Thursday, January 18, 2007

Eleventh Circuit Analyzes All Writs Act and Anti-Injunction Act

Per Burr & Forman v. Blair, 470 F.3d 1019 (11th Cir. Nov. 27, 2006):

These consolidated appeals arise from a dispute among several groups of attorneys over the entitlement to attorney's fees awarded in connection with the settlement of a mass tort litigation in the district court, Tolbert v. Monsanto Co. . . . In these consolidated appeals, Blair and Trussell challenge the district court's assumption of subject matter jurisdiction over their claim against Burr & Forman, and the court's authority to enjoin them from prosecuting that claim in state court. We conclude that the district court lacked subject matter jurisdiction to adjudicate Blair and Trussell's claim against Burr & Forman and to enter the injunction. We therefore reverse.

The district court found its authority to issue the Injunction in the All Writs Act and the Anti-Injunction Act, two statutes that work in conjunction to enable a federal court to exercise its jurisdiction and enforce its judgments and, at the same time, limit the court's ability to interfere with state court proceedings. The All Writs Act provides that federal courts "may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law." 28 U.S.C. § 1651(a) . . . . Courts have read the language of this statute broadly. . . . The broad authority that the Act invests in the federal courts to utilize traditional equitable tools is not unlimited. The Act does not create subject matter jurisdiction for courts where such jurisdiction would otherwise be lacking. Henson v. Ciba-Geigy Corp., 261 F.3d 1065 (11th Cir.2001). . . . Instead, the Act provides courts with a procedural tool to enforce jurisdiction they have already derived from another source. Brittingham v. Commissioner, 451 F.2d 315, 317 (5th Cir.1971) [(internal quotation omitted)]. . . . The Anti-Injunction Act serves as a check on the broad authority recognized by the All Writs Act. It prohibits federal courts from utilizing that authority to stay proceedings in state court unless the requirements of one of three narrow exceptions are met. . . . The All Writs Act and the Anti-Injunction Act are closely related, and where an injunction is justified under one of the exceptions to the latter a court is generally empowered to grant the injunction under the former. See Olin Corp. v. Ins. Co. of North America, 807 F.Supp. 1143, 1152 (S.D.N.Y.1992). Thus, in assessing the propriety of an injunction entered to stop a state court proceeding, the sole relevant inquiry is whether the injunction qualifies for one of the exceptions to the Anti-Injunction Act. . . .

[F]or the Injunction to have been permissible under the Anti-Injunction Act, it must have been issued under the Act's second or third exceptions, i.e., it must have been necessary in aid of the court's jurisdiction or to protect or effectuate the court's judgment. In light of the federalism concerns underlying Anti-Injunction Act, courts construe both the "necessary in aid of its jurisdiction" and the "to protect and effectuate its judgments" exceptions narrowly. See T. Smith & Son, Inc. v. Williams, 275 F.2d 397, 407 (5th Cir.1960); Delta Air Lines, Inc. v. McCoy Rests., Inc., 708 F.2d 582, 585 (5th Cir.1983) [internal quotations omitted]. Courts have upheld injunctions predicated on the "necessary in aid of its jurisdiction" exception in two distinct situations. The first is where the federal court in an in rem proceeding obtains jurisdiction over the res before the state court action involving the same res is brought. See In re Abraham, 421 F.2d 226, 228 (5th Cir.1970). . . . Orders enjoining state court proceedings have also been upheld in contexts roughly analogous to proceedings in rem, such as where enjoining the state court proceeding is necessary to protect an earlier federal court injunction. See Wesch v. Folsom, 6 F.3d 1465, 1470 (11th Cir.1993). . . . The third exception to the Anti-Injunction Act authorizes a federal court to issue an injunction to, "protect or effectuate its judgments." 28 U.S.C. § 2283. This exception is generally referred to as the "relitigation exception." See Jacksonville Blow Pipe Co. v. R.F.C., 244 F.2d 394, 400 (5th Cir.1957) An injunction under the relitigation exception is appropriate where the state law claims would be precluded by the doctrine of res judicata. . . .

Although the court's order did not cite the "protect or effectuate" exception of the Anti-Injunction Act, we infer from the language the court used in drafting the order that it based the Injunction on that exception. Burr & Forman agree and contend that the "necessary in aid of its jurisdiction" exception provided an alternative basis for issuing the Injunction. We disagree on both counts. . . .

The "necessary in aid of its jurisdiction" exception provides the basis for an injunction "[w]hen particular property is before the district court ... such as when it is the subject of an in rem proceeding or in the custody of a bankruptcy trustee[.]" Klay v. United Healthgroup, Inc., 376 F.3d 1092, 1103 (11th Cir.2004). The principle focus of this exception is on parallel in rem proceedings--one in federal court, the other in state court. See Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 641-42 (1977) (noting that traditionally the exception has been used to enjoin parallel in rem proceedings, while concurrent in personam proceedings have traditionally been allowed to continue). . . . This is simply not a situation in which a state court in rem proceeding is competing with a federal court in rem proceeding to resolve ownership of a res. . . . Burr & Forman argue alternatively that the Injunction was justified because Blair and Trussell's contract action may affect the disbursement of attorney's fees from the QSF--specifically, the amount paid to Burr & Forman--such that the administration of the QSF was closely analogous to an in rem proceeding. . . . [N]othing in the record indicates that Blair and Trussell's breach of contract action challenges the Tolbert settlement or seeks a lien on the money held in the QSF for attorney's fees. . . . The district court did not have to enjoin the state court proceedings to enable it to exercise its jurisdiction in Tolbert.

We now turn to the applicability of the "protect and effectuate its judgments" exception, the so-called "relitigation exception." This exception is essentially a res judicata concept. For an injunction to be proper under this exception, each of the claim preclusion requirements of the applicable state law--here, Alabama law--must be met. . . . Once the court remanded the case for the first time, any jurisdiction it may have had over the case ceased. The court, therefore, lacked subject matter jurisdiction to issue the Merits Order disposing of Blair and Trussell's claim. Because the court lacked subject matter jurisdiction to issue it, the order was not entered by a court of competent jurisdiction. Thus, the Injunction does not fall within the Anti-Injunction Act's relitigation exception.


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