Midlock, Andrew v. Apple Vacations West

In the
United States Court of Appeals
For the Seventh Circuit
____________

No. 04-2615
ANDREW MIDLOCK, JR., et al.,
Plaintiffs-Appellees,
v.

APPLE VACATIONS WEST, INC., et al.,
Defendants.

APPEAL OF: WILLIAM J. CREMER.

____________
Appeal from the United States District Court
for the Central District of Illinois.
No. 03-4081—Joe Billy McDade, Judge.
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ARGUED JANUARY 26, 2005—DECIDED APRIL 20, 2005
____________

Before POSNER, MANION, and WOOD, Circuit Judges.
POSNER, Circuit Judge. William Cremer, the lawyer for all
but one of the defendants in this tort suit, appeals from an
order fining him $5,000 and directing him to reimburse the
plaintiffs $3,285.28 for attorneys’ fees. The suit had been
filed in a state court in Joliet, Illinois, but Cremer, acting on
behalf of one of the defendants whom he represented, re-
moved the case to the federal district court in the Northern
District of Illinois, the district in which Joliet is located. The
2 No. 04–2615

plaintiffs moved to remand the case to the state court
because there was no federal jurisdiction. The only possible
basis of federal jurisdiction was diversity of citizenship, and
Cremer acknowledged that one of the defendants (the one
he didn’t represent) was a citizen of Illinois, as were the
plaintiffs. But he argued that that defendant had been
fraudulently joined. The district court disagreed and re-
manded the case to the state court from which it had been
removed; the ruling was pursuant to 28 U.S.C. § 1447(c),
which requires the district court to remand a removed case
“if at any time before final judgment it appears that the
district court lacks subject matter jurisdiction.” The remand
“is not reviewable on appeal or otherwise,” § 1447(d), with
an immaterial exception. So the case went back to state
court—whereupon another defendant whom Cremer rep-
resented removed it to the federal district court for the
Central District of Illinois. Cremer’s ground was the same,
that the nondiverse defendant had been fraudulently joined.
The district court remanded the case to the state court on the
ground that a case can be removed only to the federal
district court for the district in which the suit is pending, §
1446(a), which in this case was the Northern District of
Illinois, not the Central District. The court then ordered
Cremer to show cause why he should not be sanctioned
under Fed. R. Civ. P. 11 for his frivolous attempt to remove
the case to the Central District; and after a hearing the court
imposed the sanctions that Cremer is challenging in this
appeal.
The plaintiffs had not asked for sanctions; and while a
judge is permitted by Rule 11 to impose sanctions on his
own initiative, when he does that he cannot include an
award of attorneys’ fees. Fed. R. Civ. P. 11(c)(1)(B), (c)(2).
But Cremer did not notice this until he filed his reply brief,
which was too late. The judge could have awarded fees
under 28 U.S.C. § 1447(c) (“an order remanding the case
No. 04–2615 3

may require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the remov-
al”), but did not invoke that provision, which in any event
would not have authorized the fine that he also imposed.
See Wisconsin v. Hotline Industries, Inc., 236 F.3d 363, 367 (7th
Cir. 2000); Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 410
(7th Cir. 2000) (Ҥ 1447(c) is not a sanctions rule; it is a fee-
shifting statute” (emphasis in original)). Another oversight
by the parties is their failure to remark the fact that not all
the defendants joined in either removal, as is required,
Chicago, Rock Island & Pac. Ry. v. Martin, 178 U.S. 245, 248
(1900); Hanrick v. Hanrick, 153 U.S. 192, 197-98 (1894); Parrino
v. FHP, Inc., 146 F.3d 699, 703 (9th Cir. 1998), though the
statute does not say so. The requirement— which anyway
might not be applicable here if Cremer could show that the
only nonremoving defendant was indeed fraudulently
joined by, and perhaps acting in cahoots with, the plaintiffs
to defeat removal—is not a jurisdictional defect and hence is
waivable. McMahon v. Bunn-O-Matic Corp., 150 F.3d 651, 653
(7th Cir. 1998). And it was waived. It is even unclear
whether all but that defendant actually joined in either
removal and, if not, whether the failure of the other defen-
dants to do so might be excused by their not having been
served. Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529-30
(7th Cir. 2004). But, again, the plaintiffs have made no issue
of this.
The case is a symphony of frivolousness. The plaintiffs
argue that we have no appellate jurisdiction because Cremer
did not file his notice of appeal within 30 days of the entry
of the order imposing sanctions. The order imposed the
$5,000 fine on Cremer but also directed the plaintiffs’ lawyer
to submit a statement of his expenses in opposing the
frivolous removal to the Central District; the parties then
stipulated to the amount of those expenses, $3,285.28. The
4 No. 04–2615

district court entered a new order directing Cremer to pay
both the fine and the attorneys’ fees, and Cremer filed a
notice of appeal within 30 days of that order. The plaintiffs
argue that the earlier order, the order to pay just the fine,
was final and appealable because a proceeding to obtain an
award of attorneys’ fees is “collateral” to (that is, separate
from) the case out of which the fee proceeding arises.
That is true in general but not in this case. Usually when
a judgment is entered and the winning party then seeks an
award of attorneys’ fees, the pendency of the fee proceeding
does not affect the finality of the judgment. Budinich v.
Becton Dickinson & Co., 486 U.S. 196, 199-202 (1988). The fee
proceeding cannot start until the judgment is entered, so
allowing the appeal from the judgment to be delayed until
the attorneys’ fees proceeding was resolved could delay the
final resolution of the case indefinitely. See Fed R. Civ. P. 58;
Local Union No. 1992 of IBEW v. Okonite Co., 358 F.3d 278, 287
(3d Cir. 2004). Indeed, since “a claim for attorneys’ fees
(other than an interim claim) cannot be quantified until the
entry of final judgment . . ., if the pendency of such a claim
prevented the judgment from becoming final, it could never
become final.” Alonzi v. Budget Construction Co., 55 F.3d 331,
333 (7th Cir. 1995); see also Houben v. Telular Corp., 231 F.3d
1066, 1071 (7th Cir. 2000). But in this case attorneys’ fees
were not sought for services in obtaining a separate judg-
ment, namely the imposition of the $5,000 fine. They were
sought as one component of the sanction for improper
removal, the other component being the fine. So when the
judge imposed the fine and asked the plaintiffs’ lawyer to
submit a statement of fees, he was entering an order that
would not become final until he determined the amount of
the attorneys’ fees that he would award. Discon, Inc. v.
Nynex Corp., 4 F.3d 130, 132 (2d Cir. 1993); cf. Sonii v. General
Electric Co., 359 F.3d 448, 450 (7th Cir. 2004).
No. 04–2615 5

So we have jurisdiction of Cremer’s appeal and move to
the merits. The second removal, which was the occasion of
the sanction that he is challenging, was doubly frivolous.
First, as he admits, he was trying to obtain a second opinion
on removability—and that is not permissible, though not, as
the plaintiffs seem to think, because section 1447(d) states
that an order of remand to a state court “is not reviewable
on appeal or otherwise” (emphasis added). While as an
original matter “otherwise” might be thought to embrace
review by another district judge, we and other courts have
held that the reference is to other ways of obtaining appellate
review, such as by asking for mandamus (see also In re La
Providencia Development Corp., 406 F.2d 251, 252-53 (1st Cir.
1969)) or a declaratory judgment (as in New Orleans Public
Service, Inc. v. Majoue, 802 F.2d 166 (5th Cir. 1986) (per
curiam)), and that the provision we quoted does not pre-
clude successive removals. Benson v. SI Handling Systems,
Inc., 188 F.3d 780 (7th Cir. 1999); Doe v. American Red Cross,
14 F.3d 196, 199-200 (3d Cir. 1993); FDIC v. Santiago Plaza,
598 F.2d 634, 636 (1st Cir. 1979) (per curiam). Cases such as
Vogel v. U.S. Office Products Co., 258 F.3d 509, 519 (6th Cir.
2001); Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d
527, 531 (6th Cir. 1999); In re Lowe, 102 F.3d 731, 733-36 (4th
Cir. 1996), and Harris v. Blue Cross/ Blue Shield of Alabama,
Inc., 951 F.2d 325, 330 (11th Cir. 1992), are in some tension
with Benson and its sister cases. But they are distinguishable
because they hold only that section 1447(d) strips the district
court of jurisdiction to reconsider an order of remand issued
by it. The distinction is noted in FDIC v. Santiago Plaza,
supra, 598 F.2d at 636.
But the first remand, because it establishes the law of the
case, “may be revisited only when intervening events justify
that step.” Benson v. SI Handling Systems, Inc., supra, 188 F.3d
at 783 (citation omitted); to same effect see Doe v. American
6 No. 04–2615

Red Cross, supra, 14 F.3d at 200 (“re-removal” permissible
only “on grounds different than the first removal”); In re
Diet Drugs, 282 F.3d 220, 232 n. 8 (3d Cir. 2002); S.W.S.
Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 492-94 (5th Cir. 1996).
Cremer believes that he can remove the case to federal
district court as many times, and in as many districts, as he
wants, until he finally finds a judge who will agree with
him. The many times is barred by the doctrine of the law of
the case and the many districts by the statutory provision
limiting the venue of a removed case to the district in which
the suit was pending when it was removed. As we noted in
Benson, “multiple removals could encounter prob-
lems—could even lead to sanctions—if nothing of significance
changes between the first and second tries.” 188 F.3d at 783
(emphasis added).
Cremer says he relied on a decision by a district judge
who refused to be “bound by a prior different district
court’s remand order which was based on the prior district
court’s erroneous determination that it lacked subject matter
jurisdiction.” Sawyer v. Commonwealth Edison Co., 847 F.
Supp. 96, 99 (N.D. Ill. 1994). The judge gave no explanation
for this conclusion, such as a change of circumstances be-
tween the first and second removal. (The case was decided
before Benson.) But Cremer argues that a decision, even if
unreasoned and obviously incorrect, by any court at any
time insulates a lawyer who bases his position on the
decision from sanctions. That is not correct. See Szabo Food
Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1081 (7th Cir.
1987). If the decision is reasoned, and the reasoning at least
colorable, an argument based on its reasoning is unlikely to
be frivolous. Or if the decision, though unreasoned, is the
decision of an appellate court with potential jurisdiction over
the case in which the decision is being cited as authority, the
lawyer for the litigant can appeal to the doctrine of stare
No. 04–2615 7

decisis. That doctrine imparts authority to a decision, de-
pending on the court that rendered it, merely by virtue of
the authority of the rendering court and independently of
the quality of its reasoning. The essence of stare decisis is
that the mere existence of certain decisions becomes a
reason for adhering to their holdings in subsequent cases.
E.g., Dickerson v. United States, 530 U.S. 428, 443 (2000);
Planned Parenthood of Southeastern Pennsylvania v. Casey, 505
U.S. 833, 854-65 (1992). The bare fact that a case has been
decided is a ground for deciding the next case, if materially
identical, in the same way.
But as we have noted repeatedly, a district court decision
does not have stare decisis effect; it is not a precedent. Bank
of America, N.A. v. Moglia, 330 F.3d 942, 949 (7th Cir. 2003);
FutureSource L.L.C. v. Reuters Ltd., 312 F.3d 281, 283 (7th Cir.
2002); Zurich Ins. Co. v. Amcor Sunclipse North America, 241
F.3d 605, 608 (7th Cir. 2001); Colby v. J.C. Penney Co., 811
F.2d 1119, 1124 (7th Cir. 1987); Anderson v. Romero, 72 F.3d
518, 525 (7th Cir. 1995); see also In re Executive Office of the
President, 215 F.3d 20, 24 (D.C. Cir. 2000) (per curiam);
Threadgill v. Armstrong World Industries, Inc., 928 F.2d 1366,
1371 (3d Cir. 1991). It may be a wise, well-reasoned decision
that persuades by the quality of its reasoning, but in that
respect it is no different from a persuasive article or treatise.
The fact of such a decision is not a reason for following it.
This conclusion is based not on a disrespect for district
judges, but on the sheer unmanageability of a system in
which the authority to lay down legal rules is dispersed
across a multitude of independent courts. There are 65
federal district judges in this circuit alone. They sit by
themselves rather than in panels. If the decisions of each of
these judges have the force of precedent, how is a lawyer to
advise his clients? Often the different judges will render
inconsistent decisions, and it may be years before the con-
8 No. 04–2615

flict is ironed out by an appellate decision. So Sawyer gave
Cremer no support at all. And if it had—but we want to
emphasize that it did not—it still would not have gotten
him off the hook, because it did not involve venue.
Cremer told the district court that his clients had insisted
that he remove the case to federal court regardless of
whether there was any legal basis for removal. That was a
dreadful excuse. A lawyer who pursues frivolous litigation
cannot defend himself by arguing that his client made him
do so. A lawyer is under a legal duty not to yield to such
importunings, and he opens himself to sanctions if he does.
Thomas v. Tenneco Packaging Co., 293 F.3d 1306, 1327-28 (11th
Cir. 2002) (per curiam); Wilson-Simmons v. Lake County
Sheriff’s Dept., 207 F.3d 818, 824 (6th Cir. 2000); Whiting v.
Lacara, 187 F.3d 317, 322-23 (2d Cir. 1999) (per curiam);
South Star Communications, Inc. v. FCC, 949 F.2d 450, 452
(D.C. Cir. 1991) (per curiam). “Telling would-be litigants
that the law is against them is an essential part of a lawyer’s
job.” Bailey v. Bicknell Minerals, Inc., 819 F.2d 690, 693 (7th
Cir. 1987). Cremer was properly sanctioned for conducting
frivolous litigation.
AFFIRMED.
No. 04–2615 9

A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit

USCA-02-C-0072—4-20-05