Canyon’s motion for partial summary
judgment, dismissing Taylor’s § 1983 claims only.
The parties tried the remaining state court claims to a
2
691 F.2d 931 (10th Cir. 1982). The district court’s
opinion in Milonas, Civil No. C-787-0352, is unpublished.
3
Id.4
Given the nature of the acquisition by CMC and New Provo Canyon of Old Provo
Canyon’s assets, a serious question exists whether New Provo Canyon is the same entity as Old
Provo Canyon or even its legal successor. As we reject Taylor’s judicial notice claim, though, we
do not reach the question whether a state actor determination as to Old Provo Canyon would
apply to New Provo Canyon even if the district court were to take judicial notice of the prior
determination of Old Provo Canyon’s state actor status.
3
jury, which found that New Provo Canyon was 25% at fault for the
damages Taylor suffered.5 After the court determined that New
Provo Canyon was liable to Taylor in the amount $7,500, Taylor
timely filed a notice of appeal.
5
The jury found Taylor’s mother 75% at fault for Taylor’s
damages.
4
II.
ANALYSIS
A. Standard of Review
We review the district court’s grant of summary judgment de
novo6 and its refusal to take judicial notice for abuse of
discretion.7
B. Judicial Notice
In his appellate brief, Taylor argues that, “as a matter of
stare decisis, collateral estoppel, or judicial notice, the
district court’s decision in Milonas should inform the decision
of the district court and the decision of this Court.” Taylor’s
contentions are wholly without merit. We write primarily to
address when, if ever, a court can take judicial notice of the
factual findings of another court, and we turn to this issue
first.
Taylor argues that the district court erred in not taking
judicial notice of the Milonas courts’ determination that Old
Provo Canyon was a state actor. Rule 201 of the Federal Rules of
Evidence provides that a court may take judicial notice of an
“adjudicative fact” if the fact is “not subject to reasonable
dispute in that it is either (1) generally known within the
6
Eugene v. Alief Indep. Sch. Dist., 65 F.3d 1299, 1303 (5th
Cir. 1995), cert. denied, 517 U.S. 1191 (1996).
7
C.A. Hardy v. Johns-Manville Sales Corp., 681 F.2d 334, 337 (5th Cir. 1982).
5
territorial jurisdiction of the trial court or (2) capable of
accurate and ready determination by resort to sources whose
accuracy cannot be questioned.”8 Taylor asserts that the factual
findings of the district court in Milonas —— upheld on appeal ——
fall within this second category. We disagree.
We have not previously addressed this precise issue, but the
Second,9 Eighth,10 and Eleventh Circuits11 have, holding that, even
though a court may take judicial notice of a “document filed in
another court . . . to establish the fact of such litigation and
related filings,”12 a court cannot take judicial notice of the
factual findings of another court. This is so because (1) such
findings do not constitute facts “not subject to reasonable
8
Fed. R. Ev. 201(b).
9
Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc., 969
F.2d 1384, 1388-89 (2d Cir. 1992) (holding district court could
not take judicial notice of bankruptcy court’s finding that
sellers had provided notice required to preserve their trust
rights and were cash sellers).
10
Holloway v. A.L. Lockhart, 813 F.2d 874, 878-79 (8th Cir. 1987) (holding district court
could not take judicial notice of finding of another court that use of tear gas was reasonable and
necessary).
11
United States v. Jones, 29 F.3d 1549, 1553 (11th Cir. 1994)
(holding district court could not properly take judicial notice
of findings of another court establishing nature of salary
dispute in question).
12
Lib. Mut. Ins., 969 F.2d at 1388; see also Jones, 29 F.3d at 1553;
Colonial Leasing Co. of New England v. Logistics Control Group,
762 F.2d 454 (5th Cir. 1985) (discussed below).
6
dispute” within the meaning of Rule 201;13 and (2) “were [it]
permissible for a court to take judicial notice of a fact merely
because it had been found to be true in some other action, the
doctrine of collateral estoppel would be superfluous.”14
In General Electric Capital Corporation v. Lease Resolution
Corporation,15 the Seventh Circuit adopted a rule similar, but
not identical, to that of the Second and Eleventh Circuits. The
court in General Electric held that the district court had erred
in taking judicial notice of a finding that a settlement in a
prior, unrelated proceeding was “fair, reasonable, and adequate.”
The Seventh Circuit held that these findings did not qualify as
facts “not subject to reasonable dispute.”16 The court did not,
however, adopt a per se rule against taking judicial notice of an
adjudicative fact in a court record, stating:
We agree [with the Second and Eleventh Circuits] that
courts generally cannot take notice of findings of fact
from other proceedings for the truth asserted therein
because these are disputable and usually are disputed.
However, it is conceivable that a finding of fact may
satisfy the indisputability requirement of Fed. R.
Evid. 201(b). This requirement simply has not been
13
Jones, 29 F.3d at 1553-54; Lib. Mut. Ins., 969 F.2d at 1388-89; Holloway, 813 F.2d at
878-79; see also Nipper v. Snipes, 7 F.3d 415, 415-417 (4th Cir. 1993) (holding district court
abused its discretion in admitting state court findings of fact).
14
Id. at 1553; see also Lib. Mut. Ins., 969 F.2d at 1388-89; Holloway, 813 F.2d at 879.
15
128 F.3d 1074 (7th Cir. 1997).
16
Id. at 1801-83. The court also noted that, if a court were to take judicial notice of
another court’s findings of fact, it would render the doctrine of collateral estoppel superfluous.
Id. at 1083.
7
satisfied in this case.17
It is not necessary at this point for us to determine
whether courts in this circuit are never permitted to take notice
of the factual findings of another court or are permitted to do
so on rare occasion, subject to the Rule 201's indisputability
requirement, because the Milonas courts’ state actor
determination cannot clear the rule’s “indisputability” hurdle.18
That Old Provo Canyon was a state actor for the purposes of the
Milonas suit (let alone for the purposes of the present suit) was
certainly open to dispute and was, in fact, disputed by the
parties. That determination simply was not the type of “self-
evident truth[] that no reasonable person could question, [a]
truism[] that approach[es] platitude[] or banalit[y],” as
required to be eligible for judicial notice under Rule 201.19
17
Id. at 1082 n.6.
18
We note, however, that we have difficulty conceiving of an
adjudicative fact found in a court record that is not subject of
reasonable dispute and, therefore, of which a court could take
judicial notice. If such a fact were to exist, it would seem
that it would have to obtain its “indisputable” status from some
source other than a court’s imprimatur in the form of a factual
finding.
19
See C.A. Hardy, 681 F.2d at 347-48 (holding that district
court abused its discretion in taking judicial notice that
asbestos causes cancer because proposition “is inextricably
linked to a host of disputed issues”); Cf. Harcon Barge Co., Inc.
v. D&G Boat Rentals, Inc., 746 F.2d 278, 282 n.1 (5th Cir. 1984)
(taking judicial notice of the manner in which clerks of the
district courts of the Fifth Circuit note date of entry of
order, which was not disputed by the parties).
8
In addition, the Milonas courts’ state actor determination
is not an “adjudicative fact” within the meaning of Rule 201.
Whether a private party is a state actor for the purposes of §
1983 is a mixed question of fact and law and is thus subject to
our de novo review.20 Rule 201 authorizes the court to take
notice only of “adjudicative facts,” not legal determinations.21
Therefore, a court cannot take judicial notice of another court’s
legal determination that a party constituted a state actor for
the purposes of § 1983: That determination is neither an
adjudicative fact within the meaning of Rule 201 nor beyond
“reasonable dispute.”
This result is wholly consistent with our precedent. In
Colonial Leasing Co. of New England v. Logistics Control Group,22
we addressed whether, in a creditor’s subsequent suit against its
debtor for fraudulent transfer of assets, the district court had
improperly taken judicial notice of the existence of a prior
judgment in favor of that creditor.23 In holding that the
district court did not abuse its discretion, we stated that
20
Albright, 884 F.2d at 838.
21
See Charles Alan Wright & Kenneth W. Graham, Federal
Practice & Procedure: Evidence § 5103 at 472-73 (1977) (Courts
cannot take judicial notice of legal determinations under Rule
201).
22
762 F.2d 454 (5th Cir. 1985).
23
Id. at 459.
9
“[t]he district court could properly take judicial notice, under
Rule 201(b), of the judgment for the limited purpose of taking as
true the action of the Oregon court in entering judgment for [the
creditor] against [the debtor] . . . . The judicial act itself
was not a fact Id. (emphasis added).
25
580 F.2d 1260 (5th Cir. 1978).
26
Id. at 1277 n.33.
10
opportunity to submit its own evidence and to question those
parties whose depositions were made part of the record.27 In his
brief, Taylor argues that, in so holding in Kinnett, we went
beyond simply permitting a district court to take judicial notice
of facts found true by another court, actually allowing the
district court to take “as true certain evidence in depositions
in a completely separate case.”
Taylor misreads Kinnett. In fact, the issue in Kinnett was
not even properly categorized as one of judicial notice, despite
the court’s use of that term. A fact that has been judicially
noticed is not subject to dispute by the opposing party ——
indeed, that is the very purpose of judicial notice.28 The
district court in Kinnett, however, did not accept the deposition
testimony and evidence presented to it as true, but rather
granted the defendant the opportunity to present counter-evidence
and examine witnesses on the issues covered by the alleged
judicially-noticed deposition testimony.29 The court did not, as
Taylor asserts in his brief, take “as true certain evidence in
27
Id.28
See Jones, 29 F.3d at 1553 (“Since the effect of taking judicial notice under Rule 201 is
to preclude a party from introducing contrary evidence and in effect, directing a verdict against
him as to the fact noticed, the fact must be one that only an unreasonable person would insist on
disputing.”) (quoting Wright & Graham, Federal Practice & Procedure: Evidence § 5104 at 485);
C.A. Hardy, 681 F.2d at 347-48 (“The rule of judicial notice
580 F.2d at 1277 n.33.
11
depositions in a completely separate case.” It simply admitted
into evidence deposition testimony taken in another case.
Kinnett, therefore, in no way conflicts with our holding today
that the district court did not err in refusing to take judicial
notice of the Milonas courts’ state actor determination.
C. Stare Decisis
We dispense with Taylor’s remaining two arguments quickly.
First, Milonas is not entitled to stare decisis effect in this
Circuit because it is a Tenth Circuit case, and there is no rule
of intercircuit stare decisis.30 Moreover, “[s]tare decisis
means that like facts will receive like treatment in a court of
law.”31 Milonas was a class action suit, in which the federal
district court in Utah looked to Old Provo Canyon’s treatment of
the class as a whole to determine whether state action existed.32
The present inquiry —— whether New Provo Canyon’s treatment of
one individual constituted state action —— differs substantially
from that in Milonas, irrespective of whether, for purposes of a
class action suit, Old Provo Canyon’s treatment of its patients
30
See, e.g., United States v. Scallion, 548 F.2d 1168, 1173
n.8 (5th Cir. 1977) (refusing to follow Second Circuit); Samuel
Estreicher & Richard L. Revesz, Nonacquiescence by Federal
Administrative Agencies, 98 Yale L.J. 679, 735-41 (1989).
31
Brock v. El Paso Natural Gas Co., 826 F.2d 369, 374 (5th
Cir. 1987) (quoting Flowers v. United States, 764 F.2d 759, 761
(11th Cir. 1985)). Black’s Law Dictionary defines stare decisis
as “to abide by, or to adhere to, decided cases”. Black’s Law
Dictionary 1406 (6th ed. 1990).
32
Milonas, 691 F.2d at 939-40.
12
generally constituted state action. Thus, the question here does
not present the necessary “like facts” to trigger the stare
decisis doctrine.
D. Collateral Estoppel
For the very same reason, Taylor’s collateral estoppel
argument fails. Collateral estoppel —— or claim preclusion —— is
applied to bar litigation of an claim previously decided in
another proceeding by a court of competent jurisdiction when ——
but only when —— the facts and the legal standard used to assess
the facts are the same in both proceedings.33 Collateral
estoppel does not bar the litigation of the state actor issue in
the present suit because, although an entity may be deemed a
state actor generally, in the case of a private party, the
relevant question is whether the specific conduct in question
constituted state action.34 Milonas determined that Old Provo
Canyon’s challenged conduct —— treatment of the class ——
constituted state action. That conduct is irrelevant to whether
New Provo Canyon’s individualized treatment of Taylor constitutes
state action. The facts underlying the two disputes are by no
means the same.
Finally, finding no merit in Taylor’s remaining arguments,
33
Id.34
See, e.g., Goss v. Memorial Hosp. Sys., 789 F.2d 353, 356 (5th
Cir. 1986) (examining whether private hospitals’ revocation of
doctor plaintiff’s staff privileges constitutes state action).
13
we decline to address them.
III.
CONCLUSION
For the foregoing reasons, we affirm the district court’s
grant of summary judgment.
AFFIRMED.
14