Joseph Young v. New Process Steel, LP , 419 F.3d 1201 ( 2005 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
AUGUST 9, 2005
No. 04-11554 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 01-01151-CV-AR-S
JOSEPH YOUNG,
DARREL SIMS,
MARK STEVEN GREER,
MORRIS PICKETT,
Plaintiffs-Appellants,
versus
NEW PROCESS STEEL, LP,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(August 9, 2005)
Before CARNES and PRYOR, Circuit Judges, and FORRESTER *, District Judge.
*
Honorable J. Owen Forrester, United States District Judge for the Northern District of
Georgia, sitting by designation.
CARNES, Circuit Judge:
This appeal brings us a question of first impression: May a district court
require, as a condition for appealing a judgment, that a losing plaintiff in a civil
rights case post a Fed. R. App. P. 7 bond that includes the defendant’s anticipated
appellate attorney’s fees? The front line position of the appellants in this case,
plaintiffs who lost their Title VII and 42 U.S.C. § 1981 lawsuit, is that the district
court cannot order them to post such a bond, regardless. Their fall back position is
that the court cannot do it without making a finding consistent with Christiansburg
Garment Co. v. Equal Employment Opportunity Comm’n, 434 U.S. 412, 98 S. Ct.
694 (1978), that the would-be appeal is frivolous, unreasonable, or groundless.
Although we reject the plaintiffs’ primary position, we do find merit in their
secondary one.
I.
In May 2001 Joseph Young, Darrel Sims, Mark Greer, and Morris Pickett
filed a lawsuit against their employer, New Process Steel, L.P., pursuant to 42
U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C.
§§ 2000e et. seq. Their complaint alleged various forms of racial discrimination,
including a racially hostile work environment and various adverse employment
actions. Young sued under Title VII and § 1981, while the other plaintiffs sued
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only under § 1981. New Process Steel moved to dismiss Young’s Title VII claims
and, alternatively, moved for partial summary judgment on those claims. In
response, Young moved to amend his complaint to bring all of his claims under §
1981. The court granted both Young’s motion to amend and New Process Steel’s
motion to either dismiss or grant summary judgment against Young’s Title VII
claims.
In July 2002 Greer filed a new lawsuit alleging that he had been fired by
New Process Steel after the original action was filed and that the firing was
retaliatory. The new lawsuit was consolidated with the original one. Meanwhile
the plaintiffs’ attorney informed New Process Steel that the plaintiffs planned to
pursue only their hostile work environment claims. In response, New Process Steel
filed, pursuant to Fed. R. Civ. P. 41, an unopposed motion to dismiss all of the
plaintiffs’ other claims, the ones alleging racial discrimination regarding overtime
and promotions. The court granted that motion and dismissed with prejudice all of
those other claims, leaving for trial only the racially hostile work environment
claims and Greer’s retaliation claim.
The first trial of those remaining claims ended in a mistrial in June of 2003,
which was granted on motion of the defendant, which was apparently made as a
result of some comments by the plaintiffs or their attorneys to the jurors.
3
Thereafter, on Greer’s own motion his retaliation claim was dismissed, leaving for
the second trial only the plaintiffs’ hostile work environment claims. That trial
ended in a jury verdict and final judgment for the defendant in October 2003. The
four plaintiffs filed their notice of appeal from that judgment on November 21,
2003.
On February 5, 2004, the district court, without prodding from the
defendant, entered an order stating:
Pursuant to Rule 7, Federal Rule of Appellate Procedure, this court
would require appellant to file a bond or provide other security in an amount
necessary to ensure payment of costs on appeal if the potential costs taxable
on appeal can be fairly approximated. If appellee wishes to invoke Rule 7, it
shall within fourteen (14) days submit evidentiary materials to support the
fixing of a bond amount.
Being able to take a hint when hit over the head with one, the defendant responded
by filing a motion that asked the court to require the plaintiffs to post a bond. The
defendant sought to have the bond cover its anticipated appellate attorney’s fees as
well as the other costs it would incur as a result of the appeal. The motion was
accompanied by affidavits estimating the amount of those attorney’s fees. In
granting the motion in its entirety, the district court relied on Pedraza v. United
Guar. Corp., 313 F.3d 1323 (11th Cir. 2002), which it called “potent medicine.”
The order the court entered required the plaintiffs to post a cost bond in the amount
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of $61,000 as a prerequisite to their appeal. All but $1,000 of that amount was to
cover the attorney’s fees the defendant estimated it would incur in the appeal.
The defendant’s motion did not allege, and the court’s order did not pretend
to find, that the plaintiffs’ appeal would be frivolous, unreasonable, or groundless.
Instead, the court expressly disavowed the need for a finding of that nature. In a
memorandum opinion accompanying its order, the court stated: “The fixing of a
Rule 7 bond, pursuant to Pedra[]za v. United Guaranty Corp., 313 F.3d 1323 (11th
Cir. 2002), does not require the court to predict whether or not a defendant will
prevail on appeal, or to require that defendant demonstrate that the appeal is
frivolous.”
The plaintiffs appealed the district court’s imposition of the Rule 7 bond.
See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546–47, 69 S. Ct. 1221,
1225–26 (1949) (a district court’s order requiring one party to post security prior to
appealing is a final appealable order). Their putative appeal on the merits was
stayed pending the appeal of the bond issue. Without hearing oral argument, a
panel of this Court issued a decision vacating the district court’s order requiring the
bond and remanding with instructions that the court not include the defendant’s
anticipated appellate attorney’s fees in the Rule 7 bond absent a finding that the
plaintiff’s appeal would be frivolous, unreasonable, or groundless. Young v. New
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Process Steel, L.P., No. 04-11554 (11th Cir. Nov. 23, 2004) (per curiam). The
defendant filed a petition for rehearing en banc. In response, the original panel
vacated its earlier opinion and set the case for rehearing before an oral argument
panel of the Court. We are the new panel and have heard oral argument on the
issue.
II.
While this Court generally reviews a district court’s imposition of a Rule 7
cost bond only for abuse of discretion, Pedraza, 313 F.3d at 1328, that limited
standard does not mean much in this case, which turns on a pure law issue
involving the interpretation of Rule 7. We decide pure law issues de novo, id.,which is another way of saying that a ruling based on an error of law is an abuse of
discretion. Koon v. United States, 518 U.S. 81, 100, 116 S. Ct. 2035, 2047 (1996)
(“A district court by definition abuses its discretion when it makes an error of
law.”); United States v. Brown, 332 F.3d 1341, 1343 (11th Cir. 2003) (same);
United States v. Hall, 349 F.3d 1320, 1323 (11th Cir. 2003) (an error of law “is by
definition an abuse of discretion”).
Rule 7 has two sentences, but only the first one has any relevance to the
issue before us. That sentence provides: “In a civil case, the district court may
require an appellant to file a bond or provide other security in any form and
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amount necessary to ensure payment of costs on appeal.” Fed. R. App. P. 7. The
rule does not define “costs” for its purposes, but this Court went a long way toward
doing so, at least for cases where a fee-shifting statute is involved, in our Pedraza
decision. There we explained that the word “costs” for Rule 7 purposes should
draw its meaning from the fee-shifting statute applicable to the underlying case.
Pedraza, 313 F.3d at 1333.
Pedraza was a case arising under 12 U.S.C. § 2607(a) of the Real Estate
Settlement Procedures Act, and the applicable fee-shifting provision in that statute
stated that “the court may award to the prevailing party the court costs of the action
together with reasonable attorneys fees.” 12 U.S.C. § 2607(d)(5) (emphasis
added). We explained that the words “together with” meant that attorney’s fees
were recoverable in addition to costs, not as part of costs. Pedraza, 313 F.3d at1333–34. For that reason, we concluded that in a RESPA case the district court
could not order appellants to post a Rule 7 bond that included anticipated appellate
attorney’s fees. Id. at 1334–35. It could not, because the fee-shifting statute
applicable to the underlying RESPA lawsuit, 12 U.S.C. § 2607(d)(5), did not
include attorney’s fees in its definition of “costs,” 313 F.3d at 1334–35, and Rule
7 does not authorize courts to require a bond in an amount larger than “costs” as
defined in the applicable fee-shifting statute.
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We said more in Pedraza, and the more we said has direct relevance to this
case. Explicating our holding in Pedraza by giving an example of its converse, we
stated that a district court could order a losing plaintiff to post a Rule 7 bond that
included anticipated appellate attorney’s fees if 42 U.S.C. § 1988 were the
underlying fee-shifting statute. See 313 F.3d at 1333–35. That’s because § 1988
expressly allows the court to award the prevailing party “a reasonable attorney’s
fee as part of the costs.” 42 U.S.C. § 1988(b) (emphasis added). Thus, where
§ 1988 is the applicable fee-shifting statute, “costs” includes anticipated appellate
attorney’s fees. In our present case, of course, § 1988 is the provision that governs
fee-shifting, as it will in civil rights cases generally.
Of course, the statement in Pedraza about what should be done in a case
where § 1988 is the fee-shifting source is probably dictum, because that case was
not before this Court then. See Watts v. BellSouth Telecomm., Inc., 316 F.3d
1203, 1207 (11th Cir. 2003); United States v. Aguillard, 217 F.3d 1319, 1321
(11th Cir. 2000) (per curiam). We are not bound to follow dictum, but do accord
it any respect it earns through its persuasive value. See New Port Largo, Inc. v.
Monroe County, 985 F.2d 1488, 1500 n.7 (11th Cir. 1993) (Edmondson, J.,
specially concurring). The statement in Pedraza about § 1988 is not incidental or
oh-by-the-way dictum, but instead illustrates the nature and extent of the rule that
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was actually used to decide the case. For that reason, we are persuaded to give the
statement more respect than we might afford dicta that was not as closely
intertwined with the reasoning and result of the decision containing it. See Local
28 of Sheet Metal Workers’ Int’l Ass’n v. Equal Employment Opportunity
Comm’n, 478 U.S. 421, 490, 106 S. Ct. 3019, 3057 (1986) (O’Connor, J.,
concurring in part and dissenting in part) (“Although technically dicta, . . . an
important part of the Court’s rationale for the result it reached . . . is entitled to
greater weight . . . .”). Even though not required to adhere to Pedraza’s statement
that Rule 7 permits inclusion of a defendant’s appellate attorney’s fees as part of a
cost bond where § 1988 applies, we nonetheless choose to follow it. The
statement makes sense, and it expresses a conclusion compelled by the reasoning
that led the Court to reach the result it did in Pedraza.
The plaintiffs contend that Pedraza’s statement about the proper
interpretation of Rule 7 where § 1988 applies, which is to say in civil rights cases,
is wrong. The statement is wrong, they say, because it is inconsistent with that
provision’s pronounced plaintiff preference. Although the language of § 1988 is
itself party-neutral, the Supreme Court held in Christiansburg that while “a
prevailing [civil rights] plaintiff ordinarily is to be awarded attorney’s fees in all
but special circumstances,” Christiansburg, 434 U.S. at 417, 98 S. Ct. at 698
9
(emphasis omitted), a district court should not award attorney’s fees to a
prevailing civil rights defendant absent “a finding that the plaintiff’s action was
frivolous, unreasonable, or without foundation,” id. at 421, 98 S. Ct. at 700.
The plaintiffs in this case ask us to carry over Christiansburg’s pro-plaintiff
interpretation of the fee-shifting provision of § 1988 into Rule 7’s appellate bond
provision. Actually, that is their back up position. Their primary position asks us
to slant Rule 7 even further toward plaintiffs than Christiansburg slanted § 1988.
What they primarily want us to do is hold that attorney’s fees can never be
included in the bond an appealing plaintiff can be required to post in a case
covered by § 1988, not even where the appeal is going to be frivolous,
unreasonable, or without foundation.
The Christiansburg decision argues against the absolutist position the
plaintiffs advocate. The Supreme Court did not hold in Christiansburg that
attorney’s fees could never be awarded to prevailing defendants; it only restricted
the circumstances in which that could happen. We can faithfully follow the
Christiansburg decision by holding that the same restrictions applied by it to the
award of attorney’s fees under § 1988 also apply to the inclusion of attorney’s fees
in a Rule 7 cost bond. Rule 7’s language makes no distinction between plaintiffs
and defendants (“may require an appellant to file a bond”), just as the fee-shifting
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provisions of § 1988 do not (“may allow the prevailing party . . . a reasonable
attorney’s fee”).
And the same policy reasons are at play in both contexts. The reason that
attorney’s fees are awarded to successful plaintiffs as a matter of course where
§ 1988 applies is that in civil rights cases plaintiffs are “the chosen instrument of
Congress.” Christiansburg, 434 U.S. at 418, 98 S. Ct. at 699. Congress has
decided to implement its civil rights laws by effectively deputizing individuals to
act as “private attorney general[s]” while they pursue their own interests as
plaintiffs. Newman v. Piggie Park Enter., Inc., 390 U.S. 400, 402, 88 S. Ct. 964,
966 (1968). Reimbursing successful plaintiffs for the cost of their attorneys out of
the losing defendants’ pockets serves a dual function: it provides an incentive for
bringing the lawsuits, and it adds to the costs of those who violate the civil rights
of others. Id.; Christiansburg, 434 U.S. at 418–19, 98 S. Ct. at 699.
By contrast, a victorious defendant in a civil rights action is not the “chosen
instrument of Congress,” few defendants need any incentive to defend themselves
when sued, and a losing plaintiff in a civil rights case has not been found to have
violated anyone’s civil rights. Hence the rule announced in Christiansburg that
defendants who win civil rights lawsuits generally cannot recover their attorney’s
fees from plaintiffs. To that general rule, however, the Supreme Court in
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Christiansburg also announced an exception: A court may award attorney’s fees
under § 1988 to a prevailing defendant where the court finds that “the plaintiff’s
action was frivolous, unreasonable, or without foundation.” Christiansburg, 434
U.S. at 421, 98 S. Ct. at 700. This exception, the Supreme Court explained, is
appropriate because “while Congress wanted to clear the way for suits to be
brought under the [underlying civil rights] Act, it also wanted to protect
defendants from burdensome litigation having no legal or factual basis.” Id. at
420, 98 S. Ct. at 700. Put a little differently, requiring plaintiffs to pay the
defendant’s attorney’s fees where there clearly was no good reason to bring the
lawsuit discourages groundless lawsuits, which is a good thing in the civil rights
area as in others.
The Christiansburg rule applies not only to trials in civil rights cases, but
also to appeals by plaintiffs in them. Because a heavy majority of judgments are
affirmed on appeal, most appeals by plaintiffs in civil rights cases do not
ultimately result in righting a wrong under the civil rights acts. But some do. And
when they do, the plaintiffs are awarded attorney’s fees for the appellate part of
their effort as well as for the trial part. See Lattimore v. Oman Constr., 868 F.2d
437, 440 & n.6 (11th Cir. 1989) (affirming the district court’s grant of appellate
attorney’s fees to a prevailing civil rights plaintiff), abrogated on other grounds by
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City of Burlington v. Dague, 505 U.S. 557, 112 S. Ct. 2638 (1992). Likewise,
when a plaintiff who was unsuccessful at trial fares no better on appeal, the
plaintiff is not assessed the appellate attorney’s fees of the defendant unless the
appeal was frivolous, unreasonable, or without foundation. See Bugg v. Int’l
Union of Allied Indus. Workers of Am., Local 507, 674 F.2d 595, 599–601 (7th
Cir. 1982).
Applying the reasoning of the Christiansburg decision to the Rule 7 context,
a general rule requiring a losing plaintiff in a civil rights case to post a bond that
includes the defendant’s attorney’s fees on appeal would discourage and might
prevent some appeals for which there is a good basis. As a result, individuals
would be prevented from acting as private attorneys general to pursue through the
appellate process the enforcement of the civil rights acts.1 That would be bad
policy at the appellate stage of the process for the same reasons it is at the trial
stage.
1
We are not persuaded by the defendant’s assurance that if a plaintiff in a civil rights
case cannot afford to post a bond that includes the defendant’s anticipated attorney’s fees on
appeal, the plaintiff can always move to proceed in forma pauperis. See Fed. R. App. P. 24.
The plaintiffs insist there is a gap between qualifying for in forma pauperis status and being able
to post a large bond, and that they fall in it. We need not decide if there are some plaintiffs who
are too poor to post a bond but too affluent to qualify for IFP status. Cf. Page v. A.H. Robins
Co., 85 F.R.D. 139, 140 (E.D. Va. 1980) (“A logical counterpart to Appellate Rule 7 is Appellate
Rule 24, which pertains to appeals in forma pauperis.”). We need not decide that because even
for plaintiffs who can afford to post appeal bonds, the larger the bond amount, the higher the cost
of appealing; and the higher the cost of appealing, the greater the disincentive for doing so.
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By the same token, however, a plaintiff who is unsuccessful in a civil rights
suit at trial should not be freed from the burden of an appellate bond that includes
anticipated attorney’s fees where the appeal is likely to be frivolous, unreasonable,
or without foundation. On appeal, as at trial, applying full cost disincentives in
those circumstances is consistent with the intent of Congress “to protect
defendants from burdensome litigation having no legal or factual basis.”
Christiansburg, 434 U.S. at 420, 98 S.Ct. at 700.
While happy to have Christiansburg’s general rule imported into the Rule 7
area, the plaintiffs want us to clip from that rule the exception for frivolous
appeals. They argue that in this context the Christiansburg exception is
unnecessary and impractical. It is unnecessary to discourage frivolous appeals in
civil rights cases, they say, because Fed. R. App. P. 38 already serves that function
in all cases. Rule 38 does allow an appellate court, after motion from the appellee
or after issuing its own notice, to order the appellant to pay damages and single or
double costs for a frivolous appeal. Nonetheless, the argument that Rule 38
obviates the necessity for the Christiansburg exception at the appellate level does
not measure well against experience or logic.
Experience has shown that because most appellees just want to be rid of the
annoyance of a baseless appeal with as little additional fuss as possible, the trickle
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of Rule 38 motions does not nearly approximate the flood of frivolous appeals.
And given all of the demands on the time of appellate courts, few Rule 38 notices
issue without a motion. These forces combine to make Rule 38 a toothless tiger in
most instances. Not only that, but logically it is better to prevent frivolous appeals
than to punish those who bring them after the case has taken the time of the
appellate court. We expect that at least some baseless appeals will be stopped at
the Rule 7 stage, sooner rather than later in the process and with greater savings in
time and effort.
The plaintiffs’ impracticality argument against recognizing the
Christiansburg exception in the Rule 7 context posits that it will be “extremely
difficult” for a district court to determine prospectively whether an appeal is going
to be frivolous, unreasonable, or without foundation. District courts, however,
have a great deal of experience weighing the merits of potential appeals. In every
one of the thousands of proceedings in which a state prisoner denied 28 U.S.C. §
2254 relief or a federal prisoner denied 28 U.S.C. § 2255 relief seeks to appeal,
the district court that denied relief must determine whether there is likely to be
enough substance to an appeal for one to be allowed. See Fed. R. App. P.
22(b)(1) (“In a habeas corpus proceeding . . . [i]f an applicant files a notice of
15
appeal, the district judge who rendered the judgment must either issue a certificate
of appealability or state why a certificate should not issue.”).
In deciding whether to allow an appeal from the denial of § 2254 or § 2255
relief to proceed, the district court must decide if the petitioner “has made a
substantial showing of the denial of a constitutional right.” 28 U.S.C.
§ 2253(c)(2). Where the court has held that a procedural bar to relief exists, it
must also decide if the prisoner has made a substantial showing that the
procedural ruling was wrong. See Slack v. McDaniel, 529 U.S. 473, 483–84, 120
S. Ct. 1595, 1603–04 (2000). These determinations, which district courts
routinely make in order to decide whether the denial of § 2254 or § 2255 relief can
be appealed, are not perfectly analogous to the determination they must make in
order to decide whether a judgment denying relief in a civil rights case can be
appealed. Deciding whether a “substantial showing” has been made is not the
same thing as determining whether an appeal will be frivolous, unreasonable, or
without foundation. But both tasks essentially involve evaluating a plaintiff’s
possibility of success on appeal based on what the court has seen of his case at the
trial level. That is enough of a similarity to convince us that district courts will be
able to assess prospectively appeals from the denial of relief in a civil rights case
under a scale heavily tilted in favor of the plaintiff who wants to appeal.
16
In summary, reading Rule 7 against the Christiansburg decision, we hold
that a district court may not require an unsuccessful plaintiff in a civil rights case
to post an appellate bond that includes not only ordinary costs but also the
defendant’s anticipated attorney’s fees on appeal, unless the court determines that
the appeal is likely to be frivolous, unreasonable, or without foundation. If the
court does make that determination, it has discretion to grant the defendant’s
motion and require the plaintiff to post a bond in the amount of the defendant’s
anticipated costs including appellate attorney’s fees.
But it need not do so. Because Rule 7 states the authority it gives in terms
of “may,” the district court may decide not to require an appeal bond or to require
one that does not include the amount of the defendant’s anticipated attorney’s fees
on appeal. See Fed. Prescription Serv., Inc. v. Am. Pharm. Ass’n, 636 F.2d 755,
757 n.2 (D.C. Cir. 1980) (“[T]he new Rule 7, effective August 1979, leaves the
requirement of an appeal bond to the district court’s discretion . . . . We cannot
dismiss American’s appeal for failure to post a bond the district court chose not to
require.”); Pan Am. Grain Mfg. Co. v. P.R. Ports Auth., 193 F.R.D. 26, 43 (D.P.R.
2000) (“Rule 7 leaves to the discretion of the district court in a civil case whether
to require the filing of a bond for costs on appeal.”); Lundy v. Union Carbide
17
Corp., 598 F.Supp. 451, 452 (D. Or. 1984) (“The requirement of an appeal bond
under Appellate Rule 7 is left to the discretion of the district court.”).
Of course, the fact that a plaintiff in a civil rights case is required to post a
Rule 7 bond that includes anticipated appellate attorney’s fees does not mean the
plaintiff will be required to pay attorney’s fees if the judgment is affirmed on
appeal. This Court will award a defendant who succeeds in preserving a judgment
against a plaintiff in a civil rights case attorney’s fees only if we find that the
plaintiff’s appeal turned out to be frivolous, unreasonable, or without foundation
within the meaning of the Christiansburg decision.
We REVERSE the district court’s order imposing a Rule 7 bond in the
amount of $61,000, and REMAND the case for further proceedings consistent
with this opinion.
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