United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
June 15, 2006
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 04-60979
CITIFINANCIAL CORP.; CITIFINANCIAL, INC.,
formerly known as Citifinancial of Mississippi, Inc.; and
AMERICAN HEALTH AND LIFE INSURANCE CO.,
Plaintiffs-Appellees,
versus
BILLY HARRISON and KIM HARRISON,
Defendants-Appellants.
Appeal from the United States District Court
For the Southern District of Mississippi
Before HIGGINBOTHAM and DeMOSS, Circuit Judges.*
PATRICK E. HIGGINBOTHAM, Circuit Judge:
This case involves two separate civil actions concerning the
same dispute between essentially the same parties, both actions
ultimately residing in the United States District Court for the
Southern District of Mississippi before two different Article III
judges. In one of the actions, the judge compelled Billy and Kim
Harrison to arbitration under the Federal Arbitration Act and
stayed proceedings on their substantive claims then pending before
the other federal judge. In the other action, the judge disposed
of other parties and “administratively dismissed” the remainder of
*
Judge Priscilla Owen was a member of the panel that heard oral arguments.
She has since recused and has not participated in this decision. The case is
being decided by a quorum. See 28 U.S.C. § 46(d); Matter of Volpe, 943 F.2d
1451, 1451 n.* (5th Cir. 1991).
the case. The Harrisons appeal, and we dismiss for lack of
jurisdiction.
I
Billy and Kim Harrison, both residents of Mississippi,
obtained a home-renovation loan from CitiFinancial pursuant to a
loan agreement, signed by the Harrisons and by Mario Arellano, a
CitiFinancial employee. Despite the loan agreement’s arbitration
clause, the Harrisons, Annie Newton, and Bobby McLaurin brought
state-law claims against CitiFinancial, Arellano, and American
Health and Life Insurance Company, CitiFinancial’s wholly owned
insurer, in a Mississippi state court.1
CitiFinancial, Arellano, and American Health removed the case
to the United States District Court for the Southern District of
Mississippi, alleging that defendant Arellano, also a resident of
Mississippi, was improperly joined to defeat diversity
jurisdiction. The removed case fell to Judge Barbour. The
Harrisons moved to remand, but Judge Barbour withheld ruling
pending this Court’s en banc decision in Smallwood v. Illinois
Central Railroad Co.2
With a wary eye on the issue of fraudulent joinder to be
decided in Smallwood and wanting to proceed to arbitration,
defendants CitiFinancial and American Health, but not Arellano, the
1
Bobby McLaurin was dismissed from the case for failure to prosecute.
2
385 F.3d 568 (5th Cir. 2004) (en banc).
2
local defendant, filed a separate civil action against the
Harrisons––and only the Harrisons––in the United States District
Court for the Southern District of Mississippi. That matter fell
to Judge Wingate. There, CitiFinancial and American Health
petitioned the district court to compel arbitration under section
3 of the Federal Arbitration Act and sought a stay of the
proceedings in Judge Barbour’s court.
Judge Wingate granted CitiFinancial and American Health’s
motion to compel arbitration, finding that the Harrisons’ claims
were covered by a valid arbitration clause. As requested by
CitiFinancial and American Health, Judge Wingate’s order compelling
arbitration stated, “All matters in civil action 3:03-cv-523BN [the
Barbour action] pertaining to [the Harrisons’] claim are hereby
stayed.” Judge Wingate entered a final judgment, and the Harrisons
filed a timely notice of appeal from Judge Wingate’s order. That
appeal was docketed in this Court as Number 04-60979, and it is the
matter currently before this Court.
Following this Court’s ruling in Smallwood, Judge Barbour
concluded that resolution of the motion to remand in the original
action was unnecessary because Judge Wingate had stayed the
Harrisons’ substantive claims. CitiFinancial and American Health,
but not Arellano, filed a motion to compel plaintiff Annie Newton,
who was not a party to the proceeding in Judge Wingate’s court, to
arbitration, which Judge Barbour granted. Judge Barbour noted that
3
Arellano was not a party to the motion to compel and ordered Newton
to inform the court within ten days whether she intended to proceed
against Arellano. Newton did not respond.
CitiFinancial, American Health, and Arellano then filed a
motion to dismiss or, in the alternative, to stay proceedings
pending arbitration. Judge Barbour granted the motion, noting that
the Harrisons were compelled to arbitration by Judge Wingate, that
Newton was compelled to arbitration in a previous ruling, and that
Newton failed to inform the court that she intended to pursue
claims against Arellano. As such, Judge Barbour entered a final
judgment dismissing all claims against Arellano. Then, Judge
Barbour ordered that the case be “administratively dismissed from
the active docket of this Court” subject to “any remaining
party[’s]” motion “to re-open this case if further judicial
intervention is necessary to enforce the rulings of this Court, or
to enforce the rulings of the arbitrator.” No party has appealed
from Judge Barbour’s order.3
II
We raise jurisdiction on our own.4 Section 16 of the Federal
Arbitration act limits our jurisdiction over orders relating to
3
We have taken judicial notice of the proceedings in Judge Barbour’s court.
See Missionary Baptist Foundation of Am. v. Huffman, 712 F.2d 206, 211 (5th Cir.
1983) (“A court may take judicial notice of the record in prior related
proceedings and draw reasonable inferences therefrom.”).
4
See Int’l Ass’n of Machinists & Aerospace Workers Local Lodge 2121 v.
Goodrich Corp., 410 F.3d 204, 207 (5th Cir. 2005).
4
arbitration. We can hear an appeal from “a final decision relating
to arbitration,” but we cannot hear an appeal from an interlocutory
order “granting a stay of any action under section 3 of this
title.”5 “Final decision” takes its “well-developed and
longstanding” meaning––that is, a decision is final when it “ends
the litigation on the merits and leaves nothing more for the court
to do but execute the judgment.”6 Our jurisdiction turns on
whether we look only to Judge Wingate’s order compelling
arbitration, or whether we read Judge Wingate’s order in light of
the proceedings in Judge Barbour’s court.
A
If we only examine Judge Wingate’s order, then we would have
jurisdiction to consider the Harrisons’ appeal. The only issue
before Judge Wingate was CitiFinancial and American Health’s
petition to compel arbitration under section 3 of the FAA. That
petition was granted, and Judge Wingate entered a final judgment
compelling arbitration. Twice, we have resolved this issue, both
times concluding that we had jurisdiction. This is so, because
“the federal action did not contain any substantive claims” and
“there was nothing for the district court to dismiss.”7 Put
5
9 U.S.C. § 16(a)(3), (b)(1).
6
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000).
7
Am. Heritage Life Ins. Co. v. Beasley, 37 Fed. Appx. 712 (5th Cir. May 22,
2002); Conseco Fin. Servicing Corp. v. Shinall, 51 Fed. Appx. 483 (5th Cir. Oct.
1, 2002).
5
another way, once the court compelled arbitration, there was
nothing more for it to do but execute the judgment.8
B
If we examine Judge Wingate’s order in light of the action in
Judge Barbour’s court, then we would not have jurisdiction to
consider the Harrisons’ appeal. Judge Wingate did two things:
first, he ordered the Harrisons to arbitration; and second, he
stayed proceedings in Judge Barbour’s court. Judge Barbour
respected that ruling, and the Harrisons’ claims are still pending
there. Taken together, we have an order compelling arbitration and
a stay of the underlying proceedings. Consistent with section 16
of the FAA, “An arbitration order entering a stay, as opposed to a
dismissal, is not an appealable order.”9
That conclusion is somewhat complicated by the later history
of the case. Judge Barbour dismissed with prejudice all claims
against Arellano, but he was not a party to CitiFinancial and
American Health’s independent action and is not a party to the
present appeal. Judge Barbour then stated, “It is further ordered
that this case is hereby administratively dismissed from the active
docket of this Court. However, any remaining party may move to re-
open this case if further judicial intervention is necessary to
8
Green Tree, 531 U.S. at 86; Digital Equipment Corp. v. Desktop Direct,
Inc., 511 U.S. 863, 867 (1994); Coopers & Lybrand v. Livesay, 437 U.S. 463, 467
(1978).
9
Green Tree, 531 U.S. at 87 n.2; Apache Bohai Corp., LDC v. Texaco China,
B.V., 330 F.3d 307, 309 (5th Cir. 2003); see also 9 U.S.C. § 16(b)(1).
6
enforce the rulings of this Court, or to enforce the rulings of the
arbitrator.”
We must determine if an “administratively dismissed” case is
a “final decision” under the FAA, and we conclude that it is not.
To be sure, the case was not dismissed using the usual language of
dismissal, but we are not bound by the district court’s words.10
Further, on two occasions, we have held that when a district court
“administratively closes” a case, that action was equivalent to a
stay, prohibiting appellate review.11 This is so, because
administratively closing a case is merely a case-management tool
used by district court judges to obtain an accurate count of active
cases.12 Just as an administratively closed case can be “reopened
10
See Gulf Guaranty Life Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d
476, 482 (5th Cir. 2002) (given that the record showed the “clear intent” of the
district court that its order be appealable under Green Tree, the order was a
final decision under section 16).
11
See Mire v. Full Spectrum Lending Inc., 389 F.3d 163, 167 (5th Cir.
2004); South La. Cement, Inc. v. Van Aalst Bulk Handling, B.V., 383 F.3d 298, 302
(5th Cir. 2004) (same); see also Dees v. Billy, M.D., 394 F.3d 1290, 1294 (9th
Cir. 2005); ATAC Corp. v. Arthur Treacher’s, Inc., 280 F.3d 1091, 1099 (6th Cir.
2002); Penn West Assocs., Inc. v. Cohen, 371 F.3d 118, 128 (3d Cir. 2004); Lehman
v. Revolution Portfolio LLC, 166 F.3d 389, 392 (1st Cir. 1999); Fla. Ass’n for
Retarded Citizens, Inc. v. Bush, 246 F.3d 1296, 1298 (11th Cir. 2001). But see
Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 707-08 (5th Cir. 2002) (holding
that a case “CLOSED,” as opposed to “administratively closed,” was a final
order).
12
Mire, 389 F.3d at 167 (“District courts frequently make use of this
device to remove from their pending cases suits which are temporarily active
elsewhere (such as before an arbitration panel) or stayed (such as where a
bankruptcy is pending).”); Lehman v. Revolution Portfolio L.L.C., 166 F.3d 389,
392 (1st Cir. 1999) (“This method is used in various districts throughout the
nation in order to shelve pending, but dormant, cases.”); Corion Corp. v. Chen.,
964 F.2d 55, 56-57 (1st Cir. 1992). Lehman “endorsed the judicious use of
administrative closings in circumstances in which a case, though not dead, is
likely to remain moribund for an appreciable period of time,” citing specifically
arbitration proceedings. Lehman, 166 F.3d at 392 n.3.
7
upon request of the parties or on the court’s own motion,”13 Judge
Barbour’s order administratively dismissing the Harrisons’
substantive claims states that “any remaining party may move to re-
open” the case if judicial intervention is necessary. The
Harrisons’ substantive claims removed from the “active docket,” by
definition then resided on an “inactive docket.” In contrast, a
fully “dismissed” case is removed from the docket, terminated
indefinitely, and restarted only upon the filing of a new
complaint. That is not the case here. Under these limited
circumstances, the Harrisons’ “administratively dismissed” case is
in the same posture as an “administratively closed” case.
Therefore, should we consider Judge Wingate’s order in light of the
proceedings in Judge Barbour’s court, we would not have a “final
decision” appealable under section 16 of the FAA.
C
As illustrated, how we view the proceedings below determines
the jurisdictional question, and we conclude that Judge Wingate’s
order must be reviewed in light of the proceedings in Judge
Barbour’s court. First, examining both proceedings is most
consistent with the strong federal interest––expressed by both the
13
Mire, 389 F.3d at 167; see also Miss. Fleet Card, L.L.C. v. Bilstat,
Inc., 175 F. Supp. 2d 894, 904 (S.D. Miss. 2001) (Barbour, J.) (granting petition
to compel arbitration under FAA, ordering “that as arbitration has been compelled
and all issues in this case disposed of, the Clerk of the Court is to
administratively close this case,” and noting that “[e]ither party may seek, by
motion, to reopen this case in the event further action is required by the
Court”).
8
Congress and the Supreme Court––in favor of arbitration.14
Examining both pushes this case to arbitration quickly, foregoing
delay while the merits are considered on appeal. Moreover, we have
two orders from two Article III judges of the same United States
District Court. “[J]urisdiction is lodged in a court, not in a
person.”15 Two points must be stressed: first, Judge Barbour
respected Judge Wingate’s stay order, entering various orders
disposing of other parties in the case and putting the matter on
hold pending arbitration; and second, the Harrisons’ substantive
claims have not been dismissed by any district court.
Functionally, this case sits in a posture no different than had
both orders been issued by a single district court judge, a
situation in which we would conclude we lacked jurisdictions under
section 16.
We do not retreat from the notion that one district court
judge, whether as a matter of respect and institutional
orderliness, if not jurisdiction, should shy from involvement in a
case proceeding before another Article III judge.16 Although
14
See 9 U.S.C. § 3 (mandatory stay provision); id. § 4 (provision for
ordering arbitration); id. § 16 (provision authorizing immediate appeals only
from orders disfavoring arbitration and forbidding immediate appeals from orders
favoring arbitration); Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983).
15
In re Brown, 346 F.2d 903, 910 (5th Cir. 1965).
16
See In re McBryde, 117 F.3d 208, 225 (5th Cir. 1997); Dhalluin v.
McKibben, 682 F. Supp. 1096, 1097 (D. Nev. 1988) (“[T]he structure of the federal
courts does not allow one judge of a district court to rule directly on the
legality of another district judge’s judicial acts or to deny another district
judge his or her lawful jurisdiction.”).
9
CitiFinancial and American Health asked Judge Wingate to stay
proceedings in Judge Barbour’s court, the prudent––and perhaps
required––course would have been to decline the request or transfer
the matter to the judge with the first-filed case or otherwise
defer. The Harrisons objected to the stay order in their moving
papers, contending that CitiFinancial and American Health already
selected a forum for resolution of their petition to compel
arbitration when they raised the issue as an affirmative defense in
Judge Barbour’s court. Judge Wingate’s order compelling
arbitration and staying proceedings in Judge Barbour’s court did
not specifically address that issue, thus implicitly rejecting it.
The power of one district court judge to stay proceedings pending
arbitration in another district court judge’s court is a question
we need not decide today, as the Harrisons did not pursue that
issue on appeal. Significantly, the sum of the actions of the two
judges was a cooperative response to issues arising out of the same
dispute, and in the largely “uncharted waters of superintendence of
Article III judges,”17 we proceed only as far as necessary. Since
the parties and the judges treated these two actions as one, we
will do the same. While the hard edge of jurisdiction is not
softened by expediency and immediacy of need, its principles must
read on the reality of the contest.
III
17
In re McBryde, 117 F.3d at 209.
10
Accordingly, this case is dismissed for lack of jurisdiction.
11