Gibbes v. Ameristar Casino Vicksburg Inc.

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT June 21, 2005
Charles R. Fulbruge III
Clerk
No. 04-60835
Summary Calendar
WALTER H. GIBBES, JR.; MARGARET S. DOZIER,
Plaintiffs-Appellants,
versus
AMERISTAR CASINO VICKSBURG INC, Etc.; ET AL
Defendants
AMERISTAR CASINO VICKSBURG INC, A Nevada Corporation
Defendant-Appellee.
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Appeal from the United States District Court
for the Southern District of Mississippi, Jackson
3:99-CV-911-WS
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Before WIENER, BENAVIDES, and STEWART, Circuit Judges.
BENAVIDES, Circuit Judge:*
Plaintiffs-Appellants Walter H. Gibbes, Jr. (“Gibbes”) and
Margaret S. Dozier (“Dozier”) filed a complaint in Mississippi
state court on November 22, 1999 alleging Mississippi state law
claims against Defendants Ameristar Casinos, Inc. (“Ameristar”),
Harrah’s Vicksburg Corporation (“Harrah’s”), Isle of Capri
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
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Casinos, Inc. (“Isle of Capri”) and Deposit Guaranty National
Bank. Gibbes and Dozier owned interests in real property on the
Big Black River, between Vicksburg and Jackson, Mississippi, on
which Horseshoe Gaming, Inc. proposed the building of a casino
and an associated racetrack. Ameristar, Harrah’s and Isle of
Capri all had existing casinos in Vicksburg, and they worked
together to successfully convince the Mississippi Gaming
Commission to deny a license for the proposed casino. Gibbes and
Dozier alleged that the actions taken by Ameristar, Harrah’s and
Isle of Capri to oppose the new casino were tortious under
Mississippi law. Gibbes and Dozier asserted that they would have
received substantial economic benefits if the Gaming Commission
had approved Horseshoe Gaming, Inc.’s application.
After Isle of Capri settled with the Plaintiffs, the
remaining Defendants removed this action to the United States
District Court for the Southern District of Mississippi.
Gibbes and Dozier brought their claims against the
Defendants only after a neighboring landowner, E.L. Pennebaker,
Jr. (“Pennebaker”), used the same theory – that it was tortious
under Mississippi law for the Defendants to work together to
oppose the approval of the proposed Big Black River casino – to
win a multi-million dollar jury verdict against Ameristar and
Harrah’s. While Gibbes and Dozier’s suit against the Defendants
was pending, Ameristar and Harrah’s appealed the judgment that
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Pennebaker won against them to the Mississippi Supreme Court.1
The Mississippi Supreme Court reversed the judgment against
Ameristar and Harrah’s, concluding that the Noerr-Pennington2
doctrine protected their efforts to lobby the Gaming Commission
to deny the approval of the Big Black River Casino. Harrah’s
Vicksburg Corp. v. Pennebaker, 812 So. 2d 163 (Miss. 2001).
Accordingly, the court determined that all state law claims
asserted against Ameristar and Harrah’s were barred as a matter
of law. Id. at 174.
After the Mississippi Supreme Court found in favor of
Ameristar and Harrah’s in Pennebaker, Neville H. Boschert,
counsel for Ameristar, wrote letters to Wayne Dowdy, counsel for
Gibbes and Dozier, on May 10, 2002 and August 12, 2002,
requesting that he dismiss this action with prejudice. On August
20, 2002, Dowdy responded to Boschert’s request by stating that
he intended to proceed with the case.
1
Because Isle of Capri and Deposit Guaranty National Bank
settled with the plaintiffs in Pennebaker, only Ameristar and
Harrah’s appealed the trial court judgment in that case to the
Mississippi Supreme Court.
2
The Noerr-Pennington doctrine, which is grounded in the
First Amendment right to petition the government, provides that
parties who petition the government for governmental action
favorable to them cannot be prosecuted under the antitrust laws
even though their petitions are motivated by anticompetitive
intent. The doctrine has its origins in two U.S. Supreme Court
cases: Eastern Railroad Presidents Conference v. Noerr Motor
Freight, Inc., 365 U.S. 127 (1961) and United Mine Workers of
America v. Pennington, 381 U.S. 657 (1965).
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On September 20, 2002, Ameristar served, but in accordance
with Rule 11 of the Federal Rules of Civil Procedure did not
file, a Motion for Sanctions and Award of Attorneys’ Fees.
Ameristar’s Motion was based on the ruling of the Mississippi
Supreme Court in Pennebaker, which barred state law claims
identical to the ones brought by Gibbes and Dozier, as discussed
supra.
On November 5, 2002, Ameristar and Harrah’s filed a Motion
for Summary Judgment, which the district court orally granted
after hearing argument from counsel on December 10, 2002. On
March 26, 2003, the district court entered a Memorandum Opinion
and Order and separate Final Judgment in favor of Defendants.
On April 9, 2003, Ameristar filed its Motion for Sanctions
and Award of Attorneys’ Fees. On September 2, 2004, the district
court entered its Memorandum Opinion and Order granting
Ameristar’s Motion for Sanctions and awarding Ameristar fees and
expenses in the amount of $10,089.10.
Gibbes and Dozier appeal only this sanctions ruling. They
do not appeal the entry of summary judgment in this case.
STANDARD OF REVIEW
We review the district court’s imposition of sanctions
pursuant to Rule 11 for abuse of discretion. Whitehead v. Food
Max of Mississippi, Inc., 332 F.3d 796, 802-03 (5th Cir. 2003)(en
banc).
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DISCUSSION
Appellants contend that the district court abused its
discretion by sanctioning them, pursuant to Rule 11, for failing
to withdraw their complaint in light of the Mississippi Supreme
Court’s decision in Pennebaker. Appellants assert that the
district court should not have sanctioned them because Mr. Dowdy,
counsel for Gibbes and Dozier, believed that case law supported
the position that the federal district court in this case was not
bound by the Mississippi Supreme Court’s interpretation of the
Noerr-Pennington doctrine, which is a matter of federal law.
The district court found Appellants’ contention that the federal
courts are not bound by the Mississippi Supreme Court’s ruling in
Pennebaker to be unavailing because it was not supported by
existing law. We agree.
A federal court, in the exercise of its diversity
jurisdiction, is required to apply the substantive law of the
state in which it is sitting. See Erie R.R. Co. v. Tompkins, 304
U.S. 64 (1937). Thus, the district court in this case of wholly
state law claims was bound by the Mississippi Supreme Court’s
decision in Pennebaker. In Pennebaker, the Mississippi Supreme
Court concluded that claims identical to and based upon the same
operative facts as those asserted in the instant action were
barred by the Noerr-Pennington doctrine as a matter of
Mississippi state law. Pennebaker, 812 So. 2d at 174.
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The district court further found that the doctrine of
collateral estoppel applies to preclude the issues in the instant
case from being litigated again. The Pennebaker court’s decision
has fully and finally determined that all the issues present in
the instant case are barred by the Noerr-Pennington doctrine as a
matter of Mississippi state law.
In sum, the district court found that it was clear, based on
the foregoing principles of law in effect at the time of the
Pennebaker decision, that the Appellants’ legal contentions given
as the basis for refusing to dismiss this case were not warranted
by existing law. Accordingly, the district court concluded that
Appellants’ behavior violated Rule 11 and that sanctions were
appropriate.
We agree with the district court. Gibbes and Dozier were
given ample opportunity to dismiss this case in light of the
decision in Pennebaker and they refused to do so. This was
unreasonable and not supported by any authority. Under these
circumstances, we find that the district court did not abuse its
discretion by imposing Rule 11 sanctions in the amount of
$10,089.10.
CONCLUSION
For the foregoing reasons, the order of the district court
is in all ways AFFIRMED.
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