Regions Bank v. Rivet

REVISED, OCTOBER 3, 2000

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 99-30501
_____________________

REGIONS BANK OF LOUISIANA; WALTER L BROWN, JR;
PERRY S BROWN; FSA, L.L.C.

Plaintiffs - Appellees

v.

MARY ANNA RIVET; MINNA REE WINER; EDMOND G MIRANNE;
EDMOND G MIRANNE, JR

Defendants - Appellants

_________________________________________________________________

Appeal from the United States District Court
for the Eastern District of Louisiana
_________________________________________________________________
August 22, 2000
Before KING, Chief Judge, and GARWOOD and DeMOSS, Circuit Judges.

KING, Chief Judge:

Defendants-Appellants Mary Anna Rivet, Minna Ree Winer,

Edmond G. Miranne, and Edmond G. Miranne, Jr. appeal from the

district court’s judgment permanently enjoining them from

relitigating in state court issues and claims regarding a

collateral mortgage that had previously been decided by order of

a federal bankruptcy court and from enforcing two default

judgments. Defendants-Appellants argue that the Anti-Injunction
Act, 28 U.S.C. § 2283, bars the district court’s actions.

Although we find that the lower court properly enjoined

relitigation of issues and claims regarding the collateral

mortgage, we determine that its enjoining enforcement of the

default judgments was in error. As a result, we affirm in part

and reverse in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

At the heart of this case is a collateral mortgage on a

leasehold estate granted by Tulane Hotel Investors Limited

Partnership (“THILP”) to members of the Miranne family

(Defendants-Appellants Edmond G. Miranne, Edmond G. Miranne, Jr.,

Mary Anna Rivet, and Minna Ree Winer, hereinafter “the Mirannes”)

to secure a $5,000,000 collateral mortgage note.1 The leasehold

estate was created in 1957, when Lois Stern Brown executed a

lease in favor of Pelican State Hotel Corporation. After a

number of subsequent transfers, the leasehold estate was acquired

by THILP in September 15, 1983. On that same date, THILP granted

to First Financial Bank2 a first mortgage on the leasehold to

1
THILP was described by a district court as the Mirannes’
investment vehicle. See United States ex rel. Minna Ree Winer
Children’s Class Trust v. Regions Bank, Civ.A.No. 94-4085, 1996
WL 264981, at *1 (E.D. La. May 17, 1996). Minna Ree Winer is the
wife of Edmond Miranne Jr.; Mary Ann Rivet is the wife of Edmond
Miranne.
2
This Bank apparently was formerly controlled by the
Miranne family. See Minna Ree Winer Children’s Class Trust, 1996
WL 264981, at *1.

2
secure a $15,000,000 collateral mortgage note pledged to the

Bank. On May 2, 1984, THILP granted the Mirannes the second

mortgage on the leasehold that forms the basis of the parties’

instant dispute. That mortgage was recorded in the public

records on August 17, 1984.

THILP apparently defaulted on its loan to First Financial

Bank, causing the Bank to act to enforce its mortgage on the

partnership’s primary asset, the leasehold estate. On October 5,

1984, THILP sought protection under Chapter 11 of the Bankruptcy

Code. The bankruptcy court subsequently granted First Financial

Bank’s motion to convert the proceeding to a Chapter 7

liquidation proceeding and appointed an interim trustee. In

April, 1986, the appointed trustee applied for court approval to

sell the leasehold estate at public auction free and clear of all

liens, including, specifically, the second mortgage. The

bankruptcy court issued an order advising all creditors and

parties in interest of the sale pursuant to 11 U.S.C. § 363(f),

and setting a hearing on any objections for June 16, 1986. THILP

objected to the sale. Edmond Miranne Jr. appeared at the hearing

on behalf of himself and Edmond Miranne Sr., as holders of the

second mortgage. On June 17, 1986, the bankruptcy court denied

the objection, granted the sale application, authorized the

trustee to sell the property, and ordered that the sale would be

free and clear of all interests, claims, liens, mortgages and

encumbrances, including the Mirannes’ second mortgage. The court

3
also included in his order the terms of the sale (e.g., there

would be a minimum opening bid of $5,250,000), with the listed

terms reflecting the provisions of a letter agreement between

First Financial Bank and the trustee. THILP appealed from this

order and moved for a stay. A hearing was held on the matter,

and THILP’s motion for a stay was denied by the bankruptcy court

and by the district court.

The leasehold was sold at public auction to First Financial

Bank for the minimum bid of $5,250,000.3 On August 14, 1986, the

bankruptcy court approved the sale to First Financial free and

clear of all encumbrances other than four chattel mortgages.

First Financial was ordered to pay $150,000 to the trustee, an

amount previously agreed upon, and to pay the auctioneer’s fees

and costs.4 The Orleans Parish Recorder of Mortgages was

directed by the bankruptcy court to cancel and erase all liens,

mortgages, and encumbrances bearing against the property.

Nonetheless, the Mirannes contend that the second mortgage

remains on the public records.5

3
This amount represented 75% of the $7,000,000 appraised
value of the property as found by the court in a judgment signed
June 9, 1986.
4
THILP appealed to our court from the bankruptcy court’s
orders approving the sale of the leasehold. This appeal was
dismissed on the basis of 11 U.S.C. § 363(m). See In re: Tulane
Investors Ltd. Partnership, No. 86-3836 (5th Cir. June 1, 1987)
(unpublished).
5
Because the first mortgage was not reinscribed after ten
years, it was cancelled. See LA. REV. STAT. ANN. 9:5161 (West

4
 On December 29, 1993, Secor Bank, First Financial Bank’s

successor, purchased from Walter S. Brown, Jr. and Perry L. Brown

(members of Lois Stern Brown’s family) the fee interest in the

property, making Secor the owner of both the property and the

leasehold. This caused the lease to cease to exist.6 Secor

immediately conveyed its interest to FSA, the current owner of

the property.

On December 29, 1994, the Mirannes filed a “Suit to Enforce

Mortgage Via Ordinaria or Alternatively for Damages” in state

court against Regions Bank (Secor’s successor), Perry Brown,

Walter Brown, and FSA, alleging that the Mirannes’ superior

rights under the second mortgage had been violated by the 1993

transactions. The Mirannes sought payment of their secured debt

and to have their mortgage recognized and maintained against the

property, and alternatively, sought damages.7

1991) (allowing for cancellation of inscriptions of mortgages
that have not been reinscribed within applicable periods).
6
As this court noted in Rivet v. Regions Bank, 108 F.3d
576, 581 n.7 (1997) (“Rivet I”), rev’d, 522 U.S. 470 (1998),
under Louisiana law, “when a lessor’s interest and a lessee’s
interest in the same immovable property are consolidated in the
same person, the lease ceases to exist and the person vested with
both interests will hold perfect or full ownership — essentially
the equivalent of ‘fee simple’ title in the common law.”
7
Judge Wiener, writing for the panel in Rivet I, noted
that “[i]n their complaint, the Mirannes assiduously avoided any
hint of the previous bankruptcy proceedings and orders affecting
the leased premises, the leasehold estate, and their second
mortgage against it.” Rivet I, 108 F.3d at 582.

5
 On February 3, 1995, defendants in the state action

(Plaintiffs-Appellees here) removed the case to federal court on

grounds of federal question jurisdiction. FSA filed an answer in

federal court on February 7, 1995, and the Browns filed answers

in federal court on February 14, 1995. The district court denied

the Mirannes’ motion to remand and granted Regions Bank’s motion

for summary judgment.

This judgment was appealed to this court, which affirmed the

district court’s denial of the motion to remand. See Rivet v.

Regions Bank of La., F.S.B., 108 F.3d 576 (5th Cir. 1997) (“Rivet

I”). The Supreme Court reversed, see Rivet v. Regions Bank of

La., 118 S. Ct. 921 (1998), and the case was remanded to state

court. The clerk of the district court apparently forwarded only

the order of remand to the state court. The answers of the

Browns and of FSA were not also forwarded. On August 7, 1998,

Regions Bank, FSA, and the Browns filed this action in federal

court under the All Writs Act, 28 U.S.C. § 1651, and the

relitigation exception to the Anti-Injunction Act, 28 U.S.C.

§ 2283, seeking preliminary and permanent injunctions against

further proceedings in state court.

After this action was filed by Plaintiffs-Appellees, the

Mirannes filed in state court a motion for summary judgment

against Regions Bank. Three days later, on October 30, 1998, the

Mirannes sought preliminary defaults against the Browns and FSA,

based on their not having filed answers in state court. On

6
November 4, 1998, a judge, who was not the judge to whom the

Mirannes’ state-court action had been assigned, confirmed default

judgments against the Browns and FSA for $4,688,919.10, and

explicitly recognized the second mortgage on the leasehold

estate.8 Documents filed in support of the default judgments did

not mention that FSA and the Browns had filed answers in federal

court (stating only that no answers had been filed in state

court). At the ex parte hearing held with regard to the

confirmation of default judgments, no mention was made of the

answers filed in federal court, or of the leasehold’s sale free

and clear of all liens.

On January 26, 1999, the district court entered a

preliminary injunction, staying further proceedings in state

court. Regions Bank filed a motion for summary judgment to

enjoin permanently the Mirannes from relitigating the issues

regarding the Mirannes’ second mortgage that were resolved by the

bankruptcy court. The Browns and FSA filed a motion for summary

judgment to enjoin permanently the Mirannes from prosecuting the

state lawsuit, from executing or enforcing the default judgments,

and from initiating any other action to recover against them

based on the second mortgage. They also requested that the

district court require the Recorder of Mortgages to remove the

8
The judgment against FSA indicates it is in rem.

7
default judgments from the public records. The Mirannes also

filed a motion for summary judgment.

The district court determined that the state-court claim

involved the same subject matter as the bankruptcy court’s orders

and thus that the relitigation exception to the Anti-Injunction

Act applied. It also determined that Plaintiffs-Appellees would

suffer irreparable injury if the state-action was allowed to

proceed, and that conversely, the Mirannes would suffer no

injury. Thus, on April 13, 1999, the court entered judgment in

favor of Regions Bank, FSA, and the Browns permanently enjoining

the Mirannes from relitigating in state court issues and claims

regarding the second mortgage that had been decided by order of

the bankruptcy court (“Injunction I”), and further permanently

enjoining the Mirannes from enforcing the default judgments

entered in state court against the Browns and FSA (“Injunction

II”). It denied the Mirannes’ motion. The Mirannes timely

appeal.

II. THE RELITIGATION EXCEPTION

The Mirannes challenge the district court’s determination

that the relitigation exception to the Anti-Injunction Act

applies to this case. The application of the relitigation

exception is an issue of law, and therefore this court reviews de

novo the lower court’s determination that an injunction may be

issued under that exception. See Next Level Communications LP,

8
v. DSC Communications Corp., 179 F.3d 244, 249 (5th Cir. 1999).

We review a lower court’s decision to issue a permanent

injunction for abuse of discretion. See Peaches Entertainment

Corp. v. Entertainment Repertoire Assocs., Inc., 62 F.3d 690, 693

(5th Cir. 1995).

We use a four-part test to determine whether the

relitigation exception to the Anti-Injunction Act applies to

preclude litigation of a claim in state court: (1) “the parties

in a later action must be identical to (or at least in privity

with) the parties in a prior action”; (2) “the judgment in the

prior action must have been rendered by a court of competent

jurisdiction”; (3) “the prior action must have concluded with a

final judgment on the merits”; and (4) “the same claim or cause

of action must be involved in both suits.” New York Life Ins.

Co. v. Gillispie, 203 F.3d 384, 387 (5th Cir. 2000) (quoting

United States v. Shanbaum, 10 F.3d 305, 310 (5th Cir. 1994)). It

is insufficient that a claim or issue could have been raised in

the prior action: The relitigation exception requires that the

claims or issues that the federal injunction is to insulate from

litigation in state proceedings “actually have been decided by

the federal court.” Chick Kam Choo v. Exxon Corp., 486 U.S. 140,

148 (1988); Texas Commerce Bank Nat’l Ass’n v. State of Florida,

138 F.3d 179, 182 (5th Cir. 1998). We must review both the

district court’s determination that each of these requirements

has been met in the instant case and its conclusion that the

9
principles of equity, comity, and federalism supported its

issuance of an injunction. See Regional Properties, Inc. v.

Financial & Real Estate Consulting Co., 678 F.2d 552, 566 (5th

Cir. 1982) (noting that the Anti-Injunction Act does not

“‘qualify in any way the principles of equity, comity, and

federalism that must [in its absence] restrain a federal court

when asked to enjoin a state court proceeding.’” (quoting Mitchum

v. Foster, 407 U.S. 225, 243 (1972))).

A. Injunction I

Injunction I bars the relitigation in state court of issues

and claims regarding the Mirannes’ second mortgage that were

decided by the bankruptcy court. The Mirannes dispute that their

state-court action involves claims or issues that have been

“actually litigated.” They present no arguments regarding the

other requirements for application of the relitigation exception.

We note that a prior panel of this court examined, inter

alia, whether the Mirannes’ state-court action involved questions

that were “actually litigated” in THILP’s bankruptcy proceedings.

See Rivet I, 108 F.3d at 590-91. It found it “indisputable that

in the 1986 bankruptcy court proceedings the continuing validity

of the Mirannes’ inferior mortgage was ‘actually litigated and

decided.’” Id. It was subsequently decided that that panel was

without jurisdiction to decide the issues before it, see Rivet v.

10
Regions Bank of La., 118 S. Ct. 921 (1998), and we therefore

cannot regard its determinations as binding. Our own examination

of the Mirannes’ argument, however, leads to the same conclusion.

The Mirannes’ state-court action is “in part an in rem

action to enforce a mortgage against immovable property situated

in the Parish of Orleans.” A key issue decided by the bankruptcy

court was whether that same property — the leasehold estate —

should continue to be encumbered by the very lien the Mirannes

seek to enforce in state court. Under 28 U.S.C. § 1334(e), the

bankruptcy court had exclusive jurisdiction over the leasehold

estate. In THILP’s bankruptcy proceedings, the trustee

determined that the bankruptcy estate would benefit by the sale

of the leasehold free and clear of essentially all liens, in part

because it was only on these terms that First Financial

Bank/Secor Bank/Regions Bank (hereinafter “the Bank”) would agree

to release its claims and pay the trustee $150,000, which could

be distributed to the remaining creditors. The bankruptcy court

agreed with the trustee’s determination, and authorized a sale

pursuant to 11 U.S.C. § 363(f). Creditors were given notice of

the sale and the opportunity to be heard. Compare Ray v.

Norseworthy, 90 U.S. 128 (1874) (holding that a sale of property

purportedly free and clear of liens was ineffective in cancelling

the lien held by an individual not given notice of that sale),

and Mooney Aircraft Corp. v. Foster (In re Mooney Aircraft,

11
Inc.), 730 F.2d 367, 375 (5th Cir. 1984) (“We recognize that a

sale free and clear is ineffective to divest the claim of a

creditor who did not receive notice . . . .”), with In re

Edwards, 962 F.2d 641 (7th Cir. 1992) (holding that a bona fide

purchaser at a bankruptcy sale acquired good title to the

debtor’s property, despite the mortgagee not having received

prior notice of the sale). There is no question that the

bankruptcy court had the power to issue orders that stripped

liens from the leasehold estate and that extinguished the

Mirannes’ rights in that property. See Norseworthy, 90 U.S. at

135 (“Beyond all doubt the property of a bankrupt may, in a

proper case, be sold by order of the bankrupt court free of

incumbrance . . . .”).

The Mirannes state that they do not contest the validity of

the bankruptcy court’s orders when those orders were entered in

1986. Instead, they contend that because those orders were never

domesticated and enforced in accordance with Louisiana law, the

orders never had force or effect to extinguish the Mirannes’

mortgage rights. The Mirannes point to events occurring after

entry of the orders and argue that those events enabled them to

“revive” their mortgage and to assert their rights under it in

the state-court action.9 In short, the Mirannes assert that

9
In addition to the failure of the Bank to domesticate
and enforce the bankruptcy court’s orders in accordance with
Louisiana law, the Mirannes assert that two events are
particularly important to their ability to enforce their

12
whether they are able to enforce their second mortgage today is a

question different from that addressed by the bankruptcy court in

1986. At the heart of their argument is the assumption that the

bankruptcy court’s orders were not self-executing. The orders,

rather than effectuating a sale free and clear of all liens,

merely gave the Bank a right that required use of state

procedures to perfect and enforce.

The Mirannes and the State of Louisiana, as amicus curiae,

point to Louisiana Revised Statutes 9:525110 and 9:5031,11 which

mortgage. The first of these events is the reaffirmance of the
debt between THILP and the Mirannes. This was accomplished in
April, 1989, when Minna Ree Winer, President, and THILP’s general
partner, the Tulane Hotel Investors Corporation, signed a
document reaffirming the original debt. The second of the events
is the reinscription of the mortgage on the public records in
April, 1994.
10
Louisiana Revised Statute 9:5251 seeks to preserve
rights of mortgage holders by providing that:

Except as otherwise provided in Civil Code Articles 813
and 815, no conventional or judicial mortgage . . .
shall be cancelled, removed from the public records, or
in any manner affected by any public or private sale of
property subject thereto in . . . bankruptcy . . .
proceeding.

The provisions of this Section shall not apply to the
execution of judgments governed by Book IV of the
Louisiana Code of Civil Procedure, Article 2251 et
seq., or to judicial sales in executory proceedings
under the Louisiana Code of Civil Procedure, Article
2631 et seq.

LA. REV. STAT. ANN. § 9:5251 (West Supp. 2000).
11
Louisiana Revised Statute 9:5031 seeks to protect rights
of lien holders by providing that:

13
purportedly prevent any public sale of property in bankruptcy

from affecting “in any manner” any conventional mortgage or lien

on that property, and argue that under these statutes, the Bank

was required to use state domestication and enforcement

procedures to remove the Mirannes’ mortgage and to truly hold the

leasehold free and clear of that mortgage. The State of

Louisiana states that the purpose of the statutes is

to avoid putting the Recorder in a quasi judicial role
by calling on him to determine, inter alia, whether the
judgment was validly entered, whether jurisdiction
existed in the rendering court, whether the holder of
the mortgage had been afforded notice and a fair
opportunity to be heard, whether or not the right to
enforce the judgment had lapsed under Louisiana law,
and so on. Th[e] tried and true Louisiana procedure
[listed in the statutes] provides for a Louisiana
District Court Judge, and not a Parish Recorder, to
decide whether these various legal niceties have been
observed, and, therefore, whether a foreign judgment is
entitled to enforcement in Louisiana.

Amicus Brief, at 12. The implication of this language is clear —

if a Louisiana District Court Judge determines that one or more

of the listed “legal niceties” have not been observed, then the

order is not enforced in Louisiana. But, in relevant part,

No lien . . . shall be cancelled, removed from the
public records, or in any manner affected by any public
or private sale of property subject thereto in any . .
. bankruptcy . . . proceeding. However, the provisions
of this Section shall not apply to the execution of
judgments governed by Book IV of the Louisiana Code of
Civil Procedure, Article 2251 et seq., or to judicial
sales in executory proceedings under the Louisiana Code
of Civil Procedure, Articles 2631 et seq.

LA. REV. STAT. ANN. § 9:5031 (West 1991).

14
whether the above-listed “legal niceties” were observed in the

sale of the leasehold estate to the Bank was determined by the

bankruptcy court and by the district court.12

The Mirannes contend that our recent decision in Davis v.

Davis (In re Davis), 170 F.3d 475 (5th Cir.) (en banc), cert.

denied, 120 S. Ct. 67 (1999), supports their position that

despite the provisions of the Bankruptcy Code and the language of

the bankruptcy court’s orders, the Bank was obligated to use

state procedures to enforce its right to hold the leasehold

estate free and clear of the Mirannes’ lien. They rely on

portions of Davis’ language to argue that § 363(f) does not pre-

empt Louisiana property law and enforcement provisions. Although

we are inclined to disagree with this,13 we need not decide the

question here. We find little in Davis that applies directly to

the instant case. Unlike the plaintiff in Davis, the Bank is not

a judgment creditor. The bankruptcy court’s orders in this case

12
The trustee supplied the bankruptcy court with evidence
that creditors had been notified of the proposed sale. At
several points during the proceedings related to the sale, THILP
challenged that sale, arguing, inter alia, that the bankruptcy
court did not have jurisdiction over the property, that the
requirements of § 363(f) had not been met, and that the sale was
enjoined by state law.
13
We note, for example, that the language of § 363(f), by
allowing a trustee to sell a debtor’s property free and clear of
all liens, would seem to be in direct conflict with the language
of the Louisiana statutes, which state that mortgages will not
“in any manner” be affected by a public sale in bankruptcy. See
Davis, 170 F.3d at 482 (“[P]reemption may be implied if state and
federal laws conflict . . . .”).

15
involved a sale of property determined to be within the court’s

jurisdiction. Unlike the plaintiff in Davis, who sought to use

§ 522(c) of the Bankruptcy Code to collect a non-discharged debt,

the Bank did not need to take further steps to “execute” the

bankruptcy court’s orders.

The Mirannes’ argument that the questions they raise in

their state-court action are different from those resolved by the

bankruptcy court must be rejected. Once the sale of the

leasehold occurred and was approved, title was transferred, as

ordered (free and clear of all liens). See In re Whatley, 155

B.R. 775, 781 (D. Colo. 1993) (holding that orders authorizing a

sale free and clear of liens and confirming that sale were self-

executing and did not require “any enforcement proceedings in

order to bring them to fruition”), aff’d, 169 B.R. 698 (D. Colo.

1994), aff’d, 54 F.3d 788 (10th Cir. 1995). If a bankruptcy

court’s orders authorizing and approving a sale free and clear of

liens were not self-executing, it would seemingly be impossible

to have the liens attach to the sale proceeds. See, e.g., 11

U.S.C. § 1129(b)(2)(A)(ii) (providing that a “fair and equitable

plan” includes those that sell property free and clear of liens,

have those liens attach to the proceeds of such sale, and meet

other requirements regarding the treatment of those liens on the

proceeds); S. REP. No. 95-989, at 56 (1978), reprinted in 1978

U.S.C.C.A.N. 5787, 5842 (“Most often, adequate protection in

connection with a sale free and clear of other interests will be

16
to have those interests attach to the proceeds of the sale.”).

Orders that were not self-executing would also be inconsistent

with the Code’s emphasis on the finality of sales. See, e.g., 11

U.S.C. § 363(m); Edwards, 962 F.2d at 643 (noting that “[i]f

purchasers at judicially approved sales of property of a bankrupt

estate, and their lenders, cannot rely on the deed that they

receive at the sale, it will be difficult to liquidate bankrupt

estates at positive prices”); Bleaufontaine, Inc. v. Roland Int’l

(In re Bleaufontaine, Inc.), 634 F.2d 1383, 1389 n.10 (5th Cir.

Unit B 1981) (“If deference were not paid to the policy of speedy

and final bankruptcy sales, potential buyers would not even

consider purchasing any bankrupt’s property. As a result, the

bankrupt’s creditors would be the ones most injured thereby.”).

As was noted in Rivet I, “[f]or the bankruptcy court in the

instant case to authorize and approve the sale of the leasehold

estate free and clear of essentially all liens and encumbrances,

that court necessarily had to decide whether the Mirannes’

inferior second mortgage could survive as an encumbrance against

the leasehold estate after that estate was sold at public auction

by the THILP trustee’s foreclosure on the superior first

mortgage.” 108 F.3d at 590. The Mirannes’ state-court action

represents an attempt to use subsequent events to “revive” and

enforce a mortgage on property that had been conclusively

stripped of the Mirannes’ lien in 1986. Because the Mirannes’

state-court action necessarily requires relitigation of the

17
precise question resolved by the bankruptcy action, i.e., the

survival of the Mirannes’ mortgage as an encumbrance on the

leasehold estate, we agree with the district court that the

relitigation exception applies in this case.

We also find that the district court did not abuse its

discretion in issuing Injunction I. It specifically determined

that the Plaintiffs-Appellees would suffer irreparable injury if

the Mirannes were allowed to proceed, and that the Mirannes, “who

have always been aware of the bankruptcy court’s orders to

discharge the underlying debt and to sell the property free and

clear of the mortgage,” and who have “nevertheless attempted to

obtain a judgment from a state court in flagrant disregard of the

bankruptcy court’s orders,” would not be injured by an

injunction. With respect to Injunction I, we have no cause to

disagree with this conclusion.14

14
The Mirannes also argue that the district court’s
actions impermissibly encroach on state sovereignty, citing,
among other cases, the Supreme Court’s recent Eleventh Amendment
decisions in support of their contentions. The crux of the
Mirannes’ argument appears to be that the district court’s
actions infringe on the states’ “absolute Constitutional
authority to judge the existence of real property interests
within their borders.” Although states have the power to define
property interests, it is clear that the Constitution also
provides Congress with the authority to establish procedures for
the transfer of those interests within the context of
bankruptcies. See U.S. CONST. art. I, § 8, cl. 4 (giving Congress
the authority to establish uniform laws on the subject of
bankruptcies in the United States); International Shoe Co. v.
Pinkus, 278 U.S. 261, 264 (1929) (“The power of Congress to
establish uniform laws on the subject of bankruptcies throughout
the United States is unrestricted and paramount. . . . The
national purpose to establish uniformity necessarily excludes

18
 B. Injunction II

We find we must reach a different conclusion with respect to

Injunction II. That injunction bars the Mirannes’ enforcement of

default judgments, entered by the Civil District Court for the

Parish of Orleans, against FSA and the Browns. The Mirannes’

challenge to the issuance of Injunction II has two main prongs:

They assert that the district court had no subject-matter

jurisdiction over FSA’s and the Browns’ claims and that the

court’s action is inconsistent with the commands of Parsons

Steel, Inc. v. First Alabama Bank, 474 U.S. 518 (1986). We

address first the question of subject-matter jurisdiction.

The Mirannes assert the district court did not have subject-

matter jurisdiction over the action brought by FSA and the Browns

because “as to them there was no federal element in the State

Action.” The Mirannes contend that the only way a state court

defendant becomes entitled to the protection of the Anti-

Injunction Act is to have raised the affirmative defense of res

judicata in the state-court proceedings. Because there is no

affirmative defense of res judicata on file in the state

state regulation. . . . States may not pass or enforce laws to
interfere with or complement the Bankruptcy Act or to provide
additional or auxiliary regulations.”).

19
action,15 FSA and the Browns are not entitled to the protections

of the Act.

We emphatically reject this argument. Neither the All Writs

Act nor the Anti-Injunction Act is jurisdictional. See Southwest

Airlines Co. v. Texas Int’l Airlines, Inc., 546 F.2d 84, 89 (5th

Cir. 1977) (Anti-Injunction Act); Brittingham v. Commissioner,

451 F.2d 315, 317 (5th Cir. 1971) (All Writs Act). Instead,

jurisdiction is based on the original case (here the bankruptcy

proceeding). It is not necessary for the district court to have

jurisdiction over the second suit as an original action. See

Royal Ins. Co. v. Quinn-L Capital Corp., 960 F.2d 1286, 1292 (5th

Cir. 1992) (“[A] federal district court can exercise ancillary

jurisdiction over a second action in order to secure or preserve

the fruits and advantages of a judgment or decree rendered by

that court in a prior action.” (internal quotation marks

omitted)); id. (noting that jurisdiction exists “even where the

federal district court would not have jurisdiction over the

second action if it had been brought as an original suit”); see

also Local Loan Co. v. Hunt, 292 U.S. 234, 239 (1934); In re

Mooney, 730 F.2d at 374. Because the court below was the court

in which the bankruptcy proceedings were conducted, it had

15
This is due to FSA’s and the Browns’ answers filed in
federal court not being transferred to the state court upon
remand.

20
subject-matter jurisdiction over the claims of FSA and the

Browns.

We turn now to the Mirannes’ Parsons Steel argument. They

contend that because the district court did not consider the

preclusive effect of the default judgments, and certainly did not

give the judgments the preclusive effect they deserved, it erred

in issuing Injunction II. See Parsons Steel, 474 U.S. at 525.

The Supreme Court held in Parsons Steel that “the Full Faith and

Credit Act requires that federal courts give the state-court

judgment, and particularly the state court’s resolution of the

res judicata issue, the same preclusive effect it would have had

in another court of the same State.” 474 U.S. at 525. We read

the Court’s language to require that we assess whether a state

court has issued a final decision that operates to bar re-

assessment of the preclusive effect of a prior federal action.

We therefore confront two questions in the context of this case:

whether the default judgments in this case are final judgments,

and if final judgments, whether they bar our re-assessment of the

res judicata issue. As the Parsons Steel Court noted, we must

look to state law for the answers to both of these questions.

Id.

Our analysis of the question whether the default judgments

are final judgments under Louisiana law provides us with no

definitive answer. On one hand, the language of article 1915(B)

of the Louisiana Code of Civil Procedure suggests that the

21
default judgments, because they were issued against fewer than

all the parties in the original action, are not final

judgments.16 On the other hand, FSA and the Browns, in filing

actions in state court challenging the validity of the default

judgments, have acted as though the judgments are final. Our

research uncovered no case that has applied the language of

article 1915 to hold that default judgments issued against fewer

than all the parties are not final judgments. The Mirannes

contend that that article is not applicable to the instant case,

16
At the time the Mirannes filed their state-court action,
article 1915(B) of the Louisiana Code of Civil Procedure
provided:

(1) When a court renders a partial judgment . . . as to
one or more but less than all of the . . . parties,
. . . the judgment shall not constitute a final
judgment unless specifically agreed to by the
parties or unless designated as a final judgment by
the court after an express determination that there
is no just reason for delay.
(2) In the absence of such a determination and
designation, any order or decision which
adjudicates fewer than all claims or the rights and
liabilities of fewer than all the parties, shall
not terminate the action as to any of the claims or
parties and shall not constitute a final judgment
for the purpose of an immediate appeal. Any such
order or decision issued may be revised at any time
prior to rendition of the judgment adjudicating all
the claims and the rights and liabilities of all
the parties.

LA. CODE CIV. PROC. ANN. art. 1915(B) (West 1998).

22
but also acknowledge, as they must, a degree of confusion in the

extant cases.17

If we were to conclude that the default judgments were final

judgments, we would still face the preclusion question. Under

Louisiana law, judgments that suffer from “vices of form” do not

preclude relitigation of the claims or issues because such

judgments are null and void.18 See Kelty v. Brumfield, 633 So.2d

1210, 1215 (La. 1994); Murdock v. Brittco, Inc., 517 So.2d 898,

902 (La. Ct. App. 1987) (“Since service . . . was not made in

accordance with law, it follows that the proceedings which

resulted in the default judgment . . . were null, void and of no

17
The Louisiana Legislature amended Article 1915(B) in
1999 to “eliminate confusion with Article 1915(A).” The
amendment, which eliminated the term “parties,” was made
applicable to cases filed on or after January 1, 2000. See 1999
La. Acts 1263 § 3.
18
Default judgments will be declared null and void if they
suffer from any of the defects listed in Louisiana Code of Civil
Procedure art. 2002:

A. A final judgment shall be annulled if it is
rendered:
(1) Against an incompetent person not represented
as required by law.
(2) Against a defendant who has not been served
with process as required by law and who has
not waived objection to jurisdiction, or
against whom a valid judgment by default has
not been taken.
(3) By a court which does not have jurisdiction
over the subject matter of the suit.
B. Except as otherwise provided in Article 2003, an
action to annul a judgment on the grounds listed in
this Article may be brought at any time.

LA. CODE CIV. PROC. ANN. art. 2002 (West 1990).

23
effect”). Judgments that suffer from “vices of substance” may be

annulled as well. See LA. CODE CIV. PROC. art. 2004 (West 1990)

(providing that “[a] final judgment obtained by fraud or ill

practices may be annulled”).

FSA and the Browns have filed petitions in state court

seeking to have their default judgments declared null and void,

arguing that those judgments suffer from vices of form and of

substance. See LA. CODE CIV. PROC. art. 2002; 2004. In addition,

Perry Brown has filed a motion for a new trial. FSA and the

Browns point to a number of facts that they argue render the

default judgments invalid, including (1) the failure to serve

Walter Brown while the state court had jurisdiction over the

Mirannes’ case; (2) the failure of Mirannes’ counsel to inform

FSA or the Browns of the intent to seek default judgments; (3)

the failure of Mirannes’ counsel to inform the judge issuing the

default judgments that FSA and the Browns had in fact filed

answers after the case was removed to federal court;19 (4) the

failure of the Mirannes’ counsel to inform the judge of the

lengthy history of this case and of the efforts made by FSA and

the Browns to defend themselves against the demands made by the

Mirannes; (5) the failure of the Mirannes’ counsel and of Edmond

19
The Mirannes’ counsel has admitted to not informing the
judge of the answers FSA and the Brown filed in federal court.

24
Miranne Jr.20 to inform the judge of the bankruptcy court’s

orders or the leasehold’s sale free and clear of the Mirannes’

lien; (6) the failure of the Mirannes’ counsel to inform the

judge of the ongoing proceedings for injunctive relief in federal

court; and (7) the falsity of Edmond Miranne Jr.’s testimony at

the default judgment hearing as the mortgage he testified was

recorded at the time had in fact been cancelled.

FSA argues that we may look to these facts as a basis for a

conclusion that the default judgments, if final judgments, do not

have preclusive effect. But this means we would be deciding the

same questions that the state court has been asked to decide.

Thus, under the circumstances, our task under Parsons Steel

requires that we predict whether that state court would declare

the judgments nullities under Louisiana Code of Civil Procedure

article 2002, would exercise its discretion and set the judgments

aside under article 2004, or rule that the judgments are valid.

We find that the principles of comity and federalism counsel

against making such predictions, given the existence of FSA’s and

the Browns’ state-court actions. The Louisiana state court is in

20
Edmond G. Miranne, Jr. testified at the ex parte hearing
conducted regarding confirmation of the default judgments. The
only mention of the transfer of the property from THILP to the
Bank occurs on page 12 of the hearings transcript. Mr. Miranne
described the sale as follows:

There was a sale by Tulane Hotel Investors Limited
Partnership to what was then First Financial Bank, FSB,
which through a couple of mergers and name changes, is
now Regions Bank.

25
the best position to determine whether the default judgments

should be declared nullities under state law. Thus, although we

view the facts that FSA and the Browns present as compelling, we

nonetheless determine it best to refrain from drawing any

conclusion regarding the judgments’ preclusive effect under the

circumstances present here. As the Supreme Court advised long

ago, federal courts should decline to issue an injunction against

state-court proceedings if there are any doubts as to its

propriety. See Atlantic Coast Line R.R. Co. v. Brotherhood of

Locomotive Eng’rs, 398 U.S. 281, 297 (1970) (“Any doubts as to

the propriety of a federal injunction against state court

proceedings should be resolved in favor of permitting the state

courts to proceed in an orderly fashion to finally determine the

controversy.”). Given the circumstances of this case, we

conclude that we must reverse the district court’s judgment with

respect to Injunction II.

This is not a felicitous result. The default judgments’

recognition of the Mirannes’ mortgage is in direct conflict with

the bankruptcy court’s orders, and we certainly would not

advocate that others use the means apparently employed here to

obtain such judgments. But our displeasure with the outcome with

respect to Injunction II cannot be used to uphold its issuance.

Cf. id. at 294 (noting that a federal court cannot issue an

injunction “merely because [state court proceedings] interfere

with a federal protected right or invade an area preempted by

26
federal law, even when the interference is unmistakably clear”).

Federal courts assessing whether to enjoin state-court

proceedings must also assess whether principles of comity and

federalism counsel restraint. See Parsons Steel, 474 U.S at 526;

Mitchum, 407 U.S. at 243. Our respect for the state court moves

us to leave to it questions related to the validity and

enforceability of the default judgments under Louisiana law.

III. CONCLUSION

For the foregoing reasons, we affirm the district court’s

judgment as it relates to the injunction barring the Mirannes’

relitigating in state court issues and claims covered by the

bankruptcy court’s orders, and reverse the court’s judgment as it

relates to the injunction barring the enforcement of the default

judgments issued against FSA and the Browns.

AFFIRMED in part; REVERSED in part. The Defendants-

Appellants shall bear the costs of this appeal.

27