The decision is certainly not the first time the Seventh Circuit has chastised attorneys and lower courts for insouciance toward the requirements of federal jurisdiction.
Nor is it the first time the court has punished attorneys for it. In Cincinnati Ins. v. Eastern Atlantic Ins., 260 F.3d 742, 747 (7th Cir. 2001), the court reprimanded the attorneys.
And in the related cases of Meyerson v. Harrahs East Chicago Casino, 299 F.3d 616, 617 (7th Cir. 2002)(Meyerson I), and Meyerson v. Showboat Marina Casino Part., 312 F.3d 318, 321 (7th Cir. 2002) (Meyerson II), the court issued orders to show cause why sanctions (including fines and suspension from practice) should not be imposed, but the cases dont indicate what sanctions were ultimately imposed.
However, the decision to not impose a sanction, but to order that counsel conclude the litigation in state court at no expense to the clients, is unprecedented.
The question is whether the order is lawful.
The court cites three cases as authority for the order: Willy v. Coastal Corp., 503 U.S. 131 (1992); Cooter & Gell v. Hartmax Corp., 496 U.S. 384 (1990); and Szabo Food Service, Inc., v. Canteen Corp., 823 F.2d 1073 (7th Cir. 1987).
However, Willy only holds that a court may impose sanctions even though subject matter jurisdiction is lacking, and both Cooter & Gell and Szabo only hold that a court may impose Rule 11 sanctions after an action is voluntarily dismissed.
In the case at bar, however, the court expressly disavows that it is imposing a sanction, and cites only its authority to govern the practice of counsel in litigation as the source of its power.
The courts order is in sharp contrast with its holding in the recent case of Mother & Father v. Cassidy, 338 F.3d 704 (7th Cir. 2003). In Mother & Father, the plaintiffs voluntarily dismissed their federal lawsuit with prejudice pursuant to FRCP 41.
The district court then ordered that the determination of costs would travel to the state court, and whichever party prevailed in state court would be entitled to the award of costs.
The Seventh Circuit reversed, holding that the court lacked such authority for several reasons.
First, the court found, Nothing in any of the Federal Rules of Civil Procedure with which we are familiar authorizes the kind of wholesale delegation to the state court that the district court wished to effectuate here. Mother & Father, 338 F.3d at 710.
Second, the court added, it seems to us that an order by the federal court directing the state court to assess the conduct of both parties in litigation that did not even occur before it would raise serious constitutional questions under the Supreme Courts anti-commandeering decisions. Also relevant is the Courts reluctance to order state courts to enter particular forms of retroactive relief (cites omitted). Id., at 711.
Finally, the court conduced that the district courts order would be an affront to principles of comity. The court observed, Even if the district court had jurisdiction to enter this type of order, it is unclear how any federal court apart from the Supreme court of the United States could ensure compliance, … because the Rooker-Feldman doctrine would foreclose lower federal-court review of any costs determination by the state court.
Even if the court were to construe the district courts order as a request, rather than an order, the Seventh Circuit found it would be problematic, noting that the state court would be under no obligation to honor the request, and may lack the authority to award costs incurred in federal court. Id.
Many of the concerns that the Seventh Circuit had in Mother & Father are equally applicable to the case at bar.
First, nothing in the rules of civil procedure authorize a federal court to order an attorney to litigate a case in state court for no fee.
Second, the decision raises similar constitutional and comity problems. State court judges have the same inherent authority to govern practice before them that the Seventh Circuit has, and the courts order arguably tramples that authority.
Finally, it is unclear how the court could enforce its order, should the attorneys refuse to abide by it, and insist upon payment for relitigating the case in state court.
It could be argued that the courts order is less severe than sanctioning the attorneys by suspending them from practice, and, since the court has that authority, it could impose the less severe order that it did in the case at bar. Nevertheless, this argument would still fail to address the federalism and comity concerns that plagued the court in Mother & Father.
Thus, while Mother & Father is not directly controlling, the principles that govern the decision, if applied to the case at bar, suggest that the courts order may be outside of its power.
Furthermore, while the object of the order is to benefit the clients, and the clients must surely be pleased with the decision in principle, the fact is that they may not be comfortable being represented by attorneys who no longer are receiving any benefit from their labors.
– David Ziemer
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David Ziemer can be reached by email.