United States Court of Appeals
Fifth Circuit
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT FILED
February 21, 2006
No. 05-30633 Charles R. Fulbruge III
Summary Calendar Clerk
GULF SOUTH MEDICAL AND SURGICAL INSTITUTE;
BURKS-FARBER CLINICS;
GEORGE A. FARBER, SR., M.D.,
Plaintiffs-Appellants,
v.
AETNA LIFE INSURANCE CO.,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
(2:04-CV-02868-MLCF-DEK)
Before KING, WIENER, and DEMOSS, Circuit Judges.
PER CURIAM:*
Plaintiffs-Appellants Gulf South Medical and Surgical
Institute, Burks-Farber Institute, and George A. Farber, Sr., M.D.
(collectively “appellants”) appeal the district court’s orders
dismissing their complaint for failure to state a cause of action
and imposing sanctions under Rule 11 of the Federal Rules of Civil
Procedure. We affirm the order of dismissal but vacate the
sanctions order.
*
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this opinion should not be published and is not precedent except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.
I.
FACTS AND PROCEEDINGS
In 1993, appellants sued Defendant-Appellee Aetna Life
Insurance Co. (“Aetna”) and Lafarge Corporation in a Lousiana state
court to recover medical charges to which appellants claimed they
were entitled but wrongly denied, alleging defamation and abuse of
discretion in the denial of benefits. The claims at issue were for
dermatological treatment of Edwin Delaney between August 1988 and
June 1990. Following removal to federal court, the action was
dismissed by summary judgment, and we affirmed on appeal.
In September 2004, appellants again sued Aetna in state court,
again alleging that Aetna wrongfully withheld the same payments for
Delaney’s dermatological treatment rendered during precisely the
same period. This time, appellants asserted fraudulent concealment
as their legal theory, basing their theory on a class action
pending in Florida against Aetna which involves patients treated
between August 4, 1990 and June 23, 2004. Again, this new state
court action was removed to federal court, and the district court
again dismissed under Rule 12()(6)b, albeit for reasons of res
judicata. In addition, the court imposed sanctions “for filing
claims which have already been resolved” by the court. It is from
the dismissal and sanctions orders that appellants appeal.
2
II.
ANALYSIS
A. Rule 12(b)(6) Dismissal
We review de novo a district court’s dismissal under Rule
12(b)(6).1 We construe the complaint liberally in favor of the
appellants, and we will affirm only if it appears beyond doubt that
they can state no cause of action.
Res judicata bars an action when a court of competent
jurisdiction has rendered a prior judgment in an action in which
(1) the parties are the same, (2) there has been a final judgment
on the merits, and (3) the same cause of action is involved.2 We
use a transactional test to determine whether two complaints
involve the same cause of action.3 If the same nucleus of
operative facts underlies both actions, they involve the same cause
of action.4 “The substantive theories advanced, forms of relief
requested, types of rights asserted, and variations in evidence
needed do not inform this inquiry.”5
1
Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 164 (5th
Cir. 1999).
2
Test Masters Ed. Services, Inc. v. Singh, 428 F.3d 559, 571
th
(5 Cir. 2005).
3
Id. See also Agrilectric Power Partners, Ltd. v. General
Elec. Co., 20 F.3d 663, 665 (5th Cir. 1994).
4
Agrilectric, 20 F.3d at 665.
5
Id.
3
The instant action arises out of the same nucleus of operative
facts as did the 1993 suit. Appellants’ allegations in the second
petition assert claims for the same payments that were at issue in
the first lawsuit. That they now claim entitlement to the payments
under a new theory —— fraudulent concealment —— does not insulate
the present complaint from res judicata. As the district court
correctly noted, appellants fail to demonstrate how a class action
currently pending in Florida involving claims asserted on behalf of
different patients during a different period affects the issues and
disposition of this case. We affirm the district court’s dismissal
of the second, removed state action.
B. Sanctions
We review a district court’s imposition of sanctions for abuse
of discretion.6 Rule 11 does not apply to filings made in state
court.7 “To uphold sanctions under [R]ule 11, we must be able to
point to some federal filing in which the sanctioned attorney
violated that rule.”8 Here, the district court imposed sanctions
in the form of attorney’s fees and costs for appellants’ “filing
6
Whitehead v. Food Max of Mississippi, Inc., 332 F.3d 796,
803 (5th Cir. 2003).
7
Edwards v. Gen. Motors Corp., 153 F.3d 242, 245 (5th Cir.
1998) (noting that “[t]here is no indication, in the text of the
rule, that it applies to filings in any court other than a
federal district court” and declining to uphold a sanctions award
to the extent that it punished the filing of a state court
petition).
8
Id. (emphasis added).
4
claims which have already been resolved by the Court.” In other
words, the filing for which the district court sanctioned
appellants was the petition filed in the second lawsuit.
Significantly, however, appellants filed their second petition in
Louisiana state court, as they had in the first case. We may not
uphold an award of sanctions imposed under Rule 11 on the basis of
state court filings. As a matter of law, then, we must hold that
the district court abused its discretion when it imposed sanctions
in this case based solely on a state court filing.
Aetna attempts to preserve its sanctions award by re-
characterizing the basis of the sanctions as appellants’ response
to Aetna’s motion to dismiss, rather than to appellants’ filing of
the lawsuit itself. Aetna’s argument is unpersuasive. The
district court order makes perfectly clear that it imposed
sanctions for appellants’ filing of the second suit. Furthermore,
review of Aetna’s district court motion for sanctions belies its
current re-characterization. Aetna filed that motion based solely
on the assertion that the suit was filed in violation of Rule 11;
yet that suit was filed in state court, then removed by Aetna. We
are constrained, therefore, to vacate the imposition of sanctions.
5
III.
CONCLUSION
For the foregoing reasons, the district court’s summary
judgment of dismissal is affirmed, but its sanction order is
vacated.
AFFIRMED in part, and VACATED in part.
6
Gulf S Med Surgc v. Aetna Life Ins Co
Combined Opinion