St Paul Mercury Ins v. Williamson

• Court: Court of Appeals for the Fifth Circuit
• Decided: May 27, 2003
• Docket: 02-30298
• Status: Published

Opinion

United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS May 27, 2003

FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk __________________________

No. 01-30648 No. 01-30879 No. 02-30215 __________________________

ST PAUL MERCURY INSURANCE COMPANY; ET AL,

Plaintiffs,

HAYNES BEST WESTERN OF ALEXANDRIA; H L HAYNES; AMERICAN GENERAL INSURANCE CO; MARYLAND CASUALTY CO; H L & H HOLDING CO,

Plaintiffs-Appellees,

v.

SONYA WILLIAMSON, Individually and on behalf of her minor children; ROBERT T WILLIAMSON, Individually and on behalf of his minor children,

Defendants-Appellants,

ABNER WILLIAMSON,

Appellant.

__________________________

No. 02-30298 __________________________

HAYNES BEST WESTERN OF ALEXANDRIA INC; H L HAYNES, MR; H L HAYNES, MRS; AMERICAN GENERAL INSURANCE CO; MARYLAND CASUALTY CO; H L & H HOLDING CO, Plaintiffs-Appellants-Cross-Appellees,

SONYA WILLIAMSON, Etc; ET AL,

Defendants,

SONYA WILLIAMSON, Individually and on behalf of her minor children; ROBERT T WILLIAMSON, Individually and on behalf of his minor children,

Defendants-Appellees-Cross-Appellants,

and

ABNER WILLIAMSON; DIXIE WILLIAMSON,

Appellants.

___________________________________________________

Appeals from the United States District Court for the Western District of Louisiana ___________________________________________________

Before JONES, WIENER, and DeMOSS, Circuit Judges.

WIENER, Circuit Judge:

The case before us must be the nadir in a seemingly unending

series of lawsuits and counter-lawsuits in federal and state courts

over the past thirteen years. In this latest iteration, Sonya and

Robert Williamson (“the Williamsons”), appeal from a district

court’s order preliminarily enjoining them from prosecuting one of

the many actions they have filed in Louisiana state court against

St. Paul Mercury Insurance Co. (“St. Paul”), Haynes Best Western of

Alexandria Inc. (“Haynes Best Western”), Best Western International

(“BWI”), H.L. Haynes, Mrs. H.L. Haynes, American General Insurance

Co. (“American General”), and Maryland Casualty Co. (“Maryland”)

2 (collectively, “the insurance parties”).1 For their part, the

insurance parties have cross-appealed the district court’s denial

of their request for a permanent injunction against the Williamsons

in this same state action. As we determine that the district court

properly refused to issue a permanent injunction against the

Williamsons, which makes the district court’s preliminary

injunction against the Williamsons moot, we affirm.

I. FACTS and PROCEEDINGS

The genesis of this appeal is a 1990 lawsuit that the

Williamsons filed in Louisiana state court against the insurance

parties (the “original lawsuit”). In that lawsuit, the Williamsons

alleged that Sonya Williamson suffered injuries resulting from an

electrical shock that she purportedly incurred while all were

living at the Haynes Best Western in Alexandria, Louisiana. In

September 1994, a jury found that Sonya Williamson was injured, but

that the injuries arose from a staged accident or fraud. The state

trial court entered judgment in favor of the insurance parties, a

Louisiana Court of Appeal affirmed the judgment in January 1997,2

and the Louisiana Supreme Court denied the Williamsons’ writ

1 St. Paul and BWI subsequently settled their claims with the Williamsons and have been dismissed from the appeal. American General and Maryland are now represented by their successor-in-interest, Zurich Insurance Company (“Zurich”), although for ease of reference, Zurich is included in the “insurance parties” designation. 2 See Williamson v. Haynes Best Western, 688 So. 2d 1201 (La. Ct. App. 1997).

3 applications in June 1997.

Harken back to November 1993. While the original lawsuit was

pending in the state trial court, St. Paul filed suit in federal

district court against the Williamsons, claiming violations of the

Racketeer Influenced and Corrupt Organizations Act (“RICO”),3 and

alleging fraud and conspiracy under Louisiana law (the “RICO

suit”). St. Paul alleged that the Williamsons had a lengthy and

well-documented history of purposefully defrauding insurance

companies through the filing of claims based on staged accidents

and non-existent injuries. The Williamsons promptly reconvened

against St. Paul; they also separately sued all of the insurance

parties, making identical claims for violations of RICO and

Louisiana fraud and conspiracy statutes. The RICO suit and the

Williamsons’ counter-lawsuits were consolidated; and, on pre-trial

motions, the district court dismissed all claims, except one: It

granted summary judgment to St. Paul on its claim against the

Williamsons for malicious prosecution.4 The district court set the

case for trial solely on the issue of damages. In November 1997,

a jury awarded damages of $411,166.56 to St. Paul. The Williamsons

appealed the malicious prosecution judgment, and St. Paul appealed

the dismissal of its RICO claims.

Now back to November 1995, when the RICO suit was still

3 18 U.S.C. §§ 1961-68 (2000). 4 See St. Paul Mercury Ins. Co. v. Williamson, 986 F. Supp. 409 (W.D. La. 1997).

4 pending in the district court and the original lawsuit was

proceeding through the state appellate courts. The Williamsons

filed a petition in Louisiana state court invoking Louisiana Code

of Civil Procedure (“LCCP”) article 2004 to annul the judgment in

the original lawsuit that found Sonya Williamson’s injuries to be

the result of either a staged accident or fraud (the “nullification

suit”). Under LCCP article 2004, a “final judgment obtained by

fraud or ill practices may be annulled.”5 Although the

nullification suit remained dormant for several years, it was

revived when the Williamsons filed a third supplemental and

amending petition in March 1998.

This revival apparently prompted the insurance parties to file

a new complaint in federal district court to enjoin the state

nullification suit (the “injunction suit”). In it, the insurance

parties contended that the Williamsons —— via the nullification

suit —— were attempting to relitigate the district court’s judgment

in the RICO suit (which dismissed the Williamsons’ claims against

the insurance parties). In October 1998, the district court issued

a preliminary injunction enjoining the Williamsons from litigating

the nullification suit in state court (the “first preliminary

injunction”). The Williamsons timely appealed.

As the two appeals from the RICO suit and the appeal from the

injunction suit derived from the same set of facts (and prior

5 LA. CODE CIV. P. art. 2004 (emphasis added).

5 lawsuits), we consolidated them in 1999. In August 2000, we issued

our first opinion in this epic, vacating in part and affirming in

part the various judgments of the district courts.6 Specifically,

in the RICO suit, we affirmed the dismissal of the Williamsons’

claims, but vacated the judgment in favor of St. Paul on its

malicious prosecution claim; we also vacated in part the district

court’s dismissal of St. Paul’s RICO claims against the

Williamsons. In the injunction suit, we vacated the first

preliminary injunction against the Williamsons, which had prevented

them from prosecuting their nullification suit in state court.

Of relevance here is the portion of our August 2000 judgment

that vacated the district court’s first preliminary injunction.

The district court had agreed with the insurance parties that the

Williamsons were attempting to relitigate the dismissal of their

claims in the RICO suit, which permitted the court to issue an

injunction under the relitigation exception in the Anti-Injunction

Act.7 We held that the relitigation exception in the Anti-

Injunction Act was inapplicable; noting that, under Louisiana law,

a nullification action could be based on either fraud or ill

practices.8 Although we recognized that the district court

“considered and adjudged the issue of fraud” in the RICO suit, we

6 See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425 (5th Cir. 2000). 7 28 U.S.C. § 2283 (2000). 8 Williamson, 224 F.3d at 448-49.

6 also recognized that the record revealed that “the district court

did not actually litigate an ultimate issue of fact that precludes

the possibility of litigating the issue of ill practices and the

corresponding nullification claim.”9 Thus, we concluded that on

remand the district court could enjoin the Williamsons from

relitigating the issue of fraud in the nullification suit as

grounds for annulling the judgment under LCCP article 2004, but

that it could not enjoin the Williamsons from prosecuting the

nullification suit based on their claim that the insurance

companies engaged in ill practices, the other nullification ground

under that article.10

We thus remanded the case to the district court, and the

insurance parties promptly filed a motion for a permanent

injunction against the Williamsons to prevent them from further

prosecuting the nullification suit. Before a hearing could be held

on the insurance parties’ request for a permanent injunction,

however, the Williamsons returned to the state courts in search of

a default judgment in the nullification suit. After some palpable

forum shopping, the Williamsons eventually convinced a judge in the

Civil District Court for the Parish of Orleans to issue an order,

ex parte, granting them a default judgment.11 This effectively

9 Id. at 449 (emphasis added). 10 See LA. CODE CIV. PROC. art. 2004. 11 See In re Williamson, No. 01-30533 (5th Cir. July 25, 2001) (DeMoss, J., specially concurring) (noting that, despite

7 nullified the judgment in favor of the insurance parties in the

original lawsuit.12

When the insurance parties discovered what the Williamsons had

done, they responded by filing (1) a motion in state court

requesting a new trial and (2) motions in district court requesting

sanctions and a contempt order against the Williamsons. In April

2001, the district court held hearings on the insurance parties’

motions; the result was another preliminary injunction, which

effectively enjoined the enforcement of the default judgment in the

nullification suit (the “second preliminary injunction”). The

Williamsons timely filed a notice of appeal.

While the Williamsons’ appeal was pending before us, the state

court that had issued the default judgment continued proceedings

apace, ignoring the second preliminary injunction. In May 2001,

the state court denied the insurance parties’ motion for a new

trial. The insurance parties thus returned to the district court

and requested that the second preliminary injunction be amended to

cover any state appellate proceedings. In June 2001, the district

court agreed, expanding the scope of the second preliminary

injunction accordingly.

The Williamsons petitioned us for a writ of mandamus to order

being denied a default judgment by one Louisiana judge, the Williamsons “continued mightily with their search until they found a receptive ear”). 12 Id.

8 the district court to vacate the second preliminary injunction. We

denied the petition, reasoning that the Williamsons had timely

filed their notice of appeal, which provided them with an adequate

remedy.13

In January 2002, before we heard the Williamsons’ appeal on

the second preliminary injunction, the district court, on remand

from our Williamson opinion, permanently enjoined the Williamsons

from relitigating the issue of fraud in the nullification suit (the

“permanent injunction”). In March 2002, the district court issued

another order that (1) denied the insurance parties’ request for a

permanent injunction to enjoin the Williamsons from pursuing their

“ill practices” claim in the nullification suit, and (2) enjoined

the Williamsons, pursuant to Federal Rule of Civil Procedure 62(c),

from prosecuting the nullification suit in state court while their

appeal of the district court’s second preliminary injunction was

pending before us. The insurance parties timely filed their notice

of appeal of the order denying their request for a permanent

injunction of the Williamsons’ “ill practices” claim. We again

consolidated the appeals, and here we are.

II. ANALYSIS

A. The insurance parties’ request for a permanent injunction of the Williamsons’ nullity action ground in alleged “ill practices.”

13 See In re Williamson, No. 01-30533 (5th Cir. July 25, 2001) (order denying petition for writ of mandamus).

9 1. Standard of review.

We review for abuse of discretion a district court’s denial of

a motion for a permanent injunction.14 The application of the

relitigation exception to the Anti-Injunction Act, however, is a

question of law that we review de novo.15

2. The district court correctly refused to enjoin the Williamsons from pursuing their “ill practices” claim.

Under the Anti-Injunction Act, a “court of the United States

may not grant an injunction to stay proceedings in a State court

except as expressly authorized by Act of Congress, or where

necessary, in aid of its jurisdiction, or to protect of effectuate

its judgments.”16 This statute is generally recognized to permit

a district court to enjoin state court proceedings on only three

bases: When it is (1) expressly authorized by a federal statute,

(2) necessary to assert jurisdiction, or (3) necessary to protect

or effectuate a prior judgment by a federal court.17

The insurance parties urge that a permanent injunction of the

Williamsons’ entire nullification suit is justified under the third

14 Regions Bank of La. v. Rivet, 224 F.3d 483, 489 (5th Cir. 2000). 15 Id. 16 28 U.S.C. § 2283 (2000). 17 Atlantic Coast Line R.R. Co. v. Bhd of Locomotive Eng’rs, 398 U.S. 281, 286 (1970) (noting that the Anti-Injunction Act establishes “an absolute prohibition against enjoining state court proceedings, unless the injunction falls within one of three specifically defined exceptions”).

10 condition —— protection or effectuation of a federal court’s

judgment —— commonly called the “relitigation exception.”18 The

religitation exception “is founded in the well-recognized concepts

of res judicata and collateral estoppel.”19 “[A]n essential

prerequisite for applying the relitigation exception is that the

claims or issues which the federal injunction insulates from

litigation in state proceedings actually have been decided by the

federal court.”20

The insurance parties contend that the district court erred in

denying their request for a permanent injunction against the

Williamsons’ litigating their “ill practices” claims in the

nullification suit. In support of this contention, they maintain

in the alternative that either (1) the relitigation exception in

the Anti-Injunction Act is applicable, or (2) the district court

addressed the underlying facts of the “ill practices” claim when it

adjudicated the “fraud” claim. The Williamsons respond that the

insurance parties’ contentions here amount to nothing more than a

thinly veiled attempt to circumvent our prior ruling in

18 Next Level Comms. L.P. v. DSC Comms. Corp., 179 F.3d 244, 249 (5th Cir. 1999). 19 J.R. Clearwater, Inc. v. Ashland Chem. Co., 93 F.3d 176, 179 (5th Cir. 1996) (quoting Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 147 (1988)). 20 Assurance Co. of Am. v. Kirkland, 312 F.3d 186, 189 (5th Cir. 2002) (quoting Chick Kam Choo, 486 U.S. at 148).

11 Williamson.21 At a minimum, urge the Williamsons, the insurance

parties’ claims are precluded by the Anti-Injunction Act. In the

alternative, the Williamsons suggest that we should reject the

insurance parties’ argument for an injunction here because the law

of the case doctrine applies.

Given our earlier holding in Williamson, we find ourselves

compelled to agree with the Williamsons that the law of the case

doctrine applies here. We previously determined that the

relitigation exception in the Anti-Injunction Act is inapplicable

to the Williamsons’ “ill practices” claim in the nullification

suit.22 “Under the law of the case doctrine, an issue of fact or

law decided on appeal may not be reexamined either by the district

court on remand or by the appellate court on a subsequent appeal.”23

Neither the law nor the underlying facts have changed since

Williamson. Thus, we are shackled by the law of the case doctrine

and forced to affirm the district court’s order denying the

insurance parties’ request to enjoin the Williamsons from pursuing

an “ill practices” claim in the nullification suit.

B. Did the district court err in preliminarily enjoining the Williamsons from prosecuting their nullification action?

The resolution of the insurance parties’ appeal concerning the

21 224 F.3d at 448-49. 22 Id. 23 United States v. Matthews, 312 F.3d 652, 657 (5th Cir. 2002) (quoting Tollett v. City of Kemah, 285 F.3d 357, 363 (5th Cir. 2002)).

12 permanent injunction has made the Williamsons’ appeal from the

order granting the preliminary injunction moot. The preliminary

injunction was superceded by the district court’s orders that (1)

granted a permanent injunction prohibiting the Williamsons from

pursuing a “fraud” claim in the nullification suit, and (2) denied

the insurance parties’ request for a permanent injunction that

would have prohibited the Williamsons from pursuing an “ill

practices” claim in the nullification suit. These orders

effectively ended the operation of the preliminary injunction that

prohibited the Williamsons from prosecuting their default judgment

in the nullification suit as such. Therefore, we need not address

this issue.24

III. CONCLUSION

As Judge Jones noted in her dissent from the panel majority

decision in Williamson: “To stage an accident for insurance tribute

is reprehensible. But it’s also hard to see what good, or what

collectable money judgment, may come of a RICO suit against these

pathetic plaintiffs. This litigation . . . should end!”25 We

wholeheartedly agree. If it were not for our obligation to abide

by the law of the case doctrine, we would gladly bury this black-

flag pettifoggery, born and nurtured as it was of the parties’

24 Obviously, all motions carried with the appeal are also denied as moot. 25 Williamson, 224 F.3d at 450 (Jones, J., dissenting).

13 amalgam of lawsuits and counter-lawsuits filed and prosecuted over

the past thirteen years.

Regrettably, however, we are constrained from playing Hercules

to this juridical Hydra: Lest anyone forget, we function under the

stricture of federalism and the principle of comity that is

exemplified in the Anti-Injunction Act.26 Thus, our decision to

affirm the district court should not be seen in anyway as an

imprimatur of what has occurred here. Simply put, the time has

long since passed for this litigation to end, but the hemlock is

not ours to administer: At this juncture, only the courts of

Louisiana can euthanize this unseemly saga. We remain nonetheless

confident that, even absent the mandate of a federal injunction,

the Louisiana courts will timely drive a stake through the heart of

this heretofore immortal vampire when the Williamsons further seek

to prefect and enforce their ill-practices default judgment in the

nullification suit.

AFFIRMED.

26 See Chick Kam Choo, 486 U.S. at 146 (discussing the constitutional and policy justifications for the Anti-Injunction Act).