Midwest Motor Exp. v. Central States

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No. 94-3328
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*
Midwest Motor Express, Inc.; *
Midnite Express, Inc.; Express *
Cartage, Inc. *
*
Appellants, * Appeal from the United States
* District Court for the
v. * District of North Dakota.
*
Central States Southeast and *
Southwest Areas Pension Fund, *
*
Appellee. *
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Submitted: September 14, 1995
Filed: December 4, 1995
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Before WOLLMAN, JOHN R. GIBSON, and MORRIS SHEPPARD ARNOLD, Circuit
Judges.
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MORRIS SHEPPARD ARNOLD, Circuit Judge.
Midwest Motor Express appeals from an order transferring this case
from the District of North Dakota to the Northern District of Illinois.
We affirm the order of the district court.1
I.
Midwest was obligated under its multiemployer collective bargaining
agreement to make contributions to Central States, a pension fund. During
a labor strike, Midwest ceased making pension contributions to Central
States, creating concern at Central States
1
The Honorable Patrick A. Conmy, United States District Judge
for the District of North Dakota.
that Midwest would withdraw and permanently cease making such
contributions. If an employer withdraws from a multiemployer plan, the
employer is liable to the plan for an amount known as "withdrawal
liability." 29 U.S.C. § 1381(a) (1985). The parties litigated the matter
of withdrawal liability, but settled the litigation before it reached any
conclusion on its merits.
Some time later, the union at Midwest was decertified. This
triggered Central States' belief once again that Midwest would withdraw and
cease to make contributions. Central States sued Midwest in the Northern
District of Illinois and sent Midwest a Notice and Demand of Withdrawal
Liability as provided under the Multiemployer Pension Plan Amendments Act
of 1980. In response to this notice, Midwest initiated the present action
for declaratory and injunctive relief and moved to enjoin Central States
from seeking remedies based on Midwest's failure to pay withdrawal
liability. (It seems that the proposed injunction was an attempt to
prevent Central States from moving ahead in any other forum.) Central
States then moved to transfer venue to the Northern District of Illinois
under 28 U.S.C. § 1404(a). A magistrate judge2 granted the motion to
transfer and dismissed the motion for injunction and the district court
upheld the magistrate's decision. The district court clerk's office,
without waiting a reasonable period of time to give the parties an
opportunity to file a notice of appeal, immediately mailed the case file
to the Northern District of Illinois. The Northern District of Illinois
dismissed the case after transfer on the grounds that it had no
jurisdiction while this appeal was lodged in the Eighth Circuit.
II.
We initially address some jurisdictional matters. First, although
we generally do not exercise jurisdiction over transfer
2
The Honorable Dwight C. H. Kautzmann, United States
Magistrate Judge for the District of North Dakota.
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orders, see, e.g., United States Fire Ins. Co. v. American Family Life
Assurance Co., 787 F.2d 438, 439 (8th Cir. 1986), we do so when the order
to transfer has the effect of refusing an injunction and the motion for
injunction and the order to transfer are inextricably bound up with each
other. See 28 U.S.C. § 1292(a)(1); Nordin v. Nutra/System, Inc., 897 F.2d
339, 343 (8th Cir. 1990); Emerson Elec. Co. v. Black & Decker Mfg. Co., 606
F.2d 234, 237 (8th Cir. 1979). In this case, the order had the effect of
refusing an injunction, and the order and the injunction sought were
inextricably bound up with each other, because the injunction would have
prevented Central States from proceeding in the Northern District of
Illinois, and the order in fact sent the case to that district.
Second, Central States argues that this court does not have
jurisdiction because the district court clerk mailed the court file to the
Northern District of Illinois before the notice of appeal was filed in our
court. Our circuit takes the view that the physical receipt of the file
in the transferee court is the event that signals the end of jurisdiction
in the transferor court. In re Nine Mile Limited, 673 F.2d 242, 243-244
& n. 5 (8th Cir. 1982) (per curiam). Central States argues that, under
Nine Mile, we never acquired jurisdiction because the notice of appeal was
filed after the district court lost jurisdiction of the case. We note,
however, that the physical transfer of the file was premature because it
was sent in violation of Nine Mile's directive to district court clerks
that they wait a reasonable period before transferring case files after a
transfer order is entered, 673 F.2d at 244, and also appears to have been
an inadvertence since the file was mailed in violation of that clerk's
office's own policy (presumably in accordance with Nine Mile's directive)
of waiting thirty days before mailing a file pursuant to a transfer.
We question the applicability of Nine Mile when the clerk's physical
transfer of the file was premature, mistaken, and was of
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no practical effect. The premature mailing in violation of Nine Mile's
directive renders the transfer of questionable legal effect. Cf. Farrell
v. Wyatt, 408 F.2d 662, 664 (2d Cir. 1969) ("the question here is whether
the district court had power to order the transfer; when that is the issue,
we reject the argument ... that the clerk's physical transfer of the file
destroyed our jurisdiction"). The mailing also appears to have been a
simple mistake, and, frankly, it seems to us odd at best that the clerk's
act of mistakenly putting a case file on a mail truck bound for Montana
could divest a federal circuit court of appeals of jurisdiction. The rule
that jurisdiction follows the file avoids the procedural and jurisdictional
snarl that would likely ensue if two courts were simultaneously working on
the same case. See 15 Charles A. Wright, Arthur R. Miller & Edward H.
Cooper, Federal Practice & Procedure § 3846 at 358 (2d ed. 1986)
(exceptions to the rule in question "create possibilities of unseemly
duplication of effort, and perhaps even inter-circuit conflict, if an
appeal is going forward in one circuit while the papers are lodged in a
district court in another"). We need not worry about any such conflict
here because the Northern District of Illinois declined jurisdiction over
the transferred file.
The premature physical transfer of the file in this case was a
violation of our directive in Nine Mile; the Illinois court recognized the
mistake and declined jurisdiction. These two facts separate our case from
Nine Mile. To find under these circumstances that we do not have
jurisdiction because the file was accidentally mailed to Illinois would
elevate form over substance and serve only to delay the resolution of this
appeal. We conclude that we have acquired jurisdiction.
III.
We affirm the district court and its decision to transfer this case
based upon the "first-filed" rule. This rule "gives priority, for purposes
of choosing among possible venues when parallel
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litigation has been instituted in separate courts, to the party who first
establishes jurisdiction." Northwest Airlines, Inc. v. American Airlines,
Inc., 989 F.2d 1002, 1006 (8th Cir. 1993). Midwest maintains that Central
States' claims were premature when filed and thus legally nonexistent, and
that, as a result, the Illinois forum was not the first to acquire
jurisdiction. Midwest thus asks this court to weigh the merits of the
Illinois action in order to determine whether that forum has jurisdiction.
But this is a non sequitur. "A court may have jurisdiction over a case
even though the case is one to which there is no merit. ... The
jurisdiction of the federal courts is dependent on the subject matter of
the action or the status of the parties to it; it is not dependent on the
merits of the case." Charles A. Wright, Law of Federal Courts 31 (5th ed.
1994) (footnote omitted); see, e.g., Venner v. Great Northern Ry. Co., 209
U.S. 24, 33-35 (1908). The Illinois court therefore has jurisdiction to
decide the issues before it and it obtained this jurisdiction before the
North Dakota court did.
Midwest also argues that "compelling circumstances" should lead us
to ignore the first-filed rule, see United States Fire Ins. Co. v. Goodyear
Tire & Rubber Co., 920 F.2d 487, 488-89 (8th Cir. 1990), but we find the
proffered circumstances insufficiently compelling. Midwest again asserts
that Central States' claims were premature when filed, but, if the claims
are legally infirm, we trust the Illinois court to dismiss them. Midwest
also alleges that Central States' complaint contained false statements of
fact, and that this constitutes a compelling circumstance for ignoring the
first-filed rule. If these alleged misstatements indeed exist, Midwest may
move for sanctions in the Illinois court. We might have been be more
favorably inclined to Midwest if it had produced evidence that Central
States promised or indicated in some manner that it would not sue, that
Midwest relied on this representation, and that Central States then filed
a surprise complaint, see id. at 489, but Midwest has made no such showing
and offers to make none.
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Finally, the district judge suggested at the end of his opinion that
he was "reasonably certain" that Illinois courts had greater expertise in
pension benefit matters. Midwest argues that this comment demonstrates
that the district court made its decision on improper grounds. The order,
however, recited legally sufficient grounds for transfer. The comment has
the quality of a mere observation or afterthought, and does not suggest to
us that the district court abused its discretion in making its decision to
transfer.
IV.
There remains an outstanding matter of contempt sanctions. Central
States filed a motion for a preliminary injunction in the Illinois action
seeking to prevent Midwest from transferring assets and to compel Midwest
to pay all past-due amounts under the withdrawal liability payment schedule
as well as to make future payments under that schedule. Midwest responded
by applying to the Eighth Circuit for an injunction pending appeal
preventing Central States from "enforcing, collecting, accepting, claiming
or directly or in escrow, obtaining interim payments of alleged pension
withdrawal liability from Midwest in any other forum." We granted
Midwest's motion for an injunction pending appeal. Central States then
modified its motion for injunction in the Illinois action by dropping the
request that Midwest pay withdrawal liability, but pushed ahead with its
attempt to forbid Midwest from transferring assets. The Illinois court
denied the motion and Central States sought review in the Seventh Circuit.
Upon Midwest's motion, we found Central States in contempt.
We have reconsidered the order finding Central States in contempt.
Our order did not specifically enjoin Central States from seeking to
prevent Midwest from transferring assets. See Schmidt v. Lessard, 414 U.S.
473, 476 (1974) (per curiam) (injunction must contain explicit notice of
precisely what conduct is outlawed). We are of the view that Central
States did not
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violate our injunction and therefore reverse our finding of contempt
against Central States.
V.
For the foregoing reasons, we affirm. Midwest's motion for leave to
supplement the record is granted. All other pending motions are denied.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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