Romo, Jose v. Gulf Stream Coach ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-2866
JOSE ROMO, MARGARITA ROMO, ELIDA ROMO,
a minor, by and through her father and next
friend JOSE ROMO, ALICIA J. CONTRERAS, and
MARIA LIMON,
Plaintiffs-Appellants,
v.
GULF STREAM COACH, INCORPORATED, an
Indiana corporation, and MONOGRAM
CONVERSIONS, INCORPORATED, an Indiana
corporation f/k/a MONOGRAM CONQUEST
CONVERSIONS,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 00 C 462 -James B. Zagel, Judge.
ARGUED FEBRUARY 23, 2001--DECIDED MAY 21, 2001
Before FLAUM, Chief Judge, and RIPPLE and
WILLIAMS, Circuit Judges.
RIPPLE, Circuit Judge. After sustaining
injuries in a car accident, the
appellants (collectively "the Romos")
filed suit in Illinois state court
against Gulf Stream Coach and Monogram
Conversions ("Gulf Stream"). Gulf Stream
removed the case to federal court and
then filed a motion to dismiss. In the
motion, it maintained that the Romos did
not serve process within 120 days of
filing the complaint, as required by Fed.
R. Civ. P. 4(m), or, in the alternative,
that the Romos had failed to exercise
reasonable diligence when serving
process, as required by Illinois Supreme
Court Rule 103(b). The district court
granted the motion to dismiss and refused
the Romos’ subsequent motion for relief
from the order. The Romos now appeal. For
the reasons set forth in the following
opinion, we affirm the judgment of the
district court.
I
BACKGROUND
The Romos sustained injuries on May 26,
1997, when the rear bench of their 1988
Chevrolet van tore loose from its
brackets upon collision with another
vehicle. On May 26, 1999, the Romos filed
suit in the Circuit Court of Cook County,
Illinois, against Gulf Stream, alleging
that Gulf Stream’s negligence in the
design and manufacture of the seat
mountings, brackets, and track system
caused the injuries. On the same day, a
summons was issued to Gulf Stream and
sent to the sheriff of Elkhart County,
Indiana.
At a case management conference in
December 1999, the Romos discovered that
the summons never had been served./1
The Romos then filed an alias summons and
sent it again to the Elkhart County
sheriff for service. Gulf Stream was
served with the alias summons in January
2000.
During the same month, the case was
removed to federal district court upon
Gulf Stream’s motion. On March 20, 2000,
Gulf Stream filed a motion to dismiss the
Romos’ complaint on the alternative
grounds that the Romos (1) did not serve
process within 120 days of filing the
complaint, as required by Fed. R. Civ. P.
4(m) or (2) had failed to exercise
reasonable diligence in their service, as
required by Illinois Supreme Court Rule
103(b). Grounding its decision on Rule
4(m), the district court granted the
motion; it held that the Romos had not
effectuated service within 120 days and
that no good cause excused the delay./2
Relying on Rule 60(b)(6) of the Federal
Rules of Civil Procedure, the Romos later
moved for relief from the district
court’s order of dismissal. The Romos
argued that the district court had erred
in holding that Rule 4(m) governed the
service of the complaint. They asserted
that only state procedural rules governed
service effectuated prior to removal. The
district court denied the Rule 60(b)(6)
motion. Although it acknowledged that it
should have applied state, and not
federal, law to assess the Romos’
diligence in serving process prior to
removal, it noted that the application of
state law still would have resulted in
the dismissal of the complaint. Thus, the
court determined that its failure to
apply state law did not constitute an
exceptional circumstance warranting
relief under Rule 60(b)(6)./3
II
ANALYSIS
In this court, both parties agree that
the district court erred when it
initially held that Rule 4(m) governed
its consideration of the motion to
dismiss the complaint. They are correct.
The Federal Rules make clear that they do
not apply to filings in state court, even
if the case is later removed to federal
court. See Fed. R. Civ. P. 81(c) (Federal
Rules govern in removal cases only "after
removal"); Alber v. Illinois Dep’t of
Mental Health and Developmental Disabil-
ities, 786 F. Supp. 1340, 1376 (N.D. Ill.
1992) ("No federal interest in a case
arises until the date of removal, and
there is no reason why federal procedural
rules should be thought to apply until
such an interest arises.").
The parties do disagree, however, as to
the applicability of Illinois Supreme
Court Rule 103(b)/4 to the case. The
Romos claim that the rule has no place in
federal court because it is procedural
and that Gulf Stream should have raised
any challenge to service in state court
before removing the case. Gulf Stream
asserts in reply that the state rule is
the proper tool to test the diligence of
service effectuated prior to removal.
We agree with Gulf Stream and conclude
that federal courts may apply state
procedural rules to pre-removal conduct.
Although we have not had occasion to
address this issue in the precise context
now presented, the timeliness of service
of process, we have addressed it in a
closely analogous context, at least in
passing. See Allen v. Ferguson, 791 F.2d
611, 616 n.8 (7th Cir. 1986) ("In
determining the validity of service prior
to removal, a federal court must apply
the law of the state under which the
service was made . . . .").
We note, too, that other federal courts
have dealt with the same or similar
issues, and their opinions provide useful
guidance for our decision today. In
McKenna v. Beezy, 130 F.R.D. 655 (N.D.
Ill. 1989), for example, the district
court applied Illinois law to dismiss the
plaintiffs’ complaint for their lack of
diligence in serving it. In that case,
because the action was filed originally
in state court and the conduct in
question occurred prior to removal, the
court applied Illinois law rather than
Rule 4(m). See id. at 656. The Eleventh
Circuit has noted that a federal court
may review, after removal, the
sufficiency of process by looking to
state law. See Usatorres v. Marina
Mercante Nicaraguenses, S.A., 768 F.2d
1285, 1286 n.1 (11th Cir. 1985).
Our conclusion here is consonant with
our previous determination that a federal
court may not apply Rule 11 to sanction
the signer of a paper filed in state
court. See, e.g., Bisciglia v. Kenosha
Unified Sch. Dist. No. 1, 45 F.3d 223,
226-27 (7th Cir. 1995); Burda v. M. Ecker
Co., 954 F.2d 434, 440 n.7 (7th Cir.
1992); Schoenberger v. Oselka, 909 F.2d
1086, 1087 (7th Cir. 1990)./5
The district court therefore committed
no error in applying the state procedural
rule. To hold otherwise would render the
federal courts powerless to address the
timeliness of service after removal.
Conclusion
For the foregoing reasons, we affirm the
judgment of the district court.
AFFIRMED
FOOTNOTES
/1 The record does not indicate why service was
never made on Gulf Stream.
/2 The court explained that it had relied upon the
Federal Rules because both parties agreed that
they applied. In their submission to that court,
however, the Romos had contended that both Rule
4(m) and Rule 103(b) were inapplicable.
/3 The Romos styled the motion as one for relief
from the district court’s order under Fed. R.
Civ. P. 60(b)(6), and the district court decided
the motion on that basis. It found no exceptional
circumstances that would justify reopening the
judgment because the same result would have been
reached under the state rule.
We note that the motion was filed within 10
days after entry of the order. Under the law of
this circuit, therefore, the motion must be
characterized as a motion to reconsider pursuant
to Fed. R. Civ. P. 59(e). See United States v.
Deutsch, 981 F.2d 299, 301 (7th Cir. 1992) (not-
ing that this court has adopted the bright-line
rule that all substantive motions filed within 10
days of the entry of judgment be treated under
Rule 59); see also Doe v. Howe Military Sch., 227
F.3d 981, 992 (7th Cir. 2000); Charles v. Daley,
799 F.2d 343, 347 (7th Cir. 1986). Although both
Rules 59(e) and 60(b) have similar goals of
erasing the finality of a judgment and permitting
further proceedings, Rule 59(e) generally re-
quires a lower threshold of proof than does Rule
60(b). See Helm v. Resolution Trust Corp., 43
F.3d 1163, 1166 (7th Cir. 1995); see also Ball v.
City of Chicago, 2 F.3d 752, 760 (7th Cir. 1993)
(distinguishing the "exacting standard" of Rule
60(b) from the "more liberal standard" of Rule
59(e)). Instead of the exceptional circumstances
required to prevail under Rule 60(b), Rule 59(e)
requires that the moving party clearly establish
a manifest error of law or an intervening change
in the controlling law or present newly discov-
ered evidence. See Cosgrove v. Bartolotta, 150
F.3d 729, 732 (7th Cir. 1998). Under either
standard, our appellate review is deferential.
See Figgie Int’l, Inc. v. Miller, 966 F.2d 1178,
1179 (7th Cir. 1992) (setting forth an abuse-of-
discretion standard for review of rulings under
Rule 59(e)); Lee v. Village of River Forest, 936
F.2d 976, 979 (7th Cir. 1991) (same for Rule
60(b)).
We do not believe that the Romos could have
fared any better under the more hospitable stan-
dard of Rule 59(e). The Romos served the com-
plaint almost eight months after it was filed,
even though Gulf Stream at all times was doing
business in Indiana and never changed locations.
The Romos also knew Gulf Stream’s location.
Moreover, as we have noted, "[i]f a litigant
wants the benefit of whatever lower threshold of
proof Rule 59(e) may offer, it behooves him to
indicate that his motion is under Rule 59(e)."
Ball, 2 F.3d at 760.
/4 Supreme Court Rule 103(b) provides:
Dismissal for Lack of Diligence. If the plaintiff
fails to exercise reasonable diligence to obtain
service on a defendant, the action as to that
defendant may be dismissed without prejudice,
with the right to refile if the statute of
limitation has not run. The dismissal may be made
on the application of any defendant or on the
court’s own motion.
/5 Other circuits agree. See Tompkins v. Cyr, 202
F.3d 770, 787 (5th Cir. 2000); Griffen v. City of
Oklahoma City, 3 F.3d 336, 339 (10th Cir. 1993).